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Andrew Mason's statement about being fired as Groupon CEO (jottit.com)
646 points by robbiet480 on Feb 28, 2013 | hide | past | web | favorite | 186 comments



Full text of his statement:

(This is for Groupon employees, but I’m posting it publicly since it will leak anyway)

People of Groupon,

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. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!

I will miss you terribly.

Love,

Andrew


Very classy. Keep in mind, though, that it makes is somewhat easier to take being fired in stride when you have a $200 million cushion. He doesn't have to deal with many of the challenges that most newly-fired people do - like finding a job in the not-too-distant future, etc. To be sure, getting kicked out of the company you founded is an emotionally challenging experience, but he can lick his wounds on board a private jet to a private island.


Getting fired from something you poured your heart and soul into for close to five years, sacrificed relationships, health (+40 lbs), etc., must feel awful. I suspect he really does feel love for many of the people who were in the trenches with him during this time, as he avers in the closing line. Staring at your bulging bank account can only do so much to lessen that pain, at least in the short term.


Staring at an empty bank account, a pile of bills & wondering how you're paying rent next month does a remarkable job at distracting you from the emotional aspect of getting fired as well.


Yes, thank goodness for being broke.


so true. just that if they superimpose then for sure you go into depression. Now that can be life changing.


I really hope this is sarcasm.


hammering a nail through your foot supposedly cures your headache too. At least in the short term.


Oh the tears of sorrow the poor guy will shed into his heated swimming pool after being ejected from such a respectable business, with 200 million to his name...

I don't think I have been this touched ever since Lassie died.


Because wealthy people don't experience passion. Down with the 1%! #occupy


Lassie died?!


Got stuck in a well after Jimmy went off to war. The new dog was a pug, and was averse to leaving the couch. The family assumed she ran away.


Maybe they meant Old Yeller.


Hush, don't let the bad man's lies scare you. Lassie is still alive and she's with Santa's Little Helper in a doggie spa in the maldives.


I should imagine that staring at $200 does a lot to lessen the pain. Groupon has been a big scam from the start and to come out of that with a huge pile if cash is nothing short of a scandal. In America the banks nearly bring down the whole of the western world's economies and we bail them out so they can give themselves huge bonuses instead if sending them to jail. And this guy gets to spend the rest if his life in luxury leaving behind a miserable bunch of share holders and customers.


Yes, how dare people make money. Those bastards!


"Make" fine, but the post you responded to said they were a scam. Surely you don't imagine that any way one can make money is noble? On the off chance that you do, would you mind telling me where I could find you after dark with lots of cash on you and no firearm?


I think claiming Groupon is a scam is a pretty subjective statement.

And the answer to your question is never all three :)


This comment is totally unnecessary given all the caveats downandout made, and as someone who has lived through hard times it upset me to read your comment, although I do appreciate the edit that was made.


Your hard times are only hard relative to that of others, and even then, only in some aspects.


But we know the human brain doesn't work like that anyway. My life is, in almost all aspects, better than the vast majority of the people in the world, but that doesn't stop my brain from making me feel completely awful when something bad (relatively) happens. Your brain doesn't say 'well, you've been fired from the company you worked for for 5 years, but hey, at least you have fresh drinking water'.


Locus of perception. Even just being "cold" relative to someone else (temperature).

Locus of perception isn't really a "phrase" that is accepted, though it would merit some Cog Psych research to quantify the phenomena above.


> well, you've been fired from the company you worked for for 5 years, but hey, at least you have fresh drinking water

I'm not sure whether it's my brain, or 'me' that's saying it, but this is pretty much what I tell myself every time something 'bad' happens to me. Works like a charm.


> Your brain doesn't say 'well, you've been fired from the company you worked for for 5 years, but hey, at least you have fresh drinking water'.

You should maybe look into getting a more compassionate brain.


That's ridiculous. You've never felt upset about a girl (or guy) , or because you lost your job, or just because you had a shitty day? You can probably rationalise it away as 'well people are worse off than me' but it likely doesn't make you feel a whole bunch better.


You're right, I could have worded that differently and better. What I intended to say was that even then, there's usually some thoughts about being happy for the wonderful things I do have, bubbling in the background (not continuously, of course). And like you said, I also try not to go with the "some people have it much worse" line of reasoning.


In what way is your message to him helpful?


I'm afraid he can't read that from behind his mountain of money.


He is still serving as a director on the board, so it's not as if he's being booted out of the company. He (or the shareholders) may choose to change that, but for the time being he is still involved directly in the well-being of the company. This would be a great opportunity to learn how to manage the company the way it should be (Groupon Hate aside) and perhaps return as CEO in the future or be better prepared for whatever is next.


It may feel awful but the previous poster's point was probably that there's no stress to go along with it. For middle class people who get fired they may have all those feelings and effects as well but they also have the stress of needing to get a job within a few weeks.


I liked how down to earth it was, but also thought that he is probably laughing all the way to the bank.

Perhaps not laughing, and I don't mean he was malicious, just that I'd surely have a bit of a snicker if I had a run that was half as good as he did.


This is the exact reason you want your CEO to have a good cushion: So you can fire him from one day to the next, or even discuss with him over a longer period of time that he'll have to go, and have as few worries as possible that he's going to take it reasonably well.


Personally I think it's exactly the reason why you don't want your CEO to have a cushion - he doesn't really care, it doesn't really matter to him that his former company is going down the toilet as he's cashed out long ago.


Cashing out is not thesame as not caring. Didn't Steve Job cash out when Apple fired him, but when he returned, he still cared enough to do awesome things. Why would you want the CEO of a public or big company to be worrying about his personal finance instead of the business. There is a reason why even hired CEO's are well compensated.


You want a CEO's interests to be aligned with the company's, which is why most CEOs are given share options that will be worth something in 3 - 5 years, large bonuses based on success, and so on.

Steve Jobs cashed out when Apple fired him, but when they hired him back they also gave him large numbers of stock options [1], worth billions after he'd resurrected the company.

1 - http://en.wikipedia.org/wiki/Steve_Jobs#Wealth


I definitely have more money than I had 10 years back, but the feelings I go through when I'm hurt are the same.


Very classy. Keep in mind, though, that it makes is somewhat easier to take being fired in stride when you have a $200 million cushion.

== Wait what? If you have to say it, it probably aint.


Gracious would have been a better word, but I was in a hurry when I typed that (there is also a typo in there that I didn't notice until hours later after I couldn't edit it).


Its not a wordsmithing issue. Its PR. It is not "class" or "grace". If you study the Co's history, this would become clear. The withdrawls of cash from the company by its senior management, for example, are "classic" but not "classy".


This has to be one of the most honest dismissal statements I've ever read. Major props to him.


Same. Wow. That guy sounds like someone I'd want to work with in the future.


Agree that the letter is good. But I'm puzzled by your reaction to it. Seems more of a populist "touchy feely aw shucks nice guy". How does that make you want to work for him? He wrote a good letter. What about the things he sucked at? What about the immaturity? The bad business decision. So what he is humble.

Some of the business people who are viewed as the most heartless and absolute assholes (by outsiders) can be incredibly loyal if you are on the inner circle and can provide you with opportunity. The nice guys can be swayed by others and give you the axe.

Business is business. Being a nice guy doesn't equate to winning in many cases.

Your comments sometimes come off as abrasive. That has no impact on whether I would recommend you or your company for security work (which I have done btw). My wife choose a doctor with a great bedside manner for a difficult operation our daughter needed.[1] I found a world class person who specialized in the exact problem who was almost impossible to deal with and very dismissive. He handled a difficult operation brilliantly. That's what I want the personality is secondary.

[1] Risk of facial paralysis a possibility with bad outcome.


The letter opens with the things he sucked at.

I don't care that he's nice. I care that he cut through the crap.


Agreed - but I also suspect he's been writing this letter in his head for quite some time.


I think the guy knows his statement is going to be the lede of a lot of very popular news stories.

I don't care who threw the grenade at this point, Mason jumped onto it.

It's a great letter.


Got to agree with you, tptacek. People are conveniently forgetting that so many other fired CEO's with fat bank balances have not bothered to be honest about their reasons for leaving.

This is classy.


The first grenade was waiting to be jumped on almost two years ago. Then there were more grenades every quarter.

The only thing Andrew Mason's jumping on at this point is a pile of Scrooge McDuck money.


It seems like there might be a lopsided U-shaped curve to the expected benefit of "cut[ting] through the crap." On the left, at zero admission of guilt, is the baseline. It seems that in the middle there would be a diminished return expected when making a qualified or partial confession, but if you can get past a certain threshold (which may not be possible for all people in all situations), the expected benefit shoots back up.


The letter is great -- super-gracious, self-deprecating, funny, self-aware. It makes him look good and makes it pretty difficult for other people to criticize or attack him. But I don't think the letter necessarily reveals (1) his true feelings about anything or (2) whether he's a good guy to work for.


It's a fair point, and you balance out the spectrum of "touchy feely vs. effective," but it's just that: a spectrum. People don't have to be abrasive and impossible to deal with in order to be brilliant, and people don't have to be in touch with their emotions and have good bedside manner to be incompetent and a waste of oxygen.

I think his point that he "made it so far" on his first try is apropos. He's done a shitload as CEO to capitalize on the opportunity and generate a ton of value (debatable whether that will be long term value) in a way that few people ever do.

To fault the guy for having a good exit letter seems a bit myopic.


If nothing else, the fact that he wrote this letter suggests that he knows to some extent what went wrong.

I'd argue it is better to work with someone who has made mistakes before (and will be less likely to make them again) than someone who hasn't.


> So what he is humble.

A willingness to admit your mistakes is more than humility, though. It's the first step towards not making those mistakes a second time.


>Business is business. Being a nice guy doesn't equate to winning in many cases.

Regardless of how relevant it is to Andrew Mason's case this is a very important point to realize. It certainly was one for me and many others I know of. Mind you, "winning" in this case doesn't only pertain to selfish, zero-sum victories; it's relevant in the boarder sense of "winning": "the art of choosing actions that steer the future toward outcomes ranked higher in your preferences" [1]. Recently I was linked to a Cracked.com article [2] that I think summarizes the difference between "being a nice person" and "winning" in the boarder sense with great, harsh lucidity. Please don't let the tone dissuade you from read the following quote in full.

>Let's say that the person you love the most has just been shot. He or she is lying in the street, bleeding and screaming. A guy rushes up and says, "Step aside." He looks over your loved one's bullet wound and pulls out a pocket knife -- he's going to operate right there in the street.

>You ask, "Are you a doctor?"

>The guy says, "No."

>You say, "But you know what you're doing, right? You're an old Army medic, or ..."

>At this point the guy becomes annoyed. He tells you that he is a nice guy, he is honest, he is always on time. He tells you that he is a great son to his mother and has a rich life full of fulfilling hobbies, and he boasts that he never uses foul language.

>Confused, you say, "How does any of that fucking matter when my (wife/husband/best friend/parent) is lying here bleeding! I need somebody who knows how to operate on bullet wounds! Can you do that or not?!?"

>Now the man becomes agitated -- why are you being shallow and selfish? Do you not care about any of his other good qualities? Didn't you just hear him say that he always remembers his girlfriend's birthday? In light of all of the good things he does, does it really matter if he knows how to perform surgery?

>In that panicked moment, you will take your bloody hands and shake him by the shoulders, screaming, "Yes, I'm saying that none of that other shit matters, because in this specific situation, I just need somebody who can stop the bleeding, you crazy fucking asshole."

>So here is my terrible truth about the adult world: You are in that very situation every single day. Only you are the confused guy with the pocket knife. All of society is the bleeding gunshot victim.

[1] As defined by Eliezer Yudkowsky in http://lesswrong.com/lw/31/what_do_we_mean_by_rationality/.

[2] See http://www.cracked.com/blog/6-harsh-truths-that-will-make-yo.... This may or may not be the first time this website is cited on HN.


I'm surprised I haven't seen it mentioned yet, but it strikes me as very similar to Conan O'Brien's "dismissal" statement, especially the "People of Groupon" greeting. It's effectiveness is in the plain, straightforward truthfulness and a dash of self-deprecating humor. Refreshing, but also a great PR move.

"People of Earth:

In the last few days, I've been getting a lot of sympathy calls, and I want to start by making it clear that no one should waste a second feeling sorry for me. For 17 years, I've been getting paid to do what I love most and, in a world with real problems, I've been absurdly lucky. That said, I've been suddenly put in a very public predicament and my bosses are demanding an immediate decision."

http://www.huffingtonpost.com/2010/01/12/conan-obrien-statem...


The fact that Conan points out how lucky and rich he is makes his letter a bit better in my opinion. (And let's be frank -- if you watch the film made about Conan's banned from TV tour it's clear he was very hurt by the whole deal.)


Agreed.

My only previous exposure to him was the awkward/creepy death stare he gave in an earlier interview:

http://allthingsd.com/20110601/see-andrew-masons-amazing-dea... [video]

This letter greatly improves my impression of him. Well done.


The video and this letter are both very small snapshots of him as a person. Your impression of him is probably not representative of reality. Consider learning more if you care to have a more accurate impression?


Agreed, "I failed at this part of the journey"

Yes a few hundred million will make life easier but admitting you failed, up front in a letter you know will be read by everyone you can think of - it takes a certain kind of raw


In fact, admitting you failed may be even harder when you're accustomed to being wealthy and in a position of command.


Sorry, GroupOn was under someone's command?

:-)

But yes, good point, sarcasm was inevitable.


I too enjoyed the honesty here, but how much of that is Andrew's personality and how much is facilitated by the fact that by cashing out early [1] on an 'inside' round he doesn't actually have to work if he doesn't want to?

What I'm saying is that I have observed that the honesty someone has about how their last job ended is inversely proportional to their need to get another job. If they really need another job, people position their departure in a way that makes them the victim, if they don't care if they get another job, they are more forthcoming. It may be built into the psyche for all I know.

That said, given that it doesn't matter at all if he's seen as being fired or choosing to leave, I think it was great that he was as forthright about his tenure as he chose to be.

[1] http://articles.marketwatch.com/2011-11-03/commentary/306980...


Really? It seems to me that a lot of well-compensated but unsuccessful CEOs take the route that Mason pretended to in his first sentence — "I wasn't fired and my departure is completely amicable. I'm just leaving because I suddenly want to pursue new opportunities and/or spend more time with my family." It's sort of like getting broken up with and describing it as "a mutual decision."


As a former Groupon employee, that's Andrew's personality.


Are you serious? Groupon misled investors for years about its real financial numbers, and Mason (along with the puppetmaster, Lefkofsky) made millions off the fake data. The humor in this letter hides the real damage done to investors.


Fake data? Give me a break. Groupon pioneered a new business model. With a new business model you need to account for things in ways they have never been accounted for before. While I'm not arguing their numbers didn't look shady at times, but it's because no one knew how to account for how the cash moved through Groupon's books because no one had ever done it before.

Do you count the full price of the deal as revenue? Or do you count only Groupon's cut of the deal as revenue? How often should they pay out the merchants? How do you account for refunds? Where do you keep the reserve pools Groupon needed to pay out all those refunds? Are the reserve pools considered an asset? Or a liability? How long do you need to hold the reserves before you can be sure there won't be any more refunds?

Management had to answer all of these questions in a matter of weeks because Groupon was growing so fast. It's not surprising they kept changing the way they accounted for things so often. The fact that you think Groupon knowingly misled investors like it's some sort of conspiracy is absurd.


The problem with this argument has always been that the answers are clear to people with some business experience.

"Do you count the full price of the deal as revenue?"

Gross revenue? Sure. Net revenue? Of course not.

"Or do you count only Groupon's cut of the deal as revenue?"

Yes, as net revenue. Of course. Same as any marketing/advertising company.

"How often should they pay out the merchants?"

As slowly as possible, from Groupon's perspective. What was so amazing here was they essentially built an ad network where the inventory suppliers had zero power over the scenario and accepted unfavorable payment terms. Instead of getting paid net 30, they accepted net 90 or worse.

"How do you account for refunds?"

As credits to the expense account where the original purchase was posted, just like with any other business.

"Where do you keep the reserve pools GRoupon needed to pay out all those refunds?"

You don't have to keep it anywhere because they get marked as credits to the expense account. There's no need for a pool or any other sort of artifice. Creating a pool makes sense only to cloud what's going on.

"Are the reserve pools considered an asset?"

Of course not. But why do we have a pool again?

"Or a liability?"

Of course.

-------------------

Groupon did a lot of brilliant things. One of the smartest was realizing that though their model was no different from any other sort of ad network, since it wasn't immediately obvious to outsiders, and since their suppliers had so little power, they could make up new accounting rules and principles to generate favorable cash flows.

I don't write this to say this was wrong. It was brilliant. I want to disagree with the idea that they HAD to do this. They could have paid out net 30 and counted refunds like any other business, but they realized they could get away with not doing this for some time, and ran with it.


Oh, boo-hoo. If you invest in a company without reading or understanding their finanical reports, too farking bad. That's why you're an investor.


Would you back up your claims? This is interesting.


This blog is pretty thorough in going through their past accounting issues: http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/281

One of their obvious no-nos was that they were booking the total amount of the deal as recognized revenue, instead of their fees. Also they came up with non-GAAP accepted metrics to measure their performance which were deemed dubious by outsiders.


A good place to look is Rocky Agrawal's articles on Groupon. Here's his author feed:

http://venturebeat.com/author/rockya/

just scroll back a bit.


Rocky Agarwal is far from credible. He made a name for himself by making it his personal goal to bash Groupon as much as possible. Probably because a number of his co-workers at TellMe left to join Groupon and he supposedly wasn't offered a job to join Groupon.

His so called reporting wreaks of jealousy as he watched his former co-worker's equity skyrocket with Groupon's growth while he was left out.


I'm fascinated by the theory that somebody's reporting on a topic is automatically suspect because they have developed a strong opinion on the topic.

If you've got issues with what he wrote, I'd be interested to see what specifically you feel he got wrong. But regardless, I think he deserves credit for digging into Groupon financials, and for calling out the lack of substance well before most people did. Jealous or not, the collapse of the daily deals space and Groupon's sickly stock price suggest that he was broadly correct at a time when most financial journalists were hyping Groupon and its stock.



It's true. Groupon's accounting gimmickry is extensive, and began pre-IPO (recognizing full purchase price of coupon when they are only acting as an "agent" (middleman) not as a "principal" (i.e., making the food, owning the spas for the massages etc.), which as a CFO I can tell you is Accounting 101.

Among other places: http://bit.ly/Y3hfft

And yes Rocky Agrawal and the Grumpy Accountants Professors and PrivCo.

And the accounting tricks continue - even most Wall Street analysts covering the company for a living have not picked up on it - but for "Groupon Goods last fall they changed the way they account for those purchases. (Remember for Goods their "deal-share" is even smaller than their 37% or so for restaurants/spas/etc. It's under 10% for tablets, laptops etc. So when they at first sold a $2000 flat screen TV, they booked (as forced by the SEC finally) just their $200 cut. When revenue growth slowed, they (meaning likely Eric Lefkofsky instructed) Groupon to find a way to recognize the entire $2,000 sales as their revenue. And the only way (again, speaking as a CFO who knows this intimately - not boasting my opinion is better than anyone else's, just sharing the real facts, I don't own or short the stock - and the only way they could recognize the entire $2,000 example TV sold is if they "took possession of it, then re-sold it" in plain language. And one of the requirements is that Groupon has (even briefly) the "risk of loss" (that is, the TV breaks while legally/technically in their possession before shipped to the buyer). I.e., find a way that Groupon's technically not just a deal middleman on Goods and let the buyer and seller deal with each other, but be the Reseller like Amazon.

So they literally (and this is not speculation, this is in the SEC filings - not highlighted and sort of minimally mentioned, but it's there) - they literally state starting with their third quarter 2012 10Q that beginning that quarter Groupon signed a new contract retaining a 3rd party company to act on its behalf to receive the goods from the Goods merchant, then that company acting on Groupon's behalf - with a contract that says Groupon bears "all risk of loss" and then ships it to the buyer. Now that sounds awfully inefficient, and it is, because it has to be shipped twice, reducing Groupon's margins to near zero on Groupon Goods. But it takes Groupon Goods revenue from 10% of each sale to 100$ of each sale. Starting to get the picture?

So in the last 2 quarters they reported a dramatic spike in Groupon Goods revenues (no profits of course) but analysts - not knowing any better - began to upgrade the stock, saying yes the daily deals business is slowing to almost 0$ year over year, but look at Groupon Goods! Its revenue is suddenly growing like gangbusters! (I have to give hat tip here to an Accounting Seminar that used it as an example, and to PrivCo who published a Research Note detailing it, but I checked everything in the SEC filings and can say with 100$ certainty, but of course you can confirm it yourself.)

So price targets were raised, and many former bullish turned bearish analysis (like Ken Sena from Evercore) turned bullish again, and said Groupon is going to surprise all the naysayers! Groupon Goods is its true future, it's growing in triple digits in revenue now! (Because their revenue recognized went from 10$ of each sale to 100%, by having this fulfillment company acting on their behalf briefly taking possession of the goods and contract says Groupon has "all risk of loss" - even though the possession was sometimes for 10 minutes, since they just put it in a box and shipped it right away to the waiting buyer who had already pre-ordered it. No inventory, just in and right out the door.

One more fact you should know (again gotta give hat tip to PrivCo securities lawyers on their staff who pointed this out), go to the section on "Related Party Transactions" (i.e. this is where a company is doing business or hiring a company owned by a senior Officer, Director or Major Shareholder). And in that section - brief as it is - it says one of those Related Party Transactions is that they retain and have a contract with a fulfillment company founded in mid-2012 that is owned by Eric Lefkofsky and Brad Keywell (Groupon's co-founders, Board members and largest shareholders). Yes you read that right. They saw daily deals declining sharply, and decided they had to find a way to "grow Revenue" - without actually selling any more stuff. So they quickly formed this company that signed exactly the contract terms needed verbatim that would allow the accountants to deem Groupon as having taken possession and acting as a principal / reseller and not an agent and recognize the entire Goods amount purchased.

And most Wall Street analysts (Evercore's Ken Sena was on TODAY on BloombergTV still touting the Groupon Goods revenue growth as reason to buy the stock, even though daily deals fell for the first time ever year over year.) He's clueless, and he's telling his clients Buy based on Groupon Goods revenue growth spurt since last summer.

I'll let the HN crew react to above instead of just saying out loud what I think of that or what you should. Share what you think of that.


> It's true. Groupon's accounting gimmickry is extensive, and began pre-IPO (recognizing full purchase price of coupon when they are only acting as an "agent" (middleman) not as a "principal" (i.e., making the food, owning the spas for the massages etc.), which as a CFO I can tell you is Accounting 101.

How this is supposed to be an accounting issue and not fraud is beyond me.


Many (if not all) public companies have two sets of books. One they use to show investors and shareholders, and another used to make managerial accounting decisions.

Sure their investor/shareholder books may seem deceptive, but it's legal and everything is there for us to see and analyze. I have done this type of analysis in MBA level accounting case studies. It's really fun when you see the whole class conclude one thing, but then later find out everyone's wrong due to misinterpreting a few assumptions.


Regardless of what he did or didn't do with Groupon, I love this letter; it hit all of the points it should have and didn't say too much or too little. The humor, humility and hope really tie it all together.


He's being replaced by Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonisis. They will serve as co-CEOs until they find a permanent replacement.

Here is Lefkofsky's statment: On behalf of the entire Groupon Board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history. Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future.

Source: http://techcrunch.com/2013/02/28/ceo-andrew-mason-replaced-b...


And if I remember correctly, Eric Lefkofsky was one of the investors who cashed out ~$1billion (!) of his Groupon shares during one of their last VC rounds. I'm surprised they were able to do that, but so many people were killing themselves to be a part of the deal that Eric was able to push this slimy deal through. How any rational VC allows early investors to do that is beyond me...

Nothing against the guy (I have no experience with him) but that deal just smelled rotten. So I'm not convinced that these two people are going to be particularly effective replacements/stand-ins.




Taking cash off the table is not seen as a negative signal if done systematically.


Read the links I posted. Much of the last round of funding went to them instead of to Groupon.

So, in a way, they took money that could have been used to grow/invest in Groupon away. So this is not your normal "diversifying the portfolio" move.


Since having two CEO:s worked so well for RIM^H^H^HBlackBerry.


To be fair, it worked extremely well for many years. Admittedly when the wheels fell off, they really fell off.

I'm not sure you can make a judgement about 2 CEO systems from BBRY.


Google had a triumvirate structure for quite some time, though with one "official" CEO.


Also, it's not like the dual-CEO thing is supposed to be permanent at Groupon. I think they are just looking for some breathing room right now.


...or they had a special deal this week: Appoint one, get one free.


A sample set of one makes for a bad survey.


No wonder the Capitals have been struggling. Ted's been overextended between them, the Wizards, and the Groupon restructuring.


"My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers."

lack of data that overrides intuition? If it was a pile of data I could understand, but lack? That's when intuition come handy no?


I'm guessing he had an intuition that X was the right thing to do, but there was no data to support doing X.


I was wondering if it was all the made up numbers he's put out over the years, but that hurt investors rather than customers.


That also leaves me a bit confused.


"My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers."

Otoh Meg Whitman has said something like "if you can't measure it you can't manage it".


"If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through."

Wow, that's actually kinda a perfect analogy. I totally understand.


"If you can't measure it you can't manage it" is a classic management platitude. I doubt Meg Whitman was the first person to say it.

Furthermore, it's completely untrue. Many things that must be managed are incompletely measurable, and almost everything in knowledge work falls into that category. See Robert Austin's excellent "Measuring and Managing Performance in Organizations" for a scientific exploration of the topic. (It's a more accessible version of his Ph.D. thesis.) His insights are applicable to more than just performance measurement.


It was Drucker actually.


Peter Drucker, actually. Also incorrectly attributed to Deming (who, um, would disagree).


Different strokes for different folks.


It's refreshing to see an exit memo that is so honest. He even put some humor in there, and personal accountability.

Self-deprecating though it may be, I'm sure there are a multitude of factors that he's taking the fall for. CEO's are responsible of course, and he's taking this hit as gracefully as anyone could, but there's no way he could shoulder all of this on his own.


This is fantastic letter. If we could all get fired so gracefully.


+1 for the Battletoads reference. I probably broke a couple NES controllers out of frustration back in the day.

As morbid as it sounds, it is refreshing to see such a painfully honest email. I wish Groupon and Andy the best.


Honest and funny. So rare in the corporate world.


I've had little respect for the way Mason ran Groupon, but I have immense respect for the way he's handling his dismissal.


A funny goodbye letter doesn't make up for lying consistently to investors since before the IPO. He failed, a lot, he did not have an accident, he failed over a long period and in various ways (ripping off the shops, the accounting trick and the share value/financial results).

He's not a hero for writing this letter, he as to be treated with circonspection, and at best given a second chance under close watch.


Unless you have been in his position, running a multi-million dollar public company for the first time in your life, you don't know what mistakes you will make.


And? I would probably fail way sooner, and that wouldn't mean that making a funny departure letter should save my ass if I misled people.


clark-kent is right. Hindsight is 20/20. I'm sure we all know Tom Brady shouldn't have made that pass that caused the game losing interception, but its hard to say if you were in his shoes at that point, that you would have done it any differently/better.


Indeed - that's a really well written letter.

(Though cynical-me wonders how much of it is heartfelt and honest, and how much of it is carefully engineered spin - crafted and chosen by a team of psychologists/marketers. About the only admirable thing about Groupon, at least to me, is their magnificent use of language to persuade and influence both buyers and sellers of Groupon deals.)


I felt it was dishonest when I got to "good fat camp to lose my Groupon 40." It seems he tried really hard to inject humor and trivialities into the letter.


More than once at company meetings, when he turned around and looked at the video projection, he'd mention being startled at how fat he looked from behind.

This is what Andrew Mason was like. He was one of the high points of working at Groupon.


hi peter! :P Also, 100% agreed — he was the heart and soul of the culture there.


He has repeatedly talked about the weight he has put on due to long work hours, so I don't think he's being dishonest here.


With Mason, I'm assuming phoniness at every turn:

http://news.ycombinator.com/item?id=5301302


I assume Mason answered that question about ten thousand times before at that point. If the person that asked that really asked it like that, then I have to say it was a poorly phrased, thoughtless question that no CEO would answer. He's hardly a phony for having answered it with a simple, "Yes." How would you actually expect him to have answered that? What's your ideal scenario there? "Nope. We're hosed. Everyone get out now." Would you have wanted to hear all of his strategies for how he was going to make it sustainable? So their competitors could preempt them? Perhaps if the question had been asked in a more thoughtful manner, he would have elaborated in greater detail.



"for the way he's handling "

Assumes he wrote the statement and wasn't helped by PR people of course. In that case he gets credit for at least listening to those more experienced than he is.

Can't tell without seeing his reaction in other situations that are similar of course.


"John, I'm just been told that Groupon is announcing my termination tomorrow. If you could put me in touch with a PR person that's familiar with Battletoads, I'd be very appreciative."


If you've ever seen, read, listened to anything from this guy, you know he doesn't use PR people. Trust me, this is straight from his mouth/mind.


Thanks I was wondering about that.


Yeah, he was once meant to be on TV news talking about Groupon and because they asked a question he didn't want to answer, he told a funny irrelevant story about his life just to play out the clock. A real square peg in a round hole but in the best possible way (though not necessarily from investors' POV).


Same as politicians do. It takes some practice to learn to do that. I would suspect he was prepped in evasion techniques prior to the TV appearance. Actually hard to believe he wasn't schooled in some of this actually.


Here's a copy of his statement.

--

(This is for Groupon employees, but I’m posting it publicly since it will leak anyway)

People of Groupon,

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. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!

I will miss you terribly.

Love,

Andrew


"Nothing in his life Became him like the leaving it."

King Duncan: Is execution done on Cawdor? Are not Those in commission yet return'd?

Malcolm: My liege, They are not yet come back. But I have spoke With one that saw him die; who did report That very frankly he confessed his treasons, Implor'd your Highness' pardon, and set forth A deep repentance. Nothing in his life Became him like the leaving it.

Macbeth Act 1, scene 4, 1–8


I used to work at Groupon, and for all the shit it gets there are a lot of good people working on ambitious problems there and this letter is exemplary of the kind of character that inspired people to work there.

Best of luck to them as they try to turn things around.


Errrr... I'm not really getting the tenor of many of the comments here.

For one, look at what he isn't saying. But start with what we know.

He is being fired. That means he isn't leaving by choice, and most likely doesn't want to be leaving at all.

He is the CEO, and the CEO takes responsibility for the company's failures. Them's the rules of the game, for any leadership role. He is saying no more than that.

In particular, he never says he was wrong. He says he failed to continue being the successful CEO of this particular company. In fact, he somewhat obscurely implied that his intuition was right when what the company did turned out to be wrong. Why do you think the company did those things then? Did he tell it to, or did he lose the battle?

This letter was not written to us. It was written to the people at his company. People who are important to him. Which means it probably wasn't written for us either. The speculation that this is wholly a calculated move seem BS to me.

All that is just pointing out the known facts and suggesting likely deductions. More speculatively, I'd like to share my interpretation of the tone of the letter:

He's pissed. He's pissed but doesn't want to show it. He is staying well in control, writing a decent letter that puts something of himself into it but not too much, not enough to lose face or stir up conflict that could only harm the ones left behind. He's trying to bow out gracefully without capitulating, and I think he did a decent job of it. But this is no "wow, this guy is awesome, I bet he's learned some great lessons and I'd be stoked at the chance to work with him" letter. It's adequate, mainly admirable for hitting just the right level of adequacy when you know the guy probably wants to scream and rip someone or something's head off. He just got fired, dammit!


And not just fired from some place he worked at. Fired from a company he put more thought and time into over the past 5 years than anyone even puts into raising their own children.


Andrew Warner of Mixergy interviewed Andrew Mason in 2010 while Groupon was at its peak. I haven't had a chance to re-watch it yet but I imagine it'll be a very interesting watch given recent events.

Here's the video: http://blip.tv/mixergy/mixergy-groupon-andrew-mason-3852853

And transcript: http://mixergy.com/andrew-mason-groupon-interview/


Chrome throws a security error up for this site:

The site's security certificate is not trusted! You attempted to reach www.jottit.com, but the server presented a certificate issued by an entity that is not trusted by your computer's operating system. This may mean that the server has generated its own security credentials, which Google Chrome cannot rely on for identity information, or an attacker may be trying to intercept your communications. You cannot proceed because the website operator has requested heightened security for this domain.


I don't understand this error (I get it too). Why doesn't Chrome allow you as a user to understand the security risk and bypass it? Firefox and Safari let me at least continue.

http://cl.ly/image/2c1I0U2o3t0I


Because most users will make a bad decision and continue to condition themselves to ignore security warnings. If, instead, a critical mass of users can't use a website at all, the site owner actually has to fix the problem.

I noticed that you said you "don't understand the error" yet you wanted to bypass it. This line of thinking is exactly the problem. I don't mean that in a condescending way. Disabling the last line of defense as a matter of routine is resulting in more and more attacks, so Google wants to move the problem to where it should be - the misconfigured website.

The short version is that during a previous visit to that site, it sent an HSTS HTTP header, which is really the only protection there is against SSL stripping attacks. Basically, it tells your browser, "My site will ALWAYS be SSL (and valid SSL) - if I ever tell you otherwise, it's not me, so do not communicate."

HSTS is relatively new, so browsers are handling it a bit differently and you don't see it often. A broken SSL chain on a site that did not give you HSTS would still allow you to ignore it.


>I don't understand this error

Is it typical for front-enders in Rails to not know web security / SSL?


I meant I don't understand why Chrome forces this error with no bypass.

Do we really need to be sniping?


Sorry if I offended, I was legitimately curious.


Ah, no worries.

Yep, Rails people have to understand and deal with SSL issues just like everyone else :)


My guess is it's because of the way the site is setup on heroku with regards to SSL.


I'm surprised that there's not more comment that they guy taking over, Eric Lefkofsky, is the "slimy one" that made Groupon such as sleazy IPO, not Mason, for cashing out $1BB+ pre-IPO.


I saw Andrew Mason speak at Startup School in 2010; the headline of his talk was 'Polishing your turds and GETTING SUPER RICH.'

http://www.justin.tv/startupschool/b/272030648


How fitting for a man that built a predatory company to be ousted by predatory executives.


Check out Andrew Mason's bio blurb at WSJ. Weird. http://topics.wsj.com/person/M/Andrew-Mason/6435



As a fellow Northwestern grad it disappointing to see him go, but as a lover of Chicago its probably for the best. I'd really love to see GroupOn succeed and help anchor a diversified tech presence in the city. We have some great startups, but you need big public companies in the same way a mall needs a Macys, Nordstrom, etc.


Unfortunately, at least as I understand it, the center of gravity for tech at Groupon is in SFBA now.


Why do I routinely see people on the net capitalize the second o? (You're not the first I've seen even today.) Is it like Microsoft, where it used to actually be MicroSoft and people like Mark Cuban still spell it that way out of hipsterish I-was-there-in-the-old-days sentiment? Or do a lot of people just think thats how it's supposed to be?


I think it's just because the pun "Groupon = coupon" is too subtle to be intuitive to me. I think of it as "group on [to]" which I realize makes no sense.


Andrew took Groupon further than 99.99% of all startups will ever go, then went out with a funny, accountable, and humble goodbye note.

If you honestly embrace startup risk and failure, you simply cannot bash this guy.


My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers.

Are there more insights in this? What do you think are the intuition decisions Groupon took (that’s public) that probably wasn’t against data?

It might seem obvious in retrospect, but as a startup founder I’d love to learn in context.


Agreed, even if it's too sensitive today I'd love to someday hear the real story behind ambiguous statements like that. There's a lasting lesson in there for everybody somewhere.


Battletoads is definitely one of the best platform games ever created, kudos for the reference. It's playable on online NES emulators such as http://www.playnes.net/play/107/Battletoads.html


Dear Andrew,

One bad year and a couple missed objectives, and your boss fires you? Looks like you were dealing with somebody who doesn't invest in training his employees... you'll be much happier working for somebody else.

Love,

an observer


It's not one bad year. Every year they've had, from a profit perspective, has been a bad year. We just didn't know how unstable the business model was when they were private. By the time merchants had a chance to figure out what selling a Groupon actually gets them (which for most is little more than a huge headache and a loss of money) Groupon was a public company.

Groupon built this massive juggernaut on a shaky premise, which is that merchants can sell a Groupon and more than recoup the lost revenues in future business. It's debatable whether merchants will keep selling these at 25% when most lose money on it and seem to get no long term benefit. It actually seems unlikely.

Groupon also spent more to acquire users than they made off them, figuring they'd make it up later, much like they were telling merchants. That's why they included the ridiculous ACSOI metric in their prospectus.

It's likely at this point that they need to pivot, and they probably just don't think Mason is the guy to do it. Maybe they think he should have done it sooner.

The nice thing about Groupon is they're in a great position to do it. The bad thing is it's going to be tough, and what they pivot too is uncertain.


Interesting argument. Seeing as Mason created from scratch a company valued at around $20B using Lefkofsky's seed investment of $1M, it seems to me like a very respectable accomplishment.

Whether the current business model is viable and how much they need to pivot if they do, that's hard to tell without walking a mile in their shoes. But if I only had to bet on one horse, I'd pick the one that has a proven record for a "very respectable accomplishment" and give him the tools he need to succeed.

If Lefkofsky thought the business was so bad, would he have taken the reigns himself?


Well, no. He used Lefkosky's $1m, plus about $1.14 billion in venture funding to make a company that is now worth about $2.8 billion.

Groupon's market cap was just under $13b at IPO I think. Now it's under $3b. Losing 75%+ of your value isn't an accomplishment in the eyes of the public market, it's a dismal failure.

Remember the original dot com bubble? Lots of startups grew to multibillion dollar valuations, some even in the public market, then flamed out. Is that a "very respectable accomplishment"?

Lefkosky took over because it's quite common for the board to lead the hunt for the new CEO. Who else would do it?

And even if you assume that Groupon was well-managed pre-IPO, rather than a Ponzi scheme that used VC capital to buy users and hype themselves into an IPO and then dump a loser of a company onto buyers from the public market, that still doesn't mean Mason's the guy to get them to the next stage. Some people are good early stage CEOs but not late. I quite suspect Mason is neither though.


This is classy, glorious and full of honor.

Me personally, I would love to fail like this someday.

The most big wins in my life have come after big failures. This guy is set for something big in life.


It's shocking to me how bad the HN community is getting when I check out of a comment thread every couple weeks or so.


Another Steve Jobs in the making. This has happened with Steve as he was fired after founding Apple.


Except Jobs and Apple built revolutionary products that changed entire industries. Groupon is a way for people to buy the same old stuff for a little cheaper.


I doubt it.


Except Apple was very profitable at one stage.


Sorry, I am not buying this.

He knows what he is doing.


i too felt that it was very self serving. didn't actually place the blame on himself


Well done.

"I let a lack of data override my intuition on what's best for our customers." Isn't it intuition that becomes the problem when faced with a lack of data?


It seems he means that his intuition was correct but wasn't followed for lack of data backing it up


The problem isn't the CEO, it's the business model.


I thought the entire concept was kind of confusing.


an honest post. I haven't really followed what's going on with Groupon or the whole daily deal space, but good on him for driving the whole world insane with the daily deal craze. Seriously, two years ago, finding daily deals online was EVERYWHERE - it's not easy to start something like that.

It's like... Gangnam style for startups!!!


Heads up, as of this writing, the website is down. I think we accidentally slashdotted the page.

Anyone confirm it's not just me?


confirm


I don't like Mason, but I like this smart, classy, honest message. And he has a great sense of humour.


Groupon has Jeff Holden, who was an extraordinary exec at Amazon in the earlier days.

He might be a good fit for CEO.


Overall Andrew has done a awesome job, from just being a guy with a great idea and taking it to be the fastest growing company in history while inventing a new space is quite remarkable. I think everyone on this board would have liked to hit a homerun like this after only a couple hits at the plate.


I'm curious why he was "fired" rather than given the "opportunity to resign."


This is a true testament to the difference between startup and cube culture.


He has made his money. Enough to do another startup.


I love how candid he is in this letter. Good stuff.


Does anyone know how many employees Groupon has?


I was okay with this until the third paragraph.


Why do you hate battle toads?


$25 IPO stock about to become an OTC stock.


That's a great letter.


Your app crashed from the traffic


Jottit is a site that was co-created by Aaron Swartz. (And runs on Heroku, apparently.) Hopefully his co-creator can help bring it back up?


Groupon fires an excellent CEO while Yahoo's new CEO is utterly impervious (for whatever reason) and is getting away with waging a holy war against engineers? What is going on?

Can I expect the laws of physics suddenly to invert tomorrow?


I am not sure that Andrew Mason would be universally described by all as an "excellent CEO"...Groupon's financial performance suggests otherwise.


To blame a company's success or failure on 1 person is a ludicrous notion. All I've seen from the man indicates that he's a CEO I'd definitely like to work with and then have a beer after work with.

To take the failure of a company on your own shoulders in spite of it being a collective group failure or a fundamental failure of the business model is a heroic act. To be so publicly fired for something that arguably no person could have prevented is not something I'd want to experience.

OTOH, it's interesting to see how bad the downvoting on HN has become lately. Point out a CEO is good and another CEO is terrible, which seems to be in broad agreement with every other commenter, and get downvoted into oblivion. What's going on, guys?




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