LivingSocial's Tim O'Shaughnessy on the Power of Decisions In 'Trep Talk, the co-founder and CEO shares his most important business lesson and why he believes in moving fast and pushing the envelope.
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Tim O'Shaughnessy's spirited approach to business belies his small-town roots. The co-founder and CEO of daily deals giant LivingSocial grew up in Apple Valley, Minn. (population: approximately 50,000), as the youngest of four siblings in a typical suburban family. His mother was a pre-school teacher, while his father ran a small business. Although he may not have imagined back then that he'd be leading a company to blockbuster success, O'Shaughnessy says he knew early on he had a penchant for problem-solving.
"You know those logic puzzles? I loved to do those, even in elementary school," recalls O'Shaughnessy, now 30. "I'm really good at interpreting data and detecting trends."
It is a strength that would serve him well in business. After graduating from Georgetown University, O'Shaughnessy managed product launches at AOL, where he would meet Steve Case, an early investor in LivingSocial. When Case started his next company, Revolution Health, O'Shaughnessy led the consumer products team there before striking out on his own with three colleagues in 2007. They started an app developer on Facebook called Hungry Machine, but later evolved into a daily deals site and rebranded as LivingSocial.
Today, the Washington, D.C., based company has about 5,000 employees serving 67 million members in 25 countries. While the company declined to provide financials, LivingSocial has reportedly raised $600 million in venture capital at a valuation topping $3 billion, according to published reports and industry estimates.
In this interview for 'Trep Talk, O'Shaughnessy shares his insights on the importance of moving fast, never waffling on tough decisions, and pushing the envelope. Edited interview excerpts follow.
'Aha' moment: It was really with Facebook opening its platform in 2007, where third parties could build applications. I remember thinking 'Wow, you can access users and create a user base of people faster and cheaper than you ever could at any other point in time on the web.' We thought that was really powerful and we could create a business out of the social space. That kind of set us in motion.
If I knew then, what I know now... I would have gone even faster. When you're helping to build a new market, the early-mover position is really important. We move fast, but we could have gone faster to put us in an even better position. It was within our grasp, but we hemmed and hawed about how much to accelerate the business. We lost about six months because of that.
Hiring tip: Spend a lot of time with people and make sure they get along not just with you, but also the people they're going to work with. When you're a small company and a person doesn't work well with other people and therefore becomes a low performer, that's a tough situation to be in.
Biggest business lesson: More is lost in indecision than the wrong decision. It's not about being reckless or cavalier, but don't spend lots of time agonizing over this or that because you'll end up losing ground or frustrating people.
Competition…can be helpful in establishing and building a category. That said we want to beat our competition. We want to them so far in our rear-view mirror that we can't see them anymore. If you don't have that mentality, I'm not sure you have the stomach for your business.
Data decisions: There are an infinite number of stats, so you could end up putting too much emphasize on the wrong metrics. There's a 90/10 rule that fits: Figure out what the 10% of the stats are that will give you 90% of the information you need to evaluate performance.
I admire… Jeff Bezos and how he had a vision and was willing to go after it in the face of investors and pundits saying otherwise. I admire Warren Buffet for how he thinks about and evaluates businesses and opportunities. More recently, Mark Zuckerberg has done a fantastic job of having a longer term view in what he's going for and not being dissuaded by criticisms. He's proved a lot people wrong and I think that will continue to be the case.
On naysayers: It's human nature to want to criticize and see people and organizations fail, which is an interesting phenomenon. You can't change human nature. Once you realize that, you just don't care anymore.
When pitching investors…clearly identify the problem and how you propose solving it -- in 30 seconds or less. It needs to be that simple, where you can say: 'This happens in real life. This sucks. We can make it better for people and here's how. The end.' Then you can go into what you're going to do and the capital you need.
Three must-reads: Buffett: The Making of an American Capitalist by Roger Lowenstein is a fantastic book about how Warren Buffet started and how he thinks about things. Founders at Work: Stories of Startups Early Days by Jessica Livingston offers insight into founder dynamics, how you scale an organization and make decisions around exits. If you're interested in leadership, Roosevelt is one of the more interesting characters in American history. The Rise of Theodore Roosevelt by Edmund Morris shows how he thought about leadership and motivated people at an early age.
Startup tip: If you're not making one or two hard decisions every month that you're genuinely struggling with, you're probably not pushing the envelope or trying hard enough. The easy decisions are easy for a reason.