Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why can a scam company raise $40 Million Series C + $76 Million Series B?

news.ycombinator.com

Post reply on HN
Print view View original

111–120 of 480 posts

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#111

Post by MattBearman »

jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

You sir a full of shit (and clearly unbiased). JustFab has become fairly well known in the UK for pulling this cheap trick on unsuspecting customers, I've even seen it reported on TV news.

Due dilligence my ass:

https://www.google.co.uk/search?q=justfab&oq=justfab&aqs=chr...

http://www.consumeraffairs.com/online/justfab.html

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#112

Post by [deleted] »

jdh wrote: post #42
karterk wrote: post #29

Earlier quoted context omitted.

Not the OP - but I did take a look at that page, and I do find it misleading. The "checkout as a regular member" is in a small font on the sidebar, while the main CTA is big, bold and defaults to the VIP program. The part where you're told about the monthly fee is in the last sentence of the sidebar. I had to practically hunt it to find it - for most people shopping online this will be oblivious. By giving the screen…

I don't accept the word "misleading" -- I do not believe the page in any way misleads. It does not try to position it as anything other than a subscription, and the language is plain english. Could they put the subscription details in bold? Could they use a larger font than all the other text? Sure. It's a tradeoff, for sure, and every retailer has to optimize their site to perform. Could they pop up three boxes afte…

[deleted]

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#113

Post by mschaecher »

jdh wrote: post #42
karterk wrote: post #29

Earlier quoted context omitted.

Not the OP - but I did take a look at that page, and I do find it misleading. The "checkout as a regular member" is in a small font on the sidebar, while the main CTA is big, bold and defaults to the VIP program. The part where you're told about the monthly fee is in the last sentence of the sidebar. I had to practically hunt it to find it - for most people shopping online this will be oblivious. By giving the screen…

I don't accept the word "misleading" -- I do not believe the page in any way misleads. It does not try to position it as anything other than a subscription, and the language is plain english. Could they put the subscription details in bold? Could they use a larger font than all the other text? Sure. It's a tradeoff, for sure, and every retailer has to optimize their site to perform. Could they pop up three boxes afte…

As someone who spent a lot of time optimizing conversions, it painfully obvious that they are optimizing to not be clear. If the subscription was so valuable, they'd message it as a top level value prop. But you're not dumb, their not dumb, so I don't have to tell you that.

I honestly can't believe they get away with, nor have the balls to even do it in the first place.

I actually wrote the ATD reporter who held their feet to the fire a little bit last week. He should've done far more.

While we're at it, let's take a look at above the fold of the how it works page on A BIG Apple monitor. http://d.pr/i/tCVH

So obvious it's a subscription there right?

How about the homepage? http://d.pr/i/1BVn

Clear as day right?!

I mean your rewards page makes it sound like you're telling a friend about personalized recommendations. Might as well be messaging those units at the end of an article "Selections recommended for you...."http://d.pr/i/YmIT

I can't even tell if your gift card page is signing up the person buying a gift card for a subscription or what is going on there.

And btw, might want to have legal look at this language at the bottom of your gift card page because I'm pretty sure it's a violation of California's gift card/certificate laws. http://d.pr/i/SDS

It's also funny that the phrasing "no obligation to buy" is all over the place.

When in fact obligation is legally defined in the civil sense as a contractual compelling promise for a course of action.

And that the word buy is also defined as the exchange of property from one part to another by way of an agreement.

And I'll talk slowly, property in that sense doesn't have to mean goods.....property can be money too.

So by purchasing on JustFab you are most certainly signing an agreement that compels you to exchange property with another party unless you cancel the agreement thereby removing your obligation.

So really, during a 5 day window at the beginning of every month you have no obligation to buy.

Miss that window and you don't even have a say in the matter!

It's also very telling that the FAQ section contains no section on "how do I cancel my VIP membership and stop getting billed every month?"

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#115

Post by bowlofpetunias »

drakaal wrote: post #3

Most of you are too young to remember, "Buy now and we'll send you CD's each month for just $9.95 per month, keep only the ones you want, cancel anytime" This is the same thing. It may feel scuzzy, but they do tell you this up front, and while they hope you forget, it isn't a scam, it is just preying on the uninformed.

I'm old enough to remember those.

I also know that those dubious tactics were used to draw people in, but in the end there had to be explicit consent to the subscription model, hence they always emphasized the "you can cancel anytime" part.

JustFab doesn't do that. It crosses the line from "scuzzy" into "scam" by totally obscuring the fact that they are a subscription based service.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#116

Post by rtb »

weland wrote: post #60
jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

This is an old business practice that I remember from when I was a kid. There were a lot of second-rate publishers (books, in this case, but it worked for pretty much anything) which basically worked on a "buy a book now, and we'll send you a new one each month for ". But you had to specifically opt out of this, which was done by ticking a very small box in the corner, in which case the prices for a single order woul…

Exactly - it's a scam and if it gets enough traction hopefully it will be explicitly illegal soon (v.s. just arguably illegal via general anti fraud statutes).

See the comment" rel="nofollow">https://news.ycombinator.com/item?id=6455718">comment from "Semaphor" below; this type of scam is already explicitly illegal in Germany.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#117

Post by djhomeless »

avalaunch wrote: post #69
jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

The other commenters are being too nice in their replies. You're full of shit. JustFab is a shoe of the month club masquerading as a normal online shoe store. The VIP Membership Program is the essence of JustFab's business model and yet it's missing entirely from the home page of their site. It looks like any other shoe store. And yet you think it's clear that the user is being signed up for a shoe of the month membe…

Also with you on this. The checkout flow is deliberately misleading. Sorry Mr. VC, you DID do your homework and the fact that you still invested is telling.

First off, what is the "happy path" on this checkout page? Right, totals + shipping costs + grand totals + checkout button. What else is hiding in this element? "Promo Code: 50% off your FIRST item", emphasis mine. What this is telling the consumer, is NOT that you are signing up to the VIP program and getting a discount because of it, it's saying "hey, since you're new, we are giving you a discount".

Would a consumer walk away from the happy path with the assumption that they had signed up to a subscription in exchange for the 50% off for their first item? No.

Yes Mr. VC, the subscription info is here on the page, but the location is not an anchor. The way the page is designed is to funnel the users attention down to the continue checkout button. The product designers knew this. At least GoDaddy puts their useless up-sells in the middle of the page, but they clearly give users an ability to opt out. They don't try to fool users by hiding them on parts of the page where they know they won't look.

Wow, I just said a startup is worse than GoDaddy. Getting frosty in hell no?

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#119

Post by tuananh »

hmexx wrote: post #71
jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

So 800k out of 1m (according to your numbers) manage to avoid the subscription fee. Remaining users: 200K * $39 / month in revenue. So $8 million / month of recurring revenue through this programme. I wonder how the margin on that compares to the rest of the business ;)

    JustFab "generate about $100 million this year" in sales
funny that 8 * 12 = 96 which is close enough.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#120

Post by ttctciyf »

jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

If purchase entails buying into "VIP membership", why doesn't that show up in the shopping cart, where people are actually looking?

If purchase commits the buyer to additional monthly payments, albeit under some conditions, why isn't the user alerted to this in the shopping cart, where they are looking?

At what point does a UI disaster become a scam? As an uninvolved observer, somewhere around here I'd have thought.

Post reply on HN