It has now been 150 days since Fab completed its 2013 restructuring which saw us cut our operating expenses by two-thirds and go from more than 750 employees to around 300 today.
Since then, armed with tens of millions of dollars, a great brand, loyal customers, a passion for design, an amazing network of designers, a resilient team, and enough time to make a difference, we’ve been hard at work on the turnaround.
It’s been said over and over and over again that startups are hard. True that.
Startup turnarounds? Really fucking hard.
Have you ever been clinging onto a rocket ship, then cut the engines at full speed, and then tried to fly again? That’s what we’ve been going through at Fab the past months.
In the history of startups I bet you can count on one hand the number of companies that went from $0 to $1B in valuation in just 2 years and then voluntarily cut their operating expenses by 2/3 and then rose to greatness again. Will Fab be able to do it? We’ll see. There are days when I’m certain we will. There are days when I question if we can. I’ve had VC after VC tell me that they’ve basically assumed Fab is going to die; for how in the world can a company possibly survive 3 rounds of layoffs and cost cuts as we’ve had?
But if there’s one thing we are not going to do, it’s quit.
It’s a fucking startup.
It’s supposed to be hard. We’re entrepreneurs. This is what we do.
In fact, as I freely tell people, I’m actually having more fun now than ever. Why? Because we’re actually doing the hard work of building a company now. We’re figuring shit out. We’re owning up to every crack and digging in and fixing it. We’re fighting for our lives.
If you’re really into startups, this is the fun time. This is the time you earn it and learn it. Want to know what it takes to turn around a company and rebuild it? Fab is one of the only places in the world you can get that kind of experience. If you’re a real startup person, this is the best time to be at Fab.
Back in 2012 and 2013 when Fab was a rocket ship we didn’t stop and figure things out. We just focused on growth. Grow now, figure it out later. While there are a couple of examples of companies that pulled off that trick, it generally only works for so long. Ultimately, if your goal is to build a great company — and that is our goal — you have to figure out your sustainable customer value proposition (your product differentiation) and your business model. Growth without solving for the USP and equation of the business only gets you so far.
In the past 150 days we’ve gone through several phases. (A) Post traumatic stress from layoffs, (B) then just hoping the wheels don’t fall entirely off the car, (C) then investing in product pipeline, (D) then on-boarding new executives and managers, then — and this is the place we’re at now — (E) solving for a repeatable viable business model.
Are we out of the woods yet? No.
Do we know what it will take to get there? Sorta. We’re still figuring it out.
I can say with confidence that Fab will win or lose based on our ability to assemble and manage the right people for right now.
People always say that it’s all about having the right people.
That’s too easy.
It’s all about the right people for right now.
What is Fab right now? Right now it’s a fucking startup.
It’s really hard. It’s intense. It’s a struggle. It’s ambiguous. It changes a lot. It’s all consuming. It’s a lot of sausage making. It’s working weekends to hit numbers and dates. It’s stretching people beyond their comfort zone. It’s insisting on doing it better even when it’s already pretty good. It’s being brutally honest about gaps and weaknesses. It’s one day you’re headed in one direction and the next day another, because the first move wasn’t the best move. It’s being ok with things not working because that creates opportunities to learn how to fix it.
It’s a fucking startup.
Since day 1 we have asked every potential Fab employee a simple question during the interview process: Why do you want to work at Fab?
It used to be that people joined Fab because they wanted to hop on the rocket ship. We were the hot company that everyone wanted to climb onboard for the ride.
Now, it’s a fucking startup.
We need people who want to do really hard things. We need people who live for the struggle. (Thanks Ben).
Fab has had many great employees in our short history. But it takes different people for different times. Right now we need people who look at the challenges in front of us and get excited not depressed. Right now we need people who live for the thrill of figuring it out. Right now we need builders.
Why are you here?
I asked every member of our team to email me their own answer to that question this past week.
Why? Because it’s wartime at Fab and every team member needs to be here for the right reasons. It’s not enough to just want to be around long enough to see what happens. It’s not enough to just want to do good work and hope for the best. It’s not enough to just love design. It’s not enough to just come to work each day and hope it gets better. Even worse, it’s not enough to come to work and reminisce about the past. You can’t be a passive morale drainer. You need to believe in our ability to build a new Fab and raise your hand and volunteer and lead. You need to be relentlessly curious about fixing and building. You need to go to bed each night obsessed with the struggle and wake up each morning dying to dig in and make it better.
The past is behind us. The old Fab is gone.
The new Fab is being built today and tomorrow.
Being part of a turnaround requires a certain mentality — what I call a “builder’s mentality.” Builders face reality and tackle the tough problems every day.
It’s a fucking startup. Why are you here?
Here are some of the answers the builders of the new Fab emailed me:
- I am here because I’m a builder.
- I want to build a company that touches millions and millions of people in a positive way and is known as one of the great companies of our time.
- I want to build a company that is known for solving tough problems head-on and overcoming great obstacles to achieve outsized market success.
- I want to build a company that is known more for the turnaround than for the flop. The experience we will gain in this turnaround will be the most valuable experience of our lives.
- I want to build a company that is admired worldwide for our innovation. We will be known for disrupting the design industry not just playing in it. That’s a big vision and we need to act with humility towards it, and understand the reality that it wont happen easily nor will it happen overnight. But we do need to keep thinking big even as we play small.
- Times are tougher now than they’ve ever been, but I’m also more energized than ever by the strategic direction of the company. We are narrowing our focus to the categories where we have the largest market opportunity and investing deeply into private label to increase our contribution margins. We are building content rich consumer experiences that communicate the value of the products we sell and help get the user over the hump of making large purchases without being able to touch and feel the product. We are making deep investments in analytics so that people across the company can be armed with the right data to make smarter and more informed decisions. And we are evolving our culture into a collaborative work environment that fully engages the brain power of leaders across the company to solve our hardest problems. I believe these decisions are putting us squarely on the path of becoming that disruptive design technology company, and that gets right at the passions that brought me to the company in the first place.
- I love the fact that we’re having the difficult conversations as a team. I think it’s incredibly important that as an organization we provide honest, thoughtful feedback whenever things don’t work as planned / certain areas aren’t performing as they should. If we weren’t willing to have these conversations (and in all honesty, I don’t think we were for a major part of the last 2 years) I wouldn’t be here. I think these are critical and will be what help us to figure out how we can be successful as a company. I also think that we added key people who will help us figure this stuff out. If we hadn’t added certain individuals, I think our likelihood of success would be significantly diminished.
- I have the stomach for this. One critical thing that I have learned over the last two years, which I didn’t know prior to coming to Fab, is that I have the stomach for the uncertainty. It honestly doesn’t bother me and in fact actually motivates me to help try to figure out what it will take to make the company successful. If I’m gaining the experience, am able to emotionally handle the ups and downs of this type of an environment and have the financial upside if things go well, then I realized there’s nothing more that I can ask for.
- I want to build. I want to build something great. To build a business with products that people want to write or tell their friends about. To build a team that our competitors want to steal. To build cash flow that frees us up to enrich others personally and professionally. I want to build processes that make it easy for customers to find (and fiend) for our products
- I want to be a part of the Fab turnaround. I want to see Fab win in the marketplace. I want Fab to achieve commercial success that is far greater than our modest financial projections. I want Fab to be a beloved brand again. Harder to quantify, but I want Fab to be one of the most admired lifestyle brands in our space and one of the most admired companies to work for in our industry. And I take this all very seriously.
- I was asking this question to myself many times last year. There were times last year when everything was apparently going fine and I didn’t see myself making any difference. Those were the times when I thought I should quit. Times have changed since then. These are challenging times, fun times. I’m here now because I want to prove to myself and to everyone that we can turn this around. I’m here because I feel I can now make a difference.
- This is an insane amazing challenge and I don’t back down from a challenge.
- I want to discover and bring great product from amazing talented designers to people who love and appreciate quality product.
- It’s weird. But I find myself progressively more pumped about work today than I was a year, six months or even three months ago. I love the challenge and the chase. I love the need to hit numbers, grow the business, address our gaps and all in lightening speed.
- In short, I love the intensity our current situation demands. I love the opportunity I have every day to impact our business. It makes me feel like a net contributor, and that’s very important to me. If in 18 months, we’re out of the woods, I’m going to feel great knowing my input had at least some tiny role in getting us out. That’s important to me.
- Fab has this insanely rare combination of having huge potential AND giving me the opportunity to have an outsized impact on it.
- Because I have been given the opportunity of a lifetime.
It’s a fucking startup.
We’re here to Build.