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Burrow CEO Stephen Kuhl: The shift to e-commerce is here to stay

By Ali Montag, Jul 10, 2020 11:43:22 AM

Burrow CEO Stephen Kuhl shares his playbook for direct-to-consumer businesses.

In 2016, Burrow CEO Stephen Kuhl told Y Combinator his plan to sell furniture online. Buying a sofa shouldn’t require driving to a store, he said. It shouldn’t require finding friends to help carry the sofa up the stairs. Furniture should be sold direct-to-consumer. It should come as modular pieces in lightweight boxes. It should be easy to disassemble and reassemble, in case you need to move.

Four years later—as Americans remain advised to stay at home—that plan couldn’t be more prescient. 

“This has rapidly expedited the shift from retail to e-comm in the furniture industry, and that's something that we're benefiting from,” Kuhl says today. “Our company is literally built for this. Our stuff is delivered via UPS Ground Shipping. You don't have to interact with a human being when it arrives. You can do it all yourself.”

Kuhl co-founded Burrow with Kabeer Chopra as part of a class project at Wharton in 2015. The company has since raised almost $30 million in venture capital to sell its luxury sofas, loveseats, armchairs, coffee tables, and more.

Stir-crazy customers are anxious to upgrade their living rooms. Burrow’s sofas, which typically arrive in a week, are now on back-order. “It’s a great problem to have, but a problem nonetheless, because of the overwhelming demand lately,” Kuhl says.

I asked Kuhl for his advice on managing teams, developing new products during the pandemic, and building a brand that lasts. His answers have been lightly edited and condensed.

How do you approach leadership at Burrow?

Leading a team is a skillset that you develop over a long period of time. It takes a lot of hard work. There’s this idea that if you’re in charge, managing people is easy.  But it's one of the hardest things that you have to do as a leader of an organization. 

There are a couple of basic things that are really important to do that sound obvious but are oftentimes overlooked because you just assume everybody knows everything in your company.

First, clearly articulate your strategy to the whole company and repeat it over and over again. We have done so many exercises over the last year to learn where we can improve as leaders, and it was surprising for us to learn that in a lot of cases, people across the organization didn't feel like they knew what our strategy was.

We were like, “What do you mean? Of course, everybody knows what our strategy is. We're making innovative furniture and we're improving the end-to-end customer experience for people, and everything we do supports that strategy.”

But without clearly articulating it and laying it out, like, “This is the strategy,” people can get lost pretty easily. Or, they can mistake strategy for just day-to-day operational stuff. So I think that's one of the most important things to do. Repeatedly communicate what your strategy is and how everybody in the company contributes to that. It helps people understand how they plug into the bigger picture.

What does that look like at Burrow? 

For one example, providing a superior customer experience is part of our brand. That's part of our strategy to win. That's a competitive differentiation in the furniture industry for us.

So somebody on our customer experience team who might feel like they've just spent their entire day answering people's questions about, “Where's my order?” or, “Can you send me more swatches?” might feel like its monotonous day-to-day stuff.

But by them providing a superior level of service to the customer, and then taking that data that they've collected from customers and flowing it to other parts of the organization, our teams can say, “Okay, what can we do from a process perspective, from a technology perspective, etc., to remove any friction from the customer experience going forward?”

We can free up our customer experience teams to focus on helping customers that actually need to have a human-to-human conversation, like “Can you help me understand how to design my living room?” or “What do you recommend goes best with this?” Those are the conversations that we want our people to be helping our customers with.

Every single little task somebody could be doing throughout the day, in some way, connects to something more strategic. 

As CEO, how do you split your time between day-to-day management and long term strategy? 

Ideally, I would spend 100% of my time on the future. My job is to make sure we’re pointed in the right direction and to work with everyone across the organization to connect the dots. Inevitably, there are day-to-day things that come up. 

Or, it’s taking time to review the day-to-day metrics. How efficiently are we acquiring new customers? What is the feedback that we're getting from our customers on these products that we've launched? 

I probably end up spending 60 percent of my time looking at future endeavors and the rest of the time connecting with everyone on the day-to-day stuff. 

What strategies do you use to keep the company on track? 

You know, we used to do OKRs and I felt like we were almost forcing them on the organization. It felt disconnected from what people were doing on a day-to-day basis.

Those types of goal setting exercises are important, but for us, from a strategic perspective, a lot of it is just prioritization. Startups, unless they’re incredibly well funded, are super lean. So the one resource you’re lacking is people.

You have to accomplish a lot with fewer people than you have to do it. What that really means is you have to be okay with making sacrifices or trade-offs.

It's like, “Ideally we would like to do these 10 things really well.” But which three are going to make or break the business? And which three, if we didn’t do anything, if we were really bad at them, would make a difference? Could we get by at being bad at those things but really good at these other things? 

That's a constant exercise. It's really hard to do because you want to do everything really well all the time. You just can’t. You just don't have the resources to, so it’s important to push yourself and the organization to stay focused on the top priorities and do those really well. That's what sets you apart. Doing 10 things mediocrely doesn't set you apart as a business. You just kind of blend in.

How do you consider prioritizing the launches for new products? For example, your new online design consultation service? 

By collecting customer feedback research. You don't have to be perfectly scientific, you don't have to hire McKinsey. Just talk to your customers, do focus groups, get on the phone with them, and do surveys.

We do surveys all the time. People love doing them and you don't have to offer some huge reward. We offer the chance to win a free throw blanket. So you know that people aren't doing it for the possibility of winning a blanket, right, they're doing it because they care about the brand and they want to give their input. And how cool would that be if you gave feedback to a company and they used that feedback to create new products for you?

For a lot of founders, and people in general, you're afraid to ask because you’re afraid of what the answer might be.

What if they don't like what we're starting to develop? What if they don’t like it what do we do? Well, wouldn't you rather know that now than launch it and have them not like it? You should perfect products as much as possible before launching. You're not going to figure out all the kinks, but I think doing any sort of customer research upfront is incredibly valuable. People are more willing to give their opinion than folks might think.

What is your top advice for building a new brand? 

I think it starts with defining what you want to stand for as a brand. What is our voice? What do we want our visual identity to be? How do we want to talk to customers? 

I think consistency is really important. We’ve been guilty of not doing this in the past. At Burrow, we tried to be too many things to too many people. And then your brand just becomes a little bit diluted. And I think you'll find that if you stand for something that your customers can clearly articulate, you're going to attract more people.

You might feel like you're being a little bit too specific and focused, but you're actually being way more meaningful. When we designed our first sofa, we solved a lot of problems and pain points in the furniture industry: It gets delivered in the mail in a week, it arrives in compact boxes you can bring up a flight of stairs by yourself, you can assemble it with no tools, we made it more comfortable, more stain-resistant, you can change the size over time, we included a USB charger. We solved all of these problems.

But you can't go to customers and say, “Hey, here's the laundry list of problems that we solved.” You have to summarize it. 

So over time, we've kind of found our brand voice and figured out that we're just an innovative company that solves solutions in furniture. And we're going to be the most convenient brand out there. If you just kind of leave it at that, all the products and services that fall underneath that make total sense.

We knew from the beginning that we wanted to focus on convenience and the customer experience. So if we had just done that from the start, we would have saved ourselves a lot of time and headache. It's that consistency. When people see it over and over again, they know exactly what to expect from a company.

What consumer trends are you seeing today? 

75% of furniture was sold in retail stores previously. And now, unless you live in certain places that have somewhat opened up, you have to buy your furniture online. This shift to e-commerce for furniture and for a lot of industries—that is here to stay.

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