
Groupon - Cool Business Model - Banzai10
http://www.chrisbrogan.com/groupon-clever-collective-buying-site/
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dlevine
I think that the "threshold" is really a red herring. Having followed the site
for a few weeks at this point, I would suspect that pretty much every deal
"tips".

The actual effects of having a threshold are twofold: 1) First of all, it
encourages people to tell their friends to participate 2) It creates the
illusion of a group discount where none exists. A big discount might tarnish a
business' reputation, but if there is a "group discount," people understand.
When you think about it, there is actually no economy of scale about a
business offering several hundred coupons valid for a six-month window.

It's brilliant marketing, though.

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robotrout
I agree, it's a marketing stunt. There are no economies of scale at work here.
Now, if I made it for an event, and I only booked the event venue and hired
the entertainment / wait staff if the threshold tickets were purchased, than
there's genuine utility here. But for miscellaneous products/services that I
offer daily anyway, this is just a marketing stunt.

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brandnewlow
You just solved my startup's problem of not having an interesting (i.e. not
"drinks at a bar") way to organize our meetups. Thank you, kind sir.

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thunk
The central concept here -- a transaction triggers when a threshold of
participants is met -- is bigger than group coupons. It's a sort of "Group
Transactional Economics" by analogy to the atomicity of db or stm
transactions. I think it could eliminate a lot of the risk and inefficiency
dealt with by independent makers of all stripes.

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brm
The central concept is incredible but the way groupon uses it is not, the spa
did not book over $4300 in business like Chris says, rumor has it that groupon
actually takes 50% of the sales for itself. Sure, Groupon is a good business
but its borderline abusive to its partner businesses (something that would not
work if applied to independent makers).

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req2
Could you elaborate on your claim of abusiveness? I'm not sure such an
unsourced rumor is sufficient evidence, nor am I aware of Groupon having such
Walmartian clout that it can bully vendors into deals. Surely the spa signed
its own end of the contract?

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crux_
I worked at a consulting firm on a flameout .com (actbig) business that had a
nearly identical model back in the late 90s; the big difference here seems to
be the (smart!) focus on local businesses & services rather than generic goods
like electronics and furniture, and offering only one deal at per day (rather
wootlike).

Last time this happened: <http://news.ycombinator.com/item?id=692644>

I think the answer to the the question I asked then might be "yes." :)

(They still have a ways to go for profitability, though... 40 people on staff
while the items are usually under $100 and have less than 1000 purchasers.
Still, they've made it much further than my old client did.)

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clistctrl
excellent, I have this idea for a way people can buy pet supplies online!

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crux_
How about this -- an alternative currency that people can use for purchases
and give each other as gifts?

(Yup, I worked on that one too, although very briefly.)

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dabeeeenster
This is 10 years old! Letsbuyit ran this model in the dot-com hysteria but
obviously blew up before they could prove it would make money (no doubt they
got someone like Oliver Stone to direct their TV ads or something).

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thomasfl
If auctions is the core of the new economy, then there's plenty of business
opportunities left.

