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Three Lessons for Startup Founders From Andrew Mason's Not-So-Funny Resignation

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ANDREW MASON
AP

Apologies by business leaders who screw up are traditionally weak brew, swathed in corporate speak and lacking any real mea culpa.

So last week, when newly-ousted Groupon ex-CEO Andrew Mason fired off a witty, self-deprecating, full-throated 'I blew it' email, the plaudits rolled in.

Now, I bow to no-one in my appreciation of good humor and self-awareness, but unlike most observers, Mason's words left me unamused.

Treating a $1.6 billion, 11,000-employee organization like it's your personal plaything isn't funny, and including a neo-hipster inside joke about Battletoads in your farewell missive doesn't make it all okay.

Mason's wry wit might -- just might -- have been hilarious had he penned it in the aftermath a solely personal train wreck, but given the sheer number of people involved (not just direct employees, but everyone in Groupon's supply chain), 'just kidding' doesn't cut it.

Mason never made the transition from startup-kiddie to CEO, and his resignation email shows why. If you're a business founder and you don't want to suffer the same fate, here are three key takeaways:

1. There's only one strategy for a startup. Make sure you know what it is.

The only valid strategy for a startup is to stop being one. Around 80 percent of all startups fail, and the most common reason is simply that they hung around in startup mode too long.

The Early Struggle stage is a dangerous one for any business, and perpetuating a so-called startup culture is like forcing your child to stay in diapers because you think it's cute -- it's not, and it isn't good for the business.

If you're running a startup, do yourself -- and everyone else -- a favor: find a profitable, sustainable market, and as soon as possible, stop being a startup.

Andrew Mason fell for the startup-culture hype and treated his 11,000-person business like it was still in diapers. Doesn't work.

2. If you're offered a once-in-a-lifetime gift, take it.

In 2010 Google offered Mason $6 billion for Groupon. It was a dumb offer, one which in retrospect would have made Google look even more incompetent than its Motorola Mobility acquisition.

The one thing dumber than Google's offer? Mason's decision not to accept it.

Yes, we all have great hopes for our new businesses, and most founders have an ego that wants to see success achieved on their own terms, unalloyed by a leg-up from others. And yes, the idea of creating a potemkin business solely so it can be purchased by Google, Microsoft or Apple is a little repulsive, but once in a hundred lifetimes something so extraordinary happens that the usual math doesn't apply, and this was one of them. Mason's sophomoric grasp of business reality failed to recognize this.

3. Only employ others if you can act like an adult.

A tightrope walker performing death-defying stunts 1,000 feet up without a net is different from a construction worker who tries the same stunts while building a skyscraper. One is providing a form of entertainment, the other is recklessly endangering the lives of his co-workers.

Once a company founder employs other people -- let alone 11,000 of them -- they enter into an implicit contract: one that assumes they will act like adults when managing the business, and won't indulge in high-wire acts of bravado for their own entertainment.

This doesn't mean forgoing risk, giving up on innovation or turning into a stultifying bureaucracy (check out Apple, Disney, Valve, Amazon, Nike) -- but it does mean forgoing 'What, me care?' self-indulgence.

Self-deprecation isn't funny when others get hurt.