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Groupon’s Founder on How to Get Super Rich
Groupon founder and CEO Andrew Mason revealed his six tips for creating a successful startup, or in his words, “polishing your turds and getting super rich,” at YCombinator’s Startup School event at Stanford University.
Groupon is among the hottest startups on the planet. In just two years, the company has made group-buying a worldwide phenomenon, grown to 1,600 employees and increased its valuation to more than $1 billion. It almost feels like Groupon and its team were always destined for greatness.
In reality though, Groupon’s road to prosperity was filled with a lot of struggles and big misses. Mason told the story of how Groupon grew out of a failed company that was trying to do too much all at once.
In 2007, he started a company called ThePoint. It’s a platform that lets users create donation campaigns for causes. You pledge money and provide your credit card, but you don’t donate anything until you hit the “tipping point,” either a certain number of people joining the campaign or hitting a certain financial mark.
Mason loved the vision behind ThePoint, which was to solve the problem of collective action. He thought that the platform could do everything from create charity campaigns to build giant anti-snow domes over Chicago (a real campaign on ThePoint). He wanted to give people the ability to make real change occur through collective action.
To prove the potential power of ThePoint, Mason started a small WordPress blog called Groupon in fall 2008, powered by a widget from ThePoint that provided the daily deals. By summer 2009, Groupon was clearly taking off and Mason’s team quickly shifted its resources and focus onto the daily deals platform.
While ThePoint didn’t get a lot of momentum, Groupon shot into the stratosphere. Why, though? Mason has six reasons why he thinks Groupon succeeded and ThePoint did not. More importantly, these six points are his advice to aspiring entrepreneurs trying to build businesses.
- 1. You’re building a tool, not a piece of art. Mason suggests that you don’t get blinded by vision, as he was with ThePoint. Groupon has been the total opposite, very focused on hooking the customer within the first few seconds.
- 2. Recognize and embrace your constraints.
- 3. Have a growth plan.
- 4. The best tools aren’t always that cool. Groupon chose e-mail because it’s simple and universal.
- 5. You’ll probably fail. Mason suggests that you have the fear of failure in the back of your mind because it’ll help you confront reality and shape your decisions toward building a viable product.
- 6. Quit now. Sometimes you have to let an idea go.
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