The Story of Groupon & its Daily Deals

Richard MacManus: Is there a particular type of person that uses this product a lot, in terms of the demographics, or is it pretty broad?

Ken Pelletier: I think it’s pretty broad. It makes it a fun product to work on, where there’s a really broad appeal. We have a pretty good handle on our demographics, but there’s fairly wide spectrum. We know that skews toward women [and] it’s a fairly young audience. But we offer [retail] products and we’re in a number of different cities, so that makes the spectrum of demographics pretty wide.

RM: Since the launch, have there been any particular usage patterns that have surprised you as the product has grown? Things that you perhaps weren’t expecting when you launched the product…

KP: We’ve had a really strong word of mouth element to our growth. I guess it’s no surprise, but it’s one of the things we thought about in the beginning – and to try to tune for. People like to share a deal with friends for a variety of reasons. Maybe to help them save money, or maybe they want to plan to do something together. Or for a lot of social reasons. It’s an easy thing to do, whereas on The Point when we were doing collective action, it’s a little bit of a higher bar.

So it certainly is a high level of social sharing and we see lots and lots of activity on Twitter and Facebook. So in subtle ways we try to optimize for that.

Twitter and Facebook

RM: Facebook and Twitter have become extremely popular in the last year or two, so has that changed the way people use Groupon?

KP: I think so, yeah. I think there’s a natural shift towards people using those different types of media to share – which we are certainly happy with. So we make all of that possible right from the site.

We watch those [platforms] and they are really, really active. There’s a lot of hype [about] Twitter in particular and Facebook as well. It’s a little bit easier to see [results] on Twitter, if you get a live search going and you watch references to Groupon. It’s pretty active, so it is certainly a big factor.

Focus on Mobile

RM: In April, you had a big investment into the company and I know that a lot of that will be used for expanding into different markets [i.e. new countries and cities]. But in terms of the product itself, are you planning to expand the product – for example targeting different devices or creating new features?

KP: Yes, absolutely. Of course, part of that is to expand and we’re expanding rapidly. We’re in 30 countries now, something like 250 cities internationally – including about 100 cities in the US. We’re growing rapidly and hiring for expansion. But a big part of that is certainly going to be focused on the product.

There are some big things that we’re doing and things that we’ve announced already, like personalization of deals.

Mobile is a big push for us. We’ve got a whole team of mobile developers and we are already on Android and iPhone. We’ve got a mobile website as well. We’re seeing a lot of growth in that area [and] we think it’s a really natural fit. And there’s certainly a trend in the industry toward mobile.

One of the things that I see as a challenge is to keep the simplicity which we think is one of the key parts of the recipe that makes Groupon work. It’s a pretty simple interface, it’s easy to use. So we’re going to defend that and not just add features. We’re investing pretty heavily on features that don’t change the way the user acts, like a personalization engine. It doesn’t compromise that simplicity. [But] there’s a lot of complexity and sophistication that goes into that. It gives a better over-all experience. At the end of the day, you’re [still] presented with a single deal per day.

Those were the kinds of things that we’re working on, plus lots of things that we’re not announcing yet.

RM: Thanks Ken! Readers, let us know in the comments if you use Groupon or similar ‘deal of the day’ products. What’s been your experience of it?

Discuss

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