The Groupon founders wanted to do the deal. The fuckin' vulture capitalists who have seats on their board veto'ed against the sale. I guess they wanted to earn more than a 100X multiple?
Are Groupon's Days Numbered?
- Thread starter Fiver
- Start date
The Groupon founders wanted to do the deal. The fuckin' vulture capitalists who have seats on their board veto'ed against the sale. I guess they wanted to earn more than a 100X multiple?
Indian version of groupon i.e. SnapDeal.com is doing very well. Mainly because they claim to be a deals website but are actually just another ecommerce store who sells items for companies-which-don't-exist for good discount rates once they triple the sale price. Apart from that, the very deals they sell have discount like 10-20% which you would normally get anyways. This does not sounds like a successful business model but it now is a hundred million plus dollar business.
It was obvious that Groupon was going to shit when the founders sold $220MM of their shares in a private fundraising round. Who the fuck does that if they're confident in their company?
That's more money than anyone needs to live on, buy a nice house, plane, and everything else. They sold it and people still bought in afterwards?
Whilst yes I appreciate founders should diversify their risk, and that it's good for a company for its founders not to be relying on it to pay their mortgage and everything else (so that they can take more risks).. No one can justify $220m when the company isn't profitable.
Genius dude who founded it though, pocketed few hundred $m and I'm sure he DGAF.
That's more money than anyone needs to live on, buy a nice house, plane, and everything else. They sold it and people still bought in afterwards?
Whilst yes I appreciate founders should diversify their risk, and that it's good for a company for its founders not to be relying on it to pay their mortgage and everything else (so that they can take more risks).. No one can justify $220m when the company isn't profitable.
Genius dude who founded it though, pocketed few hundred $m and I'm sure he DGAF.
My wife uses groupon.
My eyes hurt every time she opens her email; nothing but groupon and living social deals. I think I should teach her what the unsubscribe link is for. Those guys need cut back on the emails. People are developing groupon email blindness.
My eyes hurt every time she opens her email; nothing but groupon and living social deals. I think I should teach her what the unsubscribe link is for. Those guys need cut back on the emails. People are developing groupon email blindness.
My daughter owns a store and ran a groupon promotion. It was a massive success. She set a cap on the offer that was well within her ability to deliver, she had a clear objective for the promotion (to get future bookings) and made a real event out of it. Result - a large number of future bookings sold at the normal rate. She broke-even on the event because she sold extras that were outside the offer. She ran this about 6 months ago and she had over 90% of the bookings show-up.
If done right the outcome can be good for the company. When I called at the end of the day a $60 service would net me $4 profit. The motto was "sell them something else while they're there".
This.
I've been betting against Groupon from pretty much the second they went public. The amount of red flags coming from that company was ridiculous.
1. Raising money using that money to pay out the founders (lol)
2. Groupon's misleading accounting
3. The brokeness of the idea behind Groupon
4. Complete lack of any barriers to entry
Quote from Groupon's chairman when he was running a previous company:
I try to avoid stocks but this one was just too easy.
The problem with trying to offer marketing services to small businesses is that most small businesses don't have a clue about marketing.
Every once in awhile I get dragged screaming and kicking into building a website for a small business. I'm at risk of getting concussion from self-slapping of the forehead during the whole process.
Every once in awhile I get dragged screaming and kicking into building a website for a small business. I'm at risk of getting concussion from self-slapping of the forehead during the whole process.
Exactly.
I don't care what business I'm in. If I can get a flood of new customers in my door and break-even, I'm game. As long as I have a solid plan to turn a certain % of those customers into a profit, it's a snap decision.
It amazes me how many business owners don't understand this concept.
Yea, it all depends on the type of business.
My sister is an Optometrist. She was thinking of running an offer, $100 gift certificate to be used on glasses for only $50. She would pocket $25. Thing is, each of her glasses frames has about a $200-$400 profit margin built in. Plus once they come in, she can sell them on an eye exam ($90), contact lens fitting ($40), contact lenses, sunglasses, etc.
....
If you haven't found out already, farticles are converting, 4 years later.
Well it's no surprise Groupon is failing as they grew too fast. There is a rumor floating around the industry that LivingSocial and Groupon are discussing a possible merger. This will buy them maybe another year if that happens. However eventually they will go bankrupt. The cost of keeping their business running is just to high and they have spent all the $$$. This is the same thing that happened to major poker sites. Instead of putting the $$$ for balances into a bank account they spent it in marketing, etc... So when they have a few rough months, the money coming in isn't enough to cover expenses.
Contrary to what many people believe here, businesses do actually get lots of customers coming back after redeeming their deal, if they treat customers well and make a good impression.
A "daily deal" isn't a discount, it's a marketing campaign. It's a way to get customers in the door. What businesses do with those customers is really what determines if they come back or not.
The deal site I'm involved in is still doing well and don't see that changing in the future. We are not nearly as big as groupon or livingsocial but we are well established in the markets we are in.
So that's why I can confidently say the industry is not flawed as there is a huge market for discounts, the problem is the way these large companies managed money that did NOT belong to them.
Contrary to what many people believe here, businesses do actually get lots of customers coming back after redeeming their deal, if they treat customers well and make a good impression.
A "daily deal" isn't a discount, it's a marketing campaign. It's a way to get customers in the door. What businesses do with those customers is really what determines if they come back or not.
The deal site I'm involved in is still doing well and don't see that changing in the future. We are not nearly as big as groupon or livingsocial but we are well established in the markets we are in.
So that's why I can confidently say the industry is not flawed as there is a huge market for discounts, the problem is the way these large companies managed money that did NOT belong to them.
Look up April 15, 2011 - That is what happened to major Poker sites. The US government decided smoking weed is ok, but playing poker online is not.
Pokerstars made/makes an utterly obscene amount of money, even without the US market. When the shit hit the fan, not only did they pay out every cent owed to all their US players and still keep their entire guaranteed tournament schedule/prize pools... they later turned around, bought up Full Tilt, all it's debt and player account balances, paid all that off, and re-opened the site.
Full Tilt went down because they were utterly stupid running their books.
Yes, I'm well aware of UEIGA and the impact it had on the gaming industry.
The reason Poker Stars did so well is because of UEIGA, since this forced Party Poker (and others) out of the US market. Yes they do extremely well and are a profitable company (as far as I know). But what about the 100's of sites like FullTilt that simply fell off the face of the earth one day because they didn't have any money left to operate, let alone pay players? What would have happened if Poker Stars didn't step in and takeover that massive debt?
The point is that they mismanaged the funds and tons of other sites made the exact same mistake.