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How Fab Fired Everybody, Started Selling Steaks, And Then Turned Itself Around

With the firing of over half their workforce, the last year was a tough one for Jason Goldberg and company. Here's his vision for a slimmer, more nimble Fab.

Last July Fab raised $150 million at a billion-dollar valuation, but by the fall the flash sale company cut itself from 700 to 300 employees. A cofounder left. They started selling steaks.

As founder/CEO Jason Goldberg wrote in a confessional blog post, the Most Innovative Company had lost its way.

Goldberg riffs on how Fab got all astray by privileging growth above all else. He talks about how they "became a media darling overnight" and grew revenue by 500 percent—thus the loss of perspective. They had started "to dream in billions" instead of taking things day by day. The growth emphasis was seen in the company's expanding geographically—like the opening of an office in Berlin—and departmentally, getting into verticals that didn't quite find with that founding mission of designy delightfulness.

It's kinda like what happened with Starbucks, Goldberg says:

It reminds me of the bit in Howard Schultz’ autobiography when he walked into a Starbucks one day and said to himself: "This doesn’t smell like a Starbucks, it smells like food. A Starbucks is supposed to smell like coffee." He vowed to return Starbucks to its core mission and smell the coffee again. The analogy to Fab is not all that off. I should have known we were headed down the wrong path when we had a weekly butcher shop selling steaks on Fab. Brighten lives with design = steaks? Doh!

What Fab needs to do, Goldberg adds, is to smell the design coffee again.

How to Avoid Mission Creep

From the way Goldberg explains it, Fab fell victim to one of the oldest traps in the book: mission creep. It comes from the military: soldiers will go out to get a project accomplished and try one more thing, one more thing, and one more—until the goal of the mission gets diluted. In software design you call it feature creep, where you encumber a core offering with unnecessary accoutrement.

So how to you deal with mission creep?

1. Stay close. In the laundry list of mea culpas, one that's most resonant is Goldberg's realization that flying away for weeks at a time doesn't function well for leadership. "Emails become missives," he says. "Fewer people are involved in decision making and they wonder how decisions are made." The solution: If you're actually there, decisions get made together, over days, not minutes.

2. Trim the fat. Goldberg asked his team to count up the products on Fab that they weren't proud of. The result: more than a million bucks in inventory. The solution: only sell the stuff you're proud of.

3. Do the work. Goldberg has his vices, like browsing HackerNews, nailing down travel plans, mashing out blog posts. The solution: "When you find yourself doing the stuff that you do instead of doing the work," he says, "stop."

Hat tip: Betashop Quarterly

[Image: Flickr user kirainet]

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  • Matt Maldre

    I think the "solution" line in here is flipped. You say, "If you're actually there, decisions get made together, over days, not minutes."

    If you are there, shouldn't decisions be made in minutes, not days?

  • Why don't publishers ever apologize for over-rating these startups? Seems like it should be a running list like the "corrections" sections of news papers (which actually do a poor job of it, too).

  • So, how is this guy still in a job?

    Sure 'owning' your mistakes is great but the co-founders deep lying narcissism seems to have come at the cost of almost losing a business. Surely he's extremely lucky to be still in situ.

    It looks like Fast Co. is now looking for the (any?) good news story related to this to back up their initial triumphing of Fab. Maybe they just made a mistake, no?