To The Fab Team:
Over the past couple of months I have been spending a lot of time gathering feedback about Fab and working closely with Bradford, our executive team and our board of directors, determining the best way to invest in Fab and execute on our opportunity to create long-term value in the global e-commerce arena.
Both paths converge at a single point: customer-centricity. Providing the greatest customer value provides the greatest business value.
We have been meeting with our customers. Reading their responses to surveys about Fab and the products we sell. Seeing how people use our website and mobile apps. Responding to their emails and talking to them about what they love and would like to love about Fab.
I’ve also solicited your input at management off-sites, company brown-bag sessions, and in spirited group forums.
I have also spent a considerable amount of time with our executive team and board, identifying the key markers on our path to sustainable profitability.
- The shift in our business from flash sales to an inventory model, enabling a consistently great shopping experience.
- Determining the best way to invest in and provide more benefits to our customers -- things like free shipping, free returns, best pricing, unique and exclusive products, quality curation, and informative customer communications.
- Strategic investments. This includes everything from new warehouses, sophisticated consumer and operations technology, our own private label products including custom furniture, and more.
- Our desire and decision to get Fab profitable on our existing financing.
The feedback from our customers, employees, management, and investors clearly illustrates that delighting customers is the single most important metric for Fab, and that every decision we make: how we act; communicate with each other, our designers and our customers; what we choose to invest in; and how we move forward must be predicated on that belief.
Our decision to accelerate Fab’s path to profitability has an impact on our business operations. We are certain that a profitable Fab is the best Fab for our customers. Therefore, a constantly improving cost structure is critical to providing our customers with ongoing benefits.
All of this time spent listening and taking it all in, in entirety, has been a privilege. More importantly, it has helped me and our executive team identify and codify a clear and consistent marker for what motivates us at Fab.
It is this:
Our motivation at Fab is to enable people to brighten their lives with design. This is more than a cool thing that we do, it also an incredible global e-commerce opportunity.
Design helps people express themselves. Helping people incorporate and embrace design into their everyday lives rewards the makers who innovate, take chances, and pour their energy into their life's work.
Fab, as the trusted connector between makers and consumers, is designed such that our success is 100% dependent on making our customers smile.
Our tagline affirms our customer promise: Smiles. Guaranteed.
Guaranteeing a smile is not easy, and it is not cheap, but it is essential to our creating longterm value. Guaranteeing smiles is a philosophy. It is a culture. It is a work ethic. It permeates everything we do. It is the backbone by which we prioritize all of our initiatives and expend our resources.
We’ve proven that there is an enormous global appetite for everyday design. That exists within an even greater universe of e-commerce opportunity. For the last two years, Fab has been at the nexus of these trajectories, putting us on a rocket-like path of growth. While exhilarating, that type of growth can only last on its own for so long. At some point, the rocket reaches an apex and either begins to fall or with intelligent guidance continues on an upwards trajectory.
We’re aiming for the stars.
Here’s how we’re going to get there.
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Fab Operating Values.
As this is our first all-Fab letter, I want to begin with some insight into our operating values. Our values reflect how we conduct ourselves and what we expect from our team members. This is not just corporate fluff: this is our culture.
We value Everyday Design.Design brightens peoples’ lives. In a world of increasing sameness, design helps people express themselves.
We value our customers.Smiles. Guaranteed. We are all empowered to do whatever it takes to make our customers smile.
We value The Golden Rule.We treat others the way we want to be treated.
We value transparency.We’re direct. We’re true to ourselves. We share without fear. Trust is built through authenticity.
We value thinking smarteven as we think big. We want to smartly grow the company in a way that lets us achieve profitability on our existing financing. We also want to have a considerable and positive impact on the world.
We value making mistakes.If we are not making mistakes from time to time, we’re not trying hard enough. We innovate. We take chances. We are intensely paranoid of becoming complacent.
We value measurement.We lead with passion and back it up with data. Ultimately, the data dictates our decisions.
We value passion.Fab people make Fab’s mission their own mission.
We value perseverance.A startup goes through many phases. Even at the most successful startups, there are peaks and valleys. Fab people push through the valleys to create and then climb more peaks.
We value going long.Creating customer value is a marathon, not a sprint. We know that creating value for customers, over time, creates value for the company and our equity owners.
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Fab is Everyday Design.
We launched on June 9, 2011 with a big idea: Fab is Everyday Design.
Previously most of online shopping had focused on selling commodity products, so we set out to build the Internet’s first major lifestyle shopping brand, centered around design as a lifestyle. We imagined Fab as the world’s shop for affordable, functional, beautiful products that people wear, live with and gift to others -- Everyday Design objects spanning home products, fashion, and fun stuff.
Everyday Design is for everyone. We know that great design exists in every product category, at every price point, in every material, from every country, from emerging and established designers equally. We want to make sure the world knows it as well. Before Fab, many people had a misconception of design as expensive and elitist. We want to demystify and democratize design and make it accessible and affordable for everyone. We take inspiration from Charles and Ray Eames who said: "We want to make the best for the most for the least." We believe that everyone, everywhere benefits from great design.
Everyday Design is right in front of us. It only takes a moment to engage with it. It could be the feeling of a coffee cup in the morning. Or the way lighting strikes the walls of a room in the evening. The color of a pen. The touch of a scarf. The whimsy of an iPhone case. Living with design fills our lives with sense of poetic beauty that fundamentally we all need to feel alive. To feel happy. To smile.
Everyday Design is a way of life. The products we make and sell and the designers we are lucky enough to work with enable people to express their own personal style. When a person embraces and incorporates design into their everyday life they become a designer themselves.
Everyday Design is a point of view.
A Fab product must meet the following four Everyday Design criteria:
- It is modern. It reflects a fresh outlook on life. It is innovative.
- It delights people. It is not ordinary. It helps someone express themselves.
- It is high-quality.
- It is well-priced relative to the value it provides.
Fab is Everyday Design.
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Our First Two Years: A Foundation For Growth.
In our first two years we grew really fast.
- We worked with more than 20,000 product designers ranging from mom-and-pop shops to multi-billion dollar corporations.
- We sold their products primarily through daily flash-sales events - timed sale events launching every day, occasionally with a discount to retail price. We ran a lot of events, often as many as 40 new events per day and more than 200 per week.
- We sold more than six million products, about 50% in home decor, 30% in women’s and men’s fashion, and 20% from a variety of categories that we bucket together as “fun stuff.”
- We achieved around $20 million in sales in our first six months and we sold another $115 million in our first full calendar year.
- By our second anniversary we achieved more than $40 million sales quarters and $1 million sales days.
- We expanded our reach outside the U.S. to 30 countries. Currently, more than a third of our monthly revenue is generated internationally.
- More than ten million people have discovered Fab and registered for our website and mobile apps.
Above all in our first two years we proved that there is an enormous appetite for Everyday Design.
But near-term growth is not our objective.
Long Term Focus.
While we are proud of our early growth, focusing on near-term growth is not our strategy. From the beginning, we have nurtured a huge vision to deliver something meaningful to our customers over the long-term, not to deliver a near-term return. We have made many decisions this year that sacrificed near-term growth in favor of a healthy long-term business.
An example of such a decision was our transition away from flash sales to an inventory planning model. Our customers told us that they loved Fab’s curation but wanted to feel confident that they would be able to shop at exceptional prices and get speedy delivery. Taking inventory is key to making that happen. And making that happen costs tens of millions of dollars of investment in people, processes, warehouses, technology, and inventory -- the sort of investments you make when you want to exceed customer expectations over the long-term. We do. And we will.
Another example of such a decision was our recent purge of more than a thousand products from Fab that do not meet the Fab four Everyday Design criteria as defined above. One customer said to us recently: “I used to love Fab, but now there’s too much crap mixed in with the good stuff.” How did we get there? Well, a lot of stuff sells. If we solely focused on the near term, we would expand our definition of Everyday Design and just sell all sorts of stuff, including the crap. But that is not what we stand for. We stand for Everyday Design. That’s Fab. The famous German designer, Dieter Rams, once defined his design approach as “less but better.”
We know that a long-term focus on customer needs is critical to achieving long-term value in ecommerce. We will continue to make decisions that put the best interests of our customers first.
To put the e-commerce market in 2013 into perspective only requires a few data points:
- According to a recent eMarketer report, global e-commerce sales in 2012 topped a trillion dollars in annual sales ($1.2 trillion).
- E-commerce is the only trillion-dollar industry growing in double digits. In 2013, global sales are estimated to grow by 18%, and by 2016, 15%. If these estimates are accurate, then over the next five years e-commerce should grow by another $1.2 trillion, doubling in overall market size.
- Yet today, global e-commerce represents only 6.5% of overall retail sales.
Think about. It took 17 years -- from 1995 to 2012 -- to get to $1.2 trillion dollars worth of annual online shopping. But, it will take online shopping only five more years for another $1 trillion per year to be achieved.
Jeff Bezos, the defining e-commerce pioneer, continues to point out in his annual shareholder letter that today is still Day 1 for e-commerce.
We agree with Jeff. Today is still Day 1.
Over the next few years, as retail evolves to e-tail, and as another trillion dollars of annual commerce spend occurs online, a lot of companies will flourish. But the real winners will be consumers. Consumers will win because the companies that capture the most dollars in the shift from offline to online will be those that deliver exceptional customer experiences.
In a market growing as fast as e-commerce is, capturing a dollar or two, or one thousand dollars or two, or one million dollars or two, or even $100 million dollars or two, is frankly not that hard. The market is expanding so fast that acquiring a lot of transactions is not a complicated proposition. What is hard, what is valuable, and what will create a long-term valuable e-commerce businesses, is an ongoing commitment to delivering exceptional experiences. The companies that win big will foster trust. The companies that will win big will offer great merchandise at affordable prices and extreme convenience. The companies that will win big will provide consumers with the most value.
As we embark on Year Three at Fab, our collective focus and energy is devoted entirely to building the type of company that customers will trust, rely on, and find valuable for decades to come.
We want to be one of the small handful of companies that are truly built to last because they are built on a foundation of exceeding customer expectations and fostering customer passion. We believe that customer-centricity is the only way to achieve long-term success in ecommerce, or in any business for that matter.
Our Vision Is To Be The Most Loved Company In The World.
This is a huge vision. And it is okay for us to acknowledge that it will not be easy to achieve.
Generally, people do not love companies. People love people. People love products. People love experiences. Our challenge and our opportunity is to to to create experiences and products that engenders intense love from our customers for Fab. I know that we have a long, long way to go towards achieving this vision, and I am confident that this vision is the vision that will result in the greatest long-term value. We can measure our progress towards it. And I know that we will not rest nor become complacent until we have achieved it.
This vision will not happen overnight. Rather, it will be realized one great customer experience at a time, over time.
Our Mission: Fab Delivers Smiles. Guaranteed.
This is our compass. Our North star. It is what we do every day. If we deliver smiles day-in and day-out, back it up with an absolute guarantee to our customers, we will deserve and gain their loyalty and trust over time, and only then will we be able to reasonably fulfill our vision to be the most loved company in the world.
Achieving that goal of delighting customers worldwide will reward those who supported our vision with capital and each employee equity owner of who worked hard to make Fab profitable. It’s a solid win-win-win.
Delivering smiles is completely ingrained at Fab. It is our culture. It is how we foster love.
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Our clarity of focus at Fab could not be sharper.
Our entire strategy boils down to five words:
All at once, this is our market differentiation, our brand, our value as an investment, and our customer promise: Fab helps people discover great design, at great prices, backed by an absolute smile guarantee. And, we enable it by managing a constantly-improving cost structure.
This is also our moat against commodity e-commerce and offline competitors.
We Have A Clear And Aligned Positioning.
- Everyday Design. The world's best design selection at great prices.
- Smiles. Guaranteed.
- Constantly improving cost structure.
- Fun Stuff
- Mobile apps.
- 30 Countries managed via central headquarters in NYC.
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Fifteen Things Fab Does Because Our Number 1 Goal Is Delivering Smiles.
We Listen to Customers. Religiously. And We Measure Our Success Through Our Customers.We’ve determined over the last few months every decision we make at Fab should start with a simple question: Will this make our customers smile? If it will, we consider doing it. If not, we won’t. Our culture is one of passion first, but it is always backed by data. While we pursue a lot of decisions through gut and intuition, our ultimate measurement is how well our customers respond the decisions we make.
Our Number 1 Metric Is FPS.
FPS stands for Fab Promoter Score. The Fab Promoter Score measures how likely a customer is to recommend Fab to their friends. As you know, we ask our customers this simple question regularly upon receipt of their Fab order: How likely are you to recommend Fab to your friends? Customers respond with a score from 0 to 10, with 0 being not at all likely (a detractor) and 10 being a solid 100% absolutely likely (a promoter). Customers are also given the option to write us comments in addition to their survey answer.
Take the percentage of promoters and subtract the percentage of detractors and the net result is FPS. We’re surveying our customers daily and tracking our FPS trends to figure out why detractors are detracting and promoters are promoting. It is a great way to monitor our progress towards being the most loved company in the world and whether we are living up to our mission.
Today, our FPS score among recent purchasers is around 70. That’s approaching some of the best-in-class retailers like Amazon and Nordstrom.
But our goal is not to be on par with the best, our goal is to be the most loved company in the world.
Our Number 2 Metric Is FRC.
FRC stands for Fab Recurring Customers. The Fab Recurring Customers score measures how many customers have made a purchase from Fab in two consecutive ninety day periods. This is a great measure of ongoing customer loyalty and whether we are succeeding in our mission.
The Fab Smile Guarantee.Our official company tagline expresses our promise to our customers.
Smiles. Guaranteed. Our guarantee is just that. If a Fab customer does not like any aspect of their Fab experience, we will do whatever it takes to make them smile. All of us at Fab are empowered to do whatever it takes to make our customers smile.
For example: recently, a Fab customer emailed us to ask if she could return some unopened items that she bought six months ago because she had been laid off from her job and she was short on cash. She wasn’t smiling and neither were we when we heard her story. We did the right thing and took the returns. A small thing but it resulted in brightening her day at a time when she really needed it. Smiles. Guaranteed.
Recently, another Fab customer tweeted at us to complain about a chair he bought that had developed an issue a few months later. We replaced it immediately. Smiles. Guaranteed.
Our Smile Guarantee mandates that we go above and beyond to put the customer first, always, even if it costs us more. We do that not only because it is the right thing to do but because it also builds long-term loyalty and trust. We know that consumers have many choices when it comes to buying products. In order for us to warrant a solid share of our consumers’ wallets in the years to come, we must prove to them that we are worthy of their time, trust, and money. This trust does not come through a single transaction. It is developed over time by a series of experiences that exceed consumers’ expectations.
We provide free returns. If a customer does not like their purchase, it is on us to make them smile - by listening, offering a replacement, or taking a return.
We provide free shipping. Shipping should be fast and free. Today we offer free shipping for any order above $49 and for any item that we cannot ship within five days.
We provide a price match. We recently built an automated tool that credits customers whenever we lower the price of a product within 14 days of their original purchase. We do this because it exceeds customers' expectations and delights them. We automated the technology for this because the responsibility for noticing such a price change should not be on the customer. We take responsibility for our customers' delight. Being proactive about getting it is more expensive for us, but the resultant consumer surprise and delight earns trust. And love.
Another example: as those of you who helped on this initiative know, this last Labor Day weekend we held a site-wide sale of 25% off everything. We mailed out a postcard to some of our customers alerting them to the sale. Unfortunately, about 20,000 customers did not receive the postcard until the day after the sale ended. Obvious decision: we extended the sale an extra week for those customers. Smiles. Guaranteed.
As I noted earlier, guaranteeing a smile is not an easy thing to do, and it hits the near-term bottom line. But smiles are the single most valuable investment we can make, vital to our existence and to our long-term strategy. Again, the collective feedback gathered over the last few months is distilled into this simple, ambitious vision: for Fab to be the most loved company in the world. Smiles. Guaranteed.
Our Merchandising Strategy Starts With What Our Customers Will Love, Not With What Will Sell The Most.
In a world of sameness, Fab delivers discovery, excitement, and smiles. Our customers value self-expression and our job is to help them achieve it. We have a keen understanding of our customers’ desires, needs, and interests. Our colleagues scour the globe for products that will excite and inspire.
Fab is not a purveyor of cool, rather, we are a trusted curator -- the friend people ask for a tip or advice on something to brighten their lives.
Today, our focus is on four major categories: Women’s, Men’s, Home, and Fun Stuff (gifts, tech, gadgets, bikes, iPhone cases, etc.). We will apply the Fab formula to these categories before moving on to additional categories. Over time the Fab model and point of view will be applicable to any product category.
We also pride ourselves in delivering fresh takes on Everyday Design, such as these upcoming collections:
DesignTrek | South AfricaA collection of textiles, tabletop, fashion, accessories, and furniture from designers in South Africa. This event is organized in collaboration with the World Design Capital - Cape Town 2014 organization. Our collection launch event will be held in NYC at the South African consulate this fall. For some of the participating designers for this collection, Fab’s buy for our store was the single biggest order they had ever had.
DesignTrek | MexicoSimilar to South Africa, our second curated region-specific collection will be personally curated by Bradford; the collection will reflect an assortment of Mexican designers, who fuse Mexico's rich craft tradition with their views of the modern world. The assortment will span across all categories.
Design|Trek collections will focus on designers that source local materials and imbue traditional craftsmanship with a modern flair.
Moooi and Hay.These are just a two of the truly innovative design brands on Fab this fall. Moooi will anchor our lighting collection, and we will feature a huge assortment from Hay (which no other retailer carries fully in the U.S.). We recently filmed videos in London at the 2013 London Design Festival celebrating these partnerships.
The Fab Heritage Collection.Dreamt up by our very own Fab designer Evan Clabots, Heritage is a cross-category collection focusing on nostalgia and the icons typically found in thrift stores. Think arrows, trophies, oars, snowshoes, hammers, bowling pins, bunting, fire buckets ... found objects and flea market treasures. These motifs will be rendered in bright color palettes and adorn accents like pillows, bedding, and tabletop.
New licensed collectionswith a host of amazing new collaborators, ranging from big and small, the iconic and the hot-right-now, from all over the world. Approximately 20 of these collections are slated to launch in 2014.
Extensive, modern, and eclectic Chanukah and Xmas Decor shopsare also on tap: Wood and paper trees. Origami ornaments. Minimalist Menorahs. All reasons why Fab is the place for modern holiday decorating.
Designer Calls.Fab regularly holds open calls for designers to pitch products to Fab, (in addition to our everyday product submission from on our site). Hundreds of designers bring prototypes to these open calls and present them in front of a panel of accomplished designers. In Q1 we will bring the first products from our 2013 Designer Call in NYC, Milan, and London to the Fab marketplace. This is an exciting and very powerful story of how we are helping emerging talent find a home and market in the world for their products.
And there are literally dozens of more exciting initiatives like these in the works.
We Design Fab Around Lives.
How people think about design. Their wardrobe. The rooms in their house. When the weather changes. When their house changes. When there is a special occasion. When they want something new. When they want it personalized to them. We obsess over understanding how design can fit into a person’s life, and we then design our products and services around meeting that person’s needs...multiplied by millions. We are just beginning the scratch the surface here. It’s exciting stuff.
Case in point: Fab Designed By You (DBY). Fab DBY enables anyone to easily customize their Fab furniture to almost any dimension, shape, color, or material. Fab DBY is live today in Europe and it is off to a phenomenal start. We will continue to expand our DBY offering to more geographies in 2013, including the U.S. We will also expand it into additional product categories.
We Are An Empowerment Platform For Designers.
A core part of our strategy is to find the best products in the world from emerging and established designers alike, from hyper-local to international, from a designer/maker in Brooklyn to a huge retailer in Berlin. We have sold products from designers from more than 80 countries. We take particular pride in discovering new designers and shining a spotlight on their work and helping them globally scale up their businesses. At Fab we believe that the heroes of the world are the people who dare to see things differently, makers who turn their passion into ideas and objects that can touch the lives of millions.
Designers are our lifeblood at Fab. We rely on and support makers, and we provide an unparalleled platform where they can showcase and sell their wares. That’s something to be intensely proud of.
Designers are our customers too -- their success is our success.
We Invest in Fab’s Own Label of Products.
Our Fab label is all about providing our customers with unique and exclusive designs at unbelievable prices. Creating a meaningful label is not quick or easy. It takes investing millions of dollars in product development, manufacturing, and time in order to bring products to market. There will likely be hits and misses. But it is an investment we are making because it puts the long-term interests of our customers first, as they have told us they want unique designs at great prices.
Our private label efforts fall into three main buckets: (1) identifying gaps in the marketplace where independent design community members are not currently able to fulfill consumer demand; (2) collaborations with designers where we license their designs and manufacture products on their behalf or as authorized derivations and reproductions of their work; and (3) finding unique stuff on our travels around the world and bringing it to our global audience. We believe in authenticity of design. We never copy. And, when possible, we always try to collaborate with the original designers.
In our most recent month more than 5% of sales was from the Fab label. This is one of the strategic investments mentioned at the beginning of this letter that we anticipate growing in the future.
We Invest in Inventory and Warehouses.
Our customers tell us that they want high quality products delivered fast. They want better product descriptions and better product imagery. Doing that requires taking inventory, inspecting items, photographing them from multiple angles, and videoing the products.
Over the past year we have been undergoing a massive shift from our roots as a flash sales model to an inventory model. We are doing this because our customers tell us that getting unique products delivered to them fast is far more important to them than just getting unique products. We have found in our history that a unique product delivered swiftly increases Fab customer satisfaction, repeat-likelihood, and propensity to promote Fab to one’s friends four-fold over a similar product that takes longer to ship.
An inventory model is not easy. And it is expensive. But it is key to our long-term strategy of delivering smiles, guaranteed. That’s why Fab is investing millions in warehouses and automation technology to house and quickly move all that inventory.
So far this year we’ve expanded our footprint of warehouses to more than five hundred thousand square feet across three locations, two in New Jersey and one in Eindhoven, The Netherlands
We Automatically Opt Customers Out Of Emails They Do Not Open.
Duh. That’s just common sense. As we shift from flash sales to inventory I’ve challenged our marketing team to design a Fab world where we don’t rely on email to generate traffic.
We Prioritize Our Technical Roadmap Around Projects That Bring Smiles To Customers And Help Us Build An Efficient, Scalable Business.
Leaders in e-commerce invest in homegrown technical systems. We are doing the same, growing our in-house engineering talent and investing in technical systems that will power our growth and scale with the business. Our technology enables us to rapidly iterate around the demands of our customers and to improve our web and mobile platforms. Fab now counts more than 110 people in our product development and engineering organization. We will continue to invest in growing this critical area.
Key technology investments in Q4 include: An inventory management system that provides visibility and control across our facilities, a promotions framework that bubbles up the most compelling offers, innovative tools to help customers discover and find what's new, a personalization engine that provides personalized product recommendations and thus a more relevant shopping experience, and a new and improved mobile shopping experience that builds on our industry leadership position in m-commerce, making it even easier to discover and shop from any device. All predicated on providing exceptional customer value.
We Optimize Our Operations To Maximize Customer Satisfaction.
Streamlined processes are the key to offering fast, free shipping and best-in-class customer service. As we focus on an inventory-based business model, we are designing processes and investing significantly in technology to help us scale efficiently and reduce operating costs. Managing a global business forces us to strengthen our supply chain.
We are building processes that optimize our transportation costs as well as designing innovative inventory controls to effectively move product between facilities. We have chosen warehouse locations that minimize shipping costs and reduce shipping times and we have outfitted those facilities with our own technical systems.
In parallel, we are also designing systems to help us effectively and efficiently respond to customer issues, whether it is offering easy returns, quickly getting a replacement product shipped, or automatically crediting customers when prices drop.
We Constantly Improve Our Cost Structure.
Managing towards a constantly improving cost structure is critical in order to continue providing our customers with exceptional service and benefits. We make budget and investment decisions that will result in the greatest possible long-term customer value and shareholder value.
Even as we grow, we are committed to staying lean and spending every dollar as if it were our last. While we are optimistic about our chances, we also run the company with a healthy dose of fear that we could always go out of business tomorrow if we make poor investment decisions today.
We Will Grow Into Additional Geographies If And When We Are Confident That We Can Deliver An Exceptional Experience.
Right now we are wholly focused on getting it right vs. growing fast.
We Make Mistakes.
We keep pushing and trying and we are not afraid of momentary failure. Rather, we are - and should be - intensely paranoid about the dangers of complacency.
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Fab Employees. You.
We are thankful that the Fab team continues to believe in and build towards our collective vision of being the most loved company in the world.
Everyone here is has the option to be an equity owners of Fab. We do this to encourage everyone to operate as owners, to challenge the status quo, to continue to challenge each other, to innovate, to push things forward, and to better design our processes, our team, and our business.
Our company culture is defined by our operating values and how we conduct ourselves every day. The challenges we face and the problems we solve -- and how we go about doing it together -- creates the Fab culture. One of my recent favorite Fab sayings is “share without fear.” We have begun starting our meetings with this reminder, because we need everyone’s input in order to design the best possible Fab.
It isn’t always easy to work at Fab. We have big ambitions. We make mistakes. We embrace change. We are paranoid of complacency.
I could not be more proud of the ambition, intellect, and resilience of the Fab team. We have challenged you to create a company that delivers Smiles, Guaranteed. Your response to that challenge continues to surpass our greatest expectations.
One of my biggest goals going forward is to provide our team with even more transparency and insight into the drivers of our business. As we accelerate on our path to profitability it is more important than ever to have all of our team members aware of and informed about the logic behind our actions.
We should all be thankful and proud that our investors believe in and support our vision and plan.
This year Fab raised more than $150 million to enable us to continue focusing on the longterm. In total, Fab has raised more than $300 million to help us pursue our vision. That money represents a trust in us that we will utilize capital wisely, which we intend to do by getting profitable on our existing financing. I am confident that if we continue to grow customer value, we will have ample access to capital to fully execute on our strategy and the global ecommerce opportunity.
Goal & Objectives For This Next Period.
I acknowledge that our near term decisions may not always make immediate sense externally.
Our focus on the long-term necessitates that we put the best interests of our customers first, evolve quickly, try stuff, invest, and make mistakes. We know that if we create customer value and foster customer trust and admiration, long-term sustainable revenue and profits will be achieved over time.
Our #1 goal is to increase customer value.
Our 4 Key Management Objectives for this next period are as follows:
- Grow our FPS score. [to internal targets]
- Grow our base of FRC's. [to internal targets]
- Continue making Fab an empowering and fulfilling workplace. [to internal targets]
- Constantly improve our cost structure. [to internal targets]
Those are the big ones. There are other strategic initiatives we are considering pursuing. Some of these initiatives will pay off. Others will not. We’re aiming for far more of the former than the latter.
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We’re Just Getting Started.
One final point.
There will be ups and downs. Growing a great business that has a meaningful and lasting positive impact on the world; that delivers a solid return to our shareholders requires having the strength to see past the short-term and out to the endless horizon of opportunity. To the stars where the rocket is headed. (It isn’t a coincidence that our anniversary reminders are rockets engraved with employee names and anniversaries.)
I could not be more bullish about the Fab opportunity to help people brighten their lives with design.
If we live up to our mission and deliver smiles, guaranteed, we will reach our vision of being the most loved company in the world.
Along the way, we’ll be creating value for those who invested and worked hard to make the Fab vision a reality.
We’re just getting started.
Founder and Chief Executive Officer