Groupon CEO: We Made a 'Bush-League Mistake'
Groupon CEO Andrew Mason has admitted that the daily-deal start-up made a "bush-league mistake" in misstating its revenues before it went public late last year.
"Smart people can get this stuff wrong," Mason, 31, told CBS's "60 Minutes."
Last September, the Securities and Exchange Commission forced Groupon to restate its revenues, saying it took in $312.9 million instead of $312.9 million in 2010. Revenue was cut in half because the three-year-old start-up agreed to omit payments it made to merchants for their part in the deals. The adjustments showed Groupon had a $420 million operating loss in 2010 and a $117 million loss in the first quarter of 2011.
Mason claimed the reason the company misstated its revenues was because "we're inventing a new industry."
“If we were smart, evil people, we would be more cunning and subtle in our evil ways, you know?” he said.
During the SEC-mandated quiet period before the public offering, Mason himself made headlines for writing a memo to Groupon employees where he said the company was "getting the sh—kicked out of us in the press."
He said of getting rapped by regulators: "I'm not going to pretend like its been fun to have something that we poured our hearts into over the last three years, and see it criticized while we have our mouths taped shut."
Then he added, sounding more like Groupon's wacky deals copy than the CEO of a company that employs 10,000 people in 46 countries, "We've now been hazed, we're like Wolverine and our skin has been melted off. We've had adamantium fused onto our bones. And it's made us stronger as a result."
(Lesley Stahl of "60 Minutes" failed to get the X-Men reference, saying "I'm not sure what that means." Wolverine, for the record, is a near-indestructible mutant. He has a metal alloy, also nearly indestructible, called Admantium bonded to his skeleton.)
Mason, who along with his founding investors Eric Lefkofsky and Brad Keywell, became a billionaire when Groupon first went public Nov. 4. He said the success of the company has been "intoxicating."
"It was just this rocket ship ride that you couldn't let go. But you didn't want to let go either," he said.
The keys to its success: Tailoring deals based on subscriber ages, gender and other traits and writing deal copy that makes customers laugh, he said. The company claims it has 150 million subscribers.
"We do realize that we're sending people an e-mail every single day, and that could get annoying," he said. "So there's gotta be something else there that keeps you engaged and keeps you from un-subscribing."
Can Mason, who once posted a video on YouTube of himself doing yoga in his underwear, grow up to be a responsible CEO?
"I think if there's any difference between me and a traditional CEO, it's that I've been unwilling to change myself or shape my personality around what's expected," Mason said. "Am I as experienced or as mature or smart as other CEOs? No probably not, but there's something useful about having the founder as a CEO."
Mason then admitted on air he'd asked "60 Minutes" whether he should turn up in a suit and tie for his interview.
"They said I shouldn't," he told Stahl. "So maybe, you know what? Maybe I am changing. Cause I might've not asked before."
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.