party like it's 1999

Groupon CEO Andrew Mason Sits in the Middle of a Multi-Billion-Dollar Ecosystem

In Hollywood, a pitch to producers might go, “It’s just like The Hangover, you know, but with chicks!” To get venture-capital funding in the tech industry, the pitch goes more like, “We’re just like Groupon, but [insert negligible added bonus here]!” In its short time on earth, Groupon has already spawned almost 200 copycats, including Amazon’s Living Social, and similar offerings from Facebook, Bing, and Yelp. That’s partly to do with Groupon CEO Andrew Mason’s success and winsome personality and partly the fact that companies have been waiting years to muscle in on the billions in local online advertising (think: 50 percent off coupons for a coffee shop/spa/restaurant offered to the people that actually live in that neighborhood). But mostly, it has to do with a me-too mindset permeating the tech industry — okay, and Hollywood.

Groupon has already spawned two new sectors of companies in its ecosystem: (1) start-ups that aggregate all those 200 Groupon clones and (2) start-ups that help you with unused Groupon coupons. (About $5 billion will be spent on daily deals this year, but estimates are that only 80 to 90 percent of people actually redeem the coupons.) As investors have thrown money at those symbiotic “recouping” and aggregating start-ups, they also spawned their own clones.

So you have companies like Yipit (and its twenty-some clones) that aggregate the deals, and companies like DealsGoRound, CoupRecoup, and Lifesta helping consumers to redeem unused ones. But the ecosystem doesn’t end there: A New York company called Group Commerce (a Groupon … but for publishers!) just signed up the New York Times, Thrillist, and Daily Candy to offer deals on products targeted to its readers and content rather than bad, old unreliable advertising. Welcome to the next subsector!

Mason, however, is already on to the next big thing: cash registers across America. According to BusinessWeek, Groupon is in talks with the makers of electronic payment manufacturers like Verifone to have a Groupon button right next to the credit card swiper, to make it easier for small businesses. Up next: how about a subsector of parasitic start-ups that recycle those cash register buttons when it turns out Mark Zuckerberg bests Mason at his own game?

In Groupon’s $6 Billion Wake, a Fleet of Start-Ups
Former DoubleClick Execs Launch Group Buying Platform For Publishers [NYO]
Cash Registers May Get a Groupon Button [Businessweek]
For coupon overreachers, a chance to recoup []

Groupon CEO Andrew Mason Sits in the Middle of a Multi-Billion-Dollar Ecosystem