Made.com: Julien Callede, Ning Li and Chloe Macintosh

The entrepreneurs behind designer furniture start-up Made.com explain why their direct to consumer model was an instant success

In the space of just a couple of years, Made.com has charted a course from unknown start-up to a genuine player in the UK’s home furniture and fittings market.

The company began with grand ambitions, but a simple idea: to create designer products at affordable prices. Expanding on a direct to consumer model already tried and tested in France, Made.com’s three entrepreneurs planned to revolutionise the furniture market. With no storage costs to contend with and designers lining up to take part from the get go, Made.com’s profile has been on a steady incline and the online retailer is now synonymous with trendy, non-extortionate furniture.

A wealth of experience

Made.com’s founders all bring something different to the table. Businessminded Ning Li worked for investment bank Rothschild before co-founding MyFab, a Paris-based furniture retailer with a very similar business model to Made.com – sourcing products directly from factories. Julien Callede

had a wealth of experience in operations and management, as well as a solid business background from experience in venture capital and start-up management. And Chloe Macintosh brought a creative element, having spent 10 years working as an Associate Partner at the top architectural practice of Norman Foster.

Chloe’s move into retail e-commerce stemmed from a friendship with digital entrepreneur Brent Hoberman – best known as founder of Lastminute.com – who asked her to head up the design operation at his online furniture retailer MyDeco.com.

As it turned out, Brent was instrumental in getting Made.com off the ground. “He was very interested in the ‘direct from the factory’ business and reached out a few times to me when I was still CEO of Myfab”, says Ning. “I had the idea of a direct to consumer business model, but was living in Paris and most of my contacts were in France. I wouldn’t have come to London to start Made.com without the backing of someone like Brent.” Ning finally responded to Brent’s friend who had introduced them – at this point Ning had cashed out from Myfab and embarked on a one-year round-theworld trip. Brent persuaded Ning to come to London.

Here, Brent introduced Ning to Chloe and, as the business model for Made.com began to take shape, Ning brought in his friend from business school, Julien Callede, who brought some much-needed design and operational experience to the business.


Action point:
See if you can get a Start Up Loan to help you start a business idea
(external site, opens in new tab)

A concept emerged

At its heart was the direct from the factory model, but, as Chloe is keen to stress, Made.com’s business plan was not simply about the processes associated with keeping costs down and offering cheaper prices to the public – it was also about design. “We wanted to offer a platform for designers and offer them a route to market,” she says. “We wanted to be really aspirational and compete with both the likes of Ikea and Conranshop.”

The business model was deceptively simple. Made.com would commission designs – tables, chairs, beds, lighting, etc. – which would be marketed through its website. The items would be manufactured only when a customer placed an order, and the goods would then be shipped from the factory, via a UK depot and on to customers’ homes. With minimal storage required, and with no expensive high street shops, costs could be kept to a minimum and the savings passed on to customers. Thus, design-led quality pieces could be offered at a greater discount than from competitors.

Ideas into reality

To achieve their objectives, Made.com’s founders had to place a number of ducks neatly in a row. Before they could even think about coming to the market, they needed finance, suppliers and the all-important co-operation and participation of talented designers.

Finding the funding was challenging. However, the founders – Ning in particular – had a track record, and the business model had been tested in the French marketplace. Equally important was the fact that, with Brent as chairman, the project had financial backing and business experience from the start. Together they raised an initial funding round of £2.5m for the UK launch of Made.com.

Arguably the market conditions were favourable. In 2009 and 2010, the UK economy was beginning a fitful and often faltering recovery. Consumers had an appetite for well-designed furniture, but conventional suppliers were struggling with the realities of costly warehousing and retail floor space.

At the same time, a large segment of the buying public were paying off debt and seeking out the best available prices. Witness the collapse of Habitat. Made.com’s low-cost model was ideal for this marketplace.

The second challenge was to find suppliers – which was far from straightforward. Following Made.com’s unconventional business model, a minimum order quantity must be reached before products are actually manufactured, meaning that orders for the suppliers are not guaranteed.

Unsurprisingly, suppliers did not find this prospect particularly appealing, as they would traditionally agree to a number of minimum orders before they sign a contract.

As a new company it was something of a gamble. With no track record on sales, the founders knew that some producers might understandably shy away from gearing up to deliver on contracts that might only generate a trickle of orders. Larger manufacturers were unlikely to be receptive to the Made.com pitch; and, although smaller companies might be happy to take on the work, from the founders’ perspective there was a risk that they would lack the resources to provide a stable run of production.

Made.com therefore focused on the middle range, says Chloe. “Manufacturers who weren’t too big or too small. And what we set out to do was work with them as collaborators – as partners.”

Initially, Chloe’s expectation was that the company would be working with relatively young and inexperienced designers. This was, after all, a new and untried concept and therefore potentially a risk for established names.

Young designers, fresh out of college, would see the opportunity rather than the risk. But one established designer saw the potential from the outset. Steuart Padwick was the first designer to come on board with a desk that Made.com sells for £300 – the bespoke version on Steuart’s website costs £2,000. This product was the result of the first designer collaboration, a hit with the press (appearing in more than 50 publications to date) and remains one of Made.com’s bestsellers today.

How They Started Digital: How 25 Good Ideas Became Spectacular Digital Businesses, published by Crimson Publishing, is available on Amazon now.

Comments

You must log in or Sign up to post a comment.