Competition and humor drive Groupon's Andrew Mason

PALOS VERDES, Calif Fri Jun 3, 2011 5:33pm EDT

PALOS VERDES, Calif (Reuters) - Groupon CEO Andrew Mason once thought of the hundreds of companies copying his business plan as plagiarists.

Now, he joked to a crowd of investors and analysts this week, he just thinks of them as the competition.

The 30-year-old executive's light touch belies the serious threat that Google, LivingSocial and any other company with a daily deals website poses to Groupon, which on Thursday filed to go public.

But it is also the sort of quip that helped Mason win over the crowd at this week's All Things Digital conference and underscores just how far he is from the slicked-back entrepreneur many in Silicon Valley might expect.

Instead of majoring in business or economics, Mason studied music at Northwestern University, graduating in 2003. Instead of moving to California to start his tech company, he stuck around in Chicago.

And rather than playing the role of hotshot executive, Mason continues to goof it up. At this week's conference, he insisted that organizers work with his drivers' license picture -- showing his mouth open wide and his face contorted -- when it came time to put together official event materials.

In the biographical information provided by Groupon, Mason claims to be working on a book called "Unleash the Power Within: Self Help for Self Helpers."

His offbeat sense of humor, however, can also land him in hot water. When Groupon ran ads that appeared to mock issues such as Chinese oppression in Tibet and the threatened rain forests, there was a public outcry and the company pulled the campaign.

"For us, it was like who would seriously believe someone would trivialize these issues?" he said on Wednesday night, the day before Groupon filed for an IPO that could raise up to $750 million.

The company is not Mason's first. It evolved from a venture called the Point, a site to improve online organizing and fund-raising. Mason dropped out of graduate school in public policy at the University of Chicago to work on the business. Before that, as a teenager, he started a business to home-deliver bagels on weekends.

DEATH STARES, STUPIDITY AND LOVE

Groupon is another matter altogether. The site has 83 million subscribers and deals with nearly 57,000 local merchants in 43 countries. The investor community has pegged its value between $15 billion and $20 billion.

As founder and chief executive, Mason is Groupon's public face; and just as Mark Zuckerberg did with Facebook, he is defining its culture.

His personality played well at this week's conference. When interviewer Kara Swisher asked Mason questions he did not want to answer -- about the IPO and his decision to reject a takeover offer from Google -- he skipped the usual platitudes.

Instead, he used silence and a long, piercing glare that Swisher later dubbed the "death stare." The audience laughed and clapped. At a dinner later that evening, one of the chief topics of conversation was how well Mason handled himself on stage.

But the talk also made clear Mason is thinking about his business and its challenge, all the time. Groupon launched a few months ago in China, where Mason said he is already facing competition, including from a site that also calls itself Groupon.

In the United States, he said he divided the competition into three categories: One would be small clones, another would be entries by existing corporate powerhouses, such as Google Inc, which has launched a competing service, and Amazon.com Inc, which backs LivingSocial. The third category is "people out of left field," meaning they have a twist on Groupon's model that Groupon has not come up with yet.

As a counter strategy, Mason pushes his company to "build a product that makes (customers) love us more than anybody else."

At the same time, he is trying to drive Groupon from "being a sales and marketing company to more of a tech company." That evolution means Mason, a native of Pennsylvania, sees his biggest mistake as not opening an office in Silicon Valley soon enough. There he could have tapped into the engineering and technology talent of the area.

Talent like that would help improve predictive analysis tools to determine if using Groupon will help build up a merchant's business. The company has come under fire for creating one-off rather than repeat customers.

In a letter to potential investors that accompanied the IPO filing, Mason made no bones about his missteps.

"As with any business in a 30-month-old industry, the path to success will have twists and turns, moments of brilliance and other moments of sheer stupidity," he wrote.

(Editing by Paul Thomasch; editing by Andre Grenon)

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