Faire’s CEO on Avoiding the Startup Graveyard: A Lesson in Disciplined Growth

Most CEOs might be pessimistic if their company lost more than half of its valuation. But for Max Rhodes, co-founder and CEO of Faire, the experience was a wake-up call that steered his online wholesale marketplace toward a more sustainable future. This is the story of how Faire navigated a critical moment, shedding “vanity metrics” and prioritizing long-term health over relentless growth.

The Allure of Hypergrowth and the Perils of “Vanity Metrics”

Launched in 2017, Faire quickly gained traction, connecting independent brands with small retailers. Over the following five years, the company raised over $1 billion in funding . Rhodes admits the company became “addicted to the growth rates,” expanding its headcount to 1,200 employees and chasing metrics that looked decent on paper but didn’t necessarily translate to a healthy business. “We started taking shortcuts,” Rhodes stated in a CNBC interview .

The Turning Point: April 2022

The turning point came in April 2022. While Faire’s revenue growth was slowing, Rhodes dug into the underlying numbers and discovered troubling trends: declining customer retention, complaints about the platform’s performance, and a surge in users motivated solely by short-term discounts . The company risked becoming another startup with a high valuation but no path to profitability.

A Difficult Decision: Slowing Down to Speed Up

Instead of doubling down on growth with more capital, Faire made a counterintuitive decision: it intentionally slowed down. This involved slashing spending, reducing staff by roughly 20%, and eliminating many of the incentives and discounts that had attracted customers . Rhodes described the decision as “painful, humbling, and necessary.”

The Results: A Return to Health

The strategy worked. Within months, revenue growth began to climb again. By 2025, Faire’s revenue grew by 32% over 2024, and customer retention rates significantly improved. The company is now projected to break even in the near future . (Faire declined to provide documentation to verify its revenue growth.)

Competition and the Broader Market

Despite the turnaround, Faire faces competition. Paris-based Ankorstore, valued at $2 billion as of January 2022, is a key rival . Both companies too compete with the resurgence of physical trade shows, which saw a market size of nearly $16 billion in 2024, according to PwC .

Lessons in Leadership and Avoiding Hubris

Rhodes attributes the initial missteps to “hubris,” fueled by rapid valuation increases. He emphasizes the importance of staying grounded in core values and listening to advisors who can provide honest feedback. He also highlights the need to be skeptical of success and avoid the trap of using capital as a shortcut to growth. “If you look at all the really great companies that I admire, almost every single one of them had something approaching a near-death experience,” Rhodes noted .

Key Takeaways

• Beware of “Vanity Metrics”: Focus on sustainable growth indicators like customer retention and profitability, not just top-line revenue.
• Stay Rooted in Core Values: Don’t lose sight of the principles that made your company successful in the first place.
• Embrace Skepticism: Question assumptions and be wary of feeling invincible, especially during periods of rapid growth.
• Listen to Your Board and Advisors: Seek honest feedback from trusted sources.