Great headline.

I am not going to lie, Groupon was definitely a brilliantly timed idea. I do question their stability in the long-run though as they continue to grow and demand a higher volume of coupons from small businesses. Wouldn’t this inevitably lead them to run promotions with large businesses?

Awesome question at the end =]

As with alot of things in life its about luck.

Groupon is nothing new so lets not call it a totally new business model as if previous versions did not exist even back in the dotcom era.

Groupon came at the right time with the economic crisis and more 24 hr online time (compared to dotcom era when you only logged on for a few minutes/hours because you paid per minute on a slow modem connection).

Good on them , I think it is more a Fad that will drop away in coming years.

Also shows that alot of startups are not first time success stories and have lots of failures under the belts.

I think saying he created a new business model is being very generous.

It’s more like the vente-privee.com business model but modified to be scaleable as it’s more lead generation over an internal sales model.

Still fantastic execution.

As a business that has been listed on Groupon I can attest to the service they provide. They’re customer service is top notch, they execute things perfectly, and while our Groupon didn’t yield that much direct profit, it got the attention of business partners, which would have been tough without the exposure they provided.

Now that they have made it big,there will be all these stories to make it dramatic….

Movie “The Coupon Network” to be released Fall 2011.

There is no such thing as pure luck. Luck comes to people who work hard and keep evolving an idea without giving up until finally something hits right and they execute on it.

Trust the force, you must

Its not a unique idea and can be easily reproduced. eg Living Social is almost better than Groupon (and takes less cut).

170 cities in over 22 (states?) countries. I could be wrong, but just a heads up :)

Alexia, the company is called Groupon, not GroupOn.

Hi James,

I think you may have misunderstood what I said. I think it was a brilliantly timed idea, not a unique one. I agree with you there. There were actually a handful of group-buying sites such as Mercata and Mobshop that were around back in the day. I think the key has been in Groupon’s hefty use of social media to advertise deals and attract new members.

-David

It’s not only the site… It’s about getting the business to run… contact restaurants, bars etc… Thats quite difficult… Maybe now you get the point why the others sucked.

Andrew Mason is a badass. A transparent, funny, smart leader. I’d intern for that dude.

I love getting insight into the path of fellow entrepreneurs. The comment about timing is certainly spot on. The idea, execution, and the team all need to be timed just right with the market.

We are pushing forward into the design your own & crowd-sourced fashion space, and the timing (team & execution, too!) seems right, http://bit.ly/9mkIDb .

How do they account for “revenue”? Is is the full price of the item before discount, price after discount, just the discount or their commission for the sold item? If this is a commission, then the result is mega impressive; if this is a full price of the item, I recall another company in the past used the same type of accounting to claim the #1 Internet marketplace title, called Enron.

Revenue is this in the business world. Customers pay whoever it is the beneficiary. The beneficiary account that as revenue.

What I assume is this, the people who go to groupon, pay groupon. Goupon pays sales and business partner from that.

If they pay business partner 50% and sales 50% of what they make, their revenue is $365M * 0.5 * 0.5 = $91.25M a year. I believe they can claim profitability.

The model is very similar to gift card. If a business goes out of business, consumers that purchase groupon of the business will lose that money. Just like when Circuit City goes out of business, the hundreds of millions of dollars in gift cards are no longer good.

This model is more detrimental to society in more ways than Amway multi-level marketing pyramid scheme.

When enough businesses fail, and consumers holding the bag. That’s when the house of cards collapse and the FTC and state government have to make new rules to protect consumers.

It would be ethical for them to state that if the business goes under, they have no recourse and they lose all the value in the groupon. Consumers are basically gambling that the business has staying power for the duration of the groupon. And when groupon expires, consumers can get the full amount of the groupon value back.

+1

can you pls spare me a gm of that stuff you are smoking?