

So you think you could build your own Groupon? - moses1400
http://thenextweb.com/entrepreneur/2011/02/15/so-you-think-you-could-build-your-own-groupon

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jiffylu
This article is more about if you were in Groupon's shoes could you have done
the following...

Yes. I think I could build my own Groupon... in fact hundreds of people have
and many are quite profitable.

Could I build it to scale? Could I build a sustainable business that will be
there for the long haul or be significant enough to be acquired? Could I find
an untapped niche that the group buying biz model could exploit?

The writer doesn't even list many accomplishments and the barriers to entry
that Groupon has created (besides capital and what access to capital buys you
i.e. PR, buying competitors, buying super bowl ads.

He should have said... Could you compete against Groupon's salesforce? Could
you compete with their ever decreasing cost of customer acquisition? Could you
compete with their high gross margins while you are forced to cut your margins
to compete?

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us
Most of those people are idiots. Even if you don't take into account
everything listed in that post, considering you need enough people to tip a
deal for it to work is hard enough. In the early stages of building a Groupon
clone, the toughest challenge is getting enough people on board day 1 to tip a
deal. If you don't get enough people and the deal doesn't tip, you already
suck. Most people who aren't in the marketing world don't realize how
difficult this is and I'm sure this is at the top of the list for many of the
2000+ Groupon clones as to why they fail. The ones that succeed are those
lucky enough to get enough users early on to tip onto the next stage. But even
then there are more challenges than merely how "simple" an idea Groupon is.
And Groupon isn't the only exception. Every startup has a list of challenges
people on the outside can only begin to imagine.

~~~
knowsnothing613
err.. aren't you also proving that Groupon isn't a scaleable business, since
it requires an army of salespeople to negotiate deals with retailers, and
massage the pricing beforehand.

I've read blogs (Techcrunch & the FDA groupon fail) that say groupon ask
retailers to raise prices a month before, so when they offer deals, it appears
as though you're getting 50% off, but you're really getting 50% of a
product/service that has been marked up 30% a month beforehand. Price
msassaging requires direct sales contact, and it'd be hard to automate, since
you need sales personnel to follow up.

I'd like to know how EBITDA profitable Groupon is. None of this revenue b.s.
It's a meaningless data point, without the context of EBITDA.

~~~
roel_v
"that Groupon isn't a scaleable business, since it requires an army of
salespeople to negotiate deals with retailers"

Requiring people doesn't make it non-scalable. Doesn't McDonalds scale? If you
have a process to acquire, train and retain sales personnel, it can be made to
scale. 'Scale' != 'throw more/better hard/software at it'.

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hackscribe
Cloning Groupon is the easy part, the hard part is executing.

~~~
dasil003
Executing what? The word execution in the startup world refers to everything
you do to build a startup, including cloning the competition. If you're
talking about a _specific_ type of startup, you need to identify what's hard
beyond simply "execution" since that's a given.

~~~
hackscribe
I'm referring to executing the Groupon "business model" which is what this
article is really about. It doesn't take much "execution" to clone and create
a landing page for subscribers. But thank you for your insightful knowledge
into the meaning of the word "execution" in the startup world.

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askar
Keep in mind that the concept of Groupon not just need a group of people to
tip the deal but also would need a "sustained effort" of a group of a people
behind the scenes to get the interestingness of Groupon going. If you think
about it, it's not that easy of a part to find those interesting local deals
and set constraints on top of it and on and on...

To me, that's one reason all these clones fail miserably.

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malloreon
I'm pretty sure Groupon has more than 1 employee.

~~~
notahacker
Actually, that's where the article misses the hard part, which is building an
effective, scalable sales force that can get a constant stream of suitable
merchants through the door, which requires a rather different skillset to
knocking up a mailing list app over a weekend.

Splashing your profits on a Superbowl ad is the easy bit.

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jawartak
'Put together a business plan to raise the $1million needed to take it from an
idea in your head to an actual business'. How would you possibly spend $1M
simply getting a Groupon clone started?

~~~
patio11
Facebook and AdWords Content Network ads to get email submissions. (If you
want 10k strong opt-in email lists in each of 10 cities for your early adopter
set, that cost cost you $100k by itself. More as GroupOn and competitors grab
the low hanging fruit of signups and cheap ad inventory.)

