Groupon - A Lean Startup

Groupon is one of the fastest growing companies of all time.  Its founders had already had one failure, so this time they decided to try something new and to keep it simple.  They build a Minimum Viable Product (MVP).  On their first day, just 20 people bought their first deal - a two-for-one pizza in a restaurant on the first floor of the company’s Chicago offices.

The founder Andrew Mason tells their story :

“We took a WordPress Blog and we skinned it to say Groupon and then every day we would do a new post.  It was totally ghetto.  We would sell T-shirts on the first version of Groupon.  We’d say in the write-up, “This T-shirt will come in the color red, size large  If you want a different colour or size, email that to us.” We didn’t have a form to add that stuff.  It was just so cobbled together.

It was enought to prove the concept and show that it was something that people really liked.  The actual coupon generation that we were doing was all FileMaker.  We would run a scrit that woudl email the coupon PDF to people.  It got to the point where we’d sell 500 sushi coupons in a day, and we’d send 500 PDFs to people with Apple Mail at the same time.  Really until July of the fist year it was just a scrambling to grab the tiger by the tail.  It was trying to catch up and reasonably piece together a product.”

Handmade PDFs, a pizza coupon and a simple blog were enough to launch Groupon into record-breaking success.  An MVP helps entrepreneurs start the process of learning as quickly as possible.  It is not necessarily the smallest product, but it is the fastest way to get through the Build-Measure-Learn feedback loop with minimum effort.  The goal of the MPV is to test fundamental business hypotheses and begin the process of learning.

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