developed colon cancer, Tracy put o; an art curating job at
Sotheby’s in New York City to come home—and never left.
Teddy graduated in 2006, interned at ESPN, worked briefly as
a movie producer’s assistant, and then followed Tracy’s lead.
Daniel had them start in junior roles. When Tracy arrived,
many vendors still thought customers wouldn’t purchase furniture online, but the then-23-year-old saw opportunity. Daniel
had tested eBay as a place to sell discontinued items, so Tracy
used the eBay business—which was pulling in about $100,000
annually—as a way to iron out the logistics of shipping cribs.
In 2005, when Babies “R” Us cold-called Tracy to see if the
company could start drop-shipping its signature Jenny Lind
crib—a vintage design made with carved wooden rods—MDB
was ready. “Our core competency became drop-shipping” and
making products “FedEx-able,” says Tracy, who’s now MDB’s
VP of sales. Soon, MDB added Walmart, Amazon, Target, and
other major e-commerce sites to its customer list.
When Teddy joined in 2006 as a junior account rep traveling
to retailers on the West Coast, he realized the company had no
brand recognition. “We were always at the back of stores, not
in the [display] windows,” he says. He analyzed the crib market,
and observed that design innovation happened only at the high
end. So he pitched his father on a modern, a;ordable crib brand
for design-savvy parents. The result was Babyletto, which
launched in 2009 and is a big part of why MDB started to pick
up roughly $10 million in revenue each year. In 2010, Teddy
orchestrated the acquisition of the upscale Nursery Works line,
which sells that $4,500 acrylic Vetro crib.
Over the years, MDB had become an extended family
a;air. Daniel’s younger sister, Julia Fong Yip, joined in the
early 1990s and eventually became the company’s VP of talent
management, and his older sister’s husband, John Kwok,
became MDB’s CFO. Other spouses entered the fold too—
Tracy’s husband, Eric Lin, a trained architect,
was hired in 2011 as MDB’s head of product
development, while Teddy’s wife, Ti;any, who
once worked as Steve Jobs’s assistant, became
MDB’s creative director in 2015.
Eric and Ti;any further elevated and diversified the company’s o;erings, helping to create a
crib-brand powerhouse. With Nursery Works,
MDB had a vehicle for higher-end designs but
lacked the in-house expertise. That changed with
the arrival of Eric, who discovered that the company’s design process was relegated to Microsoft.
“Babyletto was born in MS Paint,” he says. Like
most crib wholesalers, MDB was somewhat
reactive, mostly tweaking competitors’ styles. As
MDB’s first professional designer, Eric helped
move the company toward more original looks,
competing on brand rather than on price. One of
the results was the futuristic, $7,500 solid maple
Gradient crib, which got attention from the
design community. Meanwhile, Ti;any started
creating distinct identities for each brand, helping
target every price point more e;ectively.
By 2014, Daniel was preparing to pass the CEO
father decided to share the role for a year, until 2015, when
Teddy became the sole CEO. The elder Fong—who gave himself
the title of teacher—gestured toward his son’s autonomy,
announcing to employees that a new direction was healthy in a
family business. But in strategy sessions and management meet-
ings, Daniel’s voice retained its outsize influence, and employ-
ees often became confused about whose lead to follow.
To bring clarity to everyone’s roles, the family hired
a leadership training expert who set up quarterly meetings.
At one, the expert addressed what he diagnosed as Daniel’s
“seagull” problem: Despite the fact that he’d handed over
the CEO role to Teddy, Daniel had a tendency to swoop in,
crap all over the place, and fly away. “That was an interesting,
tough conversation,” says Teddy. It’s still a process, but
now Daniel strives to use suggestive language instead of
directives. “Comments like that I love,” says Daniel. “With-
out that, I can’t improve.”
With MDB now dominating the nursery, Teddy decided to
tackle another part of the home—the living room. In 2015, two
years after visiting that Chinese factory where he learned how
inexpensively modern couches could be made, he launched
MDB’s first startup, Capsule Home. The e-commerce company
sells modern, neutral sofas that range from $900 to $5,000 as
well as other furnishings.
It’s the first time MDB has tried to sell directly to custom-
ers, and it’s doing so in a category that is already well popu-
lated with such retailers as West Elm and Crate & Barrel and
online upstarts like Article. While Capsule has gotten some
good press, Teddy and his Capsule co-CEO, Kelly Hwang, are
upfront about the di;culties they face. “The biggest challenge
is the slow pace of growth tied to building brand awareness,”
says Hwang, a former startup adviser and investor. So they’re
experimenting—email marketing, pop-up
shops, Instagram giveaways, wholesaling
earlier product iterations on sites like
Wayfair—to see what sticks.
They’re hoping that Capsule’s secret
weapon will be those close manufacturing
relationships Daniel cultivated over two-plus decades. That Chinese sofa factory, for
instance, is owned by Kenneth Chong, a
loyal MDB manufacturer. Chong values his
relationship with the Fongs so much that
last year he prototyped roughly 50 concepts
for Capsule that he’ll produce in very low
quantities—sometimes just five or 10—as the
startup figures out what sells well.
Chong is also working with Capsule to
produce a $400 sofa with USB charging
ports that will debut in August. Teddy hopes
the new couch will be just the audacious
product the company, which recently
hit seven figures in revenue, needs to
cut through the noise. Daniel is patient.
“A brand is just a hobby until it hits the
$2 million mark,” he says.
LESSON NO. ;
EACH GENERATION NEEDS TO FIND I TS VOICE
When Teddy Fong took
over as CEO of MDB,
his father, Daniel, had
a “seagull” problem—
he’d drop in, criticize,
and then disappear.
The family hired a
expert to mediate
meetings and provide
“It’s through those
that my dad and I have
found our voices–when
to defer, and suggest
rather than direct,”
says Teddy. “As a
person who is taking
the place of my father,
I’ve learned that the
family dynamics should
always come first.”