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April 11, 2024
April 11, 2024
Going into fall 2020, fabric, a Seattle-based headless e-commerce platform, seemed set to thrive. Every kind of business suddenly had to become laser-focused on e-commerce to meet massive increases in online purchasing due to the impact of the COVID-19 pandemic. But three-year-old fabric had a branding issue, so it hired Faisal Masud, who had helped build billion-dollar online retail businesses for Amazon, Staples, eBay and Groupon, as its new CEO.
“The fabric brand that I inherited was called ‘Simplifying Growth with a Modular E-Commerce Platform,’” Faisal explained. “My first reaction to that was, ‘What on Earth does that even mean?’ We then went on a journey to completely rebrand ourselves.”
B2B leaders must hit on the right technology messaging because their customers are spending hundreds and hundreds of thousands of their employers’ dollars on software, services and hardware. These customers’ jobs depend on them making the right purchase decisions. Speaking their language—or using the “customer voice”—is crucial for marketers to establish the trust necessary to drive end-to-end sales conversations. With prior experience as a B2B buyer, Faisal had also long studied business and life principles and had a wordsmith’s eye.
The results speak for themselves. A little over a year after joining fabric, Faisal and his team raised $100 million, and the company was valued at $850 million. The company’s revenue has grown 800%+ year-over-year, and it now employs 200+ people, up around 500% since February 2021.
We talked with Faisal about rebooting the company brand, how fabric fits in with other buzzy e-commerce names and his expectations on how the larger retail scene will shake out. What follows is an edited version of our discussion:
How did you set out to change the fabric brand?
In my first two weeks as CEO, I wrote an open letter to all employees about how we need to bring in foundational first principles for how we run this organization, and if we don't, we're not going to build a good company. I also wanted to establish values that we could always point to when we were confused or conflicted or having an argument about what we needed to do next. These values will effectively set the bar for who we are.
How did I rebrand the company? We had to brand from within. We must have our priorities right. I shared five product principles which I think we should all care about. They are: parity-performance, reliability, usability, integrating intake, and doing less will mean doing more. And if we can have those principles in place, we're going to succeed. If we don’t, we will fail.
So, you first changed the brand from within—what the company should be about. What came next?
We took that ethos and told our customers, “We are fabric. We are an API-first cloud native [partner] that’s here to end the misery of replatforming.”
Because to me, “replatform” was like a four-letter word in e-commerce. When e-commerce players have to replatform, it never goes right; it always goes wrong. So, it was all about how I could make this less painful for the buyer, what can I tell them that will resonate with them, like, “Oh yeah, I don't like that—I want this.”
I used to be a B2B buyer, so I understood that our customers would want to hear real solutions to their problems rather than a vague pitch. Customers are delighted to go on this journey because they've been stifled by their existing or previous systems. They’re either outgrowing their custom platforms or they’ve been constrained by their monolithic platforms.
When e-commerce players have to replatform, it never goes right; it always goes wrong.
B2B e-commerce may reach $21 trillion by 2027. Is it a major part of your growth?
It’s a fairly sizable part of our total annual revenue—about 30% of our accounts. So, the short answer is yes. When I joined fabric in 2020, our B2B business was mostly nonexistent.
For so long, the overall B2B market lacked a sense of urgency. The pandemic has accelerated the urgency to change within the space somewhat. But I’d say that B2B is still about 15 years behind B2C.
The bigger picture for retail: Where does fabric fit in with the Amazons and Shopifys?
I see a home for all of us to coexist. It doesn’t have to be them or us. Why can’t it be all of us? When you are a brand, you need to have a multi-pronged strategy. We provide a very different service from an Amazon—there is just no overlap in terms of platforms.
I say this as we have customers who have a bunch of lines of businesses—medium [retailers], big marketplaces, distribution companies, B2B sellers, direct-to-consumer brands. We don’t serve SMBs; they should be on Amazon Marketplace. But if they are mid-market or larger, they should be with us.
What’s surprising in e-commerce is that there’s no competitor to Amazon. You’d think that by now someone would have emerged. Nobody has a Prime program like Amazon does. They’ve built a juggernaut, and I don’t see how you break that mold any time soon.
What's surprising in e-commerce is that there's no competitor to Amazon. You'd think that by now someone would have emerged.
Putting on your retail analyst hat, how do you think Amazon vs. Walmart will pan out?
Walmart doesn't stand much of a chance online, compared to Amazon. It's too little, too late. Walmart took a lot of safe bets, but those types of bets don't have a high yield. By the time they took a [$3.3 billion] bet on Jet.com, they made the wrong bet. Walmart not only put bets on the wrong horses, those horses fell down and died. Jet’s dead and they made seven acquisitions that are also all dead for the most part.
I think Walmart has a severe identity crisis; they don't know what to do, so they are just all over the place. Part of their challenge is they're always chasing Amazon.
Brands should focus on their core competencies, on what they are good at.
How about offline?
Do I see Walmart as a threat to Amazon's grocery business? Yes. Do I see Walmart as a threat to Amazon's pharmacy ambitions? Yes again. But I do not see Walmart as any kind of threat to Amazon’s e-commerce business. They’re a zero threat.
Brands should focus on their core competencies, on what they are good at. Walmart should focus offline because it is their core competency. Amazon's core competencies are in Prime, Prime Studios, AWS, Marketplace, etc. Amazon tried to strike at Walmart’s grocery business, and so far have not delivered much of a punch.
Again, brands should focus on what you're good at. Don’t just chase what someone else is doing and then try to copy and paste that. You will fail every time. Don’t waste your time trying to get into other people’s domains where your company doesn’t have a core strength.
