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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?

#281

Post by danielweber »

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…

Do you think that the people subscribing to this are knowingly doing so? Do you think they have decided that $X/month is worth what they are getting?

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

#282

Post by belorn »

brador wrote: post #88
jdh wrote: post #42

Earlier quoted context omitted.

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…

Just a reminder folks, don't downvote just because you don't agree with what's being said. Do downvote meaningless comments and clear spam.

http://jacquesmattheij.com/The+Unofficial+HN+FAQ#downvoted

being factually wrong in the face of this many comments will invite my downvote.

> "It does not try to position it as anything other than a subscription, and the language is plain english."

In my opinion, that is simply factually wrong.

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

#283

Post by danielweber »

unclebucknasty wrote: post #225
pjbrow wrote: post #150

Earlier quoted context omitted.

Very well said. I agree entirely - there should be a concrete change as a result of this thread. It's impossible for a reasonable person to read the opinions of the well informed people here and continue to think that everything's A-ok. This is an opportunity to prove your ethical bona fides, jdh.

If you look at their profile on consumeraffairs.com [1], you'll find a ton of complaints about this VIP program on the first page alone. In fact, the company replies repeatedly with a canned response. They are well, well aware of what they are doing. If they do change anything, it will not be because they have been suddenly educated or even found morality. It will be because the sunlight is so bright that they fear f…

Here's a question:

Upon learning that many of your customers are unhappy and believe themselves to have been tricked into subscribing, do you:

a) change the process, or

b) defend the process?

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

#284

Post by [deleted] »

tuananh wrote: post #119
hmexx wrote: post #71

Earlier quoted context omitted.

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.

[deleted]

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

#285

Post by rjbwork »

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're being disingenuous. I don't think it was at all obvious, and it took me at least 10 seconds to fully realize where these extra charges were described, and that's only because I knew it was there somewhere. It took another 5 seconds to find the link to the place where you can buy it as a "regular" member.

This is automatic and opt-in, and non-obvious opt-out recurring membership fee. It's scummy and the default should be to purchase as a normal member, then try to genuinely upsell me in the sidebar. It's the equivalent of being automatically enrolled in amazon prime when I go to buy anything from amazon, and having to click a tiny link to the right that says "don't enroll me in amazon prime, just let me buy this" if I don't want amazon prime.

The entire shopping cart is an example of a dark pattern. http://darkpatterns.org/ and I personally wouldn't use a site whose entire business model clearly hinges on tricking or ensnaring its customers.

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

#286

Post by imsofuture »

cs702 wrote: post #278

JustFab is not a 'scam company' (in the sense that they may not be doing anything technically illegal), but they are using DARK DESIGN PATTERNS[1] to trick at least some people into doing things they don't want to do. The checkout page[2], in particular, seems designed specifically to trick people into signing up for recurring monthly charges. Any person who adds merchandise to the cart and then clicks the big 'Conti…

Let's not whitewash it though. That's a scam.

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

#287

Post by DrJokepu »

cs702 wrote: post #278

JustFab is not a 'scam company' (in the sense that they may not be doing anything technically illegal), but they are using DARK DESIGN PATTERNS[1] to trick at least some people into doing things they don't want to do. The checkout page[2], in particular, seems designed specifically to trick people into signing up for recurring monthly charges. Any person who adds merchandise to the cart and then clicks the big 'Conti…

No, seriously, if your business model is based on tricking people into paying for something they don’t want and didn’t realize they’re getting charged for (no meeting of the minds), your company is a scam company. It’s simple as that.

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

#288

Post by Daniel_Newby »

downandout wrote: post #108
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…

I'm curious if, during due diligence, jdh and the other investors were given access to Justfab's chargeback rate on the subscription fees , and whether/how many merchant accounts maintained by the company have been shutdown. Having just looked at the site, I would definitely be misled by this, but that doesn't necessarily mean their core customers are. Math doesn't lie: if chargeback rates are higher than e-commerce…

Just as important as the charge-back rate is the backlog of unused entitlements. Oh, and the median entitlement to age of account ratio.

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

#289

Post by jeromeparadis »

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…

At least, these scams would ship you something! It would remind you they decided to scam you by sending you an overprice item. Justfab got the genius idea that it is much more profitable to have apparently nicely priced items that you won't order or receive but still be charged for.

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

#290

Post by jasonlotito »

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…

Here's your screenshot, with the bottom part cut off. The part below the shopping cart. This is important, because the shopping cart is also the Order Summary.

http://i.imgur.com/dmxIwHr.png

So, it's obvious that the intent is to hide the fact that membership is $39.95 a month. The goal is to trick the person into getting the membership. I guarantee that's intentional.

Porn sites don't even go this far.

Edit: I should also note that you are fabricating a story here.

"By asking members to commit to come back to the site once a month..."

You aren't asking. You are including the person automatically, and requiring them to opt-out. And you are keeping that as hidden as possible by including this important information "in the same font size as everything else on the page."

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