GET CODE: Website: Groupon.com
It was in 2006 that Andrew Mason left his studies to found a website called The Point. He was backed by investor an entrepreneur Eric Lefkofsky. But, what was the point of the point?
The Point helped to stoke the enthusiasm of fundraising. Most people will not give to a cause unless they are invested in what the cause is. People want to feel as if they are making a difference, and if they cannot see that happening, they are reluctant to donate to a cause. As part of the website, Mason and his colleagues created what they would call the ‘tipping point’. When there was enough money or signatures, then the plan would be put into action (kind of sounds a little like a future website, doesn’t it?).
The website was doomed to fail. There was not enough focus, and soon everything became too widespread across the site, and visitor numbers began to decrease. Mason had to let some of his work colleagues go, and the idea seemed lost. However, there was one idea which worked, and the more Mason and Lefkofsky thought about it, the more appealing it sounded.
When buying power was involved, more people invested and were interested. The Groupon seed had been planted and was beginning to grow. The investors in The Point wanted some of their money back, so they pushed Mason to turn this website into something viable. Mason found businesses which wanted to sell lots of products at a discounted rate. These products would be sold daily. “Get Your Groupon.com” is what he named the idea.
The idea worked. Mason encouraged by the early promise, partnered with some of the original staff of the point to call around as many businesses as they could to create more of these deals. They then began to set ‘tipping points’. Only when a deal reached a certain number of consumers, would it go ahead (just like the fundraising in The Point). If the product or service reached the tipping point, then Groupon would take a cut of the profits, and the business would make some money.
In October 2008, Groupon sold its very first deal: buy a pizza and get one free. From a humble beginning of a 5000-person mailing list, when the deals first started rolling out, Groupon now has over 30 million subscribers in North America Alone.
In December 2010, Groupon turned down an offer of $6 billion for the company. Not many people turn down Google, but they did. Groupon continues to grow, and the mission is to be the very best at what they do.
It is amazing that a failed idea could be a catalyst for a billion dollar company. The company created a win-win situation for everyone. Consumers get great deals at great prices, and businesses get more customers and more profit. Groupon started out as The Point, with a completely different mission. When the company branched off into the world of vouchers, who could have predicted what would happen next?