Cleveland startup wants to become the Uber of custom cabinets
A Cleveland startup company is vying to disrupt the multibillion-dollar market for cabinets with an online, custom approach that puts idle manufacturing capacity to work.
But first, founder Tino Go and Baru Inc. need more money.
After four-plus years of fits and starts, Baru launched a website on Jan. 25 where industry pros – interior designers, cabinet dealers and remodeling contractors – can order custom cabinets. Those orders, translated into machining instructions, go to regional cabinet makers whose computer-controlled machines turn those instructions, and Baru-supplied materials, into products.
The result is custom cabinets that are priced competitively and delivered more quickly than the industry average – six weeks or sooner from the order, rather than several months, Go said.
The process streamlines supply chains, where 40% of the industry's revenues go to shipping, warehousing, packaging and obsolete inventory, Go said.
“If we can make everything digitally local to the customer, then you've eliminated all of that,” Go said during a recent interview.
So far, manufacturers in 32 cities across 12 states are interested in joining Baru’s cabinet-making network. The orders come with low overhead – manufacturers won’t have to invest sales, engineering or administrative time to handle Baru’s orders. Manufacturers use computer numerical control cutting machines, known as CNC routers, that typically run just two to three hours a day. Leveraging this idle capacity is key to his business model, Go says. There are around 4,000 CNC routers across the U.S.
“Our business is not selling the product,’’ Go said. “Our business is maximizing machine utilization.”
Baru is a shared-economy model that links custom cabinet buyers to available CNC routers in their regions, says Carl Rolfing, an early investor in Baru.
“At the end of day, he’s looking to be the platform like Uber to taxi cab drivers or AirBnb to potential renters,” Rolfing said.
Time to pitch investors
Baru’s website launch culminates years of work by Go, who holds a degree in economics from the University of Michigan and a master’s in finance from Indiana University. His career includes work as a turnaround specialist and a financial executive at small and mid-size companies, including a manufacturer of aircraft landing gear and an international maker and supplier of horticultural products.
He has raised and invested about $700,000 in Baru, including $200,000 of his own capital, $476,000 from investors like Rolfing, and $25,000 from the Ohio Innovation Fund, which provides venture capital and expertise to early-stage Ohio companies.
Go hopes to raise up to $1 million more by the end of March. That will allow him to bring on a four-person team, develop his technology, build the brand and grow Baru’s cabinet-sales network. Go forecasts Baru will reach $34 million in net revenues in two years. Along the way, Baru will develop the use of augmented and virtual reality devices for customers to see how Baru products fit into cabinet spaces. The company already has two patents for the technology.
It all started in 2014, when Go wanted to order custom shelving for his home in Elyria. But he was put off by a time-consuming, “medieval” process. He never bought the shelves.
“I just found it super-frustrating,” Go said.
Go had helped run distribution and manufacturing companies. He knew that computer-aided design and engineering software could mesh with available computer-controlled cutting machines to improve the buying experience for custom furnishings.
“I thought that all the manual processes of translating what I wanted into manufacturing instructions was woefully antiquated and inefficient,” Go said. “The machines should be able to translate a customer’s desires into manufacturing instructions. That's what Baru does.”
Go eventually left full-time corporate work to immerse himself in the furniture and cabinet industries – and how he might innovate with a digital, distributed manufacturing approach.
Go founded Baru in 2019. Baru means “new” in Indonesian, the language of the country where Go was born. His family came to the U.S. in 1969, when Go was 5.
Big break from Google
By 2020, Baru was operating a custom furniture website. An early break came from Google, where Baru was an offering in the company’s perks program. Employees working remotely because of COVID could buy from Baru at a discount to customize their workspaces.
“We manufactured in 12 cities around the country,” Go said. “That was the first technical proof of concept that distributed manufacturing would actually work.”
"Our business is not selling the product,’’ Go said. “Our business is maximizing machine utilization."Tino Go, founder, Baru, Inc.
At times, Go was doing measurements himself. He hired software engineers to translate customer orders into machining instructions.
“Historically, it was a lot of technology testing and a lot of selling and market discovery at the same time,” Go said.
Through 2023, Baru sales totaled about $246,000 for furniture and cabinets. Among the customers was Laura Bennett of Chagrin Falls, co-founder of Embrace Pet Insurance who is now a business consultant. She said she met Go through an entrepreneurial group and became “fascinated with what he was trying to do.”
In early 2021, she ordered an electric sit-stand desk online with customized features for $1,272, including delivery and setup in her home three weeks later.
“I buy a lot of furniture from Ikea, so generally I have to put it all together,” Bennett said. “They just took care of everything. I was delighted with the whole experience.”
“It’s not to say this is going to be a replacement for Ikea,” Bennett said. “But it is for times when you want to have more control over the size, shape, functionality and so on.”
Cabinets are Baru’s future – for now
Since founding Baru, Go has transitioned from a custom furniture manufacturer to focusing strictly on custom cabinets.
“Furniture was a good test product for us to start with to determine whether manufacturers would be interested and whether the technology worked among factories,” Go said. “But since our raw materials come in large sheets, it was hard to achieve good material usage yields. Often, half of the materials purchased would not be used for a custom furniture item.”
Go said he has $70,000 in cabinet orders in the pipeline. On Baru’s website, cabinet customers will specify dimensions and choose among a range of models, finishes, colors, and add-ons. Customers will see the price adjust as choices are made. Their selections will result in machining instructions for manufacturers and purchase orders for local material suppliers.
The 32 cabinet manufacturers that are part of the Baru network are in proximity to a population of 110 million, according to a Baru presentation to investors. The initial focus will be the Cleveland and Detroit markets. Eventually, Go wants to be in the country’s top 100 metropolitan areas.
“Our whole thing is we manufacture less than an hour away from the customer's location,” Go said. “We've eliminated packaging, we've eliminated timing, and largely eliminated damage risk, and we've kept it local.”
The approach sustains or adds jobs to the local economy and cuts down on the pollution generated by shipping in the mainstream cabinet-manufacturing industry, Go said.
Woodworks Design, a custom cabinet manufacturer in Middlefield, Ohio, has handled three Baru orders so far, including Laura Bennett’s sit-stand desk.
“We fit into their concept as a good team member because of the software we run in our CNC capacity,’’ said Todd Armfelt, founder and president of Woodworks Design. “We’re using the same platforms and it allows them to send us code that we don't have to program. We just cut stuff out and put it together, and they also provide materials.”
It’s low-overhead work that Armfelt hopes expands.
“They make it very easy,” Armfelt said. “So far, we’d like to be on their team. And we’d like to see this market grow for us and Baru.”
Lots of hurdles
Baru faces a number of challenges, some of which are common for startup companies.
Rolfing, the early investor, said the appeal and price of Baru’s custom cabinets must catch the eye of the average buyer.
“The biggest hurdle for him to get over is that wealthy people will spend the money for a product that is custom and quality,’’ Rolfing said. “Now, will your average buyer spend the money to get something that is custom? Do they care that it’s custom?”
More likely, Baru will find a niche with a builder or contractor, Rolfing said.
“Potentially, a builder will say, ‘I’ll order my stuff from here because it’s the same price, I can make changes and I can get it quicker,’ ” Rolfing said. “I don’t think right now your typical furniture store at the mall are (Baru’s) competitors.”
That’s why Baru’s focus and online presence have evolved from consumers to industry professionals, at least initially.
“We're focused on developing a reselling dealer network for repeat business,” Go said. “And a smaller customer group will be easier for Baru's team to manage during the first year of scaling operations and sales.”
Baru’s “Uberization” of manufacturing makes sense for cabinet makers with underused capacity, said Kalle Lyytinen, chair of the Department of Design & Innovation at Case Western Reserve University’s Weatherhead School of Management.
But matching local manufacturing with customer demand is much more complex than pairing drivers with riders, he said. Among Baru’s challenges is dependence on manufacturers for a quality product and reliable delivery, Lyytinen said.
Go said the quality is inherent with local cabinet makers in the Baru network. Their costs include big investments in CNC routers, related technology, and skilled operators, Go said. Quality products and problem-free delivery are vital to covering those costs and, ultimately, their financial success. And manufacturers won’t want to lose Baru’s business because the orders have low overhead and high margin, Go said.
Launching the website and courting investors are tasks Go hoped to have tackled by now. But tight finances and finding talent have been challenging, he said.
The time is right for Baru’s next round of fundraising, said Rolfing.
“There’s plenty of money out there,’’ Rolfing said. “The idea is big and (investors) like big. You can’t question this man’s perseverance. He’s been doing it now for years.”
Rolfing and Lyytinen noted that Baru’s model of mass customization via decentralized manufacturing could be a boon for a lot of industries. A key indicator for any manufacturer is how often his machines are used, Lyytinen said.
“So if you can increase the utilization rates by getting additional work, from your primary customers or somewhere else, that’s a good deal for you,’’ Lyytinen said.
Go said wide adoption of the approach is one of his goals.
“Baru is the tip of the spear to completely change manufacturing,” Go said.