1 00:00:00,080 --> 00:00:02,759 Speaker 1: We're going to start our story today. On June eighteenth, 2 00:00:02,960 --> 00:00:06,480 Speaker 1: two thousand and thirteen, this was the day that Jason Goldberg, 3 00:00:06,600 --> 00:00:09,760 Speaker 1: the founder and CEO of an online startup called fab 4 00:00:09,840 --> 00:00:12,440 Speaker 1: dot com, announced that he had just raised a big 5 00:00:12,520 --> 00:00:19,000 Speaker 1: round of funding. Online retailer Fab dot Com announced a 6 00:00:19,040 --> 00:00:21,680 Speaker 1: new round of financing today that values of the company 7 00:00:21,720 --> 00:00:24,120 Speaker 1: at about a billion dollars. Now, that makes the company 8 00:00:24,160 --> 00:00:27,000 Speaker 1: one of the most valuable startups in New York. A 9 00:00:27,040 --> 00:00:29,200 Speaker 1: billion today doesn't sound like that big of a deal. 10 00:00:29,320 --> 00:00:32,199 Speaker 1: I mean, Uber is worth what sixty billion dollars, but 11 00:00:32,280 --> 00:00:35,599 Speaker 1: at the time it was an incredibly exclusive club, very 12 00:00:35,680 --> 00:00:38,239 Speaker 1: rare achievement. Jason was in our bloombrick headquarters in New 13 00:00:38,280 --> 00:00:40,920 Speaker 1: York to talk about the successive is fundraising, and he 14 00:00:41,159 --> 00:00:43,080 Speaker 1: was beaming on TV. The way we look at the 15 00:00:43,120 --> 00:00:46,720 Speaker 1: world is that there are currently four e commerce companies 16 00:00:46,760 --> 00:00:50,760 Speaker 1: that are worth more than ten billion dollars, Amazon, Racketan 17 00:00:51,000 --> 00:00:54,000 Speaker 1: and Japan, Ali Baba and China and eBay, and we 18 00:00:54,040 --> 00:00:56,040 Speaker 1: think Fab has a legitimate chance of being the fifth one. 19 00:00:56,360 --> 00:00:57,920 Speaker 1: But as soon as he got up the set, he 20 00:00:57,960 --> 00:01:01,040 Speaker 1: walked downstairs to meet with the jackals the media. You 21 00:01:01,160 --> 00:01:04,680 Speaker 1: Sarah I told him I had some documents to show him. 22 00:01:04,720 --> 00:01:06,920 Speaker 1: It wasn't that excited about it. But the background is 23 00:01:07,040 --> 00:01:09,479 Speaker 1: a couple of weeks earlier, I had met a fab 24 00:01:09,520 --> 00:01:13,720 Speaker 1: former employee who told me about how dysfunctional the startup 25 00:01:13,920 --> 00:01:17,280 Speaker 1: was internally, that they had missed the revenue targets a 26 00:01:17,360 --> 00:01:22,320 Speaker 1: year earlier. By over, he introduced me to more employees. 27 00:01:22,360 --> 00:01:25,120 Speaker 1: To introduced me to more employees, and I ended up 28 00:01:25,120 --> 00:01:28,000 Speaker 1: with the stack of emails that showed a little bit 29 00:01:28,040 --> 00:01:31,160 Speaker 1: about the company culture and how difficult it was for 30 00:01:31,360 --> 00:01:34,440 Speaker 1: some people to work there, and also just how many 31 00:01:34,480 --> 00:01:37,080 Speaker 1: executives had departed in the last year. It was about 32 00:01:37,120 --> 00:01:40,200 Speaker 1: eleven people. So Jason had presented this rosie picture on 33 00:01:40,280 --> 00:01:43,760 Speaker 1: TV and then you presented him with these very uncomfortable 34 00:01:43,800 --> 00:01:46,039 Speaker 1: internal emails. How did he respond to that? So the 35 00:01:46,080 --> 00:01:49,520 Speaker 1: thing about Jason is he's kind of a politician. He's 36 00:01:49,680 --> 00:01:52,840 Speaker 1: very good at getting people on his side, being a 37 00:01:52,960 --> 00:01:56,520 Speaker 1: very sympathetic character explaining his position. And so at the 38 00:01:56,520 --> 00:01:59,360 Speaker 1: time we met, Jason was still very much in sales mode. 39 00:01:59,760 --> 00:02:03,000 Speaker 1: He was like, maybe just don't understand that the culture 40 00:02:03,000 --> 00:02:04,760 Speaker 1: of our startup. Maybe you need to come to our 41 00:02:04,800 --> 00:02:08,240 Speaker 1: headquarters and will show you how it is to be Fab. 42 00:02:09,360 --> 00:02:11,400 Speaker 1: So I presume you went, you visited the company, you 43 00:02:11,480 --> 00:02:13,000 Speaker 1: drank a little bit of their kool aid, and then 44 00:02:13,000 --> 00:02:16,079 Speaker 1: you still publish a very harsh story. And what happens 45 00:02:16,080 --> 00:02:19,440 Speaker 1: after that it was kind of war. At that point, 46 00:02:19,560 --> 00:02:22,959 Speaker 1: Jason put out a blog post saying that there had 47 00:02:22,960 --> 00:02:27,399 Speaker 1: been blatant misrepresentations in the story. He denied it all, 48 00:02:27,520 --> 00:02:31,200 Speaker 1: he spun. But it turned out that wasn't a blatant misrepresentation, 49 00:02:31,240 --> 00:02:33,520 Speaker 1: and it was really the beginning of the end for 50 00:02:33,600 --> 00:02:36,400 Speaker 1: fab dot com. I spent the next year reporting on 51 00:02:36,520 --> 00:02:41,760 Speaker 1: layoffs after layoffs, everything unraveled, and eventually Fab got sold 52 00:02:41,840 --> 00:02:55,440 Speaker 1: for fifteen million. Hi, this is Brad Stone and I'm 53 00:02:55,480 --> 00:02:58,359 Speaker 1: Sarah Fryer, and this week on our very first episode 54 00:02:58,360 --> 00:03:01,680 Speaker 1: of Decrypted, we're going to hear from Jason Goldberg. This 55 00:03:01,720 --> 00:03:04,440 Speaker 1: is a particularly personal story for him, and it's a 56 00:03:04,440 --> 00:03:07,320 Speaker 1: little bit of a personal story for you too, Sarah. Right. Well, 57 00:03:07,360 --> 00:03:10,120 Speaker 1: for for me, it was just a constant back and 58 00:03:10,160 --> 00:03:13,440 Speaker 1: forth between me and it's entrepreneur back in the day, 59 00:03:13,480 --> 00:03:16,000 Speaker 1: and now we get to actually talk it out. We 60 00:03:16,120 --> 00:03:18,880 Speaker 1: spend so much time talking about all the successes here 61 00:03:18,919 --> 00:03:21,960 Speaker 1: until Icon Valley, but we really don't talk enough about 62 00:03:22,000 --> 00:03:24,359 Speaker 1: what it's really like to drive an entire company into 63 00:03:24,400 --> 00:03:27,720 Speaker 1: the ground and leave a smoking, crater sized hole and 64 00:03:27,760 --> 00:03:29,840 Speaker 1: failure just the way things in for the vast majority 65 00:03:29,840 --> 00:03:33,840 Speaker 1: of tech companies. It's brutal, it's emotional, it's public, and 66 00:03:34,000 --> 00:03:37,760 Speaker 1: it's kind of embarrassing, and for some reason, somehow a 67 00:03:37,760 --> 00:03:39,880 Speaker 1: lot of founders find a way to pick themselves back 68 00:03:40,000 --> 00:03:43,320 Speaker 1: up and start a new company all over again. Jason 69 00:03:43,400 --> 00:03:45,920 Speaker 1: is now launching an app called Peopo, and that's why 70 00:03:45,960 --> 00:03:48,440 Speaker 1: he agreed to talk to me, probably so he can 71 00:03:48,440 --> 00:03:51,080 Speaker 1: put all of this behind him. He called me the 72 00:03:51,080 --> 00:03:53,800 Speaker 1: other week from Puna, India, where he was putting the 73 00:03:53,840 --> 00:03:56,720 Speaker 1: finishing touches on his new startup before launch. You know, 74 00:03:56,760 --> 00:04:01,400 Speaker 1: we had all sorts of promise and opportunity and it 75 00:04:01,480 --> 00:04:04,640 Speaker 1: didn't work. And you know, I think my my, my 76 00:04:04,840 --> 00:04:07,520 Speaker 1: biggest emotion of it is, you know, just you know 77 00:04:07,640 --> 00:04:12,720 Speaker 1: that I'm sorry. So let's take this from the beginning. 78 00:04:13,040 --> 00:04:15,960 Speaker 1: Sarah tell us about Jason and fat So. Jason is 79 00:04:16,000 --> 00:04:20,320 Speaker 1: not your typical engineer founder. He came up through the 80 00:04:20,360 --> 00:04:23,520 Speaker 1: Clinton White House. He's kind of a serial entrepreneur with 81 00:04:23,800 --> 00:04:28,040 Speaker 1: a lot of suave personality. He gets his suits tailored 82 00:04:28,080 --> 00:04:31,320 Speaker 1: at Bottega Vanetta. He takes an uber everywhere, it doesn't 83 00:04:31,320 --> 00:04:34,640 Speaker 1: take the subway, and he sort of got this presence 84 00:04:34,880 --> 00:04:38,440 Speaker 1: and he partnered with this guy Bradford Shellhammer, who has 85 00:04:38,480 --> 00:04:42,960 Speaker 1: this incredible design aesthetic, and together they founded this site 86 00:04:43,000 --> 00:04:46,920 Speaker 1: called Fabulous, which was a gay social network and it 87 00:04:47,040 --> 00:04:52,400 Speaker 1: wasn't really going too well, but Bradford, with his design shops, 88 00:04:52,440 --> 00:04:55,520 Speaker 1: started picking out these products that he really liked and 89 00:04:55,560 --> 00:04:58,040 Speaker 1: he started doing this big gay deal of the day. 90 00:04:58,240 --> 00:05:01,520 Speaker 1: This was at the height of group on and Living Social. 91 00:05:01,560 --> 00:05:03,960 Speaker 1: Everyone was going crazy about these things and those deals 92 00:05:04,000 --> 00:05:07,200 Speaker 1: really took off, and eventually Bradford and Jason realized that 93 00:05:07,240 --> 00:05:09,839 Speaker 1: should be our company, so they shut that down. They 94 00:05:09,960 --> 00:05:12,360 Speaker 1: launched this new site a couple of months later with 95 00:05:12,520 --> 00:05:16,080 Speaker 1: all of these really quirky, interesting products that you really 96 00:05:16,120 --> 00:05:18,640 Speaker 1: just couldn't find anywhere else. Yeah, I remember how much 97 00:05:18,640 --> 00:05:21,000 Speaker 1: attention and hope there was around fab dot com and 98 00:05:21,080 --> 00:05:24,040 Speaker 1: there could be this large space in e commerce outside 99 00:05:24,040 --> 00:05:26,880 Speaker 1: of the amazons and the e bays for boutique products 100 00:05:26,960 --> 00:05:30,400 Speaker 1: and eccentric product categories. You know, it took off like 101 00:05:30,440 --> 00:05:32,719 Speaker 1: a rocket ship. Um. You know, when we launched we 102 00:05:32,760 --> 00:05:35,640 Speaker 1: had a really small team we had. You know, I 103 00:05:35,680 --> 00:05:38,359 Speaker 1: think we had fifteen people at most in New York 104 00:05:38,480 --> 00:05:42,600 Speaker 1: and we had a team of like fifteen people in Puta, India, 105 00:05:42,920 --> 00:05:46,400 Speaker 1: and you know it it was it was kind of incredible. 106 00:05:46,400 --> 00:05:48,719 Speaker 1: I mean it was like, we sold a million dollars 107 00:05:48,720 --> 00:05:51,760 Speaker 1: of the merchandise in our first twenty days. Um, we 108 00:05:51,760 --> 00:05:54,719 Speaker 1: were profitable, uh, you know, kind of a casual basis 109 00:05:54,760 --> 00:05:57,280 Speaker 1: in the first month, and I was like, whoa, we 110 00:05:57,360 --> 00:06:01,320 Speaker 1: really had something in our hands. And um, in just 111 00:06:01,400 --> 00:06:04,960 Speaker 1: six months, FABS old twenty million and merchandise. They raised 112 00:06:04,960 --> 00:06:08,920 Speaker 1: money from investors at a two million valuation. And honestly, 113 00:06:09,000 --> 00:06:11,560 Speaker 1: their biggest problem was that they couldn't keep up with demand. 114 00:06:12,000 --> 00:06:14,360 Speaker 1: They were selling out of products too quickly and couldn't 115 00:06:14,360 --> 00:06:16,720 Speaker 1: get things shipped fast enough. Right, So what did this mean? 116 00:06:16,760 --> 00:06:18,880 Speaker 1: I mean, they sound like good problems to have, But 117 00:06:19,040 --> 00:06:21,200 Speaker 1: what's the challenge. I just heard about a lot of 118 00:06:21,240 --> 00:06:23,840 Speaker 1: angry customers who had to wait for months before they 119 00:06:23,839 --> 00:06:27,320 Speaker 1: got what they ordered. And while still dealing with all 120 00:06:27,360 --> 00:06:31,560 Speaker 1: those issues, Jason and his executive team got wind of 121 00:06:31,640 --> 00:06:35,719 Speaker 1: some copycat companies in Europe and they decided to launch 122 00:06:35,800 --> 00:06:38,560 Speaker 1: there and compete with them and crush them early. That 123 00:06:38,600 --> 00:06:40,920 Speaker 1: was an early I think when you have a lot 124 00:06:41,000 --> 00:06:44,440 Speaker 1: of you know, smart people who tell you that, hey, 125 00:06:44,520 --> 00:06:46,160 Speaker 1: you know, you really should try, you know, going to 126 00:06:46,240 --> 00:06:48,919 Speaker 1: Europe faster. And you know, we saw what happened with Airbnb, 127 00:06:49,160 --> 00:06:52,200 Speaker 1: or we saw what happened with Pinterests or whatever it 128 00:06:52,279 --> 00:06:54,159 Speaker 1: might be, you know you should go and you know, 129 00:06:54,279 --> 00:06:57,160 Speaker 1: and and try to you know, going faster. I allowed 130 00:06:57,160 --> 00:06:59,120 Speaker 1: myself to believe that, okay, you know, we should give 131 00:06:59,160 --> 00:07:00,880 Speaker 1: it a look, and and then once we gave it 132 00:07:00,880 --> 00:07:02,520 Speaker 1: a up, we got really excited about it. And so 133 00:07:02,720 --> 00:07:05,640 Speaker 1: ultimately it became a distraction for both Jason and Bradford. 134 00:07:05,760 --> 00:07:07,320 Speaker 1: And at one point they were spending a couple of 135 00:07:07,360 --> 00:07:09,240 Speaker 1: weeks out of the month. They're trying to set up 136 00:07:09,480 --> 00:07:11,600 Speaker 1: the right teams and the right executives to run the 137 00:07:11,640 --> 00:07:14,720 Speaker 1: year of operation, while they still had all these problems 138 00:07:14,720 --> 00:07:18,040 Speaker 1: in the US with merchandising and inventory. It was just 139 00:07:18,120 --> 00:07:24,080 Speaker 1: getting to be too much. In our first year, we 140 00:07:24,120 --> 00:07:26,760 Speaker 1: worked with more than five thousand designers and sold nearly 141 00:07:26,840 --> 00:07:29,800 Speaker 1: two million products, and our dreams for FAB are just 142 00:07:30,040 --> 00:07:34,120 Speaker 1: getting started. And even though expanding geographically onto an entirely 143 00:07:34,400 --> 00:07:37,720 Speaker 1: new continent, FAB was expanding in some more product categories. 144 00:07:37,840 --> 00:07:41,960 Speaker 1: This is about authenticity. This is about showing people products 145 00:07:41,960 --> 00:07:44,800 Speaker 1: they will love and delighting them day after day, adult products, 146 00:07:45,000 --> 00:07:47,280 Speaker 1: pet products, all sorts of things that they had to 147 00:07:47,360 --> 00:07:51,239 Speaker 1: find interesting, unique things for. Jason said that the quality 148 00:07:51,360 --> 00:07:54,120 Speaker 1: started to deteriorate. At fab. We believe we have a 149 00:07:54,160 --> 00:07:57,760 Speaker 1: special opportunity to become the world's greatest design resource. On 150 00:07:57,840 --> 00:08:01,320 Speaker 1: the outside, everything's still looked great. I I remember spring 151 00:08:01,320 --> 00:08:04,680 Speaker 1: two thousand thirteen story fab dot com winning the e 152 00:08:04,800 --> 00:08:07,880 Speaker 1: commerce war with whimsy. Not quite sure if I remember 153 00:08:07,880 --> 00:08:11,480 Speaker 1: who wrote that one. That might have been me. Okay, 154 00:08:11,520 --> 00:08:14,040 Speaker 1: that was me. But inside, as you found out later, 155 00:08:14,400 --> 00:08:17,400 Speaker 1: things were starting to fall apart. Well. They were spending 156 00:08:17,520 --> 00:08:20,080 Speaker 1: so much money on marketing, I think like thirty million 157 00:08:20,400 --> 00:08:24,800 Speaker 1: in and the customers they were getting through marketing. Per 158 00:08:24,920 --> 00:08:28,440 Speaker 1: Jacent's calculations, he thought that they would be as dedicated 159 00:08:28,560 --> 00:08:31,600 Speaker 1: as the early customers. That's how he built all his projections, 160 00:08:31,640 --> 00:08:34,480 Speaker 1: But in fact they were kind of one and done, 161 00:08:34,520 --> 00:08:36,360 Speaker 1: like they would buy one product and never come back 162 00:08:36,400 --> 00:08:39,520 Speaker 1: to the site. And behind the scenes he was out 163 00:08:39,520 --> 00:08:43,160 Speaker 1: there frantically trying to raise money to fit those growth projections. 164 00:08:43,800 --> 00:08:46,680 Speaker 1: But people were actually a little bit skeptical and he 165 00:08:46,840 --> 00:08:49,400 Speaker 1: fell short. He ended up with only a hundred fifty 166 00:08:49,400 --> 00:08:51,840 Speaker 1: million of the three hundred million he thought he needed. 167 00:08:52,160 --> 00:08:55,800 Speaker 1: What feeling at that time because everyone who talked to 168 00:08:55,800 --> 00:09:00,760 Speaker 1: you around then describes you as just being completely, you know, 169 00:09:01,920 --> 00:09:07,520 Speaker 1: religious about Fab's vision. And in anyone who thought that 170 00:09:07,520 --> 00:09:10,040 Speaker 1: that the company maybe wasn't going to grow as fast, 171 00:09:10,400 --> 00:09:12,840 Speaker 1: UM would would get talked out of it. It is 172 00:09:12,880 --> 00:09:15,800 Speaker 1: quite possible that, you know, I think you're in a 173 00:09:15,840 --> 00:09:18,520 Speaker 1: situation like that, then maybe you can get somewhat delusional 174 00:09:18,960 --> 00:09:22,800 Speaker 1: um in thinking that you can just figure it out. UM. 175 00:09:22,960 --> 00:09:26,280 Speaker 1: And also you know, just you know, it's like you 176 00:09:26,280 --> 00:09:29,240 Speaker 1: you see that you know in that that you're growing, 177 00:09:29,440 --> 00:09:31,360 Speaker 1: and that if you can figure out way to keep growing, 178 00:09:31,440 --> 00:09:33,840 Speaker 1: that you can kind of grow your way through it. UM. 179 00:09:34,240 --> 00:09:36,920 Speaker 1: And I think it was also kind of a fear 180 00:09:37,000 --> 00:09:40,760 Speaker 1: for what happens if we don't if we, if we, 181 00:09:40,880 --> 00:09:42,599 Speaker 1: if we if you know, if we did hit you 182 00:09:42,760 --> 00:09:45,320 Speaker 1: slam on, if we did hit the brakes and we 183 00:09:45,360 --> 00:09:48,200 Speaker 1: said let's not grow as fast, that would that would 184 00:09:48,200 --> 00:09:50,960 Speaker 1: have meant, you know, it's pretty ter Cronian layoffs. And 185 00:09:51,000 --> 00:09:53,160 Speaker 1: that brings us to the moment where we started today's 186 00:09:53,160 --> 00:09:55,960 Speaker 1: show with us now for an exclusive interview is Fab 187 00:09:56,000 --> 00:09:59,280 Speaker 1: dot com CEO Jason Goldberg. Jason, great to see you. 188 00:09:59,480 --> 00:10:02,319 Speaker 1: Thanks for the scoop, huge cash infusion for you and 189 00:10:02,360 --> 00:10:04,120 Speaker 1: your company. What are you going to do with them? 190 00:10:04,160 --> 00:10:06,640 Speaker 1: On TV, things seemed to be doing so well. Jason 191 00:10:06,679 --> 00:10:09,480 Speaker 1: looked so proud, but in reality he was backed into 192 00:10:09,480 --> 00:10:12,959 Speaker 1: a corner. And then Sarah, you present him with the emails. 193 00:10:13,760 --> 00:10:16,280 Speaker 1: You know, I was very proud of the company, very 194 00:10:16,280 --> 00:10:21,880 Speaker 1: protective of the company, and UM and I also was 195 00:10:22,360 --> 00:10:26,240 Speaker 1: scared at the time, um, because you know, I was 196 00:10:26,320 --> 00:10:28,960 Speaker 1: in the midst of, you know, going through a fundraising 197 00:10:29,000 --> 00:10:31,559 Speaker 1: process where you know, we raised a lot of money, 198 00:10:31,559 --> 00:10:35,080 Speaker 1: but I also knew that we didn't have enough, and UM, 199 00:10:35,240 --> 00:10:37,080 Speaker 1: I was worried about kind of like the chinks in 200 00:10:37,080 --> 00:10:45,800 Speaker 1: the armor. And at least to the public and to me, 201 00:10:46,360 --> 00:10:50,040 Speaker 1: he was denying that things were pretty bad, but Fab's 202 00:10:50,080 --> 00:10:53,000 Speaker 1: board members were looking at the company's numbers and urging 203 00:10:53,120 --> 00:10:56,720 Speaker 1: Jason to face reality. Howard Morgan was an early investor 204 00:10:56,800 --> 00:10:59,600 Speaker 1: in FAB and he also sat on Fab's board. This 205 00:10:59,640 --> 00:11:02,960 Speaker 1: is what he was telling Jason at the time. At 206 00:11:03,040 --> 00:11:04,920 Speaker 1: this current rate, you're gonna be out of money much 207 00:11:04,960 --> 00:11:08,400 Speaker 1: too quickly. You've got to really make radical changes here. 208 00:11:08,440 --> 00:11:11,400 Speaker 1: You've got to make radical cuts. You've got to change 209 00:11:11,440 --> 00:11:13,920 Speaker 1: some of the culture, because there was a very free 210 00:11:13,920 --> 00:11:17,400 Speaker 1: spending culture for quite a while as well. Uh you know, 211 00:11:17,960 --> 00:11:21,720 Speaker 1: Jason and Bradford were getting off for Europe a couple 212 00:11:21,720 --> 00:11:25,800 Speaker 1: of times a month, and uh, you know, we're entertaining 213 00:11:26,480 --> 00:11:30,439 Speaker 1: uh merchants and suppliers and stuff like that. You've got 214 00:11:30,440 --> 00:11:34,320 Speaker 1: to cut all that. So it took a bit for 215 00:11:34,400 --> 00:11:37,480 Speaker 1: this message to really reached Jason, but Howard says that 216 00:11:37,520 --> 00:11:40,760 Speaker 1: to his credit, Jason acted fast. Wants to click for him, 217 00:11:40,880 --> 00:11:43,480 Speaker 1: and it wasn't just about cutting back on his first 218 00:11:43,480 --> 00:11:47,080 Speaker 1: class flights to Europe and five star hotel stays. Just 219 00:11:47,120 --> 00:11:49,440 Speaker 1: a little more than a month after that TV interview, 220 00:11:49,679 --> 00:11:52,679 Speaker 1: fabulaid off a hundred employees in Berlin to refocus in 221 00:11:52,720 --> 00:11:55,800 Speaker 1: the US, and they cut another hundred employees, mostly in 222 00:11:55,800 --> 00:11:58,200 Speaker 1: New York two months after that. And in those difficult months, 223 00:11:58,280 --> 00:12:01,240 Speaker 1: Jason's best friend and co founder also left. Yeah, I 224 00:12:01,320 --> 00:12:04,040 Speaker 1: reached out to Bradford to see if he would chat 225 00:12:04,080 --> 00:12:07,920 Speaker 1: with us, he said in a Twitter direct message that quote. 226 00:12:08,000 --> 00:12:10,640 Speaker 1: I've put that way behind me and I'm focusing forward. 227 00:12:10,800 --> 00:12:15,640 Speaker 1: I hope you understand Bradford's nowaty day. You know my 228 00:12:15,679 --> 00:12:18,400 Speaker 1: co founder, Bradford was, you know, my best friend. We 229 00:12:18,520 --> 00:12:21,480 Speaker 1: you know, built the business together, you know, um, you 230 00:12:21,520 --> 00:12:24,400 Speaker 1: know he he and I did not kind of see 231 00:12:24,400 --> 00:12:29,920 Speaker 1: eyed eye on um the needs for cuts and um 232 00:12:29,960 --> 00:12:32,000 Speaker 1: and how deep we should go with the cuts. And 233 00:12:32,000 --> 00:12:35,520 Speaker 1: it's very hard for him. And where I failed was 234 00:12:35,559 --> 00:12:37,800 Speaker 1: I should have found a way to keep him on 235 00:12:37,880 --> 00:12:44,480 Speaker 1: and involve him. Despite those cost cuts, Jason was never 236 00:12:44,520 --> 00:12:47,840 Speaker 1: able to turn things back around again. After some more layoffs. 237 00:12:47,880 --> 00:12:51,520 Speaker 1: In early Jason sold FAB to private equity firm for 238 00:12:51,640 --> 00:12:54,560 Speaker 1: fifteen million. He used that money to fund a spin 239 00:12:54,600 --> 00:12:58,640 Speaker 1: off site called him that made custom design furniture, and 240 00:12:58,880 --> 00:13:01,960 Speaker 1: I never really took off either. Jason sold that company 241 00:13:02,000 --> 00:13:05,240 Speaker 1: earlier this year. So to recap, Jason Goldberg laid off 242 00:13:05,320 --> 00:13:07,960 Speaker 1: hundreds of employees, lost hundreds of millions of dollars of 243 00:13:08,000 --> 00:13:11,000 Speaker 1: his investors money, had a falling out with his best friend, 244 00:13:11,040 --> 00:13:14,960 Speaker 1: and became a poster child for a start up belly flop. 245 00:13:15,040 --> 00:13:17,080 Speaker 1: And yet he's still in the game and he's got 246 00:13:17,120 --> 00:13:19,640 Speaker 1: a new company. So much hype back then, but his 247 00:13:19,679 --> 00:13:22,600 Speaker 1: new company, he's lying low. It's based in Berlin, and 248 00:13:22,800 --> 00:13:25,840 Speaker 1: his engineering team is in India. But you're right. For 249 00:13:25,920 --> 00:13:28,160 Speaker 1: most people, you'd think that would be enough to keep 250 00:13:28,200 --> 00:13:31,360 Speaker 1: you on the sidelines, but really not Jason. That new 251 00:13:31,400 --> 00:13:34,360 Speaker 1: company he started just a day after he signed the 252 00:13:34,360 --> 00:13:39,000 Speaker 1: deal with him. That's I guess part of my therapy 253 00:13:39,120 --> 00:13:43,040 Speaker 1: is just building something. And um, you know, I I 254 00:13:44,240 --> 00:13:48,920 Speaker 1: love designing products. I love figuring out use cases, uh 255 00:13:49,120 --> 00:13:52,320 Speaker 1: and acknowledging that you know, when it comes to turn 256 00:13:52,320 --> 00:13:54,560 Speaker 1: it into a business that I have to make sure 257 00:13:54,679 --> 00:13:59,080 Speaker 1: to avoid the missteps that we have with the What 258 00:13:59,160 --> 00:14:03,920 Speaker 1: about you, I mean, what about your family and friends, 259 00:14:03,960 --> 00:14:09,719 Speaker 1: your new life in Berlin? Um, how are you? How 260 00:14:09,720 --> 00:14:13,560 Speaker 1: are you doing just in terms of personally coping with 261 00:14:13,600 --> 00:14:16,679 Speaker 1: everything you obviously you know from on a on a 262 00:14:17,240 --> 00:14:20,600 Speaker 1: friends standpoint. You know, I got divorced from Bradford basically 263 00:14:20,800 --> 00:14:23,400 Speaker 1: right and so that you know, and then we were friendly. 264 00:14:23,440 --> 00:14:24,800 Speaker 1: Now took us a while to be able to talk 265 00:14:24,840 --> 00:14:27,240 Speaker 1: to each other. And you know, we've seen each other 266 00:14:27,280 --> 00:14:29,240 Speaker 1: a few times and we have a lot of friends 267 00:14:29,240 --> 00:14:31,400 Speaker 1: in common, but you know, the relationship is seen hard 268 00:14:31,440 --> 00:14:33,440 Speaker 1: for to ever be the same. And I think we 269 00:14:33,440 --> 00:14:36,600 Speaker 1: we have, we developed a mutual respect. Um, But it's 270 00:14:36,640 --> 00:14:38,320 Speaker 1: it's you know, it's it's not the same and we're 271 00:14:38,320 --> 00:14:41,600 Speaker 1: not best friends anymore. One relationship Jason has kept is 272 00:14:41,600 --> 00:14:44,200 Speaker 1: the one with his husband. He and Chris got married 273 00:14:44,200 --> 00:14:46,280 Speaker 1: in two twelve, which was back when things were still 274 00:14:46,320 --> 00:14:49,040 Speaker 1: really good with BAB, and they stayed together even in 275 00:14:49,080 --> 00:14:51,920 Speaker 1: the aftermath of bab Stermize. Now they live in Berlin together. 276 00:14:52,360 --> 00:14:55,960 Speaker 1: We're both enjoyed living in Berlin and um getting you know, 277 00:14:56,040 --> 00:14:57,880 Speaker 1: kind of getting away from some of the kind of 278 00:14:57,920 --> 00:15:00,760 Speaker 1: spotlight and glare from the kind the star in the world. 279 00:15:01,000 --> 00:15:05,040 Speaker 1: But I said this year sixteen is you know, people 280 00:15:05,040 --> 00:15:07,720 Speaker 1: who know me really well, and I've got a very good, 281 00:15:07,760 --> 00:15:10,680 Speaker 1: you know, group of friends all around the world. Um, 282 00:15:10,720 --> 00:15:12,520 Speaker 1: you know, they would say that they haven't seen me 283 00:15:12,640 --> 00:15:15,720 Speaker 1: this kind of um at peace and kind of mellow 284 00:15:15,720 --> 00:15:18,280 Speaker 1: in a long time. Jason says that more than anything, 285 00:15:18,320 --> 00:15:20,920 Speaker 1: he's just really sorry that you'd let his employees down 286 00:15:21,000 --> 00:15:24,440 Speaker 1: at FAB, and he feels awful that Fab's investors never 287 00:15:24,440 --> 00:15:27,960 Speaker 1: made a return on their investments. But Howard Morgan, who's 288 00:15:28,000 --> 00:15:30,440 Speaker 1: that FAB investor and board member we've heard from earlier, 289 00:15:31,080 --> 00:15:33,600 Speaker 1: says he doesn't regret investing in FAB. But I don't 290 00:15:33,600 --> 00:15:35,480 Speaker 1: regret I don't regret doing it. Because we have to 291 00:15:35,520 --> 00:15:37,480 Speaker 1: swing for the fences in order to get the big 292 00:15:37,480 --> 00:15:39,840 Speaker 1: wins that we get. We were the first people in Uber, 293 00:15:39,880 --> 00:15:42,720 Speaker 1: were the first people in Blue Apron. I mean, you know, 294 00:15:42,960 --> 00:15:44,640 Speaker 1: so we we've had we had some some of our 295 00:15:44,680 --> 00:15:49,280 Speaker 1: successes as well. Howard Morgan even invested his personal money 296 00:15:49,360 --> 00:15:53,280 Speaker 1: in the startup that Bradford Shellhammer started after he left FAB. 297 00:15:54,360 --> 00:15:56,680 Speaker 1: I asked him if given the opportunity, he would invest 298 00:15:56,680 --> 00:16:00,600 Speaker 1: in Jason's new startup too well first round because the 299 00:16:00,640 --> 00:16:04,800 Speaker 1: idea conflicts with another one about company. So but I 300 00:16:04,800 --> 00:16:08,200 Speaker 1: would invest in Jason again, absolutely, because you feel like 301 00:16:08,200 --> 00:16:11,920 Speaker 1: you've learned. I know that he's learned. I mean I 302 00:16:11,960 --> 00:16:14,560 Speaker 1: see what he's trying to do with with with Pico uh. 303 00:16:14,800 --> 00:16:17,640 Speaker 1: And not not only has he learned, but he's quite 304 00:16:17,680 --> 00:16:21,160 Speaker 1: a bit humbler, I think. And he still has the 305 00:16:21,240 --> 00:16:24,000 Speaker 1: skills to design great products and to motivate people to 306 00:16:24,120 --> 00:16:31,440 Speaker 1: join them in the effort. The stories are really a 307 00:16:31,480 --> 00:16:36,040 Speaker 1: great commentary on Silicon Valley and how it perhaps doesn't 308 00:16:36,080 --> 00:16:39,360 Speaker 1: celebrate failure as much as it says, but it tolerates failure, 309 00:16:39,400 --> 00:16:41,840 Speaker 1: and an entrepreneur can drive a company into the ground, 310 00:16:42,000 --> 00:16:46,760 Speaker 1: can fail very visibly, and yet there's always the second chance. 311 00:16:46,760 --> 00:16:49,000 Speaker 1: There's going to be someone out there who believes that 312 00:16:49,080 --> 00:16:52,080 Speaker 1: he or she has learned from their mistakes and deserves 313 00:16:52,160 --> 00:16:55,080 Speaker 1: to try it again. Well, failure in Silicon Valley is 314 00:16:55,080 --> 00:16:59,880 Speaker 1: actually widely celebrated. You see see posters and Facebook's wall 315 00:17:00,080 --> 00:17:03,920 Speaker 1: saying um, move fast, break things, fail fast fail. Often 316 00:17:04,119 --> 00:17:08,480 Speaker 1: you have entrepreneurs who write these heartfelt medium posts about 317 00:17:08,520 --> 00:17:11,200 Speaker 1: what they learned after they had to shut the lights 318 00:17:11,240 --> 00:17:15,159 Speaker 1: off at their startup. And in this failure is unique 319 00:17:15,160 --> 00:17:17,879 Speaker 1: because of how how big it was, but it doesn't 320 00:17:17,920 --> 00:17:21,439 Speaker 1: make it any less a part of the Silicon Valley 321 00:17:21,480 --> 00:17:24,320 Speaker 1: culture where we all sort of feel like, if you're 322 00:17:24,320 --> 00:17:27,480 Speaker 1: going to take these big risks, some things aren't going 323 00:17:27,520 --> 00:17:31,040 Speaker 1: to work out. And actually more than startups fail. But 324 00:17:31,160 --> 00:17:32,879 Speaker 1: let me ask you this, So let's go back to 325 00:17:32,880 --> 00:17:36,040 Speaker 1: where we started the show two thirteen. You're seeing him 326 00:17:36,080 --> 00:17:39,720 Speaker 1: in the Bloomberg offices. Uh, you're presenting him all these 327 00:17:39,840 --> 00:17:42,800 Speaker 1: uh internal emails and documents from the company, and he's 328 00:17:42,800 --> 00:17:45,280 Speaker 1: trying to persuade you not to run the story. Is 329 00:17:45,320 --> 00:17:47,840 Speaker 1: he now fast forward to today? Do you think he's 330 00:17:47,840 --> 00:17:50,600 Speaker 1: still spinning you in terms of how he says he's 331 00:17:50,680 --> 00:17:53,879 Speaker 1: learned and he says he's moved on, and um, you know, 332 00:17:53,880 --> 00:17:56,199 Speaker 1: it's a much more humble I mean, I think I 333 00:17:56,240 --> 00:17:59,520 Speaker 1: think any any time you go through something like that, 334 00:17:59,640 --> 00:18:01,760 Speaker 1: you kind of have to force yourself to learn if 335 00:18:01,760 --> 00:18:03,680 Speaker 1: you're going to have the confidence to go out there 336 00:18:03,680 --> 00:18:06,760 Speaker 1: and do something again. But what I will say is, 337 00:18:07,680 --> 00:18:10,080 Speaker 1: oh my gosh, I'm reporting for this podcast, and in 338 00:18:10,240 --> 00:18:13,280 Speaker 1: reporting on Jason in the past, there are so many 339 00:18:13,359 --> 00:18:18,800 Speaker 1: people who will not cannot refuse to forget times that 340 00:18:18,880 --> 00:18:22,399 Speaker 1: he's he's spun them, or lie to them or or 341 00:18:22,440 --> 00:18:26,159 Speaker 1: screwed them over. And so I think after a while 342 00:18:26,320 --> 00:18:30,520 Speaker 1: it becomes difficult to to believe. And I think, you know, 343 00:18:30,560 --> 00:18:33,239 Speaker 1: even for Jason himself, he has to pick himself back up. 344 00:18:33,320 --> 00:18:35,880 Speaker 1: And for you personally, are you still skeptical my job? 345 00:18:36,440 --> 00:18:38,600 Speaker 1: Are there days where I'm like, you know, gosh, I'll 346 00:18:38,600 --> 00:18:40,439 Speaker 1: never you know, I'll never work again. And you know, 347 00:18:40,440 --> 00:18:43,040 Speaker 1: who's want to hire this guy or invest in this guy? 348 00:18:43,200 --> 00:18:46,320 Speaker 1: And yeah, but not too much. I mean, I think 349 00:18:46,359 --> 00:18:48,600 Speaker 1: for the for the most part, I think the attitude 350 00:18:48,600 --> 00:18:52,760 Speaker 1: of you know, I think that I have some talents 351 00:18:53,160 --> 00:18:56,720 Speaker 1: and that has some flaws, and I need to prove 352 00:18:56,760 --> 00:18:59,280 Speaker 1: to myself and to others that the talents can overcome 353 00:18:59,280 --> 00:19:01,439 Speaker 1: the flaws and I can improve on the laws and 354 00:19:02,000 --> 00:19:05,280 Speaker 1: um and be successful. And that's what I'm setting out 355 00:19:05,320 --> 00:19:09,879 Speaker 1: to do right now. Well, that's it for this week's 356 00:19:09,920 --> 00:19:13,720 Speaker 1: episode of Decrypted. Thanks for listening. If you haven't already, 357 00:19:13,760 --> 00:19:15,879 Speaker 1: subscribe to our show and iTunes or any of the 358 00:19:15,920 --> 00:19:18,960 Speaker 1: great podcast apps out there and leave us a grating 359 00:19:18,960 --> 00:19:21,320 Speaker 1: and review that goes a long way and getting our 360 00:19:21,320 --> 00:19:23,199 Speaker 1: show in front of more people, and tell us what 361 00:19:23,240 --> 00:19:25,439 Speaker 1: you thought of today's show. You can talk to me 362 00:19:25,480 --> 00:19:28,919 Speaker 1: on Twitter at at brad Stone, Sarah's at Sarah Fryer, 363 00:19:29,200 --> 00:19:32,440 Speaker 1: and you can follow our whole tech team at at Technology. 364 00:19:32,760 --> 00:19:36,080 Speaker 1: This episode was produced by Liz Smith and Akiato. Aaron 365 00:19:36,080 --> 00:19:39,040 Speaker 1: Black assisted with reporting my print story, which I hope 366 00:19:39,040 --> 00:19:41,959 Speaker 1: you'll check out on our beautiful, newly designed tech page 367 00:19:42,000 --> 00:19:46,000 Speaker 1: at Bloomberg dot com. Slash Tech was edited by Emily Busso. 368 00:19:46,560 --> 00:19:49,320 Speaker 1: ALC McCabe is head of Bloomberg Podcast. We'll see you 369 00:19:49,400 --> 00:19:49,840 Speaker 1: next week.