Today I invite you to read this post by Courtney Rubin, How a Hot $100 Million Home Design Startup Collapsed Overnight, The untold story of how Homepolish’s extremely Instagrammable house of cards came tumbling down.
There are a lot a cautionary red flags for you VCs and investors, and as I’ve been saying for some time: there’s a lot of them like that.
How many red flags ? Too many…
“The founders openly favored signing up the most physically attractive designers, saying they would be more appealing to clients.”
Courtney Rubin
“What had more important ramifications for the company’s future was Santos’ singular focus on press, with nearly all profits — at least in the early days — going to marketing.
CR
Yep…”design for all ethos.“
How “secretly” they get…
“Several months after the [VC] funding, Santos also stopped sharing details about the company’s health. According to five former employees, stats like how many hours were sold and how many designers they had signed up had been shared at weekly all-hands meetings. (In one of the company’s early offices, they had even been written on the wall, near the company’s core values: “Be the Solution,” “Dream Smart,” and “Keep It Fun.”) But according to ex-employees, this stopped suddenly in 2016, and the all-hands meetings themselves became much less frequent. “Everything got a lot more secretive,” says one ex-employee.
CR
Sure, seniority counts…backwards.
“Soon, not a single staffer from the early days remained.
…By employee estimates, 75% of the leadership team that started in 2018 didn’t end 2018 with the company.”
CR
Nothing wrong with laying off staff while you’re living large…
“On June 21, Santos — sitting alone under a crystal-accented chandelier in the office — put three-quarters of the company on what was supposed to be temporary unpaid leave, maybe two weeks, he said, according to former employees who were there at the time. (The other quarter of the company stayed on for minimum wage.)
By July 22 [2019], most employees had gone a full month without pay — meanwhile, Santos’ husband Instagrammed a photo: A six-bedroom, $1.6 million home the couple had just bought in East Hampton, complete with two ponds, a tennis court, and a Jacuzzi.”
CR
“Design for a client’s workspace,” [Santos] wrote, adding that he always did his best thinking in nature. “For all my obsessive planning, preparing and orchestrating, life unfolds as it will,” he wrote. “Almost entirely out of my control.”
CR
WWID ? What Will the fleeced Investors Do ? That money ain’t coming back…