
LivingSocial: Employees' and Founders' Common Stock Now Worthless - donohoe
http://www.privco.com/livingsocial-receives-emergency-110m-cash-infusion-from-existing-investors-to-avoid-bankruptcy
======
karoramj23
As an independent restaurant owner, I can't say I didn't expect to see this
one day. The model simply doesn't work, at least in our industry. The
restaurant loses money on every single "daily deal" that is redeemed. With
LivingSocial or (insert any other daily deal site here) taking half of the
deal, the restaurant is simply left with 25% of the revenue generated. This
does not even cover our food costs, let alone labor.

The rise of daily deal businesses have brought up a couple of fundamental
issues for us: 1)Customers are often daily deal hunters - We would be willing
to take the one-time loss on a daily deal, if we had a chance of converting
the customers into regular diners. However, we have found that most people who
purchase these deals, simply move on to the next deal after they are done.

2) Cheapens the product - Once you have lowered the price for a product, in
this case food, the guest automatically ties the value of that product back to
the price they paid. This is a huge problem for restaurants in particular
because the guest is not willing to pay full price for the product even if
they liked it. Now your product is valued at half of your current price, and
to get that customer back in the door, you have to offer a significant
discount again (most likely another daily deal).

3) Cannibalizes our existing customer base - One of the worst unintended
consequences of using daily deals is that some of your regular guests start
waiting for these deals, and only come in when they are available. This hurts
in two ways: 1) regular guests are now spending less than they were the last
time they came in, 2) regular guests are now waiting for a
LivingSocial/Groupon deal to become available before returning to the
restaurant causing them to wait longer before returning to the restaurant.

I believe that a company that provides customer acquisition via deals could be
extremely valuable, but they must do it properly, and most importantly it must
benefit their customer (in this case the restaurant). Until a company learns
how to ensure that a business is obtaining a profit from providing this
massive discount, without cheapening the product, and cannibalizing existing
sales, the daily deals industry will continue to fall by the wayside.

~~~
schiang
I really hate using LivingSocial/Groupon because it seems like the business
owners always HATED taking these deals. I always feel like I'm being treated
differently because I'm not paying the actual price. One time when I used one
of these deals, I even heard the employee say to another employee "... another
#$#@$#@ groupon deal....". If they didn't like people using the deals, why
bother signing up for it?

I can't wait for these daily deal business to go away because I don't think it
benefits anyone.

~~~
MichaelApproved
_"I can't wait for these daily deal business to go away because I don't think
it benefits anyone."_

If you don't like these deals, then don't use them but don't say that they
don't benefit anyone. Customers benefit from these deals all the time. 50% off
a meal is a great offer!

I think the biggest problem with these deals (for the wait staff at a
restaurant) is that people think they should tip based off the discounted
meal, instead of the full price.

It's a deal on the meal, not a deal on the tip.

~~~
flyinRyan
>If you don't like these deals, then don't use

When all your competitors are? Go make a business and try that strategy.

>50% off a meal is a great offer!

So great the company who set it up went right out of business despite an
insane amount of funding.

>I think the biggest problem with these deals (for the wait staff at a
restaurant) is that people think they should tip based off the discounted
meal, instead of the full price.

I don't think people should tip at all. Tipping is just a sneaky way of having
the customers pay the labor costs directly. It's ridiculous to say a steak
costs $7 when I'm paying the the server as well.

~~~
MichaelApproved
My points about not using the deals and them being great offers was from the
point of view of a customer.

 _"I don't think people should tip at all. Tipping is just a sneaky way of
having the customers pay the labor costs directly. It's ridiculous to say a
steak costs $7 when I'm paying the the server as well."_

Not wanting to tip and actually not tipping are two different things.

I agree with you that the whole tipping concept can get ridiculous but like it
or not, that's the system we have.

To not tip in all cases, in a system that has tipping as a critical part of
the labor costs, is flat out wrong. You _know_ the system is based on tipping
and you're punishing the wrong person for your distaste for it.

If you don't want to tip, don't participate in the entire system. Don't go to
any restaurants or other place of business that advocates tipping and makes it
a critical part of the staffs salary.

Again, it's absolutely wrong to not participate in only one aspect of the
system you dislike when the people who get hurt are the ones with little power
to change things.

------
tomasien
I know some of Living Social's original investors, and I approached them for
an investment in my startup about 8 months ago. Part of our pitch was that
daily deals solve and amazingly valuable problem in an inherently not-valuable
way, and although our system would take less of a straight line, it would and
already WAS solving the problem for a small subset of businesses in a more
valuable and vastly more sustainable way.

They ultimately passed on the investment, our last gasp to survive, because
"Living Social was obviously their flagship, and they didn't want something
who's core value proposition was that Living Social was doomed, which is
obviously isn't." That's very close to a direct quote.

This doesn't make me happy. I hope Living Social figures it out. They realized
Daily Deals were doomed even before Groupon did and tried to work out other
revenue streams. I hope this report isn't even true. But God damned if I
didn't tell'm so.

~~~
timdorr
Do you think Daily Deals are a fundamentally flawed concept?

I tend to think there's nothing wrong with them other than an over-saturation
of the market and a prevailing attitude that says all you need is a
sufficiently large mailing list to win. But that's just my outsider's view.

~~~
btilly
They are flawed unless you can do something about retention.

Has anyone tried the concept where the "deal" is that you go, name the site,
and get a coupon giving you a deep discount the SECOND time you go back to
that store? That would seem to make more sense. Because everyone that the
store gives the deal to, has actually paid full price once. And wanted to go
back. And if you've been twice, you're more likely to go 3x. And furthermore
most of the failed leads were a sale, so nothing was lost.

~~~
dangero
CVS, El Pollo Loco to name 2 that I've interacted with lately. When you buy
something there, they give you coupons at the register for next time that are
pretty deep. I'm guessing this is a proven effective marketing technique
judging by the big companies using it.

~~~
btilly
The coupons that you're talking about are for specific products. The idea
being that you come in to get that price on one thing, and wind up picking up
others at full price.

~~~
cpeterso
Some stores offer coupons for your next purchase. For example, Gap gave me
coupon for 20% off any one item if I complete their online survey. That's a
pretty big discount, so that survey information must be pretty valuable.

~~~
maxerickson
I think that they don't expect you to come back for just 1 item. So I would
guess that they value the engagement and increased chance of a trip to a
store.

I don't know their margins, but I doubt a 20% discount has them losing much on
that item.

------
teej
Over 5 years ago I turned down an offer to work at LivingSocial. Last year, I
would've been worth $10 million on paper. All of that fake wealth evaporated
today. What a mess.

~~~
bitcartel
Wow, LivingSocial has now been funded to the tune of $918 million, and really,
what is there to show for it?

<http://www.crunchbase.com/company/livingsocial>

~~~
fleitz
I guess they bought a lot of ads.

~~~
mpeg
and not very well apparently, I managed to get a 70% discount on their listed
price for something by using their referral system (refer 3 people and get
yours free) plus targeted advertising

------
pshin45
I've always felt that companies like Groupon, LivingSocial, and Zynga do way
more harm than good.

Early on I was impressed by how well these startups were able to capture
mainstream attention and change the way so many people live and behave.

But at the end of the day, what value does Groupon and Zynga actually add to
society? I'm of the opinion that most daily deals and social gaming companies
bring out our most primitive and animalistic tendencies (addiction and
impulsiveness), and are antithetical to human progress.

If this is the beginning of the end of LivingSocial and daily deals then good
riddance I say.

~~~
argonaut
Please define "good" and "human progress." In my experience these terms are
often so nebulous as to be meaningless when applied to companies.

EDIT: How can you conclude that I'm wrong if even you haven't defined "good"
and "human progress" in your argument?

~~~
pshin45
Point taken, and I'd rather not even attempt to define the two because I think
that is outside the scope of HN altogether.

I'm pretty new around here and the last thing I want to do is be starting
political/moral/religious flame wars in a post about LivingSocial.

~~~
irollboozers
I disagree, it is will within the scope of HN especially if we're to prevent
this sort of thing happening again from a founder/person on the ground level.

The other guy is wrong, good and human progress can be paired well with
technology and business solutions. It's called social venture, and it's
possible. It's just not what the valley focuses on.

~~~
chii
you can take the view that Good means profitable. thus if your business
generate a profit you have done good.

of course this is only true if the market is free.

~~~
jbooth
Drug dealers? Pirates? Hell, the somali pirates even have an investment system
now.

~~~
chii
lets talk about drug dealers. The drug market isn't really a free market.
THere isn't really easy competition, the means of production is difficult for
people to get into. The participants don't really want to do it sometimes, but
is forced to.

In fact, if the gov't legalized drugs, and let big pharmaceuticals produce
these drugs, i reckon it'd drive the scarcity of the drugs down, leading to
their devaluation, and the market would correspondingly collapse (as its no
longer seen as the forbidden fruit).

~~~
jbooth
On driving prices down, yes, on the market collapsing, you have clearly never
interacted with an addict.

Selling drugs to an addict is in no way creating value for society. None.
You're taking money that was hustled/stolen in order to leave someone worse
off than if they got clean. It might be that legalization is better than the
black market but what I'm contending here is that "just because you made
money, does not mean you were serving society".

~~~
argonaut
Did you read my comment? Please define what you mean by "value, "worse off,"
and "serving society." Don't just throw those terms around expecting everyone
else to share the _exact same_ values as you.

Some examples: life, truth, and/or pleasure. If it's a combination, how do you
prioritize?

Discussing "X has no value" is absolute garbage if you don't discuss "value."

------
DigitalSea
I am honestly surprised they've lasted this long. The whole current premise of
daily deals does not work whatsoever. Every business owner I've ever known
that has done one of these daily deals has never done them twice, why? Because
every deal offerer (restaurant, beauty spa, dentist, tooth whitening formula
company, discounted holiday) loses out and it has been proven a daily deal
coupon doesn't mean you'll get a return customer because lets face it, most of
the people buying these daily deal vouchers like bargains and your standard
price offering is probably way out of their affordability league.

I once considered a daily deals type site where the premise was there is a
strictly limited number of deals driving up the demand and at the same time,
not bankrupting the family owned hardware store because 800 people bought
their $500 worth of tools for $120 voucher because they thought more vouchers
would mean more return business. Sucks about the stock though, I'm sure every
single employee of LivingSocial deserves that money, they had a good thing
going. I feel sorry for the families of the employees who are about to lose
their jobs. They say the economy is on the mend, the increasing number of
failing business stories I read every week says otherwise...

~~~
damian2000
If you're going to use a daily deals site, come into it not expecting a profit
and look at it for what it is ... a form of cheap marketing. I know a couple
of businesses that have used them and found it generated a decent amount of
additional sales. Mind you that was about 2 years ago.

~~~
chii
it's not cheap if youre making a loss on every deal and the number isn't
capped. its a good channel if you manage it properly tho.

------
confluence
Here are a few tips for others startup employees:

1\. Take the least amount of stock possible - your startup is statistically
unlikely to succeed. It'd be better to bump your salary up $10-20K than to get
the stock.

2\. Unless it's liquid - it's worthless.

3\. Valuations pre-cashflow - are useless. Anybody can value anything at
insane levels using just one dollar. I value HN at $1 billion by offering to
buy only 1 share of 1 billion in common stock for $1 right now. See the
implicit valuation leverage. I took a dollar, then invented the billion.

4\. If you work for a "nasty" startup - one which people can consider to be
negative long term to one or more parties - expect eventual collapse or flat
line growth (Zynga/Groupon).

5\. Companies exist to make management, investors and founders rich - they
hold the vast majority of the stock - and benefit greatly from path dependence
and network effects. You on the other hand don't. Expect to be screwed at any
time.

Think of it like this. Managers/founders of most companies are pretty dipshit
- how is it that they can own so much more stock? Simple. Be there earlier!
Akin to how old money works. Imagine if you were the first person to squat
land near what has now become Manhattan. You'd easily be worth hundreds of
millions. There is obviously some skill in researching, predicting, working
and acquiring land that will soon appreciate in value. But it's not worth
nearly that much. Path dependence, luck and network effects do that. See GFC
boom and that dumbass cousin who made and almost certainly lost millions in
housing to understand how this works out.

Startups really aren't that different to a speculative investment in a house
during boom times. Once you understand this - a lot of things start to make a
hell of a lot more sense.

6\. PG says be relentlessly resourceful. That's useful. But even better is to
be relentlessly cynical.

Free t-shirts? Just an easy way to drop your salary and indoctrinate you -
scratch that - it's a god damn uniform - freedom be damned! Free food? You
took a $30-$40K pay cut to take the damn job - the food isn't worth a tenth of
that + you're now working during lunch hours! Free hardware? That's only
$2-$4K.

Hackathons? That's just work during your free time - or if it's during work
time, it's a startup product you should own, but don't. More days off? Aren't
you already working 60+ hours a week today! Culture shit after work? That's
just more indoctrination. Gym membership? Only $200-500 - peanuts! Flexible
work hours? That just means work more, but do it at times that aren't 9-5.
Parental leave? Big companies and Europe have had that for ages.

Oh, and that culture fit crap? That's just discrimination - rebranded! What?
You don't like what other late 20s upper-class educated males like? Be gone
heathen!

End advice.

Not saying big companies or government jobs are any better. But at the very
least you're already cynical about those things and demand to get paid well
enough in risk-adjusted terms.

~~~
socalnate1
You sound like the worst employee ever.

~~~
confluence
Yes - realistic employees are the worst - they are so unexploitable!

What companies really need are wide-eyed, earnest, new college grads who have
no idea what goes on in the real world, and how much they are truly being
screwed by their current startup.

Those guys rock! They work 100+ hour weeks, they don't have families, or
commitments and are willing to do it all for mere peanuts and empty promises
of golden rainbows!

Sadly - a few years of this turns them into realistic employees - and you need
a whole new batch to replace them.

~~~
temphn
Honest question: do you believe there any job where you are not being screwed?
And do you believe you are an above average employee, or that you could be a
founder yourself (as it's just like getting in on Manhattan early)?

If so, why not work in that job (rather than at a startup)? Or why not found a
startup (rather than be an employee)?

~~~
confluence
Any job with monopoly pricing protections - a doctor or engineer at large
established firms fit the bill. Once you have monopoly pricing - you are no
longer the one being screwed, but rather the one doing the screwing.

Do I think I'm above average? Depends on what you mean by average.

There are zero barriers to entry in becoming a founder - so yes I'm founder
material. As is everyone else. The question that actually needs to be asked
is: How lucky can one get?

~~~
snowwrestler
I know several doctors and they all complain about how they are getting
screwed--by the trial lawyers, the insurance companies, the hospital, the
government, etc.

This may just be a situation where the grass looks greener.

------
pbreit
I can't see Living Social surviving if it really is short that much money owed
to merchants. Why on earth would any new merchants join at this point knowing
that Living Social is reasonably unlikely to be able to pay them?

I'm a bit surprised the company is so nonchalant about running that far behind
on merchant payables. An easy argument could be made that it should not have
dipped in to merchant funds at all and all that cash should have been
"restricted".

Also, the cheap shot on Groupon is pretty lame considering that Groupon has
something like 2x the cash on had as it owes merchants (if I'm reading Sep '12
Balance Sheet correctly).

------
doktrin
> _But despite our Current Liabilities being high, they at least are not as
> frightening as Groupon's Merchant Payables gap, as Groupon pays out usually
> in 1/3rds (30 days, 60 days, then 90 days), while at LivingSocial, we
> usually pay 80% of the total daily deal's sales to a merchant within 10 days
> of the offer ending, and then we owe them the other 20% months later. So yes
> we owe local merchants a lot of money, more than our Cash, and these
> Merchant Payables are most of our Current Liabilities as PrivCo surmised,
> but I will point out thta at least it's not as as great a portion of our
> Current Liabilities as Groupon's._

What's with the Groupon deflection spin? LS clearly screwed up here. Pointing
fingers at Groupon as an even-worse-offender achieves literally nothing.

~~~
imjk
I agree. You could even argue from a business perspective that Groupon's
making a wiser business decision by using the time value of money more in its
favor.

------
moocow01
You never would have thought by their office space that anything was wrong...
[http://www.businessinsider.com/living-social-office-
tour-201...](http://www.businessinsider.com/living-social-office-
tour-2012-8?op=1)

~~~
xeon47m
So true, also surprised they didn't have a super bowl commercial.

It's like the dot com hype all over again but with crazy short term revenue
that's unsustainable

~~~
kylemhill
But they did have a Super Bowl commercial:
<http://www.youtube.com/watch?v=33jb2Ns7yaQ>

------
jes5199
What a weird, weird company. There was a time when fully half of the talented
rubyists I knew were joining LivingSocial all at once. And none of them could
tell me why the company needed such incredible firepower. I guess they never
figured it out.

------
taf2
This is absolutely terrible news. I don't care if you "like the daily deals
business model" or "hate the daily deals business model" - this is very very
bad news for a lot of people. It will have impact on the rest of the industry
and perhaps already has. We should be very disappointed that things have gone
south in this way. We should work harder to build profit into our businesses
and we should hope still that LivingSocial can pull itself above water... Best
wishes go out to everyone there...

~~~
ma2rten
Maybe I am being too insensitive, but ...

I think that if the valuation for companies, which have been overvalued
corrects itself, that is ultimately a good thing for the industry and society
at large. It means that resources are being freed up to work on more valuable
things. It is also another case study from which this young industry can
learn.

As for the employee and investors, they have taken a deliberate bet on the
company and lost their stakes. This is what you sign up for when you decide to
work for / invest in a start up.

~~~
guy_c
I like your perspective on this. It is impossible to see the 'damage' done by
capital applied (or over applied) to the wrong thing. So people don't really
think about it. What great things were NOT created by the great people
LivingSocial hired.

------
ericz
Can someone speak to the reliability of this site? Or provide a corroborating
source?

~~~
signed0
The Washington Post & Reuters corroborate the statement that Living Social
received $110 million in funding, though neither says anything about stock
options.

[http://www.washingtonpost.com/business/economy/livingsocial-...](http://www.washingtonpost.com/business/economy/livingsocial-
receives-110-million-cash-
infusion/2013/02/20/618163ea-7b79-11e2-9a75-dab0201670da_story.html)

[http://www.reuters.com/article/2013/02/20/us-livingsocial-
id...](http://www.reuters.com/article/2013/02/20/us-livingsocial-
idUSBRE91J0UK20130220)

------
clamattack
Only tangentially related maybe, but I've noticed an increase in the
'scamminess' of a lot of daily deals lately. Stuff like a cottage for
£70/weekend but if you read the small print there's a 'cleaning charge' of
£250 - to give one recent example.

I don't know if that perhaps hints at the desperateness of daily deal
companies to get new business in running such promotions, but it certainly
dampens any enthusiasm I have for checking these sites again in the future.

------
ericz
Perhaps I'm missing something here -- people criticize group deal sites for
taking too much of the money in a deal (50% of the revenue). The marginal cost
for LivingSocial on this is 0... why aren't they making tons of money? Where
has the near $1 billion dollars gone?

~~~
jsankey
You're assuming it costs LivingSocial nothing to enlist a new business willing
to offer a deal. I'm sure this is a huge cost for them, especially considering
this is a "land grab" phase where there is fierce competition from other deal
sites.

------
larrywright
This isn't terribly surprising, they've been losing engineering talent left
and right. It was pretty easy to infer that they were in trouble.

~~~
petercooper
To be fair though, I know that you (and I!) follow more Rubyists than the
average HN reader or analyst ;-)

------
Wista
This is an example of a flawed business model, copied (from Groupon, et al),
then over-funded so that the economic viability of the Model does not surface
as soon as it should. In the finance world these often called Ponzi schemes,
just saying...

------
tyang
This headline is misleading, because it implies the common stock was worth
something at one point. :)

------
bruceb
I was in their Seattle office and they seemed to be spending money on things
needlessly. They had events where they spend hundreds yet only brought in 20
people at maybe $10 a piece. Can't say I am surprised.

------
mattetti
Here is the indirect response of LivingSocial's CEO via a leaked memo reported
by CNN: [http://finance.fortune.cnn.com/2013/02/21/what-really-
happen...](http://finance.fortune.cnn.com/2013/02/21/what-really-happened-at-
livingsocial/)

It doesn't mean that most of the advices here aren't just that PrivCo might be
making up stuff stories.

------
benmanns
Not enough cash to pay local merchants? If I were a merchant on LivingSocial I
would be cancelling any further deals and notifying my customers that they
should be filing chargebacks. I doubt the credit card companies would let
LivingSocial off as easily as their employees had to.

------
planetjones
Google must be relieved that they didn't end up 6 billion dollars out of
pocket and holding the sinking ship that is Groupon.

The marker is saturated, businesses have had enough of getting little in
return and consumers are getting annoyed with their inboxes full of annoying
offers.

------
photorized
The investors must have had one of those 75% off coupons.

I honestly don't understand how these sites manage to raise any money at all,
regardless of valuation.

~~~
jonnysilk
In the early years of Groupon it was seen as coupons moving online to create a
new business model that was going to drive retail.

The sites had off the charts growth, huge revenue dollars that were growing
just as fast and the land was up for grabs.

Even Google got suckered into this when it tried to buy Groupon for billions
in cash, I can see where the investors were coming from, well at least before
2011.

------
pmboyd
The fact that investors are putting up the money means there is some hope to
the business. Not every startup gets that ...

People seem to really focus on the negative. Startups are known to be bimodal
outcomes. Either you retire from them or your income is down a few years. If
you don't believe in a specific startup, don't work for them. If you don't
believe in any startup, go work somewhere else.

------
kbar13
* This Has To Be The Worst Written Article I've Seen In A While

* Who Designed This Piece Of Art?

------
ready_set_go
If only they had beat Groupon to an IPO and been the ones to raise a warchest
before the market realized these businesses were a terrible idea.

Once this funding runs out they will probably be a great bargain basement
acquisition for a handful of companies.

I feel really bad for the hard working employees who were counting on the
stock options =(

~~~
aaronbrethorst
You should _never_ count on stock options being anything other than a nice
bonus that likely won't materialize. If you're taking a significant haircut on
salary or benefits in order to have a shot at a big payday, you're doing it
wrong.

Join a startup because you think it'll be a fun ride, not to make a million
dollars.

------
nemesisj
I think one thing to remember when joining a company, particularly one of the
higher profile startups that raise huge sums of money is that values really
matter.

Not mission statement values, but the actions that are consistently taken on a
daily basis.

Is your startup or employer profitable? No? Then why are they spending money
on nice offices and expensive dinners and so on? I can almost guarantee that
LivingSocial could have done with less than the 800 million it raised had they
valued frugality and breaking even more than being some giant media darling
worth-a-billion company. Deficit spending can work longterm for governments,
but not for companies or individuals.

It's a real shame everyone got cleaned out, but they had to know this was
going to happen at some point.

------
robryan
The part where group deals fall down is the big margin that the sites are
taking, this is the difference between a deal being a break even or loss
leader and putting the business offering the deal in a big financial hole.

These margins are required to pay for a large sales team to convince
businesses that they need to run these deals.

I think a more sustainable model is one closer to traditional affiliates
marketing or self serve advertising. Where the deals site provides a platform
that is largely self service and takes say a 5% cut rather than 50%.

This does loose one of the original ideals of group deals, that there was only
1 for an area (or at least a small amount each day) so each business running a
deal was able to get a ton of exposure.

------
kamloops
I value the people who would be your potential co-workers and the social
impact your work makes over how much stock I'd get or the "20% time" I'm given
to work on non-core projects.

Startups do give you the opportunity to have a more hands-on role at the
company considering the size of the engineering staff. Naturally (if you're
driven and you're confident in your ideas and can work well with people), can
make a bigger impact at a smaller company/startup than at some of the more
established tech giants. I think experience you gain far outweighs the slim
chance your 3000 shares of common stock will amount to anything. You can take
that experience with you to a larger tech company.

------
joeco
Are there any corroborating reports on this? I can't find any. I'm calling BS.

~~~
wallawe
And you are correct, sir.

------
j45
Whenever someone offers you equity or shares....

Try to remember how many times it ends up being worth something, and staying
something.

otoh, getting valuable mentorship like YC is probably worth paying for.

------
callmeed
Out of curiosity: If LivingSocial files for bankruptcy and fails to pay
merchants, are those merchants still required to honor any outstanding deal
vouchers?

------
colmvp
$110 million seems like a drop in the bucket if they really are bleeding money
and have 4000+ employees, many of whom are probably very upset at the
evaporation of their stock options.

~~~
jasonlotito
FTA: Sources said LivingSocial's Board made clear this was the final lifeline,
that the company must break even by the end of the year including closing
dozens of unprofitable offices and laying off thousands of employees

------
damian2000
Anyone know how they are doing outside the US? Over here in Asutralia for
example they seem to be selling plenty of vouchers. I know some businesses
that use them often.

~~~
freshyill
I was laid off in November. Last we heard, they were doing quite well in Asian
countries, particularly in Korea. This is what they told us, anyway. They also
told us last fall that profitability was right around the corner.

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hakaaaaak
Will the deals already bought still be valid if they go under?

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djt
I imagine they will become unsecured debtors

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grainawi
this is extremely sad to see. hopefully this report is exaggerated and not
entirely true.

that said, the daily deal model is clearly broken.

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tyang
Yes, and I'd argue the daily deal model never worked in the first place. Why?
No real value add to small businesses.

The daily deal model was an experiment that went on too long, overfunded by
delusional investors - some playing with other people's money - and media and
social media hype.

You know what model isn't broken?

Positive cash flow businesses. :)

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tamersalama
I wonder what will be of talent acquisition happened along the way.

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joonix
An email newsletter list was valued at $5 billion.

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goronbjorn
I wonder what this means for Amazon.

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apapli
Would it mean anything? Genuine question - where do you see a connection?

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cpeterso
Amazon held a 29% stake in LivingSocial as of the end of 2012.

