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A few short years ago, LivingSocial was the pride of the D.C. tech scene. The web coupon shop gobbled up young talent and downtown real estate, opening up a metastasizing array of offices with such amenities as a speakeasy and a ball pit. Mayor Vince Gray could hardly make a speech without delivering a triumphant applause-inducing line about the company’s success.
And then it all came crashing down. LivingSocial posted nine-figure losses in 2012 and 2013. Layoffs followed layoffs. Plans for a big headquarters in a forthcoming New York Avenue NW development were scrapped, and then existing offices began to close.
But what might have seemed like a huge loss for D.C.’s burgeoning tech scene actually presented an opportunity for other startups—-firms that may have a brighter future than LivingSocial.
Take Tahzoo. The four-and-a-half-year-old company, which manages customer experience for Fortune 500 firms, officially opened the doors to its new headquarters this week, at 1005 7th St. NW. The LivingSocial sign that used to adorn that building’s facade is gone, replaced by a faux-cursive “Tahzoo.”
Entering the office prior to the Wednesday open house, the first thing I hear is the unmistakable pop of a ping-pong ball. Tahzoo CEO Brad Heidemann is wrapping up a game with his brother, also a Tahzoo employee. The new space is much larger than the Georgetown office from which Tahzoo moved—-about 12,000 square feet, versus 3,300—-giving the 50 workers at the headquarters much more room to spread out and finally making room for the all-important ping-pong table.
Tahzoo’s still getting set up at the new office. But there wasn’t all that much work to do. The company put in a few new walls and added couches and other furniture. “They were a little more, white desks and phones for everyone,” Heidemann says of LivingSocial. Mostly, though, the space, leased from LivingSocial, was ready-made for a tech company to move in.
When I ask Heidemann whether LivingSocial’s consolidation and departure from the 7th Street building helped his company out, he gives me a look that says, That’s a dumb question. “I got Class A space at a fraction of the price, and I didn’t have to do any work building it out!”
Tahzoo looked at office space in Dupont’s iStrategyLabs and Georgetown’s Papermill. “But to be honest, we saw this space, and we’re like, ‘We’re done,'” Heidemann says.
Other tech companies have filled the LivingSocial vacuum as well. The retail software firm Optoro moved into the old LivingSocial building at 702 H St. NW. Contactually, a customer relations management startup, occupies the first floor of the 7th Street building, below the upper two floors Tahzoo calls home. The innovation lab of ECMC, which guarantees federal student loans, is in the process of moving into a 3,000-square-foot third-floor space next to Tahzoo on 7th Street—-not technically a former LivingSocial space, but one the company would likely have occupied had the grand-headquarters plans come to fruition.
The Gray administration established a “Digital DC” tech corridor along 7th Street and Georgia Avenue NW earlier this year to promote tech growth there. Tahzoo and ECMC are geographically eligible for grants through the program, but neither has received one—-a sign that at least some tech companies can flourish on the corridor without government assistance. Heidemann says he just applied for a grant, though, and expects to get it. He’ll use some of the funds to install showers for his employees who bike to work.
And he plans to expand. Heidemann is currently hiring for 25 new positions and thinks he can accommodate up to 120 people in the space. But eventually, he hopes to take over the whole building—-just like LivingSocial once did.
Photos of the Tahzoo headquarters by Aaron Wiener