On Track For $250M In 2013 Sales, Fab Pivots Again, Buys Custom Furniture Shop Massivkonzept And Opens Retail Storefront
Design-focused retail site Fab has announced its new pivot, along with an acquisition and much more.
As we reported last week, Fab now has 12 million users and is continuing to grow at a fast clip after its initial pivot. Last year, the company saw $150 million in revenue, and revealed in February that sales were up by nearly 300% in January 2013 over January 2012. International is also a huge potential growth area for the company.
Fab has 1 million members in the UK, which is generating nearly 40% of its sales in Europe and is its fastest growing market outside the U.S. The company has sold more than 7 million items, with one product sold every seven seconds. Mobile is also a huge growth area, with one-third of sales being placed via mobile.
According to the company, Fab will double revenue in 2013, and should reach $250 million in 2013 sales. Interestingly, Fab says that most of its revenue is not derived from flash sales, which was the initial model Fab adopted after its pivot in 2011. As we wrote in this profile of the company, Fab infamously pivoted from Fabulis, which was a social network for the gay community, into a flash sales site. Fab says that two-third of sales are currently not from the flash-sales on the site.
This second pivot is less dramatic but definitely meaningful. Fab is now branding itself as a design store, and now has a unified technology experience across its iPad, iPhone and web apps. The company is revealing a complete redesign which makes it more of an integrated e-commerce site. You can now access design pages by room, type of furniture, color, designer and more.
Another twist in the pivot: Fab is partnering with designers to manufacture and sell home furnishings exclusively through Fab. Fab is also producing and manufacturing its own line of products and home goods. Additionally, Fab has acquired German custom furniture store Massivkonzept, which the company says is profitable and has a $10 million revenue run rate. The idea behind Massivkonzept is that it allows you to essentially design your own furniture online. You configure shelving, table, and seating systems online and choose the dimensions, color, and materials on your designs. The company turns this into actual, well-designed furniture.
Lastly, Fab, like Warby Parker and other e-commerce sites; now has a brick and mortar presence with a new retail store in Hamburg, Germany. Fab will test physical retail environments and different types of retail formats in Hamburg and in other markets. Germany isn’t a huge surprise for the first in-store presence; 60% of European revenue comes from Germany and Austria.
Clearly this is a big part of co-founder Jason Goldberg’s vision for how Fab will compete in e-commerce in a post Amazon world Fab sells products that aren’t listed on Amazon, and with this pivot, the company continues to focus its retail efforts away from Amazon’s core business. In fact, 90% of Fab’s products sold cannot be found on any other major website.
So how is Fab funding this expansion? We’re hearing the company is raising more than $100 million in funding at a $1 billion valuation. The company previously raised $171 million from Andreessen Horowitz, First Round Capital, SoftTech VC, Menlo Ventures, Baroda Ventures, Ashton Kutcher, Guy Oseary, Thrive Capital, Kevin Rose, SV Angel, The Washington Post and others.
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Flash Takes Another Step Towards Death As Unity Drops Support
Oh, Flash. Remember when there was still a little reason to believe that it wasn’t a dying medium? When the angry Android masses swore up and down that the absence of Flash would be the death of iOS… only for Adobe to kill their Android effort after just a year?
The shambling corpse of Flash takes another punch to the face today, with game engine Unity announcing plans to drop support.
For the unfamiliar, Unity is a pretty friggin’ awesome game development engine, used in releases like Rovio’s Bad Piggies, Temple Run 2, and a host of other games. I used it pretty heavily to build my Augmented Reality TARDIS project, as well.
One year ago, Unity began work on a feature that allowed developers to export their Unity projects to a Flash SWF file. While the company plans to keep Flash support around until the next major Unity release, the only work they’ll be putting into it moving forward is bug fixes.
Unity CEO David Helgason has a full post on his reasoning here, but his three-part logic is pretty straight forward:
- Unity doesn’t see Adobe as being committed to Flash anymore
- With things like mobile support and Adobe’s crazy Flash revenue sharing requirements being announced and then quickly abandoned, Developers have seemingly stopped trusting Flash
- Developers seem to be moving away from Flash, so Unity would rather focus on improving their own web player, which has suddenly found its footing amongst Facebook developers
As you might expect, the comments on the Unity post have turned into a bit of a war zone, with much of the heat thrown by those who somehow haven’t moved on since the summer of 1999.
It’s been fun, Flash. We had some good times on Newgrounds back in the day. You’re still my favorite platform for video playback until HTML5 gets its W3C wings. But it’s sleep time soon, okay?
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IBM To Invest $1 Billion In Flash Technology Research, Reflecting Obsolescence Of Hard Disk Drives
IBM plans to invest $1 billion in research to design, create and integrate Flash into its servers, storage systems and middleware, a reflection of the changing requirements needed for companies to manage massive amounts of data.
As part of the news, IBM also announced a new line of Flash appliances. These storage appliances are based on technology acquired from Texas Memory Systems. IBM says the appliances can run 20 times faster than spinning hard drives and can store up to 24 terabytes of data.
The move comes as more companies need better ways to manage the high volume of data resulting from the influx of mobile apps, the web and the ability to create data with updates in pictures, video and trillions of text messages.
All that data makes for major bottlenecks in systems that have long depended on mechanical hard disks to process information. Those hard disk systems did just fine in an age when vendors built vertical stacks for transaction-based systems, such as ERP and business-management solutions. Today, the market is shifting to a more distributed horizontal mesh where data is spread over tens of thousands of servers.
IBM has a deep history in the server market and middleware and is showing a new focus on storage. But who is this for? If you look at the news, it’s apparent this move is to support its existing customer base, which has long-term investments in credit-card processing, manufacturing and operations that require large enterprise resource planning environments.
IBM’s Flash investment shows how companies are calibrating their strategies according to the data they process. Facebook uses Flash to process Internet-scale applications. IBM will apply Flash to software installations inside data centers at big banks, factories and other large-scale operations. These are two different uses tied together by the universal need to manage data and integrate it into the way we live and work.
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Scenes From Penn State’s Startup Week Hackathon
For the past week or so I’ve been hanging out at Penn State University for its second annual Startup Week, an educational get-together of startup founders and entrepreneurs spearheaded by Weebly CEO (and Penn State alum) David Rusenko. The idea is simple enough: to give students some crucial insight into what it means to be a startup founder, and hopefully inspire some to take a chance on an idea they believe in.
Those Penn State students have been on the receiving end of startup wisdom from the likes of Weebly’s Rusenko, Reddit/Hipmunk co-founder Steve Huffman, Exec founder Justin Kan, and Scribd/Parse co-founder Tikhon Bernstam just to name a few, but there’s only so much fun to be had by just listening to tales of startup glory. That’s why Innoblue, Penn State’s student-run entrepreneurship group, invited local (and not so local) nerds to cook up their own pizza-and-caffeine-fueled ventures for 24 hours on a Friday night. Now I’m a sucker for a good hackathon, so I sat down with a few of the would-be founder teams to get a feel for what they were trying to accomplish in a mere 24 hours.
Of all the teams present (Innoblue’s Kathleen Warner told me this has been their biggest hackathon yet), only a few dabbled with hardware. Penn Staters Sujay Patel, Houston Hunt, Katya Greene, and Andrew Greene were among that small subset with a project they call Dashtag.
Long story short: Dashtag is meant to help retailers, businesses and organizations push information to visitors’ mobile devices with NFC tags. “Let’s say you’re walking through the mall and GameStop has a tablet app demo,” the team explains during its two-minute pitch. “You tap your device to the node and the download starts.” They figure it can also be used for painless Wi-Fi network setup (say, at a coffee shop), and to authenticate Bluetooth transmissions without the need for users to fish their phones out of their pockets.
Penn State juniors Jimmy Zelinskie, Dan Scanlon and Drew Oros, as well as Justin Makaila from West Chester University, stayed up all night to whip up a multi-person, Django-powered video chat web app they call Present. Video conference calls are par for the course these days, but the idea here is that users can stream from webcams or iPhones thanks to a native app.
The team baked Twitter support into Present so viewers can more easily communicate with broadcasters. They’ve also managed to coax the thing into work on Roku and Google TV boxes. Here’s the kicker, though — all video streams are tagged with GPS data by default, so users will eventually be able to manipulate a map interface to view videos from certain areas.
And then I came across a familiar face: David Fontenot from the University of Michigan (also known as one of the guys behind the super-sketchy Playbook app) is at it again with another dubious concept.
I can’t really repeat the name in polite company but HackMyJ*zz wants to connect people eager to start families with famous or noteworthy sperm donors. Fontenot’s tongue was planted firmly in cheek for this one, but he maintains that this is still a market that’s worth tapping — reluctant teammates Pulak Mittal (University of Pennsylvania) and Tess Rinearson (Carnegie Mellon University) didn’t seem convinced. Good luck with that, I guess.
But the most impressive thing to come out of this group was a project called Hologram, created by Zain Shah (University of Pittsburgh ’15) and Ishaan Gulrajani (MIT ’16). Simply put, Hologram creates 3D images from 2D ones by analyzing and assigning depth values to certain areas based on how the objects depicted are lit.
According to Gulrajani, “areas of the photo which are dimmer without flash and brighter with flash are closer, and areas of the photo that aren’t affected by the flash are farther away. The resulting 3D image could stand a bit of polish but it works remarkably well considering the pair knocked it out in 24 hours. Judges actually had to confirm that they didn’t start working ahead of time before awarding them the grand prize: an all-expenses paid trip to San Francisco.
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