Reader David Geihufe, who joined the debate around the Groupon as a social enterprise debate (part 1, part 2), points us to a recent TechCrunch post on the “pivots” of web companies. Joking that the word pivot has jumped the shark and should now only be used in mockery, TechCrunch illustrates the way web companies have pivoted during their growth process.
Image by Sean Percival. Click to enlarge.
TechCrunch describes the first iteration of Groupon (refering to founder Andrew Mason’s The Point service for nonprofits) as a “Boring Social Good Thingy”. The company pivoted when Andrew launched the side project Groupon and then pivoted again when it moved from a simple “Daily Deal Widget” to what TechCrunch calls a “Social Commerce MONSTER”.
The illustration then suggests a possible next pivot for each company. For Facebook, the next pivot is labeled “The Next Google (or Friendster)” referring to the potential for Facebook to emerge as the most powerful web company in the world or fade away as early social network leader Friendster has done.
The next pivot for Groupon is labeled “Walmart”, essentially taking the “Social Commerce MONSTER” label and projecting that Groupon will go on to become a leading retail company. I think the best way to understand my post on Groupon as a social enterprise is to re-label the next pivot for Groupon as “Walmart (or a Social Enterprise MONSTER)”.
Who knows? As the first iteration of Facebook shows, how a web company starts off doesn’t necessarily dictate what it will become. But on the other hand, Groupon is alone among the listed companies (or any major web company to the best of my knowledge) that began life as a social enterprise.
Your last sentence says it all. The truth is businesses must change to survive. It’s not that Groupon lost its desire to do social good, but in morphing its model to survive. They moved from a social enterprise to a values-drive business.
I hope so. Of course they may have just ditched their old social agenda and now are tacking on G-Team as an after thought. Only time will tell, but I think it is an important and interesting story.