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g” alt=”" width=”150″ height=”79″ />In two and a half years, Groupon has created an innovative but simple social buying platform that has gained the attention of many Internet giants and assisted thousands of small business owners.
After a $6B valuation from Goolge, Groupon rasied $1.2B and created an international strategy of acquisition. Groupon president and COO Rob Solomon said, “We’re building by partnering.” In only a few short months, Groupon has become the leader in almost every international market and is still growing at an exponential rate. According to Lightspeed Venture Partners, Groupon went from $100k in revenue in January 2009 to $10M in January 2010.
What makes Groupon so incredibly successful? After observing the success of Groupon, I’ve identified four principles which answer that question in part, and which you can use when building a social site:
Simple Business Model – Groupon is an innovative twist on group buying that is extremely user friendly. They offer only one deal a day in specific geographical locations. The most challenged Internet users understand the concept within seconds. Many websites today desire a website that has every bell and whistle imaginable. The more simple a website, the easier it is for a user to purchase a product or service.
Outstanding Social Integrations – Instead of creating traditional marketing campaigns that focus specifically on consumer awareness (like company profiles on Facebook and Twitter, print advertising, etc.), Groupon’s marketing strategy focuses on spreading social buying behavior. With every customer purchase, Groupon encourages you to share the deal with friends via Facebook, Twitter, and email. Friends informing friends has a much stronger effect than a company “push” strategy.
Focused on Passions – Everyone loves to save money, and deals and coupons are many Internet users passion. Social sites should be based around interests or passions. A social site thrives on sharing information based on the community’s interests. Because Groupon is based on a passion, it makes the users of the site that much more interested in sharing the deal or coupon to friends.
Aggressive Growth Strategy – According to Forbes, Groupon is the fastest growing company ever. The assistance of major social platforms allows Groupon to get in front of millions of people instantly; additionally, Groupon has created a strategy to tap into a global market. With any early stage social site, it is important to invest in a fast growth strategy. Users will leave a community that is not continually growing and one that doesn’t have a significant amount user generated content. These are four critical, key strategies in building a social site.