Remembering Groupon

seirinkan.jpgToday I stumbled upon a bunch of the recent news about Groupon firing CEO Andrew Mason. I went looking for my own anti-Groupon blog post from right before its IPO. Tracking it down made me finally back up my two Posterous blogs (sorry to see Posterous go, always liked it better than Tumblr personally). Anyway, here's the Groupon piece, from Jan. 15, 2011.

Leads and Loyalty, or Just More Juice for Groupon?

As Groupon anticipates a $15 billion IPO and investment bankers fight for their massive cut of anticipated revenues from this cash-out move, I've been thinking about the fact that while I hear about Groupon all the time, I've never heard from a friend or coworker about a great business they discovered because of the social discount service.

The problem with Groupon's massive group discount gimmick is that is designed to build loyalty and market share for Groupon, not the small businesses it relies on to provide real goods and services. In this way, it's just as much a fraud as the investment bankers now salivating over its imminent stock sale. The web is full of stories about businesses that were not prepared for the rush of customers that Groupon brought in (does Groupon actually give good advice to its customers about pricing and volume?), and not full of stories about all the great repeat business at regular prices. 

Groupon has legions of fans, including some business owners happy with the flood of traffic it can bring. But I just can't get excited about it.

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