So I'm sure everyone here knows what deal of the day sites are, curious to hear what your opinions are on the industry as a whole.
I've done my research and have my opinions but i'm curious to hear what WSO has to say for it.
Would you start a site like groupon if you knew how to hustle and market it on both ends and wait on IB for a bit? or is the bloodsucking cubile c#nt lifestyle of IB too attractive to pass up on for most of you?
HOLLA
You're probably a little too late to the party. Unless you offer some new technology, platform, marketing strategy etc., which it doesn't sound like you do from your post, then go to banking, learn a bunch and start a venture with more experience. Even if you do have some of the above statistically you are destined to fail regardless. If you had a truly innovative idea that would be one thing be just to be a "me too" isn't that impressive.
lol, u serious? this deal market is gonna crash and burn
Do banking. The deal daily market is more tapped out than Pamela Anderson. You'll never be more than another "me too" site (at best). Not to mention that after you crash and burn, you're going to have a really hard time getting "back" into IB, because a daily deal site isn't even the kind of startup crash and burn that will get you respect. Pass.
There is room in the space for another player. It is unfortunate that the site with the worst model was the one that gained the most traction. Fill the holes that Groupon has left in the industry.
Your going to need to provide more tools for merchants. The biggest of which is being able to not only track the details of running a specific deal but also being able to track customer acquisition rates and customer return rates. You also need to keep in mind that for a small business they can not afford to lose money on a deal and hope those customers come back in 6-12 months. They need to see a return shortly after running the deal for it to be worth it for them.
What this translates to is building the deals around the merchants own needs. A mom and pop restaurant has different margins then a neighborhood hardware store ect.. Finally you need to address the issue of one stop shopping of daily deals which often times results in the businesses simply losing money with no return.
Ofcourse, groupon/livingsocial all of those clowns simply cannibalize business's right now which is what gives this industry such a bad rep.
I agree with the notions that deal of the day is going to crash and burn but I think people are overlooking the niche market aspect of it.
so far its the response from you guys is what i anticipated hahah but my question is forget about becomming the next groupon. How could you sell one of these sites that's GENERATING a revenue with a decent subscription base already, say a couple hundred thousand people.
Lets say you had 100,000 members (for argument sake) and produced 10,000 in sales a month, how hard would it be to sell it to someone at a multiple of 10? easy? moderately hard? impossible?
It wouldn't be impossible. If your profitable why not run with it and try and grow it?
Interesting that the guy calling Groupon/Living Social clowns is a guy in a dorm room fantasizing about a get rich quick scheme that isn't even contemplating anything original. If it wasn't for them you wouldn't even have an idea. Whereas these guys are not only industry leaders they have made a shit load of money (regardless of whether or not their model will crash they have actually achieved something).
Assuming you can get into banking take that route; you have much to learn.
This whole thread reminds me of this recent Tech Crunch article: The New Silicon Vally Douchebag
http://techcrunch.com/2011/06/17/the-new-silicon-valley-douchebag/
[quote=ke18sb]Interesting that the guy calling Groupon/Living Social clowns is a guy in a dorm room fantasizing about a get rich quick scheme that isn't even contemplating anything original. If it wasn't for them you wouldn't even have an idea. Whereas these guys are not only industry leaders they have made a shit load of money (regardless of whether or not their model will crash they have actually achieved something).
Assuming you can get into banking take that route; you have much to learn.
This whole thread reminds me of this recent Tech Crunch article: The New Silicon Vally Douchebag
http://techcrunch.com/2011/06/17/the-new-silicon-valley-douchebag/[/quo…]
Thanks for the article (Seriously) but I ain't fantasizing in a dorm room.
Don't assume, it'll get you into trouble in the future. I'm launching a site on monday, what city are you in maybe you can subscribe
@ke18sb
in your opinion where do you see the deal of the day industry heading?
The industry is building a terrible reputation with merchants. Groupon had a great first mover advantage, but every one of their critical metrics (like avg spend per deal and avg deals bought per member per month are plummeting). Additionally, there are anywhere from 800 - 1000 Groupon clones out there, depending on source. This is a massively crowded market and margins will not stay where they are now. Read the series of posts on TechCrunch by Rocky Agrawal on the sector, not pretty.
If the site is already built, then go ahead and launch, but I wouldn't bet my life savings on it. There may be some alternative models that successfully develop that will be more merchant friendly and have less of a churn and burn aspect, but like I said before, this is a very crowded market, and there are almost no barriers to entry.
I'm all for entrepreneurship, but unless you have some very unique twist, I'd look elsewhere.
As far as your question about selling a daily deal site, don't count on it. Who are you going to sell it to? Almost every tech major already has their own product. Google, Facebook, Amazon, etc. have all launched sites. As mentioned in my other post, the barriers to entry are too low.
If you can get to scale in some interesting market niche, there may be a vertically focused buyer, but why wouldn't they just build their own given their existing customer base and name value?
I'm not sure what you mean by how easy it is to sell at 10x, but you aren't going to get 10x revenue. Also, is your revenue number pre or post split with the merchant?
Sorry to be negative, but I've already seen too many of these companies looking to raise money. That said, best of luck to you.
@TechBanking
Since i'm launching tomorrow and already have a leg up on it i might as well tell you my vertical and thats luxury goods, not necessarily like LV/Prada/Hermes but upper end goods and services that groupon and all the others neglect to touch on.
I actually really appreciate your input, its really insightful and coincides fursure with my thinking. I havn't bet the farm on my site but i've invested minimally.
The 10x revenue is based on post split
but at the end of the day, all i;m thinking about is how am i going to sell this website as i don't plan to run this for the rest of my life. In terms of making it successful and bringing in the business/revenue its happing already and we havn't even launched yet, simply because of my team but the real question is, is who is going to buy this puppy in a few months down the road.
What area of tech do you think is underrated that people are neglecting and has potential for some explosive growth?
If you'd like to PM me, I'd be happy to look at your site post launch and give you my thoughts. I've spent a good amount of time on this sector recently.
It's not overlooked, but companies that figure out the best ways to enable the mobile wallet are, in my opinion, going to make a ton of money in the next couple of years. The issue is that there is a gap between now and when smart phones have NFC chips. Google's idea to use a sticker is stupid. PayPal already tried that with Bling Nation, which failed. There is a ton of interest in the sector, but there is a clear need for innovation to bring some of these concepts to market. Payments is not an area to take lightly though...Peter Thiel made some interesting recent comments about this in an interview.
LBS, which has now been hyped for >5 years, finally seems to be at a tipping point. People that figure out good ways to monitize LBS apps will make money. SoLoMo (if unfamiliar see the Mary Meeker presentation) ad integration will be a big opportunity.
My favorite part about tech is that there are hundreds of avenues that the market can take, and I find it interesting to see where things will fall. If I had (what I thought was) a sure fire idea on where to make money and how to execute from a technical perspective, I would drop my banking job tomorrow and pursue it.
It seems like everyone is focusing on the first four categories of the buy model:
http://tutor2u.net/business/marketing/buying_decision_process.asp
Facebook, Google, Amazon, Apple, Foursquare, GroupOn, Living Social, Yelp, Square all focus on disrupting buyer behavior with mobile technology. I'd like to see a service that helps merchants manage post-purchase behavior. Something to consider, especially if you have a daily deals site focusing on expensive luxury goods.
This is a very interesting comment. You are right, the entire daily deals space is disregarding the final point at this time. The real value in this space is to show merchants how to better interact with and market to their customer base and that has been completely missed by the market leaders. If you can provide customer data and analytics to the merchants, they can begin to find value add beyond simple foot traffic. This should be the next phase of development in the daily deals market.
I do disagree about Yelp in this regard as they started with #5 and are moving forward, good insight though.
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