Tonight as I was turning on to Peachtree Rd at West Paces Ferry I noticed a large billboard at the intersection that simply said SweetJack.com. Being the startup junkie that I am, I wondered what it was and made a note to check it out later. Well, I pulled up the site and, you guessed it, it’s another daily deal site like Groupon, Living Social, Scoutmob, and Half Off Depot.
The most interesting thing about SweetJack is that it is part of the large Cumulus Broadcasting company. One of the questions about the daily deals market has always been what’s blocking others from entering the market? A media company, that has a significant sales team and existing relationships with a variety of businesses, is uniquely suited to start a daily deals site due to the clear economies of scale from existing infrastructure.
Now, is yet another deal site (YADS) a sign of a bubble? I do think there are signs of a bubble but I have no concerns of a bankruptcy-induced crash. See, the big difference with this market, compared to the dot-com hey day of the late 1990s, is that this is a viable economic model whereby vendors split revenue with marketers that drive business to their store. It is grounded in real dollars with real consumers. Will there be significant consolidation, pricing pressure, and daily deal sites that don’t make it? Yes, just like any market that is at the will of the invisible hand.
What else? Do you think there’s a bubble with daily deal sites?