5 ms·

Fab's Second Pivot

44 points by taylorbuley 14y ago

ew 14y ago
Hey @betashop, would love to know some of the numbers on burn when you launched. Eg. how much marketing spend occurred to get that $10m in sales your first year? Also lines like 25% higher gross margins doesn't really indicate if that means it's making you money or not. I'd be grateful if you could let us know some more info. Thanks!
deleted 14y ago
[deleted]
citricsquid 14y ago
What's the difference between pivoting and evolving? Does it have to do with the goals of the company changing, or something else?
- dabeeeenster 14y ago
  There isn't, it's just that one is a buzzword and the other is what normal successful companies do.
gilrain 14y ago
They're going to reveal their pivot in 2013. No need for anyone else to waste time reading to the bottom to find that out, like I did.
ghc 14y ago
I feel like they don't know what pivoting means. The first pivot doesn't sound like a pivot; they built a new business with the same venture money. The second pivot isn't a pivot either. I think reasonable people would call that "growth and expansion." Pivoting is supposed to mean that you changed strategic direction based on validated learning. Twitter and Instagram started as pivots. This sounds nothing like that.
- jonathanjaeger 14y ago
  They did notice that the design aspect of their previous site was a differentiating factor and extrapolated on that, but I agree it wasn't a pivot.
- mikeryan 14y ago
  I agree the second "pivot" doesn't sound like a pivot, However w/r/t The first pivot doesn't sound like a pivot; they built a new business with the same venture money. That sounds like a pivot, the way I define it. I agree most pivots do have some tangential relationship from the previous goal thats because you learn where the market is from what you've done. Thats not to say its the only way to find a new market opportunity. I'm not sure why you define Twitter as a pivot and not Fab. Twitter was Odeo which was a podcasting company which was sinking. Evan Williams had blogging experience but Jack Dorsey (as I understand it) was the original idea guy behind Twitter. A lot of pivots aren't related to the original idea that founded the company. For the VCs doing something else with that money is almost more important then just continuing to chase an idea without legs, since once the money is invested they can't reinvest in new ventures.
  - o_sam_o 14y ago
    Moving away from flash sales could be considered a pivot. They may have discovered others (i.e. Gilt) where buying up all the good seconds, or that their buyers where buying the wrong thing and their flash sales where not selling out.
- IsaacL 14y ago
  Pivoting is a random-restart hill climbing algorithm. If you change strategic direction but remain in the same space, that's climbing the hill. If you change to a completely different idea, that's random restart.
untog 14y ago
Presumably their second pivot involved buying an e-mail list from someone, or reactivating deactivated accounts. I started receiving newsletters from them (Ashton Kutcher's favourite gifts? Well, if I wasn't already going to unsubscribe...) on the 11th, and again yesterday- the last e-mail I received from them before then was in September '11. Unsubscribed again- hopefully this time it's permanent. It appears I am not alone, either: https://twitter.com/search/realtime?q=%40fab+spam&src=typd https://twitter.com/search/realtime?q=%40fab+spam&src=ty...
- omfg 14y ago
  They don't seem to honor unsubscribe requests as the mails keep coming.
- nwh 14y ago
  I too, have no idea how I ended up on their mailing list. I certainly never gave them the address they emailed me at.
whalesalad 14y ago
A ninety day pivot exercise followed by that kind of success and growth is extremely motivating. Glad to see this on the homepage!
betashop 14y ago
Hi. @betashop here, CEO of Fab. Happy to answer any/all questions. With regards to the "was it a pivot" comments below. Fab was first fabulis, for 13 months. We built a ton of product and a small but loyal following. We then shut it down to pursue our passion. That's a pivot. Regarding Fab's 2nd pivot in 2012, we pivoted our business from a drop-ship model to an inventory model. That's quite a pivot.
- scottrblock 14y ago
  I don't think "shutting down to pursue a passion" is what most of HN considers a pivot. A pivot is named as such because your business is keeping one foot in the ground while changing direction. This is done after testing your initial assumptions, normally with no more than an MVP. This might just be semantics, but it seems like a significant difference to me.
  - gojomo 14y ago
    Sometimes the "one foot in the ground" is only the team, as they chase a completely different product and market.
- proee 14y ago
  What was the driving factor to change from a drop-ship company to inventory based? Seems ideal if you can keep everything drop-ship to avoid the capital expense related to managing all your products.
  - snuze 14y ago
    I remember ordering a mug from fab and it took a noticeable amount of time to arrive (weeks). Perhaps they are trying to improve that.
- dusing 14y ago
  Stop saying pivot, it doesn't mean what you think it means.
proee 14y ago
Why did Fab succeed? Why would someone shop here instead of say Amazon? I don't understand the reason for the huge growth and expansion. What problem are they solving that is creating such huge growth? Very Impressive, but I don't understand WHY they are successful.
- dusing 14y ago
  I would ay its curation. Sure amazon may have all this stuff (probably not) but Fab only shows you "cool" stuff. Thats also why I like http://thefancy.com http://thefancy.com
  - hglennrock 14y ago
    Yes, this. I never browse Amazon - I am always searching for a specific item. Fab is the opposite experience. I could spend hours just browsing. It is dangerous. I've told my boyfriend that if he is ever at a loss for a gift idea, just go to fab.com and pick something at random and there is a 99% chance it would work out.
- o_sam_o 14y ago
  Amazon does have an offering in this space: http://www.myhabit.com http://www.myhabit.com
arbuge 14y ago
I wonder what they're doing about patent trolls and what their lawsuit/settlement stats are. I'm sure they're getting plenty of them nipping at their heels. Maybe they agreed to sign non-disclosures or something. [I have patent trolls on the brain after reading various HN articles on the topic of late...]
therandomguy 14y ago
We just call it introducing new product lines and/or expanding business.
parfe 14y ago
30 comments discussing the nuances of the buzzword "pivot".

44 points by taylorbuley 14y ago

ew 14y ago

Hey @betashop, would love to know some of the numbers on burn when you launched. Eg. how much marketing spend occurred to get that $10m in sales your first year? Also lines like 25% higher gross margins doesn't really indicate if that means it's making you money or not. I'd be grateful if you could let us know some more info. Thanks!

deleted 14y ago

[deleted]

citricsquid 14y ago

What's the difference between pivoting and evolving? Does it have to do with the goals of the company changing, or something else?

dabeeeenster 14y ago
There isn't, it's just that one is a buzzword and the other is what normal successful companies do.

gilrain 14y ago

They're going to reveal their pivot in 2013. No need for anyone else to waste time reading to the bottom to find that out, like I did.

ghc 14y ago

I feel like they don't know what pivoting means. The first pivot doesn't sound like a pivot; they built a new business with the same venture money. The second pivot isn't a pivot either. I think reasonable people would call that "growth and expansion." Pivoting is supposed to mean that you changed strategic direction based on validated learning. Twitter and Instagram started as pivots. This sounds nothing like that.

jonathanjaeger 14y ago
They did notice that the design aspect of their previous site was a differentiating factor and extrapolated on that, but I agree it wasn't a pivot.
mikeryan 14y ago
I agree the second "pivot" doesn't sound like a pivot, However w/r/t The first pivot doesn't sound like a pivot; they built a new business with the same venture money. That sounds like a pivot, the way I define it. I agree most pivots do have some tangential relationship from the previous goal thats because you learn where the market is from what you've done. Thats not to say its the only way to find a new market opportunity. I'm not sure why you define Twitter as a pivot and not Fab. Twitter was Odeo which was a podcasting company which was sinking. Evan Williams had blogging experience but Jack Dorsey (as I understand it) was the original idea guy behind Twitter. A lot of pivots aren't related to the original idea that founded the company. For the VCs doing something else with that money is almost more important then just continuing to chase an idea without legs, since once the money is invested they can't reinvest in new ventures.
- o_sam_o 14y ago
  Moving away from flash sales could be considered a pivot. They may have discovered others (i.e. Gilt) where buying up all the good seconds, or that their buyers where buying the wrong thing and their flash sales where not selling out.
IsaacL 14y ago
Pivoting is a random-restart hill climbing algorithm. If you change strategic direction but remain in the same space, that's climbing the hill. If you change to a completely different idea, that's random restart.

untog 14y ago

Presumably their second pivot involved buying an e-mail list from someone, or reactivating deactivated accounts. I started receiving newsletters from them (Ashton Kutcher's favourite gifts? Well, if I wasn't already going to unsubscribe...) on the 11th, and again yesterday- the last e-mail I received from them before then was in September '11. Unsubscribed again- hopefully this time it's permanent. It appears I am not alone, either: https://twitter.com/search/realtime?q=%40fab+spam&src=typd https://twitter.com/search/realtime?q=%40fab+spam&src=ty...

omfg 14y ago
They don't seem to honor unsubscribe requests as the mails keep coming.
nwh 14y ago
I too, have no idea how I ended up on their mailing list. I certainly never gave them the address they emailed me at.

whalesalad 14y ago

A ninety day pivot exercise followed by that kind of success and growth is extremely motivating. Glad to see this on the homepage!

betashop 14y ago

Hi. @betashop here, CEO of Fab. Happy to answer any/all questions. With regards to the "was it a pivot" comments below. Fab was first fabulis, for 13 months. We built a ton of product and a small but loyal following. We then shut it down to pursue our passion. That's a pivot. Regarding Fab's 2nd pivot in 2012, we pivoted our business from a drop-ship model to an inventory model. That's quite a pivot.

scottrblock 14y ago
I don't think "shutting down to pursue a passion" is what most of HN considers a pivot. A pivot is named as such because your business is keeping one foot in the ground while changing direction. This is done after testing your initial assumptions, normally with no more than an MVP. This might just be semantics, but it seems like a significant difference to me.
- gojomo 14y ago
  Sometimes the "one foot in the ground" is only the team, as they chase a completely different product and market.
proee 14y ago
What was the driving factor to change from a drop-ship company to inventory based? Seems ideal if you can keep everything drop-ship to avoid the capital expense related to managing all your products.
- snuze 14y ago
  I remember ordering a mug from fab and it took a noticeable amount of time to arrive (weeks). Perhaps they are trying to improve that.
dusing 14y ago
Stop saying pivot, it doesn't mean what you think it means.

proee 14y ago

Why did Fab succeed? Why would someone shop here instead of say Amazon? I don't understand the reason for the huge growth and expansion. What problem are they solving that is creating such huge growth? Very Impressive, but I don't understand WHY they are successful.

dusing 14y ago
I would ay its curation. Sure amazon may have all this stuff (probably not) but Fab only shows you "cool" stuff. Thats also why I like http://thefancy.com http://thefancy.com
- hglennrock 14y ago
  Yes, this. I never browse Amazon - I am always searching for a specific item. Fab is the opposite experience. I could spend hours just browsing. It is dangerous. I've told my boyfriend that if he is ever at a loss for a gift idea, just go to fab.com and pick something at random and there is a 99% chance it would work out.
o_sam_o 14y ago
Amazon does have an offering in this space: http://www.myhabit.com http://www.myhabit.com

arbuge 14y ago

I wonder what they're doing about patent trolls and what their lawsuit/settlement stats are. I'm sure they're getting plenty of them nipping at their heels. Maybe they agreed to sign non-disclosures or something. [I have patent trolls on the brain after reading various HN articles on the topic of late...]

therandomguy 14y ago

We just call it introducing new product lines and/or expanding business.

parfe 14y ago

30 comments discussing the nuances of the buzzword "pivot".