I think Groupon's rapid growth was mostly due to fear from competition. They wanted to expand as rapidly as possible because everyone was having their own Groupon-like deals. If something grows so much out of fear (and, of course, greed), you don't learn from your mistakes. You don't have time and patience to change course and fix what's broken. So Groupon has built a very vulnerable system that can collapse just as fast as it was built.

I believe that the concept of social buying is great, but its complexity deserves more respect than it has been given. There has to be a balance between the amount of money merchants are willing to risk to introduce themselves to new people, number of those people becoming repeat customers, how much long term boost does the merchant get from those repeat customers, etc. It takes time to find out what is working and what is not.