At Deal Site LivingSocial, Fast Growth And High Risk
LivingSocial is one of many companies using daily e-mails to connect customers with local businesses. Despite stiff competition from Groupon, the young company is growing quickly, says CEO Tim O'Shaughnessy.
The companies offer daily deals at restaurants, beauty shops and other enterprises, using social media to tap into local business advertising.
Groupon remains the largest and most famous. And when Google recently tried to buy Groupon for $6 billion, the offer was rejected.
As for LivingSocial, Amazon invested $175 million in the company in December. And the company is growing quickly, with hundreds of employees now helping it find deals for customers in more than 100 cities.
Based in Washington, D.C., the privately run LivingSocial says it made hundreds of millions of dollars last year.
CEO Tim O'Shaughnessy, 29, tells Morning Edition co-host Steve Inskeep that now, the challenge is to manage LivingSocial's growth without losing its focus.
And part of the company's culture, he says, is to take risks.
"One of the things I like to say around the office is, if you're not making at least one decision a month where you are genuinely nervous about it, you're probably not trying hard enough," he says.
Asked for an example, O'Shaughnessy says, "We actually started to go and advertise, and promote our service, in markets that we weren't live in."
The gamble paid off -- LivingSocial quickly added markets and signed up more members. And the company's fast growth attracted more venture capital, to help level out its balance sheet.
"We took our burn rate from about a 12-month time frame to about a month-and-a-half time frame -- in the span of about a week," O'Shaughnessy says. Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.