Bubble Foundry

On daily coupon companies

by Peter.

A friend just emailed me saying he’s helping a successful American daily coupon company recruit people in Amsterdam and Munich:

i have friends in common with their HR and they’re contracting me to look for suitable candidates as part of their massive european expansion, starting with germany and the netherlands. they will be filling various roles but their operating model is fairly simple: account executives (deal negotiators) and a country manager.

obviousy account exec is a graduate entry position but if you have people in mind in amsterdam – and in munich – that could be suitable for the country manager position, let me know and i’m happy to run a quick phone interview, followed by a meeting in amsterdam & another with the head of recruitment in the states. the ideal profile is someone in the digital industry with a track record of running a business: p&l experience, team development skills & ideally existing connections in retail & hospitality.

having said that i’ll also take the opportunity to identify candidates for future roles – tech, marketing, etc.

If you’re interested, email me and I’ll put you in touch.

For those not looking for a job, he also asked what I thought of their business model. I think these companies – Groupon and the like – are quite interesting and figure it might be interesting to share my reply here:

As for their business model, I really don’t know much in terms of specifics. However, the whole daily coupon business seems potentially both very profitable and very difficult. On one hand people LOVE discounts and the companies seem to get good margins on the coupons they offer from the participating businesses. On the other hand, it seems like it can be quite difficult for the participating businesses to make the coupons worthwhile if they are already operating on low margins and/or can’t keep the number of coupons to a manageable level, overwhelming a small business. I’ve read some business owners complaining that Groupon promotions cursed them with unprofitable popularity. I wonder if at some point the hype will crest and these daily coupon services will retreat to business sectors that have fewer fixed costs (ie services like massages and such, versus restaurants). This combined with the potentially large business acquisition costs and incredibly low barriers to entry suggests to me that the market could get very crowded (my sense is it already is in the US) and that pretty brutal price wars could break out.

Speaking of the Netherlands, I know that Groupon already has an office in Amsterdam (on Kerkstraat, I bike by it often) thanks to their acquisition of My City Deal. However, I have not once heard any mention of them by any of my friends in Amsterdam, techie or not. While I admittedly don’t move in the circles that they are presumably targeting (i.e. 30-something women who like spa treatments), it is surprising that they have no presence that I know of. I would think I’d hear more about them because the internet scene is REALLY small in Amsterdam and because Dutch people are cheap and love discounts. Maybe they’re just ramping up and haven’t hit upon the right coupon categories that will drive the Dutch wild. On the other hand, I could believe that there are cultural differences between the US and Netherlands that would prohibit directly importing the US approach to the country.