On a recent Wednesday night, a couple of bands are playing at 918 F Street, the Penn Quarter building LivingSocial has converted into a playground for young professionals. Past the front entrance, a stairwell curls around a 19th century steel elevator cage to the credit card–only “Speakeasy,” where bartenders mix throwback cocktails beneath bare lightbulbs. It’s just like Prohibition, except LivingSocial is sucking data off my Visa and queso sticks are available for purchase. A band plays one level above, visible through the exposed beams of what used to be a ceiling. Up there, a lone, hip guy in a cowboy shirt is coolly nodding his head by the side of the stage. This is unusual; the concert, attended largely by friends and family of the Bethesda-bred opening act, has all the edginess of a school play. So I climb a set of spiral stairs, sidle up to the head-bobber, and ask him about the band.
“Mission South,” he shouts. “They’re local.” I squint at the recent college graduates. “#918fstreet” is projected onto the exposed brick behind them, suggesting they’re supposed to catapult the venue to viral success, rather than the other way around. Across the room, one of the musicians’ moms snaps a photo with her iPhone. “They’re good,” I say to cowboy-shirt guy. “Do you know them?” Handing me a business card, he explains that he books LivingSocial’s shows.
Between sets, the booker, Matt Corrado, invites me up to 918 F’s improvised “green room,” where we sit among empty liquor bottles and unimbibed pickle-juice chasers—remnants of a drinking experiment unfit for the genteel confines of the Speakeasy. I ask for his impression of LivingSocial. “It’s pretty cool. It works. I mean, they have a lot to learn about how to run a music event,” says the 29-year-old, whose Maryland-based Pick-Up Productions is by then in its fourth week of arranging LivingSocial’s fall concert series. “They have a big ego behind what they’re doing, and they think that their brand can’t be tarnished. They think it carries more weight than I think it does.” He adds: “Just because you put it up on your website doesn’t mean it’s going to sell.”
Corrado is actually pretty happy with sales—about 100 tickets, for a space that fits double that—but he’s right that there’s a certain paradox in maintaining corporate brand identity while running a rock show. (“They want to be mom and pop,” he scoffs. “I’m mom and pop.”) How, in other words, does a 4,500-employee online coupon company—that partners with Starbucks and is part-owned by Amazon—deliver the sort of concert that’s going to pull people away from D.C.’s grittier, more established venues? “This is not a rock ’n’ roll club,” Corrado says. “For example, they didn’t tell us originally that the bar was going to close at 10. Which is fine, I guess, for a Wednesday night. It’s like, they want to party, but everybody’s got to come tomorrow to work at 9 a.m. or whatever.”
Corrado may be pleased to learn that on weekends, the Speakeasy stays open until 1 a.m. But his broader observations remain salient. As the event space testifies, LivingSocial is in transition. Since it began offering discount deals in July 2009, the D.C.-based company has made it big as a middleman between consumers and merchants, slicing the cost of restaurant meals in half and taking a cut of the revenue. Now, with rival Groupon’s stock price in the gutter and the future of the daily deals industry in some doubt, the District’s flagship tech company is capitalizing on its brand to convince consumers to buy goods and experiences straight from the source, instead of selling someone else’s product. No wonder, as Corrado observed, LivingSocial is so protective of its brand.
Ask LivingSocial employees what distinguishes them from Chicago-based Groupon and they’ll tell you that their company’s name connotes a way of life; Groupon just rhymes with coupon. Go-get-’em mantras plaster the walls of LivingSocial’s six D.C. offices, where potential employees receive distinct “values interviews” and current workers are encouraged to live the brand by a full-time Culture Team. The precise value of that brand will determine not only the fiscal sanity of the record $32.5 million tax break D.C. gave the company this summer, but the personality of Washington’s professional class for years to come. So it’s worth figuring out not only how LivingSocial brands itself, but how it’s branding D.C.
LivingSocial has had a bad couple of weeks. On Oct. 19, it coughed up $4.5 million to settle a class-action lawsuit led by a woman who couldn’t redeem an expired kayak voucher at Jack’s Boathouse in Georgetown. Then, on Oct. 25, Amazon, which owns about a third of the company, announced that it landed in the red for the first time in four years, thanks in large part to LivingSocial’s whopping $566 million third-quarter loss. The backdrop to all this? The precipitous decline of industry-leading Groupon, whose share price has dropped from $20 to less than $4 in the year since its initial public offering. The daily deal “bubble,” industry watchers began to speculate, was ready to burst.
Unsurprisingly, LivingSocial is trying to distance itself from Groupon. In an October phone interview, I ask LivingSocial founder and CEO Tim O’Shaughnessy why anyone should believe his company will fare better than Groupon has. “We’re the marketplace where you think local. We’re the place to buy and share the best things in your city,” says the 31-year-old. “I think the brand identity that we’ve been able to craft has given us permission to go more directly interact with our consumers.” In other words, as it pivots from daily deals to home goods, a takeout and delivery service, and various events, “escapes,” and “adventures,” LivingSocial is not just slashing prices, but running the gamut of local commerce. (Groupon provides many of those things too, and 75 percent of LivingSocial’s revenue still comes from vouchers. As the recent failure of LivingSocial’s Social Studies D.C. website suggests, it’s unclear how profitable the local stuff can be.) “We’re not a daily deals company,” LivingSocial spokespeople keep insisting to me, like moderate politicians trying to distance themselves from the extreme factions of their caucuses.
But LivingSocial’s identity crisis goes beyond the bad Groupon-inspired PR. When it began as Hungry Machine in 2007, the Georgetown-based startup was four friends doing tech consulting for companies like ESPN and JibJab, while creating Facebook applications on the side. By 2008, LivingSocial was developing apps full-time, and a year later had created the wildly popular “Pick Your Five,” before following Groupon’s lead and getting into the group coupon business. Now, as LivingSocial has grown from 30 to 4,500 employees in less than three years, it’s trying to spin off from the product that generated all that growth.
O’Shaughnessy says the common link among all of LivingSocial’s iterations—the special sauce that distinguishes it from Groupon—is its company culture. “You have that personnel transition that has been constant, but I think a lot of it comes [down] to the cultural dynamic that was instilled in the company very early on,” he says. “We’ve been able to keep a lot of the core DNA in how people think about things. “
The person responsible for holding that DNA steady is Andrew Dolan, the leader of LivingSocial’s “Culture Team.” LivingSocial’s values, the effervescent 24-year-old tells me, “are part of daily life, and not just something we put up on the wall.” The company-wide “LivingSocializing” events he organizes every night aren’t “just for giggles,” in other words. “A big hunk of it is living the brand and aligning what the company is all about.”
Google’s motto is “Don’t be evil.” Facebook’s is “Move fast and break things.” Those slogans speak to the idealistic, disruptive promise of the Web. “Recognize others,” and “Surprise, entice, delight,” two of LivingSocial’s core mantras, are about connecting with others, whether that means coworkers, merchants, or customers. Which should make it a cinch to “live the brand.” Dolan’s effort to successfully instill those values, however, recalls the mom-and-pop paradox that Corrado pointed out at 918 F. LivingSocial wants to be your one-stop shop for local commerce—but scaled up, and in cities all over the world. It’s intent on maintaining its startup roots, but must do so in a top-down way. And to a great extent, it’s pulled it off. Just as LivingSocial has convinced consumers to treat daily deals with more respect than traditional coupons, it’s persuaded its employees that they’re working much more than a job.
A day after the concert, I’m back at 918 F for an employees-only rock climbing session. A 21-foot climbing wall is the centerpiece of a carpeted sixth-floor game room, which also features a ping-pong table and a putting green. I’m hazy on how immersive the experience is meant to be (hipsterish spokesman Brendan Lewis will later make me jump into the company ball pit), so I stuff shorts and sneakers in my backpack. “Sexiest reporter ever,” Lewis declares, after dropping me off.
Milling around the liability-form table, I meet 23-year-old Michael Verdi, an antic ping-pong whiz, and 24-year-old Ed Weng, his straight-laced sidekick. Both are software engineers. Verdi bounced around the start-up scene in Thailand before coming here; Weng quit investment banking, explaining, “You would never have rock-climbing night at Goldman Sachs.” They’re recent graduates of the Hungry Academy, LivingSocial’s in-house programming boot camp.
After I introduce myself, the following exchange takes place:
Verdi: Do you need any, uh, good quotes or anything?
WCP: I’m dying for some good quotes.
Weng: Are you doing an in-depth piece or something?
WCP: I guess. I don’t know. Do you guys read City Paper?
Weng: Can’t say I do.
Verdi: Can’t say that I do.
Weng: New York Times!
After a brief, discouraging conversation about print media in which Verdi lambasts some high-schoolers for trying to sell him subscriptions to the Washington Post, I explain what I’m after: a window into LivingSocial’s company culture. “I’d say we probably felt really connected, like it was a family, after Tim had an all-hands-in sacrificing of a baby,” Verdi offers, presumably joking. “That really brought us together.”
With that, Verdi marches off to the putting green, yelling stuff like “boo-yah” and “the dingo ate my baby!” Munching on a slice of free pizza, I decide to delve deeper into LivingSocializing. Minutes later, I emerge from the bathroom in shorts and sneakers, receive a few mild catcalls, and strap into my harness. I make it up the wall’s “easy” section in what seems like record time, but freeze at the top. Eventually, with tips and encouragement from the LivingSocialites, I push off. The descent feels slow and symbolic, as if they’re all waiting to catch me.
What follows is an enormous information gap in my notebook. (“Not a lot of notes there, bro!” Verdi comments.) Suddenly, I’m immersed in, yes, the culture. I’m LivingSocially. The event is inclusive and without pretension, and it’s doing its job: I feel a small frisson when employees from “Takeout and Delivery” and legal meet for the first time.
I’m only snapped out of my gauzy daze by the sprightly 24-year-old Julia Lovett, who works in the company’s new “shop” division, from which consumers can buy goods directly. She’s wearing a company T-shirt that reads “Month of the Customer.” Perhaps to cater to my professional interests, the recent Georgetown grad begins talking about Aaron Sorkin’s HBO show The Newsroom. “There’s a particularly funny scene where [news anchor] Will McAvoy brings a reporter in and, well, leaves him to figure out his own conclusion, but creates this elaborate web for him to stumble into the story that McAvoy wants him to write.” Yes? “So, this is, like, the opposite of that.”
Is it? Now I’m wondering. Lovett, who LivingSocial once tapped to appear in a promotional video for its short-lived “instant deals” service, might as well be a plant from the PR department. She never strays off-message, telling me how despite its size, LivingSocial doesn’t feel corporate, and how, after college she chose LivingSocial over Teach for America, citing the company’s “broader goal to be the face of local business.” But Lovett’s giddiness—“I just love any excuse to talk about LivingSocial!”—is also a product of that vaunted culture.
Washington has “an abundance of overeducated people getting paid nothing on the Hill, and so motivated to take over the world,” says “Mike,” an employee who left this summer, and wished to remain anonymous in order to preserve his relationship with company employees. “Now this cool, hip company comes in where you can wear shorts and T-shirts to work and gives you free beer with a bunch of good-looking people around.” Moreover, LivingSocial has tailored its Silicon Valley vibe with a social mission, convincing goal-driven employees like Lovett that it’s on the cusp of a revolution in local commerce. The genius of the company’s brand, in other words, is that it makes the same pitch to consumers and merchants as it does to employees, ostensibly creating a seamless transition between work and play. “Everybody drinks the Kool-Aid,” says Mike. “It’s only, ‘How does that Kool-Aid settle in?’”
LivingSocial’s New York Avenue headquarters has all the trappings of a Silicon Valley startup. A kitchen is equipped with snacks, a beer-stocked fridge, and a Skee-ball machine. Red English phone booths provide a measure of privacy, should anyone tire of the open floor plan. Jeans are de rigueur, even for older employees, who appear somewhat uncomfortable wearing them. It looks like a tech company, it feels like a tech company... “Damn right, we’re a tech company,” hammers home spokesman Lewis the first time we meet, rebutting a frequent criticism from naysayers who objected to the tax break.
A week after my first visit, I’m back at HQ, talking to 29-year-old Web developer Jess Eldredge, who has a different take. “People are pretty involved in the [local] tech scene,” Eldredge says, listing several high-profile LivingSocial engineers. “It’s kind of crazy because we’re not really a tech company. We just have a high concentration of really smart developers that work here.”
The question of what, exactly, LivingSocial is is a complicated one. On one hand, its perky, driven workforce is of a part with the rest of D.C.’s Millennial strivers. They ride their bikes to work. They’ve helped gentrify Bloomingdale and Columbia Heights’ 11th Street corridor. They organize happy hours at The Hamilton. Though some, like Verdi and Weng, came here to be engineers, many might have landed in D.C. anyways. Only 15 percent of the company’s D.C. workforce works in programming or I.T. A plurality makes sales pitches and deals with disgruntled merchants, as evidenced by the Mumbai-style call center across from the Verizon Center. Its editorial team features former and aspiring journalists. Chinatown, around which five of its six buildings are clustered, is its Capitol Hill.
On the other hand, Hill staffers and paralegals aren’t wearing board shorts to work. What best distinguishes LivingSocial from D.C.’s establishment—besides not feeding off the federal government—is its effort to break down the barrier between work and play. While most of D.C.’s worker bees don’t need to be reminded of the task at hand—pass the bill, win the case—LivingSocial’s broad ambitions are less clear. And that’s where the Culture Team comes in.
In early October I sit in a makeshift office at HQ with Dolan and Kim Perrow (we couldn’t all fit in a phone booth), the other Culture Team staffer. Dolan started out as an all-purpose Mr. Fix-It office manager two years ago, and sees his current gig as an extension of that job. Perrow was an accountant at LivingSocial before Dolan took her on last February. In front of us is an Excel spreadsheet detailing the coming month of LivingSocializing events, which span from jalapeño jelly-making to flag football to “Annual Bosses Day.” Every Sunday night, Dolan sends LivingSocial’s 900 D.C. employees an email alerting them to these happenings, which occur at least once a day. (When Dolan & Co. aren’t organizing events, they can be found overseeing their 30 or so “Culture Vultures,” employees who have volunteered to monitor the vibe of their departments.)
“I always joke that planning out LivingSocializing from day one, in a weird way, ended up mirroring a lot of our processes for planning out a city’s deal schedule,” Dolan says. “Like, if I hammered you in your inbox every day with ‘spa deal, spa deal, spa deal,’ you’d have to unsubscribe.”
Indeed, each event in the spreadsheet is color-coded to reflect the same product categories LivingSocial offers its customers, some of which in turn reflect company mottos: Appreciation/Recognition; Entertainment; Wellness; Surprise and Delight; Food & Drink. (Before 918 F runs its sausage-making or wine-tasting events, the employees perform dry runs.) “We’re obviously very passionate about our external product,” Dolan says. “And we have the opportunity to bring that to our internal audience.”
In one sense, the point is to make LivingSocial an attractive place to work. “As everyone is trying to make the company big—more markets, more products, more everything,” Dolan says, “at least part of our job is making sure it still feels like that small company.” Along with the video games and the Rice Krispie Treats, the occasional 6 p.m. group guitar lesson no doubt mitigates stress incurred during the workday. Of the handful of former employees I spoke with, the ones who were most disgruntled about puny paychecks and long hours worked in outside sales, away from the ball pit. “Working in the D.C. offices probably would have been a lot of fun,” says Tampa-based ex-salesperson Joe Sale, who quit in 2011 by mailing a garbage bag full of company materials to headquarters. “When you’re out here, you’re out here alone.”
But in another way, LivingSocializing is just another means of reinforcing the very values employees are supposed to emphasize on the job. This is most evident in LivingSocial’s editorial department, where writers and editors strive to couch the company’s core values in their copy. It’s there that LivingSocial begins to seem less like a start-up and more like a corporation, and the culture-worship starts to feel a little bit inorganic.
If you receive emails from both Groupon and LivingSocial, you’ll notice a distinct difference in tone. Here’s the photography class Groupon advertised to D.C. subscribers on Oct. 19: “Digital technology has allowed for the introduction of many new art forms, just as Leonardo da Vinci once predicted on his blog. Upload a masterpiece with this Groupon.” Now, here’s a missive from LivingSocial for a microdermabrasion service: “Living in our dear District can cause monumental stress and hairy situations. Today’s deal from Spalon is here to lobby for your relief.”
Groupon’s copy is witty and irreverent; LivingSocial’s is cheesy and inoffensive. This is by design. According to a New York Times feature on Groupon’s Chicago editorial team, scores of Second City aspirants sit around all day dreaming up the weirdest copy possible, and editors often make it weirder. They’re aiming for the Groupon “voice.” LivingSocial, on the other hand, asks that all copy fit into a four-point rubric that reflects a company slogan. It must “inform,” “entice,” “delight,” and include “local flavor.” And, as 32-year-old staff writer Isabel Galbraith explains, “delight” and “local flavor” are gradually being phased out of the equation. “We used to write opening lines that were funny and clever, little puns, or witticisms,” she says. “But in the end, we realized, it’s more like clever for clever’s sake, and now we’re trying to do more strategic marketing.”
The LivingSocial writers I meet at the editorial office in Mount Vernon Square, unlike their Groupon counterparts, aren’t given much creative license. Galbraith, who has an MFA in poetry from Ohio State, says her day job helps her work on “strong verbs” and sentence structure for when she writes poems in the morning. Erih Prah, a 25-year-old editor who graduated from Penn State with a degree in journalism, insists she’s putting the skills she learned there to good use. “Friends always ask me, are you using what you learned?” she says. “I think I definitely am, because we have our own style guide, but we definitely pull things from AP style, and basic grammar and verb usage.” Prah and Galbraith seem happy enough, but the professional toll of adhering to a certain cultural dynamic—however laid-back—seems to wear on others.
At my next LivingSocializing event, a charcoal drawing class that immerses me even more deeply than the rock climbing, I encounter a few PBR-toting members of the design team, who seem wary of the company culture. “We’ve had ‘culture fit’ firings, actually,” says graphic designer Maggie Famiglietti, who created much of the visual identity for 918 F. “So that’s like if you don’t get along well with [people].” Another employee, who wishes to remain anonymous, tells me on another occasion that “the culture is sort of ramped up in this company, whereas originally it was pretty much just a startup, [with] talented, motivated people willing to work for less pay...but to sell the culture as something that still is very much a startup culture is not really genuine, because I barely know anyone in the company.”
Sarah Ware, a former “instant deals” salesperson who left LivingSocial earlier this year to form her own startup, Markerly, noticed something similar. With LivingSocial’s rapid growth, “everything just becomes a little more monitored and scheduled, and it’s just different. When you have a startup at first, it’s ‘here’s a keg, have fun.’ But when it’s a company-company it’s ‘here’s a drink and be professional.’”
At the same time, LivingSocial is adamant about not turning into a typical corporation. O’Shaughnessy sits at a regular desk, among the plebes. “Mike,” the former employee, says former top executive Dickson Chu was let go this summer in part because his corporate style didn’t fit in. (LivingSocial says they parted ways amicably because of business reasons, suggesting he was overqualified for his job.) That muddled middle ground between startup and corporation is to some extent exemplified by the ongoing class-action lawsuit several ex-salespeople filed against the company in May, alleging that they weren’t paid overtime. Since when do people at startups ask for overtime pay? Isn’t that what the fridge beers are for?
But perhaps the best example of LivingSocial’s midlife crisis occured in mid-October, after a member of the design team invited me to a house party in Bloomingdale that some employees would be attending. The party, with its beer-pong table and baseball game on in the background, was standard D.C. 20-something fare. Within a minute of my arrival, however, someone from LivingSocial’s press office, who just happened to be there, introduced herself and promptly tried to declare the party “off the record,” even though it was at someone’s house. Happy to show off the beers in its work refrigerators, LivingSocial’s PR team prefers its extracurricular activities be blocked from view: Maybe somebody won’t be living the brand.
O’Shaughnessy, whose first job out of Georgetown was at AOL in Tysons Corner, is a perfect emblem of Washington’s mid-2000s tech scene: made in Northern Virginia. When LivingSocial announced it was weighing offers this spring to leave for more fertile economic ground, tech-mad Mayor Vince Gray feared the District would lose its very own AOL and the homegrown Tim O’Shaughnessys it might spawn. As much stock as LivingSocial places on the habits of its employees, D.C. doesn’t care what they’re up to, so long as they don’t leave. So in April, Gray proposed a $32.5 million tax incentive to keep LivingSocial local, the largest ever granted to a private corporation. Gray’s not the only one who thought a LivingSocial departure would be “devastating,” as he put it this spring. At a June D.C. Council hearing, a Virginia tech consultant equated LivingSocial’s regional importance to the Pentagon’s. More than a few of D.C.’s own tech mavens were adamant that without LivingSocial, the District would lose all the international tech cachet it has built up in the past couple years.
LivingSocial is no doubt the city’s hippest corporation—and is already the largest in the downtown business district—but the rise and fall of once-mighty Groupon should give pause to those anticipating a “thousand millionaires” windfall, à la Facebook. Besides some shady accounting tricks, Groupon has been plagued by two factors. One, increased competition has bred merchant and buyer fatigue (Google, eBay, and even Washington City Paper are in the online coupon business now). Two, as a result, Groupon has had to spend an unusually hefty chunk of its budget on marketing to keep its email list padded. Through it all, the Atlantic reported in September, Groupon’s effect on Chicago’s tech sector has been minimal.
But Groupon, at double LivingSocial’s market share, has a leg up on the hometown team. According to a February Wall Street Journal article, LivingSocial willingly accepts a smaller cut of revenues from merchants than Groupon does, in order to gain a competitive advantage on its Chicago-based rival. Indeed, says Ashley Boehler, who left sales jobs at Groupon and LivingSocial in the past year (“the daily deals industry is dead”), the company now routinely takes a 15 or 20 percent cut on most deals, well below the 30 to 50 percent splits daily deals companies are assumed to take. “Every big national deal is costing LivingSocial money,” he told me, citing an instance in which it sold one million Whole Foods vouchers in September 2011 at a 0 percent commission, purely to increase its reach. (LivingSocial didn’t comment on this, except to tell me to be wary of a former junior salesperson’s financial information.)
Add that to the company’s dismal third-quarter showing, and it’s no wonder the $32 million tax incentive rankles. (In an email to employees, O’Shaughnessy partially blamed the $566 million loss on a $496 million “write down” of companies LivingSocial had purchased.) Some argue that the money could have been used more efficiently elsewhere. Navroop Mitter, a D.C. tech denizen who runs a mobile security startup, showed me a spreadsheet he made, calculating that the cost of housing 100 different startups each year, over the course of a decade (high rent being the biggest issue for new businesses in D.C.), runs to about $6 million dollars. Following Mitter’s math, D.C. could achieve about the same job growth LivingSocial is promising, at a fifth of the cost. (Despite this, Mitter was careful to emphasize his support for the LivingSocial deal.)
Others point out that the bill plays favorites and sets up unrealistic expectations for future tech companies that try to locate in Washington. “I don’t care that they got the tax deal. I care that no one else did,” says Michael Goldstein, who runs the Georgetown tech accelerator Endeavor D.C. “That’s kind of bullshit.” O’Shaughnessy is also the son-in-law of Washington Post Co. Chairman Donald Graham, which Goldstein suggests may have aided him politically. There’s no evidence it has; the $36,000 LivingSocial spent hiring Holland & Knight to lobby for the bill probably helped more.
The most common complaint, issued vociferously by the D.C. Fiscal Policy Institute, is that the law didn’t do enough to mandate job growth. The deal, as the Office of the Deputy Mayor of Planning and Economic Development wrote it, is split in two. The property tax credit portion, worth $15 million, is contingent on the hiring of 1,500 new employees from 2010 to 2015 and the maintenance of at least 1,000 through 2025, when the credit expires. But about 1,000 of those employees have already been hired, and the company could fill the remaining spots just by losing and then hiring new employees. The $17.5 million corporate income tax credit, meanwhile, requires that 50 percent of those new employees live in the District, as the current ones do now. In other words, LivingSocial can secure most of its tax credit simply by maintaining its status quo.
What’s more, critics contend, the jobs it will bring aren’t even useful to the District’s growing tech sector. LivingSocial uses email marketing to provide customers with real-life goods and services; the platform is Web-based, but the product isn’t. “These are good jobs, but they’re not tech jobs, and don’t contribute to a tech hub,” Ken Archer wrote on Greater Greater Washington in April. “The people who fill these jobs wouldn’t necessarily work in technology firms after LivingSocial.” Equally, DCFPI argued unsuccessfully for a provision that would have required that at least 15 percent of LivingSocial’s employees work in tech, and that the company keep all of them in D.C. proper.
LivingSocial ultimately helped push Gray’s bill through in early July sans amendment, making it clear that it might bolt if even the slightest modification was introduced. But while the firm ultimately turned down better offers to stay put, it understood that the tax package looked like a sweetheart deal. In an email City Paper obtained through a Freedom of Information Act request, LivingSocial’s head of communications, Andrew Weinstein, told several DMPED officials that the firm wouldn’t agree to discuss the bill on a July episode of WAMU’s The Kojo Nnamdi Show. “The media strategy that we have discussed and implemented since day one has been to let your office and our allies in the local business/tech community (DC Chamber, Downtown BID, Tech Cocktail, etc.) serve as the primary advocates for the bill in the press, so we could position the bill as a high-level win for DC, not a handout to one company,” Weinstein wrote. “Putting a LivingSocial executive on the show for a grilling…could leave us looking self-interested and intransigent for not being willing to modify any of its positions.”
While the LivingSocial deal represents D.C.’s largest-ever tax break, it also includes some taxpayer protections. Daily deals skeptics will be relieved to learn that LivingSocial won’t earn a penny in tax credits if it fails to occupy a 200,000-square-foot property, or goes bust, before 2016 (i.e, if it “fails fast,” as a LivingSocial mantra might put it). And if it does survive past then, LivingSocial will have likely helped diversify the local economy, whether through its contribution to the tech sector, or just because of its own independence from the federal government. (To say nothing of its role in fostering the food-truck-and-Bikeshare ethos of downtown D.C.) Still, LivingSocial’s greatest impact on the District may lie elsewhere. Just as LivingSocial has prepackaged, mass-produced, and exported its internal culture to about 70 offices worldwide, it also wants us to accept its own wholesome, curated idea of what it means to live their brand. In the same way that Google has become our one-stop shop for news, reference, and e-communication, LivingSocial aims to make itself indispensable to our social lives. (Fifty thousand people have walked through the doors of 918 F Street since it opened in February.) By succumbing to its particular vision of fun, we may all soon be LivingSocial one way or another.
In late September, Tim O’Shaughnessy announced that LivingSocial would pay for late-night Metro service running out of Navy Yard after any Washington Nationals playoff games that ran past midnight. (The team refused to pay, demanding the city cover the tab, and O’Shaughnessy stepped in to break the impasse.) The move heralded the company’s official status as an all-purpose middleman for local commerce. Though O’Shaughnessy didn’t end up paying a dime for it, the Metro deal in some ways branded D.C. as a LivingSocial town as much as the tax break did. To have fun in D.C., the announcement suggested, you’ll be going through LivingSocial.
After the press conference, I follow O’Shaughnessy and his two communications gurus into the Navy Yard Metro station, feeling somewhat unwelcome. Once we board the train, I attempt some chitchat, not knowing if it’ll be my only chance to talk to the CEO.
WCP: What are you tweeting about?
O’Shaughnessy: If you followed me, you would know.
OK, then. Radio silence for the rest of the ride to L’Enfant Plaza, at which point it appears the trio tries to lose me. I catch up just in time to follow them onto the Orange Line. Trying to keep it light, I make a joke about LivingSocial’s 918 F sausage-making classes, telling him we don’t want to know what goes into a sausage. Somewhat robotically, O’Shaughnessy answers that the sausage-making classes have been selling well.
O’Shaughnessy: I have actually bought tickets to events at LivingSocial. I think I’m actually probably one of our better customers.
WCP: How many events have you been to?
O’Shaughnessy: I mean, it’s beyond events. Through our takeout and delivery, I probably order about five times a week.
O’Shaughnessy: Yeah. Gotta eat. It’s convenient, great options.
All true. I try a new strategy.
WCP: What really distinguishes 918 F—and that’s really emblematic of your approach—is that it’s not just really about deals, it’s about engaging with the community.
O’Shaughnessy: We could be a very powerful force in the city, and you know, that requires people to believe in us.
At one point, it occurs to me to ask what his favorite office is—there are six of them, after all. Spokesman Lewis cuts in: “They’re all your beautiful children.”
“I know,” O’Shaughnessy adds. “I love all God’s children.”