In Part 3 of the Hellman-Chang story, co-founder Eric Chang mentioned that "You've got to be willing to step over the ledge and see where it takes you." What he didn't mention was that there's more than one ledge.
Here in Part 4, Eric and partner Dan Hellman have made the fateful decision to participate in their first-ever ICFF. Among the 20,000 attendees was one who could make a huge difference in their fledgling business, a representative from a highly-influential furniture showroom. And when he wants to visit your production facility, according to Eric's ledge-stepping philosophy you say "Yes." But what do you do when you don't have a production facility? Read on.
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It's Hellman-Chang's first-ever ICFF, and you guys approached it pretty strategically.
Dan: We had a pretty good location and a decent size-booth. When we got a 10x20 we specifically made sure that it was island, three-sided, open. That was important for the brand.
Eric: Right, so we could capture a lot of aisles. When you do trades shows, location is very important.
For those that have never done the ICFF, paint us a picture. You've put in the work to populate the booth, and now you're standing there and people are walking through it. What did you feel, was it going well?
Eric: We'd never done a show before [so had nothing to compare it to], but I would say that we felt it was going well from the moment the show started. We had so much foot traffic, so many people and designers stopping and oohing and awing. People looking at something of ours and saying "Oh, this is beautiful," that kind of thing.
Dan: And that was our first exposure to meeting interior designers and potential clients. We were coming into an industry cold turkey with no experience, no contacts. And the response was very good. We got a lot of press.
Let's talk about that. It can be difficult to quantify the results of what is essentially putting on an exhibition, and you guys had sunk tens of thousands of dollars into this. As up-and-comers, how do you know when it's worth it? What are the concrete business differences you felt after doing the show compared to before?
Dan: Leading up to the show we'd get maybe one or two phone calls a month from designers who saw us in the magazine for the award.
Eric: Those phone calls were only from the exposure that the brand Hellman-Chang had in the December issue of Interior Design magazine. That was it. No other websites linked to our website. We hadn't advertised. Nobody knew of us unless we told them about it. And even the few designers who actually took the time to Google us would find the website buried, probably in the second page of results. [Hence we were only getting] a call or two a month.
Dan: But during the first hour of the ICFF, we probably got 50 or 100 business cards from interior designers. At that point we didn't know who was serious and who wasn't, but it was like the flood gates opened for contacts. Eric: It was our first show and there were people that had done this show for ten-plus years that would stop by like "Whoa, this is a really good booth" or "Wow, that's a really nice catalog." So I think from that branding perspective we were starting out on the right foot. We were really making a brand differentiation, very early on. And I think the response to that was really good.
I think another good factor was that Dan and I don't have a background in design, and we don't design our pieces from a perspective of having set rules or guidelines. There aren't any major outside influencing factors in our designs. A reaction that we got from a lot of interior designers, when they saw our product, was that it was really unique, really new. They'd never seen anything like it before and it was very refreshing. And we still hear that a lot today. That works in our favor.
Eric: As far as concrete before/after differences, we got a lot of direct sales from designers in the few short months right after the show. So we could look back on the show and say, "Hey, it was worth it." And at that first show we also met the representative of [high-end furniture showroom] A. Rudin. That was probably the most important contact.
Tell us about A. Rudin and how that played out.
A. Rudin is based in Los Angeles but has showrooms throughout the country. They saw us at the show in May of 2007. The following month they called us up and said "Hey, can you come out to Los Angeles for a meeting? We'd like to talk about representing your line."
Did you guys know who they were at this point?
Eric: At the show, we had no idea. I mean, we were brand new to this industry.
Dan: Obviously we then looked them up and did our research, but before the show we had no idea.
Eric: I wanted to make sure that this was a good fit for the brand, so I called an interior designer friend asking "Have you heard of this showroom called A. Rudin?" He said "Oh, they're an excellent showroom, probably one of the top five showrooms in the country."
Dan: At that point they didn't have a New York showroom, so we couldn't check them out here in New York. In fact, looking back I think that they went to the ICFF to look for a new line to help launch their New York showroom. So all the branding that we had done to create that New York loft feel of high-end furniture, that's probably what attracted them.
Eric: They wanted to set up a meeting out in Los Angeles, but it was hard for us to get out there.
Eric: I was still nine-to-five at the marketing agency and we had just come off of spending every last penny on the ICFF. So at that point a $400 ticket to Los Angeles was a lot to swallow.
But you made it happen?
Eric: What happened was, at the marketing agency I had just pulled in a new account, O.S.I., Outback Steakhouse Incorporated, handling all their online marketing. And it just so happened that every June they have an annual meeting in L.A. with all the VP's and all the agencies, a three-day sit-down where everyone does big presentations.
And so they flew me out there that June. And before I had my first meeting at O.S.I., I was all dressed in my suit and quickly ran over to the A. Rudin showroom and made a meeting happen. I'd never been in a designer showroom before, this was the very first one. I got to sit down with the Rudins and we talked about the product lines and other things, just getting the basics down.
Can you elaborate? This is your first time walking into a showroom and your first meeting with these guys—I'm guessing there's like, numbers flying around, industry jargon, et cetera? Did you prepare for this meeting, or even know what to prepare?
To some degree. At the meeting I heard a lot of questions that I never heard before and made stuff up as I went along. It was kind of like going to the Guggenheim for that award ceremony—pretty surreal. There was a moment when I had a "Are we in over our heads?" kind of feeling, but we also had a certain amount of swagger, so it was a kind of fake-it-'til-you-make-it type of situation.
Preparation-wise, Dan and I had a certain set of needs or demands going into it that we had laid out in advance and presented at that meeting. It was tough negotiating, but the meeting went well. About a month later they contacted us with a contract, like "This is what we would like to see."
Dan: And we thought it was a good fit. Today we know they're fantastic. They're a family run company and very well respected in the industry. So it turned out to be a great decision.
Eric: When we got that contract we were like, "Wow, it looks like this is all happening--we're starting a company, we're going to do something here."And after they sent us the contract and we finally agreed on the terms, at that point they wanted to fly out to New York to visit our facilities.
Did you guys have facilities at this point?
Dan: We had a 50 square foot facility.
Eric: The co-op.
Dan: And we had gotten our first interns that summer. We had two, one girl from RISD and another guy from the sculpture program at Wesleyan.
I'm going to sidetrack for a second. How did you guys wind up with interns?
Dan: A lot of students had been at the ICFF, and these two had contacted us wanting to move to New York for the summer and get an internship at a furniture company. They had either picked up our catalog from the show or found our website. It was another great result of having a good website and good marketing.
Eric: In fact, for all of our builders, we've never put out a job posting. They always seek us out because we've developed a good reputation as employers for furniture making.
Dan: The interns had started with us before we had the conversation with A. Rudin. I was in the shop nine to five and they were coming in to help build prototypes. That was my first experience with training somebody how to make things and managing their time, making sure they're busy. So that was a very big learning experience for me, because all of those businesses that I had started before were all just me, recording people's recitals or mowing somebody's lawn in high school. This was my first experience working with others [in a managerial, overseeing capacity]. It was very exciting. They were great kids, very eager to learn, very talented.
And how did the A. Rudin meeting go?
Dan: When A. Rudin wanted to come out and visit our facility, it was helpful that we had these summer interns. We told them "Hey, we've got a really important meeting, we need you guys to kind of pose as our employees." On the day of the meeting they weren't scheduled to work, but we asked them to come in and look busy. We set up a bunch of wood scraps and shavings and piled things up to make it look like we were doing a lot. Whereas normally it was just me and the two interns working on one small piece.
Eric: On the day of the meeting, I took the day off from the marketing firm. And we asked the other guys at the co-op "Hey, can you just kind of keep your heads down?" We didn't want it to look like we were just tenants in a larger co-op.
By walking into the space, was it visually obvious that you only had a 5x10 spot?
Eric: If you're walking in there for the first time, no. And especially the way we spun it, like "This is our machine room, here are our machines," and I remember one of the visitors saying "Man, that's some expense" and I was like "Yeah." I mean it was nerve-wracking, we didn't know what to expect. And they ended up bringing out seven or eight people.
Dan: Everyone in suits—there was the guy that was going to be the New York showroom manager, both Rudin's, Ralph and Spencer, their production manager, the architect that was designing the space for the New York showroom, their VP, I mean, everyone came out.
Eric: It was a big deal, all these guys in suits showed up in a limo. Giving us another "Oh, man, are we in over our heads?" moment. But it ended up being a lot of fun. We had a really good meeting, they saw the facilities, were impressed, and we had the contract signed.
Were you guys in over your heads?
Dan: At the end of that meeting their production manager, without hesitation, started listing out all the pieces they wanted for all four of their showrooms—around 32 pieces of furniture. At that point it was me and two interns for the summer and here we had this big order. We couldn't just turn around and say "Oh by the way we can't meet that" or "It's going to take us a year to make all these pieces." We had to be able to follow through.
What was your actual capacity at this point?
We could probably produce three or four pieces a month, meaning a side table, coffee table and maybe two pedestals, something like that. But they wanted 32 pieces including larger ones like our Tao media console, which is 80 inches long. It's a big cabinet piece with doors and drawers and they wanted one for each showroom. At that stage it was just a mindboggling request, like "How we were going to be able to do this?"
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Next: Make or break time. If Dan and Eric get this next step right, Hellman-Chang gets to go nationwide! Read Part 5 here.