In 2019, just five months after starting her weighted blanket business, Bearaby, Kathrin Hamm received an email from a buyer at home furnishing store West Elm. The buyer had read an article about Bearaby’s blankets and wanted to visit the company’s showroom to see the product in person. The only problem: Bearaby didn’t have a showroom.
“We were two people with five sewing machines in a garage,” says Hamm. Instead of holding the meeting in the garage, Hamm, 39, packed £300 worth of Bearaby blankets onto a borrowed hotel trolley and wheeled them into West Elm’s Brooklyn headquarters. The 20-pound, hand-knit blankets were a hit. Suddenly Bearaby had a national distributor in West Elm.
“That was kind of the decisive moment,” says Hamm. “At that point we didn’t know how to do digital marketing and we were in the process of figuring out the product’s suitability for the market.” By the end of 2020, Bearaby had generated annual sales of $21 million. Sales nearly doubled the following year.
Like many fast-moving products, Bearaby’s blankets were born out of a personal need. In 2017, while working as an economist at the World Bank, Hamm, who was born in Germany, ordered a weighted blanket as a sleeping aid. The product worked — the full-body pressure of a weighted blanket increases your body’s serotonin and melatonin levels — but it was filled with plastic beads, which made them too hot. After noticing a gap in the market for a more breathable version, Hamm worked on a prototype using densely layered organic cotton yarn. Then she quit her job at the World Bank and gave herself a year to get the company up and running.
Chieh Huang, Boxed co-founder and CEO, knows what it’s like to swap a corporate office for a family garage. The former lawyer and mobile gaming entrepreneur started his online wholesale business in his parents’ New Jersey garage in 2013, selling household items like toilet paper and paper towels in bulk. After growing from $40,000 in sales to over $100 million in just three years, Boxed earned a reputation as the Costco for millennials. Last December, Huang took Boxed public and raised $198 million in its IPO.
While it’s every founder’s dream to go from the garage to the New York Stock Exchange in less than a decade, it brings with it many new challenges.
“There’s so much more pressure and so much more expectation, and the world can’t see it,” says Huang, 40. “On the other hand, I feel like I’m learning something new every hour of every day, so that’s it fascinating as an entrepreneur.”
We brought Hamm and Huang together at Boxed’s Manhattan offices. Then we asked her to talk about where Bearaby should grow next and why the job of a founder is always changing — but never gets easier.
Ham: We have early collaborators who are still with us, but now we’re at a point where I need more experienced specialists. When did you know it was the right time to bring in the next level of talent?
HUANG: It was similar to when I thought it was the right time for a fundraiser. Without the fundraising and re-evaluation of the company, attracting so much talent would be difficult. They would give up big, comfortable, high-paying jobs, so why come here? For myself too, I constantly feel like I need to reinvent myself and wonder if I would hire myself because there are zero similarities between what I’m doing today and what I was doing when we were in were in a garage. You need to challenge your team and set that expectation early on.
Ham: At each stage, how did you know you had the skills you needed and how did you manage to acquire them?
HUANG: Unfortunately, I had to learn the hard way every time. In those moments when you take stock and ask yourself, “Am I still right for this job?” and the answer is, “I’m not sure,” you need to ask yourself, “Do I have the excitement to move on? ‘ And the answer will probably be ‘Yes’: ‘Am I ready to learn?’ Probably ‘Yes’ again. Then you have to say, “These are the skills I need to develop or improve.”
Ham: Did most of the learning come from mentors?
HUANG: At various stages of the company, it was so important to have advisors and mentors that I trusted. The good thing is there are so many people in high growth companies now that it’s easier to find people to talk to who know what you’re going through.
Ham: A year and a half ago we were five people, now we are about 30 people. How do I know when it’s the right time to introduce new processes?
HUANG: Everyone has that paranoia that you feel, including me. Are our systems good enough? Why is there no system for this? What is the standard procedure when this happens? The first year in the garage was all about getting it done at all costs. But now when you walk into our facility, there’s literally a cutout where the broom goes after the floor has been swept. That doesn’t happen overnight. With your own paranoia and your employees knowing what looks good, I think over time you will see your processes grow in a good way.
Ham: You mentioned trying to look around corners. From doing business with CPG companies to owning your own warehousing infrastructure, there have been so many strategic moments. Were you always the idea generator?
HUANG: In the beginning I had a really bad micromanagement problem. But I also recognize that there are certain things I have to commit to and leadership is definitely one of them. Depending on where you sit and what your responsibilities are, see what’s happening in the external market and what you’re good at and what’s not good at internally. Even your C-suite doesn’t have that full 360-degree view.
Ham: For the past few months, I’ve spent 50 percent of my time with people, 25 percent with products, and the other 25 percent building the brand. How do you prioritize your time?
HUANG: If you think of it like a Venn diagram, everything you’re really good at overlaps with what you’re really passionate about — the things you should be doing every day because they’re good for you and the company . The next bucket is anything you’re good at but don’t really enjoy. For the good of the company, you should continue to do these tasks. The hardest bucket are things you enjoy but just aren’t really good at. You have to give these things away.
Ham: Now that we have two patents, I’m wondering about the strategy: Should we just license the ceilings? Or sell them yourself but try to own a smaller market? Should we consider other products?
HUANG: Only you can solve this. If you outsource strategy to your COO and it doesn’t work, nobody in the company will accept it if you say, “Well, the COO misled us.” They’ll just say, “Isn’t that your job?”
Ham: When it came to fundraising, how did you initially decide who would get the right partners on board?
HUANG: There were times when we had no choice. It was like, “If you write a check, you’re a great fit for the company.” That was the only criterion. In some rounds where we had the luxury of voting, I felt it was really important to give their credentials. Very few founders take the time to properly refer who they want to partner with. And don’t just call the companies you’re supposed to call. You also need to call those who didn’t work out. I’ve always found it fascinating to talk to these companies about how this investor behaved during bad times.
Ham: How do you see the e-commerce landscape? With the recent iOS 14 changes, getting customers isn’t that easy anymore. Is there anything you can share that worked for you?
HUANG: What is old is new again. You’ve seen basically every tech company buying Super Bowl ads again because with the privacy changes, it’s just not that easy to target these customers. So everyone tries direct mail and television. All those channels that were declared dead a few years ago are making a huge comeback because everyone needs to use them again.
Hamm You talked about the ups and downs of entrepreneurship. Is there anything you fall back on to deal with this?
HUANG I have to constantly remind myself not to get too high or too low because the ups and downs are not good for your sanity. Ringing the stock market made me feel like I could conquer the world, but the reality was we had to be back at work an hour later.
From the May/June 2022 issue of Inc. Magazine
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