Andrew Mason, the former CEO and Founder of Groupon was well known as having an offbeat style that was – at one time – one of the best and worst things about the daily deal company. He added a playful, giddy spin on the group buying business. Although those on Wall Street avoided his kooky antics and he sometimes wandered into the realm of bizarre, Mason was the epitome of an “out of the norm” founder as he pushed limitations and broke barriers.
The daily deal CEO wasn’t always known as “The Worst CEO of the Year” in fact, early in life Mason was quite the entrepreneur. Born in 1981, he grew up in Mt. Lebanon, Pennsylvania a suburb of Pittsburgh, in a Jewish family. At age 15, he started a Saturday morning delivery service called Bagel Express, similar to a morning newspaper delivery service. After graduating from Mt. Lebanon High School in 1999 he attended Northwestern University until graduating in 2003.
He began working in web design for Chicago entrepreneur Eric Lefkofsky. Lefkofsky, several years later, provided Mason with one million dollars in “seed money” to bankroll The Point, a now inactive web platform, which was Mason’s first entrepreneurial venture on the Internet. The Point, a ground-breaking approach to online collective action and fundraising, launched in November 2007
Groupon, a new creation named for a blend between “Group” and Coupon”, outgrew the campaign website a year later, and by the end of 2008, Andrew Mason and Eric Lefkofsky knew that The Point would become Groupon. In December, Lefkofsky recruited Ted Leonsis, who made his name and fortune building AOL. Leonsis would eventually become Groupon’s vice chairman. Lefkofsky’s long time business partner, Brad Keywell, also signed on.
Groupon’s first deal was in October of 2008: buy two pizzas for the price of one in the shop on the first floor of its Chicago headquarters. Twenty people bought the deal. The Daily deal site starts in four cities – Chicago, Boston, NYC, and Toronto
16 months after the company launches it is estimated to be worth about a billion dollars – The only website to do this faster was YouTube, which did it in 12.
LivingSocial launches in mid-2009, and becomes Groupon’s biggest competition.
In early 2010 Groupon had around 300 employees and growing. April of the same year Groupon raises $135 million from Digital Sky Technologies, a Russian investment firm. The deal is seen as “signifying that social buying has rapidly matured into a real business.” The next month Groupon acquires German “clone” CityDeal, doubling its global reach and officially becomes a more professionally organized, and sophisticated sales force. It is reported that Groupon bought CityDeals “somewhere around $100 million.”
Sometime in the early to middle part of 2010, Yahoo corporate development boss Andrew Siegel reached out and offered to buy Groupon for a price between $3 billion and $4 billion. What attracted Yahoo most to Groupon was the promise of personalized offers. What attract Groupon to Yahoo? Absolutely nothing – the daily deal site declines the offer.
In July 2010, Mason attended investment bank Allen & Co’s famous conference for moguls in Sun Valley, Idaho. The next month the daily deal company is valued at $1.5 billion, beating out Priceline.com as the fastest company to reach $1 billion in sales. In addition, in August 2010, Forbes magazine puts Mason on its cover. His shirt is un-tucked. He’s shrugging as if to say, who me? The cover reads: “Groupon Is The Fastest-Growing Company … Ever: The New Web Phenom.”
By October 2010 Groupon served more than 150 markets in North America and 100 markets in Europe, Asia and South America and had 35 million registered users On December 1, 2010, The New York Times reported that Groupon was the subject of a $6 billion dollar acquisition bid from Google, which Groupon turned down.
Then, Groupon’s roll of luck seems to be running out. At the end of 2010 reports reveal that Groupon actually lost $413 million in 2010.
In early 2011. the company announces a huge round of funding — a $950 million Series G that put the company’s post-money valuation in the $6.4 billion to $7.8 billion neighborhood. Groupon now also has around 5,000 employees.
June 2011, Groupon teams up with Expedia, the traveling agency and in the same month Groupon makes a major move – Groupon files for a $750 million IPO,
At The end of 2011 Groupon has more than 10,000 employees, but even though the company seems to be quickly growing Groupon reports a 2011 fourth-quarter loss of $9.8 million on an adjusted basis.
In 2012 Groupon makes an effort to change up the daily deal company. At the beginning of the year Groupon Grassroots, a site that showcases a variety of community projects and causes, makes a a big move into the business of mobile payments, launching “Groupon Payments”
Amidst rumors of Groupon’s downfall, the daily deal site buys 12 companies over the span of 2012 including Savored, a restaurant reservations and discount meal provider and Hyperpublic, which makes geolocation technology.
At the end of December 2012 Mason was named “Worst CEO of the Year” by Herb Greenberg on CNBC. In the CNBC segment, Mason was described as “too goofy to be a CEO” In Q4, Groupon reports a loss of $81.1 million or 12 center per share – this is notably a worse dive than Groupon’s Q4 2011, when it lost $65.4 million. (By comparison, the company lost $3 million in Q3 2012.) In short, Groupon is spending more, and it’s losing more doing it, too.
Now, Groupon serves in over 500 markets and over44 countries, the many major geographic markets internationally include cites in the United States, Canada, Ukraine, Taiwan, Brazil, Germany, Greece,Finland, France, the Netherlands, Belgium, the United Kingdom, India, Ireland, Israel, Italy, Poland, Portugal, Spain, Puerto Rico, Japan, Turkey, Mexico, Peru, Chile, Colombia, South Korea,Sweden, Argentina, the United Arab Emirates, Norway, Romania, Singapore, Malaysia, Hong Kong, Mainland China, Russia and South Africa.
On February 28, 2013 Mason was dismissed as CEO the day after the company missed analysts’ expectations for sales, and fell far short of the mark when it came to profit.