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🎟️ Groupon's Founding Story

🎟️ Groupon's Founding Story

AND Register for Chicago Tech Events

Landon Campbell
March 25, 2024

51st Edition

If you're new here, welcome to the Driver's Seat newsletter!

Every Monday, stay up-to-date on Chicago's innovation economy and happenings in our city.

📍 This Week’s Lineup:

⏪ Last Week at Our Office

🎟️ Groupon's Founding Story

📊 Chart of the Week

🗺 Events Around the City

🔙 Previous Editions of the Driver’s Seat

⏪ Last Week at Our Office:

Engineering students from University of Michigan visited our office to hear from our portfolio companies and learn about our initiatives in the city👇🏽

On Tuesday we held our 6th AI Tinkerers monthly meetup, featuring six demos and a lot of networking. This is Chicago's fastest-growing AI club 👇🏽

🎟️ Groupon's Founding Story

Groupon was valued at over $1B in just 16 months, making it one of the fastest startups in history to hit unicorn status. Groupon's initial success stemmed from relentless experimentation and viral marketing strategies.

Let's revisit the past to highlight key insights:

Idea on a Napkin

In 2007, Andrew Mason—a Northwestern grad student and former web developer at InnerWorkings—founded ThePoint.com to facilitate online fundraising.
Andrew secured a $1M investment from InnerWorking's CEO and founder Eric Lefkofsky, who then joined him to develop the newly rebranded Groupon.
Less than a year later, the world's first Groupon was a 2-for-1 pizza deal at Motel Bar, which was located below the Groupon office in Chicago.

Scrappy Distribution Strategies

In 2008, the founders built a 500 person email list of family and friends as their first customers.
Groupon experimented with unique marketing campaigns like "Live Off Groupon", where a user managed to live solely on Groupons for a year.
Groupspawn was another campaign that offered college scholarships to the child of parents who used a Groupon on their first date.

By the end of 2009, Groupon had spread to 28 US cities and the following spring, it reached all the way to international markets.

Three Lessons

Action produces information: Having the ability to move quick, try new things, and build in-person all contribute to building a successful startup.
Chicago has access to top tech talent and our ecosystem isn’t as competitive as other hubs. If you’re building a top tech company in Chicago, you'll have instant access to the best talent.
Distribution is everything. Especially in the age of AI as many of these models and applications will become commoditized. How you take a product to market is everything.

📊 Chart of the Week

Two weeks ago I wrote about why Illinois is winning at nuclear energy. Check it out here.

Our state’s 11 nuclear reactors, along with several new ones on the way, are set to provide huge benefits for many years to come. Reasons like nuclear are also why Illinois kept energy costs low.

In states like California, both residential and industrial electricity prices are shooting up. For the industrial sector, the electricity price in California is 2.3 times higher than in Illinois.

And California's residential electricity costs have been rising at a compound annual rate of 10.9% for the last four years, more than double Illinois's rate of 5.1%.