But we felt like it was fun to do an independent company, and we thought we could make more money doing it that way. It came back down to earth pretty quickly. In June, the company had a reverse stock split, where every 20 shares were converted into one share. He was fired in February and moved to the West Coast. Williams was ousted in March. Running the company now is Aaron Cooper, who joined Groupon in and had most recently served as North American president. There have been several over the past decade, with the company cutting employees and changing its focus back and forth between daily deals and merchandise sold through Groupon Goods.
The change to a more professionally organized, sophisticated sales force started in earnest in May , when Groupon bought a German Groupon clone called CityDeal.
One former Groupon sales rep, Ranita Dailey, is suing over the new work conditions, alleging the company violated federal and state labor laws by forcing her and other employees to work unpaid overtime hours.
Mason and other early Groupon employees have come up with some pretty good rationalizations for Groupon and how it helps the world. They like to say it gets people to try new things and that it gets small businesses cash flow.
Another source says Mason "still wears grungy old band t-shirts and hoodies and disgusting flip-flops " and doesn't seem like he's "turning into this snazzy, d-baggy CEO kind of guy. This source says that there are still things Mason doesn't like having to do and that he will learn are necessary to do. To help, Mason is, according to this source, "bringing on literally hundreds of great seasoned executives and mentors. Briefed on the details of this story, Georgiadis declined to comment.
One source who worked closely with Mason for years says that's the right call. Do I really need a layer between me and all these guys who are doing all the hard work, and the fun stuff? By then, the business was huge. But, to the shock of Andrew Mason, Groupon's big numbers were not met with the kind of acclaim he'd grown used to receiving from the press. In later filings with the SEC, Groupon removed references to ACSOI, but a source familiar with Groupon's on-going accounting practices says "[Groupon] still [looks] at those metrics and measures, every week, every month, every quarter, internal.
It is an important metric of how [Groupon measures] the health of the business. Groupon's huge revenue numbers were also inflated by an unusual accounting decision. In its initial filing, what Groupon called its "revenues" were actually its gross revenues, not net revenues. When Groupon sells a voucher to a subscriber, it collects the cash, and then, after the voucher is used at the merchant, gives some of that cash to the merchant and keeps the rest.
Normally, the amount Groupon brings in before paying the merchant would be called gross revenues. But Groupon called them plain old revenues. Normally, the amount of money Groupon keeps after paying the merchant would be called revenues or net revenues. But Groupon called that "gross profit.
One source familiar with Groupon's accounting practices says the decision to emphasize gross revenues in the S-1 had more to do with the way Groupon manages its own numbers internally than any desire to make the company seem like a more successful business.
Business Insider's Henry Blodget , meanwhile, pointed out that Groupon was running low on cash and that if it didn't go public soon, it would have to raise more in the private markets. He's standing in front of a gray background, talking into a camera about Groupon's financials.
He's wearing a coat and a shiny silver tie. His hair is combed and his face his shaven. He's recording the video version of Groupon's "road show" — the presentation it will give to the fund managers who will make or break Groupon's IPO.
You can find this presentation on the Internet. Groupon is, at this very moment, touring around the country asking investors to put their money into the company. Since that tough moment at Groupon's office in August, Mason has made some changes. He's decided he does not need a COO. He's decided to fire some of his under-performing sales staff. Securities and Exchange Commission.
Groupon spokesman Nicholas Halliwell declined to comment on behalf of the company and Lefkofsky. Twitter AllyMarotti. Groupon went from calling hundreds of venues each day to now only accepting one in eight venues that want to be on the site.
Source: Grouponworks. Source: GrouponWorks. Groupon's answer? It wasn't about the money, Groupon said. It was about an anti-trust issue. Groupon has gotten a lot of slack for going public.
Here is Andrew Mason's letter to potential stockholders. It sums up the company's history, and its future:. On the day of this writing, Groupon's over 7, employees offered more than 1, daily deals to 83 million subscribers across 43 countries and have sold to date over 70 million Groupons. Reaching this scale in about 30 months required a great deal of operating flexibility, dating back to Groupon's founding.
Before Groupon, there was The Point—a website launched in November after my former employer and one of my co-founders, Eric Lefkofsky, asked me to leave graduate school so we could start a business. The Point is a social action platform that lets anyone organize a campaign asking others to give money or take action as a group, but only once a "tipping point" of people agree to participate. I started The Point to empower the little guy and solve the world's unsolvable problems.
A year later, I started Groupon to get Eric to stop bugging me to find a business model. Groupon, which started as a side project in November , applied The Point's technology to group buying. By January , its popularity soaring, we had fully shifted our attention to Groupon. I'm writing this letter to provide some insight into how we run Groupon. While we're looking forward to being a public company, we intend to continue operating according to the long-term focused principles that have gotten us to this point.
These include:. We spend a lot of money acquiring new subscribers because we can measure the return and believe in the long-term value of the marketplace we're creating.
In the past, we've made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss. When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences. In our early days, each Groupon market featured only one deal per day.
The model was built around our limitations: We had a tiny community of customers and merchants. As we grew, we ran into the opposite problem. Overwhelming demand from merchants, with nine-month waiting lists in some markets, left merchant demand unfilled and contributed to hundreds of Groupon clones springing up around the world.
And our customer base grew so large that many of our merchants had an entirely new problem: Struggling with too many customers instead of too few. To adapt, we increased our investment in technology and released deal targeting, enabling us to feature different deals for different subscribers in the same market based on their personal preferences.
In addition to providing a more relevant customer experience, this helped us to manage the flow of customers and opened the Groupon marketplace to more merchants, in turn diminishing a reason for clones to exist.
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