The first time Stephen Kuhl and Kabeer Chopra bonded was over a beer pong game in Montreal. The second time was about a decade later in Ethan Mollick’s entrepreneurship course at Pennsylvania’s Wharton School. It was the latter experience that led to Burrow — a direct-to-customer furniture startup taking aim at box stores like Ikea and West Elm. Officially launched to the public last month, the company says they have already generated more than $250,000 in revenue and have enjoyed week-over-week sellouts of their furniture.
Like many startups these days, Burrow was founded out of a frustration. When Kuhl and Chopra moved to Philadelphia to start the full-time MBA program at Wharton in the fall of 2015, both had issues furnishing their apartments. Kuhl went to Ikea for his couch, but it took him “two and a half hours to figure out that Allen wrench thing.” Chopra’s experience was worse. He went to West Elm, which was about two blocks from his house, only to find it would take three months to get the couch he wanted. Even to get a bright orange couch — not Chopra’s desired color — it would take a $100 moving fee and two weeks to move it two blocks. “So, he got a little cart from his building and wheeled it home that day,” Kuhl says of Chopra’s experience.
The two spent the rest of their first semester of B-school researching whether others had had the same issues — and whether there could be a market for a different type of furniture shopping experience. So far, there has been.
“From those experiences, we knew the furniture industry was underserving a huge portion of the market,” Kuhl says.
TWO COMPLEMENTARY SKILL SETS
The first time Chopra and Kuhl met, they were teammates — in a game of beer pong at McGill University in Montreal, where Chopra was majoring in computer engineering. Chopra just happened to live across the hall from one of Kuhl’s best friends from high school.
“We actually played beer pong together and had no idea we’d start a company together years later,” Kuhl recalls. “We were on the same team and I got heckled pretty hard because I was the only American. But I did like him. I remember him being a cool dude. It’s just funny and I can’t believe that’s how we originally met.”
Chopra began his career as a consultant and software developer, then started a company. Before B-school he was a manager of retail analytics for Michael Kors. Meanwhile, Kuhl also started his own small business, which helped mentor and match international students to U.S. universities, before launching a career in consulting with stops at Accenture and Commonfund Capital.
By the time they both ended up at Wharton, they were ready to give entrepreneurship a serious and full-time attempt.
FOUNDED IN THE SAME CLASS AS WARBY PARKER
It was in Management 801 — the same general entrepreneurship course that produced direct-to-consumer giant Warby Parker — that Burrow found its roots. After landing on the idea to produce hassle-free couches aimed at 25- to 35-year-olds, the two spent the fall of 2015 researching. They found two main themes. First, they definitely weren’t the only ones experiencing pain points in the pursuit of furnishing. Second, no established company really has market control in the furniture industry.
As reported last year by The New York Times, from 2012 to 2014, millennials carried the industry with total spending rocketing 142% from $11.1 billion to $27 billion. According to the same report, the American furniture industry is a $100 billion-a-year industry, but even giants like Ikea or Ashley HomeStore claim less than 5% of the market.
After a semester of research, Kuhl sat in his parents’ Florida home recovering from shoulder surgery. “I spent winter break with a wrap on my shoulder, on painkillers, and nothing else to do besides sit around and do research,” he recalls. What he found — combined with a bit of cabin fever — led to him to decide to spend the rest of his time at Wharton pursuing Burrow. He called Chopra, who was getting ready to travel back from his wedding in Thailand. Chopra was in, even cancelling the internship interviews he had scheduled.
“We decided to go after it full-time from there,” Kuhl says.
EARLY SUCCESS & STRUGGLES
So far, it has looked like a wise decision. After winter break, Kuhl and Chopra formally incorporated the company and were accepted into the prestigious Y Combinator accelerator program in the San Francisco Bay Area. Instead of summer internships, the two were building their business while surrounded by other top-shelf startups. From last July to February of this year, they took over 1,000 orders for their first product — a couch with a few different color options.
Of course, it hasn’t always been easy. The first main headache the team ran into was finding a manufacturer for their couches. There was also the issue with neither of them having any experience in building physical product, much less a couch. Still, the duo began reaching out to manufacturers based in the U.S.
“They all told us politely to get lost. Those were big blows at the beginning,” Kuhl concedes. “We knew people made furniture in China, but we had no idea where to look there. And then we heard that Mexico had a growing manufacturing business.”
They also had a classmate from Mexico City. Knowing it would be a “shot in the dark,” Kuhl asked his classmate whether she knew anyone in manufacturing in Mexico.
She did. Her father’s good friend had started a factory in Mexico City; his son was now running it. “That’s who’s producing our furniture right now,” Kuhl says.