When COVID-19 began emptying out America's offices, Ron Wiener thought his office furniture company, iMovR, was in deep trouble. The company, which makes standing desks, treadmill desks and other trendy furniture, saw its pipeline of bulk orders "vaporize." It couldn't even reach many of its customers because they had abandoned their desks.
Meanwhile, the office exodus spelled doomsday for iMovR's bigger competitors on Wall Street. As big office-furniture companies like Steelcase and Herman Miller saw orders from commercial offices evaporate, their stock prices plummeted between 40% and 50%.
But as the big furniture companies continued to struggle, iMovR saw something completely unexpected happen: Business started booming. "Our business has more than tripled since February," Wiener says. "Like, all of a sudden, the hundred million desk workers in the United States needed a second desk." Companies like Google and Facebook even began giving employees $1,000 stipends to furnish their homes, and iMovR, which sells easy-assembly furniture on the Internet, was well-positioned to tap the market.
Wiener is a veteran of the tech world who speaks Silicon Valleyese — you know, casually dropping buzzwords like "the cloud" and "IoT" ("Internet of things"). When we talked, he, naturally, spoke about disrupting his bigger competitors. Wiener, who is based in Seattle, calls them "the Grand Rapids mafia," mainly because they're the muscle in the industry and are based in Grand Rapids, Mich., aka "Furniture City."
For about a century, the Grand Rapids furniture-makers have relied almost exclusively on a business model in which authorized local dealers sell furniture in bulk to companies in high-rises and office parks. These companies, like central planners, buy hundreds of desks and chairs at a time, and the dealers come in and assemble them. It's a model that doesn't really work for the home office.
Over the last couple of decades, people have been increasingly buying furniture from places like Amazon, Ikea, Overstock and furniture companies themselves without dealer intermediaries. With this shift, consumers have come to expect more user-friendly assembly with manuals and videos. It's less central planning and more individual freedom and responsibility over where to put your keister.
Wiener says the big furniture companies have dragged their heels on all this. The way he told it, we got a picture that some members of the Grand Rapids mafia may be destined to become another chapter in the classic tale of the "innovator's dilemma," a theory articulated by the recently deceased Harvard University economist Clayton Christensen about why dominant firms so often fail to innovate in the face of a changing market. Think Kodak and digital photography or the music record labels and streaming. Entrenched incumbents often resist disruptive innovations that eat into their bread and butter, and in the long run, they starve.
We spoke with executives at the two biggest furniture companies, Steelcase and Herman Miller, to get their perspective. To be fair to them, they both make great, high-quality furniture — and even with their recent layoffs, they're still manufacturing much of it in the United States.