2010 Year End Awards: My Company of the Year – Groupon

They looked Google in the face and said “no thanks”. They are the fastest growing company – EVER. They have anchored the campaign to make America deal conscious. We are talking about Groupon, the Chicago based deal-of-the-day company, who has taken the United States, Brazil, France and UK by storm.

Pittsburgh native Andrew Mason believed in the idea and had 1 million dollars in seed money to develop it. And develop it he it.

They are expecting over 500 million dollars in revenue for 2010.

The idea just works. But the only problem is that the idea is so easily duplicated. Groupon’s competition seems to be doubling by the day. Sites like livingsocial, jumponit, and others are multiplying by the day.

Now, the question is this. Is Groupon for your business? The answer is… it depends. Some companies have said that Groupon has been the best thing that’s ever happened to them. Their stores have had traffic increase by the boatloads. It does make sense though. If you are a new business and you want to get people thru the door, Groupon may work for you. Interesting fact is Groupon works generally with 1 in 7 businesses.

However, make sure you can handle the influx of people. Imagine if you have a small restaurant that may fit only 20 tables. Now you have done a Groupon special and all of a sudden you have 1000 new people coming through your doors. If your service is bad, Groupon users will let you know.

Via blogs. Via forums. Via your site.

The good side to Groupon users is that they will buy a coupon – just because it’s a good deal. Groupon knows this. In fact, the typical Groupon customer is primarily composed of young, educated, female customers the deals are often focused on the health, fitness and beauty markets. This explains why I primarily see Salon and Spas.

But as a business you have to decide if the investment is worth it. You have to pay them 50% of the deal you do. Lots of businesses feel like they can’t absorb that cost. Some have lost money. Others consider it a marketing expense and a good one. With the analytics that Groupon provides, you can see clearly alot of information you just don’t get from advertising in a newspaper, magazine or billboard.

Like or not, Groupon seems to be here to stay. But I like the fact this company has stared down some big boys (Yahoo and Google) and stayed true to their revenue model.

They have branched out to do-it-yourself stores where they take less money. They have apps for the iPhone, Android and now BlackBerry.

Keep your eyes peeled on these guys folks. I like what I have seen from them, and that’s why they are my company of the year. Check out some of the articles on Groupon in the news.