Nearly a year after the once extremely promising and successful tablet company Fuhu went broke, Inc. sat down with CEO Jim Mitchell and President Robb Fujioka—the "headstrong" mastermind—to sort out what went wrong where. The great unraveling of a company that was No. 1 on the Inc. 500 list of the country's fastest-growing private companies two years in a row before going bankrupt is, Inc. concludes, "a cautionary tale" rife with the pitfalls that can come with finding quick success. "But most of all, it's the story of two entrepreneurs who pushed too hard to go big." Fuhu started out as a kid-centric software company with revenue in the low seven figures. But it took a risk and leaped into the hardware game. Its Nabi tablet, which sold out at Toys "R" Us stores in December 2011, pushed its revenue to $118 million in 2012 and $196 million a year later.
But what followed were increased competition (from Amazon among others), a bunch of dud products (including the DreamTab launched in partnership with DreamWorks), an accumulating tab with supplier Foxconn, and wildly incorrect financial projections. Lindsay Blakely and Burt Helm write that in its heyday, Fuhu's financial team was just an accountant and a bookkeeper; the company didn't have a formal budget. In 2014 Fujioka decided to go all-in on the Big Tab, something a whole family might use together. It was a disaster. In the fall of 2015 Fuhu's Wells Fargo account went from $4,512,662.53 to $0 overnight, and in 2016 toymaker Mattel purchased the firm for a song. Read the full piece at Inc. for much more on the company and Fujioka, who continues plotting his next move. (More bankruptcy stories.)
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