500,000 users in 10 weeks: what worked for Fab.com

When Fab.com entered the market, it was just the latest flash sales site. But it has proven far more than just another also-ran, having signed up almost half a million members since launching a little over two months ago.

The company, which began as Fabulis, a gay social networking site, has managed to find success by pushing a funky curated catalog of unique design products and trying to be as social as it can. The New York–based startup, which has grown by 800 percent since May and should pass the 500,000 member mark any day now, is now revamping a core feature called its inspiration wall, making it even more social and also more tied to the commerce aspect of the site.

The inspiration wall was originally introduced in April as a way to keep users interested in Fab, which closed down its social networking site earlier in the year, as it prepared to launch its sales site. The feature allows users to share pictures of design inspirations, uploading them from their computer, from Instagram or from Google (s goog) searches. Now users can upload and favorite products from Fab to their inspiration wall, and other users will be able to see these choices and follow their tastes.

Jason Goldberg, the CEO of Fab, said it’s all part of Fab’s push to leverage social as much as possible. Users are able to share most anything they do on the site through Facebook, Twitter, Tumblr, Google+ and email, and they can comment on posted items as well. According to Goldberg, compared to other private sales sites, Fab has ten times as much activity on Twitter.

“Social is built into the core experience, and if you take that and couple it with design people who love sharing their latest design finds and showing off and seeing, it’s a natural fit,” Goldberg said.

Fab is showing that it can evolve even after its initial idea has run into problems. And it has found that life can get easier when you align yourselves with the right people. Fab most recently raised $7.7 million last month from Menlo Ventures, First Round Capital, Baroda Ventures, Ashton Kutcher, Kevin Rose, Guy Oseary and others, bringing its total to more than $11 million. The biggest sales days so far have been when Demi Moore, Kutcher’s wife, tweets about specific sales.

Even though Fabulis stalled, Goldberg believes that social sharing is a powerful tool, something he learned as the founder of Socialmedian and Jobster and the chief product officer at XING. But he said it can’t be tacked on after the fact; it needs to be built into the core of the product. Goldberg said in a blog post last week that most of Fab’s members have been added through social sharing. Email invites have been particularly successful, resulting in four times the revenue of any other social-sharing sources.

Fab still has a ways to go to catch up to bigger rivals like Gilt, but its early success suggests that it has found the right recipe.