One helpful thing many companies do in their presentations to potential investors is provide a picture of where they stand relative to the competition.
Providing an honest assessment of the competitive landscape not only helps investors understand the company and market opportunity–it helps them be comfortable that they’re dealing with a straightforward management team, which reduces the risk that they’ll get screwed down the line.
Since the dawn of the “daily deals” industry three years ago, Groupon has been No. 1 in the business and a Washington-based company called LivingSocial has been number No. 2.
Over the past year, moreover, in the US market, LivingSocial has closed the gap with Groupon, in part by partnering with Amazon and in part by rolling out some innovative new products–both developments that the Groupon folks (and Groupon investors) can’t be happy about.
As this chart of monthly unique visitors to their respective web sites shows (through June), it’s Groupon and Living Social at the top of the US industry, with everyone else getting clobbered.
Photo: Business Insider
And here’s a chart from industry data provider Yipit, which shows the relative size of the two companies and LivingSocial growing much faster than Groupon from August to September:
Photo: Business Insider
In other words, LivingSocial’s the clear No. 2, and it’s growing faster than Groupon and gaining share fast. And all of those trends are trends that prospective Groupon investors should care a great deal about.
So it’s interesting that, in the two “competition” slides in its roadshow presentation to potential IPO investors, Groupon ignores (and then grossly underplays) LivingSocial.
See “LivingSocial” anywhere on there?
It’s not on the first slide, which is decorated with big-name companies that are so small in the daily deals business as to not be worth mentioning.
And on the second slide?
Ah, there it is, in microscopic print, lumped in with the hundreds of irrelevant also-rans you’ve never heard of that are going bust by the day.
(The moral of the story? Be straight with folks, Groupon: It’s the only way you’ll begin to restore your trashed reputation.)
SEE ALSO: Here’s Groupon’s Roadshow Presentation!
(Thanks to Jordan Terry for the tip).
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