Groupon’s Andrew Mason: Of Course My Board Is Discussing Replacing Me. But I Want to Stay.
That’s totally normal, he says, for a company whose stock is down 80 percent.
That said, he think he’s the right guy to fix it. “If I ever felt that I wasn’t the right person to do the job, I’d fire myself,” he told Henry Blodget during an interview at Business Insider’s Ignition conference today.
If you want to hear a longer version of Mason’s keep-me-in-place argument, read on below.
Groupon CEO Andrew Mason is under fire on many fronts, and now some of his own board members are talking about replacing him.
This morning, he’s appearing at Business Insider’s Ignition conference in New York, so we should have a pretty good idea of the first few questions coming to him from Henry Blodget.
Live coverage follows:
Hello there! Henry starts off with the obvious question: “What’s the deal — is the board going to fire you tomorrow?”
Mason: Newsflash — our stock is down 80 percent. “It would be weird if the board wasn’t discussing whether I was the right guy for the job.”
No question we’ve had “bumps in the road,” but we’re creating a new category. $5 billion in bookings in fourth year. Fending off thousands of competitors, etc. “I feel really good about the execution of the team.” “If I ever felt that I wasn’t the right person to do the job, I’d fire myself.”
Blodget: You’ve built this great business. “Heroic achievement.”
However, you’ve gone from growth phase, now in a different place. “Are you the right guy for this job?”
Mason: Yes. “What Groupon needs from the CEO role” is consistency, among other things. “I’m flattered that people think that removing me would flatten these bumps.”
Blodget: Aren’t you freaked out that these board discussions are in the press? Anyway, the complaint, as reported, is that you’re not being a good public advocate for the company, and that has allowed Wall Street and press to pile on to you guys.
Mason: We’ve always said transparency and candor are crucial. Performance determines long-term price. “I don’t think you can talk the stock back up to $20.” Getting there will be a function of how we execute.
We grew very fast in Europe and other territories, didn’t build enough tech infrastructure, now paying the price for that. But “we know the playbook,” and next year we can show the world that we can deliver.
Blodget: How do you deal with the hype cycle, and now the scorn cycle?
Mason: “You learn a lot.” The hardest part was during the quiet period after the S-1. But the company builds up a resiliency into the culture. “They look inward for signs of progress.” I imagine that you guys are thinking that “this guy has to be crying.” But that’s not what it’s like. “We’ve built up a resilency to the external noise.” We can’t minimize pain now at the expense of pain in three to five years.
Blodget: But, seriously …
Mason: People who joined Groupon to be part of the latest fad haven’t survived. “What you’re left with are the true believers … they realize the pain they’re going to undertake for the next few months. It’s part of the journey.”
Blodget: All this sounds very wise. You know, I used to be hot stuff. Then I had a “tremendous fall … I felt the weight of that …when you go home, do you sort of feel that?”
Mason: “I don’t know what you’re looking for me to say, exactly … that it’s the best thing in the world? … I don’t read the stuff that you guys write. It’s a distraction.” [Laughs from crowd]
“People write stories about us going bankrupt.” When they started, I used to talk to our CFO about how that could actually happen, and it’s basically an “end of days” scenario.
You have to get comfortable with those kind of stories. “But they see enough examples of those kind of stories that aren’t true, that they build up a resiliency.”
One version of the story was that the business model was so great that competitors would crush us. Another was that the business model was so bad that we would be crushed.
Mason: You need to separate out our U.S. and international businesses. Two different businesses.
Now talking about pivot to goods business, explaining that infrastructure built to deliver deals also works to deliver goods.
Mason: “Goods has taken us by surprise.” We’ve been giving them more real estate. They are lower margins, still good margins, but that has hurt our numbers. But we are a growth company, and we can optimize numbers over long term.
Goods are good for us because they compliment deals.
Blodget: What does this business look like in five, 10 years?
Mason: When we started, I was a recluse, and I wanted a reason to leave my house. Deals were about discovery, for explorers. As we grew that business, we realized that we were the first company that had built a platform that connected online sellers and buyers. We’ve built retail relationships with thousands of people from “brute force.”
Mobile will be a big enabler for us. Trendline is “staggering.” A third of transactions are mobile. Over the past weekend, half of transactions were on mobile. Mobile is an enabler of local e-commerce in the same way that broadband has been for online video.
So how does Goods fit into it all? Core daily deal business is about “shocking people into buying something they didn’t want to buy when they woke up,” by big, interesting offers. By not being boring. Goods strengthens that proposition. “This is a sustaining innnovation, and this is a disruptive innovation.”
Blodget: So are you going to morph into Amazon?
Mason: No. Silly for us to try to “out-Amazon Amazon.” We’re not going to show people 1,000 TVs, we’re going to show them one TV. We think that’s a unique proposition.
Blodget: More on deals, please. Lots of local merchants complain about experience. But you’re still growing. How do we reconcile that?”
Mason: Plane crashes are more interesting than safe landings. “When Groupon fails to deliver ROI, it fails in a much more dramatic way than putting an ad in a newspaper and not getting ROI.” We track this heavily from third parties. We use ForeSee (for surveys), and we have “off-the-chart scores for satisfaction.”
Blodget: But the other constraint is that you have 100 million email addresses. Most people have tried you. How do you get growth, and combat deal fatigue?
Mason: Don’t look at it by solely looking at local daily deal business. Now we’re adding searchable indexes for deals in Chicago and New York. Will increase selection, grow by increasing site traffic, grow via Google search results.
Blodget: Back to the board meetings. Some big investors have been buying your stock. Let’s say there is a serious discussion that you should be replaced. What do you say?
Mason: “If I thought I wasn’t the guy … I care far more about the success of the business than I do about my role as a CEO.”
Blodget: And you should! You’re awesome!
Mason: “Thank you. But if I thought I wasn’t the right guy, I’d be the first person to stand up and take myself out of the job.”
Blodget: So you want the job?
Mason: “I want what’s best for Groupon.” Again, stock is down 80 percent, so this discussion is normal.
Blodget: Thanks again for showing up. “Groupon has accomplished a tremendous amount. I am hoping that you are on the Amazon and AOL trajectory going forward.”
(Photo courtesy of Michael Seto/Business Insider)