
Why I Wouldn’t Buy Into GroupOn’s IPO  - buckpost
http://www.markevanstech.com/2011/06/25/why-i-wouldnt-buy-into-groupons-ipo/
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laglad
I've never been able to understand the competitive advantage of Groupon's
business model. While they can offer local businesses a large pool of
prospective customers, they are constrained to being pseudo-local.

I lived in Philadelphia and about 3 Groupon-like models popped up around my
university and offered me more relevant deals than Groupon did. By being
super-niche, they were more useful to me. To get more entrenched in any given
locality, Groupon needs to hire more sales people and this will not scale
profitably.

I think the killer business model in this arena is the platform model - what
Yipit are doing. Aggregate deal-providers and serve as the information hub
about all deals.

I'd love to hear a good defense of Groupon's business model. It would be a
relief that staggering amounts of capital are being raised with a sensible
strategy.

