Just a year after launch, Bezar sells to AHAlife
“It is what it is.”
Is there any more depressing phrase to utter about the evolution of your dream?
If there was a shared startup public relations handbook passed between 22-year-olds charging entrepreneurs hundreds of dollars an hour to spell my name wrong and give them “advice,” somewhere bullet pointed and in bold it would say: “In case of bad news or questions you can’t or don’t want to answer, just tell the entrepreneur to say ‘It is what it is’.”
You hear it when there’s a founder divorce, a down round, a shuttering. Whenever things don’t work out as planned. It’s as appropriate as it is sad. Building a company takes a funny psychological mindset of holding yourself ultimately accountable for anything that happens at your company, and yet knowing that the bulk of companies fail so you can’t beat yourself up too much either. There’s a sense of timing, luck, happenstance, making a crucial call that seems inconsequential at the time that puts the whole thing uncomfortably out of your control into some cosmic order. The passive voice pays homage to that. It is what it is.
At 6 am this morning, I was on the phone with Bradford Shellhammer, just before news broke that he’d sold Bezar, a company he launched less than a year ago.
“It is what it is,” he said more than once.
Today the chapter of Bezar, Shellhammer’s design marketplace and “Fab do-over” closes. Bezar has sold to Australian public company AHAlife. Bezar’s brand will be no more, but much of his team will be folded into AHAlife, which has operations in New York as well.
It has been obvious something is going on with Bezar, which stopped publishing pop up shops a few weeks ago. This is far better news for Bezar customers, designers, shareholders, and team than shutting down or just running out of cash, which was speculated by Re/Code earlier this year. Shellhammer says now those reports were half true. The company was running out of money, but in part because it didn’t raise more once it began conversations with AHAlife last summer.
I’ve leave the debate about whether they could to Twitter commenters. What we know is -- for Shellhammer, at least-- this was the best of a few presented options. We also know that no one starts a company with the goal of selling it in a year. At least, no one who really cares about what they are putting out into the world. And Shellhammer-- for all his pluses and minuses as an entrepreneur, deeply cares.
I’ve covered Bezar more than most year-old companies that raised just $2.25 million. That’s in part because I have always been a fan of Shellhammer’s aesthetic, but I was also captivated by the human story of unfinished business.
So much of the real stories of entrepreneurship aren’t rare phenomenons like Facebook. It’s the story of people like Shellhammer. People who have a voice, who have something inside of them they want to amplify, that they feel pulled to put out into the world. People whose vision inspires other people to quit their jobs and follow them. And increasingly, people who don’t fit the young, white, middle-class, socially awkward, coder kid mold.
There’s poetry in the struggle and our willingness to continue to put ourselves through it.
For those who don’t know, Shellhammer was a co-founder of Fab, the company that pivoted from gay social network Fabulis, and became an early and ascendant unicorn, leading an ecommerce 2.0 revolution, before it stumbled badly and became a cautionary tale of high prices, high valuations, and unsustainable growth. Along the way, Shellhammer-- once called the company’s “secret sauce”-- was shown the door by his then best friend and co-founder Jason Goldberg. His paper net worth and emotional journey were all over the map during that process.
When Shellhammer launched Bezar, a lot of the impetus was to do something for the thousands of designers he’d gotten to know over his career, but it was also to try a similar vision and business but do it his way. To be the one making the business decisions, the funding decisions, the hiring and firing decisions.
Ultimately, it didn’t become the Harvard Business School case study that Fab will, but it also didn’t work running the near-opposite financing playbook. “It was a personal decision, a business decision and a gut decision,” he said. “It’s survival. I can’t predict the future, but I don’t think it’ll be any easier for ecommerce companies to stay alive in the coming year.”
He admits: “This isn’t what we envisioned a year ago. I guess I’m a little more risk averse than I used to be.”
The story of Bradford and AHAlife’s co-founder and CEO Shauna Mei appropriately started back in the Fab days. AHAlife started around the same time, and was also a marketplace focused on uniquely designed products. As other ecommerce companies came and went, growing bigger and surpassing her, AHAlife chugged along.
Two years ago, when Shellhammer was just starting to think about Bezar, the two of them reconnected at a conference where they sat on a panel together. She mentioned that he should talk to Rakuten CEO Hiroshi Mikitani-- one of her investors and a mutual friend. She even emailed Mikitani, suggesting he back Bezar, which he did. He was the only shared investor.
Last summer-- long before stories that Bezar was running out of money surfaced-- Shellhammer started conversations about whether or not they should raise more money or sell. He says there were other options for Bezar, but when Mei called and said they should talk, he knew it was something he had to seriously consider to at least keep his vision for Bezar in tact.
Not only did they share an aesthetic-- and that one investor-- and seemingly a similar joie de vivre as well: He went to her DUMBO offices, and it was cocktail hour. “Why is it that every time I meet someone I connect with, I’ve got a drink in my hand?” he asks. “What does that say about me?”
Most important: She’d built a sustainable ecommerce company. If Shellhammer has learned anything over his last decade of ups and downs, it’s just how unique that was. Rather than go the venture capital or pure-bootstrap route, Mei took her company public on the Australian stock exchange to finance its growth. It’s valued at some $75 million. Not huge, but a solid company that sells to some 30,000 curated products to some 500,000 customers around the world, sustainably.
Both in the carnage of Fab and during the struggles of Bezar, Shellhammer’s respect for Mei grew. “You know what it is like running a company and the ups and downs and the highs and lows,” he says. “Shauna built a business and survived while others got much bigger around her and then collapsed. She built it the way I wish Bezar had been built.”
Once it became clear that Bezar wasn’t going to raise more money, the possibility of the deal became more appealing. When the two launched, AHAlife was more high end than Fab, but Bezar had been too. A lot of the same designers and pieces that I’ve seen (and bought) on Bezar are on AHAlife, and it has a similar mission of connecting artists and designers with consumers who want more than mass-produced goods plucked by some mega-chain’s buyer. AHAlife is more international than Bezar, and frankly, had some designers that Shellhammer hadn’t been able to get. “If any other marketplace had acquired us, it would have felt more forced, but we have very similar aesthetics,” Shellhammer says. “When the opportunity came, I knew it was the best way to keep our vision alive.”
It’s a bigger with far more categories and items, and hence, harder to browse. Lost will be the daily curated pop-up shops, but that may have been an unsustainable relic of the flash sale days anyway.
“We aren’t a billion dollar company but nor is it a doomsday scenario,” he says. “So I’m ok with how things have happened. It was a nice cure to a lot of unfinished emotions that were wrapped up in building Bezar.”
I ask if he has regrets. Should he have raised more? Less? Marketed more? Less? “I don’t walk around with a tremendous amount of regret,” he says. “With my previous experience, the only regret that I had was maybe not valuing enough of what I could bring to a company. This time around I feel like I did build a team and a brand in less than a year that meant something to a lot of people in the world.”
“It is what it is.”
One thing surprised me. I would have assumed any Bezar deal would be an acquihire to get Shellhammer. But he’s the one major part that isn’t going to AHAlife, except as an advisor.
I think I know the answer based on the conversation, but I have to ask: Is there a do-over of the do-over?
“Right now I would say no,” he says laughing as if that’s an understatement. “When I left Fab I was walking around with my hand in the air saying, ‘I will never start a company again.’ Never say never I guess.”