From open office designs to closed-off cubicles, office furniture plays a more significant role than having surfaces to sit on or conference rooms for large gathers. The furniture in an office space often reflects the culture and aesthetic that a company wants to project at large. However, the process of acquiring office furniture has not changed for a long time. Greg Hayes, Sib Mahapatra, and Verity Sylvester have made it easier to obtain office furniture to design a workplace to one’s liking through Branch. Branch is a direct-to-business office furniture startup, selling premium equipment to other growing companies. The startup is based in New York City.
Frederick Daso: What’s the current process for procuring office furniture? Why is it complicated, slow, and burdensome?
Greg Hayes, Sib Mahapatra, and Verity Sylvester: Right now, there are two bad options when it comes to furnishing office space. On the one hand, “fast furniture” retailers like IKEA and Amazon are fast and affordable but lack the quality and service to scale to the needs of growing business (try asking a TaskRabbit to coordinate with a landlord on freight elevator access or insurance requirements).
On the other hand, high-end “contract furniture” manufacturers like Herman Miller make beautiful products. Yet, they are priced opaquely and exorbitantly and take 6-12 weeks to deliver. The root of these evils is that most contract furniture is sold through middlemen—local furniture dealers—that offer decidedly analog transaction and project management experiences while marking up prices to 50%.
In deciding to found Branch, we realized there wasn’t a right solution combining the speed, value, and convenience of fast furniture with the quality and comprehensive service of contract furniture. And neither option offered customers much flexibility or support after the transaction; you buy it, it’s yours.
Daso: Are there current D2B office furniture vendors? If so, why haven’t they sufficiently addressed the procurement process problem yet?
Hayes, Mahapatra, and Sylvester: Most online office furniture retailers target the consumer market with home office solutions. But furnishing for a business is as much a service as it is retailing a physical product. Branch addresses needs from producing 3D space plans to help our clients visualize their spaces, to coordinating with idiosyncratic landlord requirements, to orchestrating delivery, and assembly of literal tons of furniture at a time.
Of our competitors that do target the enterprise market, none offer flexibility. In the era of managed real estate services like WeWork and Knotel, traditional landlords have started to offer more flexible lease terms and scalable spaces that better meet the needs of modern companies experiencing rapid growth and variable on-premise headcount. Companies (and landlords) that lease or lease out these spaces will want a furniture solution to match: an accessible, comprehensive way to switch up floor plans and add/remove/upgrade furniture on demand. With our Flex program, Branch customers can trade used Branch furniture for credit toward their next purchase, which makes swapping a conference room for a pod of desks as easy as a few clicks.
Daso: What slice of the market have you decided to target initially, and why?
Hayes, Mahapatra, and Sylvester: Our typical customer is a growing business (often a startup, but not always) between 25 and 300 people. We segment this target market further by size, growth trajectory, and budget, but broadly speaking, teams in this extensive stage experience the most pain with existing solutions. They’re big enough to demand serious service and quality in furnishing an office their team will love, but too small to shell out $2-3K per head for office furniture only to be stuck with it when they double in size and move into a new office eighteen months later.
Our combination of ease, value, and flexibility resonates with each segment within this market in distinct ways. “WeWork Graduates” moving into their first standalone office place a premium on the speed and flexibility we offer, while larger companies love our value and depth of service. Beyond selling directly to companies, we also collaborate frequently with landlords, brokers, and other partners in the real estate community in addressing the growing demand for flexible, turnkey office solutions.
Daso: How has Branch managed to sell premium office furniture products at half the price of competitors? Is bringing manufacturing in-house/being vertically integrated a significant driver in lowering your cost structure, or are there other advantages you’ve managed to develop in other areas of your product lifecycle?
Hayes, Mahapatra, and Sylvester: We save money in three significant ways relative to our competitors. As you noted, cutting out dealers and selling our furniture direct to business eliminates one of the most considerable costs in the traditional contract furniture value chain. Second, we maintain a lean line of modular inventory; interchangeable components between our core SKUs limit the amount of inventory we carry, which helps reduce warehousing and working capital expense. Finally, we’re starting to use technology to create operating efficiencies in the project management process, which encompasses tasks from complying with building insurance requirements to booking the elevator.
We pass these savings to our customers, which lets us charge about a thousand dollars per head for a standing desk, ergonomic chair, and filing cabinet—or roughly the cost of a single Aeron chair from Herman Miller.
Daso: What led to the development of offering used furniture trade-in? Why haven’t other vendors offered this before? Do you offer refurbished products as well?
Hayes, Mahapatra, and Sylvester: Not too long ago, the average office lease in NYC was five years long, and flexibility in office furniture wasn’t relevant. Now the average lease is closer to three years in length; for companies that came of age in the post-WeWork era, flexibility has become a key driver of decision-making around office space.
Traditional contract furniture lines would be challenged to take advantage of this opportunity for a few reasons. In essence, dealers are loathing to stock inventory of any kind (which is why lead times are so long). High-end contract furniture is typically customized, making it harder to assemble enough inventory in any single variant to fuel a liquid market of refurbished products.
With a lean and modular line, Branch is designed for trade-in; as more of our customers take advantage of our Flex product, we plan to offer a refurb line to address price-sensitive customers at the smaller end of our target market.
Daso: How does the data your end-to-end service help inform and drive your current and future product offerings?
Hayes, Mahapatra, and Sylvester: We rely on both internal (customer surveys, funnel analysis) and external (search trends, advertising ROI) data to drive our furniture and digital roadmap. As we grow, striking the right balance between efficiency and completeness in our furniture line is a crucial objective—we want to build the one-stop stop for office furnishing in our target market, no more and no less.
Daso: Given your backgrounds in real estate, how painful was it to furnish your corporate spaces? Is Branch the company you wish you had when you all when in your previous roles?
Hayes, Mahapatra, and Sylvester: Our CEO Greg managed the furnishing process for dozens of offices while leading asset management on the East Coast for the flexible office space company Breather, and saw firsthand how growing teams were underserved by existing options.
Sib, our co-founder and head of product, made the same observation from the other side of the table while working with startups that resorted to creative methods in furnishing their offices, built his share of desks, and saw the opportunity in creating a simple, API-like experience for an office furnishing. Our co-founder and head of operations Verity brought deep real estate relationships and an instinct for design to the table, helping us understand that landlords and companies alike increasingly value flexibility when it comes to office furnishings.
Branch is the intersection of our visions for helping teams of all kinds create a professional home they’ll love, and we’re proud of our progress so far—but there’s much more to come!