LivingSocial –> GROUPON. And then there was one.

Yesterday it was announced that Groupon, the fastest growing company in history, acquired LivingSocial, the second fastest growing company in history. Prior to the acquisition, both companies competed to be the “King of Daily Deals,” a new form online advertising whereby retailers small and large offered online discounts to drive offline traffic through their doors.

In April of 2009, after having recently been laid off from what was once a fairytale startup destined to revolutionize consumer healthcare, a good friend of mine invited me to join a little known DC-based startup founded by some alums of my former employer. He said that the company “had more work than people to do it, and needed people with brains and grit to get shit done.”

After 3 years of start-up grind, I was kind of enjoying sitting around my apartment in mesh shorts collecting unemployment while I looked for my next gig, but fortunately my friend was insistent (more like harshly critical of my irrationality), and offered me a more competitive hourly rate than DC Unemployment to come and help them out.

That startup was LivingSocial, and at the time, it wasn’t in the business of daily deals. Back then, LivingSocial was all about social discovery and encouraging people to share their interests online. The company started out as HungryMachine, a foursome of 3 engineers and 1 product guy who realized that Facebook opening its API presented a huge opportunity to advise brands on how to better connect with consumers online.

When I joined the team, LivingSocial had just launched “Pick Your Five,” a wildly successful Facebook application that encouraged consumers to, not surprisingly, “Pick their five” favorite “something.” It wasn’t long before big consumer brands started paying for custom sponsored Pick Your Five campaigns and within just a few weeks/months I think we got to 80 million users / month.

Every now and then, between deleting inappropriate nude pictures and other vulgarities that inevitably surface in the social mediascape, I started hearing about this company called Groupon out of Chicago, which had just launched in DC. I bought my (then girlfriend, now) wife a half-priced massage, and as a newly minted business writer for a local blog, I decided to make my inaugural post about Groupon. I tweeted at the company and received a reply from Andrew Mason, the CEO telling me about them:

“Hey Liam – so glad you like Groupon!

We develop partnerships by calling businesses (or once we get established, they call us) and working out an offer. We usually have one person in each city, and we just had our DC person start last week. So we’re hiring, but only in Chicago.

Please send over the article, can’t wait to see it! Glad you like the blog 🙂

The editorial team hesitated to post it because Groupon wasn’t a DC-based company, but I insisted that it was a concept “worth telling Washingtonians about!”

Then, stars aligned and our CEO told me that “LivingSocial was thinking of getting into the business of Daily Deals to take on Groupon.” I was ecstatic. After all, I loved DC, I loved working at LivingSocial, and I really couldn’t have asked for a better opportunity to work on something I thought was cool (at the time, it was!) with people I loved being around (and always will!).

And so we began.

The full court press was on and we were all in on daily deals. When we launched DC, everyone at the company (all 20-something of us) cast our votes for how many deals we’d sell each day. It was so exciting.

Bit by bit, we started to gain more and more traction. Our founders were aggressive about expansion, and rightfully so, as copycats started popping up all over the place. According to Quora, there were 521 of them in the US. But this business was about executing at scale, and few companies were able to do that. In fact, only two could. Yesterday, they became one.

But this post isn’t really meant to be about all of that. It’s really meant to be about how amazing the journey of a startup can be, irrespective of the final outcome. All (at least most) startups begin the same way: a couple of smart, ambitious, hungry entrepreneurs who share a common passion for improving the human condition or building an awesome project decide to go all-in on their idea. If they’re good at what they do, slowly but surely they begin to see success and their team grows. The journey beyond that point can take a wildly different path than anticipated, but that’s how it goes…

In the case of LivingSocial, four founders in their mid-twenties took a company from 14 employees in DC to 4000 on 5 continents in five years. Think about that for a second. Growth like that is unheard of, and irrespective of the outcome, it’s quite a feat.

But again, I digress. This post is not about success or failure. This post is about people and culture. This post is about thinking of different ways to approach complex problems in a fast-paced environment. This post is about what made LivingSocial the most important, transformative, educational period of my life…

Here are some highlights:

  • The decision was made to launch our daily deals pilot in June and by the end of July, we had launched. Lesson learned: the importance of committing to a decision and working like hell to make it happen.
  • We hatched a crazy “guerilla marketing idea” that involved a hummer golf cart owned by one of our employees and a gorilla suit in the closet. All of us (even the founders) took turns driving around on the back of the thing in 100 degree DC heat only to realize that DC drivers were not willing to look up from their blackberries at a gorilla chained to the back of a golfcart giving away 50% off coupons… Lesson learned: the importance of trying & testing various approaches to things and #failingfast
  • We created a core set of company values that were not only incredibly useful internally, but excellent guidance for any professional that wants to succeed, and all humans that want to live fulfilling lives. They are: #LiveHungry, #ChampionGoodIdeas, #MakeStrongMoves, #RecognizeOthers, #SurpriseAndDelight. Lesson Learned: this is a great mantra for life.
  • We realized that there were only so many employees to interview sales candidates and that flying them all over the country would slow down growth, so we started having #supersessions (read more here), which turned the recruiting process upside down and flew 40 candidates into DC every 2 weeks and the entire company spent all of Saturday at a hotel in McLean, VA interviewing American Idol style. If you made it to the final round, you got an offer in-hand that day and had 24 hours to accept. Oh, and fun factoid, we partnered with sole proprietor who drove one Lincoln Town Car to bring candidates to-and-from the airport. As we grew, so did his business — from 1 car to a fleet of like 10 or something. Lesson learned: to accomplish lofty goals quickly and at scale, you’ve got to think outside the box and hustle like hell.
  • We started getting traction and our founders had the foresight to pour gasoline on the fire. I’ll never forget the day we launched 25 markets in a single day. Do you have any idea what it’s like to motivate & orchestrate ~50 sales people in 25 markets to sign a month’s worth of deal inventory — that’s 500 signed contracts — across 6 different verticals? Not to mention the skill required to schedule, produce, and launch all of that on a single day? The logistics of this endeavor were bananas. But we pulled it off. One of my friends who worked at the #3 daily deal company in the space texted me saying, “htf did you guys do that?” and followed that up with “it was like a funeral around here when we heard that.” They closed up shop within a few months… Lesson learned: as impossible as a goal might seem, if you have the right people, you can achieve it.
  • We had amazing sales people focused on differentiating LivingSocial from the competition. After all, we had “feet on the street.” We were more than just a voice on the phone. Our outside sales people were so awesome that all of us at HQ could see them building relationships with local merchants because they’d take selfies with them sharing a meal together on a sales call. Lesson learned: putting a face to the name is invaluable in sales. (Also, selling to restaurants often = free food.)
  • We also had insanely talented inside sales people who did a fantastic job working with local businesses by phone. Inside sales people who could make any person they spoke to feel important, making up for the lack of physical presence. This was crucial to ramp up markets and close more deals quickly. Lesson learned: inside sales is an efficient method of sales, and great inside sales people are an absolute must-have for any organization.
  • We sold 1,157,185 $20 gift cards to Amazon ($23,143,700 worth) in a single day without any technical issues or site outages (kudos tech team).
  • We sold 1,500,000 $5 gift cards to Starbucks ($7,500,000 worth) in a single day without any technical issues or site outages (kudos tech team).
  • We got to a point where we’d pretty much hired all of the talented software engineers skilled in our programming language locally, so we launched “HungryAcademy,” an in-house coding school that paid its students to learn how to program Ruby on Rails and put them to work afterwards. I know several fantastic people who made career pivots solely because of this opportunity and it has changed their life forever. To this day, I regret choosing “international consulting” over that option… Lesson learned: you can pretty much teach smart, willing, highly capable people to do just about anything. If you can’t find ’em, train ’em!
  • For a time, we had a forum whereby anyone in the company could propose a business case they thought to be worth pursuing to a panel of executives who would then take that business case into consideration. How many companies do you know that let 25 year olds present business cases to executive management? I learned: people at any professional level can have great ideas, and it’s smart to provide a forum for those ideas to bubble up to the top.
  • For a time, we held an annual awards gala known as the LivingSocial Oscars where the entire company dressed to the nines, filled a theater, and watched our leadership team #recognizeothers in one of the most unique, original ways I could think of. Lesson learned: people are undoubtedly a company’s most valuable asset and taking the time to recognize and thank them for a job well done goes a really long way to instilling passion and loyalty.
  • At one point, we were hiring at such a fast clip that the DC government offered us a tax break if we kept it up. At the end of the day, we couldn’t, but the fact that we even got there was pretty damn amazing.
  • We had the most epic sales conferences. I’ll leave it at that.
  • We had a ball pit. I’ll leave it at that, too.

MOST IMPORTANTLY: we had AMAZING PEOPLE. If you lived in the DC area and you wanted to work for a fast-paced, forward-thinking, energetic and motivated company, or you were a sales person in a remote market who wanted to bring the hottest, newest advertising opportunities to SMBs, you wanted to work for LivingSocial. Referral bonuses were plentiful and talented people recommended talented people, but they did so less because of the bonus and more so because they wanted their talented friends to experience the magic that was the LivingSocial culture.

Now, every company says “it’s the people that make us great,” but at most companies, that’s a corporate platitude. At other companies, it’s the real deal. LivingSocial was one of those companies. And irrespective of the outcome of the business overall, those of us who were a part of it would never discount the value associated with working alongside so many amazing people. The #livingsocialmafia is alive and well in Seattle, San Francisco, Los Angeles, Austin, DC, New York, London, Sydney, Barcelona, and beyond. Our network spans far and wide, and as much as each of us is lucky to have been a part of it, so, too, are others who know someone belonging to it, for an endorsement by a true livingsocialite can open many doors in the future (so don’t talk smack!)

I’ll summarize this post with the guttural reaction I posted on Facebook when I heard the news because often times that’s when things are the most real:

Start-ups start. Some start-ups pivot. Some IPO. Most don’t. Regardless, few can scale as quickly, hire as many talented, intelligent, & passionate people, and create a culture like the one we had at LivingSocial. In fact, only one other company did, and today that company bought its only remaining competitor.

I’ve always said that haters are going to hate, but you can’t possibly understand what we had, and how good it was, unless you were lucky enough to have been a part of it. Together we experienced the highest of highs, and some pretty low lows, but it was the journey and the people on it that I will always remember fondly. The lessons learned and relationships earned (and I mean EARNED) are some of the most valuable things in my life to date. Not many companies can say they had that kind of impact on people’s lives.

Yesterday, the better part of 7 years of my life came to a close. Although it didn’t surprise me, it’s still the end of a chapter of my life that meant a tremendous amount to my growth as a human being. And while companies that scale (and contract) as quickly as we did are hard to find, I strongly encourage any hungry, passionate, hardworking person that comes across an opportunity to work on building a product you value with a team you believe in to do so. Chances are, you won’t regret it.

Personally, I hope the Groupon/LivingSocial collective will thrive together.

To startup success, but more importantly, the fulfillment of the people on the journey.

Stay hungry,

LD

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