What software engineers can learn from the rapid collapse of Fast
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The story is a lot more complicated and nuanced than the headlines you read in publications but I will say that Fast was full of really talented folks who I'd be happy to work with again. For me, a big lesson I took away from this experience is the perils of an overly positive fully remote culture. It's very easy for leadership to hide things from people when information doesn't easily spread across different organizations
I didn't get as much exposure to the rest of the company as parent comment, but I'll say I saw a weird air of complacency and assumed success.
I first ignored my instincts that something was wrong, but as I saw more of how the company operated, I became convinced that the single largest problem the company had was the culture. On the surface, I agree with the parent comment, things were definitely positive, but rather than toxic, I think it was more of a naive one, like most of these people had never worked at a startup before, and didn't understand that it's always easy to snatch defeat from the jaws of victory, and that if they didn't understand what they were doing and how it affected the company then probably nobody else did either. It felt like everyone was very smart, but somewhat foolish (myself included).
That being said, I enjoyed my time there, and definitely learned a lot, especially organizationally. The people are solid and I think Affirm is going to get a pretty sweet deal.
But if you are an early employee with equity, you are not just an engineer. You are, figuratively, a shareholder. One of the reasons they give you stock options as opposed to actual shares is that shareholders have a ton of rights against companies, and can e.g. sue for investor fraud, vote the board out, get quarterly reports with financial & performance statements therein backed by federal law and the threat of investor fraud lawsuits. You, on the other hand, are given the financial exposure to the company's performance without any of the attached rights. And they will happily lie to you in order to keep you happy & get you to project enough positivity to hide flaws & keep outside investment flowing until it all collapses.
So as an employee, you should be trying to claw back some of what being a shareholder would get you, given you are so heavily exposed. I've worked at companies where there is a monthly meeting, nearly everyone present, where the entire company's business position, prospects and challenges are discussed openly. The employees (largely) didn't even have equity. Any cracks (like an imminent complete collapse in the next three days) would show very early on, but there were none, because the employees were empowered to do something about any challenges.
So, yes, there are warning signs, and your response isn't a binary choice between staying and leaving. I would like people to come away with a better model of this than "if they are hiring exclusively from big tech, that's a red flag, get out of there". You can demand more transparency if you know what transparency looks like. If you are content to sit at your desk and happily churn out React components, satisfied with management sending enough emojis at you via slack, then you can't protect yourself at all.
HR would tell us we were extraordinary, we would have world-class catering for lunch every day, and yet we had no customers, no contracts, and no money except the investors'.
It was a sobering realisation on the damage that can happen when you are submerged in toxic positivity. You forget that companies still need to earn actual money, that it's not a party every day.
It means your leadership can't think of a way to make the business work other than to get bigger checks from the same size customer base. "If only all our customers could pay us an extra zero!"
Moving upmarket doesn't work that way. They are totally different companies with purchase requirements and habits that will generate tons of work orthogonal to your core product. Spend a few quarters on compliance accreditations so you can tick boxes, multi-month sales conversations where you aren't even sure if you're just there to pressure the real Belle of their ball, etc.
If you can't do it small, you can't do it.
I've been on companies that did the opposite from going small to big. They started big, very big, with Fortune 50 costumers. That meant they hired a small but very specialized sales team with the right connections very early on.
Because the burn rate was very small (due to needing just a few engineers and employees and a small infrastructure) and the sales cycle took months, we could easily develop a strong product with the requested features, and then it turned out when we moved down to medium and small businesses most of the features were already in place all we needed to focus was on scaling the architecture.
Plus, big costumers pay very good and are loyal as long as you don't cause them headaches.
The only downside of this approach is if we hired the wrong sales people, the company would never take off.
The companies I know that succeeded with that strategy either have great starting relationships with insiders in their first sales, and had contracts signed before committing to a big staff, or got into said companies when they were small: If one of your customers turns into a rocket ship and you are tied to their revenue stream, their growth is your enterprise-sized company.
Enterprise sales might not even be all that profitable when it's all said and done: How many other companies are going to try to bid on their business? With their large size, how good is their leverage to squeeze down the profits of the winning bid.
You might have a relatively unique product, the right connections, and end up being Palantir, but it's a very narrow road with steep cliffs everywhere.
You would have companies where you have existing relationships, they love what you offer, and really want to work with you, but the deal just gets delayed by some other priority or reality of their business. The solution they already have is good enough (even if it’s barely good enough), and sticking with it is not actively putting them out of business for the time being.
It’s just reality… just like VC investing, selling into 100 small companies and growing along with some of them is waaaaay more likely to pay off than landing one whale
I'm currently at a seed-stage startup with a few Fortune 500 companies as users. We're lucky to have a great sales team that can bring that business in. If we're solving a problem for them, they're willing to use us regardless of our size, though they do care about some small particular issues around size.
It definitely is hard to have conversations about what isn't going well, even though it doesn't have to be negative or gloomy. Often the disconnect in results is chalked up to external factors outside of your control, which is sort of depressing because if that is true then you can't do anything about it.
It's like when someone encounters a bug in the stuff they wrote and look every which way they can to blame it on the library, framework, compiler, etc.. - I'd rather have the bug be in code I wrote because then I can fix it easily. You can show someone simple data that shows a strategy isn't working, and then they'll spend a week torturing the data to come up with a contrived counter-explanation.
Ultimately, it is tough because part of doing a startup is remaining positive even in situations where it isn't warranted and there are times where the strategy may not be working out in the short term but needs more time to play out. Being unwilling to ever even entertain the idea that what you're doing isn't working seems like it might be problematic though.
here we go, this is late 90s all over again
The reason late 90's start-ups invested the way they did is because they had no meaningful way to track the effectiveness of their ads, much less the payback. A Super Bowl ad for Pets.com seems fine if you can (more or less) guess that it adds a bunch of customers.
Since then, start-ups have built a bunch of tools to track customer acquisition costs and paybacks in a pretty sophisticated way, and some of the obviously crazier ads dies (or at least become more one-off).
But now we are in a fintech/crypto era and nobody really knows how to calculate paybacks once again, because the business model is so new vs. a traditional ads or commerce business (will this new crypto.com user do $1k of transaction volume every year for the next ten? sure why not?)
As a result of all this, we see crazy 'spaghetti on the wall' style advertising again, usually focused in the crypto/fintech space (See: this year's Super Bowl). I wonder when the music stops.
At least publicly, Fast never addressed this, and insisted on requiring the user to log into Fast to make a payment even when it was a worse option.
Browsers like Safari are explicitly designed to prevent people from remaining logged into third party sites like Fast. All this was just brushed under the rug and instead it was just a bunch bluster on how Fast was a revolution.
At least Bolt allows payment via ApplePay, and seems more about doing whatever it takes to maximize each seller’s conversion, rather than having an ulterior motive to push its own brand everywhere.
The two of us ditched it when we realised how inhospitable the economics were, but even then we knew Fast's shitty play was bound to fail, and I heard the news from my prospective cofounder sending me a text ("we called it!") when it happened...
“I could not be happier or more proud of my teams and what they have accomplished.”
If the company wasn’t successful, then that’s partially on engineering. As employees, we win as a team and lose as a team.
It seems like they were way overbuilt and should have gone much slower from a hiring perspective.
Perhaps these are just words that folks say to put best light on things as they leave, but it strikes me as disingenuous and lacks that ownership mentality that engineering leadership should display.
You could put that as subtext for pretty much every story you read. ;-)
> Engineers calculated the load Fast had in needing to serve their traffic. The Fast button was rendered less than 500,000 times per day - rarely needed to ever serve more than a few requests per second.
> One of the few warning signs engineers noticed is how Fast spent far more on infrastructure than the scale of the operation would have called for. Engineers sometimes brought up suggestions to scale infra down, and save costs - given there was not much revenue generated.
Sounds like the whole thing could have run on a single cheap VM, perhaps with a second one for redundancy.
I did an interview screen with them at the end of last year for a data engineering position (former coworker was high up on the design side of things and he gave a referral). The first bit of the technical question was just "write a SQL query" and boiled down to doing a group by, count, and limit. The second was something like "what if we needed to return this query from a distributed system without going to the database?" without much context.
As any sane interviewer would do, I asked for context around scale, infrastructure, and what "without going to the database" even meant. The interviewer just reiterated the question. I started talking about different approaches depending on context and all the interviewer did was tell me to program a solution. Turns out all he wanted was a time-windowed hash-map to cache values and the fact that it's a distributed system didn't matter at all.
I think that just about sums up their approach to engineering solutions.
This is often the problem when hiring too fast. New employees don't have context or direction but generally people try to be productive, so they start inventing work.
Management team is new too, and not built up either direct or handle the bandwidth and they also are lacking the direction. Senior leadership and founders are likely busy hiring more folks and potentially trying to sort through the chaos described before.
IMO, pre-product market fit company shouldn't have 500 employees, maybe not even 10. These things don't become easier with more people, usually everything gets harder and slow. You also shouldn't have massive marketing or sales force before you actually have product to sell and have figured out your sales motion.
It seemed that Fast was just trying to shortcut their way to be the next Stripe by hiring people instead of actually working on the fundamentals like the product and business.
Basically, to move development velocity faster we "load everything". Seems like a really bad idea on the surface. In practice, we only ran into an issue with a single customer that was literally 1000x as large as the other customers. It took about two weeks by 1 engineer to rework a select few calls that were egregiously slow and we were back at it.
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In other words, even with some arguably inefficient technical decisions, I've rarely if ever seen performance issues at early stage startups.
Spending time on needless infra (scale you don't need, AI you don't need, infra you don't need, things could have been postgres as in this case, ...) both prevents building useful stuff ($-generating features/experiences/...) and increases operational cost (maintenance, debugging, ...). Both the lost revenue growth and the increased costs are compounding. Imagine a maniac steadily piling on a bit more technical debt every day and eat a bit more of the seed corn every day instead of growing it.
A good phrase for this is "playing house": http://www.paulgraham.com/before.html
More like, sounds like management was trying to get as much money as quickly as they could from their VCs before it all imploded. The engineers aren’t at fault that management didn’t have a real product or vision.
Programmers love to add the latest tech to their resume then move on to a new position within ~18 months
I've seen a few startups that seemed to overengineer things (or build custom solutions rather than use something off the shelf) in expectation of massive growth.
I also thought it might have been due to resume driven development and the need to keep engineers engaged so they didn't leave.
I've also seen successful startups with a monolithic rails or PHP application that ran on heroku with next to zero custom architecture components.
I've seen this repeated on HN, but never saw the alleged flak.
Tootally worth the time /s
If your boss's boss or peers signed a contract for $1m a year from Oracle, you're going to use Oracle even if Postgres is a better product. And the only way to use Postgres in this situation is if they don't know you're running it. Which puts you in the uncomfortable situation of wanting to say, "But Oracle sucks, look how successful we've been at using Postgres?".
Basically if you don't already know that someone higher up the food chain is comfortable with saying, "I've made a huge mistake", you aren't going to 'help' them learn to do it by pointing out they fucked up. What they're going to hear is that you're asking them to say, "I just wasted a million dollars of company money on something everybody hates," which not only are they not going to do, but they're going to start thinking about how to shoot the messenger.
As many conversations go in a couple of my hobbies and talking to friends and acquaintances about health concerns, the answer often starts with, "first, get a time machine" and ends with, "or learn to live with it," often with some useful compromises in between.
One of the important things to do early in your tenure at a place is to bid various people in the management chain and those who seem to be on a management track to see how open they are to having their minds changed. Because you want to know this when the stakes are low (also the blowback on low stakes things seems to be less problematic). Then you know if or when a boondoggle is in the making whether you can stop it before it starts, or amplify all of the problems and kill it along the way, or whether you should keep your head down and conspire to keep the 'doggle at arm's length with those who agree with you.
What you'd do in that situation is make the best of that $1M contract you're stuck with anyway, while being flexible enough to migrate away from that solution when it actually makes sense to do so. Just because you've made a huge mistake doesn't mean that making a different choice after-the-fact is more sensible. Hindsight is always 20/20.
Otherwise it’s just a sunk cost fallacy.
I absolutely hate waste and was always proud of myself when I found ways to shave a thousand here and there off our AWS bill, but it was a bit depressing when I went through the thought exercise of "What would it be like for the company if I managed to get everything onto the AWS free tier?" And then compared that to what it would be like for the company if we found a way to make 1 or 2% more in revenue.
Early on, the math heavily favors worrying less about infra spend and more about product enhancements that can build revenue.
(Although often reducing the size of your infra for other reasons - usually around complexity for ops or ease of development can also have the side benefit of reducing cost and it seems worthwhile in those cases.)
YES! This is VERY true
So in my now close to 30 years of experience later, working on systems expected to run 24/7/365, I can't tell you what percentage of failures and outages were caused by the redundancy/fail-over/etc software and hardware layered into a system, but its definitely a very significant part of the problem. Frequently because its just that a "layer" someone bolted on, even if that layer was some software engineer designing for "web scale". All the edge cases are frequently not completely thought out, and when you hit one its a lot harder to recover, than simply restarting a single service running on a single server.
I’ve had massive problems with fancy (HPE, IIRC, but it wasn’t called HPE then) raid arrays caused by the controller being a POS. Using plain mdraid would have been far more reliable.
Sometimes I wonder if all the effort people put into protocols that run Paxos and Raft could be better spent running a small number of coordinator servers with manual failover. I’m suspicious that, in many use cases, leader elections cause failures more often than the leaders themselves fail.
Sounds like someone didn't understand redundancy...
There has to be a smart reply to that, like: 100% of pilots of single engine planes don’t make it home after a single engine failure. 100% of pilots of dual engine planes do make it home after a single engine failure.
So the odds are you don't. Keep it very simple, very small. I can't highlight this enough. A few boxes will get you very far. If you ever actually hit the limits, throw a big party to celebrate success and only then start to think about making your infrastructure a bit (just a bit) more complex.
> [sales] signed up a large number of smaller businesses on the platform. [...] However, integrating these smaller businesses was challenging thanks to several customizations needed for each new customer.
The ratio of revenue per each small customer vs the total cost of integration (and very likely on-going maintenance) was probably at least an amber flag somewhere for those who had visibility of it.
But maybe there was on-going hope that they would be able to sign up a big customer and integrate them before they ran out of money?
At the last company I worked at (won't call them a startup, just a 10-year old small business that somehow kept raising funding but has never made a profit) I was astonished to learn from a new CPO that in our tenth year we didn't know if we were making money from a customer.
We had no idea how individual customers used the application, which was very data intensive, or what that was costing us. The information was there, but no-one ever looked. Every sale was considered a success, even if it turned out to cost us 3x in data costs and customer support. Often customer support alone would make a sale into a loss.
We spent a relatively large portion of our revenue running very expensive servers to respond instantly to searches that no-one ever performed. I created detailed monitoring to show this. I talked about them to everyone, including Product and the CEO. No-one disputed those facts. But instead we had several people essentially dedicated to downsizing application servers and deleting unused S3 buckets, trimming three zeros a month when we could have trimmed five.
I have learned not to assume that warnings are visible, that people pay attention to them if they are visible, or that anyone cares.
They're still circling the drain, still raising money (somehow!) and I doubt anything's changed.
Places I've worked yearly contracts for B2B have been in the $100k-$5M/yr range.
The customers paying $100k/yr barely get any integrations and feature changes... they go for the ride. The customers paying $1M+/yr get features on the double.
If Fast was doing integrations and customization for customers that were paying $1000 or less a year something was very very wrong.
Unfortunately this can lead to the outcome that the company just loses more money.
from the article: "The average volume of Fast customers was low because most customers were from small businesses. And yet, every small business needed custom engineering work to be done, making integration slow. Several engineers mentioned how they did not understand how spending lots of engineering effort for each small client resulting in little revenue would result in building a company that could be worth $12B one day."
I think their primary problem was a huge valuation—with correspondingly huge expectations—but no real revenue. If you're pulling in $600K revenue, but valued at $500M... you're gonna have a bad time.
You're describing most startups here.
The real thing here is they're not that surprising. A lot of companies with their kind of funding use enterprise sales to force say $5-10M ARR, but there's only so much VC money can force for a leaky funnel, broken product, and overall incorrect market + fit. I didn't appreciate this until maybe a year or two ago. Valuation multiples in 50-100X range are super common (and even wackier numbers in seed/a). Think make believe stories like "well with another 12-18mo of growth this really just a bit over a 30X on some future forward revenue multiple...". The cash almost always leads to overspending, and it's highly unlikely the next 2-3 raises won't blow up and everyone goes home. I'm actually super impressed by the Docker team because they've been one of those rare cases of crawling out of that trap, even if with a lot less of the team.
We get job candidates with high competing offers for companies I know to be rotten inside, yet there's only so much I can say. "Our new hires are getting paid from customer revenue and with equity that doesn't have $50M-$500M of investor thumbs on the scales already cutting you out in 95% of the likely scenarios" generally doesn't punch through the kool aid.
I fell for this trick once when I was younger, but never again.
As it turns out, when companies are bleeding talent and struggling to hire they suddenly find ways to pay well above market rate. You can have a fancy title, too!
We had a competitor do something similar at a prior company. I would tell candidates that we can't match their compensation numbers but to come back if things don't work out at the other company. I'd often get a message about 3-4 months later asking if the job was still available
It's hard to tell the difference between "stop the bleeding" title/pay inflation and "aggressively competing for talent" inflation.
> Sure, come as a Senior! That's not enough? Principal it is!
Do you mean staff (E6, the level above Senior)? Also, no one is getting E6 offers 2 years out of college.
On my way out of the first startup I worked for, there was an offer to double my pay! Nope!
Don't know if that's the origin, but hey it could be. Without the story, calling someone "cockroach" has unclear sentiments.
In contrast, popular models prone to failure and largely fueled by market phenomena like low inflation rates include ad-based social media ("we'll turn on revenue in 5 years, no, really!"), blitzscaling ("we'll eventually figure it out!"), sales-driven growth ("our federal team will make our $ back in 3-5 years, no really!"), acquihires ("with enough AI talent we'll just sell our staff!").
I like venture capital, such as for deep tech and true growth, but the reality is most tech VC funding is more about financial engineering that assumes most of the portfolio fails. They push for commercial scaling too early and wipe out, which is fine for the rich VC who just needs 1-3 bets to win. Fine for them, but sucks for most founders & employees unless they job hop every 2 years. If we take VC $ again, it'd be on our terms and with a clear payback/growth return.
A great way to kill an otherwise great idea & company is putting VC $ in, which puts a company on overdrive and financially implodes before it has a chance to figure things out. They're addicted and likely can't stop relying on VC without layoffs (or less likely, succeeding), at which point many of the A players leave as well and hard to recover. Instead, if a cockroach raises > $2M (so commercialization phase), that should generate enough sales revenue that they can keep organically growing in 18-24mo later even if a follow-on round doesn't happen. You'll hear such cockroach founders saying they don't even touch the money for months. Numbers-wise, most Series A companies fizzle out, which is because of this unicorn-or-bust structure.. and especially whenever the market is not on a bull tear. With a bit more time, they probably could have figured it out... but they blew it.
Some articles: - Paul Graham's article on this: http://www.paulgraham.com/badeconomy.html . - https://medium.com/swlh/how-to-build-a-cockroach-startup-ins... - https://medium.com/the-mission/be-a-cockroach-not-a-unicorn-...
is this a reference to http://paulgraham.com/guidetoinvestors.html#:~:text=nuclear%...
I think I know what you mean by this, but I'm not sure. Could you elaborate on what this means? Thanks in advance. :)
Money is fungible
> Fast did less than $300K worth of sales and below $6K in revenue on most days from January 2022 to April 2022. There were days with around $2,000 in revenue for Fast.
I'm actually surprised that everyone was receiving daily updates of company revenue.
If you're surrounded by 100s of people at a company known to give high base pay but you're seeing daily revenue numbers in the range of $1K to $6K (they had $600K total revenue in 2021, supposedly) then you have to know that your time is very limited.
I assume they were led to believe that more investment money was just around the corner to keep the business going? With a $10 million monthly burn rate they would have needed a staggering amount of capital to just continue to exist, let alone execute any plans to turn the ship around.
There are companies where this information does go out to all employees in the spirit of radical transparency. Skyscanner is an example where every day, every employee gets the full revenue breakdown. These numbers are also shown on monitors across the company.
Look no further folks. This guy Dominic was clearly LARPing a startup.
Leveling frameworks before traction is a joke to me.
Even startup employees benefit from a visible promotion path. Remember, they had hundreds of employees. Not just a couple people in a small office somewhere.
Most likely, the levels corresponded to pay bands and helped determine where people fit into the seniority hierarchy (such as determining who receives sensitive daily information updates)
At the Fast stage, the only viable promotion path is ship work that impacts the business or close deals that bring in revenue. The promotion levels game is something you play in larger organizations to engineer a rat race for people because it turns out they really like that. But no, a startup does not benefit from hierarchy quite the opposite in fact. That crap is all overhead it’s necessary as you grow but actually detrimental to your success.
Now to be clear they shouldn't have been that big (clearly), but leveling people was not the problem.
I think OP is cracking a joke about a $600k company having six levels of hierarchy.
So all the people that have the authority and capability of saying "woah, woah, woah, we're building something far too complicated" had all the information they needed to prove it, and didn't. That's a fascinating sign of immaturity, and arguably incompetence, at some level in the org. The article points out engineers pushing up about scaling down infrastructure, but it's not clear if that came from the staff+ level or below (or both?), and leadership pushing back, or quite what.
How does this even exist at a company with essentially no revenue? This should be at most 1 person in "staff+ engineers, eng leadership"
There are times when a gamble like this pays off. Take how Uber built their organization and systems similar to how Google did it, even when they were smaller.
In the case of Uber, their approach, you could argue, paid off in the sense that Uber did get traffic that would have been non-trivial to handle, and complex business use cases that it could handle easier thanks to it's structure.
My view is that this approach is an all-or-nothing setup and it might end up poorly - and spending WAY more money than needed - than if taking it one step at a time.
Also note that Uber did operate in an environment when it could raise ridiculous amounts of money as it scaled up. This doesn't seem to be the case in the current funding environment of 2022, which has cooled down considerably from 2021.
Google did not have "staff+" when it was starting out. It had founders and a couple of hires.
I was trying to play devil's advocate but I have to agree that pre-product-market-fit, these levels are likely an overkill and distract from the real problem: validating product-market fit.
Dashboards are all the rage as a way to get teams aligned around "critical numbers" (the metrics that matter).
But, if your dashboards start telling a story of impossibility, your best people are going to leave earlier rather than hang on.
A definite downside to the dashboard cult.
It hinges on one thing that I don't know: How likely are already failing companies to recover? Probably with the added condition that incoming help is not foreseeable, because if it's failing but people know help is coming that takes away some of the negative signaling.
I suspect that most of the times struggling companies won't get better, or at beast will continue to struggle and never make it big.
If that is the case, it will be better for both parties, not just the employees but also for the founders, if the life of this failed attempt of a business is cut short. I know first hand that when you are heavily invested pulling the plug yourself is really hard. I have no data, but I would not be surprised if the problem of staying too long - for founders too - is larger than the opposite, pulling the plug too early. Not that the latter is easy to show, since even if you get a large sample, you will never know for certain for many of the data points what would have happened if the plug had not been pulled without parallel mirror universes.
Of course, this is somewhat tautological: if they weren't burning money, they'd just be a company. Startup phase complete.
My company posts daily new user signups in #general on Slack. That's not quite revenue, but you could almost extrapolate
> Fast offered $200-240K/year in base salaries with full remote work
> Sign-on bonuses were common and large. Those who asked for almost always received sign-on bonuses of $20-50K as a one-off payment
> Equity issued was lavish and presented as potentially life-changing
> A good part of people are echoing how working at Fast was an amazing experience. People liked the culture, and how employee happiness was a priority.
What's not to like here ? Working for huge amount of money, in a company whose culture puts employees happiness first, and provides an amazing working experience.
Management did "all the right things" : remote ? check ! competitive salaries ? check ! amazing experience working there ? check ! employees-first culture ? check !. Why would you even need to look elsewhere.
And when it all crashed and burned, the feeling is :
> There are people who are frustrated and disappointed with company leadership, and how the bust came out of nowhere.
Trick is that it did not come out of nowhere, people just chose to look away. It's easier to blame management (which is definitely at fault as well !) than to say "I was paid way too much compared to the actual value I was providing". When you are paid $200k / year, you should easily be able to justify that your work generates more than several thousands of USD alone, if you are unable to do that, you need to have a conversation with your mirror as well - or just accept the fact that you are benefitting from a system, which may crash and burn if too many people are in this situation, or keep on living if you are an exception.
Revenue per Employee used to be a real metric that people used. Of course, P/E ratios used to be sane as well.
I think as a serious counter to that, look at the offers that a FAANG will give you - similar base salary, similar sign-on bonuses. Generally WLB is fine.
The real differentiator - they're offering you equity which is liquid right now.
If one is risk averse, one wouldn't touch Fast with a ten foot pole.
- FAANG aren't/weren't remote
- The appeal for working at a startup vs an established company, and the sense of freedom associated with that
- Some guys that would love the idea behind FAANS...but would not like the management/process in place there (OKR, reviews, career ladder)
- Some guys that would love to work for FAANG... but didn't pass the interview (either failed or didn't try)
Seems like the kept the office these 2 years, probably few million a year. ($85 per sq ft x 125 sq ft per person x 100-450 employees = $1M - $4.7M). A tweet from 3 weeks ago: https://twitter.com/gordoncching/status/1504641710776721409
> "During its first fiscal year (February to September 1999) Pets.com earned $619,000 in revenue, and spent $11.8 million on advertising." (Wikipedia)
> "The company raised $82.5 million in a February 2000 IPO but filed for bankruptcy nine months later." (Investopedia)
Fast rasied $102 million in capital and had $600k in revenue that year... Is Big Finance about to hit the panic button again?
I'm just barely young enough to have missed it. Friends who quit school early were in on it.
I don't know if this was the case at Fast but in a lot of cases back in the 1990s a lot of the engineers knew everything was screwed up.. and they just didn't care, the money was good while it lasted.
The experience almost always helped people get ahead, no one ever gets punished for doing good work at a company that fails due to bad management and investor decisions.
One key difference is pets.com is public and got money from common people.
Fast got money from highly sophisticated VCs. They all made calculated bet.
No VCs would tell you their deals have 100% success.
Employees that join are highly educated. They also know that it is a startup with high failure chance. Much higher than FAANG. Every educated person knows this.
And it is normal to be disappointed when a bet doesn't work out.
Per the CPI, for every $1 in 2000, you need $1.68 today. 1.68^1/22 - 1 is about 2.39%/year inflation.
https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=200001...
This thread [1] touches on what some of that stuff probably was. Sounds like the CEO was a charismatic scammer.
[1]: https://nitter.net/jack_raines/status/1511737489190494208
(Just kidding).
It really amazes me sometimes the strategies of these heavily funded companies. Why pile on so much burn so quickly?
So, the money ran out and people got fired. So what? If they were any good, they no doubt found other companies to get a good deal with pretty soon after. I see no problem here. There's a shortage of competent engineers. That's the reason companies like this pay so well.
The only issue I see is dumb investors putting money in a company that clearly had no product market fit, a big spending problem, and nowhere near the ARR you would normally associate with a 100M+ C round. I mean, we're a struggling bootstrapped startup and we are getting close to that revenue this year. The investors we talk about (for a seed round) seem to be a lot more picky than was apparently the case for this company. You'd hope investors would do some due diligence. That clearly did not happen, at all. What the hell were they thinking?
Probably a juicy story there of incompetence, greed, stupidity, and various individuals benefiting when they arguably shouldn't have. I imagine the e.g. CEO of this company funneled away plenty for himself before bailing out in a hurry. If he paid his engineers a quarter million per year, I bet his own salary was probably a bit higher.
So why isn't this a standard feature of every shopping cart program, including the cheap ones? The complicated part is that you need "undo", valid for a while after ordering. That's what makes one-click buy feel safe for customers. This complicates inventory management. But you really need "undo" for an hour or so after ordering.
Well the package arrived while I was at work. After calling them 3 times to come pick it up, due to shipping delays they were never able to, and eventually told me to keep it for free.
1) Carts are slow to evolve but they will.
2) Bolt/Fast contain user based information, consumed from their use on other sites. So there's a 'network effect'. If they've shopped at ABC.com before your store, then you already have their CC data ready to go in their car. Sort of like Single Sign On but for carts.
Uh oh. That has so much scam potential.
I don’t think one click buy is that useful for smaller sites (something like Apple Pay is much more valuable as the customer doesn’t have to think about a bunch of details).
It does help smaller sites.
'One Click Buy And Ship' makes a very material difference, particularly on mobile.
I agree. It makes absolutely zero sense that an isolated feature constitutes the foundation of an entire company, much less a 400 people company.
I clearly don't understand VC logic.
EDIT: It is fast.co
They were also notable on twitter / reddit occasionally for giving away very cheap / subsidized swag like $1 hoodies.
Can't believe they missed the chance to headline a pun with the company's name
"That was one Fast collapse"
I personally avoid start-ups like the plague. To the point where i dont even bother accepting linkedin requests from startup people
Im not that big of a fan of "Big Tech" either, i wouldnt go for something like FAANG, even if maybe the pay would be good
What gave me a happy life was "industry" firms. In my case those were either consultancy/strategy firms (MBB/Big4 ) at first, which was stressful, but had good advancement chances (jumping steps based on performance) and very good networking opportunities.
Now i've retreated in "an industry". In my case a forbes 100 company in the automotive sector (they have cloud systems and develop software too). And life is bliss.
>>> Sales, however, wanted the opposite: close many deals and hit their targets of signups
If your salespeople are focused on selling to the wrong people nothing matters. You are either Shopify taking years to build or you are a rocket ship taking shortcuts - decide
This is the killer for SMEs. If you're not selling to enterprise, find a solution you can whitebox and quickly ship with minimum customisation.
Back then, it created a chain reaction. Even relatively established companies like Yahoo turned out to be dependent on startups for much of their revenue. As public companies they had to announce large misses from revenue targets. And that scared investors, which chilled the capital flows to startups, which led to even more startup deaths.
Personally I wouldn't invest in recent software IPOs that sell to startups. Nasty revenue surprises may be on the way.
Massive spending of VC investment money on offices, a sales team, engineers, and a data center and servers to meet their expected (hoped-for) scale (there was no cloud then).
No large clients on the platform. Not a lot of small clients either, TBH.
One day out of the blue over half the company was let go. Some effort to downsize and retool, but it seemed perfunctory. All the rest of the staff was let go after another couple of months.
If you have no customers, you have no business.
It takes an incredible amount of positivity to start or join a small startup. You have to believe that you/your coworkers will accomplish something that very few people have done successfully, and that requires a lot of confidence when things look gloomy.
As a total outsider here, it sounds like most ex-Fast employees are very talented and positive people. Perhaps the problem was not overall "company positivity" so much as it was executive leadership being naive and unwilling to A) identify when serious pivots/changes needed to be made and B) actually make those pivots.
Positivity is good, but not when it translates to unchecked naiveté. If you believe too strongly in your ability to succeed, you might start rejecting any signs of failure as they crop up. When something goes wrong or a mistake is made, you might find a scapegoat or otherwise discount the severity of the problem.
The other "reason for failure" might simply be that... well... startups are hard. Sometimes it just doesn't work. There might not be anyone to blame.
And if they had landed one of those big clients, they would be kicking ass. You never know how it is going to go. Sometimes you go after the small sales and die. Sometimes you go after the big ones and live.
I think there lies the problem. You need to work up to acquiring those customers.
Even if they had landed Amazon that one client would not have paid enough to make this business work when you look at their numbers.
Why keep hiring so many engineers when they aren't needed yet? Sounds like a cultural issue to continue hiring so aggressively when it's only resulting in way higher burn than you can support
Every ecommerce platform I've used has a PayPal / Google Pay / Klarna button.
I click it and my payment & shipping details are there. Seamless.
So what problem was Fast trying to solve?
Edit: found it, unique selling proposition.
And totally agreed, how do you compete with google pay, Apple Pay, Instagram, etc. it’s a losing game when you don’t have network effect.
In other words: fast was not itself a one-click checkout product.
Two of my products failed for the same reason. These are high-touch sales in terms of the custom work that needs be done for every new client. I have also seen a product fail due to the high cost of providing tech support vs account revenue.
What seems odd in this case is that Stripe knows very well how a low-touch saas should work and yet they invested in Fast. Maybe they assumed client customization will eventually be solved with a handful of options that would fit most needs?
Don't join a company only because there is more money. If you don't know what one click checkout is or have any intellectual interest in it, but jump on it just because you can make more, you will be disappointed. This works the same way in everything in life.
One must have genuine interest in what they do, before compensation.
This is undisputedly the wealthiest part of Australia.
How did the founder raise $100M with no revenue? “Charisma”? No, this is high-net worth connections and is an overlooked aspect of this whole saga.
Sure, nobody needs $250k per year to survive. CEOs also don't need to have an obscene compensation ratio compared to their workers. Health care companies don't need to rake in billions in profits every quarter. Sitting congress people don't need to conduct stock trades worth hundreds of millions every year. But here we are.
Companies paying everyday employees competitive wages in a free market is way down on my list of things to lose sleep over. We have a few other systemic issues I'd like to see solved first.
Insane levels of inequality is what’s on my list
Same for startups, except there it's a VC betting that he'll make $50M if he gives 10 companies $2.5M so that they can each pay 10 engineers $250k.
We don't live in a system where what you "deserve" has anything to do with what you get; the factors are how much cash you're expected to bring in and how much leverage you have when splitting up that cash between you and the company.
My issue is I just don’t see the world in this money focused way. From out here, in the land where it’s sort of average to earn maybe $50k and feel pretty good about that, it looks pretty sick. I don’t get it, I don’t like it, it feels disingenuous to support it with what seems to be an endless “it’s ok, everyone does it” or “that’s just how the system is” argument.
Maybe if those guys gave away 50% of their salaries to support good causes, I’d feel better about it. But I’m betting my ass they don’t.
- Have enough financial security to know that you can weather most emergencies, medical bills, etc.
- Tip well and support your friends' businesses
- Retire before you're too old to enjoy it. Or take a sabbatical.
- Do good. Let's say you want to give $10k to charity. Very doable on $250k, but asking a lot on $50k.
- Buy more ethical products (whatever this means to you)
- Avoid a lot of the soul-crushing bullshit of everyday life. Car doesn't run? Landlord is trying to screw you? You can solve those problems with money.
There are a lot of rich assholes out there, but they would have been assholes even if they were poor. You won't turn into one if you have a different outlook.
> Maybe if those guys gave away 50% of their salaries to support good causes, I’d feel better about it
Do you give away 50% of your salary? How would you feel about someone who only clears $30k claiming you don’t need that money and that you should give away 50%?
Introspect why you have tall poppy syndrome, it’s toxic and will hold you back.
Why is it normal in your mind for a lawyer to make that? Why a doctor? Why the owner of a small business? Why an exec?
> No-one needs that kind of money.
Money hasn’t been issued based on need ever in the history of the world. How is this any different?
At this point in time, they're not valuing their time, but their overall value that can be brought into a company.
So just the same as a top sales person that can bring in millions of dollars of revenue can earn a certain percent of that as commission, the best engineers can strike a similar deal.
I'm currently renovating an old house, I certainly need it :-)
But I like to tell myself that maybe, just maybe, it's not like the world owes me a possibility to have house. And maybe I don't even need or should have one. Its just my greed that pushes me towards having more stuff (and thus need more space to keep it).
During my time there, I would regularly check our monitoring dashboards and analytics tools to understand how business is doing. We also had frequent all-hands during which business metrics are communicated transparently. Through digesting and understanding the data from various sources, I was able to have a good sense of how well the business is doing, and that helped me grow in the confidence of the company.
Online checkout, as simple as it looks, has tons of complexities, nuances and interplay of various factors hidden behind it. But that's another long long story.
They took funding from Stripe and I guess they misinterpreted the point of “do things that don’t scale”.
I partly understand the over-engineered system because almost by definition, any measure of success will need to support high volumes of transactions but there are plenty of other lessons here, most of them seem quite obvious!
I've seen this abused where co-founders were only paid in equity. Instead of being told their percentage ownership, they were shown a similar extremely hypothetical graph. Unfortunately, in reality their equity only was worth ~$600/year (when computed using their percentage ownership and current valuation, which takes into consideration future risk).
Does anyone beleive this would have worked if they went with a Leander team and decreased spend? Made a simple MVP and tried to slowly grow?
Just wondering. I feel their idea is pretty mediocre and some very similar solutions already exist. The basic pitch 'one click buying for grandma' is not something I would enable for my parents or my grandmother - they'd just buy too much crap on qvc like sites.
Ain't none of the investors catch this ... ? Losing money is one thing, but this seems to me as really low growth right?
The spreadsheet didn't even have a row for "might not be a huge success".
This company was red flags from the start. I can't imagine someone walking away from a $300+K FAANG job for $240K + obvious BS equity.
Something fishy is going on here
... meanwhile back in 2021
https://www.nytimes.com/2021/12/08/business/better-zoom-layo...
https://en.wikipedia.org/wiki/Microsoft_Development_Center_N...
> ... engineering directly raising concerns to the CEO, and suggesting to focus on larger customers, fewer customizations, and bring in more revenue. Sales, however, wanted the opposite: close many deals and hit their targets of signups. In the end, sales got their way, ...
If the product is customized for nearly every customer, they've degenerated to a de facto consulting shop.
Which is fine, as long it's priced right. Palantir is a consulting shop.
a what now?
I am in ads. I know quite a lot about the revenue, split, seasonality, etc. It's something i optimize, so it's something i must know.
Ain't none of the investors catch this ... ? Losing money is one thing, but this seems to me as really low growth
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Lets put everyone there. $20k/month.
> On Monday, 4th April, Fast laid off all of its workforce of about 450 employees, of which about 150 were software engineers.
That 150 at $20k/month is $3M by itself.
The other 300... if they were paid half of that would easily be another $3M.
I'm certain there are other costs - but its easy to point to a "if they were paying that much, this many employees represents this much per month" that is a sizable fraction of that $10M/month.
12 months later they laid off 10 of the 12 remaining engineers.
I suppose it's possible they thought there was some sort of dam holding back business, which was about to burst, thus requiring loads of staff to deal with.
But most people would just say "we'll cross that bridge when we get there" and allow a bit of queuing up of customers, rather than somehow hiring and training a bunch of people in anticipation.
Uhm... Sales, marketing, finance, HR, legal, designers, QA, etc. Companies aren't just made up of engineers and people to manage those engineers.
Do you have a good track record on this ?