[andrelayer]

I was employee #30 something at Fab and had a decently unique vantage point for a while. I would say the problem was one of ambition. We had a working $100M company, however Jason and all of the investors decided that that was not enough and that we needed to be a $10 Billion company. I actually don't see that much wrong with this, it's just a bet they all bought into and they all were smart enough to understand the risks. The bet failed. Simple as that.

[GuiA]

You just summed up a big part of silicon valley. Everyone thinks it's written in the stars that they are the next billion dollar company; anything else is given the derogatory "lifestyle business".

It's just a silly game that people way above us are playing. When I left a failing startup (that could have had seen some success had it been less ambitious and raised less debt), the CTO told me: "the VCs have more money than we have time".

[x0x0]

I also worked for a company that got very serious acquisition interest in mid 8 figures, but the founders wanted a 9 figure company (and 1-2 weren't the first digits they had in mind either.) We swung for the bleachers, and went out of business.

[__Joker]

I got the impression that most of VC simply look for multifold returns and they shun companies which can be successful in a limited way with moderate returns.

[mgkimsal]

Years ago I pitched a VC with a working prototype and biz plan - actually was looking more for angel-level money (perhaps) - somewhere between $300-$500k, and I was projecting revenue (which would be mostly profits) of $5m/year within 4 years (aggressive growth by my estimation, but doable). No dice - they wanted to see numbers north of $20m/year for sizable exit before they'd be willing to put in.. $500k. Those numbers always struck me as insane, but have stuck with me (this was... 15 years ago perhaps now).

[tptacek]

It's understandable why this would irritate you but worth remembering that the VC economics don't work out for reasonable-sized successes. The wins have to pay for the losses, and the win rate is something like 2 in 10.

[velodrome]

Did you go through with the business? If so, did you end up reaching your goal?

[mgkimsal]

No, ended up scrapping it. Not just because of that, but it was a small factor.

[JohnLen]

Agreed. Many investors too looking for revolutionary ideas or products rather than general usage products which has proven to be successful.

[tashoecraft]

My sister was one of the super early employees as well, I think under 30. She's given me a very similar picture. Seemed like a lot of young people were hired who way over purchase on terrible merchandise that just didn't sell. Jason also seemed to be a terrible CEO and run the company into the ground.

[andrelayer]

I really don't consider Jason a bad CEO. He was incentivized heavily to go big along with everyone else. He made a plan to get there, a plan I actually think was the best route to try and get to $10B. It just didn't work, doesn't mean it still wasn't the best plan.

[untog]

I just feel for employees that were paid in part with equity. I'll bet a lot of them would have been very happy with a $100m valuation, but they wouldn't have had any say.

The lesson here to any even mildly talented developer is: unless you believe in the company/CEO 1000%, don't rely on equity. Take the cash, and walk away when it all burns to the ground.

[nailer]

Something about Fab's story always makes me feel sad. They did so well, and made a great product, having pivoted out of something they recognised wasn't working, and made a bunch of money. The decisions made don't seem like bad ones. The people seemed good. And a lot of the European companies they bought were doing great stuff too.

Sometimes you lose despite achieving a lot and making what seems like good decisions.

I hope you're all OK and wish you the best of luck.

[carrotleads]

I still don't know what the product was...

my best guess is some sort of e-retailer.

[nailer]

Flash sales for designer homewares and furniture.

[nazgul]

And getting away from those Flash sales appeared to be a significant part of its downfall (at least according to the article -- that and the Europe expansion).

[nanoGeek]

It's really sad to see a company end up like that... In the end, you should only risk what you are prepared to lose. Those guys maybe risked a bit more than that.