Pivot, act and balance
Groupon co-founder Eric Lefkofsky shares the lessons he learned while riding the learning curveBy Daniel P. Smith
5/25/2011 - Eric Lefkofsky has packed a lifetime of business into the last two decades.
On May 17, he shared many of those learning experiences with a near-capacity crowd at the Kellogg School.
While Lefkofsky’s talk was titled “Technology-Enabled Innovation,” the Groupon co-founder and chairman devoted more time to discussing the principles that sparked Groupon’s meteoric rise as well as his own success story.
In less than three years, Groupon, which runs thousands of deals from local merchants and service providers, has rocketed from upstart venture to an international heavyweight with annual sales expected to exceed $3 billion in 2011.
Before Lefkofsky’s triumph with Groupon, however, came mixed results in other ventures, including a fledgling apparel business and a rushed Internet company. The 41-year-old’s ascent has been a study in exploration, analysis and riding the learning curve, revealing three guiding tenets:
When Groupon’s predecessor, ThePoint, struggled to make inroads, Lefkofsky and his colleagues moved the target. Groupon turned to the tipping point of consumers’ buying power and began offering local deals in 2008. Within two years, Forbes was introducing Groupon to its readers as “the fastest-growing company ever.”
“You need to have the ability to say, ‘What I’m doing is not working and I’m going to shift course,’” Lefkofsky said.
Citing the words of Ronald Reagan — “I do believe in a fate that will fall on us if we do nothing” — Lefkofsky urged action. Whereas so many business leaders accept indecisiveness, Lefkofsky said little can be accomplished in neutral.
Recognizing ThePoint’s success with its deal-of-the-day offerings, Groupon was born when leadership raced to broaden that concept and craft a more comprehensive commercial site, a reality achieved within days of the initial brainstorm.
“If you’re willing to take action and believe in the process … you’ll get much further than by being paralyzed [by decision making],” Lefkofsky said.
Despite his reputation and worth, Lefkofsky confesses he doesn’t work weekends or beyond 6:00 p.m., a practice rooted in balancing professional and personal goals as well as ensuring sound decision making.
When reports of a Groupon acquisition surfaced last fall — some publications suggesting a bidding-war-inspired $6 billion price tag — Groupon leadership retreated and examined the potential deal with objective eyes. Seeing a still-surging company and an unfavorable timeline, they rejected all overtures. A sense of balance, Lefkofsky confirmed, led Groupon to that deal’s right side.
“You’ll come to the right conclusions more often with [balance],” Lefkofsky said.