Too fast, too luxurious: lessons from the failure of Stripe-backed Fast

Disclosure: trying and failing at something is infinitely better than having a perfect solution in your dreams. But there is a massive difference between a well-intended failure and a blatant hoax. You be the judge.

If you’re working in the financial technology space, you most definitely have heard about?Fast, a payments company that reportedly offered the fastest online checkout on the entire Internet. Even if you haven’t, I think you should because it offers some great takeaways for startups beyond just FinTech.

Despite having raised hundreds of millions of dollars, Fast has just failed and closed shop. Apparently, it was just too fast and too luxurious.

But let’s take a holistic view here, map out all the red flags, and most importantly focus on the lessons to learn. For FinTechs & tech startups, venture capitalists, and startup employees.

The Fast Brief

Before we take a deeper dive, let’s do a quick recap of Fast.

Founded in 2019,?Fast?was a US-based payments FinTech that offered a one-click purchasing process aka?one-click checkout?that reportedly took less than a second, without requiring a password or manually inputting information for every order you made. Buyers were automatically signed up for Fast after their first purchase, making future shopping effortless on any website with Fast. Additionally, sellers could also place Fast Checkout on individual product pages, enabling buyers to forego the clunky shopping cart process altogether.

Before closing the door, the 3-year-old firm has managed to raise a whopping $124.5 million from a number of prominent investors and VCs. Besides payments giant?Stripe, which led both their Series A & Series B, other investors include Index Ventures, Susa Ventures, and Global Founders Capital.?

But the exciting part begins elsewhere.

The Founder

A conversation about a startup should begin with its founding team. In the case of Fast, it was its co-founder and chief executive?Domm Holland. He was the public face of the company previously claiming to be?the world’s fastest CEO?(well, that ended really fast). And he was quite a character.

Despite charisma and great marketing skills, his past was full of red flags. It still blows my mind how he managed to raise crazy amounts of money and hire hundreds of great people. Here’s Holland’s?impressive?CV:

• The CEO's real name is not "Domm". It's actually "Dominic", and he’s an Australian native.
• Dominic got his?start?by punking Australia’s biggest airline, Quantas. In 2010, Holland bought the domain Qant.as for $20 and waved it in the face of the airline. He threatened to sell it to a rival airline and began redirecting all traffic to rival Virgin Blue's site. He eventually sold the domain for $1.3M.
• Holland later founded Tow.com.au, or as he called it - "the Uber of towing". His towing company provided a quick way to contact towing contractors when vehicles had violated reckless driving laws. It ended up with a $15M dispute, going bust, and firing staff via text messages. The crazy part? Because of the dispute, Domm threatened to sell the private bank account and driver’s license data of 21,000 drivers.
• Dominic then traveled to the US, the one & only Silicon Valley, and started what would eventually become Fast. He hence hired contractors remotely from Nigeria at ~$200/week. Once he raised funding off the back of what they built, he terminated everyone and never acknowledged their work.

I’m not here to judge, but the above alone are some really huge red flags showing that Domm Holland has no respect for any business ethics or morale altogether, and he fundamentally doesn’t care about his employees or the people he works with.

The Product

When we talk about?one-click checkout?or just?1-Click, we must understand that it’s anything but new. E-commerce giant?Amazon?has created it, filed the patent in 1997, and secured it in 1999. Back then, the idea that consumers could enter in their billing, shipping, and payment information just once and then simply click a button to buy something going forward was unheard of and magical. More importantly, it represented a breakthrough for the idea of hassle-free online shopping and undoubtedly gave a solid boost both to Amazon and the overall e-commerce sector.

September 12, 2017, marked the end of an era as the patent expired for Amazon’s “1-Click” button. As an effect, PayPal, Apple, Shopify, Stripe, and Bolt all jumped on the technology. Fast joined the crew in March 2019.

The problem with one-click checkout is that it’s a really tough business model - it has no real moat, so it’s all about scaling and scaling fast. And scale is often very difficult in payments.

An even bigger problem was that there was practically no differentiation and nothing unique in what they were offering (apart from great marketing). Fast was like?Shop Pay?or?Amazon Pay,?just that… There’s no?just, that was literally it.

That said, in order to validate Fast’s proposition, one had to believe that?(a)?customers will be more likely to checkout with Fast over Shop Pay/Amazon Pay/Apple Pay, etc. OR?(b)?Fast would provide 10X better merchant service than Shop Pay/Amazon Pay/Apple Pay, etc. None of this was true.

But Fast believed otherwise. In fact, they managed to?sell?this to investors too. Here’s one of the last slides from their pitch deck which was used to raise $20M in Series A:

(I will teardown their pitch deck soon too, laying out both the good & the ugly, so hit the?subscribe?button if you haven’t yet so you won’t miss it)

One of the craziest things here is that soon after funding them, Stripe built their own “remember card details” feature into their Checkout product. It’s called?Link with Stripe, and it’s literally the same thing that Fast was doing.

The Traction

The fact that you aren’t the first in the market or that your product isn’t unique doesn’t necessarily mean you can’t be successful. Examples from Google, Stripe, and Facebook prove that. But as noted earlier, payments is all about economies of scale and traction. Fast didn’t have either.

Despite raising a whopping $124.5M since its 2019 inception, the company’s burn rate was wild - Fast was said to be burning as much as $10 million. Every single month.?Unsustainable?is an understatement here.

Despite burning $10M/month and having more than 500 people, Fast managed to do only $50,000 per month in sales. That’s beyond nuts.

Regardless of operating as a charity, Fast didn’t refuse to spend ridiculous amounts of money on marking. Following the $102M raise, the company even agreed to pay Chainsmokers $1 million for their performance in a company event. Let that sink in.

All the flashy lights and extravaganza did create FOMO & hype. But mainly for VCs and not the core business, which was probably in huge trouble since Day 1. I’ve also read some stories that Fast was offering as much as $10,000 for some websites so that they would just integrate its checkout solution. If that’s actually the case, it pretty much summarises everything.

The Lessons

You have made it up to this point, congrats! Having covered all the ins and outs of Fast, it’s time for the lessons.

I genuinely believe Fast story is a brilliant teacher for everyone, including startups, venture capitalists, and employees. Here are the brief lessons for all of them:

To uncover the lessons, continue reading here:

***

About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

If you've enjoyed this piece, don't hesitate to press like, comment on what you think, and share the article with others. Let's spread the knowledge together!

For more, you can check me on?LinkedIn?&?Twitter?where I’m sharing my thoughts and insights daily!????