Compared to high-end fashion or luxury travel, the average shopper knows nothing about the upscale home market. “Unlike most other industries, people have no idea where to shop and what to buy,” Leo Seigal, the co-founder of the online consultation platform The Expert, tells host Dennis Scully on the latest episode of The Business of Home Podcast. “In the home industry, you’ve got all of these disparate, amazing brands, but if you haven’t heard of it, you’re not going to shop there. It’s like the Wild West.”
Bringing order to that rowdy landscape was the driving force behind the company’s new DTC e-commerce platform, Expert Showrooms, for which Seigal and Los Angeles–based co-founder and interior designer Jake Arnold raised $12 million last spring. The online showrooms target consumers who may not want to spend thousands on the design consults that are the startup’s bread and butter, but who do want to shop a curated list of products from the platform’s top designers—including Brigette Romanek, Heidi Caillier and Arnold himself—who earn commission on customer purchases.
With Showrooms, Seigal and Arnold hope to build on the success of their core site. Launched in 2021, The Expert quickly captivated the industry by connecting elite designers with clients and charging up to $2,000 for a 55-minute video consultation. “Our intention is to show people the value that designers bring to the table,” says Arnold. “Understanding what it costs is going to shift the narrative because everyone knows how much designer clothes or a five-star hotel [costs], but no one knows how much design [costs].” Two years in, the founders have assembled an all-star team of designers—including industry legends like Martyn Lawrence Bullard, buzzy up-and-comers like Noz Nozawa and design-world celebrities like Athena Calderone—and the hourlong Zoom sessions have proven to be lucrative, with the company earning $5 million in total revenue its first year in business alone.
That core business model worked great, but it came with a built-in ceiling: If you’re only offering the best of the best, you can only bring on so many designers, which means you can only make so much money. Seigal and Arnold saw an e-commerce platform as a way to scale, giving customers a one-stop shop for the upscale products they need to carry out their design plans.
Easy in theory, but running an e-commerce site with many trade-only vendors comes with plenty of challenges. Gaining their trust was the first: Many simply don’t want to work with a third-party seller because of the complexities of manufacturing custom products. The combined reputation of the designers who had signed on to the platform—combined with a year and a half of building a strong procurement team—helped The Expert to secure a top-notch list of vendors, including Pierre Frey, Chaddock, Schumacher and Apparatus, for the drop-ship, direct-to-consumer business model. “Many of our vendors that do sell direct-to-consumer have never sold on a third-party platform before because they don’t trust that the experience or the client education will be up to par,” says Seigal. “So we’ve really been proving ourselves to be able to solve all of those pain points both for the vendors and the end consumers.”
Gaining the trust of vendors is difficult—so is simply surviving as a venture-backed startup in the home industry. Historically, one of the biggest challenges for companies like Homepolish, Laurel & Wolf and Modsy has been scaling sustainably. Arnold and Seigal say their biggest funder, Forerunner, has given the company a long leash and time to grow. “I’ve never felt an ounce of pressure from Forerunner to scale beyond what we feel comfortable with and what makes sense for the type of business we’re in—our investors really understand this industry and what the specific complexities and pain points are,” says Seigal. “We’re in this for the long game—we’re not in this to make a quick buck. We want to create a thriving, loyal community of incredible designers who love us as much as we love them.”
Elsewhere on the podcast, Arnold and Seigal discuss how their commerce and procurement revenue has already exceeded consultation revenue, why their mission is focused on education and transparency, and why supply chain issues are “becoming the new normal.”
Listen to the show below. If you like what you hear, subscribe on Apple Podcasts or Spotify. This episode was sponsored by Loloi Rugs and Daniel House Club.
Homepage image: Leo Seigal and Jake Arnold | Courtesy of The Expert