Last Tuesday (10/19) our class had the rare opportunity (it seems to be a recurring theme up here, don't you think?) to visit a company that is both young and extremely successful. "Groupon" (group + coupon) is a company that has spurred out of The Point. The concept of The Point was originally intended to be based on collective social activism, but never had the success Groupon has (and probably will ever have). Just to give you little background on the founder, Andrew Mason, here's his brief profile (halfway down) on Groupon's website.
Groupon is a fantastic upcoming business that has been launched in 2008 and has increased IMMENSELY during the two years since starting up. We were able to have a meeting with the president of Groupon, Rob Soloman, who was previously a vice president of Yahoo, and it was an amazing experience to talk with him. Since starting up, Groupon, according to Forbes magazine, has been the fastest growing company. EVER. Here's the article from Forbes. Even over Google, Yahoo, eBay, you name it. In 2008 there was a staff of 7 people, and today the company employs 2700 people. Walking through their building it was seriously like a small city living on that particular floor. There were ROWS and ROWS of twenty-somethings working (all on Apple iMac's) , but in a very laid back manner. The atmosphere within the "office" seemed more like a school's computer lab when the monitor (or student working there) isn't present. It was loud, dysfunctional, fun, all of which while the people were staying extremely engaged in their work. It was a perfect work/play combination. On the walls there were dry-erase boards where employees can draw and be creative within the office (there also was a lot of pranks that were being made between co-workers). At least from what I saw when walking through the office there seemed to be a comradery between the people working and there were cliques working within this "city" of Groupon connoisseurs...Grouponoisseurs!! Did I just come up with a new word? One last thing to add to this thought...Groupon has been hiring (according to Rob's recent figures) about 100 people per month, so if YOU want to be involved with this exciting and young company, drop in a resume to them! It's worth a shot!
Groupon features an unbeatable deal on the best stuff to do, see, eat, and buy in a city. By promising businesses a minimum number of customers, customers get discounts they won't find anywhere else. The theory is based off "collective buying power" and has businesses wanting to join because it is a way to get more customers that they have never thought possible. I've (and probably some of you) have experienced this type of "collective buying power" at my internship, working with the Carrotmob group in Evanston, Illinois (here's the actual link to the Carrotmob event in Evanston I helped promote). According to Wikipedia the Carrotmob is a:
A form of consumer activism where a community buys a lot of goods from one company in a small timeperiod to reward a business's commitment to making a socially responsible change to their operations. Often the changes are of an environmental nature, such as energy efficient upgrades.
From this idea, Carrotmob is a unique concept that is able to engage both the customers and the businesses because they each are seeking to have their respective needs/wants met. The businesses are trying to sell more products, become more profitable (through energy efficiency, as well as appeal to a demographic of the population that is environmentally conscious. The consumers are merely using their collective buying power to initiate socially responsible changes in the businesses they would, most likely, buy on a regular basis anyways. ANYWAYS, back to Groupon.
You can subscribe for Groupon for free and designate which city you're in (as long as Groupon offers their services to that city), then each morning you will receive a "Groupon" for a different product/service (typically a small and local business) where the deal is typically around 50% off the original value. The businesses use Groupon as new-age marketing strategy, where they reach many more customers (Groupon has around 25 million subscribers) than they would have ever imagined.
Groupon isn't a place that businesses are necessarily looking for short(er)-term profits because of how the profit-sharing system is set up. Groupon usually receives 50% of the profit, and the business receives the other half. The companies that are looking to do business with Groupon are looking at the longer-term growth of the company, because they often will tap into markets that have never been explored. In the short run, they're going to break even or make a small profit, but more importantly they get the publicity that conventional advertising (tv, billboards, signs) can't compete with. With Groupon, the businesses KNOW that they are catching the public's eye, while advertising (on posters, billboards, etc) can't be quantified in our society's new age of marketing. If a company puts up a new advertisement, it is difficult to attribute an increase in sales to that distinct advertisement. With Groupon, the company knows EXACTLY where an increase in sales would be coming from.
Isn't this such a simple idea?? If coming up with an idea like this is so simple, why can't I do it? Groupon also has been expanding to other countries, 26 to be exact, and Rob stated that he has hoped to grow to 35 within 6 months. Rob was referring to managing the fast-paced growth of Groupon as just "holding onto the reigns" and trying to control (but not limit) the growth of the company. With the status of being the fastest growing web-based company in history, the next few years are going to indicate how Groupon will maintain their "first mover advantage." Imitators have been popping up all over the place trying to offer the same service, but don't have nearly the subscriber base that Groupon has. Maybe you can expect to see the Groupon deals in your town sometime soon (hopefully Galesburg or Peoria too...where I'm from)!