BuyWithMe

» see buywithme.com as it lived, on the wayback machine

~ the obit ~

The daily deal wave did reach Turkey. Grupanya opened in Istanbul in 2010, Intel put money into it the year after, and by 2011 there were reportedly more than a hundred and fifty group buying sites operating in the country. Groupon came in through its European arm and gave up on the market in 2015. What never reached Turkey was BuyWithMe, and it had no reason to, because the whole product was a salesperson walking into a restaurant on a named street in a named American city.

It started in Boston in May 2009, founded by Andrew Moss and Seth Rosen, seven months behind Groupon. The mechanic was the same one everybody copied. One discount a day per city, live only if enough people bought in, with the merchant handing over most of the margin for the exposure. Five and a half million dollars came in during the first year and thirty million across the life of the company, from Matrix Partners and Bain Capital Ventures.

Then it tried to buy the country. Between 2010 and September 2011 BuyWithMe acquired six companies: TownHog in San Francisco, Scoop St in New York, DealADayOnline in Chicago, Swoop, LocalTwist and a loyalty service called Edhance. Each purchase came with a city and a subscriber list, which was the point. If the business is a mailing list with a sales floor attached, buying lists is the fastest way to be national.

The theory was right about what the business was. It was wrong about what the business was worth. Groupon spent 2011 filing for its IPO in public, and the filings showed the rest of the market exactly how much a deals subscriber costs to acquire and how little that subscriber comes back. The money stopped for everyone below the top two.

By late October more than half the staff was gone, the salespeople still employed had taken a twenty five percent pay cut, and no round was coming. Gilt Groupe's city arm confirmed the asset purchase on 2 November 2011 at a reported five million dollars in cash and stock, redirected buywithme.com to Gilt City, and cut the remaining sales floor. Thirty million dollars went in and about five million came back out, across thirty months.

~ the rap sheet ~

~ the land grab ~

The roll-up was not a panic move, it was the standard advice of the moment. Every investor in the category believed daily deals would end up as a two or three name market and that the only variable was how fast you could get to scale before that closed. Buying TownHog got you San Francisco in a week instead of six months of hiring. The problem is that a subscriber list acquired this way arrives with no habit attached, and the sales staff you inherit sell to merchants who already know the coupon did not work last time.

Six acquisitions also meant six sets of contracts and six of everything else, absorbed by a company that had not proven the single-city version was profitable. BuyWithMe was carrying integration work for a national footprint while its actual revenue looked like a regional business having a hard year.

~ the next chapter ~

Gilt City kept running deals until Gilt Groupe itself was sold to Hudson's Bay in 2016 for a small fraction of its own billion dollar valuation, so the asset that absorbed BuyWithMe outlived it by about five years and then went the same way. Groupon survived, at a share price that spent the following decade making the case that the category was never worth what anyone paid.

What is left of the model is the part nobody thinks of as a deals site. Push a limited offer to a phone, make it expire, let the merchant eat the margin for the traffic. Every food delivery app in Turkey does this now, several times a week, without ever calling it a daily deal or asking anybody to convince their friends to buy in.

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