THE BIG NEWS.
Just a few days after our 2nd birthday, we’re thrilled to announce that Fab has closed $150 million in new funding in the first tranche of our Series D round of financing. This $150 million is the first part of a larger Series D round that we expect will be completed over the next few months. Fab has now raised more than $310 million since our inception. This new round of financing helps us execute on our long-term vision of being the world’s design store.
Even though we are still in the midst of finalizing additional participants in our Series D round, we wanted to go ahead and make public this first $150 million closing now because we are excited to announce that Tencent has become one of the strategic investors in Fab. Tencent will also appoint a director to our Board.
Tencent is one of the world’s largest providers of comprehensive Internet services with 825 million QQ instant messaging MAU and 194 million Weixin and WeChat combined MAU (MAU represents the monthly active user accounts as of the end of the first quarter in 2013). Tencent is the third largest Internet company in the world, with a market capitalization of $73 billion (as of 11 June 2013).
[Here are some third-party charts on Tencent’s WeChat growth.]
Fab is excited to work with Tencent to bring Fab to millions more people around the world. We specifically sought out a strategic partner like Tencent because we are intent on bringing Fab to many new markets. We believe that design is a universal language and we are confident that we can bring Fab’s unique products to millions and millions of people worldwide.
Fab also welcomes another new strategic investor, ITOCHU Technology Ventures. Fab’s existing investors, Atomico, Andreessen Horowitz, Menlo Ventures, RTP Ventures, Pinnacle Ventures, Lars Hinrichs, and Docomo Capital also participated in this latest round of financing.
THE BIG FAB IDEA: EMOTIONAL COMMERCE.
Fab is already well on our way to being the world’s greatest design store.
But Fab’s long term ambition is to be the worldwide leader in Emotional Commerce.
There are currently only four e-commerce companies in the world that are valued at more than $10 billion: Amazon, Alibaba, eBay, and Rakuten. We believe that Fab has a legitimate chance to be the fifth by leading in Emotional Commerce.
Differing from the “commodity commerce” players, Fab is the pioneer in Emotional Commerce, helping people discover and buy the meaningful stuff in their lives, like the chairs they sit on, the table they dine at, the plates they eat from, the glasses they drink out of, the pen they write with, the notepad they write in, the art on their walls, the bracelet on their arm – the emotional products in their lives. That’s Fab.
I want to be really clear on this as I’m sure there are skeptics who will ask and wonder why Fab needs so much money. Fab is focused on the long term. We are focused on creating “Wow!” shopping experiences that will result in customers making 20+ purchases from Fab within a couple of years. We are focused on being the global brand that represents emotional commerce for decades to come. Fab is not about a single transaction. Fab is about creating Wow! experiences in everything we do, from the unique merchandise we offer, to the user experience on our website and mobile apps, to fast delivery and a delightful out-of-box experience, to the follow-on customer service. We truly believe that it takes investing in Wow! in order to build the next $10B+ E-commerce company, and that’s what we’re doing.
[BTW: to put all this in perspective, Amazon has raised a total of $5.3B in equity and debt since 1997. Building a large e-commerce business is capital intensive, but there are several winner-take-all opportunities and Fab hopes to capitalize on at least one of those in the global market for emotional products.]
We have a very simple yet powerful 4 point formula at Fab:
Some additional background on Emotional Commerce:
The first wave of e-commerce — which was dominated by Amazon — was all about bringing commodity products online. We call that wave: Commodity Commerce. The fundamental principles of Commodity Commerce are selection, price and speed: the biggest product catalogue, at the best prices, delivered as quickly as possible. It’s Walmart online. It’s Target online. It’s Best Buy online. It’s your drugstore online. It’s the Amazonification of commodity retail. It’s convenience shopping for the products people already know they need. And it is perfect for when consumers already know what they are looking for and what matters most is price and convenience. Examples: books, music, electronics, shoes (your size doesn’t change), underwear (ideally your size doesn’t change very often), dry goods, tools and hardware, toys, and office supplies.
Amazon has successfully executed a winner-take-all strategy in Commodity Commerce by investing heavily in the supply chain of massive selection. That’s the same play that Alibaba has run in China, and Rakuten has run in Japan.
The second wave of e-commerce — which is a battle between Apple, Amazon, Netflix, Google, and others — is the digitization of media: Digital Commerce. Books. Music. Movies. TV. Video.
The third wave of e-commerce is all about bringing emotional purchases online. Non-commodity products represent more thoughtful purchase decisions. That’s exactly what we do at Fab. That’s Emotional Commerce. Emotional commerce involves categories like furniture, home accessories, home textiles, fashion, art, and jewelry. These are categories where people care about having something special in their lives.
We believe that the following principles will carry the day in Emotional Commerce:
Here’s why this brand building matters. 50% of Fab’s sales are in home categories. Furniture. Lighting. Textiles. When people buy home products online, they want to know that there’s a solid and respected brand behind it — and they also want to be inspired by that brand. People get excited by and want to be associated with brands that are sharp, modern, colorful, edgy, and aspirational. (See: Apple, Target, Kate Spade). Brands will have to take care to have a consistent point of view and to honor and nurture the trust relationship between them and their customers. Brands will also need to have patience and staying power.
For example, customers likely won’t buy big ticket items such as furniture during their first purchase with us. But, if we treat them well and wow them at every turn, we can walk them down a path towards turning to us in trust when they are ready to make a furniture purchase online. At Fab we find that furniture transactions happen most often after a customer’s fifth or sixth purchase. Nurturing the Fab brand is vital to our being there when the customer is ready. Today, 5% of Fab’s customers have made a furniture purchase from us. That’s both big and the start of things to come. We know that building the Fab brand is key to enabling more and more people to trust and desire to buy furniture from Fab. That’s why one of the things we’re focused on is acquiring lifetime customers; customers that will go on to make 20+ purchases from Fab.
That’s the sort of emotional bond we strive to build with our customers, such that they rely on us for their lifestyle purchase decisions.
IT’S ALL ABOUT CREATING WOW!
To sum up this whole emotional commerce thing, the way we see it, Fab is in the business of creating Wow!
If we create Wow! every day for our customers, then we will create lots of value over time for our design partners, our employees, and our shareholders.
At our all-company meetings and in investor discussions, I’m now famous (or infamous?) for repeating the same line over and over again: “I don’t give a shit if we sell $200M this year or $300M this year, what I care about is that we wow our customers everyday and build a brand for the decades. If we do that, we’ll create an amazing business that people love, and in doing so we’ll make plenty of money over time. Wow first, money second.”
2 YEARS INTO CREATING WOW!
And, we’re just getting started.
WHAT’S FAB GOING TO DO WITH ALL THS MONEY?
Again, it all goes back to creating Wow!
At the beginning of 2012 it took an excruciatingly long 16 days - on average - from time of purchase to our shipping a product. Today, 75 percent of Fab’s orders ship within 24 hours of purchase. This massive change happened by investing in technology and supply chain and logistics, and by taking inventory and stocking it in our own Fab-operated warehouses. We’ll be investing in additional enhancements to our supply chain, logistics, customer service, technology, and merchandising. In 2013 we’ll open up our own new Fab-operated warehouse in The Netherlands to serve our 3.5 million European customers. In 2014 we’ll open up our 2nd Fab-operated warehouse in the U.S., in the Las Vegas area to help us better serve the west coast.
Another big area of investment we’re making is in developing products that are 100% exclusive to Fab. We’re working closely with our 15,000+ design partners to collaborate on designs that have never been sold before. Instead of hiring hundreds of in-house designers, we’re empowering an ecosystem of thousands of makers – shining a spotlight on their products and then helping scale up their businesses. Our message to designers is simple: Designers design; Fab will help you manufacture, distribute, and grow. We’re also investing in our own line of user-designed custom furniture, Fab Designed By You, which enables anyone to easily design their own tables, shelves, benches, and more.
We’re also investing more in mobile and social. As noted, today 35% of Fab’s sales are via mobile apps and we see highest conversion rates, satisfaction rates, and lifetime value amongst our mobile members. We’ll be unveiling several new innovations there in the coming months, so keep an eye out.
And, finally, we’re investing in our international growth. Fab is democratizing design with no borders. Everyone everywhere benefits from great design. We want Fab to truly be a global brand. In the coming months we’ll be working on rolling out Fab to even more countries. Our aim to enable people all over the world to bring a little Fab into their life, and in doing so to spread great design to people all over the earth like never before.
RAISING MONEY IS A RESPONSIBILITY, NOT A SUCCESS.
There are some who will call us a success because of this fundraise.
They’ll say we’re worth billions.
And, of course, there are some who will call it a bubble.
We know that the truth is that raising money is not success. Raising money is a responsibility that opens up new opportunities. We take our responsibility at Fab very seriously. We are setting out to build the best designed website and apps, selling the best designed merchandise, with the best designed logistics, customer support, and supply-chain, and backed by the world’s best team of employees, designers and investors. We’re just fortunate to have this amazing opportunity. It’s humbling. It’s inspiring. It’s emotional. Thank you everyone for believing in us. We want to extend a special thank you to our design partners – all 15,000+ of you – for working with us. Our success is your success. We are committed to building this together.
We promise to keep learning, listening, and trying our best to make Fab worthy of the investments in our vision and future that we have been so fortunate to receive.
Oh, and it only gets harder, not easier. Anyone who thinks Fab is taking a victory lap has it all wrong. The pressure is greater than ever for us to succeed. And that’s a good thing. At Fab, one of our core values is that we celebrate our challenges. Bring it on.
Smile, you’re designed to.
As an editor at Fab, I see a lot of fun, quirky, innovative, and exciting designs. Actually, I see a lot of designs, period—over the course of an average week, I’ll read copy that describes at least 900 different items. But it’s not every day that one of those items was designed by a member of my family.
I was editing the copy for the Auroras Dagger sale in tonight’s Vintage shop when a phrase jumped out at me: Nathan George Horwitt Clock. Excitedly, I opened the images folder and scrolled through lamps, tableware, cameras, and hat boxes, until I found what I was looking for—Uncle Nat’s clock, also known as the Movado Museum Watch.
Uncle Nat is actually my Great Grand-Uncle Nathan, my Great-Grandmother Sarah’s youngest brother. He was born in Russia in 1898, and came to the U.S. as a boy, making the long voyage by sea alone after the rest of the family had already emigrated. He must have been brave and resourceful to make the journey on his own at a young age; in my childhood memories of him, he was simply fascinating. He spoke to me with none of the preciousness some adults fall into around children, instead asking serious questions and listening carefully to my answers one moment, and telling captivating stories the next.
With research for this post as an excuse, I asked my family for Uncle Nat tales. He was a skilled forager of wild mushrooms, as are many of my relatives on my mom’s side. Uncle Nat’s skill in mycology was probably developed in his early childhood to supplement a sparse diet, but it served him well in the U.S. in the ’60s, too. He would drive out into the woods, patiently gathering the fragrant, intricately ridged morels prized by chefs. Then he would speed back into the city in his little European car (family accounts vary; some say it was a Renault, others a Peugeot) to sell the mushrooms to Lutèce; a meal was included in the price.
One of my favorite stories is simply known as “Uncle Nat and the reporter.” He was being interviewed for an article, and the reporter asked to see some of his books on mushrooms. As they leafed through pages of illustrations, the reporter zeroed in on a particularly colorful specimen. Knowing Uncle Nat’s reputation as a gourmet, he asked what wine would pair best with this particular mushroom. Uncle Nat immediately named a renowned Château Lafite Rothschild vintage. Astonished, the reporter asked why he would choose such an expensive wine to accompany this dish. “Because,” Uncle Nat replied, obviously enjoying himself immensely, “that mushroom is so toxic that you might as well relish your last meal as much as possible.” I imagine that his life as an industrial designer was flavored with the same care, thoughtfulness, and mischievous humor.
Uncle Nat earned degrees from City University and New York University, and studied at the Art Students League; following a brief career in advertising, he and some colleagues founded Design Engineers, Inc. The company’s slogan was “Beautility: Without use there is no beauty/without beauty—what is the use.” He designed the Beta chair at the Brooklyn Museum; his Museum watch, which is still promoted proudly by Movado, is striking in its simplicity. The single dot at twelve o’clock evokes both the sun at noon and a full moon at night, referring to ancient means of measuring time. The wall clock on sale tonight, which was created for the Howard Miller Clock Company, is part of the permanent collection of the Museum Of Modern Art.
I asked Genevieve, the owner of Auroras Dagger, how she had come across the clock. She told me it was from the estate sale of an architect from Laguna Hills, California, who collected some of the finest art and furniture from the 1960s: designs by George Nelson, Charles and Ray Eames, and William Dunbar. Genevieve and her son waited in line overnight to view this collection, and she fell in love with the clock immediately.
It’s simply amazing to me, this practice of tracing numerous lines from this whimsical, intelligent man of many talents—through his designs, through his career, through the family stories that have become a very personal mythology. And now, 66 years after he completed his truly timeless timepiece, it appears on the very site that celebrates good design for everyone.
I hope that would have made him smile.
Tonight we’re selling the best bbq sauce you’ll ever find, Haks BBQ. Antonia Blair checks in with its maker.
A self-taught chef and food entrepreneur, Sharone Hakman was immersed in a career as a financial planner when he decided to quit his job and pursue his passion for food. The L.A.-based culinary fiend soon became a contestant on the very first season of MasterChef, a hit reality cooking show that sought to find America’s most promising amateur chef. Hakman finished in fifth place, crafting a BBQ sauce along the way that judges declared his “secret weapon.”
Three years has passed since that season of MasterChef, and Hakman now sells a high-end line of his BBQ sauces under the name of Hak’s BBQ. His goal is to redefine BBQ and elevate it with real body, developed flavor, and sophistication. The result? A deliriously good sauce that chef Gordon Ramsay has called “the most delicious BBQ sauce ever made.”
Hakman was kind enough to chat with us about his sauce and how he got started as a chef.
As a self-taught chef, how did you learn to cook so well? Without a doubt, with the help of my grandma.
You left a job in the corporate world to pursue your passion for food. What brought about this huge turn of events?
I’m now doing something that I love and am passionate about, and I’m raising my kids to do the same. My son, Lukah, was born three days before I made the change.
What was your favorite part about the experience of being on MasterChef?
Mystery boxes. There is no better kick for me than cooking on the fly.
Is there anything that you would say is a must try with your barbecue sauces?
Haha. That’s a tough question, as you know I’m going to say everything! It’s hands down a flavor enhancer to the 10th power. Besides grilling and smoking, you can braise with it or caramelize it. I even make an award winning Bloody Mary with it!
Do you have any advice for aspiring chefs?
The only real failure, is the failure to try. And the measure of success is how we cope with disappointment.
Hungry yet? Hak’s BBQ Sauce is available on Fab in three different flavors—Chipotle Bourbon BBQ, Thai Chile Tamarind BBQ, and Habanero Pineapple BBQ. For recipe ideas, visit the Hak’s BBQ website.
Are you feeling thirsty? Or perhaps suffering from a truly insatiable hunger? Fear not, mere mortal. Or at least, fear less: Fab has partnered with HBO to feed you right with True Blood-related treats. We’ve all got our favorite characters (Fab staffers live for Lafayette…and would die for Eric), and this sale has something to satisfy everyone. So channel your spirit vampire/faerie/shifter/werewolf (vampfaeshiftwolf?) and stock your candlelit home with this collection of goods honoring Bon Temps’ finest.
If you’re a Lafayette: What’s up, hookah? You sure do need a vacation. Can we come?! After all that heavy medium work, make sure to pack light—grab that Fangtasia tote Tara left at your house and cut the sleeves off your old Merlotte’s sweatshirt (you can use ‘em to make a cute headwrap). You’ll come back relaxed and refreshed, ready to get back to making the best damn grub in Bon Temps. Wait—did you write this True Blood cookbook?
If you’re a Sookie: Oh, Sookie. Bill has broken your heart (again!), your epic affair with Eric is a distant memory, and your faerie powers are dwindling…what’s a Southern belle to do? Girl, go sit down somewhere and paint your nails. This sweet polish set from Deborah Lippmann is just what you need to keep you from going out and looking for trouble like you usually do. While your nails dry, catch up on some reading: A Touch of Dead, by Charlaine Harris, should have all the answers you’re looking for.
If you’re a Bill: Then you’re a traitor. And a liar. What the hell’s gotten into you?! We’re praying a revenge so fierce will rain down upon you that even Lilith won’t be able to save you. Neither will this True Blood umbrella…but you should be prepared for anything.
If you’re an Eric: OH HEY ERIC. Did you find the house okay? Mmmm, come in, come in. Let me take your
clothes off coat. Oh, you brought me a present! I love you presents! My own fangs?! This should be fun.
If you’re a Pam: I wish I could be Pam. I wish I could be friends with Pam. Don’t you? We could all go out for cocktails and simply stare lesser beings to death over cold, dry martinis—or chilled Tru Blood, obviously. Served in these Fangtasia martini glasses. Pam would never be caught drinking from a bottle.
If you’re a Tara: Tara, on the other hand, would never be caught drinking from a martini glass. She downs pints quicker than most of the men in Bon Temps (probably because she’s so pissed about the arc of her storyline). Toast to Tara finally (hopefully!) seeing some happiness with Pam and these Fangtasia beer pint glasses.
If you’re a Sam: You’ve got the biggest heart of all, Sam. Now that you’ve found true shifter love with Luna, go get her daughter Emma back…and then LEAVE ALL OF THE CRAZY BEHIND. Go back home and try to live a normal life. You’ve still got Merlotte’s, after all: Go pour some pitchers, serve up some cold ones, and hang out with Terry and Andy. Trouble will walk through the door again eventually—it always does—so enjoy some peace while you can.
If you’re a Jessica: First Hoyt, then Jason—who’ll be your next victim? Men find it impossible to resist you. Maybe it’s your perfume: You strike us as a Forsaken girl. It boasts a mix of dark and light that sounds just about right. Here at the office, we’re rooting for you to win Jason back, so double down with this perfume and body cream set.
If you’re a Jason: You sure have been through a lot, Jason Stackhouse. Excuse me: Officer Stackhouse! An addiction to V, the loss of your true hippie love, that crazy warepanther (who lived in what we’re betting was a meth lab—her name was Crystal, after all), Maryanne the maenad, the Fellowship of The Sun…damn, that list sure is long. You also killed Eggs and betrayed your BFF Hoyt, and now you’re trying to fight the feelings you have for Jessica—plus avenge your faerie parents’ murder. What you need is to go for a nice long run and think back on those good ol’ quarterbacking days. Slip on this Bon Temps Football Sweatshirt and go back to a simpler time. You’re better off sticking to simple.
Thirsty for more? Our True Blood sale is here. And remember:
Tonight we’re offering amazingly cool surfing gear from RAREFORM, a California company that is dedicated to saving the beauty of our planet while helping help its customers enjoy it. Jordan Shavarebi investigates the story behind the brand.
If you’ve ever thought about trading in your business suit for a wet suit, this eco-friendly surfer dude fairytale might be of major interest to you. The surfer dude is one Alec Avedissian, and the fairytale begins as most fairytales do: With a discontented protagonist in a somewhat oppressive place.
Alec worked in investment banking and renewable energy, but had a tsunami-sized urge to go on a six-month surf trip through South America with his buddies. So that’s exactly what he did. He divided his time up between surfing perfect breaks and consulting with rural businesses in El Salvador. The place was beautiful, but the lakes and rivers were dangerously polluted and the beaches were littered with trash.
As if visited by an environmentally conscious Fairy Godmother, he had a revelation. He decided he wanted to reduce the waste in the world and sustain the mountains, rivers, and oceans that he loved so dearly. A friend told him that billboards could be recycled and turned into bags. This is when the fairytale gets good.
In 2012, Alec recruited a handful of friends and business partners and founded RAREFORM. They began intercepting billboards before they reached landfills and transforming them into unique, eco-friendly bags for surfboards, paddles, and wetsuits. It’s a modern day pumpkin-to-carriage miracle. Bippity-boppity-cool.
Each product is manufactured in California. 1% of each sale is donated to an organization that’s dedicated to saving the planet. And Alec got his fairytale ending: A company with a heart for the planet and an eye on the waves.
We’re totally obsessed with every sustainable, stylish, one-of-a-kind bag from RAREFORM, so naturally, we wanted to know more. We got some answers from the enchanted prince surfer dude himself, Alec Avedissian.
Is the act of “intercepting billboards” as daring/exciting as it sounds?
Haha, no. RAREFORM now has partnerships with outdoor advertising companies, specifically Lamar Advertising. We help them reduce their waste, they get to do something positive for their customers, and together we can reduce the amount of material going to the landfills
What sort of charities and organizations does the 1% go to?
We work with an organization called 1% For The Planet. They take 1% of our sales and work with environmental groups around the world, doing things to change the world for the better. We do this as a simple pledge to the environment.
How does surfing compare to investment banking?
I love surfing. I could surf everyday—especially if the waves are good and I’m with my friends and family. As far as my short time with the investment bank went, I learned that life is too short to put off the things that you really want to do…the things that are really important to you. A revelation like that is pretty “surfer,” if you ask me.
You made a pretty drastic career switch. How’s it been?
Right before I started RAREFORM I was actually working for a US solar panel manufacturer. The switch has been exciting, stressful, and fun. I have learned about so many aspects of business, things that I never could have learned if I’d stayed where I was. The career switch was not “safe,” but I have great co-founders, great mentors, and great friends who have helped and guided me along the way.
Where did your interest in the environment come from?
I first became interested in the environment when I was living in El Salvador. The rivers, beaches, and forests were so pristine but littered with trash and plastic. I think seeing that in a new setting, outside of California, was eye-opening.
And what do you think it will take to get everyone at your level of interest?
I think everyone is actually becoming more and more aware of how our actions directly affect our environment. It will take time, but when people are given the opportunity to work with eco-friendly companies, I think they’ll feel compelled to do the right thing.
The pictures and videos on your site are pretty awesome. What can you tell us about the location?
The videos and photos on our site were all taken near Ventura County. We wanted to relate to our community and those close to us, so we thought Ventura would be the perfect place.
We think repurposing is awesome, too. Any crafty ideas when it comes to using your surfboard bags, paddle covers, and change mats when we’re away from the waves?
Definitely! I know some people use the surfboard bags as snowboard bags. Others use the paddle covers as tennis racquet covers, and the change mats as dirty clothes hampers or beach bags.
Now that you know all there is to know about RAREFORM, why don’t you take a peek at its products Who knows… a single bag just might set off a magical chain of events that leads you into your own eco-friendly surfer dude fairytale. It’s possible.
A message to the @Fab employees on our 2nd anniversary.
What’s going on over at Pinterest?
I’ll be honest, I’m not a Pinterest user. I’ve tried a few times and it’s just not my bag.
For a while, I also was a Pinterest skeptic. Mostly because (a) I don’t use it, and (b) we saw traffic to Fab from Pinterest plateau and meander for a while (See chart), and (c) the traffic that we got from Pinterest rarely resulted in sales on Fab — people tend to pin the expensive aspirational stuff, not the everyday affordable stuff.
The last 3 months, something’s changed.
Pinterest was Fab’s #4 traffic source in May. And, it’s converting to purchase for the first time in a considerable manner.
This is something we’ll definitely be looking into.