Joel Neoh’s meteoric rise in Groupon: What now?
By Karamjit Singh April 22, 2013
- In 14mths, moved from running Malaysian ops to international VP of Asia Pacific
- VC who invested in him describes Neoh as that rare entrepreneur with strong execution skills
THE interview started with me taking a playful dig at Groupon’s share price as it stood then in late January.
“Ouch,” laughed Joel Neoh. Fast forward to today and Groupon is still without a chief executive officer after the Board fired founder Andrew Mason in February over the company’s poor financial performance.
And while the share price has recovered from around US$5 at the time of our interview to close at US$6.40 on April 19, that “ouch” is likely to be followed with a painful grimace rather than laughter today.
After all, earlier this month, an analyst at Swiss financial group UBS called the company’s business model “unproven.” Closer to home, during last week’s Echelon Malaysia Satellite event, a speaker noted that Groupon’s gross margins (revenue minus cost of goods sold) had dropped from over 65% three years ago to around 30% today, and described Groupon as “a company derailing itself.”
But Neoh (pic) will have little time to dwell on the current flux facing the company, which estimates that the search for a new CEO would take between three and six months, mainly because it needs someone who can manage “a highly complex organization in 46 countries” said board member Peter Barris in a Bloomberg TV interview.
Groupon chairman Eric Lefkofsky is acting as interim co-CEO together with his vice-chairman Theodore Leonsis.
That new CEO should be able to call on Neoh for some insights when he or she comes on board – the company has, after all, elevated Neoh from Groupon Malaysia CEO to international vice president of its Asia Pacific operations, to lead some of its largest markets in Asia including Japan and Korea.
With Groupon’s international business earning it US$1.17 billion in 2012, a US$197-million increase over 2011, the pressure will be intense on Neoh, described as “one of the best managers I have worked with” by Chok Kwee Bee, the venture capitalist who invested in him and Khailee Ng in their 2009 start-up, Youth Asia, which in turn launched the Malaysian group-buying site Groupsmore in July, 2010.
Groupon’s international business mirrors the business model of Groupon in the United States, with the mainstay being the group buying business, Groupon Goods; its non-services e-commerce pillar; and the emerging mobile commerce segment which it sees as being particularly promising.
It however does not break down the US$1.17 billion revenue into these three areas.
Neoh’s promotion in January was the latest in a series of greater responsibility and trust piled on him, which began with a short stint as CEO of Groupon Taiwan in November, 2011.
“I was half asleep when I got the 2am call from Groupon asking if I wanted the role. I did not realize what I was committing to,” he laughs.
It was certainly no laughing matter two days later when he found himself in Taipeh, leading an organization with 300 people which had just lost its CEO because Groupon was not happy with the growth in that market, which was three times Malaysia’s but which had seen its growth eclipsed by Groupon Malaysia in September, 2011.
Neoh did not speak Mandarin. English was not that helpful either. “Only a handful of the staff spoke English,” he recalls.
Language was evidently not much of a barrier as Neoh did well enough that after eight months, in July 2012, Groupon made him regional vice president and general manager of South-East Asia and India. And then, just six months later, he was made international VP of Asia Pacific.
That good a leader?
His meteoric rise begs the question: Is Neoh that good a leader?
Chok certainly seems to think so. A veteran venture capitalist in Malaysia, she has seen her fair share of entrepreneurs close up, and rates Neoh very highly.
“It is rare to find someone like Neoh, who is entrepreneurial and has strong execution skills. He pays attention to details and delivers the results,” she says, adding that as person, Neoh is a keen learner, “always looking to improve himself” and with strong leadership and motivational skills.
Speaking of his role in Taiwan, Neoh says that Groupon wanted someone driven and passionate for the ,role and preferred to pick internally as such a person would already know the Groupon culture and strategy moving forward.
You could say that Neoh is driven. “We knew from the start (once acquired by Groupon in January 2011) that as a small market, Malaysia could well end up being insignificant in an organization with a footprint in 46 countries.
“So, internally, we challenged ourselves to grow faster than any of the developed markets of Groupon. And we did,” Neoh says. And that brought him to the attention of Groupon Hq.
Describing Groupon as a performance-driven company focused on growth, profitability and customer satisfaction, Neoh uses performance dashboards that show him the financial status of each country he is responsible for. This helps him allocate his time to the countries that need help.
Right now, Groupon itself clearly needs help. While a perusal of its fourth quarter announcement shows some bright spots, it is getting no love from the investment community, nor the tech media.
But as a senior executive of the company, the bright spots are what Neoh is focused on.
Next: Betting on mobile commerce and Neoh’s belief that customers want to have a deeper relationship with Groupon
Groupon Malaysia’s Joel Neoh gets World Economic Forum recognition
Malaysian to lead Groupon’s largest Asian markets
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