I read this morning that Mark Cuban (originally a Lebo grad) entered what TechCrunch is calling the “Daily Deals Space”. I like the name better then “GroupOn Clones”, so I’m stealing it. Whatever you call the space, it’s getting pretty crowded in there. Which lead me to the question, “how will a winner emerge from this space?” Essentially, the reason GroupOn was so successful was that it simplified the world of deals down to one coupon per day. Clearly, if the space gets too crowded, that simplicity is gone. In order for it to remain, something has to happen.
The logical guess is that the space will splinter. There will be 400 GroupOns and people will join one or more based on their preferences. They’ll essentially become buying clubs. Here’s the problem with this strategy. Your average American is not plugged in enough to the world of social media to find the daily deal that’s right for them. Most of these things will fail, and the only ones that don’t will only be slightly less universal then GroupOn itself.
So what do I think will emerge instead? I think GroupOn or one of its clones will find a way to personalize their offers. This company can take offers from advertisers and spray them around the country to only the people they’re relevant to. This will allow both big advertisers and small businesses to advertise right alongside one another. The company that can do that effectively will eliminate the need for the splintering of the space.
The thing is, the company that effectively personalizes will have to have massive amounts of data. Anyone you know have massive amounts of data?