Reinventing Your Business


It’s a small business success story that people in the start-up world are familiar with. Once upon a modern time, a social network called struggled to grow until its owners decided to relaunch it as a flash sale site called Within six months, the company had grown into 2 million users and was valued at $100 million. Theirs is a story of how brand reinvention, when done thoughtfully, can turn around your business from failing to flourishing.

From Fabulis to Fab

Jason Golberg is what you call a serial entrepreneur. He starts and grows a business, then sells it for a profit and develops another business. Before Fabulis, there was Jobster (an online recruitment service) and XING (a social news service). Then in 2010, he teamed up with Bradford Shellhammer to create a social network targeted for gay men they named By the end of the year, the company had 110,000 members and was valued at $1.75 million. Thus, it wasn’t really failing  and yet it was not also flourishing. Golberg said that although they were drawing an average of 30,000 visitors a week, they couldn’t make them stick around.

The problem was that Fabulis was competing with many other more established social networks. Although it had a great design and functionality, that wasn’t enough to draw customer loyalty to the brand.

Thus, in January 2011, Goldberg and Shellhammer decided to go back to the drawing board to rethink things over.  In order to see what new directions they could give their brand, they had to start from scratch. However, they didn’t shut down Fabulis until they were able to come up with a strong business idea.

After several nights of brainstorming over dinner tables and after trying many product models, the pair introduced a daily deals program focusing on fashion, furniture, and accessories. It was an immediate hit, and Fabulis saw a spurt in growth of number of consumers from across a wide range of demographics. 2011 was a year of flash sites; dozens of Groupon-like start ups have emerged offering limited-time discount offers. However, all of them were focused on fashion, food, and escapes. There was no flash site focusing on design stuffs. Gordon and Shellhammer knew they could fill this gap.

For some people, reinventing brand identity is not easy. After several years and money spent on building a brand and building a loyal customer base, throwing it all away in an instant seems like a crazy idea. The key is to map out your exit strategy and make a go for it. When the potential of your new business idea seems promising, however, transition may be less intimidating, as in the case with Goldberg and Shellhammer.

On February 2011, Goldberg and Shellhammer shut down to the anger of many loyal customers. However, the exponential reward appeared to be greater than the fallout so making the shift was easy for the pair.

For the next several weeks, Goldberg, Shellhammer, and their creative and sales team spent the time restructuring their business model, marketing the upcoming brand. Signing up nearly 200,000 members through pre-launch invites, and attracting investors. The pre-launch invites were crucial. It gave people an idea of what to expect from the new brand, when it would arrive, and the benefits they would derive from the change.

Making Fab Work

When Goldberg chose Shellhammer to be his business partner, his reason was very clear to him. He wanted someone who can bring creative ideas to the table. Goldberg would take care of technical aspects, such as cost-per-click and cost-per-conversion. Goldberg understood metrics like the back of his hand, which was a big plus because in the world of Internet business, knowledge of customer acquisition is crucial.  As for Shellhammer, he  is responsible for what items they display on the site.

The Fab Sales Model

The Fab brand is all about cool, edgy, unique, well-designed, and authentic design items. Instead of spending countless hours looking for great items at value prices, customers simply go to and they will find what they need.  This is known as e-commerce 2.0 – people select products for you.

Before Fabulis, Shellhammer worked in the retail industry, and his experience definitely helped in the shaping of the Fab business model. At the same time, the brand represents departure from traditional retail models. For one, they don’t maintain a product inventory. Rather, items are directly shipped from the seller.

Fab offers something new every day. Customers will find an eclectic mix of independent and large brands. Shellhammer, who gives the final approval on everything,  prefers items with compelling behind their creation as this brings about an emotional connection with customers.

Reinventing a brand is just as challenging as building a new brand. However, when planned well, it can be done with great success.