We all want affordable, high-quality, easy-to-ship furniture. So why is it so hard to find? Startups are continually trying to innovate in an industry long dominated by Ikea, but none has come close to being a formidable competitor to the Swedish giant. They’re wildly ambitious, but rarely live up to the hype. We took a look at three companies built on similar premises—modern, affordable, direct-to-consumer furniture—at different stages in their trajectory to better understand why.
Greycork: Closed For Business
When Greycork launched its Indiegogo campaign in 2015, it was well received. The Providence, Rhode Island–based company founded by RISD students surpassed its $50,000 funding goal to receive over $270,000.
Greycork conducted user research (using similar techniques to those of the prestigious design consultancy Ideo) to uncover the traits consumers want from furniture—transportable, affordable, aesthetically appealing, and durable design. Greycork then used those qualities to inform the company’s strategy. Designers meticulously crafted their pieces’ dimensions to make shipping as cheap as possible. They used inexpensive but robust materials like ash wood, MDF (a composite material that’s stronger than plywood), and thin-plated steel. They worked with local fabricators and suppliers. They also attempted to price their furniture competitively to Ikea.
“[W]e wanted Greycork to be known for ‘revolutionary quality at a revolutionary price,'” CEO John Humphrey wrote in an email to Curbed. “It turned out, we delivered quite well on the former, but not so much on the latter.” (Humphrey did not respond to Co.Design‘s requests for comment.)
While the company was able to create products it was proud of in terms of quality—the pieces were made from solid wood and steel, and manufactured in the United States—and deliver them direct to consumer, they couldn’t do it at a low enough price point.
“We made tables that were so nice, our friends and peers couldn’t afford them—even at zero margin for us. That stung,” Humphrey’s email states.
Campaign: Finding Its Footing
When we first spoke with Campaign—a Bay Area-based seating brand—in August of 2015, its founder Brad Sewell, a former Apple engineer, was confident that his company had a solution to some of the most common challenges sofa shoppers encounter. Instead of a six- to eight-week lead time, his product would ship within three to five days, arrive in FedExable boxes (sofas normally ship fully assembled by costly freight services), and be made from sturdy materials.
The company predicted it would move from prelaunch to fully operational in 2016; well, it’s still in prelaunch mode and has its sights set on summer 2017 for the transition. Customers can reserve the sofa for shipping later this spring. The reason for delay? Challenges increasing their manufacturing volume from prototyping levels to mass production, refining the shipping and customer experience, and making the profit margins work.
“It costs twice and much and it takes twice as long as you originally thought,” Sewell tells Co.Design. “Sometimes you have to delay to make sure it’s perfect.”
Campaign struggled to find vendors who could make enough of the parts the company needed. As a small company, Campaign also faced the challenge of how much inventory to keep. Some vendors it wanted to use had minimum order requirements of around 12,000 for specific parts–meaning that they’d have inventory to make thousands of sofas that they might not sell–so they had to find alternatives. Originally, Campaign worked with a molded foam manufacturer in China, but ended up switching to an American supplier to save on shipping costs and time.
Campaign has also faced challenges getting products to customers. So far, Campaign has delivered its product to 35 states (the company wouldn’t comment on volume). But it ate the additional cost of getting prelaunch models to customers in Alaska and Hawaii. The company had to redesign its packaging to fare better in inclement weather–for example wrapping everything in plastic and looking to the mattress industry to figure out how to compress foam.
Sewell has viewed the setbacks as learning experiences and says they’ve gotten past most of the big challenges. Right now there are four full-time employees at Campaign, but the company is growing its operations, and there are about 20 open positions in marketing, customer experience, design, and manufacturing.
Burrow: Building Buzz
Stephen Kuhl—cofounder, with Kabeer Chopra, of the sofa startup Burrow—is well aware of the challenge of delivering affordable, high-quality, flat-pack design. “We’ve seen other companies not pull it off,” he says. “It shows how difficult it is to execute.”
Kuhl and Chopra are students at the Wharton School of Business and began Burrow as an independent study project. The idea for the company began when both of them moved to Philadelphia and needed to buy sofas and couldn’t find something that was affordable, easy to buy and set up, and of good quality. And they realized they weren’t alone.
“People under 35 account for 33% of furniture purchases,” Kuhl tells Co.Design. “That’s a huge segment that’s underserved.”
Burrow started with a business plan first and mined their professors–like David Bell, who was an early investor in Warby Parker–at Wharton for advice. They knew the price they wanted to hit and began thinking about how they could reduce overhead to hit that number, which was about $1,000. “If you’re living in a place for one to two years, it’s hard to justify spending $1,500 on a couch when you’ll end up selling it for $200 on Craigslist,” Kuhl says.
Finding the right supplier was critical to achieving the right price point. Kuhl and Chopra–who also participated in the Y Combinator accelerator–quickly realized that most of the American manufacturers they spoke with weren’t interested in flat-pack furniture. They perceived it as cheap, and they were uninterested in developing the tooling or changing their operations to accommodate Burrow’s needs.
“Like any mature industry, it’s run by people who have been in the business for many years–they see no reason to change,” Kuhl says. Through a business-school acquaintance, he was introduced to a manufacturer near Mexico City, which supplies furniture to high-end hotel chains, night clubs, and restaurants. Recently, its CEO took over the factory from his father, who understood the potential of direct-to-consumer companies, and was interested in diversifying his business.
Burrow, its freelance industrial designer Leah Amick, and the manufacturer worked closely to perfect the design so it could be produced inexpensively, shipped efficiently, and assembled easily. They picked a midcentury-modern aesthetic because it worked for about 80% of the target audience–young, urban professionals–that they surveyed as part of their business planning. Kuhl and Chopra surveyed over 5,000 people when developing their product and brand, held focus groups with about 1,000 people, and had informal conversations with countless people. The sofa ships within a week of purchase and arrives in standard-size boxes for UPS and FedEx, another angle that saves on the bottom line for consumers.
The product on offer is simple: It’s a sofa that comes in a one-, two-, three-, or four-seat version, has two arm height options, and five different fabric choices. The reversible cushions have one tufted and one flat side–a detail that gives buyers more customization options, but doesn’t impact the production line. The sofa is designed to be modular so customers can add seats to it if needed. If they originally buy a larger configuration, but move somewhere smaller, it’s easy to take a seat out. Burrow developed a proprietary system of latches that enables customers to assemble or disassemble a sofa in about 10 minutes.
While young, urban professionals were Burrow’s target audience, Kuhl discovered during its prelaunch sales that its sofa was also popular with young parents–who liked how the fabrics were chemical-free–and gamers–who liked that the upholstery was spill proof and the sofa was comfortable.
“If you solve multiple pain points simultaneously, it appeals to a wider audience,” Kuhl says. “It wasn’t just about shipping; it was solving everything, starting with a methodical research-driven approach. I’m not saying others haven’t done that, but I don’t think they’ve done it at the same level. We’ve built our brand around customer experience.”
Burrow wants to emphasize its experience as much as its product. For example, they were very deliberate with their website and worked with the branding agency Red Antler–the same agency behind the direct-to-consumer mattress company Casper–on its digital presence. Since the brand is new, they kept a tight edit on the information presented online to include the basics and plan to share more about their brand over time.
Burrow anticipated delays along the way, and had some hiccups with manufacturing and supply chain. One setback: A box order didn’t show up (Kuhl had to go to Mexico and cut boxes himself to fill the order). And even though Burrow hired shipping agents to navigate the challenges of international production, they also had trouble with customs, for example shipments of supplies would be held in limbo because all the necessary forms weren’t filled out. Some vendors shipped whole containers worth of materials to South America when they should have arrived in the Unites States. But Kuhl found that communicating clearly, consistently, and candidly with his customers–he wrote emails in his own voice, for example–helped minimize potential disappointment. They had to offer some refunds, but there were virtually no returns from people who decided to wait, he says.
Burrow, Campaign, and Greycork offer (or offered, in the case of the now-shuttered Greycork) variations on the same theme–affordable, well-made furniture mailed through standard shipping services. Each of them had challenges as startups operating in established, old-school industries that rely heavily on relationships and are reluctant to adapt their practices for smaller companies. While they tried to adapt their product for FedEx and UPS, they found that optimizing shipping was more complicated than sizing a box to meet the postal requirements. Unlike the software industry that moves fairly quickly, the furniture industry is slow.
In short, there are three systems stacked against companies working in this realm–production, transportation (both for shipping raw goods and getting products to consumers), and e-commerce. For lean, small brands it’s a lot to take on. We’re getting closer with each attempt to change the system, but consumers who want nice, easy, inexpensive furniture that isn’t Ikea will likely have to wait a little longer.