Repeat after me: hype won't save you

Race cars and Jessica Alba aren't enough to save your startup if your product doesn't work. Sounds logical, right? Well, why does it keep happening?

There are two reasons: hype can blind people, and we love it. We're addicted to it! That's how a scam managed to raise $168 million - and a valuation between $600 million and $750 million - by charming its way to the top. 

The dust has settled on the Fast scam, and many people use it as a perfect example of what not to do. Of course, that's easy once the company has crashed and burned, but it's hard to separate the wheat from the chaff in the startup world. 

Here's a quick summary of Fast. Domm Holland created the company to promote the so-called ‘best one-click payment system’. He promised to outperform other brands such as Shopify and go head-to-head with Paypal and Apple. No easy task. He turned to exuberant marketing stunts and a bold personality, but, in the end, it was all a lie, and he burned through millions of dollars. 

Now that we got the tragedy out of the way, let's look at the cold, hard truth. Every startup wants to have that ‘genius’ marketing campaign that sets it apart from the competition. In Fast's case, it was Holland who took center stage. 

He dove from planes and rode shotgun on racecars. Then, he paid The Chainsmokers $1 million for a concert and a promotional video, and with stunts like these, it's easy to understand how Fast was burning through $10 million a month. Still, for a brief moment, these moves made sense. After all, Fast was growing, and even in late March, it bragged about teaming up with The Honest Company. 

There’s another valuable lesson in how Holland managed to keep the truth away from employees and even investors until it was too late. A lack of transparency is deadly for a company that needs to take action. Still, Fast is perhaps the most prominent example out there, but the fact is that hype is dying. 2021 was an excellent year for fintech startups, but this year, things are different. 

Investors are cautious. Not only have deals gone down, but so have valuations and the size of investments. So, all that money that had come fast (pun intended) is no longer there. There are plenty of startups going through the same situation as Fast, but we don't hear of them. That's good if you want to go down quietly.  

While excellent marketing campaigns are a must for startups, they're useless if your product doesn't work. As fascinating as this case is from the distance, it's not something that we, in the startup world, want to see. And, yes, growing a startup is a challenge; if it'd be easy, everyone would do it, right?

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