Photograph by Aaron Wojack for Bloomberg BusinessweekAndrew MasonAndrew Mason is walking with a reporter amid the seagulls on San Francisco’s Fisherman’s Wharf, using his iPhone (AAPL)
to play an audio walking tour. As he approaches the giant hoists with
which local anglers move their daily catch to shore, the voice of a
local fisherman named Candy pipes up on the recording to describe the
scene ahead: “If you see any boats unloading, look for sea lions hanging
nearby, waiting for the fish receivers to throw them scraps.” The
recording is one of the offerings from Mason’s latest startup, Detour,
which he is trying to build into a central repository for a new kind of
GPS-based neighborhood walking tour. The guided-tour industry brings in
tens of billions a year, so it may actually be a big deal—if it works.
“People have an enormous hunger to have really compelling experiences in
their cities,” Mason says. Then a seagull poops on his head.Groupon set up shop in Chicago, where Mason majored in music at Northwestern University. He graduated in 2003, and by 2006 was developing software for Groupon’s seed investor, Eric Lefkofsky. Groupon initially appealed to consumers by persuading restaurants and other small businesses to sell unused, off-hours capacity at a steep discount. Punchy daily e-mails helped build an audience of millions of deal seekers, and Groupon was soon among the fastest-growing companies ever. In 2010, Mason famously rejected a $6 billion buyout offer from Google (GOOG).
The coupon site—and Mason—soon became better known for missteps. In 2011, Groupon ran a Super Bowl ad viewed as insulting to various charities, and pre-initial public offering accounting irregularities attracted the attention of the Securities and Exchange Commission. Perhaps most important, the company has never been able to turn a quarterly profit. Its share price, more than $26 at the close of its IPO, hovers below $7, leaving its market capitalization at about $4 billion. “The things Andrew and Groupon did really well was get small businesses engaged, which was not insignificant,” says Rocky Agrawal, an analyst, short seller, and frequent critic of the company during its early years. “The downside was that they got those businesses engaged in a business model that didn’t really work. We saw how quickly it collapsed.”
In conversation, Mason is modest about his accomplishments and quick to point out his shortcomings. “I blame everything on myself,” he says of the company’s troubles during his tenure, adding that the biggest mistake was going public, which he describes as “a hazing process for introducing you to the club of corporate douchery.” Groupon, he says, staged an IPO too early: “We had a lot of messiness that I don’t think is that uncommon at companies that go from $450 million in revenue one year to $5 billion the next.” Trying to keep up with that growth in a public setting “was my dumb decision.”
He’s more judicious with details of his firing and his thoughts about the company since his departure. Asked what he thinks of Lefkofsky, who chaired the board while Mason was CEO and has now taken his place, he turns facetious (“We are best friends. Our kids hang out every weekend. We fly there, they fly here. …”) and then says: “I don’t want to talk s--- about people.” Asked whether he’s proud of Groupon now, he pauses for a while, then says he is although he regrets not doing more to counter the notion that the company ends up hurting small business. “By and large, businesses continue to work with them,” he notes. Groupon spokesman Nicholas Halliwell wouldn’t comment on Mason’s exit, saying, “We wish Andrew all the best with his new endeavor.”
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