How to Kill a Unicorn: Fab.com

Slidebean
6 min readJul 17, 2021

“Shit, this is a big problem,”

Jason Goldberg wrote in a letter to company executives. His unicorn had run away and was heading directly towards a cliff.

But he was no rookie. In fact, he was an accomplished entrepreneur. By 2013, when he sent the letter, his creations included Jobster, Socialmedian, and Fabulis, which eventually became Fab.com.

The e-commerce company was founded in 2011, and in two years, it had raised $336MM. But, by October 2013, they had already spent more than half of it.

Even after spending $200 MM, Fab.com hadn’t tested their business model and they didn’t know exactly what their customers wanted to buy.

Fab.com was a flash sales site that offered items curated by the unique taste of Bradford Shellhammer, Goldberg’s partner. And, for a moment, it was successful, reaching a $1 BN valuation.

But, it ended up selling for no more than $30MM. How did this happen? This is Company Forensics: Fab.com

Origins

In 2010, Jason Goldberg and Bradford Shellhammer originally created Fabulis as a dating social network mainly for gay men.

Fabulis was a successful idea. It raised $625,000 in funding, from names like the Washington Post.

Fabulis was also exclusive. Until April 23rd, 2010, only other users could invite you. However, even with these conditions, it had 14,000 registered members.

But the hype didn’t translate to money. So, the founders turned it from a dating site to an e-commerce company. After five months, Fab.com reached one million subscribers. By the way, it took Facebook twice as long to reach that milestone.

Fab.com’s idea was simple: designer’s items in flash sales. Users would get email notifications of the products on sale and the time left to buy them.

There was a chandelier made completely with martini glasses that cost $1,775, a motorcycle helmet covered…

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