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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?

#71

Post by hmexx »

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 ;)

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

#72

Post by diziet »

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…

A fair question to ask would be how much revenue is coming from the subscriptions vs sales of the product, and how many credits per user are unredeemed?

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

#73

Post by jacquesm »

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 not sure what I'm more upset by, the fact that JustFab is clearly a scam or that you find ways in which you twist this to justify it (to yourself, maybe?).

That image you link contains the text 'if you don't take action between the 1st and the 5th of the month, you will be charged', how about 'unless you wish to buy another product you won't be charged' instead?

The whole flow of the page is set up in such a way to make it seem like this is a one-time purchase, if you wanted to play nice you'd make the payment button read 'continue to subscribe' instead of 'continue to checkout'.

Disgusting.

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

#74

Post by chasing »

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…

Oh, come on. The page shown in that image is totally designed to obfuscate the subscription info. I was looking for it and it still took me a minute or two to figure out where it was.

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

#75

Post by drob »

etchalon wrote: post #40
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.

If your business depends on people not reading things, then yes, your business is a scam. And generally speaking, things which "feel scuzzy", are.

If you seem like you'd describe your customers as "suckers", I don't want anything to do with you or your business.

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

#76

Post by zmb_ »

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 are funding one of the oldest scams in the book. This has been done for ages in various forms with various products as door-to-door and direct phone marketing. Currently where I live they are doing it with socks and underwear. You are lured in with "too good to be true" type deal, and hustled to sign into a continuous contract that is hard to get out of. I'm not sure about the current legal status, but I wouldn't be surprised if this business practice wasn't outlawed around here soon since it's been in the news quite a regularly.

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

#77

Post by jessedhillon »

etchalon wrote: post #40
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.

If your business depends on people not reading things, then yes, your business is a scam. And generally speaking, things which "feel scuzzy", are.

Almost all commercial software, movies and pretty much the entire licensing business model are scams then. Nobody reads the EULAs or equivalent thereof. And if people did read them, and consider thoroughly their implications, then you might see significant drop offs in purchases. Then again this is HN so that sentiment may actually garner a lot of support.

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

#78

Post by kitbrennan »

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 checkout page you links deserves a notable place within Dark Patterns. (http://darkpatterns.org/)

But lets break down exactly why that page is designed to trick a significant number of customers into purchasing something that they did not intend to purchase: * All the VIP information appears in a box that most shopping websites use for advertising or shipping FAQs. Many average readers (note that I do not say all), would fail to even glance at that box. * The 'checkout as regular member' button is in a completely different flow of the page, and of a different size. On the one hand, it would probably be ok for one of those two things to be true, but to make them both true they know that some customers will simply think there is only one checkout option when they scan the page. * By far the most scammy part of the page is the fact that the payment does not appear in the shopping cart or subtotal box! People reasonably expect that with online shopping, everything they will be paying for appears in the shopping cart.

Many of those things on their own would probably be ok. You could just claim that it is a page optimised for converting to the VIP program. However, the combination of all those things are designed not only to convert people legitimately interested in the VIP program, but to also convert a sizeable number of people that skim read the checkout page.

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

#79

Post by jeswin »

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…

Wow. I can't believe you are justifying that screenshot. This would have completely deceived many of my non-technical friends.

- When you buy shoes, you pay for shoes and not a monthly subscription. That's what people expect when they see 'Checkout'.

- Even after looking at the screen after reading this post, nowhere is it entirely obvious that I'm about to sign away $40 a month.

- reg $69, VIP $39. Looks just like a regular discount.

- I went through the checkout process, until the last payment screen. I don't notice anything saying that this is a recurring charge.

OP was being nice. This is dishonest and borderline fraud.

Edit: FRAUD.

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

#80

Post by drob »

jessedhillon wrote: post #77
etchalon wrote: post #40

Earlier quoted context omitted.

If your business depends on people not reading things, then yes, your business is a scam. And generally speaking, things which "feel scuzzy", are.

Almost all commercial software, movies and pretty much the entire licensing business model are scams then. Nobody reads the EULAs or equivalent thereof. And if people did read them, and consider thoroughly their implications, then you might see significant drop offs in purchases. Then again this is HN so that sentiment may actually garner a lot of support.

That's different. For most software and movies, people not reading legalese isn't the core of your business. You make money on people buying your DVD, not on gotchas buried in license agreements. (Or, at least, I hope.)

JustFab is different. JustFab's viability depends on people not reading the fine print on the side. As I understand it, their "VIP Program" is their main differentiator.

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