I suspect there is a reasonable barrier to entry - in that the large number of engaged mailing list subscribers required has a big first mover advantage. Nobody is going to want to be signed up to dozens of different daily deal mailing lists, so with Groupon already having a ton of subscribers they get a much better pitch to the advertisers.
I think a possible competitive strategy is much more highly targeted mailings - instead of approaching advertisers saying "we have 170,000 subscribers in your city", go with "we have 15,000 females in the 30-45 year old age bracket who earn over $85k" or "we've got 22,000 working mothers of 3-7 year old children", or perhaps "we've got 8,000 people who dine out 3 or more times a week in your zipcode". (I have no idea if Groupon are collecting and/or using detailed demographic data about their subscribers...)
I think a possible competitive strategy is much more highly targeted mailings - instead of approaching advertisers saying "we have 170,000 subscribers in your city", go with "we have 15,000 females in the 30-45 year old age bracket who earn over $85k" or "we've got 22,000 working mothers of 3-7 year old children", or perhaps "we've got 8,000 people who dine out 3 or more times a week in your zipcode". (I have no idea if Groupon are collecting and/or using detailed demographic data about their subscribers...)