This story is part of CNBC Make It's The Moment series, where highly successful people reveal the critical moment that changed the trajectory of their lives and careers, discussing what drove them to make the leap into the unknown.
Most CEOs might be pessimistic if their company lost more than half of its valuation. For Faire co-founder and CEO Max Rhodes, the feeling is more akin to relief and optimism that his business' best days could still lie ahead.
Faire is an online wholesale marketplace that connects artisans and other independent brands with small retailers looking for new products to sell in their stores. It was most recently valued at $5.2 billion following a secondary share offering in November -- less than half of its peak valuation of $12.59 billion, which it achieved post-money after a May 2022 fundraising round, a Faire spokesperson says.
Rhodes and his co-founders -- Marcelo Cortes, Jeffrey Kolovson and Daniele Perito -- launched the company in 2017 and quickly raised over $1 billion during the ensuing five years. The attention from investors was alluring, and soon, the company was chasing "vanity metrics" while growing headcount to 1,200 employees, Rhodes says.
"We got addicted to the growth rates," says Rhodes, 39.
The company risked joining the ranks of buzzy startups that never figure out how to turn their sky-high valuations into profitable, sustainable businesses -- until a moment in April 2022 that caused Rhodes to reevaluate his company's approach, he says.
Faire's revenue growth was slowing, Rhodes says, so he decided to look at some of the business' underlying numbers. What he found had the potential to sink Faire if left undisturbed, he says -- dropping retention rates, customer complaints about the state of the platform and users who'd joined only to take advantage of short-term discounts and incentives before leaving Faire forever.
One option for Faire: spend more cash in the hopes of reigniting revenue growth. Instead, the startup intentionally slowed down -- slashing spending, reducing the company's staff by roughly 20% and doing away with many of the incentives and discounts it'd used to attract new customers. The decision was painful, humbling and necessary, Rhodes says.
But within months, revenue growth ticked upward, says Rhodes. Most recently, Faire's revenue in 2025 grew by 32% over 2024, customer retention rates are "way, way up" and the company is projected to "break even in the very near future," he says. (Faire declined to provide documentation to verify its revenue growth.)
Even profitable, Faire could face stiff competition. Its closest rival also has a multibillion-dollar valuation: Paris-based startup Ankorstore, reportedly worth $2 billion post-money as of January 2022. They're both competing with physical trade shows, where the largest annual events can attract tens of thousands of retailers to purchase inventory directly from exhibitor brands.
Following a dip in popularity during the Covid-19 pandemic, those trade shows rebounded to an estimated market size of nearly $16 billion as of 2024, according to PwC.
Here, Rhodes discusses the role "hubris" played in Faire's initial rise, the red flags that led to its restructuring and why leaders should always be wary of feeling invincible.
CNBC Make It: Looking back, why didn't you see the warning signs sooner?
Rhodes: I'm embarrassed to say it, but I definitely think there was a hubris [factor]. Our valuation was doubling every six months. We went from a billion-dollar valuation to a $12 billion valuation in like 18 months. I think, in the process, we lost our way a little bit.
We started taking shortcuts. We’d raised all of this money, about a billion dollars, and we started trying to use capital as a shortcut to faster growth. We doubled the head count two years in a row, and [revenue] growth continued to accelerate, so I looked at that as a signal that [our strategy was] working.