Things seemed to be flying high this past June for Fab when the New York-based e-commerce upstart raised $150 million at a reported valuation of $1 billion from Andreessen Horowitz, Atomico and Chinese Internet powerhouse Tencent.
In a letter to his team, CEO Jason Goldberg outlined some changes he intends on making for Fab, namely moving the business from flash sales to an inventory model.
The recent layoffs are also part of an effort to become profitable more quickly.
“Our decision to accelerate Fab’s path to profitability has an impact on our business operations,” Goldberg wrote. “We are certain that a profitable Fab is the best Fab for our customers. Therefore, a constantly improving cost structure is critical to providing our customers with ongoing benefits.”
Fab’s recent struggles bring back memories of Goldberg’s venture in Seattle with the online recruiting startup Jobster. That company burned through $48 million before eventually tanking.
Goldberg, a former T-Mobile manager and White House aide, then started Fab to sell home accessories, art, clothing and more. He’s made it clear that he wants to compete with and challenge Amazon in the e-commerce space, with Goldberg touting what he calls “emotional commerce” to separate what Fab does.
Did he learn from his mistakes at Jobster? Time will only tell.