Spreets founders to exit as boss acknowledges ‘challenging’ group buying market
Hammer, left, and McEvoy
The founders of group buying site Spreets are to leave 18 months after selling it, owner Yahoo!7 has announced.
Dean McEvoy and Justus Hammer will both leave next month.
They sold Spreets to Yahoo!7 for $40m in January 2011.
According to Yahoo!7, the exits are part of “a planned management transition”. Yahoo!7 chief operating officer Stuart Sayers will now run Spreets too.
Sayers signalled that growing competition in the group buying market is making growth much tougher. He said: “While the current market for group buying has been challenging, the Yahoo!7 management team remains committed to the success of the Spreets business and to building a strong and sustainable Group Buying business.”
He added: “We thank Dean and Justus for their work in helping to integrate Spreets into the Yahoo!7 business and for their efforts in starting and growing Australia’s first group buying website.”
Last year’s Mumbrella360 session featuring McEvoy:
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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GROUP BUYING IS DEAD. YOU HEARD IT HERE FIRST.
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Fair play to these guys. $40m in the bank and finished with Yahoo after 18 months….happy days!
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But this industry’s fundamentals are stro…. bwahahahaa sorry, I couldn’t even make it through the sentence.
It’s no surprise it’s struggling, the whole industry is based on individual businesses undercutting themselves for customers who are chasing the next cheap deal.
Nothing about the process builds the one thing that smaller service oriented businesses really need: repeat, and loyal, business. This is exacerbated by the fact that the first experience is so cheap and the next experience which at regular pricing is going to be far more expensive by comparison.
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Now Yahoo can give it their usual magic touch…
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Perfect business execution. Agree with Alex and The Grim Reaper.
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Amazing how quick things move.
18 months ago this would have been considered a masterstroke but now they’re left with a company that has never turned a profit, has zero resale value in a market that is struggling. The only hope is a fire sale to Groupon to boost local operations but they don’t have the cash.
It is basically the complete opposite to how FD has gone in transactions – no one could argue that their purchases of trade me, rsvp, stayz etc haven’t been great additions to the business and the bottom line.
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The Group Buying and Daily Deal industry is only going to grow and expand. Its is bringing more offline merchants online and connecting bargain hunters with bargains.
Due to its quick growth and ability to bring more offline merchants online, GB and DD sites have carved out their own subsection in the eCommerce space. We need to remember however that these GB and DD companies are in essence no different than any other eCommerce site – Build a customer base and sell them stuff in a creative way.
Nobody argues that the eCommerce space is going to grow but their seems to be much skepticism of the GB and DD industry due to to bubble like growth;
Google realized the potential of the GB and DD industry when they offered $6 billion to buy Groupon. Its a revolution in local marketing and quickly allows local merchants to enter the online world of advertising with zero risk on a performance basis. The first real competitor to Google adsense for local business……
The GB and DD industry is Scientific Marketing at its finest and Claude Hopkins would be proud 😉
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Group buying was a great concept, however the industry has allowed itself to be corrupted and does not show due diligence in checking what they are selling. A lot of the products offered are sub-standard imports and the prices quoted to support the savings you allegedly will make should be in sentences starting with “Once upon a time” Most of the major players in this arena have signed a Code of Conduct which is then breached on a daily basis whether knowingly or through a lack of understanding of their obligations under consumer law. Sooner or later they will have to seriously self regulate or risk the regulators doing the job for them. Dean and Justus are smart. Run rabbit run is probably the best move.
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This is quite normal..
Don Valentine, founder of Sequioa Capital, said recently in a documentary “45% of new businesses change CEOs within 18 months.. Firing Founders happens quite often and is not much fun.”
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Nice work gents, nice exit ! I like this quote below….
“If revenue growth in the first Internet bubble was about selling a dollar for 50 cents, growth in the group buying business has been about getting other people to sell their dollars for 50 cents and charging them 25 cents for the privilege.”
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Vouchers are so yesterday. This time next year they will be passe and the year after embarrassing. The boys did good. $40m for 2 years work.
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