I think small businesses have always been hungry for more customers, so I believe the dynamic is something slightly different.
I think the Groupon space was basically a big many-sided bubble. Consumers loved the discounts and the urgency of it. Businesses loved the pitch, and the big response was spectacular compared with regular coupons. Investors loved the large user bases and the crazy growth. Groupon loved the high margins and the ability to make the books look great. And media had some great stories to sell.
But I don't think there was much real value there. Many businesses didn't really see long-term benefit from running daily deals. The traffic was large, but fickle.
The only reason this got so big was that Groupon deals had relatively long feedback loops, so it took businesses a while to learn that there were better marketing options. And there were plenty of businesses for Groupon's massive sales team to burn through before their reputation started to wear thin.
I think the Groupon space was basically a big many-sided bubble. Consumers loved the discounts and the urgency of it. Businesses loved the pitch, and the big response was spectacular compared with regular coupons. Investors loved the large user bases and the crazy growth. Groupon loved the high margins and the ability to make the books look great. And media had some great stories to sell.
But I don't think there was much real value there. Many businesses didn't really see long-term benefit from running daily deals. The traffic was large, but fickle.
The only reason this got so big was that Groupon deals had relatively long feedback loops, so it took businesses a while to learn that there were better marketing options. And there were plenty of businesses for Groupon's massive sales team to burn through before their reputation started to wear thin.