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A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

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Laurel & Wolf

Online interior design marketplace

General Information
Category
e-Commerce
Country
United States
Started
In 2014
Business Failure
Business Outcome
Shut Down
Closed
Active
Cause of Failure
Multiple Reasons
Founders & Employees
Number of Founders
Two
Name of Founders
Brandon Kleinman, Leura Fine
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
4
Total Funding Amount
$25.5M
Number of Investors
14
Description

Launched in 2014 by Laure Fine and Brandon Kleinman, Laurel & Wolf was an online marketplace whose aim was to bring budget-friendly interior design solutions to customers through the Internet. Laurel & Wolf theorized that a  customer would pay a flat consultation fee to be paired up with a  designer over the company’s online platform. Though some small tweaks were made over the model and pricing over the years, its basic premise always revolved around cutting out the middleman to bring quality to the customers, a concept that SF venture funds bet largely on.

Cause of Failure

Even though Laurel & Wolf generally maintained a positive, marketable image, beginning the summer of 2018, the company’s reviews on sites like Yelp were populated with an influx of mainly one-star rants. Most of the reviewers complained that furniture and other items that they had ordered through the platform either arrived broken or were never delivered. Some clients also complained of having received substandard services and never receiving refunds that they claimed for. As a result of the poor publicity, a majority of Laurel & Wolf’s designers left the platform.

However, dissatisfied customers were not the only cause of Laurel and Wolf’s downfall. The company also had various disgruntled employees that were not happy with how it was being run. Despite this, the company tried to maintain their positive, quirky social image—going as far as having employees at dance classes and bowling excursions showcased on the company’s Instagram account. Behind closed doors, however, the atmosphere did not reflect the company’s joyful facade. For instance, while co-founder Laure Fine presented herself as being generally upbeat in her interviews, most employees recounted their fear of her. On many occasions, she would publicly and bluntly berate anyone that disagreed with her ideas. On top of this, despite being a design-based company, payouts to designers were generally small and were reduced without explanation.

It is hence not too difficult to conclude that Laurel & Wolf’s internal operations were quite chaotic. For a long period, it was running without any dedicated internal accounting, HR, or clear management structure. Moreover, their first office was cramped up and with just one bathroom. When they moved to a new building, it had a range of structural issues, tight packing and has sewage seeping into the ground floor which posed health risks. 

“They have to know they can’t treat people that way.” claimed a worker who quit the company just a few months after joining. “I would get in at about 8:30, and I wasn’t leaving until about 9:00 at night. I thought it was because we were so busy, but actually, the way we did things was just really complicated.” declared another.

Combined with large spendings in marketing and branding, all of these factors led to  Laurel & Wolf’s ultimate downfall. In March of 2019, the company closed its virtual shop and soon after, its website followed.

Update

Laurel & Wolf was closed for more than one year, but it was re-launched in early-2020 under a new management.

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