Tim O’Shaughnessy on the Difficulties of Startup Growth and What’s Ahead for LivingSocial

October 18, 2013

3:00 pm

Despite the success of LivingSocial and its tremendous growth since the company was first launched in 2009, Tim O’Shaughnessy admits that he still considers the company a startup. The well-spoken and lighthearted CEO of the Washington, D.C.-based social commerce company explained his reasoning behind this at Wednesday night’s Tech Cocktail Session DC, where he talked about the challenges of startup growth and what’s in store for LivingSocial.

“[LivingSocial] is still a giant startup. We don’t have everything figured out, yet … that’s my litmus test for whether [a company] is a startup. If you don’t have everything figured out, then you’re still a startup.”

LivingSocial isn’t isolated from the issues that have affected other major companies. “There is this glamorization of startups as ‘sexy,’ but it’s actually [hard] work … there are challenges, just like any other business,” said O’Shaughnessy. Toward the end of the 2012, it was discovered that the company was laying off 400 employees. In the same year, third-quarter losses for Amazon (which has a 29 percent stake in LivingSocial), spotlighted whether daily deals were a dying venture. Most recently, the company had to deal with the data breach of 50 million users in April. In the face of all this, O’Shaughnessy says that it’s important for company leaders to serve as the rational voice for customers, employees, and shareholders:

“Screwing up is gonna happen, and the likelihood of screwing up increases as you scale … the bigger [your startup] gets, the harder it is to manage [all of these challenges]. As CEO, my role is to serve as the normalizing factor and to keep everyone [levelheaded]”.

Living Social CEO Tim O’Shaughnessy sits down with Tech Cocktail’s Frank Gruber.

Knowing that challenges will always arise, the company continues to look to the future. Rather than focusing on a daily deals concept, the company is really focused on how it can drive customers for merchants. “The focus is: how do we drive customers for merchants? That’s always been [LivingSocial’s] primary role. How do we do that efficiently [while, at the same time,] producing high customer satisfaction?” O’Shaughnessy says that there remains a huge opportunity in the local space categories. He also touched upon the company’s role in advertising and the opportunity for them to really push into the local ad space:

“We’re inherently a local ad business…our circulation is a couple of factors greater than the Washington Post.”

And as to whether the company is looking at an IPO anytime soon, O’Shaughnessy admits that it’s all really dependent on how things go. For him, the end goal for any company should not be an IPO – something he hopes others will consider:

“An IPO is not an end goal. [Rather,] am I doing right by my customers, my employees, and my shareholders? [At LivingSocial] that’s really our end goal.”

Check out yesterday’s post on what Tim O’Shaughnessy says about the keys to success.

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Ronald Barba was the previous managing editor of Tech.Co. His primary story interests include industry trends, consumer-facing apps/products, the startup lifestyle, business ethics, diversity in tech, and what-is-this-bullsh*t things.

Aside from writing about startups and entrepreneurship, Ronald is interested in ‘Doctor Who’, Murakami, ‘The Mindy Project’, and fried chicken. He is currently based in New York because he mistakenly studied philosophy in college and is now a “writer”. Tweet @RonaldPBarba.

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