When starting a small business or launching an idea, the biggest hurdle is often obtaining the seed money necessary to get the venture off the ground. One often has to rely on the depths of their own pockets, generous relatives, or the goodwill of a loaded investor. The Internet and the advent of crowdfunding offers an alternative that promises to turn this model on its head. Individuals around the world are able to make affordable contributions to projects that they feel a personal connection to or would like to see come into fruition for one reason or another. Some donate as little as ten bucks, while others donate thousands of dollars, creating a system of investment that is readily reminiscent of the creation of Linux or other open-sourced projects.

In order to develop this travelogue on crowdfunding, we have each chosen a particular website that will serve as our individual “case study” for the duration of the project. Using a set of predetermined methods, we will each accumulate data on our selected site, and then compile our findings, comparing and contrasting in order to shed some light on this online phenomenon.
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The ads are everywhere. You see them on your Facebook page, on video streaming sites like YouTube, on pretty much any website you can imagine, and now they are on TV. It seems, at least to me, that Groupon came out of nowhere, and came out full force with an aggressive marketing campaign that would ensure visibility. In the past few weeks of researching Groupon, I have found this campaign to have worked as the company has become so popular and successful that it turned down a $6 billion offer from Google. Not the kind of offer just any company would turn down, especially one as new as Groupon.

However, with the way the site is taking off, it seems like the 30-year old CEO of Groupon, Andrew Mason, made a wise gamble. Read the rest of this entry »

As I was watching Super Bowl XLV, probably paying more attention to the commercials than the actual game, I caught an ad that I’m sure many saw as well for a company called Groupon. Before this, I had never even heard of it, but a few of my friends watching the commercials game with me had. Intrigued by the word “Groupon” and trying to think of a concept for my travelogue, I looked up some more information about it.

Basically, the site offers online deals for different merchants, depending on the popularity of that deal. Each day, the site offers a new “groupon” (group coupon). If a certain amount of people sign up for the deal, everybody is able to use it. However, if the minimum number is not reached, nobody gets the deal. In an age where everybody knows what everybody wants and desires through social networking sites such as Facebook and Friendster, it’s an interesting concept to only offer deals based on what the majority of people want.

But this leads to a few questions. Does the site only offer deals that it knows will be successful? Could it be intentionally misleading people by offering deals that Groupon knows not enough people will want? Also, is this site one of the first signs of a new wave of advertising that lets small businesses get their name out to a wide market without paying top dollar, or is it too good to be true?

To answer these questions, not only do I want to find out more about the company and its creator Andrew Mason, but I want to research what are the current trends that seem to be truly connecting with people, and analyze other sites that may be starting to offer new ways to advertise, ways that benefit the platform the ads are on and the company itself.

Here’s a site similar to Groupon, in which only a certain amount of deals are available per day:

Tenka

Also, here’s one that’s being called Groupon’s main competition:

LivingSocial