Groupon.com went from ‘0’ to $500 million in sales in just 18 months.
Little wonder the CEO and founder of Groupon.com, Andrew Mason, refused to sell his social commerce site, Groupon.com, to Google for $6 billion last December shortly after his company was valued at just over $1 billion.
Groupon.com (group coupon) is a group-buying site or rather an Internet discount site meant to be a side project of The Point (a group action site), but it quickly became a honey-spot. While The Point floundered, Groupon.com flourished excellently.
The Point was launched in November 2007 to help subscribers undergo collective social actions like creating a donation campaign- pledge money, provide your credit card details, but you don’t donate until you hit a certain mark.
Likewise, Groupon.com was founded on the basic idea of a group coupon:
Groupon.com subscribers are offered a minimum of one deal per day in their city (for example, half-off for a health spa treatment). A particular number of people need to buy in, or a particular amount has to be reached before the coupon can be redeemed.
Groupon negotiates huge discounts (about 50% – 90%) with popular businesses and email their thousands of subscribers on the available deal. That way, the businesses get a lot of new customers while Groupon.com takes about 50% of the deal.
Background of Andrew Mason -The Founder and CEO of Groupon.com
The story of Andrew Mason consolidates the saying that,
‘Daring ideas are like chessmen moved forward. They may be beaten, but they may start a winning game’
Johann Wolfgang Von Goethe
The Founder and CEO of Groupon.com, Andrew Mason, was born in Pittsburgh, Pennsylvania in 1981.
He studied music in Northwestern University in Chicago. In 2006, he dropped out of a scholarship program in University of Chicago Harris School of Public Policy to set up an online collective action and fundraising portal, The Point.
The Point failed woefully but birthed a more successful company, Groupon.com, which has grown like wildfire in less than 3 years of its existence.
Groupon.com was launched in November 2008.
Currently, it has over 44 million subscribers from the Unites States, Canada, Europe and more. They partner with over 500 markets in 44 countries.
On Twitter, you can follow Andrew Mason @andrewmason, where he has over eighteen thousand followers while he follows only about 130 persons.
Andrew Mason’s Mind Exposed
In an interview with Andrew Warner, Andrew Mason revealed that he started to build websites just for fun.
“When I first started building websites … I just built websites because I had ideas that I was compelled to fulfill. I got lucky that I started working as a developer for someone [Eric Lefkofsky] who went on to be my main investor and cofounder in Groupon. He just kind of said, ‘It seems like a good idea. Why don’t you drop out of school and turn it into a company.”
Andrew Mason is a man who believes in winning and failing. Andrew Mason’s advice to business starters is,
“ … just always focus on doing things that are interesting. I think the best lesson that I’ve learned, people always talk about the importance of failure, and I think there’s truth to that. … It’s knowing that failure is a possibility … When we started Groupon from the beginning, I had this paranoia. Since then I’ve kept a list that I look at every week of what are the biggest problems for the business. What are the ways it could fail? It sounds almost fatalistic but it really frames my way of thinking. I’ve found it to be useful and it’s helped us focus on the right things and anticipate problems instead of getting to have them. Knowing that no matter how great you are, you too can fail.”
He also shows he is not afraid of competition. He said at e-G8 Conference,
“We are happy for consumers and merchants that competition exists. Facebook is a wildly innovative company. If they end up doing some cool stuff that completely demolishes Groupon, it’s probably for the better of society”
As advice to other entrepreneurs, Andrew Mason said,
“…Stop thinking about where you're going to end up and just think about the path and get satisfaction out of that … The lesson that we kind of learned is that sometimes you make the best decisions when you think nobody is watching”
From experience, Andrew Mason has these six (6) tips for aspiring entrepreneurs:
- You’re building a tool, not a piece of art. Mason suggests that you don’t get blinded by vision, as he was with ThePoint. Groupon has been the total opposite, very focused on hooking the customer within the first few seconds.
- Recognize and embrace your constraints.
- Have a growth plan.
- The best tools aren’t always that cool. Groupon chose e-mail because it’s simple and universal.
- You’ll probably fail. Mason suggests that you have the fear of failure in the back of your mind because it’ll help you confront reality and shape your decisions toward building a viable product.
- Quit now. Sometimes you have to let an idea go.
Further Reading on Internet Business Leaders
- Ten Entrepreneurship Rules for Building Massive Companies by LinkedIn Founder, Reid Hoffman.
- 16 rules of success in Business & Life in General by the CEO of GoDaddy, Bob Parsons
- Revelations from the Life of Jeff Bezos: The Founder, Chairman and CEO of Amazon.com
- How Facebook CEO, Mark Zuckerberg, Built a Giant Company from Nothing
- How Cofounder & President, Arianna Huffington Started Huffington Post & Sold to AOL for $315 million