11-16-15 Post #1
It’s been about a week since I changed jobs at Groupon, and I realized that my posts and blogs over the past few years have been so “pre-manufactured” to fit within the framework of a CEO, that they’d become largely voiceless.
I want my voice back. So I thought I would try writing something about once a week; in part because it’s hard to think of something intelligent to say more than once a week.
To avoid spending the next hour thinking of a catchy title, I’ll simply call this one: 11-16-15 Post #1
First, let me start with the past few years. When I took on the role of CEO, I thought it would only be for a few months until the right candidate surfaced. Yet almost immediately, I became overwhelmed by two feelings: the first is that even though Groupon was a big company, there was a ton of building still to be done. For a builder, it’s intoxicating when you get to construct something at scale that you believe will have an impact on the world. The second was that Groupon was a completely misunderstood and radically undervalued business.
Two and half years later, there is a lot less to build (thanks to the incredible work of our team) and the business is just as misunderstood and under-appreciated.
As an operator you focus on controlling the controllable. Since I had accomplished most of what I set out to, and Rich was completely ready to take over, it was time for me to return to Chairman.
I could spend hours going through the lessons I learned over the past few years; things I did right and things I wish I had done differently. In the end, suffice it to say the job is much harder than people think and it’s easy to throw stones from the balcony.
I think Teddy Roosevelt said it best: “It’s not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood…”
Groupon is both an incredible company and an incredibly difficult company to run. It has a scale that is truly awesome for a business that hasn’t even celebrated its seventh birthday. Over the past 12 months, the company has sold well over $6 billion dollars worth of Groupons across the globe.
When you think of the sheer numbers it’s almost dizzying: over 160 million people visited our sites last year, 115 million people have downloaded our app, we have nearly 50 million active customers, and more than a million merchants have run a Groupon.
And while the business is only growing about 10% annually, it’s been remarkably stable in the midst of some really seismic transitions. I mean how many internet businesses can you think of that generate nearly $1.4 billion in gross profit, over $250 million in EBITDA, and roughly $230 million in free cash flow?
But it’s not the financial performance of Groupon over the past few years that makes me the proudest. It’s our team’s ability to recognize trends and pivot, often enduring short-term pain, if it’s right for the business.
You can accuse us of many things, but being timid isn’t one of them. Our culture, from the earliest days forward, has always been bold. We analyze lots of data, make decisions (some of them really tough) and don’t look back.
We saw that our daily deal business had limitations, and built a marketplace, even though it cannibalized our primary cash cow.
We saw that email had limitations, and forged heavily into mobile, knowing that it would put additional pressure on our already struggling email business.
We (through Rich) realized we were operating in too many countries and not investing heavily enough in new customer acquisition, and so we decided to scale back our international operations and double down on the marketing investments we could see were working.
This is really bold stuff, especially when you’re public. The public, rightfully so, doesn’t like surprises. They don’t reward change.
But when you look at Groupon, and the opportunity it has to define local commerce, you can’t play it safe. There is too much competition; too many people innovating. And while we have a huge lead today, to maintain that lead, we’re going to have to continue to be bold, to make tough decisions and to invest in the future.
I love that this new management team is moving so swiftly and decisively.
I love the energy I see and the renewed sense of mission at the company.
Groupon is such an incredible story. From the mind of a music major in Chicago to becoming the fastest growing company of all time, and yet our best days and most defining days, are still ahead.
I can’t wait to see what comes next…