Media tells the story of Jason Goldberg's Fab confession
Fab co-founder Jason Goldberg has a confession, which he is sharing publicly at BetaShop Quarterly. In 2012 and 2013 he had taken the betashop blog "in a direction that I’m not proud of. I allowed it to veer from its original mandate around startup transparency and lessons learned to more of a promotion tool for Fab."
Goldberg revealed more on betashop than most startup CEOs would, but, he wrote:
To be perfectly honest the sharing was sometimes slanted; more and more betashop was used as a vehicle for pushing out positive data about Fab. That's not full transparency. Someone once asked me, 'will you still share so much data when things aren't going so well?' At the time I said 'Yes.' In reality, I did not. It's really hard to proactively publish negative data about your company (imagine the post: 'Hey, look how crappy our monthly sales were!') I don't know many good examples of companies who do that well, except for the occasional 'why we failed' post from early stage startups. Company transparency can only go only goes so far.Really, though, is anyone surprised that a CEO of a retail company would try to market himself through his writing? Goldberg once worked in the White House during the Clinton administration. He knows how to sell an idea.
Goldberg also called 2013 "a pivotal year." Right after closing a round of funding that raised more than $150 million at a $1 billion valuation Goldberg decided to "slow down and significantly cut the burn-rate while we strengthened the foundation vs. pursuing rapid growth. From August to November we cut our workforce by more than half from 700 to around 300 today. I said farewell from Fab to one of my cofounders and to numerous other highly capable and extremely talented executives, managers, and doers. It was painful."
That co-founder was Bradford Shellhammer. In a sense, Shellhammer was the aesthetic of the company while Goldberg drove the business .
The first time I met him Bradford I asked if that was his real name. He assured me it was and showed me his drivers license. It was 2005 and I conducted the interview when Bradford was just a guy blogging for Queerty (a play on Qwerty, the keyboard standard), a mainstream gay culture blog.
Shellhammer told me he had big plans for Queerty. After all, "gay people read. Have you seen our coffee tables?" He envisioned the site to be a gay lifestyle blog with a strong editorial voice.
We want to be the place you go when you are planning a trip, buying a new suit, getting a haircut. The coverage will include fashion, style, grooming, home decor, nightlife, dining, travel, fitness. I'll also look at politics, sex and online dating. Gay men just eat up online dating. I will be spotlighting a new line of clothing, discovering a gem of a restaurant, posting travel reviews written by my network of friends and colleagues. On my personal website, I have interviewed celebrities, artists and musicians, and am going to adopt this strategy at Queerty.Years passed and I didn't give much thought to Shellhammer or Queerty, until I heard that Shellhammer had quit blogging and was working at Design Within Reach.
Skip ahead a few more years -- 2012, to be precise -- and Shellhammer had reinvented himself again. Now he was co-founder of a hot new startup called Fab.com.
In May 2012 I wrote about Fab's famous pivot from gay social network to flash retail site media darling for Fast Company.
Here's why they pivoted:
Their gay social network, Fabulis, a mashup of Facebook, Yelp, Trip Advisor, and Foursquare, wasn't exactly failing but it was exhibiting the telltale signs of mediocrity. Like most entrepreneurs, they started out thinking they had a winner when they launched in April 2010, a clear niche they could serve. While there was Grindr and plenty of porn, there was no place online for gays to find relevant information about who to meet and where to go that wasn't focused on sex.
In the beginning Fabulis was off to a strong start, signing up 50,000 members in its first three months, but then membership slowed, barely cracking 100,000 at the eight-month mark. At this rate, they'd be lucky to generate $10 million in revenue -- this after raising $3 million in financial backing. "It was an eye-opening experience because even if you have this great idea and you build a really great product, people may not want it," Shellhammer says.
They changed their business to taking what each of the co-founders did best. Goldberg was a serial entrepreneur and Shellhammer has great taste. A lot of people think they have taste, but Shellhammer, who owns hundreds of pairs of shoes, really does. His homes have been featured in The New York Times, Dwell and Time Out New York. The de rigueur "pivot" epiphany:
One of Fabulis's few bright spots was the 'Gay Deal of the Day' through which they sold chocolates, lube, underwear, T-shirts, chairs, hamburgers -- and anything else they could think of. It dawned on them they didn't have to build something and hope someone would use it in the hopes they could monetize it down the road. This was classic retail; no gray area. They make money by selling something, which was almost as old as human time itself, and in the process, they could tap a far bigger market. 'Our whole pitch is we were for gay men,' Shellhammer says, 'so when we had overwhelming amounts of women come on and buy this Lucky's Hamburger deal, suddenly we're like, 'Okay, so we sold 2,000 of these today, but half of them have women's names. Women like to shop, women like a deal.'The re-imagined company took off. Until it started to tumble in 2013.
As Inc. put it:
The news tops an eventful year for the New York-based company. In April, the company pivoted from a flash sales site to an e-commerce business, and in June raised $150 million in a fourth round of financing, bringing the company total to a whopping $336 million. Around the same time, Bloomberg published an unflattering story about the company, reporting that its $1 billion valuation was shaky and that its founders had created a toxic culture among employees. Goldberg responded point by point in a company blog post.
In addition, the company has made two rounds of layoffs this year, letting go 100 employees in Berlin early this summer, and then another 100 from its New York headquarters last month. In November, Shellhammer left Fab.com and its $1 billion valuation "to see the world." He also seems to have pulled the plug on his personal blog.
Today, Goldberg leaves us with a list if 16 lessons he learned in 2013, including "startups are hard," "cash is king," "get advice," "stay in shape," "eat healthy," and "take vacations."
Don’t ever, ever give up. Ignore the naysayers. Focus. Lead. With resources, time, and smart motivated people you can do amazing things. Time is the entrepreneurs most precious asset. With time you can learn, adjust, and figure things out — if you have the courage to do so.
In a word: Resilience. He can have the last word.