Full Disclosure – I am a HUGE fan of what Andrew Mason was able to create with Groupon.

Like many others, I thought he was nuts for passing on Google’s $6 billion dollar offer but let’s be real, that decision was probably made more by the investors in Groupon than Andrew himself. AND…to be fair, current market cap of the company is nearly $7 billion – even with a share price that’s dropped from $26 to $10 since their IPO in November last year.

BUT…is this Daily Deal space really a sustainable, long-term business?

Well, it looks like even Mason himself thinks the answer to that question is… NO!


Yep! In his Letter to Stockholders last month, Mason said they have a new mission

“Our Mission: To Become the Operating System for Local Commerce” – Andrew Mason

WOW! There you go! Straight from the horse’s mouth!

One of the biggest criticisms of Groupon’s business model is that they never really cracked the code of local commerce – at least not in a scalable way. Local Commerce is simply too labour intensive, as Groupon’s high overheads would attest to. And that was with a pretty simple product – ie: Daily Deals. Now, they plan to create an entire ‘Local Commerce Operating System’? How labour intensive do you think that’s going to be?

Personally, I really hope they succeed. I do think it’s a HUGE mission to take on. Still, few would deny that the Daily Deals space is trending down. If that trend continues, Groupon as we know it today will surely die a slow and painful death.

Maybe this will be their saving grace?