Groupon first came to my attention a couple of months ago when Google tried to buy the company for $6 billion. Now although I’m well out of business life, I still like to follow what’s happening in the market and I’d never heard of Groupon and here was Google desperate to pay $6 billion for them. This needed a bit of research.
It turned out that Groupon is a so-called discount voucher company and the concept is so ridiculously simple that when you work out what it does, it’s one of those, ‘why wasn’t it thought of before’, moments. And it’s so successful, it’s the fastest growing company in the world, will probably sit alongside Facebook, or even be part of it (surely I’m not the only one to see the commercial affinity between Groupon and Facebook ?) and has, whilst spurning Google, decided to list on the stock market or sell some of its stock valuing the company at over $7 billion. I reckon Google will be kicking themselves in a year or two.
‘So Cupples, get on with it, what is Groupon?’
It’s so easy. You register your e-mail address with Groupon (registration takes all of a minute – no kidding!), choose your city and that’s it. Thereafter, you will get a few e-mails a day telling you of ‘special deals’ in the city, or cities, you chose, and a special deal is just that – 61% off a meal for two, 80% off of a Spa stay, £49 for a multi-media course instead of £197!
‘Great discounts, How do they do it?’
Well the vouchers for the ‘special deals’ are usually only available to be bought on the day you get the e-mail but the voucher can then be redeemed over a period of time, e.g. for a restaurant, usually from the following day for a period of one month. Had I still been working in London, I would have received these e-mails during the day, and could have been in the featured restaurant the following day on my way home. It would have been great. Linked to local Facebook friends or people in the office, it would be a terrific way of socializing on the cheap!
The one thing which is not generally known unless you have a geek like me telling you is that Groupon need to get a predetermined level of interest in a ‘special deal’ before it kicks in, so for example, I could have registered my interest in today’s deal at the restaurant owned by Frankie Dettori (famous jockey) and Marco Pierre White (needs no introduction surely) in Chelsea where they are offering a Pizza and a glass of wine for £5.50 instead of £14 but unless they get the numbers stipulated by Frankie and Bennie’s, you don’t get the deal. I suppose that’s one disadvantage (and I have to admit that I’ve not actually registered for a specific deal yet only having registered for London – I’ve now linked myself to deals in Antibes), you could actually set up a group of friends to go to a specific place and then find they haven’t attracted the necessary numbers.
OK – so how does Groupon make its money?
It’s dead simple. They just take a cut from the discount voucher they e-mail you. And their revenues are growing exponentially.
Final point – I hate spam like the rest of you but I have to say, I don’t mind getting e-mails offering me 60% discounts. One of them might just be the next thing I was going to buy!
Now, you could just register with Groupon and off you go but as I told you about it (maybe not?), and as this is still the ‘season of goodwill to all men, why don’t you send me a quick e-mail and let me submit your e-mail address to them. That way, I’ll not have to pay £5.50 for a pizza and a glass of wine, I’ll get it for free! I just have to book my flights to London to get it!
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