The Road to a Billion
At Lightbank, I get to work closely with lots of young entrepreneurs. The question I often get asked is “What can I do to insure my business succeeds?”
That’s a big question.
The reality is that taking on a disruptive challenge is hard. In fact, it’s unbelievably difficult. The path forward is never clear; and, often, you find new problems to tackle as you go along.
Take Groupon, for example.
The other day Groupon sold its billionth Groupon. That means, over the past seven years people have gone to Groupon and clicked the “buy” button, making a purchase on our site over a billion times.
It’s almost insane to imagine that something we created a few short years ago has become so widespread and loved by consumers.
There are only a handful of companies that get to say “we just sold our billionth item.” It’s such a large number.
But it’s been anything but simple. Local commerce is one of the most challenging spaces on the internet today.
As I reflect on the past seven years, it’s not the sheer number of Groupons we’ve sold that fills me with pride – it’s the manner in which our team continues to relentlessly tackle these challenges.
And Groupon’s journey, now led by Rich, is far from over. When you’re going after one of the largest and most underdeveloped white spaces on the internet, you can’t just expect that a few years in you’ll have found all the answers.
To the contrary, it took Amazon 20 years to tackle products. It took Priceline 20 years to tackle travel. And local is something like five times the size of both combined; in other words, it’s a huge space.
That said, the lead Groupon has is formidable. Not only do we have nearly 50 million customers around the world and over a million merchants who have done business with us, but that base is growing – and growing at an accelerating pace.
In the last quarter, Groupon added nearly a million new customers in North America alone. That’s almost a million people that hadn’t made a purchase in the past year that are now using Groupon. Most companies would love to have a million customers period; and we added nearly that many last quarter alone.
And while it’s early, so far they appear to be every bit as amazing as our other customers, who in the aggregate, cohort by cohort, have tended to buy nearly the same amount year after year after year.
In a few quarters, if these trends continue, the impact on our core business should be the reignition of real and sustainable growth. The math is pretty simple. If you stack a million new buyers every quarter one on top of the other, and if they continue to spend as much as our current customers, you get a really powerful compounding effect.
And this says nothing for the product improvements that the team is making which are happening at a pace I’ve never before seen at the company.
Local is hard. If it were easy, others would have cracked the code long ago.
And hard problems tend to require lots of hard work and the results aren’t always instant or apparent.
I’m excited to be on the journey (cheering from the sidelines) and I’m super proud – not just of the scale we’ve achieved, but the manner in which we’ve achieved it.
The thing about tough challenges is that they’re tough for a reason. If they were easy, everyone would take them on.
So maybe the best advice I can give is “stick with it”.
Building a business – a great business – isn’t easy. Selling a billion of anything, isn’t easy.
I mean, after all, a billion is a big number.