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

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

#171

Post by smsm42 »

pbreit wrote: post #17

It's not quite that bad. The 39.95 ends up being a credit that can be applied to a future purpose. And they are pretty upfront about how it works without one needing to "read the entire 2,500 word" TOS. I don't love the model but I don't think "scam" or "fraud" is accurate.

If the goods being sold (subscription) is not what the reasonable consumer thinks is being sold (one-time purchase), it is a scam, regardless of points and credits. Just like if you stay once in a hotel and they subscribe you to a timeshare without your knowledge, it'd be a scam regardless of the fact that you could use your timeshare for a week every January.

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

#172

Post by AndyKelley »

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…

First I want to thank you for bothering to defend yourself here in public. When a conflict exists between two parties, the best chance for resolving it is when both parties are able to present their respective cases.

I am about to get philosophical.

If we look immediately at what it means to invest, what we come up with is a profit equation. One tries to maximize the expected profit of an investment, taking into account risk.

But let's try a thought experiment. What if you had 1,000 times more money than you do right now? So if you're a millionare, you're now a billionare. Would that change what you invest in? In what ways would it do so?

Would you start making even larger investments, with even larger returns? If so, what if you had 1,000,000 times more money than you do right now? At what point does profit for profit's sake become pointless?

I think that deep within yourself, you know that investing is not merely about profit for profit's sake. Somewhere in there I think you recognize that by choosing what to invest in, you have an awesome power to change the world. You have power that extremely few people have. You are, in essence, the real life equivalent of a super hero.

Based on that, let me ask you this question:

Is this really how you want to change the world?

Is this truly how you want to spend the vast power you have at your disposal?

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

#173

Post by epaga »

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…

Not to pile on, but after looking at that screenshot, I thought your point was going to be that the VIP program was NOT necessary for buying. I had to go back and forth between your comment and the screenshot to figure out the VIP membership was automatically included instead of being an upsell.

Wow. Absolutely appalling. You really should be ashamed of yourself as should anyone working for Justfab.

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

#174

Post by franze »

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…

from your HN profile

> founder of Betfair (UK based, IPO) and eHow

"betfair" is an oxymoron, a fair betting company is a betting company that does not stay in business long

"eHow" is the pioneer of the "content farm" business

"justfab" fits quite nice into this portfolio

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

#175

Post by retube »

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…

Bollocks. Even knowing there was content on the page informing me of the VIP membership it took me a minute to indentify. It's a wall of text to process, on the RHS, in text considerably smaller than the big pink checkout button which focuses the attention.

This page is absolutely designed to catch people unawares. You long term subscribers becuase people a) don't realise theya re being repeat charged, b) they don't know how to cancel.

The business model is based on tricking people. As a VC you are not stupid, you know how this business works. To pretend otherwise is just a lie.

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

#176

Post by [deleted] »

neya wrote: post #85
avalaunch wrote: post #69

Earlier quoted context omitted.

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…

At first, I disagreed with your tone and profanity. But now, after trying to checkout on that site myself, I realize that it's fair to treat people who knowingly aid scammers, this way. Especially when they are the ones who fund them. It's not like they are innocent little babies, right? They (the company and the investors) know obviously why the conversion rates are so high - Because they are very subtle-y scamming…

[deleted]

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

#177

Post by abalone »

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…

Pardon my french HN, but what a load of horseshit.

When I was a kid there was this mail-order thing called Columbia House Record Club. It was the same business model. They entice you with super cheap music.. if you signed up for a monthly subscription. I was a happy customer. Because I was smart enough to work the system, cancel in time and get a bunch of free CDs for pennies.

But guess what? Somebody was filling their coffers and it wasn't me. Columbia House made $500M/year. It was the regular folks who didn't pay close attention and didn't realize just how much they'd be charged on a recurring basis for stuff they didn't want.

So this VC's use of high customer satisfaction rates as a defense is utterly without merit. That's the nature of this business: savvy customers do well, but at the expense of another set of exploited customers.

Here's a great article on Columbia House, which calls it "one of the more dishonest and predatory marketing devices of the 20th century". It could just as well be about JustFab.

http://thephoenix.com/boston/music/129722-rise-and-fall-of-t...

Oh.. and now I have a really bad impression of Matrix Partners.

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

#178

Post by downandout »

halviti wrote: post #163
abalone wrote: post #154

Every single person who has been misled into signing up for a recurring charge should do this one thing: Dispute the charge with their credit card company. You'll get your money back and it will issue a bunch of chargebacks to JustFab, which will penalize them financially. If enough people complain their penalties will escalate and their credit card processing rates will go through the roof. This is how the credit ca…

Except for there is a time window for these sorts of things. His girlfriend isn't going to be able to dispute charges that are 8-months old.

The window is usually 180 days, and some of the more lenient credit card companies will go back even further depending on the circumstances. She can easily get back 6 of the 8 monthly charges.

A simple way to avoid issues like this is to always generate a virtual card for each purchase, and then turn the virtual card off the moment the transaction is completed. You can do this through Netspend prepaid cards - you just open their site in another tab, generate a card with two clicks and turn it off with another two clicks. It costs nothing and the whole process adds about 1 minute to your purchase. I do this for every "free" trial I take on - if I like the service, then I will consciously make the decision to change the billing to a real card. No one gets to make that decision for me.

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

#179

Post by skelsey »

franze wrote: post #174
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…

from your HN profile > founder of Betfair (UK based, IPO) and eHow "betfair" is an oxymoron, a fair betting company is a betting company that does not stay in business long "eHow" is the pioneer of the "content farm" business "justfab" fits quite nice into this portfolio

Did his reference to Betfair and eHow just disappear?

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

#180

Post by rz2k »

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…

I suppose it isn't exactly Blue Hippo, but they'd have to be pretty obtuse not to know that it is misleading, regardless of whether it is the old or new version of the page.[1][2]

Take for example item number three shared by both in the side bar: "Skip The Month" or "Skip any month".

This isn't the usual lowercase English word "skip", it is a special "Skip", short for special terminology "Skip the Month", their official term for actively declining within a five day window, not passively skipping a purchase. (The official terms and conditions[3] specify "Skip This Month" rather than "Skip The Month", but that may be another issue.)

Its meaning could be ambiguous if the reader is adept at incorporating new usages for words as they are being defined by the surrounding context. Or, the reader could skim the headings, or the reader simply lacked the reading comprehension skills to grasp that the meaning had changed in the text below the heading.

These challenges can be out of reach for a large majority of adults. Glance at the National Assessment for Adult Literacy[4], see the descriptions of the difference between "intermediate" (44%) and "proficient" (13%), and compare the difficulty of sample questions[5] with the comprehension level needed to grasp the message. (Complete reports can be found here: http://nces.ed.gov/pubsearch/getpubcats.asp?sid=032)

This extremely poor communication that never seems to happen when people benefit from their customers understanding what they are trying to say, and makes it pretty difficult to deny that their business is based on misleading people.

[1] http://i.imgur.com/3di93.png

[2] http://i.imgur.com/d02xmsy.png

[3] http://www.justfab.com/index.cfm?action=home.terms_and_condi...

[4] http://nces.ed.gov/naal/kf_demographics.asp#2

[5] http://nces.ed.gov/naal/sample.asp

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