Chasing Growth, Fab.com Sheds Executives and Misses Targets

Two-year-old New York startup Fab.com is now selling goods in 27 countries, has a staff of 650 people, and has been spending millions on marketing. A round of funding announced in late June valued the online retailer of hipster home goods at more than $1 billion. Yet Fab is suffering growing pains, according to interviews with current and former employees who supplied internal e-mails regarding personnel and financial matters to Bloomberg News. The startup has lost or fired at least 11 executives in the past year and missed its publicly stated targets for revenue by almost 20 percent. “It is impossible to grow a company as fast as we’ve grown Fab without having mistakes along the way,” says founder and Chief Executive Officer Jason Goldberg, who reviewed the messages and confirmed they were authentic. “Hopefully we’re able to adjust and make changes effectively,” he says.

Investors including Andreessen Horowitz and China’s Tencent Holdings have put more than $310 million in Fab.com so far (Bloomberg LP, which owns Bloomberg Businessweek, is an investor in Andreessen Horowitz). The venture capital has financed the startup’s international expansion, along with a push into new lines of business, such as Fab-branded tableware, bedding, and other home goods. At the same time, he and co-founder Bradford Shellhammer have acquired a reputation as tough-minded bosses, threatening to fire employees in companywide e-mails and dictating what computer fonts workers can use.