Mikael Akerberg, CEO of Nobilia . Largest European kitchen furniture company

the world.

So you’ve done a few things, but what got you before we get into anything about where you are, tell me your background, what guy in the industry, what got you and what you’re doing

So I’ve been with Nobilia for 14 years since 2009. So it’s been a while there. And I’m actually not German. I’m actually Swedish, one of the few Swedes in the German company working in U. S. So that’s a combination. You probably have to have a screw loose to do that I guess. 

Um, 

 I grew up in a family where both my parents were driving running their own businesses. So I grew up in an entrepreneurial spirit or environment there. And I actually started my first own company when I was 19. So instead of doing military duty in Sweden, which were almost an optional there, I said, no, I don’t have time for it because I want to start a company instead.

What was the company? What’d you do? 

I was actually a construction service company for insurance claims there. I was 19 years old and had six employees at that time. Didn’t know anything about finance, economy, marketing, or anything, but, you just have to quickly learn. If you jump into the deep end you better learn to swim fast.

Why construction insurance? What, at 19, what was the appeal to the construction industry at that point?

 the construction industry, this was let’s see in the late eighties, beginning on the nineties roughly. It, it was like in, on a normal level there. And the reason why I jumped in is that my father were running his company and had some connection into the insurance world and I started to talk to these guys and then say, we really having a challenge to find companies that, that actually can execute our claims. And I said, look, let’s give it a 

So you, at 19, it sounds like you saw an issue or a problem in the marketplace. You thought about what’s the solution. How could I take this on?

You rolled up your sleeves and created a way to take it on.

Yeah. And then of course, once you started, you realize how difficult everything is, but then you just have to solve it. Huh.

And probably that’s a little bit my spirit is that I basically never see a challenge. I only see opportunities or different ways of actually how to solve it. If you see the challenges, the glass is half empty.

I see there’s a half full, I would say.

So now you’re running a company. I’m going to fast forward us now and then we can, you’re running a company. You’re at a company, Nobilia, you’re running it. And at some point you say North America. Here’s an opportunity.

Yeah, so my father and being his generation, the U. S. was the, the big hero jeans and, the music and the food and the, and everything, and he always talked about U. S., so I get, into that, that, at one point, I, I want to leave here, or at least try it out there.

What basically got me saying yes to Nobilia was not really in the offer the gave me, the conversation was actually when I went down to Germany and saw what was behind the company the way they have looked into how to produce a product.

It’s highly automated. It reminds you more of an automotive industry than a traditional wood making in the shop, if you put it that way. And then I just saw a huge potential that, this is something that, sky’s the limit, 

So there was a little tech in there

that sucked you in.

Machines is it’s sexy, isn’t it?

That’s right. We were just talking about that in golf. 

so that’s basically what get me going there and started. And then I was tasked to look into the Swedish market. And then we also discovered that the, let’s say. Call it the multi family or the big product part of it was undeveloped at NVIDIA at that time. So I took on that challenge and brought it into in eight countries at the end.

And now we are in 2015 or something there. And then that’s basically the point where we more, deeply started to look into the US industry.

 what is 

What was the impetus and the opportunity and then what went through your head in terms of the process or pieces that you needed to put together to launch in the U. S.?

So I do remember the phrase quite clear today because it’s, it was sticking out the kenks quite a lot. I basically told the board in Germany is that for how long time can we avoid the biggest market in the world. First of all the US market is 6. 6 million kitchens a year roughly, which is probably about 20 percent of the global market. And Nobilia is an international company. So how come we are not in us? And then all the, the traditional answers came yeah, it’s difficult. U. S. is U. S. You will be sued for 500 million dollars. And blah, blah, blah, blah, everything. During that time and it was probably a little bit of luck as well, is that We’re starting to see a change in trend when it comes to the design.

It becomes more of an appetite for, let’s say, in US we would call it more a modern look, or a European look, a cleaner look, if you put it that way. And I did some studies there and I said, I think we are on to something here. Something is happening and maybe it’s time to, to, jump into the pool now.

And after quite a long discussions back and forth there it was decided to, let’s say, do a real market study of us. And if the signal or the trend says what we believe it says we will go ahead and create a business case or a go to market strategy of what we can do here.

Now did you do qual, quant, combination, qualitative analysis? How did you approach it when you did your research?

Yeah it was fairly simple. I actually started from the top looking at the macros what is U. S. about, and where is U. S. as a country, or, going in that direction. Direction basically and then use, I’m starting to study the industry itself. Deeply I’ve been starting to travel here quite a lot.

At one point I spent half my times here in us for almost a year and a half 

Now, did you do grandmother research? Did you do the kind of Sam Walton kick the tires, walk into different,

Yeah I probably visited thirty, thirty five different manufacturers here and talked to them of, how they see the world and what they think is an opportunity or a challenge and, what they believe and stuff there. And talked we also did consumer analysis as well on, why or why not.

You are buying a kitchen and, what’s the preferences are how did the channel works, where do you buy a kitchen and so on. And it came out a very fragmented picture where quite different to, to, if you look into Europe where it’s very centralized, there are a few.

very large company I would not say controlling the market, but are having a very big piece of the markets and Let’s say the products are very unified You see the same kind of structure or it’s more organized structure if I put it in that way 

It’s also different habits, right? 

Yeah, so by tradition kitchens are considered being part of the furniture industry, not the building industry. So it’s a piece of furniture. It has changed, and it’s not the same in all European countries, in all regions, but if you look into Germany, which is a fairly big part of the European market When you buy a new house or an apartment or a condo or some or something like that there is no kitchen there.

There is a space for a kitchen, but you have to buy your kitchen, like you buy your furniture. And then when you sell your house or something, you are either take the kitchen with you or you sell it on the, let’s say, a secondary market to someone that wants to buy a used kitchen. That also has created a completely different products.

So first of all, it’s. It needs to be possible to fit and unfit a couple of times, and it needs to have a technical quality to take on that distress of being moved around a couple of times.

More modular almost. 

More modular as well but that’s more industry driven to be more efficient. It’s not consumer driven, but that happens probably let’s say in the seventies in Sweden.

I believe it will happen in the U. S. as well, but we are not really there yet the industry has not driven that in the same way, if I put it in that way. And that’s also, creating either a challenge or an opportunity. You have a fragmented industry, you can consider that a challenge or an opportunity.

You have a from our perspective, a complete different product that we can actually launch into a market there. I decided, again, to see this as an opportunity, that there is a void in this market where we can fit very well. And that was more or less a summary of all the discoveries that our product will fit there.

It doesn’t exist, so we have to create it from scratch. But we can build it up, and then we, or us, strongly believe that it actually will fit, and the consumer will accept it and like the way, you The kitchen is constructed and how it looks like.

So you’re a disruptor.

I would say so disruptor in a positive sense. And disruptor here? Yes. It’s, the product is completely different. The industry sometimes divided themself up if it’s a framed or a frameless cabinet. And we get a lot of s. Which one are you? And we said, we basically, none of them.

And we actually decided to call our product group, so it’s not only Nobilia but, the same kind of product. For European kitchen furnitures. And Furniture Lair actually has a purpose. It’s more than just a cabinet there. And also play a little bit of the history of it’s purpose. Are used as a, or was used as a furniture in the European market where we explain that the whole philosophy and the whole, let’s say technology behind our products are completely different.

So we can’t really be squeezed into one of the, this buckets. We creating our thought own buckets 

Interesting. So

you, what you’re taking on the market by seeing that there’s an opportunity that is unmet, and instead of trying to put yourself in a category, you’re actually creating a new category.

So I guess it’s an education strategy you take on as opposed to it. It’s maybe not disruption.

It’s more education, right? Yeah.

Yeah. It’s in, in, Yes, the communication is very educational that we’re trying to learn and teach about our products. Besides the product and it’s probably even more important is to, how would the approach to to the market itself be? And consider that we don’t only want to be in Miami we want to be in the whole, all zip codes of US there.

It’s about the infrastructure. And infrastructure in in, in my meaning here is how do we deal with the data, everything from market communication to, to customer dialogue and users conversations to how we transfer data into order management, manufacturing and not least least, but not probably even more important, the distribution itself.

How do we first of all get the thoughts and the ideas of a consumer or an end user to actually become a physical product that actually will be designed and manufactured in a way and also being delivered to the right time at the right address and in one piece. And here comes a little bit of a challenge is that US is a big country.

Sitting behind a desk in Europe, it’s just another country. Takes a big part of the globe there, but it’s still just a country. When you start looking into it you probably can compare it more to Europe instead of a country. In Europe we have 42 or 44 countries depending on which year you look into it.

With its own regulations and sometimes also their own currency and so on. US is very similar there where you have different regulations in different states and so on. Yes, it’s one country, but it needs to be viewed probably in, in 50 different ways you have to do it. But you need to see it from let’s say a country perspective, my job here is to grasp, the the whole challenge to make that happen. And probably the most challenging there was how do we make the distribution being efficient? How can we supply to every zip code in US without killing it by price?

is like a go or a no go, you can’t start and then try to figure it out afterwards. You have to have a clear picture on, what it needs to be, even if it takes a number of development steps in order to get there. But if you don’t have that clear picture, you will run into problems quickly.

Yeah.

Yeah. We spend a lot of time of looking into how can we be a national player and how long time will that take and how much resource do we have to add into it. We also quickly understood that we have to build up this network ourselves. So every product that we are delivering today is someone that actually knows the product very well, which is also important.

It’s a bulky sensitive products that needs to be in one piece. And especially if it’s produced in in Europe and not in the U. S. is that you can’t very quickly replace it. You have to ensure that it comes in one piece.

So it was a builder buy in terms of distribution. Are you finding distributors that are already solidified in the U S or are you building a network that you control? Is that, was that the kind of.

Yeah it’s a little bit of a mix. But, when we are done here, it will be completely our own network. Our own clients, our own service centers, our own everything there. But you can’t build that up from day one. It takes a little bit of time. But all the key data and all the analyzer says that the most efficient way is where we can train the people how to deal with our products best there.

That makes just the challenges even broader. 

And it’s expensive, right? Because if you’re plugging into a distribution network already

A percentage fee 

yeah, but, and there’s a pro con, right? I guess the pro con is, and I’m sure you’re weighing this stuff. And that’s interesting because on the one hand, there was already sales.

There’s already network, you already have inroads. But the negative is you’re, when you, I guess my question as I’m thinking about it is when you establish that you wanted to create a new category, did that make it easier to decide that you didn’t want to fit into a distribution model that existed and you want to create your own?

Not necessarily, but it actually became like that. That we actually are doing it completely different to what everybody else is doing it. So it’s, we don’t copy paste basically nothing. We actually create it ourselves.

And if you look into the success in Europe for Mobilia, we run our own distribution there as well.

Yeah. I don’t know, 800 trailers or something going there back and forth all over the place. And that’s part of the success that we have control out of of that part of the supply chain. But on the other end if you don’t have the right product and if you don’t have the right communication, You can have the best distribution in the world, but you will not sell any products.

We cut together there and and,

But you vetted that at the early on, because you saw that there was a potential need in the marketplace for sleek or

that for this opportunity. So did once you check that box at the early stage, did you go back and re question it, or did you say, okay, we’re, I’m confident.

I’m going to focus on these other things or do you keep going back and forth?

I start my day every morning by asking myself, If I’m doing the right stuff or not. 

I’ve heard the word efficient said, I think five times by you. So you definitely work for a German company. I get that. So with that said, looking back over the past Five years, you’ve launched five years ago in, in

North America, correct? What was the biggest thing that you could say?

This was the best I’m so happy we did this. What was the thing that was in your head that you didn’t know if it was going to work or not? And you decide, was it distribution? Was it, what was the thing that sticks out as the biggest success part?

And I’m going to ask you the other side too. So as you’re answering it. was the thing you wish you didn’t do or that you would have redone differently?

 Probably what caught my biggest, let’s say, surprise is at the same time I was asked to join a meeting in Germany there, there was a company said, we will sell a lot of kitchen online in U.

1. And I said, do I really have to join this meeting? I’m really busy. I have a lot of things to do. And I heard this like 10 times before. And, it’s simply doesn’t work. Everybody we even tried it ourselves and couldn’t really find a needle there. I listen into this guys coming from Silicon Valley in San Francisco, they have grand scale, they have really big plans.

And I said for some reason. I feel like I want to try these guys out. So we started to have a little bit of a deep conversation there. And they just started the company. It was like a couple of weeks old or something. Or, at 

No, track record. None at all. 

not at all. They did have the financial support though, which is important there.

And now fast forward. For forwarding a couple of years ahead I’m really happy. I took that meeting. One of our biggest success is actually our online sales. We are selling hundreds of kitchens online per month now, and they have found a way and it goes in the same thoughts and ideas I have is we just need a solid, reliable, Good quality product, and then we will work everything when it comes to the infrastructure to make this happen.

And they have been able, first of all, to understand and quickly adapt to the opportunities and the challenges out there. And how to, let’s say, use the technology to get people together and understand. The design and also what I would say, democratize design, make it available not exclusive that you, by history, see that, well done design needs to be almost like you have to be invited to be part of and you have to pay a lot of money.

Here it’s open for the most people.

So now is that because that’s your brand arrow as a company and they, understood how to create a communication strategy that supported your brand or did they alter it a little bit to sell more online?

No. The the core. Thoughts of, what creates a success were very similar. So we are very much aligned there. This is actually sold under something called form kitchen. What I told these guys, and of course we are very close is that why don’t we create a new brand under this?

And it, at that time when I was suspicious, it’s also a little bit protecting my brand.

sure, sure.

But it also creates a complete different value if there is a success.

So is it the same, it’s a different brand, is it, but is it under Nobilia? Or is it a different product line or a different brand?

The product is the same. It’s just under a different brand. And the brand is, let’s say created under, let’s say what kind of messaging or communication it should be which is a little bit unique for that brand. But. From a product perspective it’s the same.

So that probably helps you on a PNL too, because then you have a, you could create a separate PNL for that brand,

Yes.

because I’m sure there’s different cogs that go into it because you have a partner doing different things.

Yeah. So it makes it easier to separate, let’s say the front end infrastructure and then the back end infrastructures. So basically the separation there is production and distribution. And the front end is the communication and order management 

Now, do you have any regrets that because it’s been successful? Are there any regrets that you created a different brand? Because there’s a lot that goes into that versus just continuing the brand you had this way.

I think it was a good idea to have it under a separate brand because that also creates a more Opportunity and freedom to do it a little bit differently and allowing them the space needed in order to create that instead of being part of a, let’s say, corporate structure that you have to follow in terms of guidelines there I think that was part of the success there and, this is a Silicon Valley startup you have to Allow them to be half crazy.

In order to be successful. 

And, you, have to allow them to fail, right? Which is the other reason for the, 

Yeah, and that’s also why we also want to have a separation. So we can, 

 Part of what we will launch now this year is another discovered void which we found when we did our analysis but it will actually be executed now, is there is not really any real franchise structure in this industry, which actually surprised me, because The whole franchise model was more or less invented here in the U.

1. And has been extremely successful, subway, McDonald’s, you name it.

 So are you thinking about it that way with your company is if you think franchise opportunity, which by the way, seemingly goes completely against the, your, one of the top things that you’re saying, which is controls. So I guess there is controls in a franchise scenario, but you’re also giving the opportunity for, I guess it’s interesting,

Yeah, I would say actually a franchise creates the control but it also is that you have to be willing to share the potential profits in a different way. So you can’t be greedy and be successful as a master franchisor.

but then your district your distribution becomes more of an education distribution that the franchisee has to buy into. And that’s another, that maybe is in a different revenue stream for you.

Yeah.

Is that kind of how you’re thinking about it?

That’s basically how I think about it. What I see here in the U. S. is that we have a lot of these brick and mortar showrooms, or mama and papa stores, or whatever we can call it. It’s family entrepreneurs that are fighting on, 24 7 to create their success. And there is not any real opportunity for them to get a support in terms of how would a CRM system work.

How would more of an advanced marketing work, how is, a skilled communication set up and so on. And that is what a franchise concept can offer. First of all you will have a brand recognition that, that are different, but you also get a support that are widely different compared to if you try to do it solo.

But on the other hand, you also open doors for, let’s say, an outside investors or entrepreneurs that are not in the kitchen industry now. Doing that without that support can be really challenging. 

Yeah. Yeah. 

if you have the support, should I open a McDonald’s store or should I open a kitchen store? That kind of conversation.

And NOIA has been successful in Europe running its franchise concept there and we actually have a couple of them in France. I think there is about 500 stores or something there. We have 75 something in uk. And. Of course, it takes a number of years to perfect a franchise concept.

And it needs to be adapted to different countries or different regions and so on as well there. But I think the time is right to do that in U. S. now. And it will be, what I would say, the next opportunity. 

In the U. S., Nobelia will be in the what business?

Besides kitchens, you mean? 

Kitchens might be the, 

the rest is 

hamburgers, right? 

Yeah. 

But that doesn’t mean that’s the business they’re in, right?

and I would, without going into much in details here, but I would probably view it more as McDonalds is doing it.

 What was one of the things that if you could put a little eraser to, it would have saved you a little headache and time and maybe some money.

Yeah, so, the number one thing here is I applied Let’s say the careful mindset of a European, or especially a German, I would say. There now, five years later, we should have done it faster and bigger there. Uh, this culture here in the U. S. is so much different there compared to Germany.

And that is what I regret, basically. I should have been tougher I should have, put my American hat on very much earlier there and accelerate this faster. It doesn’t say that we are growing or going very fast from, let’s say Nivella traditional perspective, but from a U.

1. perspective, we can have done that even way faster.

That’s interesting.

 What is the one quality that you find that you have, that you can look at that, that really you would attribute to the success that you’ve seen and that the accolades you’ve gotten to get to this point, what is the one quality that you have?

I probably have a fairly easy way of seeing a structure of how something can be solved or how you can drive something from A to B. Or create something that doesn’t exist. It becomes fairly easy, clear to me what needs to be done. And I’m still fairly interested in the details to to, analyze it.

The left and right turns that needs to happen. And I’m fairly good in communicating of how it needs to happen on everything from board meeting down to the truck driver from the service center of what is important. It’s actually not to deliver products. It’s how you’re treating your customer, how you’re treating the products when you’re offloading it, and how proud you are of the truck you’re actually driving, and so forth.

I think I’m, sounds like I’m a bullshit politician here but I think that’s my strength.

Yeah. Yeah. Ability to go for it when other people aren’t, that’s what I hear, it’s and it sounds like the key takeaways I heard are one, if you’re not sure about taking a meeting, maybe you take the meeting because it might be a good one,

Yeah. 

right? That’s one.

It sounds like for you, my takeaway is It’s not, there, there really aren’t, there really aren’t challenges. There are opportunities. And when you change your mindset to what are the opportunities take a deep breath and go for it. If that seems to be the secret of your success.

you have to, be true to your vision, believe in yourself. And if there will be a failure, you just have to be straight on and say, this is a failure. No, you have to, the best, let’s say, put it this way, the best way of development or increasing something is to learn by the mistakes.

If you avoid doing the mistakes, you never know what it could have been.

yeah. So what is the one thing if I was a company that I was in Europe and I was contemplating coming into the U S what is the one thing that I should think about? Before going for that next step of research and all that other stuff.

Yeah of course you need to do your research and be comfortable with what the data actually tells you. The other what I will say is incredibly important is to to understand the culture difference in the market you’re going into compared to the culture your company actually has.

What is the difference. I was talking about, putting my American hat on a little bit too late. Culture is so important not just company

culture, but to understand culture and the environment you’re operating in. It’s probably the most underestimated power, uh, in all analysis, I would say.

And it’s hard to do a desktop analysis of culture. You have to experience it somewhat.

And I guess that really speaks to every country that you’re in, right? It’s not a U S thing. It’s a business thing. If you’re involved with a global company, you have to recognize the culture in each one of the countries you’re in,

Yes?

to but I guess the question is how much do you adapt your company and your brand to. Tap into being successful with the culture in that country, right?

Yeah, and then of course, it needs to be a corporate structure. Because otherwise, it will, why should it be, Under one umbrella, otherwise and the challenge for a corporate structure is to allow the flexibility and still be under the umbrella. What is core that we are not allowing a change on and what is basically allowed to make a tweak on.

And that judgment is hard.

That judgment is hard. That’s a good, that’s a good way.

Don’t I,

Little bit, but but it works for you. I can’t thank you enough for being a part of constructing brands. Thank you for taking the time.

It’s my pleasure. It’s my pleasure. I love the conversation and I think we should do it more.

Thank you. Thank you. I appreciate your time and stay tuned for the next constructing brands, where we speak to other icons in the industry and here. What motivates them and what fearless quality is helping them accomplish what many have tried and haven’t. Thank you for listening to another episode of Constructing Brands. Your feedback is how we thrive. So please leave us a rating and review on your favorite platform. And if you want access to even more great information, go to ConstructingBrands. com.