Groupon Investors Flee..Are Facebook Investors Next?

In June of last year, BEFORE they went public, I predicted:

Prediction: Groupon will not only the fastest company to generate $1b in revenues, but also to hit $1b in sales and go bankrupt.

Today the Wall Street Journal reports that Groupon investors are running for the hills.

Some of the early backers of Groupon Inc., including Silicon Valley veteran Marc Andreessen, are heading for the exits, joining investors who have lost faith in companies that had been expected to drive a new Internet boom. 

The verdict is out on Facebook. They still haven figured out how to monetize all of those 900 million users yet.

I think they could be sitting on the next big thing but havent taken advantage of it yet.

They still have to get around that pesky "like" lawsuit first.

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Groupon Is Officially Toast

 Once valued at $30B, Groupon's IPO is struggling to be valued at $10B.

How did it get so bad?

My prediction is coming true: Groupon will not only the fastest company to generate $1b in revenues, but also to hit $1b in sales and go bankrupt.
1. There is NO barrier to entry
2. The business model just doesnt work in the long run
3. The companies that already have access to millions of online users and touch them every day (Facebook, Google, Amazon) waited to see what works.

I think everyone knew Groupon and the group buying space was in a bubble, nobody wanted to admit it though.

FaceBook and Twitter were showing nutty revenue growth and Wall Street wanted ANYTHING Internet 2.0ish to bring to market.

Andrew Sorkin discussses the "Red Flags Missed at Groupon"

Here's a beauty:
And Groupon’s filing shows that when the company privately raised $950 million in a pre-I.P.O. round in January, it paid out $810 million of that to its investors and employees, a red flag for any investor. (Mr. Lefkofsky and his wife took home about $319 million of the total.)(check please!)

Perhaps the Occupy Wall St. people should take a look at this:  The cynical reason that the banks stood by Groupon and its accounting shenanigans is most likely the expected fees from the offering.

Even if Groupon’s I.P.O. values the company at $10 billion instead of $30 billion, the banks will probably walk away with hundreds of millions of dollars.

 What happens next?

Perhaps Groupon will generate revenue from licensing their IP, but Tippr seems to be taking a stand against that. Then there's pesky mobile application issue. What happens when consumers want real time group buying specials delivered to their mobile based on their location? Groupon and ALL of the group buying players might have a problem with that from these guys. Don't know if it makes a difference yet, but one of the most successful licensing powerhouses in the world agreed to manage their IP portfolio.

 Group buying is just a commodity like business but that doesnt mean it can't be profitable. But to make money with it, you need to be different than the rest.
Here's how to make a group buying campaign work










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Does This Kill The Groupon IPO?

 This should be the final nail in the coffin for Groupon's IPO.

Here's How To Make A Group Buying Campaign Work

Attention all group buying users , there's a reason why group buying campaigns for restaurants fail..the current business model doesnt work.

You can't give away $50 worth of food for $25 UNLESS you have a follow up plan. There is a way to use this cheap advertising and make a group buying campaign kick start your business.

Here's how you make the group buying effort work:

Group Buying Industry Is Definitely A Bubble

Yes it's a bubble without a doubt.

File this under "Are You Kidding Me?"

Groupon IPO proposed valuation is $30B valuation, and today the valuation for Living Social IPO is $15B.

This entire space is a commodity with no barriers to entry.

The two largest media/social sites, Google and FaceBook have launched their own group buying initiatives.

Prediction: Groupon will not only the fastest company to generate $1b in revenues, but also to hit $1b in sales and go bankrupt.

Am I missing something?



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Groupon Gets Into Pawn Business

Apparently the founders of Groupon saw the writing on the wall and have backed the next big thing in ecommerce, pawn shops.

Lightbank run by the founders of Groupon led a round of financing for Pawngo

The Pawngo business model, as CEO Todd Hills explained it, is aimed at people who need between $1,500 and $15,000. They send in information about items they wish to pawn and Pawngo’s valuation lab in Denver returns an estimate within an hour.

How about creating or funding a site that provides a secondary market for groupons?

You have to wonder how valuable the Groupon email subscriber list is and what other "deals" they could offer.

Story from All Things Digital





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Groupon IPO Just Lost A Lot Of Value

Instead of buying Groupon, Google decides to enter the already crowded group buying space.

Groupon, Living Social, GottaHalfIt and others are just commodities and there is no barrier to entry to this space.

A Groupon Killer is coming and will completely disrupt the group buying space.

Google Enters Group Buying Space




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Internet 2.0 Is Officially Here

Interesting story on BusinessInsider.com.

After Groupon has almost completed its $950m raise (valuing them between $6-7B), there is a much bigger story.

The increase in big financial firms backing Internet startups. Why?

We think it's another sign of the internet finally turning into the internet -- becoming big enough that huge new businesses can be built overnight.

Low cost of capital, quick return on investment and worldwide consumers.

full story


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