I think that the "threshold" is really a red herring. Having followed the site for a few weeks at this point, I would suspect that pretty much every deal "tips".<p>The actual effects of having a threshold are twofold:
1) First of all, it encourages people to tell their friends to participate
2) It creates the illusion of a group discount where none exists. A big discount might tarnish a business' reputation, but if there is a "group discount," people understand. When you think about it, there is actually no economy of scale about a business offering several hundred coupons valid for a six-month window.<p>It's brilliant marketing, though.
The central concept here -- a transaction triggers when a threshold of participants is met -- is bigger than group coupons. It's a sort of "Group Transactional Economics" by analogy to the atomicity of db or stm transactions. I think it could eliminate a lot of the risk and inefficiency dealt with by independent makers of all stripes.
I worked at a consulting firm on a flameout .com (actbig) business that had a nearly identical model back in the late 90s; the big difference here seems to be the (smart!) focus on local businesses & services rather than generic goods like electronics and furniture, and offering only one deal at per day (rather wootlike).<p>Last time this happened:
<a href="http://news.ycombinator.com/item?id=692644" rel="nofollow">http://news.ycombinator.com/item?id=692644</a><p>I think the answer to the the question I asked then might be "yes." :)<p>(They still have a ways to go for profitability, though... 40 people on staff while the items are usually under $100 and have less than 1000 purchasers. Still, they've made it much further than my old client did.)
This is 10 years old! Letsbuyit ran this model in the dot-com hysteria but obviously blew up before they could prove it would make money (no doubt they got someone like Oliver Stone to direct their TV ads or something).