When you drive into Chicago to visit Groupon corporate headquarters, you take exit 51A off the Dan Ryan Expressway and eventually turn on Chicago Drive. The office is just past The Chicago Tribune building, over the bridge and to the right. It doesn't sound like a big deal until you realize what 600 W. Chicago Drive is\u2014the former 2-million-square-foot Montgomery Ward Catalog House. The catalog house operated continuously from its construction in 1908 until Montgomery Ward's bankruptcy in 2001. As it turns out, the home of the 20th century's major market innovator may be home to the innovator of the 21st century.Right now, 600 W. Chicago Drive is not "The Groupon building" per se. It is a sort of a virtual mall, with coffee shops and restaurants on the first floor and office space above. The company currently occupies space on floors three, six and seven and, most recently, took out the entire fourth floor.(Top) A view of 600 W. Chicago Drive from the Chicago River. (Bottom) Snarf's, the ground-floor coffee shop.I meet my hosts, Julie Mossler and Nicholas Halliwell, on the ground floor next to the coffee shop. They take me in elevator to the fourth floor. As we walk, Mossler explains that the data center and mobile groups are located in Palo Alto, while the traditional site engineering, programming, sales and corporate offices are at corporate headquarters.Groupon has about 800 people in its software development ranks, with around 300 based in Chicagoland. "But that's a hard number to pin down," Mossler explains, "as we grow by an average of 150 people a week."On the fourth floor, I see the newly remodeled reception area, including a receptionists desk, "bubble" chairs, a giant spaceship cat and, believe it or not, an enchanted forest. The forest, she says, gives people a place to meet to be productive. "We want to be fun and lively, not ostentatious or goofy. There are no ball pits. The forest is for meetings."(Top) Groupon's reception area offers bubble chairs for those who wait. (Bottom) The enchanted forest looks whimsical, but it's really a seating area for informal meetings.While the enchanted forest is the most extreme perk, the free soda and coffee machines are everywhere\u2014and there's at least one Tiki bar.That had me wondering what it was like to work for Groupon.It was time to meet the software people.(Top) Groupon's Tiki hut offers free coffee, tea and other drinks. Refrigerators full of free soda are also a common sight. (Bottom) So are flags. Here the North Carolina sales staff works under the flag of Charlotte, the state's largest city.Scaled Right, Right From the BeginningAfter our coffee chat, Mossler shows me more of the office. In the hallway, I run into developers Mike Cerna and Marek Dzik.When I ask what they have been working on lately, Cerna says, "research and development, prototyping." After spending the next minute trying to figure out their specific roles\u2014everyone is a member of the technical staff, and developers are not title-centric\u2014I realize I'm talking to the first programmer and first project manager that Groupon hired.Marek Dzik (left) and Mike Cerna, programming leaders at Groupon.The company's platform architecture company started with a hosting partner, EngineYard, which provided a full Ruby on Rails\/MySQL stack out of the box, Cerna says. Groupon did recently build and convert to its own data center in Palo Alto. To do this, the company essentially implemented a carbon-copy of its technology stack in the data center, without any architecture changes. The systems ran side-by-side for two months before the Engine Yard servers were turned off and the home-grown stack stood on its own.While Ruby on Rails has traditionally had scaling problems, the company continues to rely on it successfully. Cerna tells me Groupon closely monitors actual performance and looks for bottleneck. He uses the term "inflection points" to describe times when the system approaches a bottleneck."We've had a few inflection points, yes, but at this point we can essentially scale Rails to any size," Cerna says. To do this, he admits, the team had to reach inside Rails and modify it. This is a mixed blessing; such changes make massive scale possible, but, if they aren't added back to the source code, they can cause merge problems when upgrading to future versions of the Rails platform.Groupon scales its development teams by splitting the business domain into four components: Deals, users, customers and purchases. Each of these pieces can be accessed as a Web service. Today Groupon have more than 20 services and is starting to form an architecture group. The company has scores of development teams, while the architecture group has about 20 people.Hiring at Groupon: On the Lookout for Passive CandidatesOnce I finish with Cerna and Dzik, Mossler ushers me into the "Allergic Reaction" room, where I talk to John Hundreiser, director of recruiting for engineering and IT. He walks in, gives me a firm handshake, points to the table and asks, "What would you like to know?"John Hundreiser, Groupon's IT talent scout.Hendreiser tells me the company has 85 development teams, including teams in Palo Alto, Chicago and, most recently, international hires obtained through acquisition. Teams are generally five to eight people\u2014small enough that two pizzas can feed them, he says. The engineering challenge of the day is integrating the formerly separate websites, deciding what to centralize and what to keep local. The Chicago environment doesn't help either\u2014it is widely accepted that Groupon has "tapped out" the local technical talent market.Slideshow: Groupon Among Firms Hiring Data ScientistsHundreiser also tells me the company has hit an inflection point when it comes to scale."A couple years ago, we were trying to find Ruby developers who could stand up a new app quickly. Today, we are recruiting people with more computer science depth. The problems we are trying to solve are massive scaling problems\u2014huge performance tuning," he says. "We are looking for people who have solved those problems before. The last company I worked for, and they recruited me out of, was a high-frequency trading firm. The computer engineering people we had there were very intentional about the choices they make; this is very different than the standard Ruby developer we hired two years ago."Open source is another specialty for which Groupon is hiring. Many open source tools are designed for smaller projects and environments, but Groupon's scale requires the company to roll its own software."We have hired people who have done open source development before," Hendreiser says. "They are building the next generation of tools and open-sourcing them." That strategy brings in "known good quantities" and funds research to help their projects scale to dozens of teams in dozens of countries. Hendreiser tells me the ideal job candidate is not active on LinkedIn, Monster or job boards. The company looks for passive candidates; that is, candidates who are happy where they are but might be happier at the "Big G."Analysis: Why Open Source Is the Key to Cloud InnovationThe trick is finding them, he says. "We call that sourcing. You need to use a little intelligence to combine a Tweet with a GitHub account, to find a blog, to get a resume and contact information. To get faster at this, we recently went to a sourcing conference, found the most experienced speaker and hired her."That seems to be the Groupon method\u2014figure out the problem, then eliminate it. In August 2011, the company acquired the consulting company Obtiva, almost entirely for its talent. "It made sense," Hundreiser says. "We had most of the staff working here full-time as consultants. Why not have them full-time as employees?"Before long, it's nearly 2 p.m., and I have another appointment. It's on Lasalle Street\u2014home of the Mercantile Exchange, Board of Trade, the Stock Exchange and the Federal Reserve of Chicago. Somehow, as I get in my car, it feels as if I am taking a time machine out of the present economy and into the past.A final view of the fourth floor of 600 W. Chicago Drive before leaving for the day.Perhaps I was.Matthew Heusser is a consultant and writer based in West Michigan. You can follow Matt on Twitter @mheusser, contact him by email or visit the website of his company, Excelon Development. Follow everything from CIO.com on Twitter @CIOonline, on Facebook, and on Google +.