[gallamine]

I'm an investor at the TechShop in the Raleigh-Durham area. We ran two Groupon deals over the past 9 months. Both had very good results (~280 sales each, at $120/Groupon. Groupon took ~20%). We were VERY careful to structure our deal such that we would make a profit on each deal - membership is fairly cheap per customer. Our main cost is instructor time for classes, and we have a minimum number of people/class. Furthermore, the business is such that getting a potential customer to visit the TechShop is very valuable (the TechShop has a certain wow factor), so we were counting on the discount given via Groupon as the cost of getting someone to visit and try the shop.

So far, the results have been mixed, with about 20% of the Groupon users signing up for additional months of shop access. That's better than the other steep discounted deals we've offered.

So, for a business like TechShop, Groupon works really well. We'll be working with them again.