OPEN Doors, Last in Line: The Unforeseen Advantage of Entering Markets Late

In an ever-changing marketplace with intense competition, it’s all about launching first. So how can being the last company to launch in a category possibly be a killer strategy? The arrival of a new toaster in a sea of hundreds more won’t make a difference anyway, right? Wrong. Caraway, a Direct-to-Consumer (DTC) non-toxic cookware company founded in 2019 by Jordan Nathan, is a company that decided to be the last to launch in a category and is successfully flourishing.

The OPEN Window of Opportunity

Caraway entered the marketplace after Our Place, Great Jones and Made In Cookware: brands with some momentum, albeit in an area of retail that is so crowded that it often favours the fast. Being last, though, also meant that Caraway had a chance to survey the field, noting what others had missed. It took stock of the product offerings, the targeted customer profiles and the business strategies of its predecessors, and seized on those gaps that hadn’t yet been filled.

OPEN to Change: Adaptation and Differentiation

Seeing that the playbook for earlier DTC cookware brands was wearing thin – all these companies were going out trying to source pans off the millennial-targeted factory shelf, trying to upsell nigh-to-indistinguishable IKEA cookware for a bougie upgrade – Caraway executed a tactical pivot. Instead of focusing on millennials who might have an IKEA kitchen and a desire for an upgrade, Caraway went after the joy of wedding registries and doubled down on its product design. That meant changing not just the colours and price points of Caraway’s products but also the considerations behind the components of its cookware sets to fill in underserved segments of the market. And when we’re agile enough to flex on our assumptions, we shore up our links in the chain of loyalty to our brands and the values they represent. We’ve managed to create a brand identity that exists on an entirely different plane.

Selling Strategy: OPEN Sets and Exclusive Choices

Seeing an opportunity that competitors had left open, Caraway plunged ahead by selling its cookware only as a set, whereas its competitors had been selling every single piece of their cookware individually. The customers who saw the value in a set buy-in was a high-enough percentage that Caraway, by leveraging the insight that no big competitor was selling sets, had created a selling proposition that the market embraced.

An OPEN Dialogue with Retailers

By simply observing what other DTC brands were doing online and having these early conversations with retailers, Caraway became an early mover in the brick-and-mortar space, unlike many other DTC brands that have eschewed that world in the name of owning the digital experience. Getting into retail giants such as Target and Costco put Caraway into wedding registries and made it a household name, making it an aspirational brand for couples over competitor startups.

Challenges: The OPEN Road to Funding

When you’re brought up last, though, there are some strategic advantages because the bar is already very, very low Being the first and the last brand in a kitchen to come to market presented Caraway with another challenge: securing investment. Mark Fisher, a principal at the venture capital firm Craft Ventures who backed Caraway, explains that by the time Caraway was ready to make its venture pitch, the investors who Caraway was targeting had already pledged capital to other brands in the kitchen space. It can be difficult to be the first or the last brand in a category to come to market: by the time Caraway made its case, investors were committed to other kitchen brands. That said, if there’s something the founders of Caraway learned along the way, it was an open willingness to tough it out. Fortunately, the persistence paid off. After 10 long months, Caraway closed a seed round with 100 investors – the sheer determination of its founders led to the round’s success.

A Recipe for Success: The Long-Term Payoff

These years of strategic patience and developing ‘community-style’ willingness to learn from the marketplace have finally paid off. Thanks to the willingness to remain continually open to what the marketplace brings, despite being last to the party, Caraway has raised more than $40 million in venture capital and grew its product line. One pathway to success, especially for startups, can be to remain flexible in strategy and content.

The Essence of OPEN

But at the heart of ‘open’ lies an ethos, a vision: the willingness to change, to listen, to shift course when circumstances demand it. Open, for Caraway, meant opening up to the chance of analysing the landscape, altering its strategy, and being willing to change in remarkable ways. Open meant an openness to innovation, to feedback, to the ever-changing demands of the market. Caraway’s journey reveals that, for the entrepreneur, that openness has become a survival strategy. In a world in which businesses are fighting over increasingly thin slices of the market, an open approach to innovation, to events, to customer demand can be the difference between failure and success, between closing up shop and changing the game, even for those who sit and wait for the last to go.

Jun 13, 2024
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