MORE ABOUT GROUPON'S IPO:
LETTER FROM ANDREW D. MASON
day of this writing, Groupon's over 7,000 employees offered more than
1,000 daily deals to 83 million subscribers across 43 countries and have
sold to date
over 70 million Groupons. Reaching this
scale in about 30 months required a great deal of operating flexibility,
dating back to Groupon's founding.
there was The Point--a website launched in November 2007 after my former
employer and one of my co-founders, Eric Lefkofsky, asked me to leave
graduate school so we could start a business. The Point is a social
action platform that lets anyone organize a campaign asking others to
give money or take action as a group, but only once a "tipping
point" of people agree to participate.
started The Point to empower the little guy and solve the world's
unsolvable problems. A year later, I started Groupon to get Eric to stop
bugging me to find a business model. Groupon,
which started as a side project in November 2008, applied The Point's
technology to group buying. By January 2009, its popularity soaring, we
had fully shifted our attention to Groupon.
this letter to provide some insight into how we run Groupon. While
we're looking forward to being a public company, we intend to continue
operating according to the
long-term focused principles that have gotten us to this point. These
We aggressively invest in growth.
spend a lot of money acquiring new subscribers because we can measure
the return and believe in the long-term value of
the marketplace we're creating. In the past, we've made investments in
growth that turned a healthy forecasted quarterly profit into a sizable
loss. When we see opportunities to invest in
long-term growth, expect that we will pursue them regardless of certain
We are always reinventing ourselves.
our early days, each Groupon market featured only one deal per day. The
model was built around our limitations: We had a tiny
community of customers and merchants.
grew, we ran into the opposite problem. Overwhelming demand from
merchants, with nine-month waiting lists in some markets, left merchant
demand unfilled and contributed
to hundreds of Groupon clones springing up around the world. And our
grew so large that many of our merchants had an entirely new problem:
Struggling with too many customers instead of too few.
we increased our investment in technology and released deal targeting,
enabling us to feature different deals for different subscribers in the
same market based on their
personal preferences. In addition to providing a more relevant customer
experience, this helped us to manage the flow of customers and opened
the Groupon marketplace to more merchants, in turn
diminishing a reason for clones to exist.