Why does Fab CEO start a business

Lead: American Science and Technology blog The Verge Tuesday published the title of "Fab CEO business Why a succession of ups and downs?" [Demolition man:why does Fab's CEO keep building big companies that suddenly?) The decline of Fab was strikingly similar to the company's CEO's last entrepreneurial experience, mainly due to ambitions and frequent transitions, the commentary said.

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Downs

If you ask fab staff, when they start noticing something is wrong with the company, they usually mention bicycle locks. I don't know when the bright orange bike lock was suddenly on the door of the company's executives. "Openness has always been a proud business. "You can go straight into the founder's office and talk to them about things," said a fab former employee. But all of a sudden they don't seem to trust us or even worry about us stealing. ”

In the past 2.5, for the main design of the electrical business site Fab, is a bitter tears. It has done 14 million members from scratch, revenues of more than 115 million dollars in 2012, expanded to 26 countries or regions, with a total financing of more than 325 million U.S. dollars, and the value of a breakthrough of 1 billion U.S. dollars. But success comes fast and goes fast: In just 6 months, it all falls apart.

It started in June this year when Fab laid off 150 people in Europe and in October laid off 100 people in New York. Starting in November, Bradford Sierhame, co-founder of the company, Bradford Shellhammer, announced his departure. In addition to him, chief marketing officer, chief operating officer, communication supervisor, business development director and purchasing director are leaving. The third round of layoffs was followed by an announcement that more than 50 people were laid off in New York.

"These days, the office is surprisingly calm," said a fab employee. "Everyone is busy sorting out their resumes, the atmosphere is extremely depressed." ”

History repeats itself.

How did Fab get into this position? Can it reproduce its brilliance? The answer seems to depend on one person ――fab co-founder and CEO Jensen Gudeberg (Jason Goldberg). According to insiders, he received the support of the Board, just completed a reconstruction plan, ready to promote a number of junior staff left behind after the departure of some executives. It is reported that Fab's current bank deposits as high as 120 million dollars, should be able to survive 2015 years.

But both incumbent staff and former employees seem to think that unless Goldberg can find a way to restore staff morale and revenue growth, fab may never be on the rebound. However, when it comes to coping with the sudden decline of startups, Goldberg is not inexperienced to learn from. It's not the first time he's started a company that's been in this predicament. "If you want to understand why Fab has gone through so many crazy changes and painful layoffs, it's really simple." A fab executive said, "Look at Jobster." Because Jason had made the same mistake before, history was strikingly similar. ”

Goldberg started his first venture in Seattle in 2004. At that time his hair was not gray, and not as fashionable as now, but still very handsome, very charming. He has worked as a White House aide in the Clinton administration for 100 hours a week and has been a product manager at T. Although he himself does not understand technology, but to develop new things but full of passion. His founder, Jobster, was initially a tool for managing staff referrals, and even a local hot topic that was strong enough to rival LinkedIn in Silicon Valley.

"He has a lot of energy and a few of the most daring of Seattle entrepreneurs. "He can attract a lot of good people and convince them that they can change the world," said John Cook, a senior Seattle tech journalist who has covered jobster. "Goldberg was once seen as the magic boy of the Web 2.0 era, but his aura suddenly vanished.

Jobster has achieved rapid development. Like Fab, it soon attracted 4 rounds of venture capital, a rapidly expanding number of employees and a massive takeover. Goldberg in major media about the company's growth and prospects. For a time, Jobster no one can and even by a lot of media to do with Facebook.

By the end of 2006, two years after successive rounds of financing, rumours of jobster layoffs were rife. Goldberg denied, and turned the topic to profitability, and painstakingly elaborated the necessity of compressing costs. All this is strikingly similar: Fab also started layoffs about two years after financing.

Jobster's layoffs were brutal, affecting 41% of employees. Like the latest fab, Goldberg was also friendless: Venture Partners and corporate executives left Jobster. In the end, he was swept out of the jobster himself. Goldberg had to leave Seattle and move to New York.

Frequent transformation

Shortly after the establishment of FAB, Goldberg said in a media interview: "I have made all the mistakes I can make." That 48 million dollars gave me a lot of lessons, I know how to start a business. ”

But those who have long watched him do not. "With all that money and a fiasco, he deserved to learn some lessons." "But seeing fab today, I feel like everything is familiar." ”

Scott Haug (Scott Haug) is Jobster's seventh employee and one of the first technicians. "Jason is very charming," he said. He was gifted at selling ideas to people, which helped him recruit a large pool of talent and raise large sums of money. But Jason's problem is that no matter how smoothly things go, he is not satisfied. ”

When Goldberg introduced Jobster to Hogg, it was a tool for managing staff referrals. "That business is in good shape, but it's never going to be too big." "said Hogg. When Goldberg acquired a start-up company Workzoo, it transformed Jobster into a search engine. A few months later, when he bought Gojobby, he decided to develop a social network. "Whatever the latest fashion trend in the tech industry, he always jumps from one hotspot to the next." While this can be exciting for the media and investors, it is meaningless for companies. ”

Fab has also fallen into the same cycle. It started as a gay social networking fabulis, followed by an increase in group buying and then a switch to the design-class flash-shopping model, shortened to fab names. Although the Flash purchase let fab success, but in December 2012, Goldberg also resolutely abandoned this model, to the full price of the electric business model. A few months later, it transformed itself, launched its own brand of goods and bought a custom furniture company. People familiar with the matter said that many of the internal projects had suffered a similar fate, which was first valued, but was soon thrown aside.

Fab employees, like Jobster, are fascinated by the frequent changes. Many former and current employees agree that abandoning the flash is a reckless move. "There is a saying that there are flaws in the flash-purchase model, so Giansencai leads the company to explore better direction." "But the truth is, we were developing very well, and our growth engine was our flash-forward," said one FAB director. "It may be right not to put the eggs in one basket," but Jason's approach has made people feel like they've had their flash-shopping days. ”

The situation is worrying

According to comscore, the US Internet traffic Monitoring agency, the traffic in fab sites and mobile apps peaked in November 2012, and soon after that, Goldberg announced that it had abandoned the flash-buy model. For the next 10 months, the number of independent user visits dropped from 5.275 million to 1 million in September this year, down about 75% per cent. Accompanied by a slowdown in revenue growth. When asked why the flow fell sharply, Fab declined to disclose internal data, but said the company's profitability was better than ever. "It doesn't make any sense," said one person familiar with the company's finances, "perhaps they're talking about not making money before." ”

When the Jobster staff were laid off, the handling of Goldberg was improperly handled. "We've all heard about layoffs, but Jason denies it. "They had an important board meeting before the Christmas holiday." The conference room is surrounded by glass, and the whole company can see it. But when the staff came to work that morning, they found that every wall in the conference room was covered with a thick layer of paper. "It feels like a massacre is about to be staged, and it's hard for many people to accept. ”

Fab layoffs are no better. People familiar with the matter said that when Goldberg decided to lay off jobs in Europe, senior executives begged him to assess the US business and cut the one-off job cuts, but he refused. As a result, many employees were transferred back to the United States shortly after they were transferred from the United States to Europe, although the company promised to keep the jobs in the United States, but when they arrived in New York, they were abandoned by the company in a few months. "This has completely defeated morale. "A developer who still works for the company said.

One big difference between jobster and fab, according to people familiar with the matter, is that Goldberg now has greater momentum and more money. At Seattle, he held tens of millions of dollars and had little revenue-and this time, the bank had more than 100 million dollars, and the annual revenue was much more than that. If he learned a lesson from his first failure, it would be to keep raising money in case things could change. "He wanted it when he was in Jobster, but he didn't have the money." "Look at the results this time," said a fab former executive. ”