By Brian Womack and Brad Stone
Groupon Inc. Chief Operating Officer Rob Solomon is departing from the world’s largest coupon site, leaving a hole in the company’s executive ranks as it prepares for an initial public offering.
Solomon joined Groupon about a year ago after serving as a partner at venture capital firm Technology Crossover Ventures and holding management roles at Yahoo! Inc. Solomon said in an interview that he’s better suited to navigating a company through a rapid-growth phase than when it has become large.
“I’m great at a lot of things, I’m not the guy who wants to run a 10,000 person company,” Solomon said. “I’m much better at the startup and growth stage.”
Groupon, founded in 2008, is advancing into hundreds of new cities to boost its revenue and customer base. The startup doubled its number of users in the past three months and has held talks with banks about an IPO, two people with knowledge of the matter have said. The sale, which would value the company at as much as $25 billion, may happen this year, they said.
“He’s made an enormous contribution here, and we’ll miss having him around,” Andrew Mason, chief executive officer of Chicago-based Groupon, said in an e-mail. He declined to elaborate.
Solomon will advise Groupon in the coming months as it seeks to replenish executive ranks with “a nuts and bolts operator to make the trains run on time,” Solomon said. The company may not search for a president, per se, he said.
Questions Raised
The leadership change at a growing company that’s considering a share sale may be unsettling for would-be investors, said Sucharita Mulpuru, an analyst at Cambridge, Massachusetts-based Forrester Research Inc.
“The company has been getting so much positive media and so much positive momentum that for one of the most senior people to leave raises a lot of questions they need to answer,” Mulpuru said. “You don’t leave a startup like this without raising suspicion.”
Groupon has begun ramping up hiring of managers who can spearhead expansion abroad, two people involved in the planning said in February. The company retained a search firm and has approached candidates including Jason Kilar, chief executive officer of Hulu LLC, to gauge interest in becoming head of worldwide operations, one of the people said.
Solomon’s departure was reported first by the AllThingsDigital blog.
Solomon, Mason’s Foil
Solomon, who has spent more than 15 years at both startups and public companies, served as a foil to Mason, a 30-year-old musician with a penchant for pranks. Mason dedicated office space to a fictitious character, hired a performance artist to meander about headquarters in a tutu and concocted a holiday called Grouponicus whose celebrants are barred from owning dogs.
“We work together very well,” Solomon said. “It usually takes great companies three to five to seven years what we did in a year.”
The company’s valuation has soared since Solomon arrived. It was valued at about $1.3 billion last April, when it raised $135 million from investors such as Digital Sky Technologies. The company contemplated more funding at a $3 billion valuation in November, shortly before an unsuccessful takeover attempt by Google Inc. An investment of $950 million, completed in January, pegged Groupon’s worth at $4.75 billion.
Solomon compared Mason to such CEOs as Steve Jobs at Apple Inc., Jeff Bezos at Amazon.com Inc. and Facebook Inc.’s Mark Zuckerberg.
“He is the guy who will be able to run this company for many, many years,” Solomon said. “When I came here, he really needed me badly. On a going forward basis, I can’t help him as much as I did.”
