Groupon CEO Andrew Mason on Google, Clones and Hubris–But Not on an IPO
Groupon CEO Andrew Mason made history today as the first speaker at the D conference to ever request that his poster image be based on a recent driver’s license photo–goofy grin and all.
As the man who has overseen Groupon’s wild ride to the top of the daily deals market, Mason is routinely called quirky or funny. And, in one of his finer moments as CEO, his appearance was compared to an unmade bed.
His wry sarcasm permeates the company’s culture, with staff writers crafting charming scrips offering a $20 hair cut for 10 bucks. But his humor has also backfired at times, the best example being its Super Bowl commercials, which landed Groupon in hot water.
Here’s the liveblog of Mason and Kara Swisher duking it out for who can be the most clever. Swisher needles Mason about Groupon’s just-announced travel deal with Expedia, and attempts to cajole him into spilling the beans on the company’s looming IPO, and why he turned down a $6 billion offer from Google.
Likewise, Mason deflects her questions with elaborate tales that have little to do with anything.
Expect the unexpected. Here we go:
1:24 pm: We are just waiting for everyone to take the stage, so hold on.
If you missed it, Groupon and Expedia just hours ago announced a partnership for a travel-focused deals service.
1:27 pm: OK, here we go. Kara just took the stage.
Ooh, a hint. Lots of news coming up, she says.
We are starting off with Andrew Mason, CEO and co-founder of Groupon!
1:28 pm: Mason gets on stage and has something he really wants to get off his chest. It’s the Groupon IPO!
Kara: What’s the date for the filing?
Mason says the news is that they still don’t have anything to announce.
Kara: That’s not news!
1:29 pm: Kara challenges him: I heard it’s quite soon.
Mason says nothing, but stares comically, head nodding. Gritting his teeth.
1:30 pm: Let’s change the subject and talk about the picture!
Kara says she thinks Mason looks like a dork in his driver’s license photos, and hands him a present. It’s a 4′x6′ version of his D9 likeness, suitable for hanging in his office.
Whoa, that’s really big.
Mason struggles to roll up the massive WSJ-style illustration.
Mason says the goofy grin in the driver’s license photo is an attempt to look less fat. For the record, Mason is not fat.
1:31 pm: Kara wants to get back to business, and says, seriously, let’s talk about the IPO.
Mason: Seriously? Ok, let me talk about the reasons why generally a company wants to be public.
I run a business, and going public is a way for shareholders to get money. In this day and age, people have a tolerance for companies running over the long term. I don’t think there’s any downside to making a decision like that.
In other words, not everything has to be set in stone about the company’s business before its files.
1:32 pm: Next question. Kara: Did you ever imagine growing this quickly?
We didn’t always grow this fast. We launched in December 2008, and once we figured out a playbook for running in one city, we launched in others.
Today, Groupon is in 46 countries and has 8,000 employees. (That’s probably one employee for every dot in his WSJ illustration.) A year ago, he said they had 1,500.
About half of them are selling, he adds, and most of them are in local markets. In Chicago, there’s a big call center.
It’s a very manual business. We’ve approached relationships with local companies differently than a lot of Silicon Valley companies.
1:34 pm: Kara: People have tried local a million times and it hasn’t worked.
Mason: We don’t have preconceived notions about what local ought to be.
Here come the questions about all the Groupon clones….
Mason hates the clones.
Mason explains why he’s so upset by the clones: We spent two years pivoting before we landed on this model. We are proud of the idea in the way anyone would be if they invented something.
All the clones were drafting everything we were doing. I was a music major, and with music, we call that plagiarism. But in business it’s called competition.
I’m on board now!
1:38 pm: Now Mason is talking about what haunts him the most about his business. Basically, he’s scared it doesn’t grow or evolve fast enough.
Over the course of the year, Groupon has migrated from a sales and marketing company to a technology company with more relevant and personalized deals.
My biggest mistake was waiting to open an office in Silicon Valley. Chicago is a great town, but it doesn’t have the depth of talent that you guys have.
1:40 pm: Kara is now addressing Groupon’s margins, which have been very attractive to date. But with more competitors and partnerships, like Expedia, they may erode over time.
Now Mason is turning it around on Kara, asking her how she thinks Groupon will fail.
(BTW, he interjects that he doesn’t feel comfortable hanging a big picture of himself in his office.)
And we’re back to the interview…
I told you this interview will be all over the place. I hope you are all still keeping track!
1:42 pm: Now, really seriously, Mason says Groupon will continue to have great margins as long as it is providing a great service to its customers–which are the merchants.
As long as we deliver good deals to customers and a good ROI to merchants, the margins will be fine.
Now he’s talking about his two big partnerships: One with Live Nation to provide discounts on events and concerts, and today’s deal with Expedia.
“We know better than anyone that the success of our business has to do with our relationship with merchants. The partnerships are an opportunity to bring our brand and curation with their relationships…We don’t think we’d be able to do it by ourselves.”
1:45 pm: Kara wants to know about Groupon Now, which is location-based offers that consumers use instantly, and how it’s different than what Google announced yesterday with Offers.
Mason said it’s about getting consumers to use Groupons more often, because most of the time they aren’t using a Groupon when shopping or dining.
It’s live in San Francisco, New York and Chicago.
1:47 pm: Mason is now giving a tortured demo. No, sorry, this is not like an Apple keynote.
You hit “Eat Something” to find a deal 0.1 miles away. Or, hey, he asks, why not a spontaneous teeth cleaning?
Mason: We have over 1,000 deals running in Chicago right now in order to pull something like this off. We’ve always existed between gray area between e-commerce and advertising.
People think of it as an alternative to running an ad in the newspaper or on the radio, but this is more like e-commerce.
I love about the product that you can do something when I’m bored. I haven’t gotten my teeth cleaned in six years! (Mason may need a check-up today after all his teeth- grinding.)
1:49 pm: Kara hits him with two questions at once: Is mobile the future? Do you use regular Groupon that much?
No, he doesn’t buy many Groupons, Mason admits. He’s a much bigger fan of Groupon Now. “I don’t like having to plan ahead, I like to be able to buy something and use it immediately.”
1:50 pm: What does he think about Google offers?
Mason: What they really did well is integration with Buzz.
Big laughs from the audience!
But seriously, again without being too revealing, Mason gives standard lines like, “competition is good for the consumer,” and “innovation is good for the space.”
Kara: Why didn’t you sell to Google?
Mason quietly stares. Says nothing. More teeth grinding.
Kara doesn’t give up, and still wants to know the answer. So, she asks: Why didn’t you sell to Yahoo?
Mason laughs hysterically.
The non-serious, but serious answer: We are happy as an independent company. Any company should be happy being apart of either Google or Yahoo.
Mason has a request for Kara: Stop asking questions he can’t answer, so he can stop saying bullshit answers.
1:54 pm: On to something else…Let’s talk about other competitors, like LivingSocial, which is a distinct second.
He lists three categories, where he sees competition coming from in the future:
1. Straight-up clones.
2. Sleeping giants.
3. The ones out of left field.
He says he has to remain focused: “As along as we make a product that people love more than anything else, we’ll be successful.”
1:55 pm: Groupon is very aggressive on international expansion.
Kara asks about China in particular.
We are doing a joint venture with Tencent, we have a Chinese management team running it. We’ve only been there for a few months, so there’s lots of challenges. The big challenge is that there’s a lot of competition already in China. There’s one called Groupon. Really, it’s called Groupon.
1:57 pm: Will Groupon return to TV commercials after the Super Bowl missteps?
Mason said it was a big misunderstanding.
With the Super Bowl commercials, we tried to have a sense of humor. Part of our purpose is to make life less boring for people. That’s what we do with the deals, and what we like to do with the write-ups, and that’s what we tried to do with the commercials.
For us, we though who would seriously believe we would trivialize a cause like this? We gave ourselves too much credit. People believe corporations are more evil than I thought.
2:00 pm: A question from the audience: How big is the local market?
Mason says that globally, local commerce is a $12 or $14 trillion market. “If we get 10 percent of that, we’ll be very happy.”
Mason declines to comment on what percentage Groupon actually has of that.
2:01 pm: Next question from a guy in the crowd says he finds Mason to be a “very charming guy.”
Despite his non-answers, I guess the death stare is winning people over, eh?
2:03 pm: Next a loyal Groupon user from the audience asks about “Groupon burnout” because he often pays for vouchers that he doesn’t get around to using before they expire.
Mason: We hate it when Groupons expire because it does create burnout. He says they don’t see any signs of it.
2:05 pm: Kara builds on that theme asking about all the stories in the paper about merchants who are overwhelmed and burned by Groupon.
Mason said it’s like sexual predators on social networks. Those stories are part of the discovery process of a new industry, but there’s a disproportionate number of stories compared to reality.
“We have a huge team vetting the offers. We only feature great businesses, and that’s why Groupon has been successful. It’s the biggest differentiator,” he said.
Kara says in many ways, Groupon has been a bank for these businesses because they get all the cash upfront from the offers.
Mason: We don’t like that as a reason to use Groupon, so we started doling the money out over time.
2:08 pm: Kara asks next about the wall of magazines that Mason has in the waiting room of his office. They are all of failed companies, like Friendster and Myspace.
Mason: When I think about the companies that have occupied our space, we are in right now…Companies lose focus on the customer, and they are too celebratory. I want to make sure we have a culture, and that we are still hungry. It’s supposed to be a reminder to our employees. I don’t want them to think they are part of a hip company. We still have to fight every day for our bread.
2:10 pm: And, on that note, that’s it. That’s the end. Thanks for reading.