

Ask HN: How do you launch a network effect startup like a Groupon clone - throwaway1984

Hi HN, lets take a groupon clone as a case study. Assuming you had a significant differentiating factor that would make you more attractive than Groupon to a particular group of businesses/buyers - how would you go about launching it? How would you line the first set of businesses and attract buying customers the first week of launch?
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chaosmachine
You need to get some deals that:

1\. Are so good people will tell their friends. 2\. Appeal to a wide enough
audience that all of your initial customers have at least one friend who would
actually be interested.

If you can convince a few retailers to make these kinds of deals with you,
then you just need to get a core group of highly connected early users to
start the word-of-mouth chain. If you have a popular Twitter account or blog,
you're half way there.

Obviously this is kind of chicken/egg, so you need good connections in the
retail world, the kind who owe you a favor or take "incentives".

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andrewtbham
I agree the key is some good deals. maybe you can get a retailer to do some
cross promotion... i.e. the retailer promotes your site.

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yeabuddy
Groupon spent a LARGE amount of money on marketing. They had a pretty large
affiliate marketing program that paid out ~$2ish range I believe for an email
submit. Affiliates blew this offer up.

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il
Best answer here. I used to run traffic to Groupon clones so I know all about
their affiliate program. The secret is building high converting landing pages
and a strong backend. Then push the offer out to affiliates who can drive lots
of traffic and sit back and wait for signups.

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sandGorgon
care to elaborate about strong backend ? are you referring to the system
architecture (DB, site responsiveness, PHP vs Ruby, etc.) ?

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waitingforgodel
He's using backend in the direct marketing sense... What you do with a
customer after you make the initial sale (cross selling, up selling, follow up
pitches, customer reactivation, referral drives, special events, etc, etc)

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il
You got it right :) Specifically, in this case, it's all about how well you
can upsell and how effectively you can email your existing customer base to
keep them engaged.

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systemtrigger
_> How would you line up the first set of businesses_

Call prospective partner merchants and pitch them over the phone. If they seem
open to the idea, set up an appointment to meet in person. Present, negotiate
terms and get them to sign a contract. Take photos and write a blurb about the
business. Rinse, repeat.

 _> How would you attract buying customers_

Before launch, make the homepage a signup form. Chat up the social media
channels. Launch when you have a big list (~10k) of email subscribers.

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aberkowitz
The best way to start any sort of "social business" is on a micro scale. In
this case, for example, you could start with a local shopping area. Niche
stores and small businesses are a lot more willing to try new ideas. Once you
become more successful, you can branch out.

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tincho
Hi. I can tell you my experience w/groupon. I live in Argentina, but I've
known groupon since march. They launched here like 2 months ago, and as
someone has said before, they are trying to crush the competition with MASSIVE
advertising. The thing is, that they wanted first mover advantage.

Now, considering that you are trying to enter to compete to a well established
business you have 2 alternatives. 1) get funding and launch masively 2) start
small and try to bootstrap. Anyways..the question in the end would be..how
fast can groupon copy your features? (if they are that good at all). Best of
lucks!

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aymeric
I'd focus on building a followers list (email list, facebook fans, twitter
followers, blog subscribers).

Then when you speak with businesses, you tell them how many people you can
contact, it will help them accept to offer a greal deal for your launch.

Affiliates might also help building that list.

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Kilimanjaro
I am very interested in this topic since I am working on a project that, if
marketed properly, will leave groupon biting the dust.

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petervandijck
I'm working on a project that, if marketed properly, will leave Facebook
biting the dust.

;)

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Kilimanjaro
Good luck on your project, you will need it much more than I ;)

The difference between facebook and groupon is that the former has plenty of
competition and everybody seems happy with it, while the latter is practically
a new niche and is pissing off everybody with their huge cuts from 50% to 100%

So, there is plenty of room for better groupon alternatives that can treat
their customers better.

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il
There are actually several groupon clones out there. Some are growing, most
are failing to get any traction.

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klochner
several? Last I heard it was somewhere around 70.

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mahmud
This one is by our very own smanek:

<http://www.postabon.com/>

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clayturk
<http://developer.adility.com>

