Are LivingSocial and Entertainment720 the same company? An Isolation Cabin investigation.
DC-based conglomerate LivingSocial will lay off roughly 400 of its employees to focus on its bottom line and “enter 2013 with a growth strategy,” founder and chief executive, Tim O’Shaughnessy, announced earlier this week.
Many news outlets cited LivingSocial’s seemingly reckless spending habits and frivolous employee benefits for the company’s low earnings. Headquartered in Washington, DC, LivingSocial lost $558 million on revenue of $245 million in 2011, according to The Washington Post. The layoffs represent nearly 10% of LivingSocial's staff.
How exactly does a company lose that much money throughout the course of the year and not reevaluate its business practices? In brings to mind a certain multi-media conglomerate based in Pawnee, Indiana that quickly went under due to a complete lack of oversight, fiscal responsibility, focus, and also the fact that they just gave away iPads to anyone who walked in the door. So, Isolation Cabin investigates: Are LivingSocial and Entertainment720 actually the same company? Let’s compare.
Last February, LivingSocial bought and remodeled a six-story office building in DC’s Penn Quarter to house events and classes. Then, in April, LivingSocial moved into its sixth office building near the convention center. One Washington Post article described LivingSocial’s headquarters as not “just a place where LivingSocial’s employees can enjoy playthings like a ball pit (it already has one)...but somewhere that provides everything its 20-something employees want.”
Entertainment720 also boasted sleek offices with expensive, one-of-a-kind furniture, and plenty of toys to entertain its young, attractive employees. Both companies seem to have the same taste in interior design: modern hedonism. With so many distractions, staff members failed to complete their work and productivity declined.
As Ben Wyatt, a consultant for Entertainment720, describes: “Literally there’s someone reading a magazine and someone applying nail polish. What.. What is she doing? She’s just playing with an iPad. Tom told me that chair was $27,000. That chair that has a roof. There’s someone over there in a deep sleep; she’s probably being paid upwards of $100,000 a year. There’s just a video of a boat. Look at that thing, what is that? What are you supposed to do with that thing?”
Furthermore, both companies also began with a clear, simple vision, but seemed to rapidly expand beyond their organizational capacities.
In the words of Entertainment720’s co-founder, Jean-Ralphio Sapperstein, “I know what you’re thinking. How is possible to be the best at all these things? Aren’t you spreading yourself a little thin? Nope.” The organization went bankrupt one week later.
LivingSocial started as a daily deal distributor, rapidly evolving and expanding to loosely associated industries. It launched Adventures, Escapes, an events venue, an online takeout terminal, and the (now defunct) blog responsible for the viral video ‘Shit People in DC Say.’
Entertainment720, on the other hand, offered the following services:
Create Youtube videos your kids actually watch
Will write your Tweets and your Facebook statuses
Memorial videos for pet funerals (Dogs, cats, fish, pigs, tiny horses, giant lizards, you name the animal)
Wild West sepiatone photographs
Install a state-of-the-art sound system in your home without you asking for it and watch The Fast and the Furious to test it out, or any Paul Walker movie you want
Build a tiny go-kart for your grandmother
Make your bed and sleep in it for a week to break it in
I'm pretty sure you can find a LivingSocial deal to all of these. I already have.
