They were the fastest company EVER to hit a billion-dollar valuation.
Their revenue grew 22,000% in one year.
Then they refused Google's $6B acquisition offer.
Now, no one knows if they'll survive.
The crazy story of Groupon's meteoric rise — and devastating fall 🧵
Their revenue grew 22,000% in one year.
Then they refused Google's $6B acquisition offer.
Now, no one knows if they'll survive.
The crazy story of Groupon's meteoric rise — and devastating fall 🧵
2008: The financial crisis hits.
Businesses are desperate for customers.
Consumers are hunting for deals.
Enter Andrew Mason with a revolutionary idea:
What if we could guarantee businesses customers by offering massive group discounts?
Businesses are desperate for customers.
Consumers are hunting for deals.
Enter Andrew Mason with a revolutionary idea:
What if we could guarantee businesses customers by offering massive group discounts?
The timing was perfect.
Groupon acted as a middleman, connecting local businesses to customers through deeply discounted deals.
The model was simple: Businesses offered huge discounts, and Groupon
took a commission on each sale.
But no one predicted what happened next...
Groupon acted as a middleman, connecting local businesses to customers through deeply discounted deals.
The model was simple: Businesses offered huge discounts, and Groupon
took a commission on each sale.
But no one predicted what happened next...
By 2011, Groupon had grown to:
• 150 million subscribers
• Operations in 35 countries
• Fastest company to reach $1B valuation
The growth was so explosive that Google offered $6B to acquire them.
But Groupon declined. This decision would reshape their future:
• 150 million subscribers
• Operations in 35 countries
• Fastest company to reach $1B valuation
The growth was so explosive that Google offered $6B to acquire them.
But Groupon declined. This decision would reshape their future:
Their confidence wasn't unfounded - initially.
Their 2011 valued them at over $12B.
The company's revenue had grown an astounding 22,000% to $713M in 2010.
Their subscriber base exploded from 3.4M to 83.1M in just one year.
But beneath this growth, problems were brewing:
Their 2011 valued them at over $12B.
The company's revenue had grown an astounding 22,000% to $713M in 2010.
Their subscriber base exploded from 3.4M to 83.1M in just one year.
But beneath this growth, problems were brewing:
The first major issue? Merchant relationships.
Groupon promised businesses new customers.
But these weren't loyal patrons - they were one-time deal hunters.
Businesses started realizing they were losing money on Groupon deals.
The economics weren't sustainable:
Groupon promised businesses new customers.
But these weren't loyal patrons - they were one-time deal hunters.
Businesses started realizing they were losing money on Groupon deals.
The economics weren't sustainable:
Merchants faced a tough reality:
• Deep discounts to customers
• Commission to Groupon
• Result: Significant losses on sales
As the economy recovered, businesses started questioning if these losses were worth it.
Then came the second blow:
• Deep discounts to customers
• Commission to Groupon
• Result: Significant losses on sales
As the economy recovered, businesses started questioning if these losses were worth it.
Then came the second blow:
The economic recovery changed everything.
Businesses didn't need deep discounts anymore — and consumers weren't desperately seeking deals.
Groupon found out the hard way...
Their entire foundation was built on recession economics.
But their biggest challenge was internal:
Businesses didn't need deep discounts anymore — and consumers weren't desperately seeking deals.
Groupon found out the hard way...
Their entire foundation was built on recession economics.
But their biggest challenge was internal:
They expanded too aggressively.
By 2011, Groupon had 8,000 employees with half in sales roles.
54% of operating expenses were in marketing.
Translation?
They were burning cash for growth, believing profitability would follow.
The market wasn't convinced:
By 2011, Groupon had 8,000 employees with half in sales roles.
54% of operating expenses were in marketing.
Translation?
They were burning cash for growth, believing profitability would follow.
The market wasn't convinced:
Their first quarterly results after going public?
A $37M loss.
Investors started questioning their fundamentals.
But instead of fixing their core business, Groupon made another critical mistake:
A $37M loss.
Investors started questioning their fundamentals.
But instead of fixing their core business, Groupon made another critical mistake:
In 2015, they spent $69M to acquire OrderUp and enter food delivery.
They partnered with Grubhub in 2017, accessing 55,000 restaurant partners.
But they were competing in an already crowded market.
The result was devastating:
They partnered with Grubhub in 2017, accessing 55,000 restaurant partners.
But they were competing in an already crowded market.
The result was devastating:
By 2024:
• Revenue had fallen 80% from peak
• Less than a year of cash runway remained
• Profitability remained elusive
The company that once turned down Google's $6B was now worth a fraction of that.
But there's a crucial lesson here:
• Revenue had fallen 80% from peak
• Less than a year of cash runway remained
• Profitability remained elusive
The company that once turned down Google's $6B was now worth a fraction of that.
But there's a crucial lesson here:
Today, Groupon operates in 27 countries.
Q1 2023: $121.6M in revenue.
They're focusing on local experiences and services, trying to reinvent themselves.
But they're still searching for sustainable profitability.
The lesson?
Q1 2023: $121.6M in revenue.
They're focusing on local experiences and services, trying to reinvent themselves.
But they're still searching for sustainable profitability.
The lesson?
There's a deeper truth here:
Markets change. Economics shift. But trust endures.
Groupon's biggest mistake wasn't just their business model.
It was failing to build lasting relationships with their audience.
Let me explain:
Markets change. Economics shift. But trust endures.
Groupon's biggest mistake wasn't just their business model.
It was failing to build lasting relationships with their audience.
Let me explain:
Groupon built something that their customers used cyclically.
But once the recession faded...
Their customers had no use for them. They became less relevant.
Which is why this story resonates with me a ton:
But once the recession faded...
Their customers had no use for them. They became less relevant.
Which is why this story resonates with me a ton:
We've spent the last 1.5 years building a way for founders to never lose relevance.
For them to build trust & reputation at scale so customers come to them ALL the time.
The method?
For them to build trust & reputation at scale so customers come to them ALL the time.
The method?
Building an authentic personal brand.
When you become an authority in your niche, you create a perpetual moat around your business.
You're always relevant — and you always have a constant stream of customers.
The best bit?
When you become an authority in your niche, you create a perpetual moat around your business.
You're always relevant — and you always have a constant stream of customers.
The best bit?
You don't need millions in marketing spend.
You don't need to rely on temporary market conditions.
You just need to share your authentic insights and experiences.
Because in a world of uncertainty, authenticity is the ultimate competitive advantage.
So:
You don't need to rely on temporary market conditions.
You just need to share your authentic insights and experiences.
Because in a world of uncertainty, authenticity is the ultimate competitive advantage.
So:
Founders: We’ll build your personal/company brand on 𝕏 (and beyond) without you lifting a finger.
To date, we've already helped 60+ founders get 2+ Billion combined views.
Interested in how we can do this for you? Book your free discovery call here: form.typeform.com/to/JWuXNkxQ?ut…
To date, we've already helped 60+ founders get 2+ Billion combined views.
Interested in how we can do this for you? Book your free discovery call here: form.typeform.com/to/JWuXNkxQ?ut…
Thanks for reading! A bit about me:
In 2023, I was a banker in London when I found the opportunity of the decade: Personal Branding.
So, I dropped everything to build @ThoughtleadrX — a premium media agency designed to build personal and company brands.
Follow me for more content like this!
In 2023, I was a banker in London when I found the opportunity of the decade: Personal Branding.
So, I dropped everything to build @ThoughtleadrX — a premium media agency designed to build personal and company brands.
Follow me for more content like this!
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We’re looking for top writers for our agency:
• Generalists
• Crypto/Web3
Note: English must be your 1st language, and you must be able to work in US time zones.
Want to work with our amazing portfolio of founders? Apply here: notion.so/Creative-Direc…
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