[Music] uh we thought it might be good just to get some sense of the audience so we know uh how to uh direct comments and Andrew knows a little better uh what the audience is so can I ask for uh a show of hands in several categories first how many MBA ones first year mbas okay big majority uh MBA 2s and uh Engineers from outside of the uh school okay so smattering uh alumni it's reunions
weekend okay a couple of and uh then the remainder maybe uh anybody from the D School design uh here one or two good okay so you have a sense mostly anyone from the class of 47 I heard that they're doing a reunion no that will be later uh so uh the other um uh piece of housekeeping is that uh Andrew obviously is CEO of a public company and uh that shouldn't stop us
from having a robust and full discussion but uh a couple of uh things that uh public company CEOs have to be careful when uh in a public disclosure form so if we get close to the edges on that we'll deal with it I don't think it'll stop us from having a robust discussion um maybe a good place to start uh picking up on the introduction um before
Groupon was Groupon uh it was the point and you had a number of great ideas in the point this concept that a deal wouldn't transact until a critical mass of uh the parties agreed same concept you carried over to group on but uh a lot of our students go off and start companies of their own and you know they don't always get it right with plan a plan B plan C and so forth down the line
but maybe you could talk a little bit when you were first uh founding the point and you saw things weren't going so well um how did you come to Pivot to the ideas that became Groupon uh what was that process like um what were the learnings there what would be good for our students to know about that well when when people look at group on today uh I I don't know how many people have
come up to me and uh and said oh I had that idea you know it's it's ridiculously simple right we find great local businesses and we uh offer them for sale on the internet at 50% off right it's not really that um that Genius of an idea um but it wasn't obvious at all at the time it wasn't obvious that consumers would be interested in getting a daily deal on
something like this it wasn't it wasn't obvious that Merchants would see value you know we didn't anticipate that 6 months after we launched in Chicago we would have a six-month waiting list of businesses uh to get signed up so um so I I I think that's an important thing to remember is that the ideas that are successful aren't always obvious at the
time um when when we started with let me let me talk about some of the lessons maybe that would be great um uh looking back in retrospect of things that might have helped us uh find the promised land a little bit faster if I had known these things so the point was this big massive abstract idea to solve all the world's Collective action problems it was um get
a critical mass of people who all want to either take some collective action or give money towards something and it could be anything from uh organizing the guys in your dorm to buy a ping pong table together kind of like the kickstarter model uh to um to organizing a boycott against the multinational corporation and it was such a big abstract idea that it it wasn't
something that was easy for people to understand uh it took 5 10 minutes of explaining say oh I get how that could be um so so I think the the things that tend to be successful are things that are one baby step removed from something that people already understand very well and they can Gro within 5 Seconds of looking at it um the and that's what the
point that's what Groupon was right it wasn't very difficult to explain the concept or how how the value applies to them um the other thing is uh I tended to gloss over the massive chicken and egg problem that the point had in other words it's a it's a business model that works really well and can do wondrous things once it's at scale and you have tons of customers but the use cases at a
smaller scale were were more difficult to uh to articulate the value so it so and and and I didn't I just kind of like waved a magic wand when I would talk about how we get to that place where we have millions of customers the examples I would give um of how the point would be valuable would be things like if we can raise 10 billion doar we can enclose
Chicago in a dome um and protect ourselves from the winter um and uh we found a different solution for that problem out here but um so uh so so that was a real problem and actually Groupon is a great example of of of a company that that has the opposite set of circumstances which is it works extra ordar well at small scale and as it gets larger it gets you
you have to find ways to innovate to to make it work at a larger scale you can't send all three million of our Chicago subscribers to one business you'll completely uh over overload that business so we've had to invent personalization and different types of things in order to make the business operate better at scale but it works phenomenally well at a small scale which
is also why we rented to so many uh competitors early on yeah so the uh the learnings then as you moved from the point where first of all if it takes five minutes to explain maybe uh that's an early indication that the model you might have trouble moving forward to something big and the chicken and egg issues that that are present in a lot of startups I mean
a a lot of startups if you close your eyes to that early you you might be missing it because you really do have to find a way to power up and to get to scale um so um uh then you moved to uh uh Groupon and um what were some of the early embellishments you you alluded to a few I mean as was mentioned during the introduction you started with the pizza place on the first floor the first day
and um but what sort of embellishments did you find as you as you started to build out the business what what sort of things became important operationally we'll talk about culture in a little bit because that's really important but but just as you were scaling the business what were some things that U you wish you would have done quicker you wish you
would have thought about more what was the learning in that part of it that might be helpful uh so let me see uh so some of the one one thing that's going on right now we have a number of of little startups kind of operating within group on now in different in differentes and I was spending some time earlier this week with one of the teams working on a new
initiative that we have and um they're they're frustrated and yelling at each other on different things and and feel like they're not moving fast enough and um at some moment I I I reminded myself this is exactly what it was like at the beginning of Groupon you know it wasn't like we had just discovered electricity and everybody was sitting around jumping
from for Joy it was a it was even ear early on it was a constant state of paranoia thinking that we were going to uh fail every single deal that we ran in the very early days was a massive debate we'd just be swearing at each other and um I mean looking back it's uh we we I I do think it's important that you care about those details especially early on because those you're in the process of
establishing your your your values whether you articulate them or not that what you care about as a company and uh and and so it's it's important to go through that that process early on um you know things things we could have I'm I'm happy with with how we started the business and how we scaled we we moved very fast we we held true to the things that that we cared about that
we think make Groupon special um excellent customer service having a a a voice the way that we write about the deals that we feel is credible and trustworthy with our customers so there there were a lot of opportunities to compromise on those things along the way um and we held true to them uh and uh and I think it's put us in a in a better State for the long term yeah and
um when um when you think of some of the cultural things as the company's grown as you said in the early days you know every deal you were offering was a great matter of debate in the company it got top management ATT mention you had the high bar well top management I mean there were 10 of us yeah exactly well that was top middle and bottom everyone
in a room so but but now uh so you have thousands of people and um and cultures shift as places get bigger they can shift um how do you try to maintain culture and how you know the company's not that old I mean the company's three or four years old it hasn't been around for that long a time but it's changed so much grown so much how do you what are the things you do was a leader to try to
maintain culture and keep the things that that powered you to success initially keep those in the uh just in the culture of the companies you go forward well I I had never worked at a large company before starting Groupon and sometimes I wish that I had because you could see once you're operating at scale what some of the failure modes are
and um when I started group on I remember the the few companies I'd worked on things like values corporate values were you know these platitudes that were plastered on the walls and and they never seemed it never seemed to have any purpose um but there are some companies that that really put a lot of attention into um in in into their values and when you do it pays off
enormously not not so much when you're a small enough company that you're touching every employee every day or every week but once you get larger you need a framework for pushing decision making down the organization and that's what that's what values I think do it's a set of rules um even if they're simple things like being customer focused or being long long-term oriented um they
help people further down in the organization make the same decision that the CEO would make um on the along lot of those edge cases which come up constantly so I think um I think defining what your values are and and and not just putting them on the wall but talking about them all the time living them all the time is a great investment once you get to um once you
get to a size that you're not touching your employees every single day and what uh so what can you physically do if you're the CEO of an Enterprise you know you're in four or five different cities um you have um a lot of people thousands of people what can you physically we're in 48 countries well yeah exactly uh although personnel-wise some of those
country you don't it's not like you have a ton of people there but since they're Local Deals and you need copywriters and and people to push them out every every day how do you so how do you maintain that you know you have these important values and they're not just platitudes they're the way we really run the business every day that's what you're saying you got to be genuine to them but
but what can you physically do I mean every Friday afternoon uh out here you know companies have uh company Gatherings they have different meetings different social events you what are the techniques because you know these men and women are going to go out and run companies to what what do you do to physically to to maintain that culture and and and and keep the torch uh so we
do regular Town Halls where uh people can hear from me or other people in Senior Management and ask questions we try to be as accessible as possible um it can't fall entirely on uh the CEO or the CEO's direct reports to give employees transparency and context so we try to get together with the senior 200 or so people at least once a month to
give a business update to go deeper on some strategic initiatives or certain parts of the business so that there's a large group of people who know everything that I know and are are empowered to be able to give uh context to all of their employees and actually you know being public has forced us to become very very good at that and it's
forced us to I I don't know that we're great at it yet but we're certainly investing a lot of energy in it and I think it's it's one of the ways that uh that it's that being public is actually helped to improve our culture and give us a resiliency uh and long-term sustainability because um as you get external noise you have to have internal mechanisms to make sure that uh
everybody understands the long-term strategy of the business yeah so you and your top team have to permeate through the whole company kind of a holistic view of of what the company's about what its values are how you do things and if employees have a holistic view like that they're going to get the culture and they're going to when when you get all this external noise in the atmosphere
they're going to be able to separate the signal to noise ratio uh in a good sort of way that that's what you're that's the I think that makes a good sense uh let's talk about culture and all of these questions I'm asking are all from you know the view from the top folks solicited student questions so I'm uh uh just I've changed the order a little bit
and move them around and we're going to be in this mode I should mention till about 20 of or but certainly by quarter of we'll uh be open mike uh with the whole audience but since we have a good group of questions I'm just going to push on with these a little bit uh a number of people asked about the importance of culture and you know all the CEOs who come here to vi from the
top they culture you know our place I mean you you can imagine uh you're a little irreverent you you know how that uh how that goes uh I think I think by the way my my uh reputation for irreverence is is slightly overstated it's weird I I don't know what advice to give people but but um like so that intro that I got was very nice maybe like 80% of it is actually true there
are things that have happened like uh at one time a former employer employ employer just to screw with me told an uh an interviewer that I was a massive Billy Joel fan and uh and i' played in a Billy Joel band and stuff like that which I did like for two seconds that is a for irony but uh anyway now I have people who come up to me and like quote um uh She's
Always a Woman or or something like yeah man that's an awesome song uh and now I have to live that and I don't I don't know how to respond and I usually don't have the Forum or time to refute it or it doesn't seem to matter so anyway sorry keep going that's uh uh that's good so so culture you know we have courses here at the school that that uh include the importance of
culture and and just techniques for uh for trying to establish culture but what uh you know some of the faculty here say listen you you get the culture right in the company and and culture is going to Trump operating realities any day of the week you you get your employees who understand your culture understand what's important to the management the
stakeholders of the business and and if they're reasonably smart you know the operating things will take care of themselves if the culture is Right culture is that powerful at the same time you know some CEOs are much more operating oriented and culture is a lip service uh kind of piece of it what you know you're early in your career you've never worked for a lot of big companies
but do you have a sense of that at group on how important is culture yeah I mean it's uh I fall into the former category and it's become more uh my that feeling's become more punctuated as the company's grown and I mean again culture is a way to scale the behaviors that you want to see out of your people I mean I think if you're in a space like like we are where there's an enormous
opportunity I mean we're trying to uh plug local Commerce into the internet one of the last major spaces that isn't really plugged into the internet so um that's that you have to have a green field opportunity like that um culture will attract great people great people will improve the culture and you get a virtuous cycle um but that that eventually allows you to execute and
perform and and create strong growth and value for your shareholders yeah um talking about attracting great people let's um from the the mba's point of view you know they have a lot of options when they get out of here they have a lot of options for their summer uh usually if their first year uh mbas and increasingly um you know last year uh somewhere
around 15 or 16% of our MBA 2s went out and immediately started businesses of their own uh from Stamford they didn't go to they didn't go to work for startup they were the startup they they started something either by themselves or as part of a small team and um and yet a number of students also went to work for uh Groupon or organizations like Groupon that were you know not old companies
three or four years old but but more established and um a place maybe where they could uh learn a little bit about successful entrepreneurial activities before undertaking one of their own what do you think or how should our students be thinking about that what why should someone not do a startup right away and and go to work at a place like
Groupon well it depends on what experience they had before uh they got their MBA but I can tell you I would have loved to have worked at a place like group on um uh before before I started Groupon um and uh and and and the reason is it's it's a really helpful experience in starting your company to have to have been at a larger business so that you can anticipate some of the
um potential pitfalls that you'll that you'll run into or the what a company looks like once it starts to scale um most of what I've learned about being in a larger company I've learned from uh from my team who's many of whom have come from larger companies um we have I'll give you one example of of a role at Groupon that's that's attracted a lot
of mbas or city manager position which is you come in and you run Chicago or you you you run the daily deal business for New York New York or something like that and Groupon is unusual in the world of technology companies because we're this cyborg that's a combination of technology and also humans we have a lot of people um calling merchants and doing uh doing manual
processes and that type of experience is in invaluable leadership training um it's a it's a daily street fight um going out there and closing these uh and signing up Merchants um I I sometimes say at a company like Google or Facebook everybody could go home for uh for for six months or so and and the service would keep on running um at Groupon people could go home for five days and
we'd have to shut down like we just have to put up a close sign because because our that that's about how much lead time we have of of merchants that are actually scheduled to run on the site so it's a it's intense it's very operational um you learn how to lead people you learn how to work with technologists and it's a great leadership training ground um for people
who are looking to go on and run something their selves yeah and um they can effectively learn on your nickel not their own you know they get smarter raise their odds of success because of uh uh kind of been there done that and as well as uh a lot of our students come here without vast amounts of operating experience and the city manager job where you it's like you said you don't
come to work for one day and uh it's clear there's going to be a big problem you know a lot of our students 30 40% of our students come from uh Consulting role or Investment Banking role uh with it's had high intellectual content but not the operating content that's a key part of every startup and it well it's a key part of many startups it's not as
there there are some startups starts that have their magical um Revenue generating machine where operational excellence sometimes isn't as important Point yes absolutely and the the interesting thing is the the people from technology companies that have come to Groupon that tend to succeed are people that come from companies like Amazon that I mean it's e-commerce in nature
but it's also just much more operational than other pure technology plays where um where it's harder to get used to living in that high urgency um high-intensity operational excellence uh environment yeah so you've talked a bit about the start of the company how you pivoted uh ideas how you've kept culture how you've tried to continually innovate as you built the uh
company let's talk a little more about the future and what um a number of students were interested in hearing uh over the long term what sort of white space you thought was still left in adjacencies how uh you know there's been a lot of conversation about Groupon Goods or group on services or um you know things other than just daily deal Focus but more ongoing Commerce um you
you have a lot of relationships with a lot of customers you have a huge Salesforce a lot of copywriters you write this stuff up get what else can you do with that what what are the white spaces left what's what does the future look like so our our strategy has been uh has had two components to it to go wider in daily deals by entering new categories like travel goods and so on
and that's pretty straightforward it's really doing the same thing that we've done with products or excuse me with uh local services and doing it for for products and other things and and that continues to go well um group on Goods now is uh is is a big part of our business and um and uh our customers love it it's uh it's fun to get these emails with a really eclectic mix of of
products anything from a uh from you know uh cat food to to a mattress to um a a camcorder um so so so these it's it's a fun extension of of what we're doing with local daily deals but our our real core is always going to be in local it's where we've it's where we've built these strategic G assets our direct relationships with millions of merchants
and uh and millions of customers so at the same time as we're going wider we're going deeper into local and what we see as our real opportunity is to build the world's first local e-commerce Marketplace um we call it we call it our building the operating system for local Commerce which is referring to kind of the technology infrastructure that you
need to plug Merchants into the internet and create a real Marketplace similar to how Amazon is the marketplace for products we want to do that for local and um and you'll see us move more and more more and more in that direction we've been experimenting with it with things like uh group on now which is a real-time deals on demand service that where you can pull deals instead of
having them push to you through email and we think we're really focused on building our selection of deals and making our deals easily findable uh so that whenever a customer is looking to do something uh that that Journey starts with Groupon um and if we can if we can do that we think there's so much opportunity both for c for customers and
for merchants in creating a better way to uh for customers to discover businesses and save money and for merchants to get more customers in the door as well as have tools to better run their business and um and and the transition to mobile uh is really what's enabling a shift like this because you couldn't do some of the things that we intend to do uh without people having a
having the internet with them at all times yeah that um that sounds pretty well conceived I mean a lot of people have written about uh Groupon that it's been almost the savior of the local Merchant I mean if you're a local Merchant and you're competing with the likes of Amazon and other um established huge budget uh uh digitally omnipresent sort of competitors and you're some little
local Merchant um the fact that there's Groupon and similar Services uh available starts to level the playing field so so other but I read an article about um do you buy about this business that uh ran a group on and they sold 100,000 cupcakes and it almost put them out of business I don't know about that um high class problem yeah no I'm just kidding
I'm I'm uh yeah I think you're exactly right um our our Merchants have never had a uh have never had a great way to reach customers the best thing they had was television advertising or newspaper advertising or the Yellow Pages or something like that and um for the first time uh they have a way to get hundreds or thousands of customers in the door in
fact for the first time they're dealing with a problem of if there's any problem with group on itss what do I do when I have too many customers inste of too few yeah EXA exactly and uh and we see it in in our results uh we we um use third parties to to do surveys of our Merchant satisfaction we find that our business our businesses our partners have the highest satisfaction rates out of any
anyone that these companies survey that offer B2B Services yeah and um so there's um you know there's social good in that I mean most people think the world's a better place because there local merchants and if you're a vehicle to help those local Merchants prosper in an increasingly digitally competitive World um a lot of people see real social
value in that and not that Groupon has a huge social Mission I mean it has a business Mission but what's important to our students often is a social component of what they do and um there other social uh redeeming social aspects that you see or or what is a management a group on involved with of of social nature because that's um it's been a huge pendulum swing in the 20 years I've
been here where students that's really important now it's important to the world it's important to our students I don't know if you ever think about that you know one one of the most uh interesting learnings that I've had personally is I I when I started the point I mean it's much more directly um in the service of social good it was about uh power to the power to the
people right and um Groupon I think uh just the model has and will do more good for the world than even the point would have had it been successful but in smaller ways I mean I I feel this every time I um I listen in on customer service calls in the company and and you hear about the you know 70-year old lady that got spider vean removal who never
could have afforded it at at uh at full price and it's like that's great that's going to make her life a lot better or the couple that got married using a Groupon uh for a hot air balloon and uh we're we're we're making all these experiences accessible for for millions and millions of people who wouldn't have been able to do these things otherwise
and and that feels that feels awesome like we're allowing people to live more full lives um and uh and there are a number of businesses that we've helped start or expand that never could have done it if they didn't have a vehicle to reach customers at scale as quickly as they have with Groupon um we do other stuff we have something called Groupon Grassroots we've raised over a million
dollar um where we where we run basically Groupon campaigns um to to help local businesses raise money um from our community and we kind of take our community and channel it back into the back into local causes so that's more directly philanthropic stuff that we're doing that's great um let's uh use the last a few minutes we have before we
throw it open to everyone to talk about uh life as a public company um uh obviously you had um a lot of ability to raise money even you when you were a private company I mean you raised almost gee 8900 million uh from all sorts of people and uh uh and then you made the decision to go uh public raised additional 600 or 700 million at the time of the public offering um what's it
like operating a public company and how do you keep the culture we talked about the Innovation we talked about the getting people to push each other hard on ideas you know all the things that that were so important in the first couple of years how do you maintain that when you got all this uh Sideshow going on around you of being a public company um you know it's a whole new set
of challenges and it's it's it's fun in a way when when you when you uh not that I'd wish it on anybody but uh but as a leader as a person you'd learn an enormous amount during times like this and I mean that's another cool thing about working at a company like Groupon anyone can run a company um that's going through hyper growth um but this is where it's times like this where
where you're defined as a leader and uh where where you really learn um what it what it takes so so I think that's been even though it's been challenging that's been something that uh everybody has has valued and uh the external pressure has um has forced us to identify areas where we can we can get better and uh and we have gotten a lot better as a result I
think of being a public company um so uh you know it's uh it's it's a mixed bag there's no question about it but uh but at the end of the day no regret and how do you how do you power through that personally I mean they one week they don't like your accounting you know the next week they don't like your recurring Revenue the next week they don't like your marketing cause who
knows you you all this stuff flying around how do you I mean you are the leader you're the one that these thousands of employees are looking to how do you how do you power through that personally well uh you just have to learn to uh look internally for signs of success and not look at people uh outside who where there's a long history of people misunderstanding things that
went on to be uh hugely successful or people that went on to be hugely successful so we try to remind our people internally of of the real facts about the business we're growing 45% year-over-year um we have uh massive mobile penetration you know a third of our transactions in the United States are happening on mobile devices which makes us one of the largest uh mobile
Commerce companies as a percentage of transactions um we've launched now we've Diversified into having a second major business line in group on goods and um we're the largest play player in a nent local Commerce Market with nothing but opportunity so even I mean the the good thing about about our space is um it's such a it's so open and and the
opportunity is is so full ahead of us that uh that we can afford to have some screw-ups along the way and and still uh and still succeed Mass massively as as long as we stay focused and um and uh everybody understands how we get there yeah so uh while the microphone people get ready and uh people get their questions in mind let me just uh ask one last question here which
is running the company now what's most important to you I mean what what is you have a million you're a CEO you got a million things on your plate but but what's most important to you both personally and professionally as you get up every morning as you go to work what what what's kind of what's the key thing people I mean it's uh it's making sure
that our people uh understand the strategy that we continue to attract great people and we've been uh we we've been very lucky there we some of our strongest people we've we've hired uh recently we were hired a new SVP of uh of global sales and operations um named Cal Ramen who's a great asset for the company um and uh and several other so the what what what keeps me going is
knowing that some of the people that we've added recently are some of the strongest people in the company um which is a great sign yeah as you said you know some operating models they have kind of a a secret formula or something the company almost runs itself your company uh very daytoday operational you're as good as your last deal you know kind of and and so having great men
and women who can be part of that I can see where that's uh important let's go we have a full 15 minutes we have 16 17 minutes we're right on schedule Let's uh uh o over here on the right yeah thank thank you very much for the talk um I think one question that is relevant or or kind of top of mind for a lot of the students here is just stock price given especially what's happened
with Facebook recently and your stock being I think 85% off off the 52- we High how much do you think about that or how important is that to the operating model or your vision on a day-to-day basis or do you think about this on kind of a five or 10 year Horizon well uh it creates a lot of noise um and it creates a lot of potential distraction um we would rather
it not be that way given the choice uh obviously but uh but our decisions are based on where we're going to be 3 to 5 years from now not uh what we can do to get the stock price up tomorrow or the next day um it's t again it's times like this that uh that Define uh that Define company's cultures and uh you can't really call yourself a long-term oriented company until um you're in a
situation uh you're in a situation like this and we're really trying to uh live by uh what we say yeah over here this side yeah just let her run down there with the microphone oops sorry you're next so I'm just uh kind of thinking about my hometown in the Chicago area and kind of curious your perspective of starting a business out there what were
some of the advantages and disadvantages um you know for instance was it more difficult to find engineering Talent did you ever think of moving the business out here what's your homeown uh the shamberg area so you would actually start a business in shamberg or in in downtown well no I'm just curious in general just the Chicago area yeah um there it's it's they're
tradeoffs um so it would have been hard to start a business like Groupon out here because it's so operational we have 3,000 people doing things other than engineering uh in in the United States so um so so Chicago ended up being a great home for a business likee Groupon Now We've Ended up opening an engineer office out here and in the US about half
of our Engineers are here half are in half are in Chicago great engineers in Chicago uh you don't have the depth of experience a lot of times um you know you're you're lucky if you find somebody who's worked at sear.com in Chicago um and uh and and that means that a lot of people's first real text startup experience is working at Groupon and um we've brought some Engineers over
from paloalto who have more who have more experience um working in a company at scale um in order to balance it out but uh but there they're definitely tradeoffs and uh it's hard to find Engineers anywhere uh there's no there's no Silver Bullet that I know of um but uh it's it's a great com place to do a startup I'd recommend it good um I'm wondering if you can talk
a little bit about your comp comption so a lot of um other companies have come into this space since you started and it seems like you have an advantage with your large sales force but how do you plan to keep that advantage and and how do you plan to fend off the competition in the future and how do you view those other companies um so there's two groups of
competitors that we think about there's the people that took the daily deal uh local daily deal model that we pioneered and have just cloned it and then there are people who are uh who are going after the larger local Commerce opportunity um in the first group we feel really good about where we are um we have uh a market leadership position in most of our countries and it seems to
be fairly stable in those countries uh so it's a it's an easy business to get into a very difficult business to scale uh we've seen that as many of the direct clones have have dropped out or reduced in in scope um the the second category are the other businesses that see the opportunity to um enhance the way that we buy things locally using technology
and there's a lot of people coming at that from different angles and that's why you know even as we continue to refine our Core Business we are investing in um Innovative new products uh we recently launched a payments product for example for our for our kind of Main Street business partners um that's designed for the restaurants spas and salons that work with Groupon um
great great rates uh very simple to use and um and and sign up for and and a great value ad for the merchants that are running with Groupon and we'll continue to do things like that um that are that are more Innovative in order to make sure that uh somebody doesn't come up from behind and and take the opportunity from a different angle yes you talked about the uh clones and U
you have done some Acquisitions how would you usually approach something like this like how would you evaluate which clone to buy and also um coming from Germany I've uh kind of followed the city deal uh acquisition how did the culture change after Acquisitions like this so uh great question the way that we evaluated the Acquisitions was based
on the people and uh and this especially because our strategy early on was to was to spread across as many geographies as we can so that we can capture first mover advantage and gain market share um so we really needed to rely on on strong leaders who could operate semi-autonomously um without without very close um management or people in the US being over all the time um and
that was the only way we'd be able to scale so so so it's really about getting those leaders and strong people um we again early on were optimizing for Speed and gaining uh market share only recently have we started the process of integrating the culture and um what I found is that is that uh everybody is hungry for that in the company everybody is looking for ways to
uh to not not just culturally but in terms of the technologies that we've built move to uh a unified approach and um there there are challenges for sure uh but uh you know you have to they're things that you work through and very specific as they come up so first uh first I want to say you're awesome and you've accomplished something that probably no one going to
say something really mean to me yeah not not really mean but challenging um so I mean when you were talking you know the I just the perception on both the customer side and the merchant side I feel like there was a gap between what you were talking about and what sort of my anecdotal experience has been um so like on the customer side I feel like
everyone hates da deals because they just flood the Inbox and it's not just you guys but you know it's it's lots of these competitors and then on the merchant side I've heard of several you know kind of anecdotal Merchant stories where they right that's what I was trying to do when I made my kind of failed joke about the cupcake thing yeah and so so you said you you commissioned
this internal study um we did we did it with a company called fory um who's the company that a lot of people quote when they talk about customer satisfaction um and we have I mean I can we we've talked about them at nauseum but we have among the highest scores both on the customer and the merchant on in the merchant side yeah so I guess just the problem is with the perception
you not our typical customer um and espec in paloalto I mean we suck in paloalto we have very few deals here um and uh and I think there's a a larger than normal disconnect uh between uh between the the Geeks and the tech press and the people who are our customers um and and that's part of what leads to uh the difference like I bet your mom loves
Groupon not sure if that's true of my mom and I okay we'll leave it at that yeah other questions yes over here uh Andrew i' I'd like to ask you uh about China um so uh it's been pretty well documented that uh Groupon burned um millions of dollars um firing thousands of employees uh causing what some people call a riot um and um and ultimately leading to a few months ago
Groupon exiting the market by selling it to tensent who you guys joint venture with uh was one competitor I.E Google saying that Groupon was quote getting it up in the ass um so um we've just been studying a lot about China recently as part of our curriculum so I'd be first interested in your Insight do you think it's if you just say quote it's okay to say stuff like
that too shame well judging about the laugh I obviously got away with it so interesting first your Insight in uh what was Groupon's thinking um when you guys approached a market like China and uh will you guys ever reenter the market there so um China if you if you plant the the seed of an idea what we found is if you plant the seed of an idea in uh in every
country you know it's generally going to bloom into the same flower but I think the flower looks very different in in China it's it's by far the most different Market uh that that we uh that that we operated in um I can give a number of examples I mean part part of it was people the first time uh I think the that we got some exposure was when we did our round of funding with Excel
and at that point there were something like a thousand like maybe six months later there were something like a thousand different direct clones that started so as a result they all no one built a brand that customers trusted uh they all ended up commoditizing each other you had businesses that were pure sales forces and other businesses that were pure consumer marketplaces and the
sales forces were selling to all the different consumer marketplaces um the way Chinese consumers use the internet there wasn't a lot of traffic coming from email which uh which is our main driver of transactions uh in the rest of our countries it was very small in China so very different Market um and uh required a really a completely different
strategy and a different type of uh patience you know I think where we messed up there there is we had this model that worked everywhere else of getting into a market following our Playbook scaling very quickly um and the Playbook just didn't work there um and it didn't work for anyone really I mean it's it's a very fragmented Market there's there's no clear market leader
and we just didn't we felt like we would be better off partnering um partnering with with somebody else uh which is why um we we took the actions that we took but uh you know we're still we're still in China um as uh as investors and um we're very very interested in the market and uh and how it'll develop over the long term but but but a lot of lessons learned few more
questions yeah some here in the front um so I'm just curious to hear a little bit more about what your thought process was when Google offered to acquire you and kind of why you elected against that decision and now looking back on it what what you think about it um so you know that's been written about the rumors that we were had acquisition offers uh I can't address
them directly I can tell you that um you know we made a decision to continue being uh we to to be a independent company um because we saw huge opport opportunity and um and we wanted the opportunity to pursue it unencumbered by the possibility of somebody else controlling our our Destiny or decisions and um and uh we ultimately thought we could create more value for our
shareholders that way as well and we continue to believe all those things and it you know takes more than a than a bumply bumpy entrance as a P public company for us to uh change our mind on something like that you had a few more questions down here so I'm interested in a little bit more about your strategy with your with your primary customers which I guess are
your merchants or or one of your critical customer bases and um Misha mentioned a few minutes ago you know sort of the relationship you have but you know you you mentioned the cupcakes and how Merchants can get a little bit overwhelmed at times um do you do anything to help them prep prepare for the the onrush of potential customers and in doing so create the opportunity
to work with them multiple times in the future because they don't get crushed by this Onslaught yeah I mean we absolutely do it's in our interest to make sure that Merchants don't get TR uh crushed so they will want to continue to work with us um we find it's it's simple things it's the amount of time Merchants have between when their deal is scheduled and when it actually runs if
it's just one or two days then they're far less likely to be satisfied than if we give them a week um so so those are the kinds of processes in place um we've we moved about a year or so ago to a to a structure where instead of just having salespeople we have account managers that have a long-term relationship with the merchant um they talk to the
merchant before they run their deal and prep them help them think about uh how answering phone calls and uh making sure that they're in stock on anything that they might be selling once their deal runs um we also have Chang the types of deals that we offer so for merchants that one one thing that we run into is Merchants who say I love my group on experience but man it was operationally
or I love the customers but it was operationally stressful and I just need to breathe or I need to relax before I do something like that again and so so now we offer a service for merchants that we just call internally group on light and it's a subscription model where they can run little mini deals uh that we where we sell up to 100 units a month or
or 50 units a month or something like that so instead of getting this massive one-time influx of customers it's uh it's partitioned across a longer period of time um so you know those we we we monitor our Merchant satisfaction very closely we understand what the inputs are to the percentage of merchants that are dissatisfied um you know the the the
negative stories get a lot of coverage because they're super like interest interesting right and they're they're like uh I mean it's it when it goes wrong it goes It goes It goes really wrong A lot of times there's no form of advertising that's going to have 100% Merchant satisfaction we'll strive for it but we'll never get there but I think the um the negative stories taint group
on sometimes when when you ask questions like that in the same way that like every time people fly they think that they're going to it's going to crash and they're going to die or they think about you know Mercury and tuna fish it's become one of these um kind of urban legends because all the data that we have just doesn't doesn't back it up as we uh approach the 1:00 hour we'd like
to first of all thank all of you for your uh questions secondly thank the uh student leaders of view from the top who put this together I think there uh we have one more presentation left uh and um lastly we'd of course like to thank Andrew uh and recognize you really built uh an industry leader and you're 31 years old so look forward to a lot more [Music]