
RIP LivingSocial: The fast rise and slow demise of a daily deals company - dannylandau
https://www.washingtonpost.com/news/innovations/wp/2017/02/25/rip-livingsocial-the-fast-rise-and-slow-demise-of-a-daily-deals-company/?utm_term=.0deeebc01efb
======
owly
I met a group of 6 living social employees in 2011 at a local meetup. They
spoke so negatively about their company AND their partners/customers. This
wasn't just run of the mill complaining about work or customers, it was really
vile and made me sick. I vowed to never use their service and encouraged
others to not use them. Why am I posting this? Because it is fundamental to
any startups culture to be careful about how they present themselves to the
rest of the tech community and the world.

~~~
untilHellbanned
I'd be interested to hear some specifics on why they were so bad. IIRC
bezos/Amazon invested in LS so it'd be interesting to find out what they
didn't vet properly.

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swang
> As executives reflect on LivingSocial’s fatal moment, all point to a
> security breach in April 2013. Hackers gained access to the account
> information of 50 million subscribers, and LivingSocial forced all of them
> to reset their passwords. About 20 percent never came back.

I don't know how they came to this number, but at least it's something to
point to when the c-level executives decide password security is something
that they can just skip doing. Obviously part of that 20% is are just dead
accounts but still, something to show next time you're in this situation.

~~~
protocow
Or c-level executives will remember this tidbit before they let their security
folks talk them into a password reset after a breach. You have to wonder
whether a company in that situation has other options, like blocking logins
from previously unseen IPs (for users who don't change passwords).

~~~
hackerboos
You think a company that was using SHA1 [0] to hash passwords was actually
logging IP addresses?

[0] - [https://arstechnica.com/security/2013/04/why-
livingsocials-5...](https://arstechnica.com/security/2013/04/why-
livingsocials-50-million-password-breach-is-graver-than-you-may-think/)

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akjetma
> As the longtime manager put it: “When I look at LivingSocial’s legacy, more
> than anything else, we basically gave a lot of people their MBAs in scaling
> a company very fast.”

Oh nice, the people at the company that grew too quickly learned how to do it
again. Tight.

~~~
dpflan
This is something I latched on to too; does scaling imply stability and
business fitness? Otherwise scaling is not the correct word in this context -
thin yet brittle hypergrowth that over-extends the emotions and focus of
employees and the correct use of economic resources.

Perhaps they learned the highly valuable mistakes that can make the second
time easier?

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coldcode
They raised a billion dollars, were valued at one time at 6 billion, and in
the end were worth $0. Their lasting impact is other smaller startups who
might or might not ever become anything. What a strange world we live in.

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mathattack
The key takeaway I've got is that sometimes it's hard to see when you're
inside the fad.

Interesting that the VC (Jeremy Liew) is the also behind Snapchat. You win
some, you lose some, and in Venture investing, the wins take care of the
losses.

~~~
free2rhyme214
This is always the case. Even Sequoia has made blunders before - turning down
Salesforce and investing in Webvan, to name a few.

~~~
mathattack
There are two types of mistakes for VCs:

1 - Investing in the wrong company

2 - Missing the right company

The first bucket has limited financial downside. (You only lose what you
invested) The real cost is time and attention. (An investor can only sit on a
fixed amount of boards)

The second can be a lot more painful, because the upside can be 10-100x.
Missing out on Salesforce (or Yelp, or pick your winner) can be even tougher.

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pmiller2
What does a $0 acquisition even mean? What would the purpose be?

~~~
kolp
The acquiring company acquires the target company's assets in return for
assuming its liabilities. No cash changes hands.

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Exuma
What allowed Groupon to survive in this same market (where deals are a waning
fashion)?

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free2rhyme214
If I understanding this correct - Groupon is now a monopoly?

~~~
bunderbunder
Not really, not without an extremely narrow definition of what market they
occupy.

The "daily deals" model is only one of many ways for businesses to offer deals
and try to find new customers, and for customers to find discounts.
Groupon/LivingSocial/etc have many competitors, all the way down to simply
advertising specials and promotions with a sign in the window.

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socrates1998
How is Groupon doing?

------
Animats
How long does Groupon have left?

