Daily deals giant Groupon saw its stock drop 24 percent today after the company reported disappointing earnings. The high flying company, which turned down a $6 billion buyout offer from Google back in December of 2010, has been on a slide practically since the moment it went public. But this miss was the final nail in the coffin for its young co-founder and CEO, Andrew Mason. In a press release the company announced that Mason was leaving in a "change of leadership", being replaced by Mason's original investor, co-founder, and Groupon's chairman, Eric Lefkofsky.
In typical fashion, Mason had a much blunter and more humorous reading of the situation. His letter, posted on his personal blog, is below.
After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding - I was fired today. If you're wondering why... you haven't been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.
You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I'm getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we've shared over the last few months, and I've never seen you working together more effectively as a global company - it's time to give Groupon a relief valve from the public noise.
For those who are concerned about me, please don't be - I love Groupon, and I'm terribly proud of what we've created. I'm OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I'll now take some time to decompress (FYI I'm looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I'll figure out how to channel this experience into something productive.
If there's one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what's best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness - don't waste the opportunity!
I will miss you terribly.
Mason and Lefkofsky have always had a complex relationship. Mason was an ambitious young entrepreneur whose original vision was called The Point, a crowdfunding platform for social activism that most closely resembled Kickstarter. Lefkosfky was an early backer. But after a while he began encouraging Mason to look for ways to create a business with The Point that made money. Slowly, the pair shifted their vision to the idea of collective buying and deals, and with a name change, Groupon was born.
Lefkofsky has been described as both "the most successful and prolific internet entrepreneur in Chicago," and someone "who has a history of busting investors after promising to radically transform bricks-and-mortar industries." The second description certainly fits for Groupon, which promised to transform the business of coupons, but has seen its stock decline more than 80 percent since it went public. The company is also the target of lawsuits from investors who claim the public was misled about its financials and by employees who claim the company failed to pay them millions in overtime.
Update: The Wall Street Journal has the internal Groupon memo addressing Mason's ouster. Written by co-founder Eric Lefkofsky and vice-chairman Ted Leonsis, it states that "After more than five years of super-human service to Groupon, Andrew has been asked to step down." The note goes on to praise Mason's efforts before acknowledging that "we all know our operational and financial performance has eroded the confidence of many of our supporters, both inside and outside of the company. Now our task at hand is to win back their support."
"As Groupon starts to write its next chapter, Ted and I are both honored to be able to help guide the company until a new CEO is in place," write the duo. "We are fortunate to have a very talented and committed management team to help us execute on our vision."