How much does the world need a $699 self -propelled beer cooler? Is it something that, say, every household will own in a dystopian future in which boardwalk drink stands will be banned? Or is it perhaps more along the lines of an investment for beer-selling urchins trying to work their way up to the food truck business?
That seems like a strange question for a blog about markets and the economy, but consider this: as Bloomberg’s Sarah Frier reported, The Fancy, a “social shopping site” secured $53 million of funding from a group of investors including American Express Co. And on Monday afternoon, when I first looked at the site, the electric beer cooler-carrying tricycle sat at the top. It’s now “fancied” (the site’s “like” equivalent) by more than 6,000 users.
The latest round of funding values The Fancy at $600 million; the site has on its board Twitter and Square founder Jack Dorsey* and French magnate Francois Pinault. And frankly, I had some trouble reconciling that $600 million with what I actually saw on the site. The idea here is that users find neat stuff on the web, post to Fancy.com, and The Fancy makes deals with the merchants to sell it. The problem is that beer cooler scooters, obsolete cameras with wooden cases and crystal-meth shaped rock candy didn’t exactly scream Future of Web Commerce to me.
In an informal Market Now investigation, I got in touch with the Fancy.com user who had posted the Cruzin Cooler, as well as the crystal-meth candy. I found him, known as “theheartdirector,” via Twitter to ask how serious he was about fancying the Cruzin Cooler. “Let’s say around 80%,” he responded.
The Heart Director turned out to be Roberto Maggio, an Italian advertising director and writer. I’d suspected that Maggio was more or less having fun at The Fancy’s expense, posting items that no one in their right mind was likely to buy. That wasn’t quite right. Maggio actually liked the products he’d posted, explaining that he tended to “dig things that puzzle you a bit.” Posting on Fancy, Maggio wrote,
“Makes me feel like some kind of a pop culture explorer, like with the candies: they’re a funny product, they haven’t been seen before and they celebrate one of my all-time favorite shows, Breaking Bad.”
Fair enough. Let’s grant that these are pop cultural finds. I’m just not sure that pop culture anthropology translates easily into sales, and I suspect that the final resting place for much of what does sell will be the back of a closet. Selling oddities online is a hard business.
More to the point, it’s not a business that would automatically attract a lot of interest from technology investors or big-name partners. What really seems to be the motivating factor here is that marketers are salivating over ways to get their customers to spread the word about the products they like. And Silicon Valley sees “social shopping” as tomorrow’s must-have feature, an acquisition target for a bigger commerce player like Google, Yahoo or Ebay.
Social shopping, though, suffers from one key deficiency: people just don’t like being “marketed to” by their friends–note Facebook’s now-deceased “sponsored stories.” Frier reports that The Fancy takes in $3 million in revenue each month, but those figures may be juiced by The Fancy’s collection of monthly gift boxes. That may or may not be a viable long-term plan; eventually the attraction of paying $39 a month for a a selection of “the dopest stuff” “curated” by Ashton Kutcher has gotta wear off.
The continuing tumble of Groupon Inc. might be a warning for potential acquirers. At one point Google had reportedly offered to buy Groupon for $6 billion; now Google executives are certainly not crying about having been turned down. The Fancy may get a nice burst of consumer publicity as it ramps up the celebrity deal (the site names the actor Will Smith as an investor in this round, no word on whether he’ll choose even doper stuff). What comes next could be buyer’s remorse. The Cruzin Cooler doesn’t look as rad once you take it home.
PS: Maggio says that as an ad guy he likes the directness of The Fancy. As he puts it in an email, “there’s nothing hidden or disguised as something else there, no product placement in a plot, because the products are the plot.” That’s a cogent analysis, and worth noting. Only thing is, The Fancy’s commerce-driven plot seems a lot thinner than, say, Pinterest’s.
*Correction: This post incorrectly referred to the Twitter co-founder on The Fancy’s board. It is Jack Dorsey, not Biz Stone.