The NTEN conference call interview I did with Groupon’s head of social innovation Patty Huber last week went well. Patty fielded my conceptual questions as well as lots of nuts and bolts technical questions from the large audience. I learned a couple of interesting things. (See my post on the idea of Groupon as a social enterprise for background).
Most interesting to me was the fact that while Patty’s title is head of social innovation and the G-Team concept is directed at helping nonprofits benefit from Groupon’s services, the G-Team project is a purely for-profit project. While Groupon takes no cut of funds raised via G-Team, the activity is profitable for them because it brings new users to the Groupon platform. These new users often make subsequent purchases and so G-Team acts as a sort of profitable marketing investment for Groupon.
While I can already hear some people complaining that this somehow minimizes the degree to which we might celebrate Groupon’s efforts, it of course also means that the G-Team concept and the degree to which nonprofits can benefit from Groupon’s efforts can scale incredibly rapidly. The G-Team is simply not corporate philanthropy. It is a profitable project that is fully integrated into the business model of Groupon.
How fast can it scale? Well the Wall Street Journal reported this weekend that Groupon did $33 million in revenue in 2009 and $760 million in 2010! CEO Andrew Mason wrote in a memo to his employees that he hopes they achieve “billions in revenue” in 2011.
One of the reasons Groupon is growing so quickly is that they are considered one of the first, and certainly the most meaningful, successful approaches to helping local businesses leverage online marketing to drive sales. G-Team is simply acknowledging the fact that “local businesses” include nonprofits. Of course, as it was pointed out by an audience member on the call, helping local businesses grow is a pretty good form of job creation and so there’s an argument that Groupon’s core business is creating social impact.
To me, the big take away is that Groupon is a good example of the way in which a for-profit company can create a blend of social and financial impact. They are a living, breathing, quickly growing example of Jed Emerson’s Blended Value proposition.