Have there been that many stories? I've heard a couple from small time coffee shops that may not be the best financial planners, but those few sad stories seem to reverberate without a lot of new voices joining the chorus.
I'm going out on a limb here, but has anyone else noticed that HN has a tendency to hate on Groupon?
We see dozens of articles like this reach the front page predicting Groupon's doom, always citing the same dissatisfied coffee shop, always attacking imaginary business models. I'd like to see someone refute Groupon's value as an advertising tool, or even compare it to existing alternatives.
On top of that, a class of hacker news user exists who spells "Groupon" groupOn. It seemed liken impossibly childish insult, to mangle something's name, so I assumed it was an accident or maybe that's how Groupon used to be spelled when it was a startup. Well I looked it up, and no.
Personally, I tend to hate it because I am convinced that coupons are evil. It is just a way to control people's behaviours and turn them into consumer sheep, which I resent from the bottom of my heart.
I root for startups that empower people and open up new opportunities, not for ones that have found a loophole in the human psyche and exploit it to the maximum.
I wouldn't say they're exploiting a loophole in the human psyche, rather a very well known aspect of it.
It's also a brilliant business model for a recession and financial crisis. In most instances it's win-win-win:
- Groupon makes money
- people get huge discounts, and save money if it was something they were planing to buy anyway.
- businesses both make money (assuming they worked out the math of the deal correctly before accepting it) and gain huge exposure.
I suppose the only losers are wherever people would have spent that money had they not bought the groupon, but that's hard to quantify (bought the same thing at a higher price? bought something else? saved it?).
I can't think of many more innovative business models for a distressed economy.
The losers are the waiters and employees of the featured businesses. I know plenty of people in the service industry who dread the days their restaurants or shops offer discounts on Groupon. Sure it makes money for the company, but in many cases a Groupon deal kills morale within the business.
That on top of the exploitative nature of many (most?) Groupon users, where they buy a Groupon and never revisit the business after they use their discount.
Groupon is a great business, but some concerns about the quality of the leads arise. We need the Glengarry leads.
Groupon is creating new value and opportunities. Small business now have an easy, trackable, pay-per-action source for customer acquisition. It's hardly exploitative of customers either because you can get a refund if you're dissatisfied (see the Groupon Promise).
Outside the US coupons are not a big business, at least in the countries I know. So I wonder if it will translate as profitably in the rest of the world.
Here in brazil (at least in são paulo) there are around four companies (groupon included) fighting tooth and nail for this market, even using black-hat-ish techniques (unsolicited email, misguiding website, impossible-to-unsubscribe mailing lists, deceitful ads, etc).
I think most urban-ish places with a capitalized youth are a ripe market for coupon-type businesses.
My personal theory? There's a lot of jealousy in HN users WRT groupon because they didn't start it. It's not an unbelievably complex idea -- I'd wager that many Groupon-hating HN users probably think that their current startup is much more complex/important/awesome. They're bothered by something so simple making so much money.
At least that's how I initially felt about Groupon.
At the same time, my attitude seriously limited my business. I'm trying to build a b2b marketplace, and wanted to build my "marketplace of dreams" (if I built it, they will come). I didn't address SEO or getting initial traffic because that was low brow, and would take care of itself if I built a cool enough product.
Boy was I wrong. That was a long (2+ year) lesson to learn.
In last fall's First Look Forum in Seattle, two of the five finalists (including the eventual winner Grocery Cart Savings) had good data on the problems merchants have with Groupon. Of course Groupon's aware of those too and may well have improved things since then, but the discontent is very real.
