Creativity and confidence propels founder of Groupon, Mt. Lebanon native Andrew Mason
November 14, 2010 10:00 AM
Andrew Mason, CEO and founder of Groupon
M. Spencer Green/Associated Press
Andrew Mason of Groupon on the grand staircase of the Art Institute of Chicago, one of his company's clients.
By Maria Sciullo Pittsburgh Post-Gazette
Luke VanGombos was the new kid at Mt. Lebanon High School when he discovered one of his classmates was rather unusual.
"The first time I ever hung out with Andrew, he was going a week without wearing any shoes, and eating just pizza," said Mr. VanGombos, an account manager for FirstGiving, an online nonprofit in Boston.
"Of course, he had to cut out the soles and wear just the tops, but I thought that was pretty cool."
Years later, strange and often wonderful ideas are still buzzing around Andrew Mason's brain: "The biggest thing I struggle with is what to do with the ideas I have now," said Mr. Mason, who just turned 30.
One such idea has made him CEO of what's being hailed as the fastest-growing online company in America.
Do you "Groupon"? At least 20 million subscribers in 29 countries receive the Web company's free daily e-mail, Twitter and Groupon app offers [via groupon.com].
It's a simple concept. Each day, one group coupon, or Groupon, offer is sent to subscribers. These limited-time offers are customized to fit the interests of subscribers in more than 350 cities, and they combine group buying, local commerce and local advertising.
A recent example: Buy a three-show subscription to Pittsburgh Ballet Theater -- worth $173 -- for $85. The catch is, a certain number of subscribers must buy the Groupon or the deal is off. Almost always, the goal is met.
From Lasik surgery to yoga lessons, Groupon has become expert in the art of the unusual deal.
Al Minjock owns FastDog Motorsports, a part-time auto racing school in Mars. It's a small company, with a tiny advertising budget. When Groupon sales staff approached him about a deal in August, he figured "What could it hurt?"
Stock-car racing instruction, plus a 12-lap spin around Motodrome Speedway in Smithton, regularly costs $281.
Anyone buying this Groupon paid only $140. Mr. Minjock said he expected perhaps 50 people to sign up; final tally was 263.
"We had so many, we're going to extend it through the end of next racing season," he said. "This has just been fantastic."
Groupon, based in Chicago, close to where Mr. Mason attended Northwestern University, typically takes 50 percent on each deal. Multiply that by hundreds of deals each day and it's no wonder the company is said to be worth $1.3 billion, with some analysts projecting revenues of up to $500 million this year.
Celebrating its second birthday this month, Groupon isn't the first company to arrange such commercial marriages, but it is the most successful.
Only in the age of social media could something like this evolve, and unlike the more traditional approach, it's relatively cheap, relatively quick.
"Subway had to spend millions of dollars on bad advertising until they found Jared," said Mr. Mason, who will be in Pittsburgh Monday to speak at Carnegie Mellon University. "Old Spice had to do lots of crappy ads until landing on the guy with the horse."
He started young
It started with painting house numbers on the curb.
"I was always looking for creative ways to make money," said Mr. Mason, who grew up in Mt. Lebanon. He'd run by Costco to buy Jolly Ranchers and Warheads candy, then resell it in the high school cafeteria.
"At lunch, everybody is walking around with extra change and I looked at it as my job to slop up all that change," he reasoned.
The venture came to an abrupt end when the lunch ladies pulled rank.
Most telling was a short-lived computer repair business launched with a high school friend.
"I was really into computers, but I was way overconfident. I had no idea what I was doing. We'd go to someone's house, take the lid off [the computer housing], nod and sometimes fix things, sometimes, not," Mr. Mason said.
"I think that's one thing characteristic of Andrew: He's always had confidence in spades," said his father, Bob Mason, who lives with wife Lila in Upper St. Clair.
"He has always been confident, even when he didn't have reason to be," he said.
Bob Mason and Bridgit Wolf, Andrew's mother, divorced when he and his sister, Jessica, were young, and the kids spent significant time in both Mt. Lebanon and Upper St. Clair households.
Ms. Wolf remembers her son making home movies and leading neighborhood expeditions to build a dirt bike track, even though he wasn't an avid rider -- it was the project that inspired him. And always, he was dreaming up absurd projects, the echoes of which resonate in Groupon's witty, humorous approach to sales.
Even now, his LinkedIn profile lists "server at Chi-Chi's" as a past employment.
"In high school, Andrew bought an accordion, and he would play it when all the waiters sang 'Happy Birthday' [at Chi-Chi's]. He also worked at Eat'n Park, and all the little old ladies just loved him," Ms. Wolf said, laughing.
After graduating from Mt. Lebanon High School in 1999, Mr. Mason enrolled at Northwestern University to study engineering. But even then, what he really wanted to do was make music. In high school, he was part of a garage band and in college did a brief tour of Chicago with his new band, Planet of the Planets, and called it quits.
A summer "dream internship" at Carnegie Mellon University bored him, and he returned to school to major in music technology with a piano proficiency. After his 2003 graduation from Northwestern, Mr. Mason eventually wound up working for Chicago's Electrical Audio. Steve Albini, owner of the recording studio, inspired the future CEO.
Mr. Albini "had a really strong philosophy about what he did and why he did it ... he believes the [recording] engineer is the craftsman, and that you shouldn't get paid huge amounts of money for [the band's] success," Mr. Mason said. "He by his own choice lives his own humble, modest life."
Mr. Albini remembers a kid whose enthusiasm for music was invigorating, someone who brought fresh eyes to a business that can wear you down after so many years. This worldview, he said, is apparent in Groupon's whimsical approach.
"Andrew had done some typically post-collegiate bohemian thing -- he went to New Zealand for a while to work as a fruit picker." Mr. Albini said. "Seeing the world, how people live elsewhere, it gives you a different view."
Humor's a part of it
It started with PolicyTree.org. The United States had just invaded Iraq in 2003 and there was a huge plain between the political left and right that was, as Mr. Mason put it, "creating an echo chamber."
His new website created a tree model that allowed for civil argument from both sides. In the process, he learned a lot more about writing code and building websites. It was, he discovered, a lot like writing music.
The next step was The Point. It wasn't just a website for groups of people and contributors to help fund nonprofits or save the rain forest, it provided a chance to raise money for that indie film documentary or band trip to Disney World.
"The biggest mistake we made with The Point was ... making assumptions about what people want," Mr. Mason said in a summertime address to a tech group. "You [discover] you are way too dumb to figure out what people want."
A side project of The Point was a group buying endeavour. Now that, people wanted, and so Groupon was born.
"It's important to experience some failure, or at least know that failure is a possibility," Mr. Mason said.
With a staff of 700 working in a converted Montgomery Ward warehouse in Chicago and more than 2,500 employees worldwide, Groupon is constantly hustling to broker deals, write about the deals, make fun of the deals.
"I have always had an inability to separate humor from my serious undertakings, my passions," Mr. Mason said. "And that started with my music. I was serious about music, but there was always humor in it."
True to its founder's spirit, a Groupon isn't just a money-saving offer. It's an elaborate, rambling, meta diversion, an exercise in the staff showing off its comedy-writing skills.
A website contest for subscribers to create witty, rhyming histories provided this tip: "Be brief. Much like fuming generals, Reader Challenge entries are usually funniest when they're short."
"Our philosophy isn't to tell jokes, it's to surprise people," Mr. Mason said.
Most of the employees at Groupon headquarters are young, male and unattached enough to be able to devote long, late hours to work. Stephen George, 23, began working for Groupon three years ago before the company even went online. He was -- Mr. Mason's words -- "the world's most awesome intern."
He now is the office manager, as well as the director of operations and oversees the IT department. Mr. George goes to work in the standard Groupon attire of blue jeans and casual shirt, and never turns off his cell phone.
"I don't want to miss anything," he said. "This is a time in my life when I can work 100 hours a week, so I do."
Mr. George said he is a slacker compared to Mr. Mason, whose "work ethic is unparalleled."
No time for a wife and kids yet, although Mr. Mason recently got engaged.
As an elaborate joke, Mr. Mason has commissioned a 6-foot plaster statue for the lobby of their building. It will have the body of Michelangelo's "David"... and Mr. George's face.
Only a select few have real offices among the open floor plan, and Mr. George's is the nicest -- it used to belong to the CEO.
"But every time we move, he has an office built for him, and he never moves into it," Mr. George said of his boss.
"This last one, he ended up moving into my office and put himself behind this little 4-foot table. His knees [Mr. Mason stands a lanky 6 feet, 4 inches] were hitting the desk but he mostly carries his laptop out [into the main floor of the office] and puts himself between people who started 10 days ago in Sales. They don't even know who he is, and I think that's so important for him to hold onto."
Mr. Mason is comfortable with success, but to be suddenly so "significant" -- that appears the more daunting prospect.
"I think this is similar for most [younger] people in my shoes," he said, citing Facebook founder Mark Zuckerberg, 26. "The reason you do this is not to make a lot of money, but to have an impact and to be expressive and creative."
Still, the money is nice, even if his boost in salary is rather incomprehensible.
"I remember the first time I got a big pay day from Groupon," said Mr. Mason, who still drives his old hybrid car. "As I drove home, I thought 'I should stop somewhere and spend some money! I mean, now the playing field is wide open.'
"But I couldn't think of anything, really. I still just work all the time, that's what I do. I wouldn't know what to do with a lot of money. I just went home."