Groupon CEO: “We Drove Well Over $2 Billion To The Small Businesses Of Main Street”
I have heard several stories from small businesses that they have been screwed by Groupon’s business model. Groupon encourages small businesses to offer large discounts in the form of a daily e-mail coupon and when people buy it, Groupon takes a 50% cut of that lower price. However there is no denying that Groupon has encouraged customers to go into restaurants and businesses that they would not normally find out about on their own. “We drove well over $2 billion to the small businesses of Main Street, helping them to overcome challenging global economic conditions,” said Groupon CEO Andrew Mason in a note to stockholders.
Mason said that he is excited about the “enormous opportunity” ahead for Groupon after three and a half years of rapid growth.
“Although there are risks in moving too fast, companies often don’t survive long enough to apologize for moving too slow,” Mason added in the letter filed with the SEC today. “By moving quickly, we reached a scale that has helped us solidify our market leadership, and accumulated data that is enabling our future and helping us continuously improve the experience of our customers.”
Groupon has lost half their value since their IPO in November because of concerns that the company would be able to turn their fast growth into profit. Shareholders were also concerned about the company having to report a “material weakness” in financial controls and lower fourth quarter revenue reported than previously stated. By the end of 2011, Groupon sold over 170 million Groupon deals to over 33 million active customers on behalf of over 250,000 businesses.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry