10 Questions With… Jason Goldberg of Hem
In the wild frontier of online furniture retail, Jason Goldberg is one of the first cowboys. The founder and CEO of the seven-month-old online furniture shop
Hem
has an illustrious pedigree that includes the founding of five companies—including e-commerce site
Fab
, which Hem spun off of—and a six-year stint working with former president Bill Clinton. Unveiled March 28, Hem’s first retail space is located a stone’s throw from Checkpoint Charlie in Berlin’s Kreuzberg district. With sales made via iPad and computers, also used for instant furniture customization, the 1,800-square-foot space has the feel of an Apple Store—high-tech with streamlined customer service.
Interior Design
sat down with Goldberg to hear about Hem’s unique business model and design process.
Interior Design: So you launched as an online furniture retailer. Why would you want to open a retail space at all?
Jason Goldberg: I founded e-commerce retailer Fab in 2010, and when we sold off Fab, the idea was that we would focus entirely on one thing and just do it really, really well. Hem is my dream company. At Fab we sold literally hundreds of thousands of different products, yet I never really felt like they were
our
products, always other people’s products. When we started going into our own private label for Fab, back in 2013, I saw when we made our own products, when we could say it was something we did and were really proud of, I could really see a big difference.
We want to have a direct relationship with the consumer. Sure, the store is a test for us. If we have a store, do we increase sales in the Berlin market by giving people the option of buying directly through the store
and
online? We don’t know yet. However, I think it’s going to work. The model is similar to eyeglass retailer
Warby Parker
or shave supply club
Dollar Shave Club
.
We are a technology company, but a technology company doesn’t mean online only, it means we use technology in every step of the process. Whether it is through our website or the way we connect to consumers or factories. I don’t care whether it is online or offline—as long as it is efficient. What would be stupid for us would be to have stock in our stores—then you’re no different then any other store. So for us, with the distribution capacity already set up, it’s actually easier for us to go from online to offline, verses offline to online.
ID: Can you tell us about the shop? How does the interior reflect your brand?
JG: We found the space last June. We were over in a giant office park area, and we wanted a space that could be retail and office in the same place. Specifically we sought out this part of Friedrichstrasse [on the opposite end of a high-end shopping street] because it is up-and-coming, with all these developments coming in. It’s a great place to put our flag, and if you look up the street you really see us.
Our whole thing is ‘Design Made Easy’ [our tagline], and we wanted to bring this across in the shop, really get people to feel like they are walking into our world and really see the simplicity of our designs, color, and how easily people can adopt our products into their homes. So we purposely created an environment where it doesn’t feel like you are walking into a museum. It feels like a home, with warmth.
We designed the interior in-house. It’s a collaboration between myself, global design director Petrus Palmér, and head of merchandising Ilenia Martini. We all had the same vision of creating a warm space with some color pops, that wouldn’t feel standoffish. People should be able to connect with it and touch the products. At the same time, it needed to have some wow.
The store is also in complete harmony with our online platform. Since our website offers the entire collection online at the click of the button, our whole model is going direct to the consumer as much as possible. Here in the store everything is still filled through the website. We have associates on the sales floor who do all transactions with iPads and you get the products shipped to your home. Then we have our ‘Easy Bar’ where you can browse our products and customize your own furniture all right here with our team.
ID: Why Germany?
JG: I realized being located here in Europe would be to our advantage and Berlin was one place really close to everything. We acquired a company, Massivkonzept, back in 2013 that was a custom furniture business. That was the first foundation we had towards making our own furniture. At the time, it was just custom furniture, but then we started manufacturing things. With that acquisition, there was a 25-person team in Warsaw, that had all the manufacturing relationships with the factories.
Then we acquired another company called One Nordic which was based in Stockholm and Helsinki. We do most of our manufacturing in Eastern Europe. So I looked at a map and was like, alright we have Stockholm, Helsinki, and Warsaw, where should we locate our headquarters to be about an hour flight to each place? Berlin is a great startup capital, a high-tech, international city, and Germany is the strongest economy in Europe. It all kind of works. I remember when I started coming to Berlin four years ago and hardly anyone spoke English—now you hardly hear German on the streets.
ID: How does your design process work?
JG: When we build a Hem product, one of the key things for us is we start off knowing we are selling direct to the consumer. So we think about it differently, even from the beginning of the design process. We send out a design brief saying this product has to ship parcel, in the mail. Most design companies have always taken their product and distributed it on a pallet to a store. In order to save us money and the consumer money, it should ship parcel. It’s not flatpack, but efficient-packed—we’re not trying to make everything literally flat, we’re trying to be as efficient as possible.
We have in-house designers, but we also work with outside designers—these are emerging designers that we contract out to do work exclusively for Hem. For example, for the Hai chair by Luca Nichetto we said, alright, we want to do an easy-to-ship lounge chair. So this chair actually folds over for shipping. Then we said we wanted to use this fabric with 3D weaving on it. So it became a collaboration with the designer. Then we loved the chair so much we started to do cushions in the same fabric, called Razzle Dazzle by Sylvain Willenz for Febrik. It’s named after ship camouflage activity during World War I.
ID: How much customization is possible for example, with the
Levels lamp by Form Us With Love
?
JG: We have four different colors or finishes—chrome, white copper, grey—and then small, medium, and large versions. However, all use the same components.
With our tables and shelves, it’s really as much as you can imagine. You can design as wide as you want, as high as you want with as many different doors and drawers as you want.
ID: How are sales so far?
JG: We turned on our website September 30, and we’ve sold about 12,000 products since then in Europe and the U.S. We ship to over 45 countries, but we ship directly to 31, through distribution partners that send our products all over the world. We’ve sold products in Australia, Japan, South Korea, Dubai, South Africa, and more.
Right now about two-thirds of sales are in Europe, and one-third in the U.S.—but we haven’t launched our custom offerings in the U.S. yet, and just sell what is in stock.
It’s exciting how much consumers are taking to it. The key to our whole business is to make high quality products at a low price point. The design industry hasn’t always operated that way. If a table costs 60-70 euros to make, typically the designer would sell it to a wholesaler for 180 euros, who would then sell it to consumers for 400 euros. We take a small margin and sell it directly to consumers at a great price. That’s the whole business.
ID: And you are able to do that because of your wide audience?
JG: Correct. Typically there was this huge gap between the designer and the consumer. The designer would make something, come up with an idea, and then they’d have to go find some brand to carry the product and manufacture it, and then that brand would have all these middle men to shuffle around, whether it was distributers, and partners to sell it to. So the designer would see very little of it and would have no relationship with the consumer. We’re just putting all of that together.
ID: Who would you say is your target audience?
JG: Kind of the urban professional. Though I like to say we target more the Instagram, Pinterest generation, these people who almost grow up being designers themselves in their daily life, and are looking to express design in another realm. Ten years ago, if you were starting a design company, you were targeting the elites, the design snobs—or towards the low end. Now everyone sort of thinks they are a designer, everyone has an affinity to design.
ID: Who’s your competition?
JG: Inertia. (laughs). I’d say we’re trying to grab the people who graduated from
Ikea
. Most people have a little Ikea in their life, and they get to a place when it’s time to get rid of it. It’s not the stuff you want permanently, it’s temporary. You’ve gotten somewhere, when you’re ready to graduate from Ikea. But when you graduate from Ikea, most people are not ready to go to
B & B Italia
or
Cassina
or
Ligne Roset
, and most of the alternatives out there are just kind of…eh.
We want to give people great design at a better price, but it’s also better quality. In terms of brands we are competing with or people doing a great job,
Hay
is doing a great job, but they have no online presence and are less direct to consumer. Then there’s
Normann Copenhagen
. A lot of Scandinavian brands have developed as an answer to the question, how does the design industry evolve? But they are still going through the same old model, where as we are trying to do a more direct to consumer model.
We put a lot of thought towards the experience people want to have in terms of receiving Hem products, which I think a lot of designers and retailers don’t. They more think about selling the product, they don’t think about the experience of receiving it, setting it up, and making it easy. Ikea likes to joke that part of the Ikea experience is bonding over how difficult it is to set things up, but I don’t think that is fun for anyone!
Hem’s Verso Shelf, a ladder shelf by Mikko Halonen, for example, is just two pieces that connect together with no screws. You set it up in 10 seconds and it ships really easily.
Most companies version of a stool like our Pal stool by Hallgeir Homstvedt would be one solid piece. It’s not ever intended to be taken apart. The Ikea version would require an Allen wrench. What we do, is make it really easy for the consumer, there are no screws. Everyone can find the X and match the X with the X. It’s not hard to put together.
ID: How do you see the company growing?
JG: We just started six months ago and so far we’ve been very encouraged by the way people are taking to the collection we are putting together. We are trying to be original, trying to be fresh, and really trying to do things that are designed to be online first.
Most design companies haven’t been thinking this way, they’ve been thinking more about the traditional channels, whether it is through decorators or through wholesale retailers, to get to the consumer. We have a direct relationship with the consumer. We have a couple of hundred-thousand people who open our emails every week, emails that we put a lot of thought to, in terms of really protecting that asset and cultivating it.
We do a lot of Instagram, a lot of Pinterest, and just try to be inspiring and authentic about it. When you post something on Instagram, consumers can tell whether it is real or manufactured right away. We try to imagine it being your own home—and people, they take to it.
In terms of where we are going, we’re really trying to carve out a space. The whole notion of design made easy is that design can be approachable, it’s not just for the elite few. Everyone can access and embrace good design and make it part of their life. People can live with color, people can take some risks on their own and use design to express their personality.
Today we have about 350 products from about 30 different families. Then there’s the custom products. Our goal is to double the collection over the next 12-18 months, while doing some things really unique to Hem, things that couldn’t be done through a traditional player.
