Act Two: Fab's Bradford Shellhammer looks to avoid repeating mistakes with his new startup Bezar
"Make no mistake about it, the valuation assigned to the Fab business less than 18 months ago was among the biggest whiffs we’ve ever seen in the private markets. The spectacular and rapid fall of the business is nothing short of unprecedented, leaving a nuclear crater in its wake." - Michael Carney, Pando.
A year and a half ago, New York ecommerce site Fab was among the hallowed few private tech companies to have notched a $1 billion valuation. Last November? The remnants of the legacy business were recently given a valuation of just $15 million, in a potential sale for parts that "could end up being little more than an expensive experiment in junkyard shopping," according to Carney. Co-founding CEO Jason Goldberg, along with a portion of the company's most recent funding round allocated to launching a new brand already shipped off to Germany to focus on a new business called Hem, which sells furniture online.
One of the first signs that the wheels were coming off at Fab was when its co-founder and Chief Creative Officer Bradford Shellhammer left the company in November of 2013. As Erin Griffith wrote at the time, "Fab [had] lost its special sauce," with Shellhammer's sense of taste and style, refined over years of filling his professional and social circles with designers, defining everything about the company. When discussing competitors, Fab's CEO Jason Goldberg would say, “This is a taste business. They don’t have a Bradford.”
Following that split, the last thing Shellhammer wanted was to start another company. "I was probably thinking more along the lines of being a creative director at a brand," he says.
But the entrepreneurial itch wouldn't go away. And now, just weeks after Fab proved it couldn't survive without him, Shellhammer is beginning his second act: A design marketplace called Bezar, which will launch officially this Spring.
With $2.25 million in seed funding led by Lerer Hippeau Ventures*, Bezar will offer home furnishings, jewelry, and accessories all hand-picked by Shellhammer and his team of "Design Scouts." The marketplace will focus on independent designers, but will also feature items from larger brands as long as they fit with Shellhammer's style, which is influenced in equal parts by Andy Warhol and Spencer's Gifts.
"In retail, you’re not reinventing the wheel. This isn’t Snapchat, this is a store. What I’d really like to disrupt is, I want to give consumers options to buy products that are made by real people, not marketing teams, because they’re out there."
What separates Bezar from, say, Etsy, which already exists as a marketplace for independent designers, will be Shellhammer's curation.
"I do love Etsy," Shellhammer says. "I’m a big Etsy shopper. But I’m a professional shopper. It's the joy of the hunt. Most people don’t like that. Shopping is actually a chore for a lot of people."
Moreover, Shellhammer says many designers take issue with selling on Etsy because the company doesn't police idea theft.
"Etsy sells a lot of knockoffs," Shellhammer says. "I’m wearing a scarf that’s a shredded cotton scarf by a company in Georgia. They make hand-printed, screen printed scarfs. Now there are seven other people that copy their design. Etsy does no policing of that. Etsy is full of fakes and copies."
That sense of empowering independent designers lies at the heart of Bezar.
"The big problem with designers is that they make some cool stuff and then someone discovers it, whether it’s Fab or Etsy or reseller at Urban Outfitters," he says. "Designers like to design, then when something resonates with an audience, they become a slave to that product. One or two person companies, they’re doing the sales, the design, the packaging, the shipping. The work of actually selling your product. The taking it to the UPS truck, the making it, takes away from designing your next hit. And suddenly you’re stagnant because you’re just making the same thing over and over again."
Shellhammer hopes that by spotlighting individual designers or small design teams for three days, they can move as much product in that short period as they might in a year on Etsy. That was the case with Fab, he says. That extra money, for example, can be used to hire an intern to help with the day-to-day work of filling orders, thus buying the designer a month or two to work on her next creation.
Shellhammer's approach to Bezar has differed from Fab in a few major ways. Bezar will focus less on discounts and more on uncovering the best products. Beyond that, Shellhammer believes his tastes have evolved.
"I’m 5 years older so my aesthetics have grown up," he says. "I’m now 38, and my stomach turns a little when I think about some of the stuff on Fab."
And finally, Shellhammer is no longer the "supporting act" when it comes to fundraising, he notes, and as such he has made sure to work with investors and advisors who not only share his love of design, but who also share his philosophy that Bezar should be grown far more slowly and steadily than Fab.
"I went in pitching a much more conservative business, something that grows slower and more sustainability over time, not some giant valuation," Shellhammer says. "The people who fund this company really believe in the mission of empowering independent designers."
Entrepreneurs talk all the time about how "failure" helped them succeed, sometimes to the annoyance of those who have experienced plenty of failure but little success. But in Shellhammer's case, coming off one of "the biggest whiffs we’ve ever seen in the private markets," learning from failure is the only option.
"I'm 38. I'm not your typical Internet entrepreneur. I finally figured out what I was put on this earth to do," Shellhammer says. "That’s a really liberating thing, but terrifying on some level because I realize how high the stakes are this time. This has to be a success. I have to get it right. Failure is not an option."
[*Disclosure: Lerer Hippeau Ventures is an investor in Pando.]