Sometimes Groupon hurts the ones they love
In case you live under a rock, the CEO of Groupon, Andrew Mason, got fired. I know this because I have an Internet connection and it is the first return of any Google, Bing or Yahoo (the company that actually makes people show up to the office to do their job – oh, the horror) search you do. Try it. Type in “key lime pie” into any search bar and the first result is “Groupon CEO fired.” For some reason, the news is that big.
Actually, Mason is on-man SEO firm. Because he is ironic, funny and a tad acerbic, the media totally digs him. It helps that he posted a letter to his employees announcing his shit-canning on Jottit which was sufficiently peppered with jokes and one liners that make it a fun read. That combined with the fact that at one point Fortune or Forbes or some such magazine wrote an article declaring Groupon the fastest growing company EVER – E-V-E-R! – and it is pretty big news.
I am wrong a lot. I know that for a fact. I have passed on a lot of opportunities that turned out to be huge. But I am right occasionally and I never bought the Groupon hype. I spoke with someone there when they were starting out (they were only worth like a gazillion dollars at that point – I think it was month 4 – about a company I was involved and why we should be carrying them on our site. As far as I could tell from their proposition we weren’t going to make any money, they were going to make a little and the people they were getting their daily deals from were going to get totally hosed. But this very enthusiastic employee told me we needed to carry them because they were huge and only getting huger. I got a similar story from a guy at Enron once who was trying to convince another company in which I was involved to build a portal for their bandwidth commodity exchange – for free. We passed on Groupon, and thank the Lord, Enron too,
Bottom line is businesses have to create something. They have to build a product, provide a service, offer an outcome that people want (need is even better). I didn’t see Groupon doing that. I saw them leveraging a distribution mechanism and claiming it was a value add.
Is there something to it? Yes! Should it have been the fastest growing company EVER? Probably not.
Your business must scale. No doubt about that. But remember, there are two operative terms in that statement and the first one is “business.”
As for Andrew Mason – he’s smart, funny, probably rich and seems to have perspective. I think he’ll be fine and I bet I am right about that.