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FeeFighters Acquired By Groupon (feefighters.com)
60 points by biznickman on March 23, 2012 | hide | past | favorite | 35 comments

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?

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.

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.

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.

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

I don't agree with a lot of what you're saying but would not have been annoyed or felt any need to respond to it, because your comment is markedly different than the one I replied to.

> pg started mailing his companies to stop commenting on HN because it's a fever swamp

Wow, really? That's unfortunate that HN can no longer function PR-less.

BTW, would you mind linking to a source, or something? I must have missed it when it happened, would be interesting to read. Thanks in advance.

Amazon lost money on every book sold for many years.

Worth a read: http://finance.fortune.cnn.com/2011/12/27/should-startups-fo...

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.

Which could possibly be the reason why they acquired FeeFighters.

Companies sometimes make acquisitions to augment what they are lacking.

So it's a great opportunity for some synergy: FeeFighters can really help out Groupon.

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!


Wow, congratulations.

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.

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.

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.

"we are not planning any major changes to our product line... our brands are continuing as before" can also be interpreted as stagnation, aka “don't expect anything new because our best devs will be working on Groupon's stuff”.

I think it was a fair question.

Groupon has a relationship with a massive number of merchants so being able to offer additional merchant services such as finding a better merchant account or reducing processing fees could be a good fit.

In my mind, this acqusition is about making good on the IPO. A lot of people, including me, are skeptical about how Groupon can differentiate itself from the competition. It looks like Groupon is trying to address that with this acquisition... it's trying to position itself as the easiest deal service to work with--an interesting strategy, considering that many businesses don't come back to Groupon after the first deal.

Off topic I guess but what is typical for repeat customer %? I realize it could vary considerably by what we're talking about, but it is something I have been wondering.

Yes I think ktsmith has hit the nail on the head on synergies.

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

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!

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.

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

Brian L.

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

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.

They raised $1.5 MM.

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.

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.

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.

I'd like for my favorite band(s) to sign to big labels and hopefully become rich. Sure, if they are going the route of bigger labels, I'd perhaps prefer them to sign with an established indie label before something like Sony, but it is still better than them remaining unknown. It's sad when I know some of my favorite bands of yesteryear never financially made much from the bands work.

I agree that GP's "great outcome for everyone" is probably a bit empty, but there's no shame in an acquisition, and "selling out" is a bit of a naive term. They were a for-profit business and realized they could profit most by selling the company. Why this unnecessary delusion that every startup founder is directed solely by a divine inner light?

Yet another acqui-hire/Talent acquisition ?

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.

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