How Groupon is Showing That Most US Small Businesses Suck & Why We’re In Trouble Because Of It

TechCrunch recently posted the article Groupon Was “The Single Worst Decision I Have Ever Made As A Business Owner”. And, at first, I felt sorry for the business owner.  But after thinking about it for a minute, and reading many of the comments, I came to the conclusion that she’s clueless as an owner.

Ok, I should play nice: she needs to improve her CEO skillset.

To make it really simple, all Groupon does is exchange customer acquisition costs for the discounted value of the product/service.

What’s clear is that the coffee shop owner 1) doesn’t know her customer acquisition costs and 2) didn’t have a strategy to sell those customers new products or get them to come back in the future. So, of course it was a bad business decision.

But here’s the kicker: I’m sure most small business owners in the US are like her and have no clue what their CAC is (for most of the entrepreneurial life I didn’t either). And if 50% of all jobs in the US are created by small businesses, then our already high unemployment rate will continue to get worse as these small businesses fail.

And that’s why I’m an evangelist of the Lean Startup Methodology.

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