LivingSocial Offers a Cautionary Tale to Today’s Unicorns(mobile.nytimes.com)
mobile.nytimes.com
LivingSocial Offers a Cautionary Tale to Today’s Unicorns
http://mobile.nytimes.com/2015/11/22/technology/livingsocial-once-a-unicorn-is-losing-its-magic.html
8 comments
Why do you like it? Do you enjoy the misery of others?
Start-ups fail, they did so in the past, they will do so in the future and giving those failures cutesy names to make fun of them is a pretty nasty thing to do. Behind every start-up that fails (ok, almost every) are people working their asses off to try to make a success and in some (again, not all) cases to make a difference.
The number of things they have to get right is pretty vast and all it takes is for one of those 'and' gates not to fire or to fire at the wrong moment and all that work was for nothing.
Most start-ups are pretty realistic about their chances of success and to exhibit glee at the prospect of failure of others is a negative trait. Suggestion: instead of standing by the wayside and making fun of those that try, try it yourself, give your best idea your best shot and see how that works out. And if you fail, I'll give you props for trying anyway.
Start-ups fail, they did so in the past, they will do so in the future and giving those failures cutesy names to make fun of them is a pretty nasty thing to do. Behind every start-up that fails (ok, almost every) are people working their asses off to try to make a success and in some (again, not all) cases to make a difference.
The number of things they have to get right is pretty vast and all it takes is for one of those 'and' gates not to fire or to fire at the wrong moment and all that work was for nothing.
Most start-ups are pretty realistic about their chances of success and to exhibit glee at the prospect of failure of others is a negative trait. Suggestion: instead of standing by the wayside and making fun of those that try, try it yourself, give your best idea your best shot and see how that works out. And if you fail, I'll give you props for trying anyway.
I appreciate this sentiment but if companies want to be regarded as unicorns when things are going well, it seems fair to give them a cute'sy but ridiculous name, unicorpse, when they're on their way down.
Many startups actively seek out the unicorn label as it helps them with getting press, recruiting employees, etc. Being a unicorn is shorthand to folks that this company might be big and successful. Unicorpse is shorthand for this company is dying. That seems fair.
Many startups actively seek out the unicorn label as it helps them with getting press, recruiting employees, etc. Being a unicorn is shorthand to folks that this company might be big and successful. Unicorpse is shorthand for this company is dying. That seems fair.
You said it perfectly.
Allow me to address the larger, hurt feelings behind this post, with a reminder of the difference between a cult and a religion:
> If, on appropriate occasions, the members tell, enjoy, trade, and/or devise transgressively funny jokes about their denomination, it’s a church.
> If such jokes reliably meet with stifling social disapproval, it’s a cult. [1]
The phrase "Cult of growth" comes to mind. While I don't know if it actually exists ( ask PG? ), I do believe that the way communities censor humor can shine a light on their insecurities. As in, the community may be actively avoiding an uncomfortable truth by stamping out the slightest whiff of satire.
Not always, of course. Sometimes, the community wishes to remove "kidding in the square" or other insidious sleight-of-mind tricks from their discourse.
For me, restricting the band of humor is fine if it arises from a thoughtful & honest discussion, as opposed to knee-jerk emotion. The more the latter happens, the more insecure the community perhaps (and vica versa).
In any case, I'm glad to know that most people here don't seem to be flipping out over a fun neologism.
[1] http://nielsenhayden.com/makinglight/archives/006152.html#00... (originally seen at http://www.fluff.info/blog/arch/00000127.htm)
Allow me to address the larger, hurt feelings behind this post, with a reminder of the difference between a cult and a religion:
> If, on appropriate occasions, the members tell, enjoy, trade, and/or devise transgressively funny jokes about their denomination, it’s a church.
> If such jokes reliably meet with stifling social disapproval, it’s a cult. [1]
The phrase "Cult of growth" comes to mind. While I don't know if it actually exists ( ask PG? ), I do believe that the way communities censor humor can shine a light on their insecurities. As in, the community may be actively avoiding an uncomfortable truth by stamping out the slightest whiff of satire.
Not always, of course. Sometimes, the community wishes to remove "kidding in the square" or other insidious sleight-of-mind tricks from their discourse.
For me, restricting the band of humor is fine if it arises from a thoughtful & honest discussion, as opposed to knee-jerk emotion. The more the latter happens, the more insecure the community perhaps (and vica versa).
In any case, I'm glad to know that most people here don't seem to be flipping out over a fun neologism.
[1] http://nielsenhayden.com/makinglight/archives/006152.html#00... (originally seen at http://www.fluff.info/blog/arch/00000127.htm)
That's not a bad rule of thumb. People who invoke it usually miss the detail that it's the members who need to be able to tell jokes, not outsiders. People will say feminism is a cult under this rule when a feminist suggests that people without firsthand experience shouldn't joke about certain topics.
The same issue comes up with racism. Activists will complain about race jokes being made by white people, with exactly the same characterization: "[black lives matter/brainwashed university liberals are] actively avoiding an uncomfortable truth by stamping out the slightest whiff of satire!"
But of course they are making satirical remarks constantly within their ranks. It's satire from the outside that loses it's protection because from the outside it is just a pattern of abuse. Only from within is it the necessary ingredient for healthy discourse you describe.
And of course I don't mean outside/inside to be white/black or man/woman. It's just the distinction of whether you're coming from within the movement or without. It's not hard to make jokes about feminists if you're coming from within that intellectual tradition, even if you're a man.
The same issue comes up with racism. Activists will complain about race jokes being made by white people, with exactly the same characterization: "[black lives matter/brainwashed university liberals are] actively avoiding an uncomfortable truth by stamping out the slightest whiff of satire!"
But of course they are making satirical remarks constantly within their ranks. It's satire from the outside that loses it's protection because from the outside it is just a pattern of abuse. Only from within is it the necessary ingredient for healthy discourse you describe.
And of course I don't mean outside/inside to be white/black or man/woman. It's just the distinction of whether you're coming from within the movement or without. It's not hard to make jokes about feminists if you're coming from within that intellectual tradition, even if you're a man.
> Many startups actively seek out the unicorn label
Such as?
Such as?
Possibly all of them given its arguably a rational thing to do. If you look at a list of unicorns, you will see a huge glut of them are valued at precisely 1B.
People say that this is not chance that so many different businesses happen to be worth the same but that they have accepted punitive terms to stretch their valuation to 1B because the press advantages are worth the cost. This effect will also have applied to all the companies now valued above 1B because they played the same game when they were <1B and "reached" to get the label.
People say that this is not chance that so many different businesses happen to be worth the same but that they have accepted punitive terms to stretch their valuation to 1B because the press advantages are worth the cost. This effect will also have applied to all the companies now valued above 1B because they played the same game when they were <1B and "reached" to get the label.
We maintain a real-time list of unicorns and regularly have companies reach out requesting to be added.
They're interested enough that they provide paperwork to prove the valuation when we are unable to independently verify.
https://www.cbinsights.com/research-unicorn-companies
They're interested enough that they provide paperwork to prove the valuation when we are unable to independently verify.
https://www.cbinsights.com/research-unicorn-companies
> Do you enjoy the misery of others?
That seems like a pretty loaded question.
You have attributed malice to something that may have been an understanding. Liking how a potential buzzword sounds shouldn't (in my opinion) be equated to enjoying the misery of others.
"Unicorpse" is a fun word (in my opinion). Although it might be offensive, it is also fun to say. I don't think the user was showing "glee at the prospect of failure of others" as much as he or she was commenting on how fun it is to say.
That seems like a pretty loaded question.
You have attributed malice to something that may have been an understanding. Liking how a potential buzzword sounds shouldn't (in my opinion) be equated to enjoying the misery of others.
"Unicorpse" is a fun word (in my opinion). Although it might be offensive, it is also fun to say. I don't think the user was showing "glee at the prospect of failure of others" as much as he or she was commenting on how fun it is to say.
> "Unicorpse" is a fun word (in my opinion). Although it might be offensive, it is also fun to say. I don't think the user was showing "glee at the prospect of failure of others" as much as he or she was commenting on how fun it is to say.
Correct.
Correct.
It's not loaded, the GGP has the following passage:
"hopefully it becomes out go-to word to describe the upcoming batch of startup failures"
It smacks of 'schadenfreude' (for which there is an English term but I can't remember it).
"hopefully it becomes out go-to word to describe the upcoming batch of startup failures"
It smacks of 'schadenfreude' (for which there is an English term but I can't remember it).
Everyone enjoys seeing someone else get their comeuppance (which may or may not be the word you were looking for). Is that something to be proud of? Certainly not, but neither should it be particularly shocking.
If you wanna wage a campaign against this, then you might as well start with the term "unicorn", which is itself subtly mocking; after all, unicorns aren't rare: they are non-existent. The root term implies the same thing that bothers you about the derived -corpse: these valuations are irrational, and a reckoning will be had.
If you wanna wage a campaign against this, then you might as well start with the term "unicorn", which is itself subtly mocking; after all, unicorns aren't rare: they are non-existent. The root term implies the same thing that bothers you about the derived -corpse: these valuations are irrational, and a reckoning will be had.
That's something else entirely, it does not point at all start-ups. Anyway, I disagree with the 'unicorn' bullshit as much as anybody else, the whole idea that some start-ups are 'special' before they've actually reached the cashflow positive state is a troublesome development. The cycle of hype definitely could use some pushback but to label failed start-ups with a thinly veiled form of name-calling is imho not fair.
We'll make an exception for those start-ups that call themselves unicorns.
We'll make an exception for those start-ups that call themselves unicorns.
> It smacks of 'schadenfreude' (for which there is an English term but I can't remember it).
"Comeuppance," maybe? I don't take pleasure in the misery of others in general, but when smarmy hucksters are brought low, I can't help but feel a little twinge of satisfaction. It feels a bit like justice...
"Comeuppance," maybe? I don't take pleasure in the misery of others in general, but when smarmy hucksters are brought low, I can't help but feel a little twinge of satisfaction. It feels a bit like justice...
We have understood the same sentence in two different ways.
Such is the beauty of language, and the absurdity of communicating through it.
Such is the beauty of language, and the absurdity of communicating through it.
Suggestion: instead of standing by the wayside and making fun of those that try, try it yourself
Musicians will still be telling rock critics to try making their own music when the sun burns out, but it won't be a valid complaint, even then.
Musicians will still be telling rock critics to try making their own music when the sun burns out, but it won't be a valid complaint, even then.
>Start-ups fail
I see everyone else disagreeing with your points regarding the use of the word "unicorpse". To me, however, that's not the most interesting part of your post. The most interesting part of your post is the implication that Living Social is a start-up. According to the article, at its peak, Living Social had 4,500 employees (more than Twitter has right now!). If Living Social is a "start-up", then so are Facebook, Google, and heck, even Microsoft.
>The number of things they have to get right is pretty vast and all it takes is for one of those 'and' gates not to fire or to fire at the wrong moment and all that work was for nothing.
I find that statement to be disingenuous for this example. Living Social wasn't brought down by "bad luck". They grew too fast without having a clear road to profitability (something that they themselves admit in the article) and now they're paying the price for their poor decisionmaking in the past. The troubles they're running into are of their own making, and the schadenfreude they're getting is reflective of that.
I see everyone else disagreeing with your points regarding the use of the word "unicorpse". To me, however, that's not the most interesting part of your post. The most interesting part of your post is the implication that Living Social is a start-up. According to the article, at its peak, Living Social had 4,500 employees (more than Twitter has right now!). If Living Social is a "start-up", then so are Facebook, Google, and heck, even Microsoft.
>The number of things they have to get right is pretty vast and all it takes is for one of those 'and' gates not to fire or to fire at the wrong moment and all that work was for nothing.
I find that statement to be disingenuous for this example. Living Social wasn't brought down by "bad luck". They grew too fast without having a clear road to profitability (something that they themselves admit in the article) and now they're paying the price for their poor decisionmaking in the past. The troubles they're running into are of their own making, and the schadenfreude they're getting is reflective of that.
I think many of us are worried and/or not happy that poor decisions at some large unicorns may reflect on or tar the whole sector.
They appear to have vaporized .9 billion dollars!
They appear to have vaporized .9 billion dollars!
>Why do you like it?
Because everyone knows real unicorns have an aura of otherworldly beauty and carry an innate magic that shields them from all but the most innocent of maidens.
So the term "unicorn" completely fails to match "overvalued Silicon Valley company".
Because everyone knows real unicorns have an aura of otherworldly beauty and carry an innate magic that shields them from all but the most innocent of maidens.
So the term "unicorn" completely fails to match "overvalued Silicon Valley company".
woah(1)
> “We literally bet the company and went through 12 months of runway in a couple of months because we thought that the time to own the market was right.”
This makes no sense. The switching costs for both consumers and businesses is basically zero, and there are aren't really any network effects like there are with Facebook, Twitter, etc. What did they expect to happen at the end of those 2 months? That consumers would ignore the hundreds of other deal players in the market and only buy from LivingSocial?
This makes no sense. The switching costs for both consumers and businesses is basically zero, and there are aren't really any network effects like there are with Facebook, Twitter, etc. What did they expect to happen at the end of those 2 months? That consumers would ignore the hundreds of other deal players in the market and only buy from LivingSocial?
It's been interesting to watch the rise, peak, and fall of this irrational frenzy behind companies that have a terrible business model or no business model at all.
It seems like the investment community is finally learning that yes you can get millions of people excited about something that is free or heavily discounted to the point of losing money but actually making money that way is extremely difficult. How many billions in financial and years of human capital have been burned learning this lesson?
The rise and fall of Groupon, LivingSocial and others just makes me wonder how much damage was done to small businesses in the process.
It seems like the investment community is finally learning that yes you can get millions of people excited about something that is free or heavily discounted to the point of losing money but actually making money that way is extremely difficult. How many billions in financial and years of human capital have been burned learning this lesson?
The rise and fall of Groupon, LivingSocial and others just makes me wonder how much damage was done to small businesses in the process.
If by small business you mean get-rich-quick schemes to con greedy / desperate investors, then tremendous damage has been done. If by small business, you mean a small group of individuals (or just one person) who have an idea and several free weekends / week-nights to implement that idea into a product then put it in front of potential users via sites like HN (if some sort of developer-centric product) or on a market-place like amazon or Taobao (if some sort of real product), then none at all.
The monetary cost of delivering most new products to users is pretty much at most $100 (the time cost hasn't changed though; it still takes forever to get really good at doing something). Which means, for the majority of small businesses, millions of investors dollars is next to useless to the expert owner when he or she can bootstrap him/herself to profitability without them. Sure, it might take 2 or 3 years longer, but the small business owner is also under no sleep-depriving pressure to go fast, and when one's runway is effectively infinite, one doesn't run out of it.
So to the DIY owner with plenty of professional skill, discipline, and patience, investor money (and the associated risk and burnout) just isn't attractive. Which leaves the venture investment field largely populated by impatient hot-shots peddling get-rich-quick schemes. And, having been burned time and time again, perhaps these investors would have learned by now.
The monetary cost of delivering most new products to users is pretty much at most $100 (the time cost hasn't changed though; it still takes forever to get really good at doing something). Which means, for the majority of small businesses, millions of investors dollars is next to useless to the expert owner when he or she can bootstrap him/herself to profitability without them. Sure, it might take 2 or 3 years longer, but the small business owner is also under no sleep-depriving pressure to go fast, and when one's runway is effectively infinite, one doesn't run out of it.
So to the DIY owner with plenty of professional skill, discipline, and patience, investor money (and the associated risk and burnout) just isn't attractive. Which leaves the venture investment field largely populated by impatient hot-shots peddling get-rich-quick schemes. And, having been burned time and time again, perhaps these investors would have learned by now.
I think he was referring to the small businesses that actually used services like Groupon and LivingSocial to sell their products.
Small businesses as in the small restaurants and vendors who sold coupons through things like groupon or livingsocial.
It seems that these heavy discounts weren't really profitable and didn't bring back repeat customers, and many places sold multiple lifetimes of services (like at nail salons, etc) at a loss.
It seems that these heavy discounts weren't really profitable and didn't bring back repeat customers, and many places sold multiple lifetimes of services (like at nail salons, etc) at a loss.
I ran into a former coworker from LivingSocial last week. We talked about how they had quite an impressive stable of Ruby developers a few years ago. Many have left, but there's still several who have been there for four or five years. I can't see why so many great developers are still there. Comfort in the knowledge that they could get get another job in a heartbeat if they needed to?
I currently work there so I'll answer your question (throw away account). Morale is low, for sure, but the people I work with are great, the work itself is fun and engaging, I learn a lot, pay and benefits are good, and I'm pretty confident I could get another job easily if it came to it. There's a glimmer of hope here, and I'm willing to stick it out and see what happens.
Because they pay really well and the job is fun. I remember loving my job at living social. Work does not always need to be about some greater mission. Only reason I left is my startup - is doing rather well
No doubt the work is challenging and the environment is fun. I'm just surprised the company's financial situation doesn't cause them to leave.
People's motivations for staying at a company are pretty varied.
That said, without attempting to ascribe anything to the people at LivingSocial, one thing I have noticed is that a large number - if not most - talented devs are also really shit at interviewing and negotiation.
Myself and some others I know enjoy interviewing and are at least half-okay at negotiation, so we're very confident on the job market. I have met many developers who can code circles around me for whom interviewing carries a lot of dread, and they won't do it unless they feel they really need to.
That said, without attempting to ascribe anything to the people at LivingSocial, one thing I have noticed is that a large number - if not most - talented devs are also really shit at interviewing and negotiation.
Myself and some others I know enjoy interviewing and are at least half-okay at negotiation, so we're very confident on the job market. I have met many developers who can code circles around me for whom interviewing carries a lot of dread, and they won't do it unless they feel they really need to.
never seen developers referred to as horses before
Stable: a group of people (as athletes, writers, or performers) under one management [0]
[0]: http://www.merriam-webster.com/dictionary/stable
[0]: http://www.merriam-webster.com/dictionary/stable
Everybody in the startup community could explain why LivingSocial was doomed from the start five years ago. It's only the East Coast naifs investing great wealth of other people's money that are in any way astonished.
I wouldn't consider that a cautionary tale for anyone but easily conned New York investors.
I wouldn't consider that a cautionary tale for anyone but easily conned New York investors.
I sense some bias in your comment, I just can't put my finger on it...
I love the idea that it is the New Yorkers who are financially naive. Like what kind of upside down narrative is that?
"Ha Ha let's go fleece some of those hayseeds from NYC. Rubes & their money are soon parted when they start playing with the big boys!"
"Ha Ha let's go fleece some of those hayseeds from NYC. Rubes & their money are soon parted when they start playing with the big boys!"
Yes but in startup investing it really is true - east coast people just don't get it.
Hmm, what about the living social story implies that? I for one came out of the square IPO thinking "why do those bay area companies keep getting fleeced by I banks?"
The founders and early execs of Living Social did very well! All of them walked away with millions.
Curious if you know that or just think that? They did 10 rounds of funding according to CrunchBase and at first glance I did not see any where the founders took money off the table for themselves.
Look through AngeLlist and few other places on the interwebs. Do some sleuthing....
You're the person making the claim, that means you already know where the evidence is, and assuming that is true a polite request for sharing that evidence should not be answered with 'do your own homework' on the off-chance that you don't actually have such evidence. So, if you have any evidence it would be much appreciated if you produced it.
As a rule, especially with deals like these the founders do not get to take money off the table until the company has achieved certain benchmarks so I'm as curious as the GGP is.
As a rule, especially with deals like these the founders do not get to take money off the table until the company has achieved certain benchmarks so I'm as curious as the GGP is.
I don't think they really know. The list of all LivingSocial filings is here: http://www.sec.gov/cgi-bin/browse-edgar?company=LivingSocial... and the $400M raise filing is here: http://www.sec.gov/Archives/edgar/data/1439606/0001439606110... which includes a note that $200M went to "others". But nobody seems to know definitively if those "others" included the founders or if it was just earlier investors cashing out. Given that the egregious cash out by GroupOn's founders had recently occurred I would be surprised if LivingSocial's investors would agree to paying off the founders but stranger things could happen.
[deleted]
Didn't read, nothing to caution. LivingSocial (puke) was always a straight up cash grab, I'm sure the founders did very well.
I like the ring of "unicorpse", hopefully it becomes out go-to word to describe the upcoming batch of startup failures.