The high flying e-commerce startup Fab has been struggling over the last six months, missing sales targets, losing executives and co-founders, and cutting its staff from 700 to around 300. Traffic to its website and mobile have declined around 70 percent since January of last year. CEO Jason Goldberg has taken the brunt of the blame, and today he joined his own chorus of critics, penning a 3,500 word blog post that explains where he thinks things went wrong.
"I freely admit, when you grow revenue 500 percent year over year and become a media darling overnight, it’s hard to keep perspective. No doubt, we had lost perspective at Fab," he wrote. "We had started to dream in billions when we should have been focused on making one day simply better than the one before it."
"It is my fault for getting us in such a position."A number of sources within the company told The Verge that Goldberg undermined Fab's momentum by constantly shifting the company's priorities and crushed morale by dragging out layoffs. We also reported the company was burning through its cash too quickly. Goldberg confirms this, writing:
When I made the difficult decision to cut expenses at Fab in mid-2013 I had essentially two options in front of me: keep growing at the pace we were growing and hope I could raise even more money down the road, or scale back and control our own destiny. I chose the latter. Yes, it is my fault for getting us in such a position in the first place, but the go forward decision was rather simple. I didn’t want to ever get in a position where we were desperate for cash.
This directly contradicts what Fab told The Verge at the time, when it stated that the company was "profitable."
"Want to know how Fab is doing? Ask me again in 2017 ;-)"A big part of Fab's problems was that it boasted about its numbers in detail before it stumbled. Goldberg says he won't be sharing any more detailed revenue projections in the future. "Unless you are certain that your company is going to grow up and to the right forever and ever without ever hitting a stumble or roadblock, don’t ever put forth or even allude to a revenue projection or a profitability projection or a traffic projection or anything."
This morning news broke that Fab will be all but entirely winding down its operations in Europe. Given the sizable amount of money it has in the bank, this means the company now has enough cash to fund a multiyear turnaround. "The cost-cutting measures we enacted at Fab in 2013 bought us a lot of time. Now we’ve got to figure it out," writes Goldberg. "Want to know how Fab is doing? Ask me again in 2017 ;-)."