By Margaret Harrist
When people were forced to spend more time at home in 2020, many had an epiphany: Redecoration was way overdue.
That led to an unexpected business boom for online interior design services company Modsy, which enables people to upload photos of their space, view 3-D renderings of the possibilities, and work with a designer to refine the look and order the furniture and décor.
“In prior recessions, consumer spending went down, so we thought we better buckle down for a rough year,” says Modsy CEO Shanna Tellerman. “At the beginning of the shutdown, we decided to invest in foundational elements that would allow us to scale when we came out of the pandemic—not knowing that business was going to explode.”
One of those foundational elements was a new financial system. “We had outgrown the accounting system from our early days, as well as our homegrown order management system,” Tellerman says. “You can only get so far in business with scrappy homegrown solutions or early startup software. But as you start to mature and scale, you need to focus on accounting principles and being able to report GAAP financials. We saw that the reporting systems and flexibility that Oracle NetSuite provides would open the door to the next level of growth for our business.”
Designs on the future
By the beginning of 2021, Modsy had reverted back into a growth-mode mindset, says Amanda Kwan-Rosenbush, senior director of finance and accounting at Modsy. “Part of the company’s planning for growth included improving its data and its back-office operations so company leaders could make more informed and quicker decisions and make improvements to the customer experience,” Kwan-Rosenbush says.
One of the key areas where Modsy needed better insight was understanding its profit margins and how to control all the pieces that go into that, including shipping costs.
“Shipping is a significant cost for us, and is expected to increase for the foreseeable future due to the pandemic,” she says. “NetSuite will help us analyze whether we should switch carriers or rethink our routes and enable us to select the optimal type of shipment for each product.”
That will be critical as the furniture supply chain continues to have disruptions. For example, many of Modsy’s furniture and décor partners, which include more than 50 well-known retailers and suppliers, are struggling with long delays, especially for items shipped from overseas.
In addition to better managing shipping costs, Modsy wants to have thorough insight into whether the products it’s selling are the right mix and at the optimal price, Kwan-Rosenbush says.
“With NetSuite, we’ll be able to analyze and understand in real time more elements of our revenue, operating expenses, and cash flow,” she says. “As a company, we need a single source of truth. To know that we have accurate, centralized data and the presentation can be customized for management or any team to access and understand, will be a huge benefit.”
A refined view
The Modsy leadership team will have increased visibility into the health of their business in real time. With more timely insight, the company will be able to adapt much faster to changing business conditions, from assessing and tweaking promotions to adapting to supply chain issues.
For CEO Tellerman, it’s all part of honing the vision she had when she launched the company in 2015.
“I started Modsy after we moved into a new home in San Francisco and struggled to design the interior and find the right furniture,” she says. “I just couldn’t visualize how anything I saw online would look in my space, even though I have a background in 3D graphics. I knew that many people had this challenge.”
The company, which began with a small team of experts in interior design and user experience, has now raised more than $80 million in funding and offers a range of design packages, from a single room to large and complex projects.
Users can go on the Modsy website and complete a quiz about their style preferences, upload photos of the rooms that have them flummoxed, and then work with a Modsy designer to create a custom design that fits their style, space, and budget.
“We’re constantly tweaking this artistic idea,” she says. “From an interior design standpoint, we want to be able to nail a design perfectly the first time. On the business side, we want to optimize our logistics and supply chain process even when the world is upside down, and to upgrade our finance systems and operations infrastructure.”
The company is in the midst of moving from its basic accounting systems and homegrown order management application to NetSuite ERP.
“What we do behind the scenes is just as important as what our customers see and feel every day,” she says. “We’re looking to create a system that gives us the data and information we need to make the best decisions every day, which ultimately creates a better customer experience. We’re really excited about the reporting capabilities and the analytics tools that we’re getting with NetSuite, and we look forward to unlocking the power of those systems this year.”