Photo: Dan Frommer, Business Insider
The view in Silicon Valley is that there is almost no technology to what Groupon does – that it is basically a business built on the back of a WordPress blog.
There’s some truth to that, but not much. Groupon scaled up from a few thousand subscribers in 2009 to 83 million by June 2011. You cant do that with duct tape and string.
The first iteration of Groupon was fairly simple, however.Back then, Groupon was just a side project for a company called The Point – a site where people could join together in support of a cause. If enough users joined the cause, the campaign would “tip” and pledged donations would become due.
Early on at Groupon, each offer was just a campaign on The Point.
An early employee explains: “We would literally go to The Point and create a new campaign – a fundraiser that would only tip if a certain number of pledges would made, just like anyone else could do. Then we would take that code to embed that widget – just like anyone else could do – and we’d drop it in that WordPress blog and it would render the whole interaction and user interface that would allow somebody to make a pledge. A pledge in this case was a purchase – basically saying as long as enough people buy this item, I want one too.”
That wasn’t the only make-it-work solution Groupon employees hacked together during the pivot from The Point.
During Groupon’s first many months, customer support head Joe Harrow would personally email all the customers who bought Groupon vouchers whenever a deal closed.
“He had something on his desktop that did the mail merge and sent out all the vouchers. We got 5,000 to 6,000 [subscribers] and he would tie up his work station for three hours in the afternoon,” says one source.
“We all knew, it had to change fast.”
By nine months in, Groupon engineers “forked” off the original code for The Point and finished building a new backend.
Some of them call what they built “the iceberg below the waterline.” Their point being that yes, Groupon looks like very simple technology outsiders, but underneath there’s a huge and complex operation going on.
“Underneath, [Groupon] has got very sophisticated and flexible architecture for scaling,” says a source familiar with Groupon’s technical construction.
“[Groupon has] got tons and tons of data, and more and more data, from lots of different sources that we use and exploit as much as we can. We have a big data scientists team, who are using that both to watch the wheels turn, and measure what we’re doing and see what’s happening. Also, make the wheels turn in the sense that what we glean from that data influences how the service works. That’s something that any company that’s operating at that scale, is doing. Nobody sees that.”
These people don’t mind that outsiders think their work was easy.
“It’s pretty hard to make something seem simple.”