So, Andrew Mason – the CEO of groupon.com was FIRED yesterday.
While the Wall Street story has the more ‘propah’ details, this is what Andrew Mason wrote on his own blog:
“People of Groupon,
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.
Love,
Andrew”
**
When I read about the news for the first time, I smiled.
3 events flashed before me:
The first was the firing of a trusted and co-founder of Mobile2win in China, by the board. He was guilty of not ‘listening’ to the board that comprised Softbank China & Siemens Germany.
The second incident was the firing of my second most trusted partner who I personally put in charge to take over from the original co-founder. The same board fired him on the grounds of being ‘disobedient’ and undependable.
The third and most dramatic incident was the FIRING OF MYSELF from Mobile2win!!
The message of this post will be incomplete unless you read that incident. It’s part produced here, with a click out at the end:
” By 2005, a company I had co-founded called Mobile2win (originally started in China in 2001 and then brought into India in 2003) was sailing…
We were first movers in the India Mobile VAS (value added services) space and things were looking up – thanks to all our learnings in China. The first Indian Idol voting platform had been successfully handled by us (and ever since) and Sony India had made us a long-term partner. We were partnering with lots of media companies, selling our mobile games on Vodafone and creating creative marketing platforms. Rajiv Hiranandani – head of the business was doing a great job.
The success was also creating a sweet problem:
The business needed a series B investment to scale and my existing investors – Siemens Mobile Acceleration from Munich and Softbank Ventures from China were not at the best of terms with the management of mobile2win.
Just a month earlier I had come back from Shanghai and attended the most bizzare board meeting ever in my memory.
The meeting started at 9 am and by 9:30 am, there was war in the boardroom. 2 Germans (Helmut Struss and Oliver Kolbe from Siemens), 1 Indian (Gopala Krishnan (GK) – the CEO) and 2 Chinese (Peter Hua and an Observer from Softbank) were all screaming at each other simultaneously in German, Chinese and in Hindi (me telling GK to control himself).
The issue was typical start-up stuff – scaling up, finances, hiring, firing etc, etc, and while I let them go at each other (Softbank shouted at GK for pointing fingers with this hand – a very ‘disrespectful’ act in China), clearly this was a board that was not going to co-operate with me for raising money in India.
Back home, when I started showing mobile2win around, there was massive interest. Sandeep Singhal of Sequoia India was kind enough to stay up late night in his room at the Taj, Mumbai and hammer out a term sheet for me the next morning.
All these and more got no responses from Softbank and Siemens. So I asked them what they really wanted?
Softbank was not going to put money in and Siemens wanted out. They were non-Indian VC’s and only Indian VC’s would understand Indian Mobile VAS space and hence invest.
This was going to be a tough deal to close out.
One afternoon, I met Pramod Haque and Vab Goel of Norwest Venture Partners. ( I later learnt that Anupam Mittal of shaadi.com fame had turned down a term sheet of Norwest for funding Mauj.com).
Norwest stepped on the gas and took an active interest in talking to Siemens and Softbank and understanding their motivations. They engaged with mobile2win management and also spoke to other investors.
A few days later, late afternoon I received a phone call that precipitated into the ‘toughest decision of my life’ :
Vab indicated that he had settled all issues of valuation, exit and new investment between Siemens and Softbank and the management of Mobile2win (GK and Rajiv), and that Norwest and another VC was ready to go ahead in massively funding mobile2win at great valuation terms.
Except, there was one condition:
Alok (me) had to exit the company!!! – cont’d – here
So, what does this incident teach us all?
I believe, the following lessons:
– Going ‘public’ or floating an ‘IPO’ is the last thing a startup should indulge in, not the first! Company after Company gets pounded for not performing on the stock exchange (remember the flak Facebook received when it went public?) and its promoters and CEOs got punished for not living up to ‘stock market expectations’
Let me ask a hard-hitting question – would Andrew Mason have been fired if Groupon was not a public listed company?
Think hard and tell me what you think?
My personal belief is that the ‘real manhood’ or ‘womanhood’ of a Company is not just measured by the metrics used by the stock exchange – aka its topline and bottomline growth. I believe that the dashboard of a ‘real’ Company includes data points of market creation, category creation, customer retention, global growth, employee satisfaction and lots more.
A startup Company has LOTS of issues in the first 5-7 years. This includes rapidly changing consumer habits (I believe that’s the problem facing Foursquare just now), wearing out of the ‘novelty’ of the business model (amply visible in Groupon’s case) and also massive competitors (remember how Facebook just erased MySpace?). This ‘adolescent time’ is NOT for Companies to go public. Instead, they should be busy repairing and rebuilding themselves.
– If you do want to go public, then have the BALLS or the STOCK or the VISION to stay in the Company as CEO
Steve Jobs was kicked out of Apple because he had a dud performance. But check out the preferred stocks that Zuckerberg has granted himself in Facebook to keep him as CEO. The board can definitely not throw him out. He will either voluntarily retire OR quit if he does something really stupid (a la shameful like Tiger Woods or something).
A man that I am increasingly beginning to almost WORSHIP is Jeff Bezoz. This guy has the BALLS to look at Wall Street in the eye and tell them to buzz off when he reports widely gyrating profits and numbers. But instead of buzzing off, they reward him with an increasing stock valuation? That’s because Jeff Bezoz sells his VISION to Wall Street.
He explained to them how he is investing for the future. And in the case of Companies, the future is more important than the present.
– A new CEO may or may not work!
In the case of Mobile2win China, after both my CEOs were fired, I lost hope. I just wrote the Company off. The board in the meanwhile hired Heidrick and Struggles to look for a CEO. H&S found a native Chinese and he was signed on by the board. I was barely kept informed about the terms and equity being offered to him.
But lo and behold – a few months later, things began to improve. The Company started to perform and there was a renewed sense of buzz in the business. A few months later, Disney acquired the Company in an all cash deal (low millions US$).
Similarly, when Carol Bartz was fired (read about my meeting with her), and Scott Thompson hired, things went from bad to worse. But when Scott Thompson was fired and Marissa Mayer hired, it seems like Yahoo! is on an upswing now.
Changing CEOs is like getting heart transplants. The success of survival, death or improvement varies case by case.
While you absorb all this, think again and tell me – would Andrew Mason have been fired if Groupon was NOT a public listed Company?
****