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Groupon: The $12 Billion Pivot

Groupon is scheduled to launch an IPO tomorrow and some say it could have a valuation of $12 billion.  Regardless of Groupon's valuation and how you feel about the company, Groupon is a great story on the power of entrepreneurship.  The business you are working on today could be one "pivot" away from a billion dollar idea.

Four-and-a-half years ago I interviewed with the people behind Groupon, specifically Eric Lefkofsky and Brad Keywell, who provided the early funding for what became Groupon (I learned days later that my family was moving to Boston, so I didn't proceed with the conversations).  They were speaking to me about opportunities at their portfolio companies, one of which was, a site focused on effecting social change through collective group activity.  While ThePoint still exists today, it was the initial business that spurred the idea behind Groupon. 

It is amazing and inspiring to think that four-and-a-half years ago Groupon didn't exist and now Wall Street is valuing it at $12 billion.  The concept of the "pivot" has been popularized by Eric Ries' Lean Startup Methodology, which loosely defines a pivot as changing the strategic direction of a company based on user feedback.  A business (regardless of the size) should be constantly testing its operating assumptions by getting customer feedback every step of the way.

To all of you entrepreneurs, keep listening to your customers, think big, and execute quickly, and within a few years you could be the next Groupon as well.

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  • Nov 4 Posted 4 years ago Julia Q. Zhu (not verified)

    Groupon China will fail – it’s only a matter of time. From the day Groupon entered China, it has been a bumpy road — one that now appears to be approaching cliff’s edge.

    Some analysts say this is the result of Groupon’s overly confident business model. Others say that its failure can be traced to the nature of China’s group-buying industry: with the market already divided among so many companies, even a company as successful elsewhere as Groupon can find its impact limited. No matter which view one ultimately subscribes to, what’s becoming increasingly clear is that Groupon is finding narrowing space for itself in China’s crowded group-buying industry.

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