I'd argue that Fab never really had a business, it just had investors willing to finance a growth hacking strategy.
For enough investor dollars you can buy sales and create a convincing hockey stick graph sufficient to attract more investors.
I think investors should insist on a few weeks every few months with ZERO marketing spend so that the cycle can be broken long enough to accurately measure organic growth. Inevitably the founders try to misattribute paid growth for organic growth.
The result would not be investors pulling out, it would be a more rational focus on retaining customers and building a sustainable business. Optimistic metrics don't do anyone any favors.
For enough investor dollars you can buy sales and create a convincing hockey stick graph sufficient to attract more investors.
I think investors should insist on a few weeks every few months with ZERO marketing spend so that the cycle can be broken long enough to accurately measure organic growth. Inevitably the founders try to misattribute paid growth for organic growth.
The result would not be investors pulling out, it would be a more rational focus on retaining customers and building a sustainable business. Optimistic metrics don't do anyone any favors.