How was it that Groupon was able to become a billion dollar company despite so many similar sites and seeming easiness of copying whatever is unique about their model?
UPDATE: There seems to be agreement that the proximate factors for its success are great sales, great marketing, and the first mover advantage. Still, it seems to me like this isn't enough to get a billion dollars ahead of the competiion in most markets.. Usually you need a genuinely different product to do that. So I guess what I'm wondering is the economic logic that produced this.
The idea I've been tossing around in the comments is that this is a market where network and reputation effects make the first mover advantage and good marketing create a feedback loop, where the product becomes more valuable the more people use it. This exists in other industries but perhaps the huge advantage of Groupon is due to the extreme potency of this effect in its market. Would be interested in hearing your own thoughts on whether its success is due to the particular economics of its market and if so what's your analysis?