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

441–450 of 480 posts

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

#441

Post by devrelm »

rz2k wrote: post #180
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…

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 offic…

That's a good call. If while speaking to someone, you told them they could skip the month, they would likely think that no action is needed. Then, the average user's attention is probably gone by the time they get to "Skip as many months as you'd like." At this point, they'd probably be satisfied, stop reading, and never get to the part about "If you do not take action..."

Also, wow. Looking at the progression from the old page to the new page, it becomes obvious that they're trying to hide the "VIP Membership" details.

1) The right-side column has become more narrow.

2) The right-side column becomes almost entirely devoid of color.

3) The right-side columns now uses grey instead of black.

4) The 4th item, originally headlined with "If You Do Not Make A Purchase Or Skip The Month By The 5th, You'll Be Charged $39.99 For A Member Credit On The 6th" in large, bold font is now moved to the end of the details on the 3rd point and changed match the same light, small-print font as those other details. As a side-note, this point is also the 2nd-to-last sentence in the right-side column; this could arguably make it worse since anyone skipping to the bottom would read "Each credit can be redeemed for 1 JustFab item, so use it to shop later!" and think that it doesn't sound bad.

5) The old page requires you to check a box to "accept the terms of the Just Fab VIP Membership Program."

On the old page, the only other stuff on the page appears to be the form. I'd wager that most people viewing the page would at least glance at the right-column's text, thinking that it's instructions. For that matter, moving the membership details to the order summary page from the payment & shipping page is in itself a way of playing it down.

Seeing the two pages side-by-side, I cannot imagine that many if not all of the points described above were specifically designed to lessen likeliness of the user actually reading the membership details.

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

#442

Post by aestra »

Tichy wrote: post #191

I think it's a scam, however I'd like to point out that by virtue of being honest, it could be avoided. If you are honest, you'll think "this is too good to be true", and rather than thinking "ha ha, fools, they'll make a minus on this and I get cheap shoes" you'll look closely for a catch. That's not an excuse for the company at all, of course.

"This is too good to be true?"

Um... no... Not at all. Not in the least.

They are your classic fast fashion shoes (http://en.wikipedia.org/wiki/Fast_fashion) fast fashion is cheap. Go into your local Forever 21 and look at the prices, especially the shoe prices. I can buy a whole wardrobe there for under $100.

These shoes aren't built to last. They are built fast and cheaply to capitalize on current trends.

I bought some boots last year for $30, and now they need replacing this year because they are starting to fall apart. I don't wear them every day, or even close to every day, and not during the summer. They were not built to last. I knew they weren't built to last.

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

#443

Post by unclebucknasty »

sbov wrote: post #385
iggym001 wrote: post #371

Earlier quoted context omitted.

exactly, a business model that tricks customers is not a business model, it is a scam and fraudulent

It really depends upon the percentages. From my experiences pretty much any website will trick someone, regardless of your intentions otherwise. Despite having to: choose a price, click a "I agree to be charged $ every month" checkbox, and enter their credit card information, a subscription-based website I used to run still got emails from people complaining, saying that they didn't want us to charge them yet.

It depends more on intent than percentages. If you set out to mislead and only a few people fall for it, then it is still a scam, albeit not a very effective one.

On the other hand, if your intentions are honest, but a ton of people are confused, then it is not a scam. It is just poor execution. Of course, if you become aware of this but do nothing to address it, then your intent becomes questionable.

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

#444

Post by franze »

jonnathanson wrote: post #323
revelation wrote: post #315

Earlier quoted context omitted.

A law has actually been passed in Germany to curtail these 'subscription services': https://blog.avast.com/2012/04/17/here-comes-the-zahlungspfl...

Correct, and indeed, this business model is nothing new or unusual in the EU in general, or in Germany in particular. Back in the early, pre-smartphone days of mobile, a lot of European companies made fortunes by selling ringtones through a misleading subscription model similar to JustFab's. Their success soon led to a lot of imitators in the US market. Remember those "Text 53646 to this number to get your NSync ring…

you know who the most successful company was in this "ringtone" bussines? Jamba, who was Jamba? the Samwer Brothers. just saying.

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

#445

Post by bobintator60 »

rhizome wrote: post #419
bradleyjg wrote: post #378

Earlier quoted context omitted.

Pre-internet, or at least widespread internet, there was a similar scam with music tapes, perhaps records even before that. The first month's selections would be free but for shipping, after that they would send you a bunch every month if they didn't hear from you — and a hefty bill.

Yes, it's called "negative-option billing," as practiced by the Book of the Month Club, Columbia Record Club, and others.

buying stamps "on approval" predates all of these

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

#446

Post by purpleD »

While it seems to me like this is a scam, the bottom line is that everyone's interpretation of the communication of the terms of service is subjective.

The site could stay exactly as is and not be a scam if they let you at any time "return" your $39.95 shoe credits for a full refund, no questions asked.

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

#447

Post by LispShmisp »

goshx wrote: post #431

Funny thing... this post just disappeared from the home page.

At first I thought it would be on a second page, or third but it's not. Story has a lot of comments/upvotes, isn't it what makes story stay on the first page, high up top? How does it work? Was story moved manually?

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

#448

Post by just_appalled »

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…

Hey -- You're awful!

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

#449

Post by ericd »

brazzy wrote: post #230
ericd wrote: post #164

Earlier quoted context omitted.

Sure, someone public who was given lots of money by big institutions voted for it with their money. There are a lot of fly by night operations doing this kind of thing, not many VC funded ones that I'm aware of.

> voted for it with their money. That is "voted for its likelihood to generate profits or be acquired at a high valuation". That's not exactly equivalent to my definition of "legitimacy".

Some people assume that VCs have a reasonable minimum ethical bar.
Post reply on HN