The Andrew Faris Podcast Is Your Ecommerce Business Really Just A Gambling Addiction? (With Fan Bi)
Dec 8, 2025
In this engaging conversation, Fan Bi, CEO of The Hedgehog Company, shares his expertise in rescuing distressed e-commerce brands. He discusses the pitfalls of declining ad efficiency and high fixed costs that lead to cash crunches. Fan explores the importance of cleaning up balance sheets to make businesses appealing to buyers. The duo examines the risky behaviors of struggling founders, likening them to gamblers. They emphasize that successful e-commerce brands focus on disciplined growth and the right product-market fit.
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Inefficiency Creates A Death March
- Declining ad efficiency or retention drives MER worse while fixed costs stay the same, creating working-capital stress.
- This forces expensive debt that accelerates decline into a death march.
Make Distressed Brands Saleable
- Clean up the balance sheet and present an adjusted EBITDA story to make distressed brands sellable.
- Cut unnecessary OPEX (agencies, redundant C-suite) to show realistic contribution margin to buyers.
What 'Okay' Versus 'Great' Means
- Fan defines an "okay" e-commerce business as roughly 5–12% normalized EBIT.
- Truly great businesses typically hit 10–25% EBIT and are rare at scale.