Jordan Nathan is the founder of Caraway Home, a cookware brand aimed at making cooking fun, safe, and accessible for less experienced cooks. His business runs on a sustainable model that prioritizes gradual longterm growth and diversified sale channels. Jordan also discusses consumer psychology, the importance of tracking data trends, and how to find a target demographic. With more and more people at home due to the pandemic, cooking is becoming an increasingly popular pastime. Listen now to hear how Jordan is making the best out of a unique situation and planning on expanding even further.
Sam: [00:00:00] Visualize this: it’s yet another evening in our pandemic-changed lives. You put on a pot of water to boil. But someone calls you and you end up leaving it on for too long. Your whole apartment gets oddly smokey and you feel lightheaded. Could an over-boiled pot of water really be the cause of all this? Minus Covid, this is what happened to Jordan Nathan a few years ago while he was the CEO at Vremi. Feeling short-changed by a Teflon pot, he set out to start his own cookware company, Caraway Home. Caraway’s emphasis on a younger audience who aren’t professional chefs and are really just trying to find something that’s easy to cook with sets them apart from his competitors. Jordan, it’s a pleasure to have you on the show today.
Jordan Nathan: [00:01:08] Thanks so much for having me. Excited to be here.
Sam: [00:01:11] Fantastic. So you set off on a mission, Jordan, to make cookware that’s safe, affordable and fun, things we don’t ordinarily associate with cookware. And it’s made your products more appealing to millennials. What made you choose entrepreneurship for yourselves in starting Caraway?
Jordan Nathan: [00:01:31] I think for me, I’ve always been a really entrepreneurial person. In college, I created my own major. I actually launched an e-commerce marketplace right out of school. And I think for me, the excitement of just building something from the ground up and, you know, a role that’s really as challenging as it gets to me is really thrilling. And so, you know, starting something and building something from scratch has always been of interest, really, since a pretty young age.
Sam: [00:02:06] So despite raising 5.3 million dollars in seed funding, you’ve always talked about how you remain focused on sustainable growth. Can you tell us a little bit about your thinking surrounding that? And you’ve also, before starting Caraway, been the CEO at Vremi. How did those experiences sort of inform your thinking on how to build a business sustainably? [00:02:28][22.4]
Jordan Nathan: [00:02:30] Definitely. And when we talk about sustainable growth, it’s really focusing on making sure that each first sale that you make returns a profit. I think there has become a trend in direct-to-consumer and in general retail of trying to scale very fast and not really paying attention to the bottom line. This is something I saw firsthand at my prior role as CEO at Vremi, where, you know, oftentimes when you’re building a company for the first time, you’re doing a lot of new things. You’re not always paying attention to the numbers and financials as much as you should be. You know, it becomes, I think, very challenging to fix a business two, three years down the line if you’re focused just on growth at the beginning and, you know, at Caraway, we try to kind of blend the two and we’re hyper focused on obviously growing the top line. But at the same time, we’re really looking to cut costs. And for us, we want to first be purchase profitable and to really run a sustainable business. It’s really important to have a quick payback period from a customer versus waiting for cash to come in from a subscription or multiple purchases in the future. And we believe that we can create something that’s successful if we really follow that model.
Sam: [00:04:00] Super interesting. Jordan, when we talked first, the very first time you talked about and you referenced this earlier, you sort of crafted your own major in college and it got you interested in consumer psychology that then, you know, led to the career choices you made and obviously starting Caraway a few years ago. Talk a little bit about how that’s always been an interest for you. But also, you know, you have this idea to start Caraway Home and what are sort of the two or three first things that you do given this backdrop of experience and knowledge to get the company off the ground?
Jordan Nathan: [00:04:46] Yeah. So I attended Colby College up in Maine, studied consumer psychology, in my time there I was really, really intrigued in thinking about why people gravitate towards certain products or brands. And you know what are those brands doing from a messaging perspective that attract a certain customer? And then on the other side, you know, we always talk about demographics when thinking about a target market. But you know within psychology, there are four or five core personality traits that people are kind of defined by and rank on different scales of those traits and I was always really interested in and thinking through, you know, hype, kind of more micro demographics based on people’s personality traits. And I think with Caraway, it’s been a hugely great benefit to come from that background just because, you know, we’re always really trying to get inside the consumer’s head and thinking about what products they want, what features they want. On the website, really thinking through how we can get them into the cart faster. And so, you know, there’s a science to it, but also another side of listening and hearing from the customer, but really trying to think through a lot of that psychology plays a lot into the physical and digital product that you see today on our site.
Sam: [00:06:11] So I think one piece is the psychology, the other is sort of building the muscle memory and discipline as a company around really incorporating feedback based on user actions. How do you guys do that with respect to your customers? You know, I think I guess tracking behavior on the site is one thing. Are there other tools that you use to gather some data on what prospective purchasers or purchasers are looking at and sort of doing and researching your product?
Jordan Nathan: [00:06:47] We place a big emphasis on data, everything from, you know, watching where users are going across the site where they’re getting stuck. We do oftentime run surveys to customers to hear directly from them, given we’re a digital brand and have such a big social presence without even asking. We have a really active community of consumers who, you know, share their feedback on our posts and DMs on Instagram. And so these are all great places where, you know, hopefully we’ve created a community and a dialog with customers where they feel comfortable sharing with us ways to improve the product, what they want to see next. And then from, you know, looking at new products to launch, we also like to look at things like, you know, Google AdWords. We like to look at trends across Google Trends and across social. And it’s really that perfect kind of mix of data but also listening directly and talking to the customer.
Sam: [00:07:48] Super useful to hear about all those different avenues. You know, I think so many brands talk about building a community and sort of engaging users and particularly the old brands who I think just never had that model, never started with that model in their core DNA, have struggled with that. Why do you think, you know, going back to some of your comments around consumer psychology. What is the shift, do you think, in consumer psychology that’s caused people to want to be part of a community around a product that they purchase, use, and like, and want to discuss? Compared to, you know, sort of more traditional consumer behavior where they would purchase a product. But, you know, then there was this sort of disconnect and there really wasn’t a feedback loop and people didn’t seem super interested in that.
Jordan Nathan: [00:08:44] I think consumers today want to have a relationship with their brands. I think people and brands themselves in many cases feel like a person that you’re talking and interacting with and have their own personalities, especially for something like cooking. It’s such an intimate experience. And for you not to not really understand or know about the products that you are using and where they came from. We’re just seeing a big shift towards consumers really wanting to have that relationship. And it’s more than just the product. It’s really building out a full experience with education and content and teaching them how to use the products and teaching them how to create a nontoxic home even if they don’t buy the cookware. And so it’s really this amazing one-to-one relationship. And the catalyst for that is launching a brand online, you know, in traditional retail, starting a brand 20, 30, 40 years ago. You know, your customer is the retailer and you don’t get that relationship with the actual end consumer. And so I think those dynamics have really, you know, led to where we are today and have created an evolution of brands that have such strong connections with the end consumer.
Sam [00:09:58] Well said. The question, can young people cook has puzzled people for years as multiple studies suggest a lack of confidence in that age group. An abundance of sort of cognitive offloading in the age of smartphones leads millennials to Google things like how to make a baked potato instead of relying on the intuition that lies at the heart of cooking. One of the most challenging questions that faces every entrepreneur in starting their company is picking their target demographic. How did you develop the conviction to target millennial customers with Caraway? Or maybe you didn’t, and it sort of came later on.
Jordan Nathan: [00:10:40] One thing we saw from early research, whether it’s talking with friends or consumers, or looking at across reviews on Amazon, was that the younger generation today, like you said, finds cooking very difficult. And I think if we look at a lot of the brands launched over the past few decades in this category, the typical model has been to go work with a professional chef. And I think in our minds, that’s just really daunting. I think most people at home just aren’t professional chefs and they don’t want to be and they don’t have that skill set, which is completely okay. And we have Caraway really want to embrace that. And it’s really about that ease of use and not pushing you to become that. And so even when it comes to our content, we don’t really do recipes very often. There are enough recipe sites out there. There are enough things that teach you how to cook. We’re more interested in teaching you actually how to spend less time in the kitchen or how to make things easier in the kitchen and kind of shifting the dialog to that, you know as well as you know how to make it a safe place to cook.
Sam: [00:11:47] So you start the company, you develop your initial set of products, which I love the aesthetic of, by the way, and the fact that they come in these different colors is amazing. How did you find your first customers? Like, how did you get to your first 100 buyers?
Jordan Nathan: [00:12:06] So prelaunch, you know, I think starting six months before we actually launched in November of 2019, we started building a prelaunch waitlist through a variety of tactics. One was doing giveaways and sweepstakes with other direct-to-consumer brands. We did our referral program and then myself, I had pitched many, many people throughout the prior year whether it was for funding or running the idea by them. And we built this network of, I believe, over one hundred thousand individuals and our prelaunch waitlist, who became our early adopters, who became our first customers, who were writing in before we launched, really excited to see the final product. And so we thought it was important to kind of build that initial customer base before the product actually hit shelves and hit the market.
Sam: [00:12:57] Got it. And so you find your initial customers, what was your thinking around scaling the business? You know, when we talked earlier, you talked about how the pandemic has been a beneficial thing, given that people have been at home and it’s really sort of increased demand for your products.
Jordan Nathan: [00:13:18] Definitely, a lot of the– so most of the first few months of launch, we really leaned in to organic, whether it was press or influencers or leveraging the wait list that I had just spoken about. You know, since that time, we’ve moved into a lot of the traditional tactics that a lot of online brands are focusing on, like Facebook and Google. For us as a brand, we believe in going deep first on specific channels and then going super wide, super fast. You can only launch a channel once. And so, you know, you want to make sure when you actually launch it, you can measure the incremental impact on the business. If you launch them all at once, it’s just very, very challenging to measure what’s actually driving sales. And so we’ve been laser focused on those one or two platforms. And with Covid, we’ve seen a big lift in cooking at home. We’ve seen a renewed interest from people who have never cooked or individuals are spending more time at home who want to redesign their kitchen or add a pop of color just because they’re shifting their dollars from something like fashion, because they’re not going out and wearing clothes or new shoes all the time to their home. And so, you know, it’s been a great opportunity, obviously. You know, our sales are up, certainly, because of Covid. That also has created a much stronger community. We have a lot of customers reaching out to our customer service child on Instagram, asking us for inspiration for their homes or what to cook. And, you know, I think what we’ll see even coming out of Covid, is a lot of the same renewed interest in the home and cooking.
Sam: [00:14:58] Yeah, I think that interest in cooking is definitely sure to stay with the increased uncertainty that we’re in for sort of, you know, the indefinite future at the moment. As you look back, Jordan, it’s been a few years along this journey, what are a couple of assumptions that you made when you started the business, that you subsequently revised your decisions you made that you pivoted away from?
Jordan Nathan: [00:15:25] I think early on with Caraway, when we started this company, it was back in 2018, a lot of our focus was to be solely direct-to-consumer or online. I think today we think completely opposite. I think we really want to build a brand that is accessible to people. And if our goal is to get Teflon off of shelves, which is a super toxic chemical, and we’ve got our ceramic alternative, I think the one way to really do that is to actually replace those products on shelves. And so we’ve really shifted the way we’ve thought to being as omnichannel and diverse as we can, it lowers risk in the company, but also opens ourselves up to new customers. And so, you know, today we’re on our website. We’re in a number of marketplaces and we have a lot of new distribution coming out. But I think earlier on, you know, keeping that sole focus on direct to consumer was a great thought to start, but has certainly shifted a lot. And so I think that was one assumption where where, you know, I’m glad we kind of made that switch. I think on the other side, a lot of consumer brands spend a lot of time focusing on their physical product, which, of course, is tremendously important – But they put aside the digital product. I think since we launched Caraway, the biggest thing we underestimated or assumption we made that maybe wasn’t true as the importance of the digital product. And so today we’ve brought in an in-house engineer, in-house digital designers, and we find that really making sure that site experience is as good as it can be from an education perspective to increasing conversion rate. It is really something to pay attention to. And, you know, today we’ve doubled down our efforts there.
Sam: [00:17:23] Yeah, really, really great advice. I mean, it strikes me that the best route to building a brand is directly with consumers. But that said, you’re really trying to change the way that consumers think about and educate consumers on why their choices of cookware matters and why what the cookware is made from matters. And so then making that set of products available to the consumer in a variety of different places that they can access them has become all the more important, it sounds like, as as the company has gone on.
Jordan Nathan: [00:18:06] Absolutely. You know, I think pre-Covid the statistics were that 85% or 90% of sales still happen in brick and mortar and online certainly is growing fast. And there is a big demographic of people who like to buy online. But, you know, for us, we want to be accessible to as many people as possible. And I think the only way to do that is to really create a wide distribution and not do it in a way where we’re just throwing products on shelves or on another website. It’s doing in a way where our branding comes through, where there is education, consumers know what we stand for and I think that’s been a really big shift. And, you know, for brands like Harry’s and Quip and many others who have entered into retail spaces have done a great job of, I think, changing the narrative. If you’re not on your website and can have full control of the full experience there.
Sam: [00:19:04] Yeah. As you think about it, who do you view as your competition and how do you think about brand and product differentiation?
Jordan Nathan: [00:19:13] I think we think about competition on multiple levels. You know, at the product perspective, Greenpan for us is really the leader in ceramic today. There’s many other players as well. So anyone selling ceramic is definitely a competitor. Within the direct-to-consumer space, there’s another five to eight cookware brands. Some sell stainless steel, some sell ceramic, some sell Teflon, some sell carbon steel. There’s a variety of materials, but generally we’re all going after that same consumer. And then at the macro level, we didn’t name the brand Caraway Home for no reason. And that’s because we really do want to start with the kitchen, but eventually provide products across the whole home. And so, you know, the major HomeGoods retailers, I think, you know, eventually will start to look more like over time. And so I don’t think there’s one or two competitors that can necessarily point out. But I think it’s definitely, you know, as we evolve and scale, the amount of competition, as we launch, more products will continue to increase and our portfolio will just look a lot different than what it looks like today. [00:20:26][73.0]
Sam: [00:20:27] That’s super interesting. As you think about sort of what other parts of the home to tackle, kind of what are the other areas that you’re focused on, you know, in the medium term?
Jordan Nathan: [00:20:37] I can’t share too much. But we’re really laser focused on the kitchen right now. We do like to think about really the full lifecycle of products. You know, it’s not just about the features of cooking, it’s about how you clean them, how you store them. And with many of these products, we like them to not just exist in your kitchen, but be also something you can bring into the living room or the home or use in a different way throughout your house. And so right now, we’re trying to connect those two with the anchor being in the kitchen. But as we start, I think, launching a few things that might branch into a living room table or coffee table or dining room or even bedroom, we might see other products pop up that, you know, kind of surface around that core anchor.
Sam: [00:21:27] Interesting. Last question, Jordan. As you look back, what are some lessons that you’ve learned that you think you would have liked to know going into this entrepreneurship journey?
Jordan Nathan: [00:21:44] I think the number one thing I would tell any entrepreneurs to meet and talk with as many people as possible. It sounds so simple, but you know, we ended up with a fundraising round of 100 investors. I probably pitched a good 500 to 1,000, met just a ton of great people, we have an incredible investor base. I’ve met dozens and dozens of amazing founders over the past year or two. And it’s really important to build your network there. You know, these people become your first customers. They write checks down the line towards you. For fundraising, they’re constantly making introductions. And so, you know, I think I think every meeting and person you can meet with is hugely valuable. The other thing I would say is I think focusing on the payback period and a very cash flow positive company is incredibly important. As we were talking about earlier, building a sustainable business really starts from day one, and that infrastructure needs to be there from that first sale. And so I think while people like to optimize for margin a lot and the revenue, you know, make sure what you’re doing is sustainable and very importantly, you know, cash flow is really what drives the business. And it’s okay to give up certain points here and there on margins to optimize to getting in cash faster.
Sam: [00:23:13] Yeah, really, really great advice. I think it’s interesting that you have 100 investors at this stage and it sounds like you really focused at some point on a very diverse investor base. Can you tell us a little bit about, you know you pitched a lot of investors, you bought 100 in eventually. What were the principles that sort of drove who you brought in and who you decided not to bring in?
Jordan Nathan: [00:23:43] Sure. I think the first and most important thing, and I was pretty upfront with everyone I had ever pitched about this was we want to build this brand sustainably and we’re not going to sacrifice the bottom line for the top line. And so that was really an aligning principle in a quick way to vet out those who were in effect. Outside of that, we took almost like a crowdfunding approach where, you know, we do have B.C. funds, we’ve got family offices, we’ve got fantastic consumer investors, we have founders. And then, you know, a grouping of individuals who have specialties within certain areas, across different verticals. And so the short answer is we wanted a big, diverse group. And it’s been hugely beneficial to date just because if there’s an introduction we want, there’s 100 people that– in one of those hundred people, someone has that introduction. And we’ve really enjoyed having such a big investor base to date for that exact reason.
Sam: [00:24:49] That makes a lot of sense. You know, investors have such a role to play, as you said, in introductions, advice, partnerships, sort of so many different realms. And it’s great that you were able to sort of not have, you know, a couple of dominant investors who would entirely drive the agenda. But that sort of this very diversified group, it sounds like.
Jordan Nathan: [00:25:12] Absolutely. And I don’t think there’s a right route for any company. I think it really is about, you know, what you want. It’s certainly much easier to go raise from one or two or three funds and having 100 investors you’ve got to really make that commitment and time to pitch and talk to a lot of folks. So I don’t think there’s a right or wrong way. I think for us, it allowed us to have a structure that was highly collaborative and I think more flexible than, you know, bringing on one or two funds or folks who, you know, carry the majority of weight in the cap table.
Sam: [00:25:54] Makes a ton of sense. Here’s something else you should know. The cookware market is slated to grow to f5.6 Billion dollars between 2019 and 2023. And I’m sure that’s being sped up considerably by the pandemic. Thanks to The Washington Post, Technavio, The Morning Brew and Tech Crunch for the data cited in this episode. Jordan, we love Caraway Home for reminding us that cooking can be more than a chore. Thank you very much for being on the show with us today.
Jordan Nathan: [00:26:25] Thanks so much for having me.
