Groupon, a start-up based in Chicago, offers daily deals in which people can score reduced prices and discounts on acupuncture, meals, opera tickets, Segway tours, even teeth cleanings — as long as enough people participate.
For example, a recent deal in New York offered two one-hour massages at a local spa for $75, a purchase valued at $150. But in order to receive the discount, a minimum of 60 people needed to agree to buy it by the end of the day the deal was offered. Otherwise, it would not go through. More than 1,000 people ended up purchasing the deal at the reduced cost.
Groupon, which got off the ground in November 2008, initially catered only to bargain-hunters in the Chicago area. Since then, the service has branched out to 24 cities, including New York, San Francisco, Seattle and Washington, D.C and recently in Europe the opening of London office.
To build excitement, the company offers one deal a day for each city, similar to the model used by Woot.
The idea for Groupon grew out of an earlier company that Mr. Mason created in 2007 called The Point, which tried to rally groups of people behind charities and social causes. Instead, members started using the platform as a way to get group rates on memberships and subscriptions. Mr. Mason took notice and created Groupon, raising $5.8 million in financing from the venture capital firm New Enterprise Associates and angel capital.
So far, nearly 400,000 coupons have been sold to the 750,000 people signed up for one of Groupon’s city-specific newsletters.
Mr. Mason said the company hoped to generate $100 million in revenue over the next 12 months. “We have a lot of exciting plans and ideas about where we can take this,” he said.
Published June 26, 2011
Category: Campaign, Interaction, Most Popular, Social Network
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