Introducing Launchiprex, for the Treatment of Chronic Startup Delusion and Denial
Last week, Fab.com CEO Jason Goldberg published a blog post updating interested parties on the status of his company. "It has now been 150 days since Fab completed its 2013 restructuring," he wrote of his e-commerce startup that specializes in home-design products, "which saw us cut our operating expenses by two-thirds and go from more than 750 employees to around 300 today."
He continued: "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 … 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?"
Goldberg went on and on from there, serving up a foul-mouthed manifesto that repeats the phrase "It's a fucking startup" like a mantra. (As in, "It's a fucking startup. It's supposed to be hard. We're entrepreneurs. This is what we do.")
But let's back up for a moment to Fab.com's "hot" phase. I liked (still like, as a consumer) Fab -- it's a beautifully designed site that sells a lot of cool, mostly affordable stuff -- and have bought a few things from it over the years. I even once wrote wryly about one of its comically high-priced offerings: the Zip Cabana, a stylish, quick-assembly backyard shed created by a "sustainable home-design company" called Puck & Blossom. That was back in August 2011, when Fab.com was still focused on discounting, so the Zip Cabana was bargain-priced (cough) at just $21,500 (marked down from $26,875).
But then Groupon turned into a punch line, and Fab decided it was no longer a daily-deals site. Around this time, I visited the company's Manhattan headquarters, where Goldberg proudly showed off a new "sharing" feed on the site that displayed a steady stream of the most popular, most recently purchased items -- which I guess was supposed to make me and other customers buy more stuff in a lemming-like haze of social-media euphoria.
Goldberg and his publicist tried to convince me to write about this supposedly cutting-edge new chapter at Fab.com, but I wasn't buying it. Plenty of others journalists did, though, and soon Fab was being hailed as a state-of-the-art "social commerce" (cough cough) company. Fab also pushed a lot of other tech-journalistic buttons, like talking about how much stuff it was selling through its app -- which, of course, meant it was a state-of-the-art "mobile commerce" company, too.
Fast-forward to Goldberg's blog post of last week and its generally unhinged rah-rah tone (Gawker's Valleywag called it a "Jerry Maguire memo"). It was stuffed with tech-conference-ready soundbites like, "We're actually doing the hard work of building a company now. We're figuring shit out" -- which only made me think: What the hell were you doing before?
And, "If you're really into startups, this is the fun time. This is the time you earn it and learn it." If reading that doesn't make you want to shout "Oh, shut the fuck up!" then you're a better person than I.
The simple, blunt, painful truth is that Fab.com spent way too much money for way too long chasing after growth (advertising and marketing expenses, for starters, were nutso), all while hemorrhaging investors' money. Or, as Goldberg put it in his blog post, "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." Fab's backers famously included Ashton Kutcher and Guy Oseary, not to mention VC firm Andreessen Horowitz, which should have known better.
Fab, in its go-go years, got to do what it did because of -- let's get real here -- hubristic denial and delusion.
These can be serious, life-threatening conditions for a startup, but the sad reality is that most entrepreneurs, at least in tech, don't seek treatment until it's too late.
That's why I'm doing a pivot.
With prominent hedge-fund manager David Einhorn declaring last week in a letter to investors that "there is a clear consensus that we are witnessing our second tech bubble in 15 years," I've decided that it's time for me to move on from tech … to pharma.
The flagship product from my pharmaceutical launch is something I'm calling Launchiprex, for the treatment of chronic denial and delusion -- aka tech-startup-itis.
It's a brilliant idea -- how could it not be? I'm brilliant -- and I'm going to strap it to a rocket ship and use social and mobile to help market it. And probably some real-time tech, storytelling, wearables, cloud computing and big data, too. And engagement. And selfies -- definitely some selfies.
Granted, I don't know much about prescription drugs or the pharmaceutical sector overall, but I know a hot market niche when I see one, and I figure I can, you know, figure it out later.
By the way, screw Ashton Kutcher and Guy Oseary and Andreessen Horowitz. I'm gonna Kickstarter this bitch!
Simon Dumenco is the "Media Guy" columnist for Advertising Age. You can follow him on Twitter @simondumenco.