Groupon chief executive Andrew Mason has now publicly acknowledged his own company is questioning whether he’s the right man for the job – an admission that comes as shares in the group buying giant have plummeted 80% since its initial public offering.
Mason’s shaky position as chief executive comes at a time when group buying is arguably in decline, with revenue growth tapering off, especially in Australia.
But the admission seems to have relieved some fears about the company – shares in Groupon have surged 11% after Mason’s frank discussion about the company’s position.
At the Business Insider’s Ignition 2012 conference in New York, Mason addressed reports that the company is look to find his replacement – by essentially confirming a discussion had been taking place.
Mason said it would be “weird” if the company wasn’t questioning whether he was the right person for the job.
“Here’s a news flash: our stock is down about 80%, it would be weird if the board wasn’t discussing whether I’m the right guy to do the job, it’s their chief responsibility to ask that question,” Mason said.
However, when asked whether he’s the right person to lead the company, he responded by saying, “if I ever thought I wasn’t the right guy for the job, I’d be the first to fire myself”.
Mason was positive about the company’s prospects – but admitted some key mistakes. He pointed out that although the business had invested heavily in technology in North America, the same couldn’t be said for other regions.
“Because of our strategy to grow quickly (in Europe) and capture market share, we didn’t invest in technology like we did in North America… we’re paying for that now. We now have the playbook; it’s the playbook for North America.”
He also pointed out that the margins in Groupon’s latest venture, Groupon Goods, are lower than usual and have a shorter impact on profitability. Even though these sales represent 26% of revenue in the third quarter, they’re not contributing as much to profit.
This is the same sentiment expressed by local experts in the group buying industry. A major feature appearing on SmartCompany today delves into the Australian market, and reveals heads of major businesses are changing how local businesses operate.
Product deals, for instance, are experiencing a decline as companies can’t sustain themselves on lower margins.
The feature contains interviews with the heads of companies including LivingSocial, Groupon, Cudo and Scoopon – be sure to read it here.