What's the barrier to entry in the daily deal space?

There are now officially one billion "Groupon" clones, including one I am advising.  I hear all the time, "The concept is so simple, the barrier to entry looks so low".  This could not be more wrong...

As is the case with many businesses, scale is the key to winning and dominating the category.  While I still believe LivingSocial is well positioned to be the long term winner (I know, most think I am crazy but I have my reasons), Groupon is scaling quickly.

I ran a Groupon recently for a company I advise to experience it myself.  The sales person was efficient and smart, the process strightforward and the Groupon sold out in less than 36 hours.

Want to know the barrier to entry in the deal space?  Bill Gross hit it on the head...

Bill Gross
"#Groupon is now in 46 countries and has about 8,000 employees, up from 1,500 just a year ago." Andrew Mason, CEO @ #D9

Groupon, as everyone knows by now, is growing like crazy. How crazy? CEO Andrew Mason just revealed at the D9 technology conference that he now employs 8,000 people, which is up from 1,500 a year ago. That means it grew headcount by 433 percent.

About half of its employees are sales people. Signing up local businesses to offer group discounts requires a lot of hand-holding and sales calls across many local markets. Groupon is now in 46 countries.

Groupon is a selling machine, so it needs a lot of sales people. But these aren’t door-to-door salesmen. The only way Groupon can scale this sales organization is through centralized call centers with different teams focussed on different markets. (Yelp does the same thing).

And you thought it was all about Groupon’s comedians-turned-copywriters and the “Groupon Voice.” (The company employs a lot of copywriters also, but they don’t have thousands of them). It’s a sales culture through and through. Facebook or Google would be bragging about how many engineers they have. Groupon crows about sales.

via @techcrunch