24
Aug

I’m Long On Facebook

While I’d like to fancy myself as an angel investor the truth is that I’m too busy running Fab to effectively evaluate deal flow.

As such, I’ve adopted a very simple investment thesis:

I only invest in products that I use.

Until recently this thesis had led me to invest in only 2 companies beyond Fab: Twitter (via its TweetDeck acquisition - I was an early angel investor in TweetDeck) and RJ Metrics. I use TweetDeck/Twitter all day everyday. I use RJ Metrics daily as well.

I say no to dozens of investment opportunities because they don’t pass my “do I use it?” test.

Today I’ve gone long on Facebook, investing a good chunk of money in Facebook stock at $19.20 per share.

My Facebook investment thesis is as follows:

  • Hundreds of millions of people use Facebook every day. I am one of them. Facebook is not an app, it is the app that ties together the social web. I don’t know hardly a single person who doesn’t spend at least 30 minutes on Facebook each day. That’s time they used to spend watching TV or consuming some other form of media.

  • Fab spends millions of dollars on Facebook advertising and we get a great return on that investment. It is a fantastic channel for us and it delivers real ROI with high conversion rates to purchase and then super high viral sharing rates. Facebook advertising works if you know how to use it and stick with it and turn it into a science. And it keeps getting better. We’ve seen big improvements over the past few months. 75% of Fab’s advertising is on Facebook and we will continue going big on FB as long as it remains a productive channel for us.

  • Smart vision + smart team + smart execution = potential for amazing results. I really do believe that the smartest most creative teams win. The key for Facebook will be to keep its employees focused and incentivized for the next and next and next big things. Don’t become AOL (where super rich managers lost their way). Become Google where hiring standards were kept high, fresh managers were heavily incentivized to develop the business, and where the leaders constantly pursued an innovative agenda. I believe that Zuck and Sheryl will do this.

The naysayers question Facebook’s ability to evolve towards a mobile world. Facebook’s latest iOS upgrade shows already that Facebook is adopting a mobile-first strategy. The new FB app is 10x better than the previous version.

And, then there’s instagram. Instagram is THE mobile photo sharing network. Facebook just got mobile in a big way. I have no doubt that Facebook will figure out mobile in time. Heck, I’m on a tour bus right now in Rome and everyone on the bus is on Facebook on their mobile, and they’re taking all their pictures using Instagram.

In terms of valuation, I’m long. I believe that 10 years from now Facebook can be worth $200B. I don’t care if it takes 10 years to get there. My own math says that FB is worth around $30/share today. But, again, I’m long.

Facebook today actually reminds me more of Amazon in 2000 than Google. Amazon had an opportunity to define an industry, ecommerce, and they have. I believe that Facebook has a similar opportunity to define the social web for decades to come.

Disclaimer. Fab will continue allocating our marketing dollars based on the channels and platforms that deliver the best return on investment, despite where I personally invest my own money.
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  1. kevinmendonca reblogged this from betashop
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  5. john said: Good post, smart thinking 200bil feels rich Also, 10 years in internet time will bring many new shiny things
  6. paulbz reblogged this from betashop and added:
    companies… Although Jason got his post-IPO at a better price than...now-embarrassing...
  7. betashop posted this

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About

Betashop is the website of Jason Goldberg,
Founder & Chief Executive Officer at Fab.

Jason founded Fab in 2011 with Bradford Shellhammer (Chief Design Officer) and Nishith Shah (Chief Technology Officer).

Fab is everyday design.

Fab’s mission is to help people better their lives with design. Millions of people around the world use Fab to discover everyday design products at great prices, to connect with the world’s most exciting designers, and to share their favorite design inspirations. Smile, you're designed to.

Some have called Fab "the fastest growing E-commerce company on the planet." We like to say we're just doing our best to serve up great design that makes people smile.

Fab now serves more than 11 million members across 26 countries. Fab grew sales by more than 500% in 2012, one-third of which comes from users of the Fab mobile apps for iPad, iPhone, and Android devices. In February 2013 Fab was named the #5 most innovative company in the World by Fast Company. Fab won the award for Best E-Commerce Company of The Year at The Crunchies in both 2012 and 2011. It's all very humbling and inspiring. The truth is we celebrate our challenges more than our successes at Fab and we're really still just getting started.

Fab is the fourth company Jason founded. Jason previously founded fabulis, socialmedian, and Jobster. In 2009, following the sale of socialmedian to XING AG, Jason was Chief Product Officer at XING, based in Hamburg, Germany. Before starting Jobster in 2004, Jason led product and business initiatives at both T-Mobile USA and AOL Time Warner. In a prior life, Jason spent 6 years working 100 hours a week for Bill Clinton in the White House.

Jason is also an investor in and Board Member at RJ Metrics. He is also an investor in BlackJet and Twitter. Notable prior investments: TweetDeck.

Jason is a product guy. He loves to blog, loves transparency, and loves trying to make people smile. Jason shares everything about Fab on his blog, betashop, at http://betashop.com.

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