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Illustrations: Joel Plosz

How a Hot $100 Million Home Design Startup Collapsed Overnight

The untold story of how Homepolish’s extremely Instagrammable house of cards came tumbling down.

AtAt 12:54 a.m. on September 10, yet another lust-worthy image appeared on the Instagram account of the interior design startup Homepolish. The New York-based company, which had nearly 2 million followers and a $100 million valuation, had spent the past couple of years trying to seduce customers with plush budgets, and this living room photo was fitting catnip: An Alexander Calder mobile dangling above midcentury Pierre Jeanneret chairs and a low-slung copper Charlotte Perriand table, the whole room awash in natural light. “We would have tons of guests over and make sure they TOUCH NOTHING,” read the playful caption.

It was the last Instagram post the company would ever publish.

The next day, via a Zoom video call, Homepolish CEO Noa Santos announced to the company’s national network of more than 500 designers that he was shuttering the business. On the 26-minute call, the always-immaculate Santos — who had once appeared in an ad for J. Crew — was dressed in a blue button-down shirt and looked somber. “We frankly don’t have the funding left to run the business,” he told them.

It was a bruising fall for the 31-year-old CEO, who in press interviews spoke grandly about “when Homepolish is around 100 years from now.” For a while, it certainly seemed possible. The upstart had been profitable since its launch in 2012, or at least that’s what Santos proudly told nearly every interviewer early on. In 2015, when Homepolish was barely three years old, Santos was named to Forbes’ “30 Under 30” list, in part because the company was due to hit $10 million in revenue that year.

The company also landed a series of high-profile customers — Man Repeller’s Leandra Medine, model Karlie Kloss, and payments startup Venmo — as well as designers like celebrity interiors guru Orlando Soria.

Homepolish went on to attract $20 million in funding from entrepreneurs-turned-investors such as Warby Parker co-founder Andy Hunt, who became enamored after buying $1,300 of design time. (Hunt’s Elephant VC firm put in $12.5 million; other investors included Rent the Runway co-founder Jennifer Hyman.) The company also landed a series of high-profile customers — Man Repeller’s Leandra Medine, model Karlie Kloss, and payments startup Venmo — as well as designers like celebrity interiors guru Orlando Soria, now an HGTV host. All of it, of course, was trumpeted on Instagram and on Homepolish’s website.

Santos’ plan was to simplify and democratize the fragmented interior design landscape, making it affordable to the masses. “We’re restructuring the client and designer relationship,” he told Racked in 2014. The company also planned to revolutionize the way designers everywhere worked, helping them find new clients and becoming the go-to for billing, ordering, and other administrative tasks.

But behind the company’s glossy Instagram feed was a much messier reality, according to Marker’s interviews with some two dozen employees and contracted designers — most of whom requested anonymity due to nondisclosure agreements or fear of having their reputations tarnished by association. They say Santos was an inexperienced CEO whose obsession with image led him to alienate his employees, his designers, and his customers. Instead of building a design juggernaut, the founder constructed something much more precarious — a fear-based culture where sound strategy couldn’t flourish, and where the pressure to grow led to reckless decision-making. The result: The beautiful house of cards eventually collapsed leaving hundreds of freelance designers unpaid, with some still owed as much as $32,000.

SSantos had always been a go-getter. He grew up in Hawaii, attending the academically rigorous ‘Iolani School, where keeping up took serious effort. “If you aren’t smarter than everyone else, work longer and harder than they do,” was his approach to survival there. Art class was his escape. He went on to study architecture at Stanford University, then moved to New York for a job at an interior design firm. After barely a year there, he struck out on his own in 2011, offering a service called Fifty for Fifty, a 50-minute design consultation for $50.

One of his clients was Will Nathan, an investment banker turned Buzzfeed front-end developer, who loved “nerdy art projects” and an aesthetic he described as “mountain man chic.” Nathan wanted to spend $30,000 to decorate his 450-square foot Chelsea one-bedroom — and was tired of being told his choices were, essentially, to go to Ikea or to add another zero to the budget. It was Nathan who saw in Santos’ business the potential to scale, and within months, they joined forces to create Homepolish in 2012. Santos, dark-haired and so striking-looking one website referred to him as “the brains (and beauty)” behind the operation, was the CEO. Nathan, who had a shaved head, sometimes with a beard, was the chairman. They started the company with $400.

Santos, dark-haired and so striking-looking one website referred to him as “the brains (and beauty)” behind the operation, was the CEO. Nathan, who had a shaved head, sometimes with a beard, was the chairman. They started the company with $400.

The plan, at least in those days, was to promote young designers and to make beautiful design accessible. Homepolish charged by the hour — the minimum package was $400 — and didn’t take a cut of any furniture or accessories designers chose for clients. These were fairly radical ideas in the slow-to-change interior design industry, where the goal was to get the wealthiest clients with the biggest budgets, then take a hefty commission on top of whatever the designer bought for them. Homepolish, though, was all about accessibility, transparency, and affordability, “words that aren’t tossed around often in the industry,” as the 2012 version of the company’s website noted.

For designers, Homepolish was a way to run their own projects — “your dream project,” as the company put it — instead of assisting other designers for years until they got their big chance. The company even paid for some work to be photographed professionally, which designers could then use for their portfolios. Homepolish quickly received glowing press from Dwell, Elle Decor, and New York Magazine. When Santos and Nathan appeared on CNBC’s Power Pitch in 2014, all three experts on their panel voted in support of the concept. “I don’t think you know how rare that is,” commented the host, Amanda Drury.

In interior design, projects are generally flat rate, but at Homepolish, designers would give an initial consultation. Then it was their job to sell clients on a package of hours, typically sold in multiples of five. In the early days, Homepolish took some 60% of the $100 to $130 per hour rate, depending on designer seniority, though this figure varied slightly over the years based on different incentives. (Full disclosure: In 2013, I bought a five-hour package, then Homepolish’s minimum, excited that there was a design service a freelance writer could afford. I wrote most of this story sitting on a $68 chair my designer found at a secondhand store and had reupholstered.)

The founders openly favored signing up the most physically attractive designers, saying they would be more appealing to clients.

Homepolish wasn’t the only company trying to shake up the industry. Around the same time, there was a surge of interior design startups: Havenly, Laurel & Wolf, and Decorist all had a similar “design for all” ethos to Homepolish. Havenly charged $199 for a design concept and 3D layout visualization after customers took a quiz to determine their style. Laurel & Wolf matched designers with customers, who then paid a flat fee for an online consultation. Decorist turned a few submitted pictures into an entire 3D room mock-up, complete with furniture.

At the time, Homepolish was the only one of these companies offering to send a designer to walk through a space in person, as opposed to doing everything online via uploaded images. Designers liked the Homepolish way; they say their work is intuitive and that it’s better to actually be in the physical space. Santos extolled the virtues of the company’s human touch — that designers were hand-paired with clients — and his partner Nathan took a swipe at “so-called design-in-a-box companies” that offer advice “without visiting in person.”

By 2015, when another “democratizing design” company called Modsy had entered the fray, Homepolish was in 10 locations, with an aggressive growth plan. The industry had grabbed the attention of venture capitalists; that year, competitors Modsy raised $4.5 million, Laurel & Wolf raised $4.4 million, and Havenly raised $7.5 million. (Houzz, the online design community, had raised a whopping $165 million the year before.) Meanwhile, Homepolish was still self-funded. Santos had sought investors early on, he said in June 2014, but “ultimately they were concerned with our ability to scale.”

TThe first Homepolish office in Flatiron had a convivial, cool startup vibe, with a “design bar” made out of wooden packing crates, and stools where people could work or join in the weekly happy hour, featuring Trader Joe’s cheeses arranged to perfection. (“We worked in design so we had a ton of nice accessories to spruce it up,” remembers one ex-employee.) Employees were mostly 21- to 25-year-old women, recruited largely via ads on Craigslist.

From the start, Santos and Nathan argued loudly and frequently. (Santos did not respond to multiple requests for comment, and Nathan declined to comment.) Santos, the tastemaker, preferred to make decisions based on intuition; Nathan, the coder, wanted to rely on data, using a Homepolish platform he’d built to mine it. The founders, particularly Santos, could be “intimidating and scary” to the young employees who worked for them, says an early former employee. Santos frequently raised his voice and “would openly threaten people, saying, ‘If you don’t do this, we can replace all of you,’” says one. This was balanced by thoughtful touches — personal notes when someone received a raise — and considerable charm. “He makes you feel like he’s talking only to you and is interested in your conversation,” says one ex-staffer. (The self-help classic How to Win Friends and Influence People was one of Santos’ favorite books, says a former employee who worked closely with him.)

What had more important ramifications for the company’s future was Santos’ singular focus on press, with nearly all profits — at least in the early days — going to marketing.

Homepolish sold good taste, so perhaps it’s not surprising that Santos was obsessed with image, both his own and his company’s. He would disappear for two hours for a spray tan before any interaction with the media, even if he wouldn’t be on camera. (One ex-employee recalls he “came back looking like a pumpkin” before a guest appearance on the Design Sponge podcast.) The founders openly favored signing up the most physically attractive designers, saying they would be more appealing to clients. One proposed ad campaign was: “We have the hottest designers,” with a montage of photos of the sexiest ones.

Like many entrepreneurs, Santos and Nathan were also vigilant about the company’s appearance on Yelp, a huge source of referrals, according to an early former employee. In desperate times, the founders asked her to write reviews to drown out bad ones, and to solicit her friends to do the same.

But what had more important ramifications for the company’s future was Santos’ singular focus on press, with nearly all profits in the early days going to marketing. That’s not unusual in a startup, but at Homepolish it happened, ex-employees say, at the expense of building out the company’s infrastructure. It’s unclear how much of Santos’ focus on PR — and his success getting interviews — can be attributed to his then-boyfriend (now-husband) Ross Matsubara, vice president and style director of luxury brand marketing firm Nike Communications. (In 2012, Matsubara, who I don’t know personally, sent me an email pitching me a story about Santos, when the company was two months old and had “70 clients on the waiting list.”) But Matsubara was a regular and commanding presence in the Homepolish office, and Homepolish parties were often stocked with the premium liquor brands he represented.

Even as Homepolish was buying a full-page color New York Times ad — some $150,000, before you add the color — its wait times for furniture quotes were up to two weeks, an eternity in a world where clients are used to pushing a button and having something delivered. Designers say there was no way for them to check orders; there was no direct office contact to call, and follow-ups had to be done by email. Problems with orders abounded, say multiple designers, including furniture orders that simply didn’t get placed and items that showed up at the wrong address. The entire system, says former Homepolish designer Erica Riha, “gave me nightmares.”

“These guys have been growing 100% year over year, they’re profitable, their growth has been nearly 100% organic, and customers love them,” Hunt told Forbes at the time.

Meanwhile, Santos got very into the weeds of anything marketing-related. The marketing team often was caught between his lofty vision and what they knew the company could realistically deliver. “There was a lot of couching what we could say we could do versus what was actually feasible,” says one former employee. A 2014 version of the website said that Homepolish had “a network of vetted contractors” that were screened “for quality, hustle, and dependability.” This disappeared in later versions to say that designers were happy to recommend a contractor, but that all contractors were third party and Homepolish couldn’t “guarantee their work.” (Ex-staffers from multiple departments say there were often clashes about Santos’ overpromising; three designers and two employees independently referred to both his promises and the company as “smoke and mirrors.”)

Still, employees hoped the kinks would work themselves out. Many had backgrounds in design and believed strongly in the company’s “design for all” ethos. “It was one of those communities you responded to because of how excited everyone was,” says an early former employee. Adds a second one, wistfully: “It was like magic.”

InIn January 2016, Homepolish announced it had raised $20 million in venture capital. Santos told interviewers that Warby Parker’s Andy Hunt had been the one to approach him to invest. “These guys have been growing 100% year over year, they’re profitable, their growth has been nearly 100% organic, and customers love them,” Hunt told Forbes at the time. He took a seat on the board, along with Rent the Runway’s Hyman.

Santos was similarly upbeat: “We also have no plans for becoming unprofitable,” he told the New York Business Journal. “I think unlike many startups we’re not looking to get on that fundraising treadmill.”

Santos and Nathan argued about how to use the infusion of cash. Santos wanted much of it to go to marketing; Nathan thought it should go to coders to strengthen the back end. But within six months of the funding announcement, the arguing stopped — Nathan left.

Santos and Nathan gave themselves raises to $250,000 a year apiece, compared to the $98,000 they’d made prefunding, according to a former employee who saw the figures. But they argued about how else to use the infusion of cash: Santos wanted much of it to go to marketing; Nathan thought it should go to coders to strengthen the back end. But within six months of the funding announcement, the arguing stopped. Nathan left quietly — an employee who worked closely with him said it had always been his plan to move on post-funding. He promptly bought a loft in Soho as well as a building in Bisbee, Arizona, that he turned into a hotel. (He stayed on the board until 2019, and now lives in Los Angeles.) Says one ex-employee who had Homepolish shares as part of their compensation: “Will is the only person who came out of this well.”

The influx of funding and Nathan’s departure was not a good combination. There was more “disposable income,” as one manager put it, but “less intelligence about how the funding was being used.” Suddenly Santos, who had primarily focused on marketing, found himself struggling to manage the nuts-and-bolts of running the company. As one former employee — who remains sympathetic to him — put it bluntly: “He was never a business person, and he was never really positioned to handle that.” (Another employee says she heard someone refer to him as “the junior CEO, because he was still learning how to do it.”)

The funding was supposed to go, in part, to building out a tool that would power the company’s in-house ordering service. The tool had pretty branding, “true to Noa form,” says a former employee, but it lacked some necessary technology features, and Homepolish hadn’t made the hires needed to build or maintain it. “Instead of doing that when we had a lump of cash on hand, we got a fancy office and had a lot of marketing parties,” says a former employee who saw the numbers. “By the time we realized we needed it, all that wiggle room had been blown through.”

Like many startups, Homepolish had tried and discarded a lot of things in its first three and a half years, but the pace accelerated. Instead of strengthening existing offerings, a series of new programs were rolled out and then almost immediately shelved as unsustainable, leaving employees wondering how much thought had gone into them in the first place.

It didn’t help that many of them were things the company had already tried before. For example, Homepolish had launched with a small marketplace — “champagne accessories on a beer budget,” was the slogan — that was quickly abandoned. But in post-funding 2016, the company scrambled to assemble a team and then debut an e-commerce store called “H marketplace,” which included a Homepolish candle with scents of amber, sandalwood, and freesia. That marketplace was gone three months later. The same happened with a plan to bring designers on as full-time employees. Homepolish had attempted this with about 15 designers early on, and tried it again in 2016. It was almost immediately shelved as unsustainable.

Things changed so frequently and so abruptly that employees held their breath when Santos passed their desks, not wanting to get looped into his latest idea, which would be full speed ahead before promptly being dropped a couple of weeks or months later. “You’d have to settle him and make him happy, and then two weeks later it would be over and you’d be back to your regular job, two weeks behind on work,” says one. If employees tried to push back, Santos shut them down. “He’d say, ‘I’m not interested in hearing your opinion on this. I just need you to do it,’” recalled one ex-staffer. (Two others recalled similar wording.)

Several months after the funding, Santos also stopped sharing details about the company’s health. According to five former employees, stats like how many hours were sold and how many designers they had signed up had been shared at weekly all-hands meetings. (In one of the company’s early offices, they had even been written on the wall, near the company’s core values: “Be the Solution,” “Dream Smart,” and “Keep It Fun.”) But according to ex-employees, this stopped suddenly in 2016, and the all-hands meetings themselves became much less frequent. “Everything got a lot more secretive,” says one ex-employee.

InIn May of 2016, Homepolish signed a 10-year lease for a brand new 11,306-square-foot office. The asking price was in the high-sixties per square foot, according to the Commercial Observer, or roughly $750,000 a year. Homepolish had plans to scale, but the space was triple the company’s previous digs and more than twice the size Homepolish actually needed for the number of employees it had, estimates one former Homepolish commercial designer who saw the space. It was decorated, appropriately, as a showcase for the company’s talent. One often-photographed room was the kitchen, designed like a residential one, featuring striking deep blue cabinets with brass hardware. Above the stone-top island hung a bubble chandelier with brass fixtures. Only, it was a knockoff with cheap fittings, metal painted to look like brass. “It just seemed kind of consistent with the idea of saying you’re going to deliver something that is glamorous and impressive but is actually a cheap stand-in,” says the designer, who left the following year.

Homepolish CEO Noa Santos. Photo: Mark Sagliocco/Stringer/Getty Images

At the time, the company was an industry darling. “Game changer,” wrote the influential design blog Design Sponge. “Rad and disruptive,” said Goop. The staff at Details magazine wrote of their “obsession” with stalking the Homepolish website to see photos of the best company offices. Clients were pouring in faster than Homepolish could handle, and the long waitlist was ruining the company’s Yelp rating. Santos wanted more designers across the U.S., and fast. “We just need bodies,” he told employees, vowing that there would never be a waitlist again. This was one of the increasingly rare times employees pushed back against Santos, with at least three of the company’s senior managers warning him that quality and service would suffer. “There were a lot of people telling him to be careful,” says one ex-staffer.

Undeterred, Santos nearly doubled the number of designers from about 300 to 500. In the process, the vetting of designers — which previously involved having them design sample rooms with limited time and budget — was relaxed. A customer service manager noted an uptick in complaints from both clients and designers, the latter of whom grumbled about not getting enough work.

The founders could be “intimidating and scary” to the young employees who worked for them, says an early former employee. Santos frequently raised his voice and “would openly threaten people, saying, ‘If you don’t do this, we can replace all of you.’”

It didn’t help that Santos seemed to constantly change how he felt about the designers’ place at the company — whether they were just workhorses in service of the client, or whether Homepolish’s mission was to be an agency that supported and promoted them. His flip-flopping put the company organizational structure in perpetual flux, with people being reassigned to jobs with little notice. “It was kind of whiplash-y,” says one former employee. When designers left to pursue their own businesses, he treated it like disloyalty.

By the beginning of 2017, there were already signs Homepolish was not performing as expected. On Valentine’s Day, around 15 people (about 15% of the company) were summoned to meetings at restaurants and coffee shops near the office and fired. Some were specifically told it was because they “weren’t contributing to the profits of the company.” Among those culled were four of the most senior, longest-term employees — ones who sometimes disagreed with Santos. Soon, not a single staffer from the early days remained.

InIn 2017, Santos also made four fateful decisions: The first was to quietly begin pursuing a strategic partnership with Modsy, an online interior design service that had raised $11.75 million over the previous year and half. The second — because of the relentless pressure to scale quickly — was to take out a loan “in the millions” from Silicon Valley Bank, according to a former employee. “Day number two [after the raise in 2016], I was like, ‘We need new money.’ It’s just kind of the nature of the beast,” Santos later told the design journal Business of Home.

The third big decision was to shift Homepolish toward a higher-end customer. Out with the $500 and $5,000 projects, and in with the $500,000 and $1 million ones, as it were. (As the marketing department put it, “Olivia Wilde” would replace “Jennifer Lawrence” as Homepolish’s ideal client. Wilde was elegant and sophisticated; Lawrence made headlines for pizza-stained evening wear. “You could have a drink with either one of them, but only Jennifer would get drunk,” one ex-employee says, recalling a marketing presentation.)

It had become clear to the management team that just getting more small-budget customers wasn’t going to help Homepolish hit its growth targets. Small stop-and-go projects often frustrated designers, required a lot of client management time, and, says one ex-staffer, “ended up refunded” because of the company’s “happiness guarantee.” An employee who worked in operations remembers two successive COOs, neither of whom stayed long, “always yelling that the sky was falling.”

But this situation didn’t get communicated to the rest of the company, who were left to bemoan that catering to the 1% was not the mission they had worked for with that near-religious startup zeal. Nor was going after luxury clients a viable business proposition. Santos “started to alienate the people the brand was built for in order to chase people that realistically this company was never going to get,” says one former employee. High-end customers didn’t actually need Homepolish; most interior designers catered to them already. And the plan for getting these clients didn’t seem completely thought through. “A whole team was hired for high-end sales, and then were shuffled to other jobs,” says an ex-employee.

By employee estimates, 75% of the leadership team that started in 2018 didn’t end 2018 with the company.

Santos’ other critical decision that year was also aimed at generating more revenue: A new line of business called Build, through which Homepolish would collect a 15% commission when clients used Homepolish-vetted contractors for home renovation. The program was hastily concocted, according to one former employee, because Santos wanted the marketing copy to say something like, “You hire Homepolish and you sit back and we’ll hire all the contractors; it’s seamless.” The problem was: At the time the company didn’t typically deal with contractors. So they had to start in a hurry. “It was the perfect example of what always happened there: ‘We have an idea, we haven’t fleshed it out, we’re going to rush it to market, and we’ll figure it out along the way,’” says one ex-staffer. Many designers I spoke with said they didn’t want to use the service because they saw no evidence that Homepolish had actually vetted any of the contractors (one former employee says Homepolish saw samples of the contractors’ work and customer reviews).

ByBy all accounts, 2018 was a blur. Turnover was high: By employee estimates, 75% of the leadership team that started in 2018 didn’t end 2018 with the company. “The higher you got, the harder it was to work at the company,” says one.

The year was also notable because Santos, who often worked in the office until late, was gone for unusually long chunks of time: First because of a back problem, and then for his June wedding in Hawaii. The event took its inspiration from the Alfonso Cuarón remake of Great Expectations — with wild greenery and custom-made green tuxedos for the grooms — and was featured in both Vogue and the New York Times. Pantone cards had been sent to wedding guests to guide outfit selection and Santos’ husband had hunted down the exact shade of black-green Nars nail polish worn by the “warrior army” of bra-less, ivory-suited bridesmaids. (Later, Santos spent 20 minutes of an all-hands meeting showing photos of the affair.)

But when Santos returned, he struggled to prove to investors he had something that could scale. The company introduced a new project management tool for designers that sourced, tracked, and managed buying furniture and accessories from brand partners — but there was little incentive for designers to adopt it. “It seemed to be adding multiple steps to something that’s already kind of complicated,” says one designer. “And to explain it, there were 12-page documents. I was like, ‘Why is this so hard?’” Former employees say the tool revealed how little Santos actually understood designers. (“He always told designers he was one of them, but he worked for a design firm for a year,” says one.)

By January of 2019, it was becoming clear to employees that Homepolish was floundering. About 15% of the company was laid off on January 3 — days before the three-day “2019 Kick-Off” in New York City, the first time the entire company would all be in the same room. Remote employees were responsible for any luggage charges with their economy basic flights. They were asked to stay with friends, Homepolish employees (the COO hosted three people), or as a last resort, in shared hotel rooms. The company skimped on catering for the delayed holiday party held on January 10 — a cost-cutting move which backfired when last-minute pizzas had to be ordered because employees had been downing copious amounts of donated booze (from Matsubara’s clients).

Despite these signals, the atmosphere at the kick-off was upbeat. The 75 employees left had their tarot cards read and listened to presentations, which shared a consistent message: “We want to make our operation as lean as possible to continue to attract the types of fundraising conversations we want to be having and keep the terms in our favor,” as one former employee described it. But by the end of the month, Homepolish would find itself embroiled in a massive PR crisis that would lead to its undoing.

On January 31, Ilana Wiles, who runs a popular blog called Mommy Shorts, posted about a botched Homepolish renovation of her Manhattan condo. She included more than two dozen photos of the renovation — wonky bathroom tile, sloppy finishings, a kitchen light that prevented her from opening the top cabinet. She also posted the photos on Instagram, where she had some 160,000 followers.

Wiles’ followers swarmed Homepolish’s Instagram feed. “Go fix The Wiles apt before posting more over exposed photos that don’t show the workmanship defects,” read one comment. Some included the hashtag #fyrefestofhomerenovation. Santos met with Wiles February 7, but the issue continued to drag on, with him telling her on April 16 that he was conducting an internal investigation. By May — three months later — Wiles was fed up with waiting. She posted an update to her blog, saying she had realized that Santos was punting. “GUYS. WTF,” she wrote. “You can tell Noa and Home Polish [sic] what you think of this response and the work they did on my apartment on their beautiful Instagram account.” (Wiles did not return emails seeking comment.)

By June, the story had been picked up by national media, including and House Beautiful. As time passed with no resolution — and as almost every day a new and impossibly beautiful image appeared on the Homepolish Instagram feed — the Mommy Shorts brigade grew angrier and angrier, posting comments faster than anyone could delete them. They also trolled the individual feeds of the designers, whether or not those designers had anything to do with the Mommy Shorts project. Designers like Riha no longer wanted to appear on Homepolish’s Instagram. “We were like, we don’t want our photos on there because we don’t want to be dragged under,” she says.

The timing couldn’t have been worse: Santos had just revealed at one of the increasingly rare all-hands meetings that if Homepolish didn’t get more funding, it wouldn’t get a bridge loan from the original investors. At this point, it seemed unlikely Santos could pay off Mommy Shorts even if he wanted to. Meanwhile, staffers were getting spooked that the company’s initial investors might be wiping their hands clean of the company.

By July 22, most employees had gone a full month without pay — meanwhile, Santos’ husband Instagrammed a photo: A six-bedroom, $1.6 million home the couple had just bought in East Hampton, complete with two ponds, a tennis court, and a Jacuzzi.

But Santos still seemed to believe he could pull off a miracle. Homepolish continued its quest for wealthy clients, offering complimentary consultations on the patio of Goop’s Sag Harbor shop. Santos was still trying to make things work with Modsy, but the deal fell through. (When asked to confirm talks with Homepolish, a Modsy spokeswoman emailed: “We discussed a strategic partnership from very early on until the close of their business that considered our different but complementary offerings for customers. Unfortunately the partnership did not pan out.”)

As Santos continued to grasp for a solution, he scheduled a mandatory Skype call with the more than 500 designers. They would be ranked according to how much they sold through the company’s centralized buying platform, he told them, and the rank would affect who got first pick of new clients, according to multiple designers who were on the call. Among employees, anxious messages about the company’s fate flew back and forth on personal group texts and Whatsapps. Absent information, employees snooped on Google calendars, attempting to find clues on who was meeting with whom.

OnOn June 21, Santos — sitting alone under a crystal-accented chandelier in the office — put three-quarters of the company on what was supposed to be temporary unpaid leave, maybe two weeks, he said, according to former employees who were there at the time. (The other quarter of the company stayed on for minimum wage.) “If you can handle a paycheck or two, I do remain optimistic,” an ex-employee said her manager told her, emphasizing the considerable chunk of time the company had employed her.

By July 22, as most employees had gone a full month without pay, Santos’ husband Instagrammed a photo of a six-bedroom, $1.6 million home the couple had just bought in East Hampton, complete with two ponds, a tennis court, and a Jacuzzi.

Designers were still in the dark about what was happening, and there were still near-daily posts on Homepolish’s Instagram. Referrals had slowed, but some designers reasoned it was summer and people were away. It took the designers a while to realize they, too, weren’t being paid, because things had always been a little haphazard in the finance department. “There would be errors or they would remind your client it was time to pay but they wouldn’t follow up on it. Or they’d receive it but they wouldn’t process it,” says designer Claire Hung. Designers started emailing people for answers and receiving out of office replies that didn’t list a return date. Around the third week in August, one designer (a friend of Hung’s) decided she’d swing by the office — maybe she’d get an answer faster that way. When she showed up, the office was silent and some of the furniture was gone. Turns out, it had been closed since August 1, but no one had told the designers a thing.

On September 5, Hung started a Google groups listserv for designers to pool the scant information they had. Someone shared an August 20 Business of Home article, called “What’s Going on With Homepolish?” in which Santos gave a candid interview, blaming the company’s financial troubles partly on the aggressive forecasts investors demanded. Those forecasts required continued investment to scale — investment he had so far been unable to secure, but which he was still talking about like he could. “What gives me some hope is some of the biggest, most successful companies on the planet have gone through this,” he told the publication. “It’s always right before a [new round of funding] that it’s the most challenging culturally, but in terms of the startup world, I don’t see this being a crazy anomaly.”

Within hours, Santos had gotten wind of the listserv, and Hung says he called her that evening, unhappy about being talked about behind his back. “We’re all just scared because you haven’t said anything,” she remembers telling him. She asked if Homepolish was filing for bankruptcy; she says he told her the company didn’t have enough money to file for Chapter 11, and that the bank would decide about Chapter 7. He spoke carefully, she recalls, like someone who’d taken legal advice.

A few hours later, at 2:20 a.m. on September 6, Santos sent an email about an all-designers call. After that, two more posts appeared on the Homepolish Instagram, including the final one — the photo of the Alexander Calder mobile and the Pierre Jeanneret chairs. Perhaps Santos was still unwilling to admit defeat, or maybe he was just trying to hang on to the nearly 2 million followers — arguably still a monetizable asset. Still, anyone looking at the account would have no idea anything was amiss.

On the September 11 call, of which Marker obtained a recording, Santos told the designers they wouldn’t be paid what they were owed. “The company owes more money than it has now or it will have in the future,” he said, “and any remaining money would go to creditors based on an established legal priority list, all of which our bank has the legal right to.” Instead, he offered them referrals. “We get clients coming to us every day,” he told them. His goal seemed to be convincing them not to sue, urging them to “think intelligently… as opposed to jumping to legal action which could work very much against all of us.”

He left it to the designers to explain to clients what was happening, and to work without pay, if necessary, to preserve their own reputations. “Many of my most difficult and least lucrative projects led to considerable future referral business,” he said, reminding them that design is “a word of mouth industry.”

Santos also addressed the Hamptons house — and his husband’s Instagram. He said they’d been looking for two-and-a-half years, had put down a nonrefundable “considerable amount of money,” and that in letting Matsubara celebrate the milestone publicly, “I chose my husband’s happiness over my own reputation and over everyone else’s feelings. And I didn’t take that decision lightly.”

TThe company’s unraveling, which was reported by New York magazine, left dozens of designers reeling. At least two were owed more than $30,000, potentially life-altering sums for freelancers. Some designers had to spend the months after the company’s collapse finishing projects for which they’d never receive payment, in hopes of at least salvaging a good reference from the experience. One designer had planned to take some personal time off to start a family. Instead, she spent it scrambling for work.

Many are furious that by the time Santos told them what was happening, it was too late for them to get paid. “It felt like he was cutting his losses and the bank’s losses,” says one. “But what it amounts to is stealing from us.” They noted, with displeasure, his posts on Instagram from a luxury trip to Morocco the week of Thanksgiving.

Most employees and designers acknowledge the pressure Santos was under from investors, but still blame him for polluting the company culture — and for the company’s failure. “Noa single-handedly sunk that ship,” says a long-term employee who left in 2017, but is still angry about what happened to the startup where she invested years of her life. “There were people who got the company to what it was, when it was having its hot moment, and could have taken that company to be something greater. He is the reason that those people weren’t there anymore.”

“As a founder you feel trapped. The box around you is getting smaller and smaller, and you have nowhere to move.”

The board likely shares half of the blame, speculates Steve Blank, an adjunct professor of entrepreneurship at Stanford University. “Where were they?” he asks. “It seems like a toxic combination of a board not paying attention and a first-time founder in crisis.” (Board members Hunt and Hyman did not reply to requests for comment.)

“As a founder you feel trapped,” says Blank, recalling his own experience as the founder of Rocket Science Games, a startup that failed after raising $35 million and landing Blank on the cover of Wired. “The box around you is getting smaller and smaller, and you have nowhere to move. And you’re in denial.”

Meanwhile, the workers of Homepolish have begun moving on. 11 of the company’s former designers are even hoping to fill the void with their own startup: Interior Collab, an online tool that will connect clients and designers. The founders are currently applying for nonprofit status. “It really became clear that we were a commodity to be leveraged for someone’s personal gain,” says Claire Hung, a founder. “We just want to try to create a space where that risk is eliminated for design businesses of all sizes and stages.”

Santos, though, still hasn’t given up on Homepolish. A source who spoke with him recently says he was just in Los Angeles, talking to a potential partner about selling what’s left of the Homepolish brand and turning it into a subscription service, where clients and designers would pay to be matched. He’s also back to doing what even his detractors say he does beautifully: design. On January 21, he posted to his personal Instagram a spare, beautiful image of a floating desk built into an enormous window overlooking the ocean. “Design for a client’s workspace,” he wrote, adding that he always did his best thinking in nature. “For all my obsessive planning, preparing and orchestrating, life unfolds as it will,” he wrote. “Almost entirely out of my control.”

Update: An earlier version of this piece misstated Andy Dunn’s involvement with Homepolish. He was not an investor or board member.




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Courtney Rubin

Courtney Rubin

Journalist covering health (also wellness) and business.

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