Jason Goldberg: I Was the Poster Boy for Wasting Investor Money
BY Issie Lapowsky
After burning through $48 million, the Fab.com founder learned a key start-up lesson: Be ready to turn on a dime.
Jason Goldberg pulled off one of the most successful pivots of all time when he turned Fabulis.com, a failed gay social network, into Fab.com, a fast-growing flash-sale site that raked in more than $100 million in sales last year. But Goldberg might never have changed gears so quickly had his first company, Jobster, not been a total failure.
With Jobster, we were going to help companies recruit employees using their social networks. The problem was that the product never really delivered on that promise. We hired 165 people and raised $48 million on my watch. We put ourselves on a path of going bigger and bigger before the product was ready.
We crashed really hard. I cut the staff to fewer than 50 people. Eventually, we brought in someone else to try to save the company as CEO, and I left.
It was tough. I was the poster boy for wasting investor money, and I knew it. But to me, it was never a question of whether I'd start over again. For me, the question was, How can I do it better next time?
I started Socialmedian immediately. It was just me and a couple of developers. I went to some investors and said, "I have an idea for a service where people get the news based on what their Facebook friends and Twitter followers are reading. You'll give me a maximum of $50,000, and I'm going to spend a year proving this idea. If I haven't proved it, we'll shut it down." Socialmedian got big quickly. We sold it in 11 months for $7.5 million.
When I started Fabulis, I used a similar strategy. I had a hunch that we could launch a social network around the gay community. After a year, we'd built an interesting service, but it hadn't ever taken off. So I told my investors we were going to pivot.
Knowing that I should have changed course sooner at Jobster is what really saved us at Fab. I learned that a sales pitch isn't enough if you don't have the best product. Even though we have 600 employees today, not a pixel gets on Fab's website that I haven't looked at. It's that pixel-perfect mentality that sets you apart.
First job: Clinton White House aide Age when he launched Jobster: 32 Products sold on Fab since 2011: 4.6 million