Last week LivingSocial CEO Tim O’Shaughnessy resigned from the site he co-founded (as a community of social lists before it became a deals site in 2009). The company posted his email to employees announcing his resignation:
Like you, I have given my all to the mission of this company. And I remain 100% convinced the ingredients for success are here. Additionally, I’ve given much thought to the many opportunities that stand in front of us and the benefits that could come from a new perspective and a new voice and approach at the top to lead us there. My responsibility is to recognize that now is the best time to transition leadership – when that full set of ingredients is available to be used most effectively to shape the company’s future.
The company has raised just under $950 million dollars in about five years, including from Amazon. In 2011 LivingSocial was to go public but Groupon’s rocky experience after its IPO scuttled that plan.
A spokesperson for LivingSocial said the company has a very “healthy balance sheet” and is in a strong financial position. That may or may not be PR-speak and O’Shaughnessy may have been forced out by the board. But if it’s not the case and O’Shaughnessy is willingly resigning, his move is enlightened. The company needs to further diversify or be reinvented (as Groupon is trying to do) and O’Shaughnessy’s no longer the guy to do it.
There is probably a much longer post mortem in order about what happened to the deals industry: too many sites, too-aggressive sales, a race for scale rather than focus on quality, not enough merchant education and so on.
Many deals sites are selling their assets, disappearing or have disappeared. A few will survive and some may even thrive (e.g., Zulily). But the heady days of 2009 and 2010 are gone for good it would appear.
Coupons and deals will always be popular but the manic buying and selling of daily deals that fueled the rapid rise of Groupon, LivingSocial and others is definitely over.
My guess is that the endgame for LivingSocial is absorption by Amazon. What do you think?