For reinvigorating retail—and turning down $6 billion.
Andrew Mason is the unlikely CEO of last year's unlikeliest breakout business. The 30-year-old Midwestern music grad has transformed the bottom-feeding coupon trade into a billion-dollar force that even sexy Google lusted after. A savior for small businesses, Groupon is the most exciting thing to happen to retail since eBay. Mason himself is a person of uncommon candor. "I feel like a lot of companies invest a lot of energy and money in trying to figure out who their customer is and how to be just like that, and it never comes across as genuine," Mason told Fast Company from Groupon's offices in Chicago (as rumors of an IPO swirled). "The companies that I like to do business with are—even if you find them a bit strange—genuine and real." Groupon's culture is an unusual amalgam of Second City humor, traditional newsroom (a few hundred employees have done time at one or the other), and good old-fashioned salesmanship. In a wide-ranging chat, Mason explained how all that came to pass.
Did you model the company on other successful businesses, or was it all gut?
I was on track to get a degree in public policy, so I have no business training other than doing a startup for a couple years before we started Groupon as a side project. The original startup was a site called the Point; it was a social-justice platform that existed to solve the world's unsolvable problems. When we launched Groupon, we were thinking this might allow us to pay the bills while we continue on this huge altruistic cause. We approached Groupon as what we had to do to not want to kill ourselves for hawking coupons every day. There was a kind of freedom that came with not caring if it failed, and caring primarily that it was something we could be proud of.
So given your shift from public policy and social justice to retail, what would your 20-year-old self think of your 30-year-old self?
I never really planned my life more than one month in advance. I try to chase whatever I think is the most interesting thing to do at the moment, and if it becomes less interesting, I find something else to do. One of the eye-opening realizations I had was that most of the web businesses that have been truly successful at making the world better, that usually happens as a side effect to something that is fundamentally self-serving. Not to sound cynical, but if you look at Flickr or YouTube or Twitter, the primary-use case for those tools is something far more base than when they're used to document protests or brutality or all the other ways they've helped usher in social change. I feel like Groupon falls into that category as well. When consumers are buying these half-off deals, they don't realize it, but they're playing their part in revitalizing their local economy and reversing the trend of people spending a larger amount of time in front of the computer screen and forgetting what it means to go out and experience life. People just think they're getting a deal, but they're getting so much more. At least, we rationalize it that way.
How is the startup culture different in Chicago versus Silicon Valley?
The pro and the con is that there isn't a strong cultural strand where people have preconceived ideas around you. It's a pro because when we start a business, we think about it as more of a blank slate. People in Silicon Valley oftentimes fall into a trap of wanting to use technology to solve every problem, even when they're problems humans would be better suited for solving. We have more than 4,000 employees now and more than half of those are in sales. If we were in Silicon Valley, we might have tried to automate the process. Silicon Valley looks at salespeople with the same kind of skepticism that we look at self-service. We believe that to have truly ubiquitous coverage with local merchants, human beings are an important part of the equation.
The con is that we don't have the depth of technology talent in Chicago. In November, we expanded our offices to Silicon Valley just to get the sheer number of engineers we need.
There's a natural fear that anything that rises quickly might crash equally quickly. Do you worry about Groupon's meteoric rise?
You don't have to rise this quickly to crash quickly. Even if we had taken our time, it wouldn't save us from the possibility of catastrophic failure. I think a lot about the companies that have made it to our place, and they have their moment in the Internet spotlight: the MySpaces of the world. The common theme I see with those companies that had a flameout as spectacular as their rise is they lost focus on making their customers happy. I'm hopeful that as long as we continue to think that we suck and try to be better every day than we were the day before, then we can avoid a similar fate.