Before hitting roadblocks in 2019, Fast, the much-hyped one-click checkout startup, had a unicorn status of over $1 billion and an investment worth $120 million from payments giants Stripe, Index Ventures, and Lee Fixel’s Addition. In January 2020, CEO Domm Holland announced the growth of Fast by 650%, and even confirmed the ‘incredible demand to invest in Fast.’ However, not even three months later, those plans had evaporated. Contrary to his pompous statements, investors refused to give additional investment in the latest funding round.
The Idea Behind FastIn March 2019, Fast was launched by Domm Holland, a brash Australian entrepreneur, with former Uber employee Allisson Barr Allen, who became Fast’s Chief Operating Officer. The idea of the company began with a family crisis. Holland’s son was briefly hospitalized, and Holland’s mother-in-law was in town to help the family. On one occasion, her chore involved ordering groceries online, but this simple task was suddenly complicated when she couldn’t remember or reset her password. That was a light bulb moment for Holland.
Why Did Fast Fail?In its initial days, the company grew to have 400 employees. Per Holland, its checkout services were available on about 1000 e-commerce sites, and the company was outpacing rival checkout Bolt in ‘virtually every way.’ Was that true?
1. Competitive LandscapePer Baymard’s study, one of the top reasons consumers abandoned their shopping cart was the lengthy and cumbersome checkout process. Holland pitched Fast as bringing Amazon’s one-time checkout, whose patent had expired in 2017, to the rest of the Internet. The company aimed to reduce online payment hassles and increase online transactions by storing and confirming the customer’s payment credentials and shipping information However, Fast wasn’t the only company to understand this logic. The market was already crowded with tech giants like Google, Apple, PayPal, Shopify, and startups like Bolt, Rapyd, and QisstPay, a buy now, pay later startup. Fast couldn’t just rely on its eccentric founder and flashy marketing. It had to define a true unique selling point to justify its presence. Holland claimed that Fast’s system was a more modern and easier-to-use solution than its competitors, but Bolt’s performance was leaps and bounds ahead of Fast. While Bolt had over 10 million users and a value of $11 billion, Fast only generated about $600,000 in revenue – a fiftieth of the amount Bolt was generating over the same period. Fast engineers reported that integrating their tool on merchant sites was challenging and sellers said it was not always functioning properly. The company also missed targets for signing up new merchants. Soon enough, investors realized they’d be investing money into a losing cause.
2. High Burn RateOnce Fast had secured its investment of $102 million, it ramped up its spending. Despite its low revenue, significant money was spent creating marketing buzz through athletic sponsorships and celebrity endorsements. For example, Holland contracted ‘The Chainsmokers’ to play at the New York retail conference for $1 million! The event was ultimately postponed because of the Omicron virus surge, but those were the ‘high’ standards that Holland was aiming for. Other expenses included lavish corporate retreats and extensive hiring. Since its inception, the company’s headcount spiked by 42%, including highly paid executives and engineers. It was believed that by the end of 2021, Fast was burning $10 million in cash per month!
3. Lack of CareJust like Travis Kalanick, Elizabeth Holmes, and Adam Neumann, Holland had an over-the-top CEO personality. He’d labeled himself as ‘the fastest CEO in the world’, and you’d often find his selfies on expensive boats and private jets published online. While it’s true that his charismatic personality and storytelling skills helped Fast secure massive funding, a lack of care for the product/service was evident. For example, when the company struggled financially, Holland would skip essential meetings to go skydiving, wakeboarding, or perform race car stunts. This, coupled with Holland’s $15M legal dispute with the Australian government over his first startup, Twow.com.au, left a bitter taste in the mouths of investors.
4. The Money Train is Slowing DownVenture investments carry a certain degree of risk, and recent political unrest, along with economic uncertainty, mean that investors would want to be more certain about the checks they write. Per CB Insights, since January 2022, global venture funding has dropped, and the number of companies achieving ‘unicorn’ status fell too.
Fast Went Too FastFrivolous spending, poor decisions, and rapid-fire hiring led to the company’s doom. Upon its failure, Holland referred to the company as a ‘trailblazer,’ saying some pioneers ‘don’t reach to the mountain top,’ adding his startup had ‘forever changed’ buying online. When Fast closed, it was believed that most of its engineers were offered the chance to work at Affirm, the buy-now-pay-later provider, to advance their existing product. It is unclear how many engineers accepted the job, but it was a great hiring opportunity for Affirm. Which other entrepreneur does Holland remind you of? Let us know in the comment section below. Closing your business can be a difficult choice to make. Not only is it emotional, but there are a lot of administrative tasks to take care of and plenty of opportunities to miss essential details. If you’re looking to close your business, contact us to find out how we can help you move on as fast and easy as possible.
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