Meet the Winner of NAR's iOi Pitch Battle
It all started with Software-as-a-Service (SaaS). Technology companies realized that instead of charging clients huge amounts of capital for expensive hardware, and large upfront fees for costly software that needed to be loaded on dedicated machines, they could license their solutions on a centrally hosted platform via a subscription basis. SaaS was a game changer, not only for large enterprises, but also for anyone interested in starting a business. The cost of IT infrastructure was a barrier for many entrepreneurs. An additional hurdle was the need for a full IT staff to manage all of the company's technology. Besides the benefits that SaaS affords to customers, the upside to the SaaS provider is a constant stream of recurring revenue. Not only does revenue come in month-after-month, but the enterprise valuation for subscription revenue dwarfs the valuation for companies whose revenue is made up of one-time purchases. It also increases their TAM by creating affordable solutions for companies without the financial means to deploy huge sums of upfront capital. SaaS has made it possible for anyone with an idea and a computer to get their business off the ground.
In recent years, we have seen an explosion of really interesting companies marketing XXX-as-a-Service solutions: Cars-as-a-Service, Gaming-as-a-Service, Space-as-a-Service, Delivery-as-a-Service.... The list grows every day, and the common thread for all of these offerings are tech enabled businesses that license their service on a subscription basis (usually based on the number of users).
In the real estate industry, we are starting to see dozens of Space-as-a-Service providers. The concept makes perfect sense. Instead of signing a 15-year lease when you have no idea what your headcount is going to look like in the next 12 months, or instead of committing to a lease in a new market before you have tested it, companies can book space on an as-needed basis. Whether you need space for a year, a month, a week, a day or an hour, there are a variety of Space-as-Service providers that can meet your unique needs. As companies shift to either a hybrid workforce, or a remote first strategy, the need for these services is going to accelerate.
Most Space-as-a Service providers offer fully furnished offices. The challenge is that their customers have different needs and swapping furniture is not only logistically challenging, but it is also expensive. I saw this firsthand when I was the Chief Sales Officer for Breather. Our design team created amazing spaces that were perfect for short-term bookings (typically between 2 hours and 2 years). It didn’t make sense to swap furniture for a daily booking, but when a company took a space for 6 months or more, they wanted it designed to fit their needs. One of the things that we learned is that moving furniture is expensive and it was often more cost effective to trash it (or donate it), instead of moving it out and storing it. We were often getting rid of furniture in under a year.
I was speaking with my friends at NAR recently, and they told me about the company that won their iOi Pitch Battle: Feather. Feather provides Furniture-as-a-Service. Instead of purchasing furniture, you simply rent what you need for however long you need it. You have a wide range of amazing options to choose from, and they deliver and assemble the furniture for you. When your needs change, they either remove the furniture altogether or they swap it with new furniture to address the changing dynamics of the business. Their offering goes well beyond office furniture. You can rent furniture for your home as well. Whether you change your taste often, or you are signing a one year lease at an apartment, Feather can assist you. The stamp of approval from NAR really intrigued me (they beat out a host of amazing companies in the Pitch Battle), but I wanted to dig into the business myself. After speaking with their Founder and CEO Jay Reno, he absolutely sold me on his vision. I was fortunate that Jay made time for me to answer some questions about Feather. Below is our discussion.
Where did the idea for Feather come from?
During my time living in New York City, I lived in 7 different apartments over the course of 9 years. Every single time I moved, I had to deal with the stress of figuring out what to do with the stuff I owned that inevitably didn’t fit in my new space— couches that were too big for the living room floor plan, dining tables my family and friends had outgrown, lamps and side tables that didn’t match my new apartment’s aesthetic. My options were always either to throw the furniture and decor away, or try to sell it for a fraction of what I’d originally bought it for. Then, I’d have to start the process all over again and buy new furniture to replace what wasn’t working anymore.
The whole process was a huge source of stress for me, and every other renter I knew experienced similar pain points. My Master’s in Climate and Environmental Science at Columbia University also opened my eyes to the massive impact that this furniture waste cycle has on the planet. I knew I wanted to create an option that would solve both problems— making it easier for people to move, and providing an alternative to fast furniture.
Ultimately, I founded Feather to provide greater freedom and flexibility to renters, and to help keep more furniture in homes and out of landfills— and we’re continuing to achieve that mission today.
Can you walk me through the process of selecting your furniture and getting it into your space? What is the typical turnaround time?
Renting furniture with Feather is the most stress-free, convenient way to furnish your space. Customers start by taking our optional style quiz and browsing our website, where they can choose from over 200 pieces of Feather-brand furniture, art and rugs— in addition to pieces from coveted retailers like West Elm, Floyd and Pottery Barn. We also offer pre-curated, designer apartment packages if customers need a little help with styling their new space. After customers select the items they want, they can then pick a rental term length that works best for them.
We currently offer three term length options— 1-month, 3-months and 12-months. Our most popular rental option is our annual membership plan which aligns well with typical lease lengths. With a Feather membership, customers pay $19/mo for a reduced rate on monthly furniture costs and our white-glove delivery, assembly and pickup services. The 3-month and 1-month options are great for customers who only need furniture for a short period of time— like subletters and home stagers.
At Feather, we're able to entirely furnish our customer's home in as little as 7 days— meaning anyone living in our 2,000+ serviceable zip codes can go from a completely empty studio, 1-bedroom or 2-bedroom to a fully-furnished apartment in one week. (And yes, that includes all the awkward up-the-stairs maneuvering, complicated assembly and cleanup!) On move-in day, Feather customers don’t have to lift a finger. We like to call this our “furniture magic.”
How do the economics of renting compare to buying furniture?
There are lots of compelling reasons to choose renting furniture over buying furniture, but from a purely financial perspective, renting makes the most sense for individuals during periods (or even decades) of transitional living, while we’re exploring new jobs, cities and lifestyles before settling down.
Rather than spending thousands of dollars to fill a space with furniture that you’ll either donate or sell at a huge discount later, with Feather, you can furnish an entire one-bedroom apartment for just $61 a month, rather than $6K upfront. Coveted designer couches can put you back in the tens of thousands. But what happens when the couch doesn't fit into your next apartment's floor plan, and the best resale price you can score on a short timeline is $500? When the time comes to upgrade to a larger apartment or find a new home in a city across the country, with Feather, you won't have to kick all your furniture investments to the curb.
The other alternative many people turn to in this transitional era is buying fast furniture. But a cheaply-made, $80 desk will only last until the leg breaks, or you scratch the cheap finish, or you spill an entire glass of water that warps the particle board. Buying cheap furniture rather than renting high-quality pieces doesn’t help the planet, and it certainly doesn’t help your wallet.
On the commercial side, where you do see the biggest opportunities?
There are lots of spaces that would benefit from furniture rental over ownership. And that’s especially true during this new, hyper-flexible normal we’re living in today. Here at Feather, we’re currently exploring collaborations with a variety of different commercial spaces, and, as you saw at the National Association of Realtors’ iOi Pitch Battle, we’ve seen great success recently in the real estate space— especially among home stagers.
On the residential side, is your customer base made up of mainly renters, or is there interest from homeowners as well?
Feather has customers of all kinds, but our service is attractive to people who are experiencing transition, those that have recently moved or are about to move, or who want more flexibility and freedom in their life. Our customers tend to be people in their 20s and 30s living and renting in cities, but Feather is attractive to anyone who wants more flexibility and freedom in their life. We design our furniture to be stylish and versatile enough for any kind of space— but especially small spaces, which is great for city living.
That being said, we recently expanded into D.C. and Texas markets and expanded our reach in New York, New Jersey and Connecticut— where apartments aren’t necessarily the norm— and we’ve seen immediate traction in all. It’s not about the size of your home, it’s about the lifestyle and the impact you want to have.
How big is the TAM in the US? Do you plan on expanding internationally as well?
The furniture market in the U.S. in 2021 amounts to around $247B, and is growing by around 2% a year. And the DTC furniture market makes up nearly a quarter of the revenue. There’s a lot of room to grow, and the furniture market will only continue to grow.
Our recent expansions to the D.C. and Texas markets have been completely based on customer demand for our service. Everyday, we receive inquiries from interested customers in urban spaces around the country who are waking up to the value of furniture rental. Before we explore international expansion, we're focused on responding to the needs of our customers in the U.S. Keep your eyes peeled for some exciting announcements coming soon!
Do you plan to partner with different service providers? For example, I can imagine landlords offering this service as an amenity to renters.
You are still early in your journey, but you have raised a significant amount of capital and you have a growing customer base. What are some of the hardest lessons that you have learned? What advice would you give to an entrepreneur (that you wish you had known in advance) who is looking to start their own business?
I’ve learned that getting to market early— or even better, first— is key when it comes to facing competitors down the line.
It’s also critical that when you’re starting a business, you’re creating something that solves an actual consumer need. Is your idea really innovative? Are you moving the needle? Are you filling a hole in the market that demand will drive?
Most Space-as-a-Service companies focus on the four walls of the space. You are building a business focused on the interior of the space. Are there other aspects of the interior of a space (residential or commercial) that you believe are primed for disruption?
Absolutely, we have the service and customer base that would greatly benefit from every durable good in a home or office being available for rent. We’ve started with furniture, art, rugs, and decor - but this is just the beginning of what we have planned!
Is there anything else that you would like to share?
For generations, our society has conditioned Americans to equate value with a number on a price tag. But nowadays— especially after the turmoil of the past year— consumers are beginning to rethink ownership, and whether we actually need to own something to glean value from it. In many instances, the things that we own can actually be more of a burden to us in the long term! On top of that, consumers are also beginning to place more value on the intangible: time, peace of mind, flexibility and freedom. These are all values that Feather can provide in place of baseline ownership.
Consumers are also becoming more and more aware of the impact that they have on the planet— an awareness that influences their purchasing decisions. Furniture is the #1 least-recycled home product in the U.S., accounting for 7% of total landfill waste. That number is rising every year, as the fast furniture industry adds close to 20 billion pounds of waste to landfills annually. Thoughtful consumers who want a responsible alternative to major, fast furniture retailers are turning to services like Feather to reduce their impact.
I recently read an article from my friend Jason Doshi. Jason is the CEO and Co-Founder of Paymints.io. Paymints.io provides a frictionless payment platform for real estate transactions. I really enjoyed the article, and I wanted to share it with my subscribers.
Here is a link to article:
To learn more about Paymints.io, please visit their website here