Groupon and Descript: Andrew Mason
3Digest
This episode of "How I Built This" features Andrew Mason, the founder of Groupon, as the guest. The episode delves into the story of Groupon's rise and fall, exploring Mason's entrepreneurial journey and the challenges he faced. The episode begins with a brief advertisement for Wondery Plus, highlighting the benefits of subscribing to the service. The episode then introduces Mason and his entrepreneurial background, starting with his website, Policy Tree, which aimed to aggregate arguments from different perspectives on policy issues. This led to The Point, a platform focused on collective action, which inspired the idea for Groupon. The episode explores Groupon's rapid expansion, from its initial success in Chicago to its expansion to Boston, where they encountered copycat businesses. Mason shares his initial frustration with these clones and how he learned to focus on execution rather than just the idea. He also recounts the experience of being featured on the cover of Forbes magazine as the fastest-growing company in history, discussing how he and his team used this recognition as a reminder of the potential for failure and the importance of humility. The episode further discusses Groupon's expansion strategy, working backwards from a goal of 500 cities, and the acquisition offers from Yahoo and Google. Mason shares his initial reluctance to accept the Yahoo offer and the board meeting where they ultimately decided to decline the Google offer, believing they could build a bigger company. The episode then delves into Groupon's IPO and the intense scrutiny they faced from the media and investors. Mason discusses the challenges of managing public perception and the pressure to maintain growth. He also explores the challenges Groupon faced in maintaining its growth and the negative impact on small businesses, discussing the difficulty of predicting revenue and the lack of trust from Wall Street. The episode concludes with Mason recounting the events leading to his departure from Groupon, including the board's decision to give him another chance and the subsequent realization that he couldn't turn things around. He shares his decision to be fired rather than resign. The episode then focuses on Mason's entrepreneurial ventures after leaving Groupon, including Detour, an audio tour company, and Descript, an audio and video editing platform. He discusses the challenges of building Detour and how Descript emerged from a problem he encountered while working on the company. The episode concludes with Mason reflecting on his entrepreneurial journey, acknowledging the role of hard work, opportunity, and luck. He also addresses the question of whether he would have sold Groupon if he had the chance, emphasizing his acceptance of the failures and lessons learned.
Outlines
Groupon: From Rise to Fall and Beyond
This episode of "How I Built This" features Andrew Mason, the founder of Groupon, as the guest. The episode delves into the story of Groupon's rise and fall, exploring Mason's entrepreneurial journey and the challenges he faced. The episode begins with a brief advertisement for Wondery Plus, highlighting the benefits of subscribing to the service.
The Genesis of Groupon: Policy Tree and The Point
The episode introduces Mason and his entrepreneurial background, starting with his website, Policy Tree, which aimed to aggregate arguments from different perspectives on policy issues. This led to The Point, a platform focused on collective action, which inspired the idea for Groupon.
Groupon's Expansion and Early Challenges
The episode explores Groupon's rapid expansion, from its initial success in Chicago to its expansion to Boston, where they encountered copycat businesses. Mason shares his initial frustration with these clones and how he learned to focus on execution rather than just the idea. He also recounts the experience of being featured on the cover of Forbes magazine as the fastest-growing company in history, discussing how he and his team used this recognition as a reminder of the potential for failure and the importance of humility.
Groupon's Growth and Acquisition Offers
The episode further discusses Groupon's expansion strategy, working backwards from a goal of 500 cities, and the acquisition offers from Yahoo and Google. Mason shares his initial reluctance to accept the Yahoo offer and the board meeting where they ultimately decided to decline the Google offer, believing they could build a bigger company.
Groupon's IPO and Public Scrutiny
The episode then delves into Groupon's IPO and the intense scrutiny they faced from the media and investors. Mason discusses the challenges of managing public perception and the pressure to maintain growth. He also explores the challenges Groupon faced in maintaining its growth and the negative impact on small businesses, discussing the difficulty of predicting revenue and the lack of trust from Wall Street.
Andrew Mason's Departure from Groupon
The episode concludes with Mason recounting the events leading to his departure from Groupon, including the board's decision to give him another chance and the subsequent realization that he couldn't turn things around. He shares his decision to be fired rather than resign.
Post-Groupon Ventures: Detour and Descript
The episode then focuses on Mason's entrepreneurial ventures after leaving Groupon, including Detour, an audio tour company, and Descript, an audio and video editing platform. He discusses the challenges of building Detour and how Descript emerged from a problem he encountered while working on the company.
Reflecting on Success, Luck, and the Groupon Sale
The episode concludes with Mason reflecting on his entrepreneurial journey, acknowledging the role of hard work, opportunity, and luck. He also addresses the question of whether he would have sold Groupon if he had the chance, emphasizing his acceptance of the failures and lessons learned.
Keywords
Groupon
A company that offered daily deals and discounts on local goods and services, known for its rapid growth and subsequent decline.
Andrew Mason
The founder of Groupon, a successful entrepreneur who has also experienced significant setbacks in his career.
Entrepreneurship
The process of starting and running a business, often involving innovation, risk-taking, and resilience.
Failure
A setback or unsuccessful outcome, which can be a valuable learning experience in entrepreneurship.
Collective Action
The process of individuals working together to achieve a common goal, often involving coordination, communication, and shared resources.
Product-Market Fit
The alignment between a product or service and a specific market segment, where the product meets the needs and desires of the target customers.
Pivot
A strategic shift in a business's direction, often involving a change in product, market, or business model.
Acquisition
The process of one company buying another company, often for strategic reasons or to gain access to new markets or technologies.
Q&A
What was the initial idea behind Andrew Mason's website, Policy Tree?
Policy Tree aimed to aggregate arguments from different perspectives on policy issues, creating a flow chart that would help people understand the complexities of the debate.
How did the idea for Groupon emerge from Mason's previous venture, The Point?
The Point focused on collective action, and one of the ways people used it was for collective buying. This inspired the idea of Groupon, which offered local deals to encourage group participation.
What were some of the challenges Groupon faced as it grew rapidly?
Groupon faced challenges like managing a rapidly expanding team, dealing with copycat businesses, and navigating the scrutiny of public investors after going public.
Why did Andrew Mason decide to leave Groupon?
Mason felt that his public credibility had been damaged after missing several revenue targets, and he believed that a new CEO could give Groupon a fresh start.
How did Descript emerge from Mason's experience with Detour?
While working on Detour, Mason encountered a problem with transcribing audio interviews. This led to the development of Descript, an audio and video editing platform that simplifies the process.
What is Andrew Mason's perspective on luck and success?
Mason believes that while luck plays a role, success is primarily a result of hard work, preparation, and seizing opportunities. He acknowledges that he has benefited from a combination of these factors.
Show Notes
Andrew Mason was a 27-year-old with a degree in music when he co-founded one of the fastest growing companies of all time: Groupon. Its deep discounts on everything from sushi rolls to plastic surgery soon became a ubiquitous part of life in cities across the world. In 2011, just three years after launching, Groupon had the largest internet IPO since Google, with a valuation of $12.7 billion.
But people began to complain that Andrew was not up to the role of CEO: he was quirky and unpredictable, and unable to navigate the company’s rocket-ship growth and the surge of copycats that threatened it. Soon, Groupon’s revenue slumped, and Andrew was fired from the company he’d started. But like many of the best entrepreneurs, he learned from his failure. Today, Andrew runs a new startup, an audio and video editing platform called Descript. In fact, we use Descript to make this show!
This episode was produced by Chris Maccini with music by Ramtin Arablouei.
Edited by Neva Grant, with research from Kathrine Sypher. Our audio engineers were Maggie Luthar and Robert Rodriguez.
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