In this episode of 20vc, host Harry Stebbings interviews Dom Holland, founder of the recently closed startup Fast, to candidly address the company's high-profile failure. Holland discusses Fast's burn rate issues, media misrepresentations, and the impact of having Stripe as an investor. He refutes the notion of excessive spending on marketing and events, attributing the majority of the company's costs to staff wages and benefits. Holland also reflects on the challenges of scaling a tech business in a complex and fragmented e-commerce landscape. Despite the setback, he expresses a strong desire to continue building and solving problems, drawing on lessons learned from Fast's journey. Throughout the conversation, Holland emphasizes the importance of team and product, and while acknowledging the pain of public scrutiny, he remains focused on moving forward.
"Now Fast is likely one of the most discussed and written about companies of the last month with their recent closing slash aqua hire."
The quote introduces the company Fast as a focal point of the conversation, particularly due to recent significant events affecting the company.
"And so today Dom Holland is joining me in the hot seat for an exclusive to discuss what went wrong, what statements reported are true, which are false, what's it like having stripe as an investor and so much more."
This quote sets the stage for the interview with Dom Holland, indicating that the conversation will delve into the challenges and experiences faced by Fast, including aspects of its relationship with the investor Stripe.
"The platform provides founders with free resources like Azure credits, development tools like GitHub, mentorship resources, productivity, software training and so much more."
This quote summarizes the types of resources provided by the Microsoft for Startup Founders Hub, emphasizing the comprehensive support offered to startups.
"Pipe is a completely new way to finance growth without taking on restrictive loans or diluting your ownership with vc money from vcs like me."
This quote explains the unique value proposition of Pipe, highlighting its approach to financing that avoids the drawbacks of traditional loans and equity dilution.
"When you really understand your cap table and share ownership, you motivate and engage your team and have more transparent conversations with investors."
This quote emphasizes the importance of transparent equity management in motivating teams and communicating with investors, which is what Legy aims to facilitate.
"First, I've been building for a long time. I started programming when I was about 14, so that's about 20 years ago now. So I've been building stuff for a long time, building software and hardware and whatever else."
The quote provides background on Dom Holland's extensive experience in building technology, setting the stage for his credibility as a tech entrepreneur.
"We were doing a lot of work for the Queensland government... They wanted one company to manage everything... But there was a contract dispute and the government didn't want to pay for about $17 million worth of tows and impounds that we did for them."
This quote details the specific issue that led to Tow's downfall, highlighting the financial impact of the government's refusal to pay for services rendered.
"Our burn was just far too high at the end. Over the last two quarters of 2001, we basically doubled our burn... Any company with high burn was having issues fundraising, and we were on the high end of high burn."
This quote identifies the critical financial misstep for Fast, which was an unsustainable burn rate that ultimately led to the company's inability to secure further funding.
"And so in the end, after about four months of being out in market fundraising, we ran a process and sold the business."
This quote explains the final decision to sell the business after unsuccessful attempts at fundraising.
"The vast majority of our burn came directly from people like, well over 80% of our cost space was just wages, health care benefits, over 80%."
This quote clarifies that staff costs constituted the bulk of the company's expenses, debunking the notion of excessive spending on marketing or other areas.
"We had a customer success team that was just too big for what we needed at that time."
This quote acknowledges the issue of hiring more staff than necessary at the time, contributing to the high burn rate.
"Our Burn was much, significantly lower. We've never done $10 million a month of burn before."
This quote refutes the media's claims about the company's burn rate, emphasizing that the actual figures were much lower.
"Every high profile figure is polarizing. There simply aren't people who are high profile and not polarizing."
This quote reflects on the inevitability of polarization when one becomes a high-profile figure, regardless of their intentions.
"Years ago, I stopped reading. Reading the articles. The good or the bad doesn't matter."
This quote shows the founder's decision to disengage from media narratives to maintain focus on the company's mission.
"Literally fought for months and months and months to keep the team together."
This quote indicates the efforts made to avoid layoffs and the eventual acquihire as a solution to preserve as many jobs as possible.
"It would be lovely to hold one on one interviews with every single person, but unfortunately, it's just not a practical exercise."
This quote highlights the limitations of remote communication tools in providing personal interaction, emphasizing the impracticality of one-on-one interviews for every team member in a remote setting.
"Having too high a burn is what killed our company. There's just no other way to put it."
This quote clarifies that financial mismanagement, specifically excessive spending, was the main reason for the company's failure, not the influence of strategic investors like Stripe.
"Bolt had just been building all of those integrations for a lot longer. They had five year head start on building all these pieces."
This quote explains Bolt's advantage over Speaker B's company, which was their longer period of establishing necessary integrations and infrastructure, contributing to their survival in the market.
"We got team right, we hired the right people. We hired the best people."
This quote emphasizes the success in team building, suggesting that hiring the right talent was a key strength of the company.
"We just spent too much money. We had a burn too high."
This quote acknowledges the mismanagement of funds as the critical factor in the company's downfall, rather than the amount of capital raised.
"I'm with you. I think that was a plan. And to be honest, it's exactly what I wanted to do."
This quote shows Speaker B's agreement with the idea of cutting costs to prolong the company's survival, indicating that there was a plan to do so, but it was not executed in time.
We had $8 billion of enterprise merchants in signed deals that we were onboarding. We were so past that tipping point. And my vote was to do that. It was to raise money whatever, and keep going.
This quote illustrates the company's strong position with substantial deals and the speaker's inclination to secure more funding to capitalize on that momentum.
I think our insiders just really wanted to see external investors come in and lead that process and them to participate with other people lead, which I get.
The quote explains the board's stance on funding, highlighting a preference for external leadership in the investment process.
We need to lost till the end of the year and we need to prove out X, Y and Z. I don't care about, I'm sorry, cutting heads. We're saving the company.
This quote represents an alternative strategy that prioritizes the company's longevity and self-sufficiency over immediate external investment.
I've always been the rock in my family. That's the job, right. It's really easy for people to want to hate or want to talk about or want to have a go at people who don't suffer publicly.
The quote highlights the speaker's personal coping mechanism and the societal shift towards openness about personal struggles, which he does not conform to.
I'm just going to keep doing what I do well.
This quote conveys Speaker B's determination to persevere in his professional pursuits, despite the challenges faced.
The reality behind what happened that keeps me driving forward, right? The media and whatever scumbags on Twitter can say whatever they want about me, but reality is going to go and build something magical again.
This quote reflects Speaker B's resilience and the encouragement he receives from his support network, which fuels his desire to overcome setbacks and continue innovating.
I do think that we need to celebrate failure, as Dom said there, I hope you enjoyed the show today.
The quote emphasizes the value of embracing and learning from failures as part of the entrepreneurial experience.