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LivingSocial: Employees' and Founders' Common Stock Now Worthless

privco.com

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Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#71

Post by DodgyEggplant »

karoramj23 wrote: post #60

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 la…

"taking half of the deal". This is the problem. A modest marketing website with less grid and bubble orientation could take 5%, make wonderful profit, and boost it's customers.

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#72

Post by 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.

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#73

Post by pbreit »

pshin45 wrote: post #15

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 pri…

Small business marketing and entertainment are fine endeavors. I'd cut Groupon and Zynga some slack here.

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#74

Post by jarin »

teej wrote: post #43

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.

I bombed on my interview there last year. Not feeling so bad about it now.

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#75

Post by bitcartel »

teej wrote: post #43

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.

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

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#76

Post by grey-area »

karoramj23 wrote: post #60

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 la…

I think the key here is that these deal sites take most of the money - that's not sustainable or profitable for the sites' customers (restaurants, shops etc). They're being greedy and will pay for it with the hostility of businesses and eventually death as the deals dry up.

If they took less money, and were less agressive in driving prices down, businesses could price deals correctly so that they're not making a loss on each new sale and the deals benefit everyone (site, businesses, customers).

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#77

Post by doktrin »

confluence wrote: post #55

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…

> Oh, and culture fit? That's just discrimination - rebranded! What? You don't like what other upper-class white males like? Be gone heathen!

Agreed. It bothers me to see hyper homogenous work cultures celebrated as some kind of ideal [1].

[1] http://blakemasters.com/post/21437840885/peter-thiels-cs183-...

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#78

Post by socalnate1 »

confluence wrote: post #55

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…

You sound like the worst employee ever.

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#79

Post by pshin45 »

pbreit wrote: post #73
pshin45 wrote: post #15

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 pri…

Small business marketing and entertainment are fine endeavors. I'd cut Groupon and Zynga some slack here.

I've got nothing against either endeavor, I just don't like the way Groupon and Zynga in particular go about it. (Thus my "more harm than good" accusation)

Otherwise, there are plenty of small business marketing and entertainment companies I really like.

Re: LivingSocial: Employees' and Founders' Common Stock Now Worthless

#80

Post by btilly »

dangero wrote: post #40
btilly wrote: post #36

Earlier quoted context omitted.

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…

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.

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.
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