Why can a scam company raise $40 Million Series C + $76 Million Series B? • Hacker News Board

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

#41

Post by lancewiggs » Fri, Sep 27, 2013, 7:02 AM UTC

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 would click the button and continue on that page. It's clearly deceptive, and certainly I do not get the impression that I would be signing up to a monthly fee - just a one-off.

The eye is focussed on the "continue checkout" button and the information directly above it. The customer is urged to think about shipping options, not VIP membership.

Don't believe it's deceptive? Why not put a giant "VIP a monthly fee" line just above the Continue Checkout button, and see the change in sign-ups.

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

#42

Post by jdh » Fri, Sep 27, 2013, 7:03 AM UTC

karterk wrote: post #29

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 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 after you click yes and say, "Are you sure?" "Are you really, really sure?" -- (yes, I know I'm being ridiculous) -- but yes, it is a tradeoff.

But with an NPS score in the 50's, nearing a million subscribers with very low churn rates -- happy users -- as investors we feel the business is healthy and being managed in an upfront way.

But, I can see how one might feel they would like it bolder or more prominent -- reasonable people could disagree on that.

I would submit that, when you come to view the site under the lens of clicking on a discussion about a fraud, and then go to it to decide if it is a fraud, and you (probably) aren't a likely customer and don't think "damn, that's a hot pair of boots for $40", you end up with a different lens.

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

#43

Post by jwegan » Fri, Sep 27, 2013, 7:03 AM UTC

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 find this incredibly misleading. Absolutely no where on the home page is there any hint or mention of a subscription service. The user finds a pair of boots, decides to buy them and enters what appears to be a standard checkout process.

In the screenshot you uploaded, is a standard checkout screen you would see on any e-commerce site. The only difference is there is what appears to be an ad/upsell to some VIP program that I'm sure no one pays attention to.

I've done a lot of work in product & usability in the shopping/e-commerce space and in my opinion, this flow is intentionally misleading.

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

#44

Post by [deleted] » Fri, Sep 27, 2013, 7:04 AM UTC

karterk wrote: post #29

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 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…

[deleted]

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

#45

Post by neotek » Fri, Sep 27, 2013, 7:04 AM UTC

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 was with you up until the screenshot - that's a completely disingenuous way to present some pretty vital information. It's a textbook example of a dark pattern[1].

[1] http://darkpatterns.org/

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

#46

Post by javert » Fri, Sep 27, 2013, 7:05 AM UTC

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 looked at your image, and I think it's really unfortunate that they aren't upfront about what's going on.

You have to read all the way through to the last sentence at the bottom of the page, and then think back through what you've already read to piece together what you're signing up for.

They could have just said, "If you join our VIP program, you get to order one item from each month's showcase at no charge, for a $39.95 monthly membership fee. If you don't see anything in the showcase that you like, you have until the 5th of the month to opt out and we'll waive the fee for that month."

So yeah, it's not as bad as what the OP said, but it's still pretty bad.

Speculation: Women join the site based on word-of-mouth from other women, who tell them how it works. So that's why they aren't fooled. Women who aren't told beforehand how it works are probably like "WTF?" when they see it and are turned off by it, and some % of those are just going to click through, trusting that whatever that promotion is, surely this company is trustworthy and not trying to rip them off.

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

#47

Post by jaap_w » Fri, Sep 27, 2013, 7:06 AM UTC

jdh wrote: post #33

wenxun wrote: post #25

Earlier quoted context omitted.

A quick count from these three websites showed several hundreds customers have fallen victims: http://www.sitejabber.com/reviews/www.justfab.com http://www.scambook.com/company/view/146/JustFabcom http://www.consumeraffairs.com/online/justfab.html If you google "justfab review" or "justfab scam" or "justfab fraud", there are surely many more.

You've posted this comment three times, and I won't reply on every thread, but let's be clear: these "review" sites are shady operations that extort retailers by aggregating negative reviews and charging to hide them. Amazon's review is worse than JustFab's on the same site: http://www.consumeraffairs.com/online/amazon.html You can Google a lot of e-commerce sites with the word "fraud" or "scam" and find a lot of neg…

That's true, but that doesn't mean that JustFab's businessmethods are not a scam. See the discussion above about not including the Vip-membership in the checkout-flow.

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

#48

Post by javert » Fri, Sep 27, 2013, 7:06 AM UTC

jwegan wrote: post #43

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 find this incredibly misleading. Absolutely no where on the home page is there any hint or mention of a subscription service. The user finds a pair of boots, decides to buy them and enters what appears to be a standard checkout process. In the screenshot you uploaded, is a standard checkout screen you would see on any e-commerce site. The only difference is there is what appears to be an ad/upsell to some VIP progr…

Well said.

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

#49

Post by damncabbage » Fri, Sep 27, 2013, 7:07 AM UTC

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…

"With this purchase, you will be activating your VIP membership" is in the sidebar. It's at body-copy writing, and you have to go looking for it.

This is a combined "Forced Continuity" and "Sneak into Basket" set of dark patterns that doesn't even given you the in-line checkbox to uncheck:

* http://darkpatterns.org/library/sneak_into_basket/

* http://darkpatterns.org/library/forced_continuity/

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

#50

Post by ivanca » Fri, Sep 27, 2013, 7:07 AM UTC

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…

Screw you and your rationalization to mislead the users; thousands of studies show that the button people clicks is the big one: Like 95%; and in this case is "continue checkout" so you can save all your crap for the jury.