
FeeFighters Acquired By Groupon - biznickman
http://feefighters.com/blog/feefighters-acquired/
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BryanB55
For some reason I'm not very excited about this. We jut moved to the Samurai
Gateway and I've never been a big fan of Groupon and their business model. I'm
just wondering what they are going to do with FeeFighters now. I wouldn't be
too surprised if Groupon filed chapter 11 sometime in the near future...
wasn't there recently something on HN about them losing money on every
Groupon?

~~~
tptacek
You're wondering what they're going to do now? I was too, for the 5 seconds it
took between reading the headline and then loading the article, which says
what they're going to do next: the same thing they're already doing.

You're really just, when you read a story like this on HN at this point, even
though it's a story about a bunch of people that made good on the dream of a
big chunk of everyone who reads HN (or at least what used to be a big chunk of
them, in the time before 'pg started mailing his companies to stop commenting
on HN because it's a fever swamp) --- you're really just like waiting for this
whole story to be another godawful stupid referendum on everyone's third- or
fourth- hand information on Groupon.

~~~
zred
I think it's more that many of us are having trouble understanding how
FeeFighters fits in with Groupon.

The strategy that I could see working well would be for Groupon to extend
Groupon/FeeFighters to include a Shopify competitor. They have the credit card
processing and the relationships with local businesses. "Are you enthusiastic
about selling online? Want to extend your online presence and sales?"

Just continuing FeeFighters as-is wouldn't really help Groupon substantially.
I mean, FeeFighters might be profitable and a good business, but if it doesn't
tie-in nicely to one of Groupon's current or future businesses, it might not
be a good purchase. So, I think we all expect something is going to happen -
something to leverage a collective strength rather than basically being two
separate companies with separate revenue and separate customers just jointly
owned.

I think there's a reason why some might be worried. When a company gets
acquired, sometimes that product gets discontinued (even if claims are made
otherwise during the acquisition). Othertimes, the product languishes.
Hopefully that won't be the case here, but it's hardly unheard of. Heck, even
without a merger, directions can change. I remember when Heroku had a web
editing interface and they gave that up well before being bought. But when an
acquisition happens, sometimes new combinations of people lead to new ideas
and the old ideas don't seem as exciting (or as likely to be
useful/profitable). The acquiring company may think they will continue the
acquired property, but six months later it becomes clear that they want to
spend their resources elsewhere. I'm not saying that will happen - in fact,
Heroku's purchase by Salesforce is a perfect contradiction as it has done
wonderful things since acquisition. However, Jaiku, FeedBurner, Dodgeball,
Gizmo5, DimDim, and others all show that a product can be discontinued or
languish in a state that feels like no one is looking at it after an
acquisition.

I guess if there was some announcement of "everyone, we're working on a new
way to get local businesses online easily with FeeFighters credit card
processing" we'd all feel like "nice! I can see how that would fit well and
will continue to be an awesome, actively developed product." While there's no
real reason to doubt the post, at least in the back of our heads we have to be
thinking about whether it was a talent acquisition or how committed Groupon is
going to be to FeeFighters.

~~~
awakeasleep
You have not been following Groupon closely enough for this sort of analysis.

Consider the biggest change Groupon has made in the past 5 months was the
implementation of Groupon Scheduler. Scheduler is a free booking service to
help merchants of the world organize appointments. It's free except for a link
to Groupon-- the price of using the scheduler is awareness of the fact that
you could run a Deal or Now! deal with a few clicks and a phone call.

Considering that Groupon spent so much of their engineering talent on
Scheduler, it's easy to see how a company with universal small business appeal
like Fee Fighters in it's current form (give or take a few reminder links)
becomes super desirable to Groupon.

~~~
kareemm
I'm not sure how many Groupon engineers were devoted to Scheduler, but I do
know that the core of Scheduler used to be OpenCal, who Groupon acquired last
year: <http://opencal.com>

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kenmck
This seems an odd fit to me. Groupon has a reputation for not being concerned
whether the deals it encouraged businesses to run are good for the business.
FeeFighters has had a reputation as a sincere advocate for SMB's.

~~~
kinkora
Which could possibly be the reason why they acquired FeeFighters.

Companies sometimes make acquisitions to augment what they are lacking.

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ComputerGuru
Congrats, Sean, Josh, and the rest of your awesome team. I wish you only the
best and continued success with FeeFighter's and your vision!

(mqudsi)

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tptacek
Wow, congratulations.

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orky56
Just curious, was this a talent acquisition? It's hard to tell with such few
details right now. Only asking because they're both Chicago-based and aren't
really in the exact same space.

~~~
tptacek
_Most of the FeeFighters are coming along with the acquisition and we are not
planning any major changes to our product line. The FeeFighters marketplace,
our Samurai gateway and the FeeFighters and Samurai brands are continuing as
before._

At this point I think you could literally put "this is not a talent
acquisition" in your announcement and still see people say stuff like this.

~~~
glesica
Well obviously. Since when are press releases a reliable source of
information? Especially given the number of companies that say "our product is
not going to change" only to have the product change six months later.

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teyc
Group on started off using an affiliate business model. However, running one
deal per day means there isn't much recurring revenue to be had especially
when cost of customer acquisition can be high.

However, if Group on can prove their value as an online marketing channel,
then they can earn a steady revenue stream. One of Andrew Warner's
interviewees did that, running a largely automated platform

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dmils4
A few people have touched upon it, but the Chicago startup community is very
small (compared to SV). Regardless of your opinions around why they were
bought, it is nice to see an exit for a Chicago startup (even if they are
eating their own) :0)

Next up - Grubhub!

~~~
ComputerGuru
Very small indeed. FeedBurner was the posterchild of Chicago-based startup
success for a while until Google eviscerated them in the most publicly-
humiliating fashion possible.

But as another Chicago-based startup founder that has had the pleasure of
doing business with the FF team in person, I wish them all the best, and am
confident that they will stick to their guns and keep FF/Samurai the quality
product that it is.

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Brushfire
Congrats guys. Really excited by all the stuff FeeFighters has and will
accomplish.

Brian L.

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brianbreslin
2 Questions 1\. How much did they raise in angel/vc funds? 2\. What was the
purchase price?

~~~
tptacek
When the announcement doesn't say and there's no paired announcement at the
acquirer, it usually means they're not allowed to say. GRPN is a public
company and if the acquisition is material to the company there's a whole regs
dance they have to do.

So long story short: not much point in asking the second question.

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pitdesi
Hey guys - thanks to HN folks for your support over the past couple of years.
We owe no small part of our success to the community here - not just in
getting you guys to use our products, but lots of other stuff that has helped
our business along the way.

We're super thrilled to be a part of the Groupon team, it has been a great
outcome for everyone.

I was going to answer the questions that I could but Thomas has answered all
of them accurately for me anyway.

~~~
mattmanser
How is being acquired by Groupon a great outcome for your customers? Your
company that you put your heart and soul into is almost 100% guaranteed to
die. It seems like a totally random and a bit of a silly purchase.

It seems little more than a developer acquisition which will result in
feefighters shutting down in 3.....2.....1.....

EDIT: I shouldn't post when coming back drunk from the pub, but seriously,
don't be proud about this, you sold out. This is like seeing your favourite
band sign to Sony. If acquistion was your end goal then gratz.

~~~
jcampbell1
I am a fee fighters "customer" and I don't really give a shit whether they are
acquired. They sent me to gravity payments, who gave me an awesome deal that I
wouldn't have known about except for HN and FeeFighters. I am happy now. I am
drunk as well, so I'll be the first one to toast the team at FeeFigherts.

FeeFighers biggest weakness is that no one has ever heard of them. Groupon can
fix that problem with almost no effort.

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yumraj
Yet another acqui-hire/Talent acquisition ?

~~~
kaonashi
Probably similar to the Obtiva acquisition in that regard. I know it's
extremely hard to find competent unix/ruby/python/node (not-java-c#) devs in
Chicago.

