They Turned Down $6 Billion From Google, Now They're Broke

[@wallstreetmillennial]

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[@sotonin]

nobody is buying that garbage. stop selling out.

[@StephenGillie]

This video could have been just 3 minutes long. But monetization.

[@minimalistic_banhaus]

A customer you get through a discount is much worse than a customer obtained through normal advertising. More price sensitive and more concerned about maximizing the value they get from their purchase.

[@null6075]

And the percentage Groupon takes from the business!

[@tonycrabtree3416]

Correct. Only discount old inventory or when trying to prop up the books prior to a sale of business.

[@TheGahta]

Yeah though its like most things not that clear cut. In germany supermarkets regularly sell meat at a discount (unadvertised i mean) and gets its cut with the other stuff people buy. Though i admit groupon would be a bad fit even in that case, but if you discount x and can be reasonable certain you sell more of y too you can try that

[@spicy_xinger]

100% thats why luxury brands rarely ever discount and they have a cult following. if you can build a brand that people are loyal to, you dont have to rely on gimmicks

[@TheGahta]

@@spicy_xinger you would be a fool if you think luxury stores dont give "discount" aka "we just overcharge a bit less then usual" to frequent customers Its powerful psychology

[@jonathanj8303]

Groupon had a real big push here (I'm outside the US) a few years ago and then basically disappeared. I think a large part of that was that they were consistently misadvertising deals - you'd buy a groupon deal for 2for1 on meals, and when you turned up, the actual deal with the restaurant was free starter if you bought a full price main, or free drink refills, something like that. Every single one we bought was like that, they were never as advertised, and I was shown enough of the merchants' contracts to be convinced it was groupon lying. Sometimes the merchant honoured the coupon as written, sometimes they stuck to what they'd actually offered. Stopped buying the coupons because it left a bad taste, groupon were obviously just ripping everyone off. I'm guessing most merchants felt the same way because they just disappeared. Good riddence.

[@stavas05]

The samwer brothers are responsible for that

[@robertewalt7789]

I used some good Groupon deals back maybe ten years ago.

[@jonathanj8303]

@@robertewalt7789 yeah, but what I'm saying is that Group were selling more for the price than the merchant agreed to. And then leaving the merchants to deal with the upset customers that groupon had lied to. That's fraud. Plus the merchants were getting totally ripped off, so they stopped using groupon.

[@mrb152]

The glory days of groupon were amazing. No gimmicks at all. Just pure massive discounts.

[@eudofia]

Yep, I have at least a $100 in Groupon coupons that I can't use anymore. I bought a 50% coupon for pest control, only to be told by the company that it was only for new customers. As I had used the pest company before, I had to acquire the service for a full price. And I couldn't and have not been able to use the coupon till date. Same with a lawn fertilizer program. My coupon was only valid a 50% off the first treatment if I bought a one-year subscription.

[@ljohnson1908]

I stopped using Groupon because some merchants would be noticeably upset when you mentioned having one. I once had to get a credit when the merchant refused to let me book a yoga session using my Groupon. She said it "wasn't worth" her time. Later I found out how little money the business makes when partnering with Groupon. However, surely that shouldn't be taken out on the customer.

[@stefanietaushanoff3079]

I liked it at first but there was a pretty obvious point where it stopped working for the merchants. The "offers" started getting weird and unattractive and a couple of times I bought a groupon only to find I'd basically prepaid for something at a normal price but now there's restrictions on redeeming it. At the end everyone involved was cranky.

[@joseornelas1718]

30 of those a day Can be a real pain

[@middleagebrotips3454]

Groupon is fine to sell extra capacity and ONLY for extra capacities, thus the restrictions.

[@theakinyemis2244]

100%! Some restaurants would have separate menus or even who “sections” for Groupon diners - the stigma and attitude from merchants is what eventually put me off

[@jbranche8024]

Few times I used one you had to make sure to read the limitations and restrictions. It was to much work. Used it mainly to test different businesses to see if they had a good product.

[@chewie94116]

As a merchant, Groupon was RIDICULOUS AND COMPLETE WASTE OF MONEY. When we gave 50% off, the company would take 50% of the selling fee. So in reality, we were losing 75% off the actual price instead of 50%. Then having the same customers come back, expecting the same 50% off groupon price is unsustainable as a business. When we told them the regular price which they already knew, they said- "No, I will just wait for another groupon deal from either you or your competitor". Lost thousands of dollars to Groupon and never made even $100 back.

[@roguewavecreative]

Groupon was a weird study in consumer behavior. The avg income of groupon users was surprisingly high. They were deal finders. The prob was these were not people that would come back. This hurt alot of small businesses and over time they stayed away and groupon slowly went down.

[@SilentRio]

So why sign up? Surely the objective of advertising and attracting new footfall / customers was met! Or did Groupon forcibly sign up your business without consent? You saw it, calculated some benefit. If not gone to plan blame the company rather than take responsibility.

[@irfuel]

Groupon did not get the businesses new customers. We tested Groupon. The only people you get in the door are Groupon shoppers. They use the deal (which costs you a lot of money) and never come back. I think not even 1% of those Groupon customers came back to pay full price for anything. And then the hoops you had to jump through to get your deal removed from the platform ... never again.

[@experimex]

@@CheapSushii assume they’re a business owner with inventory capabilties

[@chewie94116]

I agree with you 100%. Same thing happened to our company.

[@jacobitosuperstar]

as a groupon customer, the thing is that the deal seamed so sweet when taken, the normal price looked awfully expensive. And the more expensive the business, the more incentive there is to only go there with the groupon discount. Was great while it lasted. Visited a lot of expensive places with pennies on the dollar. Good Riddance.

[@swagdaddyify]

Groupon catered to broke people. You never should've expected a returning customer when the only reason they showed up in the first place is because they felt they were "getting one over" on you with such a good deal.

[@KinGizzard]

What made me stop being a Groupon? Groupie was that they were sending out anywhere from 5 to 8 emails every day. That was just way too ridiculous.

[@oicfas4523]

Similar for me. The deals also started to get really useless and things I'd never be interested in. Felt like spam so I just unsubscribed.

[@earthdog7900]

I read a lot about the high user Groupon users, people who would not go back to a restaurant without a deep discount. They would just go to the next groupon deal, not a sticky customer.

[@KameraShy]

That is the general risk businesses face when they, themselves, continually offer coupons, discounts, etc. as incentives. Problem is that customers get used to and expect those prices, so the business gets caught in a bind. Thinking of the old BBY coupons every month for 20% off.

[@Altirix_]

usually customers that look for good deals are "cheap" sure your food is good but theres many good restraunts. the point is they are there for the good deal. it was always going to be hard to get that customer back at a significantly higher price than what they got with the groupon voucher. 50% off at some retraunts could easily be a family food costs for a month.

[@terrie001]

I would do that. I only go with the discount. Wont likely go again next time without a coupon.

[@Angelstar7774]

Every time I went into a business saying I heard about them through Groupon they would beg me to pay them directly instead of through them

[@MarkL-we8uk]

I was offered a sales job with them back in 2012, deluded company with lots of jumping though hoops - interview with HR, then some sort of test, interview at head office with some guy who was on some TV show - an Irish giy called Jim (they were upset I didn't know who he was) sales manager and HR manager who I had previously interacted with. All this happened in a couple of days. Then radio silence for a week. I focused on other opportunities and got a job elsewhere. Week later the HR manager called saying they would like to oofer me the role. I never responded.

[@jcman240]

Dentists & car repair shops used to love these things. Give a heavily discounted cleaning/oil change then present an estimate for a bunch of other (probably unnecessary) work. Gag was up when they realized the majority of Goupon users are broke.

[@CliqueOverAnything]

Or they're very price sensitive haha, I am only going to that location due to it being on groupon

[@sentinel151]

😂😂😂

[@cactusjackNV]

@@CliqueOverAnything This, some of the most wealthy people I know use coupons incessantly. Think about it for a sec, if you're broke you can't even afford groupon.

[@Zero11_ss]

Dentists are so shady, never trust them because so many are bad. I had one telling me I need a tooth removed when i was like 25, refused and asked for other options and suddenly there was other things that could be done. Total joke.

[@loupasternak]

@@Zero11_ss a dentist looks into your mouth , and sees a gold mine

[@slodoco]

Think of yourself as café owner. You have a special drink that is on sale with a Groupon. These Social Coupons ran for a day. The place is flooded with people and you run out of the item after an hour of intensive work. The deals were so good, that they attracted all the wrong people, and it made your regular customers despise you because they couldn't come to your café in a steady state. And those other guys getting a freebie or a deep discount? Well, you never saw them again. There were articles about store owners getting burned by this all over the internet around 2010/2011. It's good for a brand new shop, perhaps. But even then you can just hand out coupons on the street, no big deal. I think the shops that signed up with Groupon got burned in the end more than they needed to or prepared for.

[@Sirfrummel]

I never understood the Groupon business model. In 2015 I met some Groupon developers at a Google hackathon, I was a new web dev at the time and I was excited to talk to this team from such an enamored company, but the question that was burning on my mind was "How does Groupon make money?" I was just so confused. They said by guaranteeing a number of discounts sold to merchants, but even with their explanation back and forth it never lined up for me, so I mentally noted to never work for the company... And here we are lol

[@arnezbridges93]

To be fair, this is the same model used by Amazon, Google and Facebook before they switched to Business 2 Business advertising. Amazon still doesn't make I profit I think.

[@abcde4677]

Their profit model is relatively easy: take cuts from each transactions. But merchants ultimately decided it wasn't worth it for them to sell it at discount when shoppers would not return to the store without discounts.

[@hellosammy4105]

@abcde4677 But that doesn’t quite make sense either. Coupons are still a thing even without groupon. If that was the norm, then the whole practice would have died out. But businesses now still issue coupons.

[@abcde4677]

@hellosammy4105 obtaining actual physical coupon vs. buying it on the app is a whole different experience. Former is much harder and takes work while latter is much easier and convenient.

[@totesmcgoatz3365]

@@hellosammy4105printed coupons have less reach and don’t cost you an additional fee beyond printing and processing. I’d say the ideal usecase for Groupon is fairly niche. You have excess capacity you want to get rid of for something vs nothing. The cruise example was a great one. Another is a restaurant that has high swings in foot traffic so you limit your Groupon to your downtime to break even and keep staff busy before your typically heavy period

[@Khigha87]

Greed! 50% of revenue is insane and obviously unsustainable. Talk about grinding the hand that feeds into dust. I really loved Groupon and I used to look forward to their daily deals and emails. It certainly made so many things more accessible to me. From trying new eateries to new experiences like shooting range packages, hot air balloons, horse riding, dance and painting classes. It did a lot to bring attention to small businesses I would have assumed were out of my budget. They didn't realise where their value lay. 50% of revenue from your vendors (a lot of which are small and growing businesses) and turning down $6B is the epitome of greed.

[@basdfgwe]

A friend had a restauraubt cafe, got caught up in the hype and signed up to groupon. Made a massive loss.

[@jeffsetter213]

As a merchant back in the early 2010's I was pitched GroupOn. 2 minutes in, I interrupted the flowery talk about generating new customers & future sales and asked about the fees. 30 seconds later I was laughing and hanging up the phone.

[@MirzaAhmed89]

6:17 literally everyone knows what Band-Aids are, and regularly buy them preemptively in case they have an injury. No one has had to be sold on Band-Aids for years, and no one needs to be constantly reminded that they exist.

[@kpectbi]

I think the business model was wrong. Instead of draconic cut, they should have provided merchants coupon service platform, and take a small percent, e.g. 10% / minimum fee per coupon purchase. It would eliminate merchant churn, and allow freedom of various deals of coupons.

[@BaoNguyen-un1km]

Groupon was a HUGE loss from a merchant stand point. We used Groupons at our business at one point but WE WILL NEVER USED THEM AGAIN. They were quick to put up the campaign but you can’t get a hold of them when you want to take down the campaign. We loss our butt off with them

[@kebuhrogers]

I used to use Groupon to get a discount at the place I was already visiting. So that business lost a huge amount of revenue. A business owner told me that they stopped using Groupon because the deals expire. That meant hundreds of people would come in on the day or days before expiration, far more than the business could service. Many customers left, others saw the business as slow and would not return as a result. Oops

[@henrytang2203]

I always saw Groupon's business model as a way to make other businesses lose money faster. The only exception was reselling goods from Ali at 500% cost price then accepting a 75% markdown leaving you with 125% gross or 25% profit.

[@xiaoka]

Yes. This. If you have a 90% margin and untapped capacity…. It’s not that bad a deal.

[@egal1780]

0:41 if we all learned one thing: if you're on the front of Forbes or a similar news outlet, either sell your shares and flee the country to prepare because your frauf will be uncovered, or sell because this will be the peak of your company.

[@ktktktktktktkt]

correlation vs causation. For companies like this, it's likely major shareholders would be involved in the decision to advertise/be involved with a magazine article. Also, your suggestion makes no sense. There was no fraud. Just not a very good business model.

[@egal1780]

@@ktktktktktktkt there was a Video by Patrick Boyle about that topic. Like for example Elizabeth Holmes and Theranos, or Martin Shkreli...

[@ktktktktktktkt]

@@egal1780 what in my comment does that relate to? There was no fraud.

[@egal1780]

@@ktktktktktktkt It was adressed at "there was No fraud" which is true for this instance, but Not Generally

[@redMaple_QC]

I used Groupon as a service provider to started up my client base. I stop as soon as I could because the fees were just too much. They were greedy and paid for it.

[@CategoricalImperative]

"no need to advertise to our customers again". As a business auditor, these are famous last words of a dying company. I did good selling calls on this company over the years.

[@QthePhysicist]

I can't believe they didn't sell for 6 billion. That sounds like pure greed to me. Or someone was behind the scenes telling them to go public and they'd make 10 billion or whatever. That person would have had some shares in the company that they dumped on day 1. Sounds like a pump and dump to me.

[@JillC]

Early on, Mark Zuckerberg was offered 1 billion for Facebook & didn’t take it.

[@soulmate805]

I don’t think it’s greed. Sometimes you move up so fast, your ego gets in the way of processing reality.

[@chlq35]

all IPO are pump and dump

[@cactusjackNV]

Me thinks Google spread around "rumors" about the company after the deal went south. But Groupon in the end shot themselves in the foot.

[@egal1780]

Now we just need a masterclass for how to do this ourselves, i.e. creating our own "tech" startup and sell it for billions to some fearful and/or optimistic tech company. It's simply absurd what gets financed, what they're willing to buy and for what prices...

[@toolbar12423]

No Masterclass is going to get you there (if they claim to, they're lying). This is all just executing an idea in a way that will actually net you profits or a disgustingly valuation when someone buys you off. How you execute that idea is up to you but it's gotta be done right.

[@egal1780]

@@toolbar12423 Don't worry, It was meant in a sarcastic exaggeration.

[@jonasbaine3538]

Step one is befriending venture capitalists

[@egal1780]

@@jonasbaine3538 though I feel like in 2021 that would've been way easier, theoretically speaking

[@TheGreekSneak]

Uber has LOST almost 10 BILLION dollars (net) since being created. Billionaires can muscle their way into being middlemen for any kind of business. Capitalism today isn't really capitalism. If it were, Uber would have folded before most of us even heard of them. 💯

[@kristoferreinholm3183]

If for any ungodly reason someone wants to know what store at the start 1:28 and 9:30 is it is a Estonian grocery store. The store in the video should be Baltijaama Selver?

[@xiaoka]

I had a friend who had a froyo place that did a successful deal. Thousands of buyers. For him it was ok because his margins were like 80% and the Groupon deal users had to pay extra if they went over the max weight limit, so he managed to make a lot more off of those “captive” customers who were already in line and had their overfilled froyo cup and toppings slowly melting on the scale. Their stores were not usually full, most of their business was takeaway, so there wasn’t a negative impact on their regular sales.

[@xiaoka]

I also knew a girl who worked in sales (store deal recruiter) for Groupon. She said they’d be fired if they didn’t close at least one deal every two weeks. Regardless of how much sales you drove. Very cut throat.

[@veryhuman7472]

tf is a froyo?

[@dinglshingle]

@@veryhuman7472 a dish from tolkiens fantasy novel "the lord of the rings", named after it's protagonist, the hobbit Frodo. you should try it, hobbit food is known for its deliciousness

[@xiaoka]

@@veryhuman7472 frozen yogurt! 🤣

[@ALCRAN2010]

​@@dinglshingleha

[@joeshmoe7485]

wow, imagine passing on $6 billion only to go broke a couple years later. I never used a groupon but some of my friends did. I would never in a million years think a company selling coupons could be worth anywhere close to that. absurd valuation.

[@davidjohnston1799]

They IPOd for $16b

[@kiiltochii1607]

Company selling coupons is worth $0. But a company with an email list and data on millions of customers? Ka-Ching! 🤑

[@deanmason5827]

Bull shit is like candy to a great many consumer's, especially the one's weak minded.

[@michaelsilver253]

I was working for Zipcar back in the Groupon era. They did some kind of cross promotion that led to a shitload of local people to sign up for the service... but due to some kind of coding issue their coupon didn't work for the first couple days, and we had to field the customer service calls during business hours. As a low person on the totem pole I was helping out on the phones a lot. In those days I hungered for death

[@Successor-e5m]

Ohhh.... Do you have Zipcar stories? Would love to hear. I remember they were local and you can get someone from your area on the phone with great customer service. It's trash now😑

[@mistermoneyman8899]

I have been in the MOVING business for 12 years and remember back i n the day when Groupon was REALLY pushing HARD to get moving companies to sign up. Albeit i was tempted to give it a shot, All I had to do was go to their site, do a simple look up of MOVING companies and what their rates were and they were ALL and ALWAYS 50% OFF.... we're talking about going from a $200 move to a $100 MOVING JOB and said to myself.... how do y'all make money off $100?!?!? NOW!!! seeing that Groupon was getting 50% of the cut which I didn't know til watching this video, Makes sense now. Profit margins in the MOVING business are very small Glad I decided to go a different route

[@slodoco]

And after you move them, they aren't likely to be a repeat customer any time soon. In that business it makes no sense. But how do you compete with 100 dollar movers on Groupon? Yikes.

[@ktktktktktktkt]

I mean, good for them turning down Google's 6B offer and later IPOing at a 13B valuation. I'm not sure how much the founders sold but seems they got a good deal.

[@krmr]

Nah that was an idiotic smooth brain move on their end. Just Google how much the og founder CEO is worth today. Obviously he had to keep a lot of shares, every sale since IPO had to be disclosed. Could've been a billionaire. But instead got fired as CEO after the IPO had happened.

[@elymanic3497]

That's if they cashed out.

[@stavas05]

@@krmryeah the founders lost a lot, but it was the perfect move for the investors and most of all the samwer brothers

[@HarishBabuM]

@@elymanic3497 how it was beneficial for the investors?

[@krmr]

@@stavas05 CityDeal was before the IPO, could've still sold to Google and Samwers would've been paid accordingly to their shares. Dunno how much they sold or when they sold on the open market though, for sure it was a better deal for them.

[@vickiephelps5169]

I loved Groupon. I sold classes for 25% of inflated face value. Most of the Groupons were purchased as gifts and groups. Less than 10% of the coupons were redeemed in the 6 month expiration window. After the expiration date I had sold 6,000 classes for $36,000. I also under sold the coupons during the classes. Only 600 were redeemed, so the pure profit was over $30,000. It was a very good year for me.😊😊😊

[@bubba99009]

Yea curious how many go unredeemed. It has to be a high %, especially for services. Food probably had a much higher redemption rate but still nowhere near 100%.

[@BatCaveOz]

One of the problems with Groupon was that vendors would often give customers a differentiated level of service vs. customers paying full price. eg. bad table and service at restaurant, bad room and service at hotel, bad haircut and service at salon etc. I know plenty of people that used Groupon to obtain a service and felt that they got a reduced level of service vs. customers paying full fare. This obviously is unlikely to result in repeat business. The vendor, knowing that the customer is less likely to actually come back vs a walk-in, is inclined to invest less time/money/effort. The customer, having received a poor experience, is unlikely to become a repeat customer. This creates a feedback loop resulting in less profit for vendors and a worse experience for customers. I am not all surprised to hear that they are about to go broke. ***They should have just sold to Google and become billionaires***

[@AlanTheBeast100]

That defeats the purpose of the coupon which is a marketing cost to gain new clients. The real problem was the steep Groupon "slice".

[@middleagebrotips3454]

At restaurants grouponers often tip based on the after discount amount, making for disgruntled servers. In later versions you would see clear terms saying grouponers getting auto gratuity based on pre discount amount. They went ipo and probably became bigger billionaire or multimillionaires.

[@AlanTheBeast100]

@@middleagebrotips3454 IPO means their wealth = the stock value.

[@MTNGear]

Had a bouncy castle business at the time this was popular in New Zealand. They pushed us hard for a ridiculous discount. Think we stuck to our guns and only did 25% but they took further fees. Took the view we'd do it once to get put in front of their mailing list. Was clear it wasn't worth it straight away and there were bloody coupons out there for ages.

[@Lowness125]

I still have one of your groupons from 10 years ago. I am going to call you tomorrow to redeem it.

[@MTNGear]

@@Lowness125 sold my share in it a decade ago so please let me know how that goes 😂

[@lostboy8084]

Honestly raise your hand if you saw a band-aid commercial recently. I think that they like do it once and a while to introduce a innovation or new type which is rarely.

[@trainluvr]

I have had some very good groupon experiences, but also some not so good. A salon charged me a 'groupon tax' so I complained and groupon double refunded the illegal fee. More often what happens is you try out a business that is doomed from the start. They have a bad location, or they are a bar pretending to be a restaurant. Twice I went to restaurants that didnt even accept the groupon because I got the address or name confused with an adjacent business. If people are not returning to a business it is usually because they do not deserve to remain in business.

[@HeavyK.]

They pretended to be a technology company.

[@JohannaDotson2467]

I LOVE this breakdown. There was another financial influencer (bow tie nation) who broke this down last year and said their was unlimited potential and that they were about to explode. “Just know way they could go away”. This makes way more sense! Thank you!

[@tsmall07]

I pretty much stopped buying Groupons when gmail started pushing their emails to the promotions section because I don't see the emails anymore.

[@randomlifts]

You don't want discount customers as a way to run a business.

[@lyth1um]

the restaurents in germany, served smaller portions for groupon customers, cant blame them.

[@tatsuyaarai6029]

Customer information (for targeted ad) and money transaction. It seems like these are the two core cash cow for many tech companies. It is interesting that Groupon didn't seem like to tap into these instead of taking 50% from brick and mortar shops...

[@grahamjones5400]

I rarely use coupons or special offers, its often just a mind game to get me to buy stuff i don't want or need, "Spend $500, get $100 in cash back. Offer ends next month!", or "Get $0.50 off the $20 Widget!". Ill just go to the dollar store and buy the generic widget brand.

[@touchofgrey5372]

As always, greed gets the best of them!

[@Dablooo356]

Former user here: merchants killed Groupon. I distinctly remember several times trying to use a Groupon that was flat out rejected or told I could only use it on a full moon on a 5th Tuesday during a meteor shower during an earthquake. Merchant purposely making it impossible to redeem and Groupon not having customer service or refunding. Would never use again.

[@wouldntyouliketoknow9891]

LMAO the CEO's statement about ACSOI is hilariously full of wishful thinking. The reality of course is completely the opposite. Johnson and Johnson has close to zero cost reacquisition - everyone freaking knows what bandaids are and there is no real competition. Groupon on the other hand is assuming that email marketing actually works. Reality is the emails are totally ignored and after a while the adaptive spam filters start putting it in "clutter" or spam folders. Groupon's reacquisition cost is obviously sky high compared to Johnson and Johnson.

[@sblijheid]

This is a child of when money is too cheap. The business model is a no go. The barriers to entry are too low and the relationship with business partners is parasitical. Either of the weaknesses can destroy the company. I never looked into them or used them and I'm a cheap skate. That tells a lot.

[@Cucumberflavoredmustard]

Groupon pressured the crap out of us to do business. We were doing well enough with regular customers, and didn't want the type of ultra-frugal customer Groupon would bring in. Frugal customers are terrible. Something is always wrong, even when it isn't.

[@bubba99009]

Had no idea they took a 50% commission on every already massively discounted sale - that is crazy and unsustainable.

[@gabriel.casanas]

oh man that's gotta feel bad.

[@bosorot]

Once upon a time . There is a Amazon $20 for $10 groupon deal . I make a total of 100 fake emails and do a self-referral.The end result is a $2000 Amazon GC for $1000 plus $1000 Groupon credit for referring friends. But I did not use most of Groupon's credit since most of the deals are not good even for free. This sum up the good , bad and ugly of Groupon.

[@OperationNonsense]

They turned down 6 billion offer, and cashed in on a 18 billion IPO, sounds like they made the good call and won the day. Post IPO decline only left investors holding the bag and therefore shouldn’t factor into the equation.

[@siddharthbirdi]

They didnt raise 18billion though, they only raised 700 million through the IPO, with Google's offer they would have made much more and Groupon would have been Google's problem.

[@intherift07]

​@@siddharthbirdi No, they got new investors to buy up 700 million dollars worth of the company and because the stock shot up to 18 billion each of the shares the founders sold they sold for 2x the price of what Google was willing to pay. Although the company crashed the founders probably cashed out billions before that. So they made a good call and made much more.

[@siddharthbirdi]

@WeAreCamels I don't know the details of when they sold their shares but if it was a fresh offer then their shares only got diluted, and if they held the shares they would have eventually gone down 99%. Only if they sold at the top would you point be true, otherwise the Google offer would have got them the full amount at one go, albeit at a third of the valuation, but then they wouldn't have to explain to anyone how the money will be used as it would be Google's problem then.

[@blablablabla542]

Tell me you dont understand an IPO without telling me you dont understand an IPO.

[@uvwxyzero]

@@siddharthbirdiNope the founder Andrew Mason is estimated to be worth around $200m

[@HarishBabuM]

Why Google intended to buy this company for 6 Billion dollars

[@Bxdarealest]

The company was basically very scammy and took advantage of business. A business will have a deal for a free beverage and gave them a list of no included beverages but Groupon would say: all your drinks free or something that sounded better. You pay and Groupon makes 50% of the price you paid so they didn’t care. Then tell business that they get 8 since the deal wasn’t selling at $30 so they lowered to 16$. Now you are showing the business your coupon but they say they never agreed to that. Most business I worked with they had cancelled Groupon but Groupon will not stop selling the coupons because they were very popular and made them money. Many business started putting a sign at the door saying : we do not accept Groupon, we do not have a deal with them. So basically Groupon was stealing and making people be mad at these business that weren’t getting any money to begin with.

[@wouldntyouliketoknow9891]

Everyone always thinks that on the way up the sky is the limit, and on the way down the turnaround is imminent. The reality is that the companies are typically reaching peak scale and valuation around the time people are thinking the sky is the limit, and when people think the turnaround is imminent, bankruptcy actually is imminent.

[@MCHuang]

User only decreased by 60% from it's peak? They're doing way better than I thought

[@RussellD11]

As a business, used them once and it was HORRIBLE, never again... Lost a ton of $$$$

[@rebeccaliew2247]

Sad that Groupon came this state...through Groupon, I was introduced to many restaurants & activities I never thought possible to do or experienced. But I admit that I only went back to minority of shops at normal advertising rate due to mainly the distance needed to travel there + portion serving or pax needed to dine at a restaurant/experience a service.

[@Olm-]

the concept for the sponsorship from this video was literally used as an example of how reading in a dystopia would look like in Fahrenheit 451 lol

[@saab9251]

It’s entirely unsustainable and will eventually go bankrupt. But, one big difference in a pay per click ad vs Groupon is that you can directly see a return on the advertising when someone uses that coupon. It also got people to actually show up to your business and try the product. Pay per click ads have a horrific conversion rate for most businesses online because millennials and gen Z are conditioned to scroll straight past an ad without even registering it existed.

[@dagda825]

0:56 the stock chart looks eerily like the dollar purchasing power chart.

[@screenwriterjohn]

I've never had a great meal from a Groupon. Even back in 2011, the half off meals were half off for a reason.

[@8risk]

Yeah becuase Groupon kept half of the already discounted price so yeah

[@OwenPhillipsMBA]

Interesting. With AI, chatbots etc a lot of the copywriting and company acquisition costs could be drastically reduced, so the concept might see a comeback!

[@AlanTheBeast100]

Trying to convince people that a sunk cost is still in the bank. Astounding that the obvious "defection" reasons didn't change their offering to customers (retailers).

[@blingiy]

You did a good job of explaining "Groupon", and why they are declining and will continue to do so.

[@TaoDeChing-ls5gz]

If the founders knew the business model will never be profitable, why they don’t sell to google.

[@spicy_xinger]

has there ever been a tech broker platform that's been profitable? seems like they all make a lot of progress the first few years before people catch on and take what they do in-house. is the business of connecting a product/service-consumer just a business doomed to fail in the longrun

[@alphakevin687]

I guess ticketmaster is doing well, since they are the only one in town

[@bicyclelife7088]

I am a advertising professional and we found our clients who used Groupon all complained that it just trained people to be cheap. They only came for the good deal, and never came back at regular price. So not only did you lose 50% of your money, you spent time and energy, and usually marketing dollars that could have gone towards finding a customer who actually had value. We would move all Groupon spend to Google & Facebook and do any sales internally, where we kept the data, and customer info and not Groupon, who would keep it to themselves. We didn't even get any learnings from the customers, only that they were cheap.

[@joeshmoe9940]

Great content as usual. 👍

[@indianapapi]

50% is way to high of a percentage, similar to Apple's 30% fee for in-app purchases. How do you not see this as a problem and adjust it as your numbers continuously decline?

[@Smoove_J]

I'm buying the dip. BOGO Chili's margaritas hasn't been priced in.

[@bruh_hahaha]

after a series of very unpleasant experiences, I haven’t even opened the app since 2012

[@foto21]

It should have made sense for merchants, but many reneged on Groupons, or expired them, which I know personally drove me away from Groupon ultimately. It wa a great novelty, but then had to evolve, and it wore out, and merchants prob got tired of giving deals to customers who would only come by when it was on sale. This is the problem with the model.

[@cryptocsguy9282]

3:12-3:15 Unicorn in financial jargon means a start up company that has raised $1 billion in venture capital funding without an initial public offering of it's shares

[@manuelr1405]

Kramer put the whammy on it lol

[@redMaple_QC]

The concept is good. The fee structure not so much.

[@ken91773]

“No way, I know what I got” 😂

[@Uncle-Smart-Alec]

Jim Cramer endorsed it,no explanation needed.

[@darrinatorrr]

They pissed people off by sending 10 emails a day

[@jamesstpatrick8493]

They can cut sales people and implement AI to create the writing portion and they call merchants to get new deals

[@crimsonlightbinder]

too late and wouldn't have made much difference even then.

[@Philippe.C.A-R]

Groupon literally killed small businesses forcing them into horrific sales : for example here in the Silicon Valley you have a slew of “customers” only consuming f Groupons to practice yoga. The conversion rate is very low in any kind of business. Not worth it.

[@innovatronixtv5025]

The problem with groupon, is they get 50% commission for all used coupons and if a customer fails to redeem the coupon, they pocket all of it. They are too greedy. Because of this, merchants never renew their deals with them. In the end they just faded away.

[@MavonEast]

In food service I found that people who coupon do so faithfully. That likely means they won't come back without a deal. They follow the discounts from store to store.

[@carsandthings5212]

Customer service is horrible. Bought vacuum once and it didnt come with a key part then Groupon declined to exchange or refund. After this i have never used Groupon in my life. Waste of time.

[@leflann2633]

I love Groupon lollll ima stick beside them

[@paulcooper3701]

My father would quote all the sayings . A bird in a hand is worth two in the bush. The first profit is the best profit. Great example of believing your own hype.

[@juanritanjaya6254]

I recall getting a eye roll from a restaurant when i showed up w a groupon. Now I know why, 50% cut is just ridiculous. Without good merchants your feedback loop is just going straight down.

[@Roccofan]

There is no way that an investment bank peddling this IPO didn’t know the weakness in the underlying business model.

[@kaystephan2610]

The single most ridiculous thing here to me is them turning down 6 billion. If you don't sell for six billion you will never sell.

[@kashjay4489]

So after charging postage per item with no multiple buying options, basic standard delivery options (3-5 days) and next day costs around £9 - £15 (UK). I can see why Groupon's competitors are winning. They haven't changed the business model much since they started, like bulk buying e.g. Costco in regions like Europe for families, etc, use AI to know your customer ....I know it's too late!

[@earthsosad]

havent heard this name for a loooong time

[@bernieoconnor9350]

Tried it once, way back when, didn't work, didn't do it again.

[@TooLateForIeago]

$20 supper? Where did you go, McDonalds?

[@nawwk79]

Google: "Guys, here's $6 billion dollars for your company." Groupon: "No..."

[@ofallnames]

A 50% margin on essentially an email chain with coupons? That’s a better margin than selling crack!

[@radicalrick9587]

*GROUPON was a novelty, a nitch market. A lot of people were like me, we don't have time for that crap. For us, it was just, give me my product so I can be on my way.*

[@kubluu]

Another banger

[@middleagebrotips3454]

The groupon model of advertising is not new. Ive done local ones where the ad company runs a local deal newspaper and i run 50% off coupon deals to pay for their editorial fees.

[@Just-SomeGuy]

They failed because they were greedy, simple as that. It reminds me of eBay and how they have got really greedy with fees. Now they do regular deals to try and retain customers as they are feeling the competition from Facebook marketplace. Now I only ever use eBay when they are doing a deal, never when they aren’t doing a deal, as the fees are sky high!