FashionStake's founders, fellow Harvard Business School graduates Daniel Gulati and Vivian Weng, will head up Fab.com's expanding fashion vertical going forward. The rest of FashionStake's team will not be joining Fab.com's ranks and the site will cease operations after the acquisition, Weng says.
FashionStake's history is a short but interesting one. When the site launched in September 2010, consumers were invited to support emerging designers by buying "stakes” in not-yet-produced collections in exchange for discounts and other privileges when said collections were manufactured. Gulati and Weng soon realized that customers were more excited about pre-ordering items at a discount, and so they quickly adapted the site to that model. FashionStake was still able to offer these items as a discount because the company could use pre-order numbers to gauge demand ahead of production.
In March 2011, FashionStake overhauled its model once again. In its third iteration, the site behaved more like a traditional online boutique that continued to invest in its key focus areas: independent design, significant discounts and customer engagement. Shoppers were able to purchase apparel and accessories from designers they could never find in their local Macy's or Saks.
But Fab.com CEO Jason Goldberg has no plans to incorporate any part of FashionStake's retail model or backend technology. Rather, Goldberg says he was largely attracted to the relationships Gulati and Weng had developed with the more than 400 independent designers featured on FashionStake, many of whom will soon gain exposure to Fab.com's larger, rapidly expanding membership. The startup, which boasts 1.65 million members to date, has acquired 350,000 members in the last 30 days alone, Goldberg says.
When asked if she had any major lessons to impart about her first startup experience, Weng spoke of FashionStake's need to test first, invest later. "You need to feel there's some sort of traction or resonance with a customer before building out [a product or feature]," she said. "The last two years we have tried to learn and adjust as quickly as we could, and that's something we've been very proud of."