Groupon Inspires Emulators: The Phenomenon of Fast Following

Regardless of the way you feel about Groupon, one positive effect of the company are many startups emulating their model. According to Jessica Bruder in “In Groupon’s $6 Billion Wake, a Fleet of Start-Ups”, the effect is called fast following. Fast following is “the idea that copying a blockbuster start-up yields fewer risks and potentially great rewards”. I consider this “fast following” positive because the examples given in the article are start-ups that expand on the Groupon model. As a reminder, the Groupon model is “team up with a local merchant, send out an e-mail blast pitching a discount coupon for the merchant’s product or service, and keep half of the revenue that comes in”.

These are the examples given by Bruder:

Emulators who send out deals based on your demographic.

From sexual orientation to race to food choices, you can receive deals based on your demographic from emulators representing that group. Jodi Samuel and Allen Ganz, created Jdeal. The sight is focused on deals for the Jewish community and by Jewish centered businesses. They have 8,000 subscribers and are expected to make $500,000 in revenue for their first year. There split is 60-40, 60 for the merchant.

Those representing local, often ignored, locations.

Last year, Rob and Wendy Jaffe, brother and sister, started Conejo Deals. They were inspired from the lack of deals within their region of Conejo Valley, CA. Their company focuses on their community, reaching out to local customers and local merchants. They have 10,000 subscribers, and have made $700,000 revenue so far. Their split is 50-50.

Specialty emulators

This year, Adam Jacox and Jason Casperson started PetSimply. They give out deals for specialty food, hygienic products, and toys for dogs. They were inspired by the small amount of Groupon deals for dog owners. They have more than 10,000 subscribers.

Companies that are the extended hand of Groupon

The company featured in this area is Yipit. The site brings together all daily deals for its subscribers. The company has “raised $1.3 million in venture capital” and has about 150,000 subscribers. This company has also inspired similar clones of its model.

I left out smaller references to companies, but please read the article for more info. I listed the purpose for the featured companies (exception: Yipit), because the one single thread in their creations is they filled a void in the Groupon model. Groupon sends out deals for many markets internationally, and there are going to be consumers that are not receiving deals related to their needs. This doesn’t mean Groupon is flawed but that they probably can’t do everything. Hence, some of their emulators are filling in the gaps. To me, they aren’t copycats but people taking a good model and expanding to make it better. But, of course, there are some companies that are straight copycats and do nothing different with their service; these companies weren’t mentioned in the article.