Memo to Fab: Don't call yourself a "pivot" unless you want others to call you a failure

By Sarah Lacy , written on April 19, 2013

From The News Desk

The word "pivot" may have officially become bastardized to the point of having no meaning today.

The term first hit popularity as a new way of describing a radical shift in a company's core function and mission -- a bold admission that something wasn't working and a Hail Mary attempt at doing something dramatically different before it was too late. (Read: All the cash was gone.) Textbook examples include Odeo's move from flailing podcasting company to smash micro-blog Twitter or Burbn's lame check-in game being reborn as mega-growth Instagram.

Originally the message on pivots was in keeping with the customer-centric lean startup movement. In the words of Steve Blank, "A founder's vision is just an opinion stated passionately." If it doesn't pan out, gather data and try a new approach. To quote investor Mike Maples, who helped popularize the term, a pivot is when you are unafraid "to throw it all away."

Because a pivot was essentially the happy ending to a story of failure, it rapidly became over-used as shorthand for something just plain not working. The gleeful words "We're pivoting!" started to dot blogs and press releases as a way of spinning a desperate re-launch. The problem with that? A pivot is really only a pivot if you land on a new strategy that works. Otherwise, it's just a prolonged failure.

It's no surprise that savvier entrepreneurs and investors have backed away from the p-word, as it has started to reek of desperation.

But in some weird "Take back the night!" move, Fab is doing the precise opposite. It's calling something a pivot that isn't and forecasting that it'll keep right on pivoting.


Business Insider has coupled a December blog post by Fab co-founder and CEO Jason Goldberg with an event invite that simply reads "Pivot" to write about the company's second pivot today. It describes the "new direction" as being the better designed equivalent of Amazon or Wal-Mart. In other words: Exactly what Fab has been billing itself as for a while now.

Don't blame BI for misusing the term. In the post, Goldberg himself describes Fab's "second pivot" -- never mind that what he is describing is in no way a pivot. Goldberg is simply describing the company's iteration as it matures, tries to get closer to profitability, and scales to meet customer demand. It includes things like building out a warehousing system, and moving away from a reliance on flash sales.

Indeed, given the crowing over Fab's growth in the post, you might argue Goldberg has simply confused "pivot" with another overused internet term: The humble brag.

Blogs today further speculate that the coming "pivot" may be selling more of its own goods made in house. Again, it's a move that's neither surprising or newsy, and likely would only compliment its existing relationships with third party designers, not replace them. That hardly sounds like "throwing it all away" or moving in a new direction at all.

The moves aren't even that uncommon or surprising as iterations go. Many ecommerce companies have broadened out from initial gimmicks, like flash-sales and subscription commerce, in order to grow, expand, and become more profitable. In fact, Index's Danny Rimer has described using these gimmicks early on to gain a market foothold as a common ecommerce 2.0 playbook.

What's more, most ecommerce companies -- including One Kings Lane, JackThreads, and NastyGal -- have embraced private labeling as a way to augment inventory, gain some control over supply, and pad their margins. None of these are pivots, because the ecommerce companies in question are all still fulfilling the same mission and selling to the same customer: They are just tweaking the model, responding to customer demand, or doubling down on what works. Fab is still trying to be the Amazon of well-designed, unique, curated items -- it's just trying to do it more efficiently, with more control and better margins.

That's not a pivot anymore than a startup buying new servers to meet increased user demand would be a pivot. It's not a pivot anymore than when Facebook opened its service up beyond colleges and high schools was a pivot. It's not a pivot anymore than when Zappos started to offer free shipping both ways or sell more items than just shoes. If that's a pivot all startups are pivoting constantly. Show me a young company whose business processes, monetization plans, and operations are staying completely static, and I'll show you a member of the dead pool.

Perhaps this was just a gambit to grab headlines. After all "Fab iterates" is far less sexy of a news item to the 24/7 tech blog cycle. It grabbed headlines today, but they weren't all pretty. Goldberg's invocation of the word has led to a series of derisive headlines and quips that depict Fab as a failing company, desperately trying to find a business model that works. (You know, a pivot.)

The tech press has been longing to write that story, and Goldberg essentially threw chum in the water by embracing a term synonymous with failure. Fab is widely rumored to be losing money, there are reports of designers complaining about having to discount their goods to be listed on the site, and if you check the hype-cycle, the company is due for a blog-backlash.

What makes Goldberg's use of the word "pivot" so strange is that Fab itself knows what a real pivot is. It started life as Fabulis, a gay social network. Its pivot to design-centric ecommerce company was a true pivot in the original Odeo-to-Twitter use of the word. The founders acknowledged what they were doing wasn't working and thought about what other skills and strengths they had. They launched the second version before their funding was all gone, proved the model, and then raised more money off the strength of that idea. Goldberg has said many times that no Silicon Valley VC would have backed right out of the gate -- had it not been born out of a pivot, it may have never been born. It's one of the great pivot stories of this wave of Internet companies.

That original pivot certainly got Fab a lot of press and attention when it relaunched the site. Everyone loves a Cinderella story, so maybe Goldberg thought the press would be so effusive a second time (and third time?) around. But you can't be Cinderella once you're already living in the palace with the prince, cozied up to $100 million in venture cash and a $600 million-plus valuation.

[Illustration by Hallie Bateman]