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:
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.
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.
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.
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.
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.
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.
They dramatically changed their business model twice. The second change was less dramatic in direction, but more dramatic in that the business had much more inertia.
That's the point of the post, and it's an impressive achievement. Read Tony Hsieh's (Zappos) "Delivering Happiness" if you want to appreciate how hard it is to build a business on drop-shipping, and how hard it is to move to full inventory.
I realize this isn't a battle worth fighting, but everyone needs to stop being pedantic over the use of the word "pivot". It had meaning before Eric Ries used it, and it will continue to have intrinsic meaning no matter how narrowly it's defined in the context of the Lean Startup movement. The business changed directions. Let the man call it a pivot.
It's a natural evolution for an online store to shift from drop ship to inventory as they get a better understanding of demand and the capital/scale to do so. It's not a pivot.
Can you please respond to the accusations of spam, above? I, too, have suddenly started receiving email from Fab even though I've opted out repeatedly.
I really hope this is a mistake and not part of this third "pivot".
Actually, no, I'd really like for you to address this in public. You offered to answer any/all questions, right? The highest voted comment in this thread is https://news.ycombinator.com/item?id=4918790, which is the one that is accusing you of spam. That guy received the Aston Kutcher spam despite having opted out of everything (as did I); can you respond to him, please?
[BTW, you might want to be careful with the celebrity endorsement. I can't think of a celebrity I find more noxious than Kutcher, so attaching his name to Fab makes me much much less likely to buy anything from you again. Especially when you're forcing that association into my inbox. Blech.]
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.
You mention a custom built supply chain tech and strong mobile/ecommerce sales. You also share a lot of stats and operational details about the biz on your blog. Would you consider encouraging your tech team to be similarly open? Blogging, open sourcing code, conferences/presentations.
Do you think Fab's time as a gay social network was important to getting a critical mass on-board for the Fab design site? Meaning, if you launched day one as a cool place to shop do you think you would have found the same success, at least as easily?
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
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.
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!
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...]
Unsubscribed again- hopefully this time it's permanent. It appears I am not alone, either:
https://twitter.com/search/realtime?q=%40fab+spam&src=ty...