Groupon May Be Poised for a Collapse

If you know me, I'm not one for sensational headlines just for the sake of publicity.  So I chose this headline because this guy makes a strong case for exactly that.   If you're a small business owner considering doing business with Groupon, you owe it to yourself to understand more about this potential business partner - and that's what they are, in a sense.  (Disclaimer here:  I started my own Groupon competitor, a 'daily deal' site called Long Beach Deal of the Day
that I haven't promoted heavily thus far, but that's because my consulting business has kept me so busy, NOT because of competition from Groupon.  So trust me, envy or 'sour grapes' is not the motivation for this post.  It's only that I want my fellow small-business owners to be aware of what risks are posed by dealing with this leviathan.)

Groupon has what everyone understands by now is a very lucrative business model.  But this is the first time I've seen anyone break down exactly what they're doing.  And he does it now with espionage or stealth; he simply reads their own legal agreements and talks with merchants who've done business with them.    Speaking of legal agreements, he even dedicates another article to breaking down the legalese in their contract.    This is priceless, by the way, because most of us don't keep a lawyer on retainer to review our legal agreements, even though we sign them all the time.  Please be very careful before you sign one of these.  He makes a strong case for the agreement being written strongly in Groupon's favor.

He calls them essentially a loan shark.  Strong words, I know, especially for this darling of the tech investment community.  But please withold judgment till you read the very strong case he makes.  It's almost enough to make me want to put some real effort into promoting my own daily deal site just to give local merchants a decent alternative to these guys.