It’s a concept perhaps too simple to get prickly about who originated it, but in November 2008 Groupon launched a daily deal site that offered steep discounts for Chicago merchants, provided enough people committed to buying the deal online that day. In the year or so since, the company launched in more than 30 additional cities, became profitable, and raised a $30 million Series B round.
With 2.3 million subscribers receiving daily emails and 1.6 million coupons sold to date, Groupon has heft. Businesses love getting swarmed by hip insidery customers who’ve already committed to spending money (and Groupon says its customers spend an average of 60 percent above the
value of the coupon). Once you grok the collective buying power idea, the term Groupon starts to seem almost generic.
Like the many online sample sale sites that have sprung up to mimic Vente-Privee, the recessionista-friendly Groupon now has a crop of clones. By now, if you live in a major U.S. metropolitan area you can get 5-10 Groupon-type email newsletters a day. (If you’re a person who likes spa services, you could make out especially well; salons and massage therapists seem to have fully jumped on the Groupon sector’s bandwagon.)
Along with the daily deal email format, each one features bright design, witty write-ups, integration with Twitter and Facebook, ample citations of Yelp reviews, a big click-to-buy button and a countdown clock. Here are some of the ones I’ve found in San Francisco:
So how big is the greater Groupon economy? Yet to be seen. Collective buying emails fit in between proven one-deal site successes like Woot.com and Steep and Cheap and hip localized newsletters like DailyCandy and Thrillist. But some of the Groupon wannabes are venture-backed as well. LivingSocial has raised venture funding — some $10 million from Grotech ventures and Steve and Jean Case. TownHog, which had formerly tried its hand at virtual betting under the name DotBlu, has raised $2.25 million from Maples Investments, D.E. Shaw, Jawed Karim, Kevin Hartz and Keith Rabois.