• LivingSocial reportedly preparing for $1-billion IPO

         

   

    July 8, 2011 |  2:01  pm

• LivingSocial has said previously that its user base is made up of about 10 million subscribers in more than 120 markets and five countries.

   

  In December, Amazon.com, the Web's largest retailer, invested $175 million in LivingSocial alongside an $8-million investment from Lightspeed Venture Partners of Menlo Park, Calif.

• LivingSocial Acquires SocialMedia For $3 Million

     

   

   

  TECH CRUNCH - Apr 17 - Fast growing daily deal service LivingSocial, which just raised $400M, has acquired long suffering social advertising network SocialMedia for $3M, all in LivingSocial stock. SocialMedia’s biggest asset today is probably its domain name. But a couple of years ago the company was one of the first companies to create a Facebook ad network that used your friends’ pictures in the ads. 2008 revenue was $15M, and 2009 revenue was on pace to hit $25M. Facebook tried to acquire the company. SocialMedia declined, and shortly afterwards Facebook threatened legal action against them for privacy policy violations. LivingSocial's February revenue was $50M, and projected revenue for 2011 is $1 billion.

• Living Social is adjusting to the invasion of competition by varying its offerings. LivingSocial.com estimates that they will surpass Groupon's revenue in January of 2012.

   

  Groupon has diverged from their original business model as the competition has grown, but the question is: Will Groupon's aggressive growth plans be enough to keep Groupon on top of the daily deal site charts?

   

  Now Facebook's potential reach is immeasurable but only time will tell if consumers will want to buy money-saving deals and share them within their social circle on Facebook. And if that's the case, the other daily deal sites should watch out!

   

  Google has an amazingly powerful reach also but there's nothing innovative and unique about Google Offers to help them stand apart from the competition. They need to step up their game if they want to be successful in the daily deal market.

• While other coupon-centric pages exist on Facebook and on the Internet, what Groupon and LivingSocial seem to do that’s different is convert the desire to save money into a social media experience that users can share not only with their friends, but with their Facebook network.

• But, again, Groupon and LivingSocial Deals take that social component to the next level through Facebook Connect, potentially inviting a user’s entire Facebook network to get in on the deal.

   

  Groupon started in November of 2008 in Chicago and currently has almost 47,000 monthly active users on Facebook, has sold more than 1.5 million Groupons worth almost $73 million dollars. These deals are offered in almost 50 mostly U.S. cities across the country, but also in Vancouver, Toronto, London and more locations are to come. It has also been running Facebook ads in at least some of these cities, we’ve noticed.
• The basic process works like this: Groupon offers one deal each day then if you and enough of your friends sign up, the deal comes through and your credit card is charged. Groupon uses “collective buying power” to set up discounts at restaurants, bars, gyms, etc. Groupon takes 30-50% of each deal.

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• There’s a pretty pervasive meme in the market: the concept of targeted content. By this I mean creating content that is only relevant to a niche audience, as opposed to everyone. Content is a critical part of the product experience. The challenge often with consumer brands is that the audience is “everyon
• 1. Create the aspirational story about the brand. Take a brand such as LivingSocial. You get great local experiences using social technologies at a deep discount. The nugget? There’s a real sense that you benefit a community of like-minded friends, family and local businesses by using the product — especially during a recession. There’s the aspirational aspect of their brand.
• 2. Ensure the primary audience and that brand story fit. At first glance, you might think the product is for everyone. But online, the most pervasive coupon-clipping, save-a-few-bucks sort of consumers tend to be women.
• Having already taken advantage of social couponing products, such as Groupon and LivingSocial, I can tell you, the word-of-mouth (WOM) pass-alongs have — for the most part — been from women friends. If you look at LivingSocial’s press, and step outside the business, venture press, the press highlights are Woman’s World, InStyle and others. There’s your target.
• 3. Creating secondary audience personas that are a good match to the brand story. Think about who is most likely to share and create WOM around your aspirational story. Not only did many WOM pass-alongs for local deals come from women, they came from moms.
• 4. Ensure the brand experience keeps that aspirational story. Once you’ve captured that audience’s attention and made it easy to use and share WOM, what continues to makes the product draw you back in? For LivingSocial, offers tend to be intentionally tailored to experiences you want but don’t need: Hawaiian spa packages, massage + facial, wine tastings, restaurants, yoga, but not tire rotations or tax preparations. It a word — nummy. The brand is the experience, and lining up business offers that validate that brand is critical, especially early on in building an audience. Once they capture that demographic there’s a good chance to diversify.

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• Users were also turning to Facebook, where the shared the deal with friends and, more importantly, talked about exactly what they’d buy, whether it was guacamole or salad. In doing so, they gave Whole Foods earned product endorsements that the brand simply couldn’t buy.

   

  In the end, Whole Foods revealed that shoppers who used the voucher had larger shopping carts, on average, than those who didn’t. But the big win for While Foods wasn’t just the 1 million shoppers coming through the door. The brand dominated Facebook, Twitter, Google, and the press that day, which meant far more exposure than the sales figures implied. “I don’t know if can think of another way to get that type of coverage, anywhere,” Spolan said.

• There's no doubt that Facebook and other social networks have served LivingSocial well: The company's services have 6.4 million users so far, who have posted over 8 million reviews. But building a business that's beholden to the social-network platforms does have its downsides.

  Chief among them is discoverability. LivingSocial is building a database of reviews, and the potential user base for those reviews eclipses the social networks. Burying content inside social networks also doesn't do great things for search engine optimization. So all content now contributed to the services via social networks will also get presence on the LivingSocial destination sites, which Google and other search engines will be able to index more easily.
• It makes sense for LivingSocial since the service uses the social networks as interfaces into a parallel network of its own users and their content. When you review a product on a LivingSocial site, it's shared with all LivingSocial users, no matter what network they're on, as long as they've installed the app. (The service uses OpenSocial as its platform for distributing its interface to non-Facebook sites.)

• When LivingSocial launched in 2007, the co-founders thought it would be interesting to match a user’s location with their interests.

• LivingSocial’s 5 Simple Tactics for Getting 30 Million Subscribers

            

   

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  When LivingSocial launched in 2007, the co-founders thought it would be interesting to match a user’s location with their interests. The model has evolved to selling vouchers to users for local experiences, and LivingSocial now serves daily deals to over 30 million subscribers. Want to know how they did it? Earlier this month, Andrew Warner of Mixergy.com interviewed LivingSocial co-founder Tim O’Shaughnessy. In the interview, Tim reflects on the early days and shares the strategies LivingSocial used to fuel its explosive growth. This post includes five of those strategies.

   

  1. Build Connective Tissue

   

  

   

  Tim believes LivingSocial’s over 30 million customers are “establishing that connective tissue with us, where we send [them] a great thing to do every single day”. How can you reach as many people as LivingSocial does? Tim explains, “to do that, we have to know what your email is”, so “we just made it as blatant as we possibly could”.

   

  By requiring first-time visitors to provide an email address, Tim says you help those people who “would want to subscribe and wouldn’t really know how to do it”. Don’t miss out on this opportunity, because as Tim points out, “email is one of those things that people keep open as a tab
• in their browser all day long. So if you have a compelling value proposition, then it can work”
• So the LivingSocial team created Instant Deals, which Tim thinks, “is one of the big, new places that the space can go”.
• . Steal Facebook Users
• Tim believes setbacks are a learning opportunity. When something doesn’t go exactly according to plan, Tim asks himself “What did I learn here, how can I apply that to the things that I do, and what are the things that I enjoy in life?”. For Tim, running a company means having flexibility to try new things.
• When Facebook opened up their platform in May of 2007, Tim says, “two light bulbs went off”. The first “was that if you had something mildly interesting, you could probably acquire users faster and cheaper than you ever could in the history of the web”, and “the second was that you could get generalized location data on a per user level”.
• So Tim and the team started building products to attract users. First was Virtual Bookshelf, one of the larger book-sharing applications on Facebook, which “at one point in time… got more book reviews per day than Amazon.com got.” Next was LivingSocial, and in version one users inputted what they liked to do in real life which the site matched with their location. Even though Tim and his co-founders “didn’t necessarily know how we were going to monetize”, they thought “if we had those data sets, we would have an opportunity to build a product and figure out what the model was later”

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