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The inevitable fall of Fast

by
George Lim
5 min. read

Our founder, Victor Lang, recently posted about Fast and its failures. This post gained a lot of interest, so we decided to write an article that would dive in a bit deeper into what exactly happened with Fast, and how other founders and people who work at startups can learn from them to avoid making the same mistakes. 

gini Founder and COO, Victor Lang’s post on Linkedin about Fast and its recent failure. (Source)

First started in 2019, Fast was founded by Domm Holland, a brash Australian entrepreneur, Allison Barr Allen, a former Uber Executive, and Australian entrepreneur Joshua Abulafia, on a mission to bring the one-click checkout feature to the rest of the internet. Within a few years of launching, Fast received more than US$120 million in investment, bringing in new money at a valuation above US$1 billion. 

However, early on in the lifetime of Fast, there were significant disputes over the company's finances. Eventually, Abulafia, Fast's other co-founder, was pushed out, making Holland the primary decision-maker of the company. While these disputes may not have seemed like a big deal at the time, they eventually transformed one of the world's most hyped startups into total failure. So what ultimately led to the colossal failure of Fast?

Reckless spending

While Fast's "flashy" marketing made them one of the most renowned startups, it also led to its downfall. By scaling quickly, Fast hired hundreds of employees and many high-paid executives from competitors. However, Fast only generated around US$600,000, which could, on average, only pay for five junior software engineers, not 395 employees. To break even, Fast needed to generate 1.5 million to 1.8 million orders per month, but they weren't near that. Furthermore, with massive changes so quickly, some employees believed the company was getting overstaffed without enough work for everyone. Some employees started feeling disengaged, resulting in low levels of commitment towards Fast. Simply put, Fast did not have a Strategic Financial Planning strategy, which led to its downfall.

Many insiders were also very concerned with this spending. Several workers noticed Holland pouring significant money into deals to create marketing buzz, which many contested. One of the most questionable deals from Fast is paying the Chainsmokers over US$1 million for an endorsement. The event was ultimately delayed because of the Omicron Coronavirus surge, but it symbolised Fast's reckless spending and poor capital management. 

Example of Domm Holland outsourcing cheap labour to Nigeria and ditching them as soon as Fast gained funding. 

Spotty product

When Fast was first founded, Holland hired engineers in Nigeria to build the early version of Fast's technology that was used to pitch to investors. However, after the first round, Holland abruptly fired those engineers. While it is not unusual for companies to hire offshore engineers as they're starting up, it is uncommon to see this much turnover in a well-funded startup like Fast. This constant turnover had vast effects on the product since it turned out that Fast's basic infrastructure was spotty at best. 

Poor technical infrastructure led to many faults and holes in the framework, leading to an overall poor and faulty product that many of Fast's Blue Chip clients could not rely on. Even some of Fast's biggest partners did not always rely on Fast, showing how Fast's success was more or less just a Facade. 

Furthermore, Fast's main product, a one-click checkout button, faced intense competition. PayPal, Apple, Bolt, and Shopify had been working on a similar product with more resources and funding after Amazon's exclusive patent on the technology expired five years ago.

Inept leadership

A company's founder and CEO is usually the company's leader. However, with Fast, Holland was not only unprepared but also immature. He was very successful in selling his company to Silicon Valley investors through his charisma but was unsuccessful in actually developing the product. 

As we look deeper into Holland, his past businesses had all ended in liquidation or failure. One of his first startups was a towing startup called Tow. While Holland stated that Tow was "an on-demand vehicle towing platform in Australia that processed more than $50M in transactions," it doesn't paint the whole picture. Tow was in a multimillion-dollar billing dispute with the Australian government over towing and impounding fees. These disputes eventually led to the startup's liquidation in 2018 while ripping off many of the tow truck partners he worked with. 

After moving to the US, Holland even changed his name, going by "Domm" instead of "Dominic", once he moved to the US and as a way of running from his past. However, Holland's cycle of failure followed him to the US, with Fast shutting down after two years of operations. Holland stated, "Start-ups fail for many reasons, to which Fast was not immune. But decisions led to this outcome which I take responsibility for." 

Young Rich Lister Domm Holland raises $168m with Fast checkouts
Fast Founder Domn Holland after raising $168m in 2021 (Source

Money drying up 

The straw that broke the camel's back for Fast was when funding stopped coming in. The company constantly asked for additional capital, and reportedly it asked its investors for new funding in November of 2020 at a $1+ billion valuation. However, investors did not budge. Even when Fast cut its ask in half and offered to lay off 50% of its workforce, investors still did not budge. Again there was no thought behind Holland's planning, but with some ​​financial planning software, he could have put his company in a much better position. 

The lack of funding in 2022 is mainly due to the private market seeing obstacles everywhere, such as the war in Ukraine, mass inflation, and a significant drop in the public stock market. These events led to global venture funding dropping 19% from Q4 2021 to the first quarter of 2022. Moreover, the number of companies that became "unicorns" fell to a five-quarter low.

Conclusion

Overall many factors led to the inevitable failure of Fast. With the company burning cash as if it was on fire, an inept leader and a spotty product, Fast was doomed to fail, and the poor 2022 economy expedited that process. 

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Ray Wyand, CEO of gini
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