Groupon: cash & crash.
Groupon’s current model isn’t sustainable. The founders and early investors know this which is why they’re using rounds and an IPO to cash out as much as they can. Large numbers of businesses are attracting customers who are only interested in coupons and deals and would never otherwise be patrons. As a web developer/designer it’s widely accepted you never engage a client by pricing to the bottom. It’s the same in business - coupon’s are great but coupon shoppers are only loyal as long as they’re getting coupons. And Groupon’s deals aren’t sustainable at massive discounts.
Don’t get me wrong - it’s a clever model. But the fact is they’re riding a wave of timing and novelty and printing money along the way. I suspect the cash & crash isn’t far behind. And as always … only time will tell.
