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Why did we turn down an offer from a major big box retailer? How a transformative year evolved Dorai Home from a Kickstarter into a brand.

Posted by Dorai Team on
Why did we turn down an offer from a major big box retailer? How a transformative year evolved Dorai Home from a Kickstarter into a brand.

Do you ever have a moment when listening or reading something and it resonates so well you want to tell everyone, “this is just like me, this is what I’m going through!”? That’s how we felt about last week’s ‘How I Built This’ episode with Tobian Lutke of Shopify.  

We empathize with his desire to use storytelling to sell a product with passion, with the sleepless nights, and with the insecurity of filling a CEO role with minimal leadership experience and feeling unprepared. It was so poignant I couldn’t help but capture some of our story in words and hope it helps others feel less alone in the entrepreneurial journey. 

Testing a Hypothesis

It all goes back to spring of 2018, when Jason approached me with a unique material that dried right before our eyes. At the time we both ran small agencies. Jason’s company Klugonyx focused on physical product design, development and manufacturing, and my company focused on brand strategy and user experience for digitally native startups.

Jason Klug and Kelsey O'Callaghan Dorai home Founders

As two curious individuals who have spent our careers on the sidelines helping other companies grow, we saw this material as an opportunity to try our own ‘side project’ and see what happened. I should mention we've both been diagnosed with ADHD, so we tend to have A LOT of ideas, but something about this one stuck. The funny thing about having a ‘side project’ when you’re an all-in type of person is that it becomes less of a small hustle and more of an all consuming obsession. Even while at agencies I’ve struggled with the notion of MVP (minimum viable product). Why create something without giving it the best environment and opportunity to thrive? I realize this varies greatly from software to products, but I hate under-delivering. Jason saw Dorai as a great Kickstarter project, which turned out to be true, and I saw Dorai as a perfect lifestyle brand that was authentic to us. The more I researched and mapped the potential product line against the macro trends of sustainability, non-toxic living, minimal design and eco-chic brands. I knew we were onto something that was worth investing our time and money into. 

Fast forward a few hectic months coupled with a new case of insomnia, we had funded our Kickstarter and were entering 2019 with ambiguity around what to do with Dorai. Once again, I’ve never been good at doing something at 50% (in fact this year I’ve been medically advised to try to ‘do life’ at 70% instead of 110% given the unsustainable stress levels). I found myself unsatisfied with client work and lacking purpose despite a lucrative operation and skillset. Meanwhile Jason’s business, Klugonyx, was taking off and expanding into China, creating one of the only ‘full-service’, end-to-end design, development and manufacturing agencies of its size in the region. It became clear that we were going to hit a financial wall by continuing to tap into both of our rapidly depleting savings, and the stress was taking a toll on my physical and emotional wellbeing.  

2 Key Events Changed Our Trajectory 

  1. We got a call from a major big box retailer (in the bed, bath and items that go beyond sector, if you know what I mean). 

  2. We pitched our first angel investor in the presence of our mentor Scott Paul.  

Event 1: Skipping over the back and forth we found ourselves in New Jersey in early 2019 in a waiting room that’s exactly as you’d imagine a dated, corporate lobby to feel like, complete with white sticky name tags. We invested in the cost of the trip, which was significant to us, to learn upon arrival the person the individual we planned to meet with wasn’t there. My heart sank as I thought about how anxious I’d been the weeks leading up to this, the practice pitches we had done, and the cost for both of us to get to this uncomfortable bench in the sterile 1980’s room. 

Fortunately his buying assistant would see us and we gave our best infomercial talk that went over the allotted 30 minute time (which was a good sign). We rushed to the airport to return to our other jobs, and within a few weeks had an offer for a store test sent our way via email. Picture from our 48-hour trip to meet with retail buyer. 

Jason Klug Kelsey OCallaghan
Event 2: In an understated cafe in Park City we met our mentor and a local investor for a breakfast pitch. We had our prototypes with us and heads full of information.  We basically fire-hosed the poor man with why Dorai was going to be the next big thing. He politely waited, and then asked the question we all anticipated, “How are you going to run this when you both have separate agencies?” A valid questions and something we hadn’t adequately worked through, our solution was, “well we’ll hire people to help fill in the gaps and with our agency skill sets this will be like another project for us.” We would soon experience first hand this was hugely unrealistic and Dorai means so much more to us personally than a standard project.

In the background, I continued to feel discontent with my client work and growingly overwhelmed by the need to do 2 full-time jobs while only getting paid for 1. It was after the pitch that Scott suggested, “Why doesn’t Kelsey take on the CEO role, she has a solid background and she is more aligned with your customer base.” 

We discussed it on the drive home. I had reservations because of aforementioned health struggles associated with stress, and I’ve always valued financial security and freedom (growing up with a family that preached ‘we’re on a budget’ - it’s now become a joke). The more I thought about it, the more excited it became to me that I could really shape Dorai into a genuine lifestyle brand that reflected our ideals. It became an opportunity to build the type of entity I’d always wanted to create for clients, but often fell off after hand-off. Finally, it was a chance to use my skills to create something of lasting significance that inspired people to live healthier, simpler lives. 

Jason and I agreed this was the best path to go, however I would need to phase out my client work, which was my steady income stream. With anxiety in full-force, we did another call with Scott who encouraged me to take the leap, to spend a few months ‘not maxing out my 401k’ (yikes) and instead pursuing something that I was actually passionate about. I knew with the challenge of scarcity I’d be driven even more to make Dorai successful (looking back, I probably should have toned it down a bit and not put so much of my external worth on the success of the company, but that’s a story for another time).

Kelsey OCallaghan Dorai CEO

This decision (which Jason fully supported) lead me to really start taking ownership in the brand and implement a broader digitally-native strategy that focused on e-commerce as top priority. There are many shortcomings I experience as a relatively young CEO/co-founder, but also positives in having matured during a transformative time where brands are creating relationships with their customers and are no longer dependent on brick and mortar channels. My key developmental career years took place in a decade where the barriers to entry are lower than ever, while the touchpoints to reach ‘your people’ are abundant and dynamic. 

Getting the Bittersweet Offer

Back to the retail thread in this story. Around the time of establishing a CEO, forming a go-to-market strategy and pitching angel investors, we heard back from the big box retailer. We got an offer to do a 50 store test. To many whom we shared the news, “this was HUGE”, “just the validation of their interest could mean big things”. 

But something about it just didn’t feel ‘right’, it went against my intuition and everything I’ve been researching, advising and observing over the past decade. Not to mention the terms of the offer were less than favorable. As 2 entrepreneurs stretched thin, who put so much of ourselves into crafting a memorable brand experience and connecting with our customers, the idea of shipping out a large chunk of our limited inventory to sit on a standardized store shelf and make a minuscule margin we’d basically be breaking even (if we were lucky and got a reorder), it felt wrong. 

As I read through the terms it was almost laughable how much we’d have to bend and the costs we would incur just to get a few square feet of retail presence - without an opportunity for proper brand education. We politely declined, which perplexed many who witnessed the months of struggle we’d undergone to get to this point. 

Why We Chose the Unconventional Path

We have zero regrets about this decision. Could it have sped things along and accelerated sales? Very likely. Would we be able to craft the brand and focus on the customer experience in the way we have? Probably not. Right now every month is a careful balance of how to allocate our time and limited resources in the best way that aligns with Dorai’s values. As an e-commerce brand we get the privilege to interact with our customer across platforms and have a human-to-human interaction. We get the chance to write blogs, share the journey and engage with you on things like voting on our next product. People say a startup is a like a child, and while we don’t have any kids of our own (yet), we can empathize with the worry and care you put into this infantile ‘thing’. We see Dorai mature and go through good and bad phases, while trying to steer it in the direction we think it best. Picture of a sign I keep in my office to remind me of the opportunity when motivation falters.  

Dorai home Opportunity

Sometimes you have to taste a little bit of the old school sheet cake to realize it’s stale and not worth the quick sugar high, followed by the big crash. We’re always looking to glean wisdom from those who have shared experiences. We recently met with successful Utah startup Thread Wallets to talk strategy and share learnings. They asked, “Do you want to get a bunch of quick sales in a short period, or do you want to build a lasting brand on a more sustainable foundation?” Without a doubt we’d much rather build something that’s genuinely adding value to your lives, even if that takes more time than trying to move through inventory with unsustainable tactics and channels. 

In the 12ish months that we’ve nurtured Dorai it’s forced me to grow in more ways than any other job. In ‘talking the talk’ about stress, balance, sustainable living, simplification and reducing toxins in our lives, I’ve had to ‘walk the walk’ and drastically change some negative patterns. It’s enabled me to be more assertive in crafting the life I want, through the company I want to build, and the legacy we want to leave. It’s challenged me to re-discover lost motivation and work through what I now realize was years of burnout to reignite my strategic creativity and discover our potential. 

I honestly don’t think any of this would have happened if we handed ‘our child’ over to big box retail, instead of laying the foundation for it to thrive as a lasting customer centric brand. We’re not saving never, but for now we’d rather weather the storm and ride our own wave then take the conventional retail route.

We love sharing and hopefully connecting with others as they go through transformative periods of life, as always feel free to reach out and share or ask any questions you may have. We’re excited for what’s ahead and grateful for every interaction we have with you, ‘our people’, everyday. 

Jason Klug Kelsey OCallaghan Dorai Home CEO

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