

 “Anyone can start a Groupon” and other startup myths - cynusx
http://andrewchenblog.com/2011/06/03/anyone-can-start-a-groupon-and-other-startup-myths

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stevenj
If I remember correctly, Groupon tested its idea via Wordpress.

Blogging software, such as Wordpress, is pretty ubiquitious.

Scaling a daily deals site might be difficult, but I don't think starting one
is.

On the other hand, starting a search or energy company would be different.

~~~
andrew_null
I think for you, "starting a groupon" just implies the tech- the post
acknowledges the trivial technical hurdle and argues that the real obstacle is
the $30 per email sub. It's not real until you are actually making money on
deals, and the cost per email is the real bottleneck.

~~~
stevenj
<http://www.mamabargains.com>

<http://www.whiskeymilitia.com>

<http://woot.com>

<http://tippr.com>

<http://livingsocial.com>

<http://steepandcheap.com>

<http://bonktown.com>

<http://chainlove.com>

<http://dailyimprint.com>

<http://scopeaday.com>

<http://leatheraday.com>

<http://noondaydeal.com>

<http://1saleaday.com>

<http://14stix.com>

<http://2daysbargain.com>

<http://98main.com>

<http://appledod.com>

<http://babysteals.com>

<http://caddiesbag.com>

<http://camofire.com>

<http://chronoshark.com>

<http://cigarmonster.com>

<http://www.socialbuy.com>

<http://www.buywithme.com>

<http://homerun.com/seattle>

~~~
fennecfoxen
My first inclination on seeing this post was to look for a "report spam" link.
Then I realized it's actually quite informative. :)

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rubyrescue
I generally agree with Andrew's posts but I disagree solely with respect to
Groupon. In fact there _are_ tons of groupons, and as far as I can tell
they're all going concerns with increasing revenues, email lists, and growing
user bases. Here in Argentina, there are at least three others, not including
the startup put together by four classmates...that was soon acquired by
groupon becoming groupon.com.ar.

~~~
webwright
I don't think Andrew's being literal. Of course you could START a groupon
tomorrow.

What he's saying is that 85 million subscribers at a current acquisition cost
of $30 (!) is a helluva moat.

~~~
fennecfoxen
You can start a Groupon, but can you finish one?

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mikealle233
I don't get the part about arbitrage of local ad inventory that's no longer
available. Is he saying it's no longer available because all the Groupon
competitors buying up the inventory?

~~~
spanktheuser
Yep. I've seen it in some other industries as well, particularly with auction
markets like AdWords. One company will figure out a novel PPC strategy that
pays out considerably more in profit than than it costs to acquire a customer.
If this strategy also scales, it's a license to print money for a time.
Problem is, competitors notice and mimic the same strategy, bidding up the
price of the ad units in question (keywords, what have you) until it cost of
acquisition is very close to the lifetime value of the acquired customer. It's
not so much that the competition buys up all the inventory (although that
happens if you don't pay attention) but that the price of the good inventory
soars for everyone. So more value gets captured by the publisher of the ad
units and less by the buyer.

------
rhizome
4000 salespeople. The End.

------
chailatte
Correct, it's not that 'anyone can start a groupon'. But it's rather 'any
website/app with a large enough reach in at least one or more local market can
start a groupon service'.

\- yelp/gowalla/foursquare/scvngr/etc.

\- facebook/google/apple/microsoft/etc.

\- country-specific like rakuten/renren/yandex.

\- local-specific like eatla/sfgate/latimes.

Literally hundreds and thousands of well-established websites can do coupons.
They just have to look up which stores already have done a group-buying deal
before and contact them. And they can all undercut each other until probably
they only take 2-3% and give the rest back to vendors.

No wonder Groupon wants to IPO RIGHT NOW.

~~~
sushrutbidwai
Even though theoretically what you are saying is correct. In reality however
the tremendous investment group on has done in the building up the sales power
provides them with more defensibility than you would think.

For example - A vendor is parting away with some money for every new
customers. She could have used the same money via adwords? Still lot of these
merchants may not have even tried adwords before. There in comes the power of
having reach to direct markets.

Of course sales power doesnot provide as good protection against competition
as technology or even UX, but that does not mean we can write off Group on
that easily as well.

~~~
chailatte
What?

