The founders of Groupon and Foursquare took the stage at the Digital Life Design conference in Munich today and said they didn’t sell their companies when they had a chance to do so because they aren’t finished with what they want to do.
If you’re a founder of a hot Silicon Valley company these days, not selling out is becoming a much more popular idea than going public or selling to the highest bidder.
Location-based check-in platform Foursquare walked away from an opportunity to sell itself to Yahoo for $100 million or more, based on published reports. And group-sales firm Groupon turned down a $6 billion offer from Google. In doing so, both chief executives followed in the footsteps of Mark Zuckerberg, Facebook’s founder, who also turned down big offers when others were urging him to sell. All of them are turning into founder-CEOs who share a vision that goes beyond selling a company in order to get rich quick.
Zuckerberg turned down a $1 billion offer from Yahoo early on, and based on Facebook’s growth, that decision has paid off in spades.
In a funny session moderated by Kara Swisher of AllThingsD, Groupon’s chief executive Andrew Mason was particularly squirmy when put under the spotlight. He said he always thought that people who couldn’t answer questions about merger talks were “corporate douchebags” and now he has to avoid answers himself. Swisher proceeded to call Mason a corporate douchebag when he said he couldn’t talk about how the negotiations with Google went. Mason did acknowledge his company has hired investment bankers to explore its options, including going public.
“I can’t comment on the speculation on any on that stuff, but I can say that local e-commerce is an exciting space, Mason said. “And we feel we’re onto something, and we’re excited to be building something in this space.” As for not talking about it, despite hectoring by Swisher, Mason said, “The first time we’ve ever acquired a company — it’s very personal. Everybody wants you to do this out in the open, and we’re only figuring things out. It’s not respectful to the other people involved to talk about it.”
Dennis Crowley, chief executive of Foursquare, said he turned down Yahoo’s acquisition offer because he felt he was only about 20 percent done with growing Foursquare’s business and that he was making a bet there was a lot more value to be created in the future.
Mason said, “2011 is the year that we become more of a technology company instead of just sales and marketing mixed with innovation.” By going it alone, Mason said, he knows the company has to continually “disrupt ourselves” before others do so.
Likewise, Crowley said he felt his company had become “huge” at 50 employees and that it has to be humble in order to keep on the growth path.
Crowley said that there are big misconceptions about Foursquare as a check-in service for hipsters in New York and San Francisco who are just using the app to check in at bars. He said more than 40 percent of the company’s users are overseas. Crowley said the company has hired a lot of people who are passionate about local culture and have a track record in social startups.
Both Crowley and Mason said they opened offices in Silicon Valley to hire engineers, but were comfortable finding talent in their own headquarters regions. (Groupon is in Chicago; Foursquare is in New York).
Mason said he wants Groupon to become the Amazon of local. He views the company not as a discounting service, but as a local e-commerce company. Groupon has helped local merchants bring lots of new customers through the door through special offers.
“I don’t think we fully realized how vital something like this could be to small businesses in the city,” Mason said.
Mason said the company is only two years old, but it took its time before expanding. After opening its first market in Chicago in 2008, the company tweaked its operations and didn’t launch its second market until five months later. Now Groupon is moving fast and is aware there are tons of Groupon clones out there.
Disclosure: The Digital Life Design conference paid for my Munich trip to moderate a panel. VentureBeat’s conference coverage is objective and independent.