A Return Ride from Rock and Roll to Riches and How to Build a Business Fast!!!

Posted on 10/10/2016 at 5:10 am

By Paul Marshall

How does one book a return ride from rock and roll to riches and how much does that cost? Answer: Not everyone will be allowed to board this ride as the cost is a lot of imagination, a lot of creativity, and a lot of passion, motivation and super hard work. But…a Mr. Andrew Mason managed to get a ticket on this super roller coaster ride showing the world how to build a business SUPER fast. Mason, now a laid back …

40 something  year-old managed to build one of the fastest growing company’s in Web history and that being – Groupon. With no commerce degree but instead, a Music major from Northwestern which may have given him the imagination and creativity needed to secure the seat on such a ride.

 Groupon is a website that sells deals to local businesses and has been able to achieve what the high profile dot-com Companies have been able to achieve plus more. Huge sales, big revenues easy profits and set up innovative strategic foundations between bricks building and internet and online sales and consumers.

At between 1-2 years old Groupon boasted a $1.35 billion valuation when it raised $135 million, the biggest chunk of it from Digital Sky Technologies, the innovative focused Moscow investment fund behind Facebook and Zynga. The only company to reach a $1 billion valuation faster than this was YouTube.

In 2010, Scott DeCarlo said Groupon was on pace to pull in $1 billion in sales faster than any other company in history. This list excludes investment holding companies (which tend to be pre-assembled before formally launching) and those built mainly through mergers or acquisitions. 

Mason was building a business SUPER FAST and Groupon was on track to exceed $500 million in revenue in 2010. In actual fact it produced around $800 million. A bit short of Scott DeCarlo prediction but still a bloody impressive result.

Impressive considering that Google, Ebay, Yahoo, Amazon or AOL did not grow this big this fast. Groupons revenue was created by taking around 50 percent of every deal listed, plus the credit-card handling fees.

 Source: Statista

In December of 2010 Groupon was presented with a 6 Billion Dollar buyout offer from Google and this would have been Googles biggest acquisition at the time. This was known by some as a super crazy offer for a company that had reported around only $30 million in revenue for all of 2009.

But Groupon’s growth in 2010 was off the charts. The Italian suited bankers from Morgan Stanley and Goldman Sachs were out dining with key decision makers and raking up huge expenses on their credit cards. Yes, this was a big opportunity not to be missed so the caviar, French Champaign and exquisite French deserts were on the table lavishly thick with the hope to seize the opportunity to present the company’s public offering. These Bankers were hoping to bath in the endless wealth generated from such an offering and all supported by professional public relation agencies contracted and paid well to generate worldwide Internet spin – a banker’s paradise absolutely. But the Company wasn’t about to give its ride up to Google.

But this aside, Mason also wasn’t just  a young corporate clone trying to pound his mind daily with the traditional and manufactured plastic corporate values suite of integrity, honest, transparency, and all the other highly publicised and promoted values that are insisted for Corporate success. Rather, Mason had a rich personality but was still young. He enjoyed subcultures, arts, alternative views and even eccentric ideas. To Mason, less common subcultures were much more exciting, more creative, more innovative, more real, more exiting and certainly more enjoyable.

But even if they were Harvard dropouts, at least Mr Bill Gates (Microsoft) and Mark Zuckerberg (facebook) attended Harvard at some point before they started their super successful dotcoms. I mean, a Harvard drop out holds a bit more prestige than a high school dropout…..doesn’t it?

Mason however was from another part of town. A part of town entrenched in a subculture of music arts and alternative perspectives. A place where time stands still to create super emotional highs and feelings based on collaborating with other creative people to generate structured sounds and to fully enjoy such sounds and creativity by the use of our human audio sensory gifts – our ears.  

In fact, Mason actually grew up in suburban Pittsburgh, where his father was well known diamond dealer and his mother worked as a photographer. Avoiding computers, it was music that was his passion and he starting piano lessons at age 6.

Along with his music, Mason’s entrepreneurial pursuits were starting to go through the gears as a teenager. At the age of 15 he delivered fresh bagels purchased from a bakery to his neighbor’s front porches. He later started selling Candy bars on weekends.

At Northwestern Mason fronted a rock and roll band that he describes as sort of punk and with like a mix of the Beatles, the Who and some Cat Stevens added in.  He thought he was going to be a rock musician until later at the age of 25 when he came upon the realization that it wasn’t about actually being a rock star; but more about being part of a alternative and less common subculture.

After college and with Mason dabbling in computer programming he landed a coding role in a Chicago firm called InnerWorkings. This was a Company that farmed out corporate printing jobs to the lowest bidder. After some more online pursuits Mason began featuring a blog that offered readers a different deal from various vendors every day. Having little to lose, his investors encouraged him to pursue the strategy. A little later, Groupon {then called Getyourgroupon.com} was born.

Groupon, {a name that blends “group” and “coupon”} delivers to a large online audience deep discounts on secured products or services. Groupon gets its offers in front of internet addicts by buying ad space through Google and Facebook and via the word of mouth of its millions of subscribers.

Mason’s early call crew of about eight people each made around a 100 calls a day hunting for campaigns. Some days the deals would come easy and they meet the minimum number of takers demanded by the vendor. On other days it was like prospecting for gold in the rice fields of China. Days such as the latter meant Groupon got nothing for their time and effort.

Mason’s model transformed the way companies–mainly smaller ones with limited marketing budgets–generated sales. At one point, Mason was armed with 250 salespeople and 70 writers to bolster up for turf wars he was experiencing in Key Capital city’s from New York to Brazil.

Groupon continued to expand fast opening in Boston, New York and Washington, D.C. and giving each city a Web page featuring its deal of the day. Groupon’s salespeople, and mainly working in Chicago, earned salary plus commission, based on revenue and the ratio of refunds (usually negligible). Copy writers would earn entry-level salaries commensurate with salaries of journalists, around $30,000 a year.

Landing a Groupon deal even at a loss, can put a small business on the map. Businesses looked at this as an incredibly effective advertising tool with amazing reach into so many markets. In March East Coast Aero Club, a flight school in USA offered introductory helicopter flying lessons, normally priced at $225, for $69. The deal had to be shut down at 11 a.m. after subscribers signed up for 2,500 lessons; the club had expected around 200 deals only to eventuate.

At one point Mason claimed Groupon had in excess of 35,000 companies clamoring to be on its roster. Only about one in eight applicants would make the cut and the deals must offer a substantial discount from normal prices and not be similar to other promotions regularly offered by the vendor.

Unfortunately, the Groupon model was easy to replicate and as such giving it an expiry date. 1000s of copycat sites have since sprung up in the U.S and worldwide including 100s in China and all other parts of the world. One Russian site, called BigLion, even ripped off Groupon right down to the system, fonts, colors and website layout. LivingSocial, was Groupon’s closest rival in the U.S in the early days also generating millions in profit since launching its service in July 2009.

On December 18, 2012, Mason was named “Worst CEO of the Year” by Herb Greenberg of CNBC. Greenberg wrote, in part, “Mason’s goofball antics, which can come off more like a big kid than company leader, almost made a mockery of corporate leadership – especially for a company with a market value of more than $3 billion.

Mason was terminated as Groupon’s CEO on February 28, 2013, the day after the company missed analysts’ expectations for sales, and fell far short of the mark when it came to profit…that is in 2013.

Masons later comment on the Internet:

“There has never been anything–TV, radio, newspaper, whatever–that could generate small business sales so quickly.”

In July 2013, Mason returned to his rock and roll pursuits and released a motivational rock album entitled Hardly Workin’ . With average write ups one journalist described the album in the following manner: “You’re not going to bump Hardly Workin’, ever. But you might give it a spin for fun, and it’s worth that much. Maybe not $9.99 on iTunes, but you could endure a Spotify ad or two just to hear someone in tech do something truly silly.” The album was produced by Don Gehman who has has worked with R.E.M and John Mellencamp. 

The motivation behind the album was explained on the website of New York’s Daily News: 

“I managed over 12,000 people at Groupon, most under the age of 25. One thing that surprised me was that many would arrive at orientation with minimal understanding of basic business wisdom….It was with this in mind that I spent a week in LA earlier this month recording Hardly Workin’, a seven song album of motivational business music targeted at people newly entering the workforce”

In February 2015, Mason released an IPhone app “Detour”, selling unconventional audio tours of major cities. The initial release offered seven different San Francisco expeditions, each costing $5. 

No doubt – this was a return ride from rock and roll to riches with many glories memories. I certainly wouldn’t have voted Andrew Mason as the worst CEO of the year considering what he had achieved just a year or two before this new amusing title was cast upon him. His rock and roll is not quite the raw caliber of the average Indie rock band but, Mr. Mason; you sure know how to …Build a Business Fast.

About the Author:

Paul Marshall is a HR Pro, corporate trainer, author and a welcomed and trusted business partner with commercial awareness and extensive expertise in people, performance and HR capabilities. With decades of Business and HR experience, the ability to value add fast to business objectives and Company growth strategies, Paul is a past winner of Small Business Development Corporation Award.

A Fellow and Certified Practitioner of the Australian Human Resources Institute (FCPHR).

Paul is an author of:

103 Golden Tips to Turbo Charge your Business make More Money and Get Rich

103 Golden Tips to Turbo Charge your Employees Skyrocket Productivity and Get More Output