There’s a new business category and I’m looking for the defining-term for it. For years I’ve been in and around the high tech industry. Worked with software, hardware and internet companies. Been involved in the venture capital funds industry and their pursuit of technological innovations.
But there’s something new out there. An innovative technology and the once so important technological barriers are not as important as they used to be. A winning idea and a thought through concept is the new king in town.
The best example is Groupon. The ecommerce industry, and more specifically, the group shopping trend, is hot now. Very hot. Since Groupon’s rejection of a 6 billion dollar acquisition offer by Google, even those who weren’t quite there want to be related to the successful celeb.
Groupon was founded about 3 years ago, and is currently employing more than 3000 employees, according to its Crunchbase page. It started with an initial angel investment of 1 million dollars in 2007, an additional 4.8 million in 2008, 30 million at the end of 2009 and 135 million this year. But it is estimated that the company is going to make 500 million dollar in revenues this year. That’s revenues, not profits, in case you were wondering. Still – an amazing number. According to this article Groupon became profitable on it’s 7th month of operation. That’s impressive.
Groupon is an interesting example because it’s mainly a concept and not so much a technology. Since it’s an internet based company it’s considered high tech, but really, there’s a new category in town, and it’s not tech, it’s more of an innovative thinking, then an innovative technology.
To be fair, there are plenty of high thinkers out there. If I take only the group shopping market I can find the amazing Lifesta, offering a marketplace for the unused Groupon and similar deals. Yippit is a deal aggregator – reading deals from all location based deal-a-day web sites. The Gifts Project enables groups of friends to buy gifts together. Yardsellr.com is a new sell and buy concept. There is some technology in those, but it’s not the main thing, not even a barrier. The value of the concept is taking its rightfully owned central position. And now, thanks to Groupon, the market is finally realizing that a good idea is as valuable as a new technology if not more. The new barrier isn’t a complicated technology any more, it’s the concept and the people who create it.
This leaves more room for competition of course, but competition can also be good. It validates and strengthens markets. It inspires high thinkers and generates new concepts.