Groupon, Once A Great Idea–Now, Not So Much
Do you remember getting those daily emails from Groupon back a few years ago? I did too. Boy what a star the company was–the fastest growing company in the history of the US, I was told at a conference where their CFO spoke glowingly, bragging about the thousands of new hires and their incredible increasing sales and valuation.
Fast forward to 2012: In a series of articles in the WSJ, Groupon’s fortunes were laid out, and it’s a sadder story today. Early investors including Marc Andreeson have cashed out, and there is a stream of top salespeople leaving the Chicago headquarters for new jobs elsewhere.
Andrew Mason, Groupon’s CEO, tried to buck up spirits last year by having the top gun sales people meet over dinner. But then he forgot to order any dinner so they had to settle for a meeting in the top floor dining room with take out pizza. Can you say “Disrepect?”
Google approached Groupon in 2011 and made a $6 billion offer to buy them outright. They turned it down. They went public, despite Andreeson’s saying that the IPO could turn out badly when their questionable revenues were scrutinized. Since the November 2011 IPO Groupon’s stock is 75% down, and analysts are comparing the company to Facebook and Zynga, who are also 50-70% below their starting share prices.
My personal experience with Groupon was that as a cafe owner, it’s not a good deal in any way–we sold 170 $10 gift certificates and were paid $2.50 apiece for them. It never moved the needle for us and didn’t help our business from having to close in 2011. It just brought a big surge of Groupon-holders in the last few days of our existence trying to cash them out.