Groupon is one of the fastest growing companies. Ever.
How did the pioneering daily deals site reach the point of a $750 million IPO in just two years? Well, it wasn't easy. In fact, Groupon almost failed before it ever existed.
Groupon stemmed from a different site, The Point. Founder Andrew Mason and his investors soon realized The Point was headed toward failure, and fast.
The coupon/daily deal idea was a final attempt to save a company so far gone, it was in the process of handing money back to investors.
Magically, the desperate attempt worked, and it spawned the fastest-growing billion-dollar company in history.
This article was originally published on March 4, but with the news of the IPO, we decided to spruced it up.
In 2006, Andrew Mason founded the would-become-Groupon company, The Point
Andrew Mason was in the midst of completing a public policy degree at the University of Chicago when he received a $1 million investment offer from Eric Lefkofsky.
Mason left school to start the company that would later spawn Groupon, The Point.
The Point's mission was to fix problems with online fundraising and the "Tipping Point" feature Groupon uses today was born
The Point's mission was to improve the online fundraising experience. People were hesitant to contribute money to causes if they didn't think their money would make a difference. They were also skeptical if they felt they were sole contributors.
To resolve these concerns, Mason and his colleagues created the "tipping point."
The "tipping point," set by the fundraiser, was a certain amount of money or signatures needed for the plan to actually go into action. Fundraisers could then see how many other people were donating money, and they could be certain their donations were being put to good use. Credit cards wouldn't be charged until the goal was met, removing all of the donor's risk.
This feature should sound familiar -- it's the whole premise behind Groupon today.
Sadly, The Point wasn't a focused enough idea, and people weren't buying into it. Mason found himself in the red.
The problem with The Point is that it didn't have enough focus.
Mason told the Wall Street Journal, "It's this huge, abstract idea. You can use this platform to do anything from boycotting a multinational company to getting 20% off a subscription to the Economist...That's the big problem with it."
See the rest of the story at Business Insider
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See Also:
- Say What You Will About Groupon's Finances, But It Still Looks Smart For Turning Down Google's $6 Billion
- The Problem With Trying To Figure Out How Often Businesses Run More Than One Groupon Deal
- Meet The Soon-To-Be Groupon Billionaires
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