Burrow cofounders Stephen Kuhl and Kabeer Chopra went to business school with an interest in entrepreneurship, but not necessarily with the intention of launching a direct-to-consumer (DTC) flatpack sofa startup.
But when they moved to Philadelphia to begin school at the Wharton School of Business, they concluded that the process of buying a sofa is hard, and the consumer experience is less than enjoyable.
“We just thought there’s gotta be an easier way to do this,” Kuhl said.
Armed with a sleek new brand and the seemingly guaranteed venture capital funding that comes with getting a degree from Wharton, Kuhl and Chopra launched Burrow in 2016 hoping to use a direct-to-consumer business model to upend a stodgy furniture industry that they believe is ripe for “disruption.”
Since the smash success of DTC brands Warby Parker, Harry’s, and Casper in the early 2010s, Kuhl’s story has played out multiple times across practically every consumer productcategory—from bedding to vitamins to toothbrushes—as entrepreneurs hope to become the next Warby Parker of their industry.
But the success of Warby Parker and Harry’s came in consumer categories where single companies with near monopolies were charging an outsize premium for their products. Can flatpack sofa brands take over the highly fragmented and competitive $80 billion furniture industry, given those conditions aren’t present?
Despite the wave of new brands, the early success stories, and the flood of venture capital, there are reasons to be skeptical that any one flatpack sofa startup will take over furniture the way Harry’s has taken over razors—even if they do become sustainable or profitable businesses.
“I don’t think this is the space where one company’s gonna come in and dominate,” said Wharton professor Kartik Hosanagar. “In fact, I would worry about profitability for a lot of these players. The long-term economics are less clear.”
How flatpack sofas brands plan to thrive
While Warby Parker is often the first name mentioned among DTC success stories, the better comparison for flatpack-sofa and furniture brands is Casper. Casper’s success came after branding a product that previously was largely commoditized and by solving a pain point in the customer experience: going to a mattress store and trying out mattresses, a process that nobody likes.
The Casper playbook—which has been cynically summed up as “pick a product, then spend a bunch VC money on branding and subway ads”—has been replicated across a number of DTC goods. But the biggest favor Casper did for flatpack sofa and furniture startups was acclimating customers to buying a large, bulky product in the mail that they hadn’t seen or touched in person.
“Casper...started popping up on the market and [I thought], ‘this is brilliant,’” said Brad Sewell, founder of DTC furniture startup Campaign Living. “‘This is proving the concept here, that people are willing to buy sight unseen online, and the home industry can make a move online.’”
Cynicism aside, each of the furniture brands is being shaped by the unique background of their founders. Sewell, a mechanical engineer by trade who worked on Apple’s early iPhones under Jony Ive, has stripped the sofa down to its individual parts in hopes of making Campaign’s flatpack easier to put together than its competitors.
Article co-founder Aamir Baig, a Pakistani-Canadian, has a background in software engineering and has used digital marketing to quickly scale Article into a furniture brand with a robust product line.
“Use of data influences a lot of decisions across the organization,” Baig said. “Those attributes contribute a lot to how we went about building this company and designing the customer experience.”
As opposed to scaling up right away, Floyd founders Alex O’Dell and Kyle Hoff began with a Kickstarter campaign to sell a set of legs that could be attached to any solid surface to make a table. The legs were an unexpected hit, and Floyd has been slowly and iteratively adding to its product line; the company launched a flatpack sofa in August.