In 2009 and 2010, Groupon became a very lucrative place for a kid out of college to work – six figures or more for 9 to 5 work.
“It was kind of first come first serve, so no sales rep was going to be put on Boise, there was no Boise — they were all on important cities. So their commission was huge because the volumes were so much higher than what Groupon ever anticipated,” says one early employee.
“Their base was 30 something [thousand dollars per year], [but] they were making a ton of money, because of cities like Chicago or New York where Groupon thought they’d sell 200 Groupons in a week and they were actually selling 2,000 or 20,000.”
Groupon higher-ups knew that eventually an entry-level sales position inside the company would have to have entry-level pay.
The change to a more professionally organised, sophisticated sales force started in earnest in May 2010, when Groupon bought a German Groupon clone called CityDeal.
CityDeal was founded by a trio of brothers named Marc, Oliver and Alexander Samwer, who now own about 6.5% of Groupon’s outstanding shares, worth $670 million.
In the year and a half since that deal went through, the Samwers’ influence on the company has become commensurate with the size of their stake in Groupon.
These days, the Samwer brothers run the Groupon sales force through their proxy, Groupon UK founder Chris Muhr.
They rule it with an iron fist. With some mixture of admiration, fear, and revulsion, their way is known amongst Groupon employees as “The German Way.”
“They’re very shrewd, savvy, sharp elbowed guys,” says one source.
“They are extreme capitalists,” says another. “For them there is no soft and fluffy side of the business. They’re revenue driven, not people driven.”
“I think a lot of us who were enchanted by Andrew’s format of a combination of people and money and customer, were kind of turned off by The German Way. I think they really changed the internal happiness for the workplace.”
For one thing, “The German Way” has meant the end of absurd pay days for entry level employees doing nine to five work. It’s also meant that Groupon’s office place has become a much more intense place to work for sales people.
“It’s a total boiler room sales culture. And it’s really hardass. It’s pretty hardcore.”
There are two views of this change. One is that it is ruining a once great place to work.
One source who holds this view says that the Samwer’s proxy in the U.S., Chris Muhr, “is the kind of guy who will hold somebody up in a meeting, and say, ‘Bob, you made a really dumb decision. Bob, you’re a stupid arsehole, sit down.’ Really hurtful, demeaning, bad shit.”
The other view of the changes the Germans have brought to Groupon is — phew — it’s about time.
One source close to Groupon’s board who holds this view, says that Groupon’s sales force is simply becoming more like a large, traditional, canvassing sales force — just like the old Yellow Pages sales teams.
“For the most part it’s an entry level job, people start and if people like it and are productive, then they get promoted. But the job’s not for everybody. Sales and telemarketing are not for everybody.”
Some, as one source put it, think the Groupon sales management shift toward The German Way signals “a very strong change of power from Andrew to the Samwer brothers.”
“I think they play Andrew like a fucking violin,” says another source.
But at a recent public Q&A meeting with Groupon sales reps and other employees, Andrew Mason made it clear which view of The German Way he holds.
An employee asked, “What happened to you? It was supposed to be fun here and now it’s not.”
But according to a source, Mason responded, “If I gave off the impression that this was a place to just come and have fun, that was my mistake, and I did something wrong.”
“This is a job and you are supposed to work hard and what’s going on is maybe what you all needed to realise; that this is a huge opportunity for all of you people so you should be working hard.”
In late October 2011, on the roadshow pitching the company’s IPO, Mason told potential Groupon investors that he would replace the bottom 10% of his sales force.
One former Groupon sales rep, Ranita Dailey, is suing over the new work conditions, alleging the company violated federal and state labour laws by forcing her and other employees to work unpaid overtime hours.
If this cut-throat side of Andrew Mason surprises you, you should catch up here…