Fab.com is a fabulous example of how to successfully pivot a startup -- it transformed itself from a failing social network into an incredibly fast growing online retailer that's projected to surpass $100 million in revenues this year. [From Gay To Pay: How Fab.com Became The Hottest Online Retailer - Forbes]
It's a great story but Fab's CEO Jason Goldberg and fellow co-founders, are less than pleased about a recent Bloomberg story by Sarah Frier: Fab.com’s Ascent to $1 Billion Valuation Brings Missteps.
Mr. Goldberg made a serious accusation against Bloomberg and its reporter, charging "blatant misrepresentations" that "were so egregious that I felt compelled to clear the air."
In a very long post on his blog Betashop he addressed the Bloomberg story point by point -- and spectacularly failed to prove any misrepresentation of the facts.
In nine out of ten points, he agreed that the information was true. In the one claim that Fab had lost 11 executives, he only mentioned five departures at senior VP level and above, with no account of any other senior management positions.
- The claim that Fab missed revenue targets by 20% was true, but only because it had raised its targets by 20%.
- The claim that co-founder Bradford Shellhammer threatened to fire staff caught modeling Fab products? True, but "it was a joke. We have thousands just like it."
- The claim that staff are required to use a special font for emails, and use high quality paper? Also true. It's "all pretty standard brand best-practice stuff."
- The claim that Fab staff aren't allowed to put their jackets on the backs of their chairs? True. "We ask them to keep their desks tidy."
- The claim that he sent emails to staff threatening their pay unless they uploaded a photo of themselves to the corporate website? True. "The bit about holding out pay was a joke."
- The claim that he emailed staff demanding a confession from whoever left a mess in a Fab model apartment? True. Although it turned out his suspicions were wrong and it was the work of an outsider.
"Blatant misrepresentations" is a serious charge made against the reputation of Bloomberg and its journalists. Yet Mr. Goldberg failed spectacularly in proving his case.
And he failed in showing Fab to be such a fab place to work. A corporate culture in which senior executives make "thousands" of jokes about firing staff doesn't sound very pleasant, or funny.
And it's hard to see how Mr. Goldberg's example of what he says is the most important of all of Fab's values, would succeed to inspire anyone: "We are only as good as our next broken dish."
However, if readers "are ready to live the Fab values, please apply."
The lengthy blog response is a case study in corporate crisis communications. It won't be found in any collections of best practices.
Here's a link to the blog post in all its prissy glory: