A postmortem on the go-to-market strategy for the 1-click checkout solution: Fast
Hello Frens 👋.
It’s been a couple of weeks, but I am finally back after wrapping up my Master's degree and ready to dive into today’s topic: 👩🚀 Fast!
Like many, when the 1-click checkout company shut down 18 months ago after raising $102m, I was surprised and confused. Fast wasn’t another boring fintech company; it was a brand, a movement, a cult even. It was everything I thought a successful startup should be!
On 29 March of this year, The Information published an expose highlighting some of the company's struggles, both from a revenue and burn perspective. Two weeks later, the company announced it was shutting down.
Motivated by this rapid rise and fall events, I wanted to understand what happened.
Before I get started, brew yourself some coffee and come back relaxed and ready to go: this will be a long one!
1. What is Fast?
Fast is a 1-click checkout company. People who regularly shop on Amazon are familiar with the concept. Instead of repeatedly re-entering your Name, Address, and Card details with a purchase, I can use their 1-click checkout button to order any SKU, Fast.
Fast facilitates product checkouts. If I’m buying a single product, I could check out Fast. But for multiple products, I would have to go through the traditional checkout process.
There are a few benefits I believe to being a complementary (rather than replacement) product to existing checkout solutions:
More straightforward Implementation: Fast did not have to deal with all the complexities of building an end-to-end checkout solution
Shorter Sales Cycle: Fast offers a better alternative to an existing solution but works alongside them. Fast made it easy “test it out” without breaking anything that currently works.
Faster Time to Market: Focusing on express checkout for a single product is one flow that Fast could standardize across all its merchant customers.
One thing I have to get across, though, when using Fast for product checkouts, it completely replaces the payment provider (Stripe, Braintree, checkout) and all the benefits of the infrastructure those providers have to offer.
Fast lives side-by-side with existing checkout solutions, but it does not talk or integrate with them. The two systems have different customer orders if a merchant is running Fast Checkout for buying a single product with 1-click checkout and Bigcommerce Checkout to manage a full cart. The two systems have different integrations they work with and send data to.
The bet Fast made is this fragmentation and effort needed to reconcile data from two separate systems is well worth it if Fast improved checkout conversion and netted their merchants more money in their pocket. If a store with a 2% visitor to buyer conversion shot up to 3% or 4% because of Fast, nothing else really matters. If I had a First 1000 store, I am confident I would tolerate more reconciliation work if Fast improves my revenue by 50%-100%.
I am sure others would too!
2. The E-commerce Payments Infrastructure Market
Over the years, there have been step-function improvements in every part of the consumer's online shopping journey except for the buying experience. Social Media made it easy to micro-target potential customers. Platforms like Shopify and Woocommerce made it easy to build wholly managed solutions to run an online store. The last piece of the puzzle was to figure out how to get people across the finish line. There has been very little work done there until a few years ago.
In the late 2010s, companies like Fast, Bolt, Paypal, PeachPay, Stripe, and even Apple set their eye on optimizing that last piece of the puzzle: the buying/checkout experience. Billions of dollars of investment later, it remains a largely untapped opportunity.
2.1 The Checkout Experience
The checkout experience represents an unprecedented opportunity. Bolt, one of Fast’s direct competitors, talked about it at length in their Democratizing Commerce Manifesto:
This is upwards of a $10T problem globally and can be due to unexpected shipping costs, account creation requirements, payment security concerns, poor error handling, and long and confusing forms amongst many other issues. When you overlay the complexities of browsers and devices, mobile cart abandonment skyrockets to 85% compared to 70% on desktop. The checkout conversion problem amounts to nearly $1T in abandoned checkouts in the US alone every year, and upwards of $10T globally. This is the checkout conversion problem.
It is not a problem hiding in plain sight; it’s a challenging problem hiding in plain sight. When Amazon’s patent for 1-click checkout expired in 2017, it presented the first opening for companies to build an equivalent solution but for the rest of the internet. The threat of lawsuits from Amazon asides, what was and remained complex about building a better converting checkout solution is the number of integrations needed to make it work. When someone presses the checkout button, 10s, maybe 100s of platforms need to get fed this information. From shipping companies to consumer lending companies like Klarna or Affirm to Accounting software..etc..etc.
Building a checkout solution that works with every software provider under the sun— that is needed— during the checkout experience made this a hard, if not an impossible, task. Companies like Fast, Bolt, and others raised hundreds of millions, sometimes even billions of dollars, in their infancy because of the high barrier of entry represented by the sheer number of integrations needed.
The only way to get this thing to work at scale is to have an engineering powerhouse!
The Integration Paradox.
Integration in the checkout space is complicated. Each category is fragmented across 5-10 big players, sometimes even more. By numbers alone, a checkout provider would need anywhere from 100 to 500 different partner integrations to be “viable.”
But building 500 different integrations takes time. A lot of time!
Even worse, a checkout provider would have to build those integrations repeatedly for every out-of-the-box e-commerce provider (Shopify et al.). Special access and relationships with those gatekeepers are critical to beginning the integration work that may take 3-4-5 years.
And It’s a zero-sum game. For instance, Shopify made 68.93% of its revenue from payment processing fees. It is the same fee that alternative modern checkout providers like Fast feast on. To add salt to injury, you also need the Shopifys & Woocommerces of the world to greenlight your solution to get the appropriate access (non-public APIs). This misalignment of interest is what made and continues to make the checkout problem so hard.
2.2 Competition from all sides.
As outlined earlier, The revenue source for checkout providers is in kick-back fees from the three payment railways: Mastercard, Visa, and Amex. Companies up the value chain (Shopify) and down the value chain (Stripe) make money from those same fees, forcing competition from all directions.
Let’s take a look at the competitive landscape.
2.2.1 Horizontal Competitors (Direct Competitors)
Horizontal competitors are checkout providers competing directly with Fast. There are 4 main direct competitors in this space.
Bolt started in 2015 and raised over $1.3b to date. Its network of merchants expands across 300+ online stores, generating ~5 billion dollars in GMV. According to The Information, bolt captured ~$50m from that volume last year.
Bolt offers two checkout solutions:
Bolt Direct: Bolt’s native payment stack supports all major card brands and provides simplified reporting, reconciliation, settlement, and fee structures. Support over 30 currencies out-of-the-box without the need for ongoing technical and maintenance costs.
Bolt Switch: Bolt’s gateway integration with top payment service providers—including Braintree, Cybersource, Stripe, Adyen, Worldpay, and NMI —help maintain your existing relationships with your partners while Bolt manages the technical stack on your behalf.
I particularly enjoyed ModernRetail summary on the difference between Fast & Bolt:
Bolt and Fast both claim to offer one-click checkout, but each with a different twist. Fast’s checkout system allows people to check out on the product detail page, rather than having to click on a separate go-to cart button. Bolt’s checkout system, meanwhile, still supports other digital wallets like PayPal and Apple Pay, but people can save their information with Bolt for faster checkout. Bolt then sends users who have created accounts a pin number each time they subsequently check out with a Bolt retailer, eliminating the need to enter an address or password.
PeachPay offers a 1-click checkout solution for Woocommerce (WordPress Commerce). They have over 200 Woocommerce stores using their solution. Similar to Fast, they offer checkout from the product detail page. In addition, users can also use PeachPay during cart checkout, similar to how one would use Paypal, Apple Pay, or a Buy Now Pay it Later Solution.
PeachPay raised $3.1m to date.
Buy with Prime - Amazon:
On April 21, Amazon announced that shoppers can now embed Buy with Prime into their checkout flow outside of the Amazon Marketplace. This program is still invite-only and in beta.
Buy with Prime brings more than just a seamless checkout solution to merchants.
Buy with Prime will allow millions of U.S.-based Prime members to shop directly from merchants’ online stores with the trusted experience they expect from Amazon—including fast, free delivery, a seamless checkout experience, and free returns on eligible orders.
Amazon has spent years building the e-commerce infrastructure for itself. They spent years being their #1 customers and now planned to democratize access to that well-oiled in a similar fashion to what they did with AWS.
Rally and many other companies have followed suit with a checkout product after seeing the rush of money in the space. Each building its version with a little twist. However, no player has shown signs of any material market share.
2.2.2 Vertical Competitors (Pre-checkout/Post-Checkout solution)
Vertical Competitors sit on top or below Fast in the Value Chain. There are three kinds of Vertical Competitors in this space:
Stripe: Stripe has their own beautifully designed checkout solution, Stripe Checkout. It integrates well with anti-fraud tools and the overall Stripe ecosystem of products (Upsell, Cross-sell, Revenue recovery, Tax Automation..etc.)
Klarna: Klarna (the buy now pay it later provider) introduced Klarna Express Checkout in the middle of 2021. Express Checkout pre-populates checkout forms when a user is paying via a Klarna Plan. Klarna has a shoppers network of over 25m users.
Paypal: In a similar vein to Klarna, Paypal introduced Paypal One Touch. PayPal’s One Touch feature reduces the checkout process to “one-touch” by keeping its customers logged in so that they don’t have to enter their account and billing information each time they’re ready to buy something with PayPal.
Apple: And of course, we have Apple Pay. Apple Pay brings the same seamless checkout experience of the app store and physical stores to a merchant's website!
Fast remains the fastest checkout provider with an average checkout time of just 2 seconds (for returning Fast users)!
According to several testing reviews (Youtubers), Paypal One touch takes about 8-14 seconds for a returning customer. Klarna Express Checkout takes about 12 seconds. Apple Pay varies widely depending on whether you are checking out from your Laptop or Phone. It could take anywhere from 2-15 seconds.
It is essential to highlight that Klarna, Paypal, Apple, and Stripe have already stored millions of customers’ data. Fast does not.
The two biggest e-commerce platforms: Woocommerce & Shopify, implemented their solutions. Woocommerce rolled out its one-page checkout earlier this year.
Shopify has Shopify Pay and, in mid-2020, rolled out its consumer shopping app SHOP. SHOP aggregates all its brands under one easy app for consumers to use. In the app, users won’t have to re-enter all the checkout details every time they shop with a new Shopify brand since the information is already saved within the app.
With the two leading e-commerce providers building their checkout solutions, it would not be a surprise if the rest followed suit reasonably soon!
Fraud Prevention and Chargeback prevention tools also started dappling with creating their express 1-page checkouts as an upsell to their core product.
Vertical Competitors have leverage over a 1-click checkout provider in the form of economies of scope or consumer-adoption scale. After all, Buy now Pay it later solutions or the suite of products (Tax management, Fraud detection..etc.) that a payment processing provider has either offers some value to the end consumer or merchant. Either way, they move the top-line and help with conversion!
A 1-click checkout provider needs to add value on top of those vertical competitors for it to be worthwhile for the merchant. One can’t improve checkout conversion by making the process faster on one end but decreasing it on the other side by not offering a financing solution to the end-consumer that can’t (and maybe shouldn’t) afford to buy the product.
So not only does a checkout solution need 100s of integration partners to build a viable solution, but they also need to convince them to partner with them when they have or will very soon have their competing product.
2.3 The Two Sides of the Checkout Market.
Both the end consumer and merchants have a different set of priorities. Merchants want fewer carts abandoned, with minimal disruption to their infrastructure and low managing cost. End users want fewer forms and an easy way to manage, track and return their orders.
Optimizing for merchants is optimizing in scalable, highly-integrated infrastructure, and optimizing for end-users is optimizing for front-end experiences and user-facing features.
3.1 One-click checkout [09/20]
At the core of Fast is the 1-click checkout solution
Fast managed to sidestep the integration paradox I discussed earlier. The 1-click checkout works a little bit differently than one would expect. Fast doesn’t replace the entire checkout process. Instead, it offers an additional button placed under each product. When users press the Fast Checkout under a product, they are taken to the Fast website where their order is confirmed, and all the backend work happens on the Fast infrastructure.
However, if they are a first-time Fast user, they are taken to a normal-looking Fast checkout flow where they enter their information to be later saved for future checkouts. You have to be a 2nd+ time user of Fast to experience the magic!
Because Fast didn’t have to build all of the integrations, it could just kickback to the old system in examples where those integrations were needed to complete a transaction. For instance, if a person wanted to use consumer lending on checkout or use Apple Pay or use a Coupon or Rakuten, they would have to go to their cart rather than use the Fast Checkout button on the product detail page. But most people won’t even know that is an option if they press the Fast Checkout button!
That dual payment infrastructure made it easier to take Fast to market, but at the same time, it meant that every day was another A/B test to see how well Fast stood against the OG checkout system. Instead of overtaking the whole checkout process, Fast took on a small portion, to begin with. Each of their 700+ customers was running two checkout systems in tandem, one for Fast Checkout on a single product and one to manage the whole Cart.
3.2 Fraud Protection & Merchant Improvements [02/21]
5 months after its initial product launch, Fast introduced some merchant solutions such as Fraud Guarantee and instant payouts for its merchants. Fraud Guarantees made Fast more competitive with Bolt, which has been offering fraud guarantees since the early days of its checkout products.
Instant Payout was a lever that the salespeople could pull on to close deals. This is well-aligned with their target customers of small SMBs, which I would assume have less than optimal cash conversion cycles. This could (and perhaps was) a big unlock to close customers.
3.3 Headless Commerce [09/2021]
In September 2021, Fast released their next evolution: Headless Commerce. Headless Commerce was the Fast button but for ads, events, and Smart TVs. From their Headless Commerce PR Release, the three prominent use cases were:
Publisher articles and display ads: While reading select custom features on Apartment Therapy, The Kitchn, or other sites, readers can instantly purchase products from sellers like Prima Coffee by simply clicking the Fast Checkout button.
In-person events: Fast has partnered with Vinik Sports Group and the Tampa Bay Lightning to equip 10,000 cup holders in AMALIE Arena with QR codes powered by Fast headless checkout – allowing fans to scan and purchase merchandise instantly from their seat.
Connected TV: TV is shoppable through QR codes within ads on select networks and content provider apps. Consumers can scan a QR code on an advertisement from merchants like Gerard Cosmetics, to instantly purchase an item.
Headless Commerce lowered the barrier for adoption even further; merchants wouldn't even need to touch their website to use Fast. This opened up the doors of opportunities for Fast to go after big wealthy customers!
4. Go To Market Strategy
Fast initially went after merchants with less than 10m in annual transactions. The initial Fast product was lightweight. It didn’t have any of the integrations needed to power a behemoth of an e-commerce store, nor did robust data sharing capabilities. For a store that spends millions of dollars on ads, not being able to track people who went through the Fast Checkout flow but dropped off was a no-starter! Going after smaller clients made sense; they are less demanding and less sophisticated. They can learn and grow together until they build a full-fledged product that they can go up-market with.
Fast initially tried to partner with two e-commerce platforms: BigCommerce and Woocommerce, to offer their product. Only merchants whose stores are powered by either of those platforms can use Fast (since each platform requires its own set of integrations). However, Fast quietly killed their Woocommerce plugin soon after the public announcement of a beta. There was no official communication from the company as far I can tell, so what happened there is something only Domm & employees know at this point. If I had to guess, it would be either low-adoption or Woocommerce signing an exclusive partnership with a competitor.
The Fast Headless Commerce was their wedge into targeting larger customers with 10+ in annual transactions. Headless Commerce is a fancy term for QR (re)ordering. This was the third (and last) major product release. This opened up a whole new category of clients for Fast to target since it provided a new (non-existent) channel for those merchants to utilize. Merchants like The Honest Company embedded these QR codes on the product packaging for fast re-ordering. The Cleveland Cavaliers added them in their stadium for fans to order merchandise during the game.
The risk from a merchant perspective of implementing Fast’s headless commerce pales compared to adding their Fast Checkout button to every product on their web page and dealing with fragmented reporting and lackluster data reporting. It’s a separate flow and would provide incremental revenue instead of eating away from the traffic coming directly to their website, for the most part.
4.2 Distribution Motion:
1/ Fast Hoodies
One of the most recognizable things Fast did was $1 hoodie drops. People wore them proudly. Not just employees or customers, random people cheering from the sidelines and tagging along the build-a-company-in-public journey bought these. 10s of thousands of people did just that.
The Fast hoodies resembled something. Maybe community, maybe something else. But people didn’t just buy them. They wanted the world to know they had them!
Watching this Fast Hoodie movement unfold over the last couple of years was fascinating to watch (I am the proud owner of the light blue edition).
Trustpilot alone has over 2700+ reviews of the hoodies. At a conservative estimate, if 5% of buyers left a Trustpilot review, that would mean they sold well over 50,000 Fast Hoodies. Fascinating honestly!
That is an achievement for an 18-month-old B2B company with only 700 customers!
The hoodies served 3 purposes.
They helped Fast bootstrap their shopper network: 50,000+ people now have their information saved on Fast for a magical experience the next time they shop with a Fast enabled merchant.
It gave potential merchants a taste of the power of the product: most people who bought Fast hoodies do not own an e-commerce store, but even if only 1-2%, that is 500-1000 new potential merchants. Almost as much as they already signed throughout their lifetime
Brand: Each person rocking their Fast Hoodie is a walking brand ambassador for the company.
Partnerships sat under the brand awareness umbrella at Fast rather than sales. If you are wondering how a B2B company sold over 50,000+ pieces of swag, the answer is (extremely successful & innovative) partnerships.
Their most prominent partnership came from Nascar driver Parker Kligerman. Parker has just over 87k followers on Twitter yet sold over 40,000 Fast Hoodies while being sponsored by Fast.
I don’t know how they identified or executed this partnership, but Fast nailed this one out of the park.
3/ Outbound Sales
Fast focused on outbound sales from day 1. They hired people to go out there, find BigCommerce Merchants with <10m in sales and get them to add that Fast Checkout button under every product. ****And they delivered!
Over 700 BigCommerce merchants. From all the merchant reviews out there, Fast's sales and account managers were responsive, helpful, and open to user feedback. Merchants loved working with the Fast sales team!
The first two distribution motions (Hoodies and Partnerships) worked on the brand side, but this was the first one that translated to real dollars, revenue, and customers!
4/ Search Ads
This is where things got a little sideways for Fast.
Chris Frantz did a deep-dive on Fast, and their marketing spent last year and came out of it with more questions than answers. He writes:
For example, they’re running ads on the phrase “stripe for woocommerce” and related terms, but they’re linking to their generic /sellers page when they should be linking to their dedicated woo page. Further, they don’t actually offer “stripe for woocomerce” as far as I can tell.
A rough back of napkin suggests they’re losing hundreds of dollars a day bidding on keywords they have a very low chance of closing on.
While you could make an argument for awareness, some of these keywords such as the pictured “woo commerce split payments” (???) is costing the an eye-watering $15 per click! And they don’t have any relevant to splitting payments on their platform.
Search ads are great because they capture potential clients at a high-intent moment, but when you are bringing a new product to market, that intent does not exist. Two options exist.
Bid on similar irrelevant keywords that potential customers are looking for. This is low intent yet highly targeted customer.
Spend that money on a better channel!
Fast chose the earlier. & it was a costly mistake!
4.3 Product Messaging & Positioning
Domm built Fast into a recognizable consumer brand in a record time. Everything on the site was tailored to the end consumer… which I found odd.
The landing page is tailored to shoppers, not merchants. They even had testimonials from people who used the “Fast Button” talking about their experiences. The problem is that shoppers are not the customers. The customers are the merchants!
And when you land on the Merchant page, you are treated with an ugly form to get in touch with their sales rep.
Compare this to what their end-consumer (shopper) landing page looks like. The dichotomy is starting!
Fast charge 2.9% + 0.3C in line with other payment providers such as Stripe.
Their biggest competitor at the time, Bolt, charges 0.6-1.8% on top of payment processing fees but later reverted to a similar pricing model.
5. What Happened?
Fast outpaced all its direct competitors. They bolted through Bolt and Peachpay to land over 700 clients. A mix of a strong brand that came with strong inbound leads, the credibility of the Stripe investment, and their investment in an outbound sales team early on helped them outpace Bolt and others. But it came in the form of smaller clients with a narrower use-case that did not translate to material revenue.
Where I think Fast went wrong was that it was a product-led company when it should have been a growth-led company. Fast should have optimized for GMV (v.s. for number of customers). In other words, Fast was built for the end consumer when it should have been built for merchants.
They did an excellent job for end consumers. The branding: on point. The consumer experience: on point. Even features such as managing orders and tracking were: on point (at least from personal experience)!
But Merchants gained very little of that love. They were slow to integrate with other merchants' service providers and broke the data reporting for merchants that implemented Fast (since they only reported if and when a purchase happens). While their hoodies had 2700+ reviews on Trustpilot, their actual product had a meager 3 reviews on G2 and the 7 reviews on the BigCommerce store. They put so little effort into building trust, brand, and credibility with the merchant community compared to the end-consumer.
On the product side, Fast was fast, but it also needed to be reliable. NPR ran a study on e-commerce stores that used Fast. 38% of those sites never even displayed the Fast button on their product detail page. Perhaps because it did not always function as expected. Chris Frantz came to a similar conclusion in his deep-dive on Fast. A quick scan of the company’s Twitter account also yielded the same conclusion. Fast is fast when it works, but that is a big when!
(Additionally, some users on Reddit reported that people who used the Fast Checkout button were confused as to what just happened, perhaps it was also too Fast!)
Headless commerce was an excellent product wedge introduced too early! Headless commerce (or (QR express ordering) helped the company move upmarket; they helped them move from scrappy mom & pop shops to giants like The Honest Company & Cleveland Cavelier. But it wedged into nothingness. The core product was not yet ready for mass adoption by the big leagues, and then there is the very limited use-case for QR ordering (it is not an existing user behavior like is the case in China). Even if headless commerce showed promise in conversion or retention for any of the big clients, it didn’t deliver the GMV volume Fast needed (a tiny fraction of orders will ever come from QR codes on the packaging or on a stadium chair), neither did it deliver leads-that-convert to the full checkout process because the integration infrastructure was not there yet.
On the distribution front, building a consumer brand did not translate into a B2C2B sales motion (Business to Consumer to Business Motion), similar to other enterprise brands that went after consumers first (Notion, Slack..etc.). The atomic network needed for Fast to realize the network effects benefits is on the scale of e-commerce on the internet v.s. on a scale of a department within a large company. Fast needed a tightly knit group of merchants with considerable overlap of customers to go to market in a bottoms-up end-consumer first approach. Perhaps they should have gone after a sport with a hardcore audience and integrated with the majority of the equipment sellers or after a niche consumer segment (GMO-free products, for instance) and integrated with all the major online DTC sellers. Just any small enough market with a small enough audience that mostly shops across the same stores!
However, the brand helped them recruit some of the best people in the business. There is no denying that! And it's a shame we had to say goodbye too soon before seeing what this group working together can do to the world!
From writing and researching this piece over the past 3 weeks, here are my key takeaways:
Fast was a true “put the user first” company, but that is not always good. Whether you are a B2C, B2B, or B2C2B company, you can only have one master, and in Fast’s case, that should have the Merchant, not the end-consumer.
Building a product wedge into a market too soon can be just as detrimental (if not more) than not making it all. Headless commerce gave Fast some headway, but the core product was not ready yet to reap the benefits!
Fast GTM honed in on what they do and how they do it! When it needed to hone in on whether it works or is worth it! Fast spent too much time building brand awareness and too little time improving conversion for their clients (the product's primary value). In their last major product press release, they did not even mention any improvements to conversion👇🏽
“Fast merchants such as Gerard and Hardwood Lumber are seeing up to 30% (and rising) adoption rates since deploying Fast Checkout and up to a 10% increase in order volume within 30 days of implementation.”
Go To Market should be optimized to get consumers to that magic moment when they unlock the product's value. In Fast’s case, that is the 2nd+ order. But many of their initial clients were either sold a low-frequency good or had no synergy with other merchants. Most Fast end-users never really got to experience the product's actual value. They only encountered it once, and it was no different from a traditional checkout product.
Powering the checkout experience for the internet is freakin hard! But I am glad we live in a world where we can rally the best of the best and try to solve these challenging problems. Sometimes that doesn’t work! And that is okay too 😀!
Until we meet next Tuesday,