After he was fired Thursday, Andrew Mason wrote a note to his Groupon colleagues filled with the same offbeat humor, charm and candor that defined his tenure as chief executive of the daily deals company he co-founded.
“After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family,” the letter began. “Just kidding — I was fired today.”
His ouster came as no surprise. Questions about his future have been swirling for months because of Groupon’s poor performance since going public a little more than a year ago.
The end of the road for the 32-year-old Mason came a day after the Chicago-based company posted disappointing fourth-quarter earnings that sent its stock reeling. But his exit was signaled three months ago when an anonymous leak to a well-read tech blog indicated that Groupon’s board of directors was considering replacing Mason.
Mason even alluded to his preordained departure in his farewell note: “If you’re wondering why … you haven’t been paying attention. … As CEO I am accountable.”
Mason’s firing also reflects a changing company with needs different from those of the skyrocketing startup he helped create in 2008. His rapid rise and fall is hardly unusual in entrepreneurial circles. It’s hard to transition from visionary to manager of a complex, global enterprise, and the pace at Groupon was nearly unprecedented.
“I’ve always thought they got a bad rap in the press,” Matt Moog, a Chicago tech entrepreneur, said of Groupon’s leaders. “It’s extraordinarily difficult to grow a company as fast as they did and get it all right the first time. The change in leadership will give them a chance to back away from that criticism a little bit and try to keep growing the company.”
Groupon’s struggles have been stunning, and dispiriting, to many in Chicago because so many expectations were wrapped up in its early success. The city’s tech scene has worked through several boom and bust cycles trying to put itself on the map as a regional center. That ambition is held not just by local entrepreneurs and investors, but civic boosters all the way up to Mayor Rahm Emanuel.
And for a while, Groupon delivered the goods. The company evolved into one of the hottest names in technology in less than three years, single-handedly redefining Chicago as one of the most exciting cities in the country for digital business. Employment at the company grew from a handful to more than 10,000 worldwide as the company’s valuation blossomed into the billions.
Groupon’s red-hot growth attracted numerous imitators, from LivingSocial to Amazon. Google noticed the competitive threat to its local advertising sales and tried to purchase Groupon in 2010 for nearly $6 billion. Groupon’s leaders said no deal.
For a while it looked like a smart call. Investors cheered Groupon’s initial public offering in November 2011. It ended its first day as a public company worth more than $17 billion.
But since then Groupon has floundered, as consumers’ appetite for heavily discounted deals on restaurants, yoga classes and pedicures has shrunk. To boost growth the company started Groupon Goods, an online retailer selling a seemingly random assortment of products — everything from leggings to cowhide rugs — at a discount.
Few analysts believe Groupon can effectively compete in the online retailer space against the likes of Amazon. Some see it as little more than an expensive way to beef up sales and, ultimately, as a distraction from its lagging daily deals business.
A more promising initiative may be Groupon’s local marketplace, a shift from pushing out daily deals to pulling in customers through ongoing, search-driven offers. Launched in November in Chicago and New York, customers who search online for various products and services will see relevant deals on Groupon.
The company called it an “evolutionary step” toward demand shopping, while Mason, on what was his last conference call as CEO of Groupon on Wednesday, said it was a necessary change of direction.
“It’s hard to believe that just a short time ago we were a deal-a-day business,” he said. “As you can see, our business continues to evolve at a breakneck pace”…
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