NEW ROUTES THROUGH CAPITALISM
busy running the day-to-day business, so it is often important for me to step in and help if needed.
of Groupon coming; we at Groupon have all spent the last three years working really hard at managing the growth. Its one of those things where when you BT: What did you see missing in the have a high growth company, you’re almarket that sparked the idea of Grou- ways trying to catch up because things pon? are moving so quickly. Each day, our
!"#$%&'(%")*#%)%"+,"%,-'./"% 0'12)$&3%&'(4-#%)5.)&6%/-&+$,%/'% 0)/0"%(2%7#0)(6#%/"+$,6%)-#%1'*+$,% 6'%8(+095&: EL: At the time, there wasn’t really anything like Groupon out there. There were sites like Gilt doing flash sales, but nobody focused on local business and services – in particular the idea of the tipping point where people in the community can come together. The idea early on was that merchants could sell hamburgers, for example, at 50% only if they can get 100 customers. Good contact between Groupon and the merchants was necessary. Even when ThePoint first started, the power of the tipping point was important. BT: Did you foresee the exponential growth of Groupon? How did you/do you tackle this growth? EL: No one could have seen the growth
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BUSINESS TODAY FALL 2010
focus is to tackle the day’s issues and make sure we don’t take our eye off the ball.
EL: We are focused on the highest rated merchants with the best reviews, best reputation, and most customers. Those are the people you want to run on Groupon – where the people will want to buy those high value discounts. The top merchants were our focus back then and what we focus on today. There’s a very long list of people wanting to run their deals on Groupon. We have a challenge to get the best people. What differentiates us is that we have been fortunate to feature the best merchants over and over again. BT: Have you seen a positive or negative impact on small businesses using Groupon? Is there a chance for those businesses not necessarily well-known in the community to be on Groupon?
EL: There’s a lot of diamonds in the BT: How do you plan to sustain prof- rough, a lot of merchants that offer reits and stability for Groupon in the fu- ally great services or food that many ture? people don’t know about. We may put a merchant on Groupon and shine a EL: Groupon is stable today. In terms very big flashlight on that merchant for of profits – Google lost money for a that day, which can spark their busilong time before it made money. It is ness. People are starting to realize the common for large tech companies to Internet, especially the power of the lose money before things turn around. community on the Internet, is really We’ve been at this for 3 years and con- important. You have to find a way to tinue to focus on thinking long term. get your name out there. Traditional forms of advertising aren’t working BT: How do you reach such a wide anymore; for example, advertisements variety of companies? How do you in the yellow pages or street posters are decide what companies to work with? not getting merchants the traffic they What is the process for striking deals? want to get. We at Groupon are really