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Comment by andrelayer | Hacker News Reader

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.

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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".

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.

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.

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).

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.

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

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

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

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.

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.

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.

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.

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

my best guess is some sort of e-retailer.

Flash sales for designer homewares and furniture.

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).

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.

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