Burrow is a direct-to-consumer sofa company that manufactures and sells high-quality, designer sofas for a fraction of the price of comparable retailers. Founders, Stephen Kuhl (WG’17) and Kabeer Chopra (WG’17) started Burrow at Wharton. We asked Stephen Kuhl to share the Burrow story with Wharton Journal:
Did you come into Wharton knowing that you want to start a company?
Business school is an ideal place to start a company. You have 2 years to prove out an idea without the pressures of needing to work, generate income, etc., plus you can work on your business in many of Wharton’s classes. For us, it was a no brainer. The worst that can happen is the business fails and you have a great interview story.
How did you come up with the idea for Burrow?
We were trying to furnish our apartments last August when we started at Wharton. Every piece of furniture was easy to get except the sofa. I went the IKEA route, meaning I rented a U-Haul to pick it up and then spent over two hours assembling the frame with an Allen wrench and upholstering the sofa with Velcro. Kabeer wanted a better sofa and a better experience, and so did a bit of research and found a sofa he liked at West Elm. When he tried to purchase it, he was told that it would take twelve weeks to be shipped to him, plus a $250 delivery fee and $100 “white glove” fee. Ultimately he just bought what they had available in store and carried it home on a cart by himself, similar to the “Pivot” episode of Friends. The entire experience was complicated and time-consuming for both of us, so we tried looking for companies that offered a better experience and a high-quality, affordable sofa. There were none, so we decided to start Burrow.
Who is your competition and how is your positioning unique compared to them?
Before starting Burrow, Kabeer and I conducted industry research and surveys of our target market of young professionals (25-40 years old, predominantly in major cities) to identify the largest pain points in buying furniture, particularly sofas. The gist of it is that once people have graduated from IKEA and Craigslist, it’s tough to justify paying more than double on an equally painful experience at West Elm or Crate & Barrel, where you have to wait 10-12 weeks and figure out a way to get the massive sofa into your apartment.
Existing players in the market focus on either on quality or the buying experience, but no company offers a seamless solution to address both needs. Kabeer and I set out to build a company that would not only solve these specific pain points for our target market, but also add new thoughtful features to elevate the end-user experience. The result of this approach can be broken down into four key parts.
- The Buying Experience – Burrow is creating a unique, engaging website. The buying process will be simple, with limited options for customization broken out over a few simple steps in the ordering process (i.e., number of modules, fabric color, leg color, and arm style), as to not overwhelm customers with too many options, but to give them enough customization to express their individuality.
- The Delivery Experience – Once Burrow fully launches, any customer within the continental U.S. will be able to receive their sofa within 5 days of placing their order. Burrow sofas arrive in compact boxes, much easier to maneuver into an apartment or up a flight of stairs if needed. The assembly process is simple, intuitive, and takes just 10 minutes. We’re building a branded and engaging unboxing experience that blends seamlessly into the assembly process.
- Using the Sofa – In addition to watching TV, young professionals now do everything on their sofas: from eating meals to drinking wine to doing work. As such, Burrow designed their sofas to be life proof. Some of the incorporated features include:
- Premium, high-density foam cushioning that holds its shape for hours on end, providing maximum comfort and support for multi-hour Netflix binging, gaming, working, or just hanging out;
- Soft and strong fabrics that pass the “double-rub” scratch and durability test, and are also treated with all-natural products for stain resistance;
- A hidden power outlet that allows users to charge electronics while sitting on their sofa, since sofas have a nasty habit of blocking power outlets.
- Moving Again – Just as easily as they can be assembled, Burrow sofas disassemble and can be moved again. And, thanks to their clever engineering, Burrow sofas are fully modular. A 2-seater in a smaller space can be turned into a 3-seater in a larger space simply by ordering a middle module. If a new look is desired, customers can flip their cushions over (tufted on only 1-side) or swap out the arms and legs of their sofa for different designs or colors (which can be purchased individually on Burrow’s website).
To date, no company has focused on all four of these parts of the sofa buying and owning experience. We’re building a brand that will communicate the company’s unique and comprehensive value proposition to our target market of young professionals. This rapidly growing market, which already accounts for over 37% of all furniture spend, has proven to react positively to new, high-quality brands that connect with them in an honest and differentiated way (e.g., Warby Parker, Dollar Shave Club, Everlane, and Casper).
What have been some major wins for you so far?
Convincing a talented, award-winning industrial and furniture designer to join our team, convincing our manufacturing partner to prototype with us for free, and getting support from friends, angels, and institutional investors to help make this happen have been our biggest wins to date. We have been pleased with early pre-order traction, though we wouldn’t have started the company if we didn’t think we could achieve that.
How did you get into Y combinator?
Y Combinator has a pretty basic application, with a straight forward question: can you make something that people want? It sounds simple, but oddly enough most companies can’t truly answer “yes”. Many companies develop something, but are too focused on what they can make versus asking people if they would actually pay money for it. Conversely, there are some companies with brilliant ideas but never end up being able to execute on them (Y Combinator always ends up with a few of these in biotech and aerospace). For us, we started out by asking people if they also experienced the same pain points as us, and then figured out if it was possible to be profitable by solving those problems in an innovative way. Y Combinator agreed, as did Highland Capital Partners, who invested in us and gave us office space in Palo Alto as part of their Summer@Highland program.
What are some immediate goals for Burrow?
We’re launching later this year – blowing this out of the water is our main focus for the next few months. Hiring out an amazing team is huge part of this.
Do you see expanding into other lines of furniture?
Absolutely. The sofa is the center of the living room and the biggest pain to buy, so we’ll establish our brand with sofas and then expand into all furniture and home furnishings.
Would you say Wharton is a start-up friendly school? What resources at Wharton helped you in raising funds for and launching Burrow?
The professors and other students at Wharton have been incredibly helpful and supportive. We’ve raised money from classmates, sold sofas to classmates, gotten free labor from classmates in Wharton classes, and received amazing advice and introductions from professors. Dr. Americus Reed and David Bell have been particularly helpful to us. Ironically, we were denied by every grant and business plan or entrepreneurship competition that Wharton or UPenn has, but were accepted into Y Combinator and Summer@Highland. Go figure.
Any advice for first years who are looking to launch their own businesses this year?
Start early. Focus on building something people want. Only work on one company. Put things in motion to force yourself to make steady progress. Don’t be afraid to just do things. Planning can only get you so far – what works better than research saying something will work is by actually proving it will work. And have fun! Starting a company should be enjoyable. It’s stressful, but if it feels like a chore, it’ll never end up working so stop and figure out how to work on something that is exciting for you.