Sunday, June 7, 2009

Companies Tony Loves: Groupon -- a guest post

This week, we have a guest post from my friend, Evan Miller, who has a very interesting website here. Evan convinced me that this week's company, Chicago-based Groupon, is worth boatloads of love. Groupon offers great deals for ordinary people if only enough people sign up for the deal (find the latest great deal here). But, they're no ordinary coupon company: Because the daily groupon attracts so many customers, Groupon is great for businesses. Groupon is a win for businesses and consumers alike, and that's innovative. But, I'll leave the convincing to Evan.

Companies Tony Should Love: Groupon by Evan Miller
Every group has someone who likes to make plans. I am definitely not that person. My idea of a successful outing in Chicago is any outing where someone--someone who is not me--sends the emails, buys the tickets, picks a restaurant, looks up the bus schedule, checks the weather, prints the directions, and calls me when it's time to go. This arrangement lets me do more important things with my time, such as work on my backhand in Wii Tennis, or rid the Mario universe of fungi and reptiles.

It's no surprise, then, that I love Groupon. Chicago-based Groupon is a decision-hater's dream: every day, Groupon sends you an email with a single bargain offered by a company in the city of Chicago. The bargain could be $40 off a massage, $30 off a bike tour, $20 off a boat tour, or 50% off a tattoo. Then it's up to you decide: yes or no. Are you in or are you out?

Instead of having to sift through the limitless activities nestled among the side streets and waterways of Chicago, instead of laboring beneath the world of opportunities presented in some hulking Guide To Chicago, instead of, once having settled upon an activity, feeling that gnawing ambivalence known to psychologists as buyer's remorse and to economists as opportunity cost--instead of enduring all those pains that form the other edge of freedom--you get a simple email called "Today's Groupon" and a web page in which to put your credit card number if you want to buy it. Groupon has done all the planning and all the haggling on your behalf to bring you a great activity at a great price; you just have to say yes or no and find a time on the next few months to redeem your Groupon.

What's the catch? In order to bring you such great deals--and I have written about underlying economics of Groupon elsewhere--Groupon will only give the bargain if a certain number of other people sign up as well. (The name "Groupon" comes from "group coupon.") So for example, to get $15 off a $25 meal at Friendship Chinese Restaurant, which was the Groupon of May 22, there needed to be 25 other people willing to belly up to the buffet. (Incidentally, there were 1,230 people who bought that Groupon. No joke!) Most of the time, enough people sign up for the Groupon, but it's a great excuse to get your friends to sign up for the Groupon as well so you can all go do something together.

But someone in the group still might want to check the weather...

"Companies Tony Loves" posts describe why innovative companies and business practices make us all better off, and therefore why they deserve our love. "Companies Tony Loves" is featured every Sunday on this blog. If you have ideas for Companies Tony Loves, please let me know. It could never hurt to have more suggestions, and who knows? Maybe you can be my next guest blogger!

1 comment:

  1. Groupon must really be a mixed blessing for a lot of businesses, given how little revenue most of them receive from Groupon and how much strain a Groupon can create in a short period of time.


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