Apt Deco prioritized profitability before growth, setting them apart in the industry where many companies prioritize growth over profitability.
Apt Deco sets itself apart in the market by offering superior logistics and eliminating the need for warehousing.
Deep dives
The Unique Focus on Profitability Before Growth
Apt Deco, a used furniture marketplace, took a unique approach by prioritizing profitability before growth. This strategy was influenced by the founders' previous experiences in profitable organizations and the necessity to build a sustainable business without substantial funding. Despite financial challenges, they achieved impressive growth rates comparable to fast-scaling startups. This approach sets them apart in an industry where many companies prioritize growth over profitability.
The Value of a Two-Sided Platform and Logistics Expertise
Apt Deco functions as a two-sided platform, connecting sellers and buyers of used furniture. The platform goes beyond typical online marketplaces by addressing the logistics aspect of furniture delivery, ensuring quality assurance and facilitating transactions. Apt Deco's delivery personnel not only transport the furniture but also examine items, resolve discrepancies, and provide added value with their expertise. By offering superior logistics and eliminating the need for warehousing, Apt Deco sets itself apart in the market.
Super Users and Expansion Plans
Apt Deco has identified super users, such as real estate and property management companies, as key partners in driving growth. These users provide access to large customer bases and act as organic channels for spreading awareness of the platform. Apt Deco's expansion plans include exploring new markets in the Northeast, such as Boston and Southern California. By strategically expanding into regions with high demand and leveraging existing partnerships, Apt Deco aims to continue its growth trajectory.
AptDeco, a peer-to-peer marketplace for used furniture in the New York City area, was growing rapidly in the massive $120 billion furniture market, despite its complexity and high costs. Co-founders Reham Fagiri and Kalam Dennis were considering different options to scale the business, including converting sellers into buyers and vice versa, finding superusers to fuel the supply for their platform, expanding to new markets, and rebranding with a sustainability focus.
Harvard Business School associate professor Ayelet Israeli and AptDeco co-founder Kalam Dennis discuss the best way to scale the business in the case, “AptDeco: Circular Economy Furniture Marketplace.”
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