I was reading this article about Groupon in the CS Monitor. Which starts from the assumption that the significantly decreased proposed valuation of Groupon in their IPO to $12+/- million from $25 +/- million is a reflection of significant problems in the company.
Many other concerns have been raised, including:
- Bad service experiences by purchasers of the coupons
- Bad experiences related to ROI and service level expectations by advertisers
- Emergence of significant levels of competition (including spurned romancer Google)
The general conclusion of the author was that Groupon simply grew too fast. "Growing too fast" is rarely seen as a problem by those of us involved in Start-ups. Is that a cop-out answer -- or are their problems simply a symptom of growing too fast? Or . . .
- Was it an issue of managing expectations?
- Is it an issue of scaling in a manageable way?
- Is this concerns just normal chatter instigated by jealous competitors?
- Does the model of inherent flaws?
- Did it already meet it's inherent market cap?
What do you think are the lessons to be learned by start-ups from the "Groupon" example?
