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by TuringNYC
3525 days ago
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Problem is these companies have two sided acquisition costs -- the vendors and the customers themselves. Even if the vendor acquisition cost was zero using your technique, you still need to acquire users (along with the 50 other Groupon clones.) |
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A little background... the company was in the television industry. The original product was "clickable TV," in which they'd managed to deploy a small Java app to set top boxes over the cable lines, which could display a small icon appear at the bottom of the screen. When a user pressed 'select' on their TV remote, they would get an email sent to them with more information. It launched in a small US city and they approached local news channels ("click now to get the full story") and local businesses ("click to get a coupon code") to sell it.
The product did work (even if you DVR'd the program, which was my favorite feature), but most of the local business that were contacted said "cool idea, but we don't have any TV commercials, so come back to us if you can do something else."
When it proved too hard to sell the clickable TV product (perhaps obviously -- even in 2010 it was 10 years too late), they decided to reach back out to the local businesses with a new idea... a Groupon clone. We ran it for a while and it did "okay," but not well enough to keep the lights on, and the company closed its doors soon after.