Meet the Gay Power Duo Behind Fab.com
They created the fastest growing e-commerce site in the world, but can Jason Goldberg and Bradford Shelhammer stay ahead of the game?
April 15 2013 8:54 AM EST
September 09 2015 10:24 PM EST
They created the fastest growing e-commerce site in the world, but can Jason Goldberg and Bradford Shelhammer stay ahead of the game?
Bradford Shelhammer (left) and Jason Goldberg | Photography by Bjorn Wallender
"Upstairs is a room that has banana wallpaper -- scratch 'n' sniff, with yellow floors," says Bradford Shellhammer, who has pretty blue eyes and a schoolboy grin. As cofounder and chief design officer of mushrooming online retail site Fab.com, he has turned an airy 46,000 square feet of primo Manhattan office space into a Willy Wonka fantasy of bright primary colors, Herman Miller chairs, and the aforementioned scratch 'n' sniff banana room. There's also a fully subsidized canteen, one of several generous staff perks. Later, when I ask Shellhammer for the most popular dishes, he texts back: "Taco day!" It can't be too bad when your employers give you tacos and a free gym membership to exercise them off.
We are in a small, glass-enclosed conference room sandwiched between Shellhammer's office on one side and CEO and cofounder Jason Goldberg's on the other. Each has direct access to the room and is close enough to call to the other without leaving his desk, a useful feature for a duo that embodies the head and the heart of the world's fastest-growing online store. "If we were one person, it would be really awesome," says Goldberg, who married his partner, Christian Schoenherr -- his second husband -- last August (Darren Criss and Deborah Cox sang for them at the wedding reception) but still likes to joke that Shellhammer is his first wife. Their relationship can leave outsiders confused.
"A lot of people think we're together -- it's the weirdest thing," says Shellhammer. "When Jason got married, people were sending me congratulations." Among their staff, they personify a mom-and-pop vibe. "I think Jason is more feared -- he's the dominant force," says Shellhammer. "If they wanted better lunch catered, they'd probably come to me; if they wanted more money, they'd go to Jason."
As Shellhammer rummages around in a large jar of gummy bears, Goldberg -- more guarded, less spontaneous -- recalls the fateful evening they spent in early 2011 at Market Table, a restaurant in New York's West Village, wrestling with the dilemma of how to salvage their eight-month-old company, Fabulis. It didn't help that they still had to tell people how to spell the name -- or even how to pronounce it (like "fabulous," not "faboolis").
Launched amid a small blitz of publicity as a social networking and travel site for gay men, Fabulis never quite found its footing--though not for lack of trying. Early on, Goldberg and Shellhammer appointed a string of boldface names to their board, including former GLAAD president Neil Giuliano and Broadway director Michael Sucsy, and hired David Fudge--i.e., that guy who made the Miley Cyrus spoof video "Party in the FIP" viral -- to replicate his formula for Fabulis, to the soundtrack of Lady Gaga's "Monster." The result was slick, but soulless; among the website's early gimmicks was an off-putting popularity contest in which users would "spend" credits to boost each other's Fabulis rankings. A site that preys on its users' status anxiety does not seem like a winning formula.
"A lot of people thought it was beautifully designed and that the functionality was cool, but we just couldn't get any of our friends to use it," says Goldberg, a start-up veteran who cut his teeth in the Clinton White House before signing on to a string of ventures--the most successful of which, Social Median, he sold after 11 months (and almost no investment) for $7.5 million. His track record had been a critical asset in getting funding for Fabulis, but sitting in the restaurant that night, he and Shellhammer knew they either had to come up with a dramatic new idea, or call it a day.
"We realized we needed to build something where there was more of a market demand," Goldberg says, "so we asked ourselves, 'What is the one thing the two of us are most passionate about, and that we can realistically be the best in the world at, and for which there is an untapped market?' "
Goldberg lifts a framed napkin from off the wall, a memento from that evening at Market Table. It shows a pie chart, drawn in wonky ballpoint pen, divided into three segments, each representing a criteria for success: "Passion," "Can Be Best," and "Big Market." At the center, intersecting all three quadrants, sits a smaller circle with an arrow pointing to one word: DESIGN.
"Literally, it took us a second to say design," says Goldberg. "I looked across the table at Bradford, and I thought, Right, so Bradford's passion is bringing color to people's lives, and my passion is designing user interfaces, which is also a kind of design. And then I just thought, Duh, why don't we just bring Bradford to the rest of the world? Everyone I know wants him to design their life, in terms of what to wear, what to buy, where to go."
Goldberg wasn't exaggerating. By the end of last year, Fab was selling 24 items a minute and had grown to a staff of 650 with 12 million members. An awful lot of people have come to rely on Shellhammer to design their lives, whether with a blue papier-mache rhino head or a pouf in the style of Warhol's Brillo box. In the run-up to the holidays last year, the best-selling item on Fab was the Beardo -- a woolen ski hat with a knit beard sewn into it (pictured). They moved 25,000 of them at $26 a pop. All in all, Fab made $45 million in revenue in the last quarter of 2012. It's stats like those that have catapulted it to No. 5 on Fast Company magazine's annual list of the most innovative companies in America, a few spots below Amazon and six places above Google.
Of course, until you find yourself on Fab.com, you might not realize just how much you need a Beardo or a Brillo pouf, but part of the genius of Goldberg and Shellhammer was to see that people don't always buy what they need; often, they buy what makes them laugh. Wit and whimsy are a big part of what makes Fab work. This is a website that stocks 31 varieties of bow ties--for dogs. "When a lot of people think about design, they think about a very high-end version," says Goldberg. "What Bradford understands is that there's beauty in products in all categories and at all prices--it doesn't have to be all boring, ultra-modern, and slick, and that was our aha."
Fab's rapid growth -- in a down economy -- has confounded skeptics who doubted the demand for a design sales site, but it's proof of Goldberg's savvy in building a company around Shellhammer's personality and point of view. "One thing about Fab, compared to Gilt or Groupon, is that we never celebrated the deal, we celebrated the product," says Shellhammer. "So even people not in the market for a new sofa are almost consuming Fab the way they would a blog or a shelter magazine." The irony, of course, is that by focusing on a subject they feel so passionately about, Fab has become the very thing they once intended for Fabulis -- an online club everyone wants to belong to.
Although it started as a flash sales site, a large part of Fab's revenue now comes from full-priced items, and the range is growing--from 2,000 products in 2011 to 15,000 products at the beginning of 2013. "Every year we're going to reinvent this business," says Goldberg. "You reimagine, you rethink how you can do things better--the companies that do that are the ones that stay ahead." He likes to quote Bill Gates, who at the height of Microsoft's domination used to tell his staff that the company was going out of business. "People would say, 'Bill, we have a billion dollars in the bank,' and he'd say, 'Yes, and we'll be out of business if we don't do this right.' "
Doing it right includes improving their delivery times. Review sites online are littered with complaints of excessively long waits, exactly the kind of experience that dissuades customers from returning. In an effort to improve the service, Fab opened its own warehouse in New Jersey last year (a second is planned for California) and Goldberg claims most orders now ship within 24 hours of being placed, but winning and retaining customer loyalty is a time-consuming and expensive exercise. Behind closed doors, critics point out that Fab is spending more than it earns to maintain its growth -- which is OK for now, but hardly viable in the long term. Or, as one tech entrepreneur put it, "If you start selling sandwiches on the corner for 50 cents, you will build a business very quickly, but it's not sustainable." Of course, there were plenty of critics of Amazon a decade ago who said much the same thing, and look how that turned out.
It's not just onlookers who have been taken aback by Fab's explosive growth. To follow Shellhammer's Instagram feed is to live vicariously in the many vibrant sneakers of a man always on the move -- one day in Paris, the next in London, bouncing to and from Fab's European hub in Berlin so often that he has a permanent suite at the Soho House there. No wonder he compares the last few years to living in Pee-wee Herman's fantasy house. "It's kind of nuts," Shellhammer says, before plunging into a story about a recent dinner at the London home of Niklas Zennstrom, founder and creator of Skype. "It was all CEOs of companies, and we sit down and everyone wants to talk about Fab -- they were all so excited about it. I'm sitting there thinking, You founded Skype, and I'm the one talking?"
If you search online, you can find a 23-minute video of Jason Goldberg speaking to a group of young entrepreneurs about the now-famous pivot from Fabulis to Fab. He runs through his story, outlines his mantra (focus on the one thing you are good at), and then, during questions, he lets slip a crucial insight. "I might get into trouble for this," he starts. "But if I were to tell a recruiter what to look for in finding a Fab employee, I'd say, 'Go find the smartest people you know who are also the weirdest oddballs, and we'll take them.' " Although Goldberg is talking about office culture, the subtext is unmistakable: Fab is a gay-owned company in an overwhelmingly heterosexual industry. It's somewhat telling that Fab was hatched in New York and not Silicon Valley, where people like Shellhammer, in particular -- "I've always been loud, I've always been colorful, I've always been bright," he says--are few and far between, and almost never at the top of a company masthead.
The fact that two founders of Fab are gay (a third, their CTO, is based in India) is an important distinction in a society fairly starved for examples of successful gay entrepreneurs. Goldberg and Shellhammer treat their sexuality matter-of-factly, even as a point of pride, and their self-confidence is exactly what people mean when they talk about mentors and role models. For Goldberg, moreover, their sexuality is not incidental to their success, but complicit in it. "Fab could only have been started by a couple of gay men," he says. "We've brought a gay sensibility in taste and style that's a little more risk-taking, a little eclectic, humorous, and left-of-center."
The scratch 'n' sniff banana wallpaper in the Fab.com offices
In many ways, Goldberg's life is a mirror of a broader shift in American life. A highly motivated self-starter, he wrote to the Clinton campaign in 1991, offering his services. He was studying at Emory University in Atlanta at the time, long before the Web and social media made it easier for people to be involved and engaged with national politics--or, for that matter, for gay people to find and identify one another. When a call came back from the campaign office asking Goldberg to drive the governor's wife, a then largely unknown Hillary Clinton, during a campaign visit to Atlanta, he jumped at the chance. Shortly after, he dropped out of school to work on the campaign full-time, helping to organize Clinton's campaign tours. It was his first experience working for a successful start-up. In Little Rock on election night, it was his CD collection that was commandeered to warmup the crowd.
Goldberg would return to college, before moving to D.C. to work as an aide to Erskine Bowles, the White House Chief of Staff. In D.C., one of his roommates was Chad Griffin, now president of the Human Rights Campaign, and a key figure behind the challenge to California's Proposition 8. Neither of them was out at the time. "We both told people we had girlfriends," recalls Goldberg, whose gruff and aloof exterior could sometimes rub people the wrong way.
"It was hard to get on his good side, and not everyone liked him, but he was the gatekeeper to the White House Chief of Staff," recalls Richard Socarides, a policy adviser to Clinton, and one of the highest-ranking out gay people in federal government at the time. "If you wanted to change U.S. foreign policy towards Russia, you had to be nice to this kid -- that's how high the stakes were." (Goldberg does not dispute that his social skills were somewhat wanting, and credits Bowles for telling him, "Jason, people are going to do things for you because they like and respect you, not because they have to -- you've got to work on that.")
Late one night, as Socarides was finishing a memo for the chief of staff, he received an email from Goldberg. "It began as this series of obtuse and obscure questions, like, 'What's it like to be gay here?' " Socarides recalls. "I was trying to finish this memo, and here's the kid I have to be nice to asking me what it's like to be gay." Socarides kept his answers short, but Goldberg persisted. "About the 10th or 12th exchange, I wrote back, 'Why are you asking all these questions?' " he recalls. "And he said, 'Well, I'm gay, and I'm thinking of coming out to my boss.' "
For Goldberg, coming out was a transformational experience, but it was also one that reflected the changing culture at the White House. For Socarides, it was a teachable moment for the whole administration, not least because Goldberg didn't read as gay to anyone at the time. "It teaches us that what appears is not always the case, and that there are gay people everywhere," Socarides says.
When Goldberg left for Stanford Business School in 1998, drawn by the promise of Silicon Valley, Bowles threw a lavish farewell party for him, but the two kept in touch. A year later, Bowles reached out to Goldberg, inviting him to help turn around a New York start-up he'd invested in. And it was in New York, at a weekly gay dance night at the late, lamented Roxy, that Goldberg met Shellhammer.
"It was my first night out in New York," says Goldberg, not long out of the closet and experiencing his first gay club. "He was wearing a visor, dancing in the middle of the room," recalls Shellhammer. "We still talked to him." The two remained in touch as their lives followed separate courses -- Goldberg moving back to Stanford, and Shellhammer relocating to San Francisco. It was a decade later, back in New York, after working at a string of start-ups, that Goldberg suggested that Shellhammer quit his job at Blue Dot and help him launch Fabulis. That was just over three years ago.
One evening in February, at New York City's Soho House, Shellhammer tells an instructive story about taking a team of six Fab employees to dinner, whereupon he invited each to tell a secret about themselves.
One had been a top swimmer in Korea at the age of 10 and was juiced by his coach; another had been jailed for some petty crime; a third had failed second grade; and so on.
Shellhammer's secret was about a friendship with a boy in fourth grade, Dustin, who was so severely paralyzed after being hit by a car that he was limited to a specially constructed wheelchair and a ventilator (they appeared in a documentary, Beginning With Bong, about special needs kids and their friends). "He really made an impact on me," Shellhammer recalls. "To be stared at all the time, always being asked questions -- he was weird, he was different. It really taught me not to judge people on face value, and it was a turning point in my life."
Shelhammer's shoe closet
The anecdote is designed to illuminate the Fab ethos that Shellhammer has been so instrumental in creating, about the way good companies thrive on diversity. But it's also a reflection of the turmoil Shellhammer experienced himself as a child, both as an adolescent struggling with his sexuality and as the child who bore the brunt of his father's drug abuse. During high school, it was not unusual for him to find needles under his bed or to witness his father shooting up. At one point, he discovered his beloved record collection had been hawked for drug money. Although his father eventually got sober, he died shortly thereafter, of a rare form of cancer, when Shellhammer was a sophomore at FIT in New York. "I hate to say this, but him dying saved my mother's life, and I think on some level it probably saved mine," he says. "It allowed my mother to move on and find somebody who actually takes care of her."
The fact that Shellhammer felt confident telling this story -- at its core a tale of triumph over adversity -- also seems indicative of the way that he and Goldberg run their company. Much like their glass-walled offices, there's a transparency to the way they lead that is both deeply personal and strategic. If you have no secrets, there will be no surprises.
On March 30, Shellhammer married his partner of four years, Georgi Balinov, at New York's Russian Tea Room, a souffle of golden firebirds and red banquettes. He describes his nuptials as his "running-away-to-the-circus fantasy." They were wed by comedian Sandra Bernhard; French porn star Francois Sagat was an honored guest; Marcella Detroit performed "Stay," her hit song with Shakespears Sister and a touchstone for Shellhammer. Later, the grooms danced to Andy Bell of Erasure, and Shellhammer himself sang "The Power of Love," by Frankie Goes to Hollywood. "I'm not kidding -- I've been taking voice lessons," he told me at SoHo House. As for what you give the creative mastermind of Fab, the couple eschewed a gift registry and instead asked guests to each inscribe a copy of their favorite book and to make a donation to Immigration Equality, which fights for equality under U.S. immigration law for the LGBT community and those with HIV.
SLIDESHOW: See Images of the Fabulous Russian Tea Room Wedding
It may be too early to say whether Fab is capable of staying the course, and Goldberg, for one, prefers to focus on the long game. "We know that while Fab is building an interesting business, we still have a lot to prove," he says. "Our measure of success is whether we've built something meaningful in five or 10 years, and that when people think about design, they think about Fab."
As for Shellhammer, he already feels like he's won the golden ticket. "Four years ago, I was working in a retail store," he says. "My friends called me a shopgirl." He pauses, and then breaks into a giggle. "Well, I'm still a shopgirl -- nothing has changed. Who's laughing now?"
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