Why being the last company to launch in a category can pay off

When Jordan Nathan launched his DTC nontoxic cookware company, Caraway, in 2019, he knew he was not the only founder trying to sell a new brand of pots and pans to millennials scrolling through Instagram. But he found that launching after his peers ended up being a blessing in disguise in all areas but one.

When Caraway launched, it joined businesses like Our Place, Great Jones and Made In Cookware in an increasingly crowded category of online cookware startups. But being a little late to the party allowed Caraway to see what other brands’ products and target audiences were, Nathan said on a recent episode of TechCrunch’s Found podcast. This allowed Caraway to change its approach and try to fill the gaps these brands were leaving open.

Nathan said that Caraway initially planned to source its pans off the factory shelf, and target millennials who were looking for something nicer than what you’d find at IKEA but not quite at the wedding registry stage yet. It seemed that every other DTC cookware brand had the same idea, so Caraway shifted gears and instead focused on wedding registries and beyond, spending a little more time and effort on their product design.

“It helped us change our color palette, it helped us change our price point, what pieces that we put in the set,” Nathan said. “And while a lot of those other brands did a lot of things right, we were able to craft our space within the kitchen DTC world that others weren’t playing in.”

Watching other brands launch also changed how the company sold its first set of products. Nathan said Caraway was initially going to sell its cookware both in sets and as individual pieces, but when they realized that none of the competition was selling sets, the company went all in and launched as sets — without the option to buy one piece at a time.

Caraway’s competitors also helped Caraway decide to start talking to retailers early in the process. Nathan said they always had planned to launch in stores, but seeing that none of the other DTC brands were looking to enter retail, Caraway started talking with retailers even before it launched online. You can now find Caraway sets at Target and Costco, among others.

Getting into retailers early helped cement Caraway’s stake in the wedding registries as it launched in retailers that had existing registry businesses like Target and Bed Bath & Beyond, before it went bankrupt. This made Caraway a more natural choice for couples building their registries than its startup cookware competitors.

While being a later entrant helped Caraway in many ways, it did hurt them in one area, Nathan said. “We were actually both last to market but also last to fundraise,” Nathan said. “And so when we went to go fundraise, every investor we spoke with had already picked their kitchen brand to tackle and invest in.”

Because of this, the first fundraising round was a slog, and Nathan said that after a 10-month period of talking to five to eight investors a day, they were able to close a seed round including more than 100 investors and no big checks from VCs.

But now, five years later, it seems that being late to the game may have paid off. The company has raised more than $40 million in venture capital and expanded its product lines to include bakeware and food storage, among other things, with more on the way.