If Groupon Flipped Their Model, Could It Unleash the Power of Networks?
As I’ve been working on the supplemental infographic for the Future of Money project, I noticed that all of the interesting new sites and ideas for value exchange are essentially types of marketplaces. There are peer to peer marketplaces now for gifting, sharing, bartering, trading, renting, lending, and investing. Most are operating on the level of exchange between individuals, but very few at the group level. (spider sense tingling: opportunity?)
I poked around to find examples of group buying sites, but the area is still rather sparse. A few examples in China (Taobao, liba, TeamBuy, getgogive), and the largest example I’m aware of here in the US is Groupon.
Groupon works kind of like Kickstarter for discounts, leveraging “collective buying power.” They partner with local businesses in your area to offer discounts on products and services, then post a new deal every day. The deals are activated only after a minimum number of people commit to buy.
Sounds like a great model. Groupon apparently thinks so too – they’re looking for a $3 billion valuation. (saw tweet yesterday, don’t know accuracy of source). Either way, it made me think that while it’s interesting to present a daily offer to a consumer, what would happen if you flipped the model? What if you allowed people to pool around a desire, and pitch it back to the supplier?
It seems like this could be an effective way to not only get discounts on products that are usually cost prohibitive (i.e. solar panels), but possibly to assist people in self-organizing for group investment opportunities.
If it had some functionality that allowed you to specify your preferences and what you care about, it could send you alerts when an offer that might interest you had been proposed. It would also make sense if it could semantically understand offers and bundle similarly worded offers or duplicates. Then provide the option to share the offer across your social networks in order to build critical mass to get it activated.
I did find one example of a company that seems to be trying to do something like this, GotoGroupBuy, but it doesn’t appear to have much traction. (maybe not enough of a “social” aspect?)
No one has made an elegant version of this just yet, but as our social profiles become more robust and public, our social networks more connected, and our creativity around leveraging collective intelligence on the rise, it seems only a matter of time before these types of marketplaces exist.
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Yes yes yes. I’ve heard others mention something like this….there was a tool that does this for musicians/speakers to know which cities want them to come play that worked a tilt of this model. I think it’s helpful for building local movements, along with Meetup.com’s new localization platform for low-friction event organization.
“If it had some functionality that allowed you to specify your preferences and what you care about, it could send you alerts when an offer that might interest you had been proposed. It would also make sense if it could semantically understand offers and bundle similarly worded offers or duplicates.”
Seems like this will be a natural next step for Facebook groups. As sufficient FB groups are organized a group behavior/preference/need graph will emerge. Marketers will then be able to target these FB groups directly. I imagine Zuck’n'Co are carefully contemplating how best to make groups most accessible to external marketers – search, group marketplace, particular tagging. Will be fascinating how they leverage FB Credits in concert.
“Then provide the option to share the offer across your social networks in order to build critical mass to get it activated.”
Done right, this will could speed the pace and up the efficiency of commerce. Downright emergent.
As always you’re a few steps ahead of them. I just started a book that gets into these principles (The Power of Pull, John Seely http://amzn.to/aDG98u). Pretty good so far. Flipping even traditional purchasing models through networks have the potential to unleash a networks natural efficiency. I’m really excited about all the experimentation going on in this space.
There are actually several companies that have been trying to work on this pull model of deal aggregation for a while now. One that comes to mind is UForce (www.theuforce.com). I am excited to see what other bright entrepreneurs create in this space as it is developing rapidly. Nice post and thanks for sharing…
What you envision, Venessa, does exist – at least here in Italy.
Groups of consumers get together to buy stuff they all need, at the best price they can negotiate from suppliers. It’s called “gruppo di acquisto solidale”, abbreviated G.A.S.
Here is a link to the National Connecting Network of G.A.S. website – their English page of presentation.
http://www.retegas.org/index.php?module=pagesetter&func=viewpub&tid=2&pid=10
Wikipedia also has a reference to them
http://en.wikipedia.org/wiki/Gruppi_di_Acquisto_Solidale
where the suggestion is made to combine that page with the one on “Community Supported Agriculture”. Personally, I don’t think that this would do justice to the G.A.S. movement, as their purpose goes beyond the field of food and agriculture…
In a similar vein, http://www.quirky.com/ works to help end-users co-design things they need, and aggregate demand for these things. So you can effectively pool demand for things that don’t yet exist! (hat tip: Shane Walker)
in the interest of the ‘souprhyme’ commandent ‘honour thy peers’ – futily trying to raise the standing of single cellers in our community of beingz since .. take your pick from innumerable iterations of day one – i wonder, .. do you realize group is duh short for grow up?
take a deep breath … now think fallujah and all the f*ckers who distract and subtract from your abstract groundwork to make life take really really different DIEwreckshuns …… breath out slowly and fully …. you are now prepped and primed to take this take on the ‘matt’er …..
For somebody who has no problem rubbing shoulders with DARPA this
approach cannot possibly be too distasteful
august 28th 2001 – Matt (‘proffr’ – the Assasination Politics Progress reporter
and APpliance promotor):
All that said,violence is one of the last taboo’s.There is so much hypocrisy
about it. Why not look at it from all angles? The internet, digital cash and
encryption/anonymity offer us new ways of keeping truely horrible violence to
an absolute minimum. If open source assasination politics worked the way I
want,the evildoers would be intimidated and run. This would require a lot of
people get involved but that would have the advantage of not having to fuss to
much with tiresome technicalities. Ive just been reading some Tim May and I
think jim bell got a lot from him.
ideosphere.com/
The Foresight Exchange Prediction Market
Affiliated with Consensus Point (www.consensuspoint.com), the leading
provider of business prediction market and collective forecasting solutions.
tradesports.com/ —–
November 18th 2008: It is with regret that the owners of TradeSports.com
decided to cease the operation of the TradeSports platform.
http://en.citizendium.org/wiki/Cypherpunk
quotes Jim Bell .. who served time (prolly on trumped up charges) cause he
made what the establishment justifiably conceives of and classifies as
threatening statements, no matter what colour instinct and or lighthearted
jocularity the tone of voice conveys
Imagine for a moment that as ordinary citizens … see an act by a government
employee or officeholder that they feel violates their rights … If only 0.1% of
the population, or one person in a thousand, was willing to pay $1 to see some
government slimeball dead, that would be, in effect, a $250,000 bounty on his
head. Further, imagine that anyone considering collecting that bounty could do
so with the mathematical certainty that he could not be identified, … Perfect
anonymity, perfect secrecy, and perfect security.
http://www.activism.net/cypherpunk/crypto-anarchy.html
Timothy C. May
http://www.cypherpunks.to/faq/cyphernomicron/cyphernomicon.html
http://www.cypherpunks.to/faq/cyphernomicron/chapter15.html
the reputation chapter .. via nother (stark raving genius) nutter i just found:
http://www.hongpong.com/
Cryptome’s man Young: “The Internet is a giant spying machine right now”: Windows 7 Law Enforcement Sensitive Guide & more Lawful Interception compliance manuals: Welcome to the Machine!
Isn’t it already happening with Carrotmobs around the world (e.g. http://berlin.carrotmob.de)? They just would have to scale. And what work’s for the environment / altruistic reasons, works for for the benefit of the group / individual with some savings too.
/max
Vanessa
This idea isn’t knew and while I can’t remember the names of startups in this field, there were a few during the first wave of the internet.
One might imagine consumers placing provisional bids for goods with a maximal price and maximum duration, and for companies to come and bid on those things. The issue is that of assessing quality of a bid and not just simply a price dimension, on group on you are offered a haircut at a particular institution not just a discounted haircut.
I think what you’re describing sounds like The Point, which is what Groupon was before it became Groupon.
Except perhaps with a focus on deals- the Point was more focusing on things people wanted to see happen and who would pay for it (should my workplace get a new fridge? rather than X company should discount their fridges).
Interesting thoughts. Funny how good ideas grow and evolve and sometimes come back to where they started when the market it ready…
Groupon has tempted me a couple of times, but it’s not very big here in Leeds in the UK as yet. Love the concept though. I’d have shares already if I could get my hands on them! It’s the mashup of two very strong emerging themes. Local, and the stream of social conciousness. Local businesses have the potential to turn a product launch into a local talking point if Social Networks continue their growth into the main stream.
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There’s a little catch 22 built in though – what gets people to go in the first place if there are no deals? And on this model, you need quite a few people to propose a deal to make it worth it for the deal offerers.
you would need quite a few people…..
where are there quite a few people….
facebook?
social networks barter your attention for their service – FB makes tons of money, – what is conclusion? the value of your attention and data far exceeds the cost of providing the service. i.e. – your opportunity cost of selling your attention/data far exceeds the economic value of the services you consume
Your 100% correct – big chicken egg here, likly why only few companies have been able to pull of – need an existing critical mass or concrete strategy to get one quickly
1bog.org (1 block of the grid) is an attempt at group purchasing of solar technology. I think they missed the point though; they have become a tool for a specific set of solar developers.
Power purchasing agreements are the sort of financial instruments taking advantage of future expectations. Ties in to the future of money as well; if we know we are going to spend a certain amount of our revenue on energy, then energy becomes currency.
South Korea and the Philippines are in negotiations around nuclear plants paid for by power purchasing agreements. The scope of aggregating demand is infinitely broad.