

LivingSocial expected to lay off 400 in U.S. - bonzoesc
http://www.bizjournals.com/washington/blog/techflash/2012/11/major-layoffs-set-for-livingsocial.html

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incision
Can't say I'm surprised by this.

I pass their fancy offices [1] all the time, but I'd have a hard time naming
anyone who uses their deals regularly.

They've gone from expanding rapidly [2] to laying off heavily in 7 months.

It's a shame as they were often touted as a success story for tech [3] and
business in general in the area.

1: [http://www.businessinsider.com/living-social-office-
tour-201...](http://www.businessinsider.com/living-social-office-
tour-2012-8?op=1)

2: [http://www.washingtonpost.com/blogs/capital-
business/post/li...](http://www.washingtonpost.com/blogs/capital-
business/post/livingsocial-gobbles-up-more-dc-office-
spaceagain/2012/04/12/gIQAzBPqCT_blog.html)

3: Yes, I know tech is relatively small part of the daily deals business. I'm
talking common perception.

~~~
thaumaturgy
Wow. Look at all that money spent on things that didn't make their business
better.

~~~
TillE
Except for the giant screen, I don't see much that looks particularly
extravagant. Too much space (why all those meeting rooms?) and too many
employees, probably, but it's hardly Ion Storm.

~~~
patmcguire
DC office space has to be expensive, they can only build up 7 or so stories by
law (nothing can be taller than the Treasury building).

~~~
joshavant
The part about the Treasury building is a common misconception! It's actually
related to the size of the street in front of the building:
[http://www.welovedc.com/2009/05/19/dc-mythbusting-the-
height...](http://www.welovedc.com/2009/05/19/dc-mythbusting-the-height-
limit/)

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Domenic_S
I still wonder about the daily-deal business model. The premise that loss-
leading discounts will spark increased retail-price customers is losing its
believability. In my circle I've never heard a business referred to as "that
place I found on Groupon" -- I've really only seen it used as a marketplace
for deep discounts on one-time (or nearly one-time) purchases. A groupon for
skydiving or a guided tour? It doesn't make any sense.

For the businesses fueling daily deals, the cost of customer acquisition
skyrockets. For customers getting the deal, returning to the business to pay
full price is hard to swallow. It's going to take some real business
intelligence to turn these daily deal companies around.

That said, my heart goes out to the 400+ employees looking at lose their jobs
before Christmas. That sucks, a lot.

~~~
brianbreslin
I don't think daily deals was the end-goal. Getting small business customers
was.

~~~
Domenic_S
If the small businesses take a bath on the daily deals though, you've
alienated the small businesses instead of gaining them.

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jcromartie
During their hiring explosion, I had a hunch that I shouldn't have gone
forward with an interview there. I think I made a good decision...

Something in my gut just said "who cares?" about the work. I couldn't get a
straight answer on what I'd be building or why I should believe they would
keep growing.

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daniel-cussen
Does anybody else remember the articles about Tim O'Shaughnessy in
entrepreneurship magazines?

[http://www.inc.com/magazine/201203/liz-welch/the-way-i-
work-...](http://www.inc.com/magazine/201203/liz-welch/the-way-i-work-tim-o-
shaugnessy-living-social.html)

Stepping back a bit, I'm starting to see a pattern. One day, the magazines are
like, "Bobby Clampit built Something2.0 out of his own golden shit with his
bare. ALONE." Ten month later we have an announcement that reads "And, ah,
Something2.0 announced 2,000 layoffs, whoops, the core co-founder team is
releasing statements that..."

~~~
patmcguire
Are we back to headcount as a success metric? The most surreal thing I
remember about Startup.com was the company going "oh no, we're in trouble"
every few months, doubling in size, and then going "oh no, we're in even more
trouble."

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brianbreslin
My guess is a large % of these laid off workers will be sales people in the
disparate cities. Call center workers too.

LS seems to be going after small businesses but w/a different end goal than
groupon, groupon looks like it wants to be the merchant provider for these
companies, LS, not sure.

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dm8
Honest question, why daily deals sites are imploding all of a sudden?

~~~
moocow01
I think for the most part daily deals were a macro- experiment. Everyone
jumped on board - startups, businesses of all shape and sizes, as well as end-
customers with high hopes everyone would win.

I think what were finding out through the experiment is that it just isn't
really sustainable for much of anyone. I dont know if that segment will be
disappearing anytime soon but the model will have to adapt.

~~~
ChuckMcM
I agree and I think it is an important insight. Why did everyone jump onto
this thing?

My intuition is that the turbulence in media, from mp3 players to PVRs to
online newspapers to Netflix and other on-demand video experiences has
seriously damaged the way in which small business would "talk" to their
potential customers. This is a gaping hole that has yet to be well served.

So I wonder if the macro experiment was that something like Groupon would
replace it those other forms of outreach.

~~~
wpietri
I think small businesses have always been hungry for more customers, so I
believe the dynamic is something slightly different.

I think the Groupon space was basically a big many-sided bubble. Consumers
loved the discounts and the urgency of it. Businesses loved the pitch, and the
big response was spectacular compared with regular coupons. Investors loved
the large user bases and the crazy growth. Groupon loved the high margins and
the ability to make the books look great. And media had some great stories to
sell.

But I don't think there was much real value there. Many businesses didn't
really see long-term benefit from running daily deals. The traffic was large,
but fickle.

The only reason this got so big was that Groupon deals had relatively long
feedback loops, so it took businesses a while to learn that there were better
marketing options. And there were plenty of businesses for Groupon's massive
sales team to burn through before their reputation started to wear thin.

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hkmurakami
A percentage figure gives us a much better idea of what the scope of this
layoff will be.

 _> LivingSocial, which has raised more than $800 million in funding, entered
2012 with a staff of roughly 5,000. The company’s most recent publicly
disclosed headcount stands at “more than 4,500 employees,” according to its
website._

So that's around 8-9% of its workforce.

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Kopion
Maybe Hungry Academy wasn't such a good idea after all...

~~~
joshbert
Maybe the fact that this company created it wasn't optimal, but I still think
it's a very solid idea.

~~~
Kopion
Yes, I agree that it is an excellent idea.

