Should we have empathy for LivingSocial CEO Tim O’Shaughnessy for assuming the mantle of corporate executive punching bag?
It has been a tough week for Tim and his daily deal gang. After announcing a new round of $110M in financing, the terms of the transaction were blistered in a report issued by a relatively obscure financial data company called PrivCo.
In its analysis, PrivCo throws around loaded words like “desperate”, “emergency infusion”, “total collapse” and “final gasp.”
O’Shaughnessy responded yesterday in an internal memo published by the Washington Business Journal that clarifies the terms of the financing and eloquently points out that the folks at PrivCo are liars and dunces. Here are notable points from O’Shaughnessy’s memo:
–The transaction was an equity round, not a debt infusion.
–The quotes from a “senior LivingSocial communication executive” included in the PrivCo report are straight up fiction.
–Two of the three investors listed on the PrivCo site as participating in the round didn’t participate, and one isn’t even an investor in the company.
The damage is done though. That’s because a LivingSocial customer, partner, employee, vendor or creditor who reads (or is even aware of) the report is most likely left with one unsinkable thought: perhaps it’s time to sever the relationship.
I have a couple of take-aways from O’Shaughnessy’s experience:
1. If you put yourself out there as an innovator and thought leader, you need to accept and be prepared for shots (both legitimate and cheap) when you stumble. And yes…we all stumble.
2. Maintain intimate channels of communication with your most important audiences. In addition to his well crafted memo, I suspect O’Shaughnessy and other members of LivingSocial’s executive team have spent time on the phones and in meetings with customers, employees and investors.
3. Keep it real and simple in your messaging. O’Shaughnessy’s memo is personable and in plain English. It’s well played! So much of communication (sales, marketing, social, etc.) is loaded up with jargon and corporate babble. All that crap does is lessen the credibility of the source.
UPDATE (FEBRUARY 26)
PrivCo has issued a new press release that defends its original report about and assessment of LivingSocial’s recent capital raise. Here’s a link.