These Furniture Designers Have Raised Over $10 Million to Upend IKEA

Based in Detroit, Floyd Home is an accessible but high-design furniture company that creates minimal home decor that lasts a lifetime. Launched in 2014 on a Kickstarter that garnered $256,273 from 1,395 backers, the company makes pieces that prize function and utility with a design-heavy, urban aesthetic. Sick of the disposable IKEA wave, cofounders Kyle Hoff and Alex O’Dell set out to make furniture that you should keep.

The first product, a 16-inch steel table leg called The Floyd Leg, is a masterful concept. Using a system of four clamps, any flat surface can become your coffee table without pesky tools. “The core idea behind the assembly of our products is that it should be intuitive,” says Hoff, an architectural guru with a master's degree from the University of Michigan. 

In January 2018, Floyd Home raised $6.5 million to research and develop new products and move into a new headquarters in Detroit, according to Tech Crunch. Since then, the brand raised additional funds, reaching more than $10 million in total. Floyd’s founders have thought of everything: spill-proof fabric, minimal-assembly pieces and a custom tool that you won’t want to hurl across the room mid-build. Ultimately, they’re curing your home decor woes.

We sought the counsel of Hoff to discuss the most important things he’s learned while launching a business, how he’s overcome challenges as a business operator and what advice he would give to someone looking to launch a startup.

Describe Floyd in one sentence.

Kyle Hoff: We want to change the way people buy, consume, keep and enjoy furniture.

If you were pitching us as potential investors, what would you say?

Hoff: The furniture industry hasn’t changed much over the years. IKEA is doing $40 billion per year and basically dominates the industry, so there are so many ways we can improve on the current experience of furniture—from how people buy and keep it to the design of the product.

What is the most important lesson you’ve learned as a founder?

Hoff: Always put the customer first. We’re lucky to have the opportunity to deal directly with our customers, which has made us extremely focused on listening to what people want and interpreting their needs when we are launching new products. For example, we’re coming out with the Floyd Shelf this summer, and before we even started designing the product, we sent out a detailed survey to our customers. In the first day, we received 1,200 submissions, and those responses ultimately informed the end design.

What’s something you knew nothing about when you started? How did you solve that?

Hoff: Everything! My cofounder, Alex, and I were totally new to this, and we just started from the ground up with the question “How do we make the best furniture company we possibly can?” We didn’t have notions about how things worked in the past. That lack of experience helped us approach this antiquated industry with a totally fresh set of eyes. When it came to logistics like the supply chain, we had to really dig in, find partners and put in the hard work to build strong relationships. But the most important thing is hiring the right people at the right time. Something else you learn as a CEO of a company is that you can’t (and you shouldn’t) be an expert in everything.

What was the biggest milestone in your brand’s history?

Hoff: The launch of our Floyd Sofa this past fall was a milestone. It was a moment that felt like tangible proof that, as a brand, we could really achieve this vision of rethinking the essentials of the home (although we still have a way to go). As a design company, we really pushed ourselves to think about how a product could come together and be manufactured in a new way. The number of previous customers that came back for the sofa was a strong reflection of our community’s appetite for what we’re doing.

What challenges did you overcome? How did you push through?

Hoff: When you’re getting started on producing a consumer good, it’s hard to know what margin you should be aiming for when there are so many variables you don’t know, such as shipping costs, tooling costs, how much it will take to reach new customers and so on. Early on, we shot ourselves in the foot a little by coming in too tight on margins. We were lucky to be able to fix it at the right time, but it really gave us foresight on how to build a healthy, long-term company. You see a lot of companies that try to come to market without an understanding of their economics. They either have to raise more money in order to make their business work at scale, or it falls flat.

What are you up to right now?

Hoff: We’re always in the process of designing new products to add to our collection. As we launch new products, the business has to evolve and it’s always getting more complex. We’re working hard to consistently ensure it’s a great purchase process, experience and delivery. We continue to innovate in new ways that haven’t been seen before in furniture.

What advice do you have for young entrepreneurs?

Hoff: If we’re talking about furniture specifically, furniture is a complicated industry and a tough nut to crack! I think that’s a reason it’s taken so long to disrupt. It’s not going to be changed overnight and it requires a deep thoughtfulness. I’d encourage being pragmatic and patient, diligent on margins and your business model, and of course, listening to your customers.

Explain your fund-raising strategy.

Hoff: We want to build a healthy business and grow responsibly. It’s always been important for us to pull partners together that can add more value than just capital. For instance, we have a strategic investor in La-Z-Boy who advised us early on, and [venture capital firm] 14W brings a ton of insights from the direct-to-consumer space.

How does your background contribute to your ability to run this business?

Hoff: I have a background in architecture. An architectural education, and practicing architecture, is about solving problems at all scales. You work across disciplines and stakeholders, which helps me work in many facets of the business without being a total expert. And of course, there is the design education side of it.

What do you most look for when interviewing job candidates?

Hoff: We have a set of values that really gauge if people are right for Floyd. The culture is something that evolves with every hire, but we keep a North Star with these values: empathy, creative problem solving, resourcefulness and self-awareness.

How do you take care of your mental and physical health as an entrepreneur?

Hoff: I personally think taking a break to reset is essential for being able to think about the big picture of a business. In a more micro sense, exercising to clear my head is critical. I love a great bike ride.