Fab.com was once thought to be the world’s fastest growing start-up, the e-commerce sites cooperate with thousands of designers, sold at flash sales mode they design all kinds of ornaments and decorations.
in the beginning of its online six months, won a $20 million investment Fab, silicon valley investors to the company’s valuation is as high as $400 million. In its heyday, the company had $900 million valuation of $336 million, and after every financing company valuations will increase to $200 million.
but then Fab began to fall. Will this month, the overall assets in a stock is given priority to deal PCH Innovations in 15 million to 50 million. In this process, the company and its CEO, Jason Goldberg (Jason Goldberg) made a lot of mistakes.
goldberg, after the failure to realize overall, to the company senior management team wrote a five-page memo. Write the date will be on October 11, 2013, which is $900 million with a $900 million valuation for the company to complete the round of financing after just a few months.
at the time, the overall laid off hundreds of employees, to modify performance for four or five times. Can be seen from the letter, memo, this is a have yet to find sustainable business models have huge investment company, but it is in trouble now. Can also find that, even with the most well-known technology companies, large investments will rapidly out of orbit.
the following is a memo in full:
the CEO file
on October 11, 2013
we want to do the following.
first of all, I want to say in front of you:
– we’ve got something to do, it is to make overall success.
– I want you to help finish the task.
– but it certainly is not the same with the past, you may have for us to do don’t feel comfortable with, it’s always difficult to change.
second, we must set up the following rules:
– I got the full authorization of the board of directors, in order to make the task achieve good results, I can do anything. I want to take responsibility for their money, this is also our money. My mission is to give the ship at the helm, you must cooperate with 100%.
– Jason has the right to question and ask anything. He might have said some make teams do not happy, but we need to find a road to development. Now we are in full stall state, it is a very serious problem.
– every aspect in the company need to monitor and measure, we have no room for blind bet.
– if the whole team, especially the senior management team is doing is not good enough, I can’t do that. After all, the whole team to get inspiration from you.
– at this time, we’d better team each other, don’t fight each other.
I have committed to the board of directors to make the following:
– we will make the company achieve self sustained.
– we will shrink the business scope to a specific customer group, at the same time to develop a sustainable business plan for the customer service.
– we’ll ask anything, and strict in the decision-making process analytical method.
– we’ll to strict assessment of talent team, and make up the shortfall.
discussion about route is over, what is needed is careful operation.
now the ship didn’t drive on the right course, this requires continuous efforts, day after day. Therefore:
the first step: admit that we had a serious problem.
step 2: based on the reality, find out to solve the problem what to do.
the third step: focus on solve the problem.
resources, time, personnel and determination.
in the face of our situation, we need objective face.
– in the past two years, we spent 200 million dollars. 200 million dollars!
– we spent $200 million, but did not justify their business model.
– we spent $200 million, but did not prove that we know exactly what the customer wants to buy.
this is not what people, what kind of person, or the team’s problems. We must be thoughtful, study what is best for Fab.
we now have more than 100 million dollars, first of all, we should let these money, secondly to figure out who should have in the past two years is clear.
Such is the
– and then to round will be very difficult, even for financing, we should also face some consequences, lose control of their own destiny, for example, or may be a bad finance.
– in our set up only 2 years, we are most startups get investment, New York, but now we have already spent two thirds of the money, this is a pleasure, is also a great responsibility.
– we must quickly find out the solution, or you will run out of money. This is definitely a great thing.
retail enterprises is the key commodity.
marketing and financial skills can never be more than goods.
successful retail is the combination of goods and the supply chain.
successful retail is a combination of goods and operations.
want to sell a way of life, must be tough to perform highly innovative concept, and combining with research to customer’s requirement.
is hard to reverse a retail enterprise, this is not going to do, must carry on the cycle of planning, we need time.
we get time is the only way to reduce spending, we need innovative thinking, and strictly implemented.
we must, must, must narrow range, and even more narrow than it used to be.
Fab to do something better than anyone, this is evidence.
this is not to say that we are unable to return to the past, build a we want to build life fashion brand, but now we must make money bit by bit.
we can’t hoard library product, in particular, we can’t afford can not sell goods, all must focus, even to miss.
we do not do enough in this aspect, the only way to stay focused is our goal. Highly disciplined focus.
it is not enough to say we get back to the past.
– strict framework. Based on customer demand, in the framework of strict buy what we want.
– at the moment, what customers need, why want to payment, is more important than what we want them to buy.
– this is not only for us, but also to Jennifer (Jennifer) and Michael (Michael). They are based on an internal customer survey planning overall target users.
if you can’t do the following, we have no chance to establish Jennifer and Michael are looking forward to the kind of enterprise:
– focus, focus, focus.
– slow down.
– continue to compress costs and improve efficiency.
– evaluation and test everything.
– to achieve this goal and clear all obstacles.
to do this, what should we do?
in the past, we did not clearly pointed out that the core value of the Fab is to the user.
– how do we focus, narrowed to a specific user groups.
– how to provide products, how to price.
– we have to do this now.
in the past, we fail to realize the cost, execution, e-commerce enterprises of low margin requirements. We’re going to do this at a time.
in the past, I made some mistakes.
– I take you go too fast.
– I lead to you lost core focus.
– I didn’t insist on focusing on the target customers.
– I don’t have in terms of cost and conform to the corporate culture corporate practices to develop a specification.
– I didn’t set up retail goods and marketing culture.
– I in customer value has not been set up before they spent too much money in marketing.
– I cause we are spending too much in Europe, in terms of technology and expand global team.
– I’m not set up culture from the aspects of goods to the delivery of the supply chain and the specification, I acquiesced in the existence of the isolated team and thinking, which has led to a serious consequence.
– I didn’t see the necessity of correct errors quickly.
-, etc., etc…
in addition, all of you have made a mistake.
I need you to do it: write down your own mistakes.
this is not to blame, but review in order to undertake the necessary according to the reality, and then move on. If we are to different, how to do better, more intelligent without a clear view, we cannot make a better overall.
the next few weeks and months you will see:
the ship on a course to correct an interest.
– focus on the company business is concerned.
– is extremely attention to plan for the future, to cut costs.
– pay more attention to Jennifer and Michael.
– the introduction of retail and e-commerce experience, including recruiting, bring their own meals, and invited consultant and mentor. (David Beckham)