The startup that launched the horse race of online mattress companies

Today’s guest is a Mixergy listener and I’m excited to have him on to talk about his business.

JT Marino is the founder of Tuft and Needle, an e-commerce mattress company.

If you are starting to see online ads for mattresses and on podcasts, I believe today’s guest started all that.

I invited him here to learn how he knew there was a problem with buying mattresses, how he started this business and where it is today.

JT Marino

JT Marino

Tuft and Needle

JT Marino is the founder of Tuft and Needle, an e-commerce mattress company.

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Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs for an audience of real entrepreneurs. My goal here has always been to create interviews for people who are building real companies, have them build up their companies, and then ideally, they come back here and talk about how they did it.

And today’s guest is a listener. And I know because I found old email from him in my inbox from not too long ago. I confirmed with him because the email address has changed, but the name is exactly the same. And I’m excited to have him on here to talk about his business because he is JT Marino. He is the founder of Tuft & Needle. If you’re starting to see online ads for mattresses, podcast ads for mattresses, mattresses everywhere online all of a sudden, it has happened over the last few years, I think this is the guy who started it all. He’s the person who said, “Hey, why don’t we take mattresses and put them online?”

And he bootstrapped it and apparently others saw what he did. They couldn’t invest with him for some reason. We’ll find out why. They invested in his competitors and now we’ve got this, I guess, what’s feeling a little bit like a horse race to see who can build the number one mattress company and become the Amazon of online mattresses, and then what happens when mattresses are sold on Amazon more broadly.

Anyway, I brought him here to find out how he figured out this was a problem, how he started his business, how he was able to bootstrap it, and how he got it to where it is today. I’m really excited about this interview. And to make this interview happen. I’ve got two sponsors. The first will help you get phenomenal designs from a collection, a crowd of people. It’s called DesignCrowd. And the second is a company where I hire developers, designers, and also the finance person who helps me here at Mixergy, it’s called Toptal. JT, it’s good to have you on here.

JT: Thanks for having me.

Andrew: Do you remember when you were listening to Mixergy? You were starting to telling me when we connected, but I was hoping you could tell the audience too.

JT: I do. I was in college, actually. And entrepreneurship and starting a company, Silicon Valley was just something I was enamored by and wanted to participate in. And as I went through my career and wanted to start a company at one point, so I want to say I probably found it through Hacker News. But yeah, it was an interview with RunKeeper, I remember. So, yeah. I’m excited to do this interview and to contribute.

Andrew: You know what? I remember at the end, he was doing really well with his business and when the interview was done and we were just talking, he said, “I’m glad that you liked this. It’s just really competitive. It’s really hard.” And he was doing well, but I could see that he was hanging on. He had to really work hard to compete against all these other running apps. Nike eventually came out with one. Apple included one later on with their watches. And I feel like you’re kind of at the similar situation. Things are going really well, but it’s got to feel like pressure to have all these competitors, don’t you think?

JT: Oh, the pressure is definitely there. And the way that we look at it is it keeps us on our toes. When we first started we didn’t have a lot of look-alike companies. It was really the big names that you would probably have come to mind when you think of mattresses.

Andrew: Who were the old big . . . You know who I remember? I remember listening to Howard Stern growing up and every freaking minute it would be 1-800 mattress, dial 1-800 M-A-T-T-R-E-S save the last . . . Keep the last as off for savings or something.

JT: Yeah. Yeah, and . . .

Andrew: But it was always original. I moved to a different city. It was a different company, right?

JT: Yeah. The way they were sold online before we started was definitely a little weird. I wouldn’t say it was a step forward for the customer. And a mattress it’s a big ticket item and something that you would typically expect to experience in person. It’s a very personal thing. So, going online almost seems like a regression, but the way we viewed it is we take a step back and we took two steps forward by removing a lot of the pains for the customer which was originally how the idea . . .

Andrew: Yeah, I want to get into that. I’m just going to hold off for a second just to give people a sense of the size that you build. Can you give us your revenues? What were, let’s say, 2017 revenues?

JT: Oh, let’s see. 2017 was about 170 million [inaudible 00:04:12]

Andrew: A hundred and seventy million.

JT: That’s right, yeah. We started in 2012 with 6,000 to open up a business account. And Daehee, my co-founder, and I had just enough savings to hold us over for a few months before we would hopefully achieve ramen profitability as they say. And this year we’re currently pacing right now between 275 and 300 million. And that’s fully bootstraps. No outside investments whatsoever.

Andrew: That is unreal. That is unreal. And you’re a person who you started out as a college dropout which a lot of successful entrepreneurs have going for them. You then decided that you are going to go get a job where?

JT: Well, I’ve actually gone back to speak to Penn State where I met Daehee and that’s where I went to school to just see where my transcript is currently and I’m about three classes away from finishing. And I think it’s more cool to be the dropout.

Andrew: Why did you drop out with three classes left? Why not just go through with it, just for the hell of it?

JT: Well, to be honest, I had a project I was building at the time and was negotiating my first contract for a B2B software app. And also around that time over the summer I had a couple big companies in Silicon Valley reach out who had seen some of my work online. And I’m sort of just thought to myself . . . I mean, I knew my parents weren’t going to be too excited about this, maybe my dad. But if I’m able to have interest and get job offers and I’m finding traction, why would I wait one more semester to wrap up rather than just get started?

Andrew: And what did you end up doing out of all those different options?

JT: So, I ended up going the consulting route as opposed to working for one of the big tech companies in Silicon Valley. And this was a company at the time that was competing . . . It was called Hashrocket. It was competing with . . . What is it? Pivotal Labs and Thoughtbot and the like. And the reason I was so excited about that was there was a few software developers and designers who I’d read some of their books and I’ll be able to personally work next to and learn from and also rapidly develop MVPs from conception of idea to the design and the engineering and even the hiring and building up those teams very quick. So I was really optimizing for my own personal experience and growth and being able to rub elbows with some of these big names and see if I can learn something.

Andrew: This was, you said Hashrocket?

JT: Yep. And they’re based in of all places, Jacksonville, Florida.

Andrew: Yeah. I remember interviewing the founder, and it was this interview that was set up for me with someone who was very knowledgeable in the space, and I said, “I actually don’t know anything about him.” He was very much a Ruby on Rails person. I said, “You know what? I have to tell you, Obie, I don’t know enough to do this interview. Can I just learned from you what Ruby on Rails was?” And we went through that. But he was incredibly, incredibly well known, right?

JT: Oh, yeah. And definitely one of the thought leaders in the space. I mean, definitely not [DHH 00:07:23] status, but when Ruby on Rails was hot, that shop was really hot too.

Andrew: Okay. And then at some point, while you were doing that, you went out to buy your first mattress.

JT: Yeah. And then it would sort of coalesced with one of the projects I had built joining that team in Palo Alto. So, it was in that time period when I ended up going shopping for a mattress and yeah, it was . . . And that’s a whole another story, but suffice it to say, it was a nightmare as [we’re still 00:07:53] shopping for a used car.

Andrew: Describe it for me. Yeah. You know what? Describe it for me. What was it like to go buy a mattress at the time?

JT: Well, I started . . . The way I would shop for anything, I went online, I was looking for, you know, what are the brands, what are the features, [text-backs 00:08:11], how do they compare? And I really couldn’t find a sense of truth with anything I was reading. It seemed like it was written by salespeople or affiliate marketers or the like. And so I’m like, “All right, I guess I have to go into a mattress store.”

So, I went to a mattress store and I walk in and it’s like I walked back into the 1980s. You’ve got white walls with posters like tacked to the walls, like, drop ceilings and carpet and like 30 or 40 mattresses in the room and you see the salesperson just pop up in the back corner with a time and run over to me. And honestly, like, I . . . First question, “What are you looking for? Is it firm, soft?” And like, I have no idea. I don’t really know how to think about that. I’ve never shopped for a mattress before. I just ever slept on what I had available.

And so after trying maybe three, four, five, I still actually became more confused and then couldn’t remember what the other one felt like, and then I just didn’t feel right, and I knew I was being gamed, and you know, “You don’t want to buy this mattress.” And I’m like, “Well, why do you sell it then?” And then taking here and there and I ended up . . . I was honestly disgusted, and I just went to another mattress store, and then it started over and all the models were different. So I was looking at one of the big names and then I go in and I’m looking for that model and then I found out all the different models like brand models are different in each store, so now I’m even more confused.

Andrew: And that’s how they could always in the commercials say, “You’ll never get the same mattress for less. If you do, then we’ll reduce the price,” because every store has essentially the same mattress under a different name so that they can maintain that lowest price for this mattress.

JT: Exactly. Exactly. And there was one brand that was consistent from store to store and so I ended up choosing that one. And then between the choices of that particular brand, I’m trying not to say the names, just used to be nice. There were about, I don’t know, maybe eight in a line and I asked the salesperson, “Which one would you recommend?” And he pointed down to the one end and then he said, “Well, that’s the least comfortable and that one’s the most comfortable, and so what’s your budget?” So, it’s literally designed to suck out as much as they can from your budget. And I mean, as far as like cognitive dissonance and paradox of choice and predatory, like, sales practices and [inaudible 00:10:31]

Andrew: You know what? I get that. And I actually had gone through that experience a lot. I ended up picking the cheapest one because, frankly, my back never gets hurt anyway no matter what I sleep on, so I might as well save the money. But they do put things down. They’ll say, “Well, you can’t rotate this one over to the other side. Are you sure you want to . . . This is how many hours a year you sleep. Are you sure you don’t want to have a better experience that way?”

But I was looking at our producers note from their conversation with you and you said all that and then you said, “Then the delivery guy took forever to come to my house. And when he finally did, he had muddy shoes in my apartment.” And I thought is this just an origin story that you’re hyping up to give people, like, put in every reason why they shouldn’t go into a store into your origin story because that’s the one time we’re paying attention to your competitors from an authentic place?

JT: Yeah. I mean, honestly, it is an origin story, but it’s a true story, and that’s why you can ask me at any time of the day and I’ll say exactly the way it went. No, it’s all true. So, I had to take off work in order to schedule the appointment, and then the delivery truck didn’t arrive, and then I had to take off work again. And I’ve had an important job at the time and I wanted to work on . . .

Andrew: And you paid $3,500 from what I understand for a mattress.

JT: I paid $3,500 and I had just started my new job and so why . . . So, just it seemed like there were so many friction points. And I finally get the mattress. And yeah, as far as like the muddy shoes, it was true. And when they came into my bedroom and they dragged it on the ground outside, and then they slammed it down on the frame and just walked out and I’m like, “All right. Well, at least I got it.” And then I slept on it and I started have the sinking feeling in my stomach because it didn’t really feel that comfortable, so I called and they’re like, “Well, no. Give it a couple of weeks.”

And now that I’m in the industry and learned about how the physics and materials work, it’s true. It does take a little bit of time to break in. But even after a few weeks, it still wasn’t comfortable and so I called again and I wanted to . . . I decided I just want my money back. And so I had to, again, schedule a time off of work to have an inspector come over, who doesn’t work for the company, they’re contracted, and I’m like, “So what is the inspector’s job? Like what are they doing?” And they said, “Well, you’re going to need to remove your sheets. He’s going to inspect to see if there’s any marks or blemishes.” I’m like, “Okay.” So, like, one of the most intimate object in my house.

Andrew: Okay. You know what? I’m getting this. You are not able to return it. I see the headaches with it.

JT: Yeah.

Andrew: Tell me if this is true. I read that you and your co-founder ended up ripping this mattress apart to see what was in it to understand how much it would cost to make this $3,500 mattress. Is that right?

JT: Yeah. Yeah, that is right. So, I was in my bed . . . yeah.

Andrew: At what point did you do that?

JT: So part of the story that sort of skipped was it wasn’t the experience that started our track down starting a company. It was honestly our experience at a . . . almost a caricature of startups in Palo Alto. I mean, I watch the show on HBO and I’m laughing because I’m seeing all these similar stories and situations like exactly how we would go through, and we honestly we’re just sort of burnt out on it and I’m just starting the next whatever and wanting to play . . .

Andrew: What do you mean? Give me an example of what you were doing that you were burned out on because it was almost comically like “StartUps,” the TV show?

JT: Well, I mean, I go out . . .

Andrew: [inaudible 00:14:05]

JT: Yeah, I go out to Silicon Valley thinking everybody’s brilliant and everything that’s being done is innovative and very important. And even the company . . . And the experience is very much the opposite for me. And I’m not saying there isn’t great innovation and great things done, but it just seems that a lot of what’s being built isn’t really that important. You have these brilliant people working on apps or this or it’s this for that or it’s this app with this little tweak. And honestly, the company I was working for was exactly that. And when you’re working 80 to 90 hours a week sleeping under your desk for sprints to roll out the next version or whatever and . . .

Andrew: The next version of whatever. What’s an example of something that you guys were building?

JT: I don’t really want to dive . . . I don’t really want to dive into . . .

Andrew: You won’t even say it generically without giving the name?

JT: Okay. So, it was sort of like a Pinterest competitor and it had a lot of celebrity sponsorships and a lot of press, and we either get these spikes in traffic but then you wouldn’t see any sign ups. And I’d be at Thanksgiving telling like my friends and family what it was and I’m like, “Here we go. Let me try this again,” and I give them the pitch and you see their eyes glaze over as you’re trying to like sell them on how this is good for them, but it actually solves no tangible problem that they currently experience.

It was a new market and it was . . . I think Pinterest did it well. This wasn’t exactly Pinterest, it was like Pinterest for shopping. And you wake up in the morning and you wonder, “Why am I doing this? Is this really actually solving a problem? Is this really putting a dent in the universe like it seems like every founder says?” And the answer was no, it wasn’t. I didn’t believe that and neither did my co-founder.

My co-founder was also my best friend in college was working at the company and we went for a walk and decided, “Let’s do it our way. And the first thing we’re going to do is we’re going to find a problem that we’ve experienced.” And that’s where we did a retrospective on our lives, it took about a week, and we just thought of everything that we’ve experienced that was like a pain in the ass.

Andrew: Like what? What’s another example beyond mattress sales?

JT: Another example of one of those ideas?

Andrew: Yeah. Was there some other pain in the ass that you had to drop in favor of Tuft & Needle?

JT: I don’t . . . Yeah. Okay. So, here’s another one. So, we actually built a . . . So, we actually built three prototypes. Actually, it was like three and a half, really. So, it was called . . . I don’t know if I want to share this. It was called Pill Stack. It was called pillstack.com and that was the prototyping. And the idea was you would go to the site and you would essentially build your vitamin profile and you would be able to share that profile of like your different regimens for the different issues that you had, but our whole goal was to have customers’ inputs and share what their pains were, what they found help them with what their particular situations and that we would essentially then develop pre-packaged vitamins that were customized to you.

Andrew: Okay.

JT: You can go back and look at when that domain was registered. There’s even probably some history on Reddit. You can see it was actually taking off in a way. And there’s some startups even now that are . . . So, I think that was definitely one of the pains was, “What vitamins should I take? How much should I take of it?” I have . . .

Andrew: I see it here. There’s the basic muscle building stack created by Dino Five, for example. Right?

JT: Tell me the websites is still up. It’s not still up, is it?

Andrew: I don’t know. I’ll take a look. I’ve got old screenshots. But why wasn’t that the thing that you were going to follow through on?

JT: Well, so, we wanted to start with . . . We wanted to start with a problem that we’ve experienced. We had about a dozen, and so we picked our top four, and we wanted to honestly go into something that was really weird, something that wasn’t just software. We wanted to branch out, taking our past experiences, maybe use that as a competitive advantage. Software and design, customer experience, those types of things. And so we picked four and we built rapid prototypes over the course of a week and we launched those and we gave each one a little bit of attention. And we had certain gates that we were looking for if it qualified for passing the test, and whichever one passed the test was the one we were going to go with. And it just so happened that mattress shopping and mattress, the product itself, which is probably the most extreme of them all of departure from what we’re accustomed to, was the one that actually got the most traction.

Andrew: Oh, so, it was, “We’re going to put it out there. We’re going to create some variations, some . . . ” Sorry, “Some new version, so it’s not just the first version if it fails and we consider the idea of failure, but we’ll put some love into it and whatever takes off, that’s what we end up doing.” Am I right?

JT: Yeah, exactly. The idea behind this was we didn’t want to come up or force an idea. So, let’s start with a problem that we have. Okay. Then from there, what features or what would you need to do in order to solve or ease some of that pain? Now let’s make some mockups and let’s go and put it up, take out some ads and see if people are interested, see if people are willing to pay because the last thing I want to do is what seems to happen mostly in high tech is you force this idea, you mash it together, you build a presentation, you pitch it to investors, and then you raise capital, then you build your team, and then you spend however much long time it takes to launch it to find out whether it works or not. It’s like, we don’t have time for that. And if we want to bootstrap this thing, which was also the number two criteria on our list for when we started a company, we would need to find out quick, and we didn’t have that much time. So, we had to move fast.

Andrew: Okay. How did you know or when did you know that Tuft & Needle was going to be the thing?

JT: When we built the site, so what we did is we took each of these ideas, we took our legal patent and read at the top of the hate list and this was for the mattress. So, the mattress hate list. We listed everything we hated about shopping for a mattress, everything we hated about a mattress. We drew a line down the center and just what we would do instead. And it wasn’t rocket science. It was pretty straightforward.

Dozens and dozens and dozens of mattresses, what if there’s one salesman and the commission’s in the games? No salesmen. I mean, it’s pretty straightforward. So, we then took that list, reduced it to the easiest set, the MVP, and then we built a mock site with a photo stock image of a mattress and then we launched that in June 2012. And Daehee wasn’t with me, but I was sitting in Coupa Cafe in Palo Alto, and I launched the site, I sent him the message and goes, “Okay. The Google Ad went up.”

And so I’m sitting there drinking a cup of coffee, my friend sitting across me. I mean, it’s packed. It’s like a buzz time and that café. And I get a phone call and Daehee is screaming, he’s like, “Dude, we just made a sale. You won’t believe it.” And I’m like, I started screaming. I literally jumped out of my chair with my hands in the air and I literally said, “Jackpot.” Like, I had no sound constraints whatsoever. The entire cafe paused. Everyone’s standing, workers, like everybody at the table looked over and they looked at me and they knew exactly what happened, and they were all smiling like, “I know it just happened there.” And then they’re like, you see the energy in them, then they went back to work. Yeah, that was . . . it was exhilarating. So, that’s what basically shut that site down because the transaction didn’t clear. We set it so if somebody could submit their credit card and got to work.

So, over that summer of 2012 was when we got to work and figured out, how do you design a mattress? What is it made of? Tear the one, but we used the knife basically to just kind of saw it open. What are the components? Why do they work the way that they do? What is . . . Essentially, engineering first principles and doing a little bit of reverse engineering and then figuring out like, “Who are the manufacturers and how do you do this?” And then October of 2012 is when we officially launched Tuft & Needle.

Andrew: You know what? I’m on that original website. I see it. It looks good. I could see why somebody would hit a Shop button and buy it.

JT: Yeah. We don’t have to . . . It was literally a mockup, so, yeah.

Andrew: But there was nothing there. Did you call at the person who bought to understand why they bought? Did you do anything beyond just say, “We’ve got validation. We’re not charging this person’s credit card. Let’s get to work.”

JT: All we were looking for was we were just looking for a click, the credit card information in the form and the click and . . .

Andrew: Just to see if people would buy mattresses online. That’s what the test was about.

JT: That’s it. And we sent an email just apologizing that this we’re having problems with the site and we weren’t able to fulfill the order. There was no transaction there, but yeah, it was essentially just to get compaction for somebody to give us some money. And that’s your ultimate proof that if somebody you don’t know is willing to pay for something that you’ve put theoretically would make or have made, then you know you’re onto something. At least that was our . . .

Andrew: How many sales did you feel would prove that this is a viable idea?

JT: Well, like I said earlier we had a couple gates. So, the first gate . . . Our first challenge was to get the ramen profitability so just enough to at add our profits and we were able to write ourselves a paycheck to pay our bills. So, I don’t remember what the number of [inaudible 00:23:35]

Andrew: And it was just enough. Can we actually pay our bills with the revenue that we’re bringing minus the cost? Okay. All right. Before we get into how you built it, let me take a moment here to talk about my first sponsor. Actually, I don’t like that I was going to talk about DesignCrowd. We’ve got to talk about HostGator here because you’re such a perfect fit. What you did was you said, “I have these ideas. Let’s validate them by creating websites for it and see what happens.”

And you know what? The better sponsor to talk about that is a company called HostGator. Anyone out there who has an idea and wants to put it on a website, I urge you to sign up for not just HostGator simple package but their medium package, the one that gives you unlimited domains. I’m telling you, once you have unlimited domains, first of all, every idea in your head can just be a website pretty fast, especially now with one click WordPress install.

Second, it doesn’t even have to be a business idea. You know what? JT, I’ve said this before that my wife and I, when we were dating, she said something that I did was déclassé. So, I went out and I copied the dictionary definition of déclassé, put my photo on it and built a website called DictionHarry. It took me all 10 minutes to do. And then I sent it over to her, made her smile. It was a thing that she remembered. So many different uses for websites.

I was at this conference and I asked the guy who work there, I said, “How’d you get to work with this company?” And he said, “You know, what I did was I built a website for them to show them why they should hire me with their name in the URL and the whole website dedicated to them.” I said, “You did it for them.” He said, “I actually did it for a few different companies that I was interested in working for.” Well, that makes a lot of sense.

So, if you’re out there listening to me and there’s an idea in your head and you want to actually make it more concrete, go to hostgator.com/mixergy, select that Unlimited Domain package because that’s the one that’s going to let you take every idea in your head and just put it out on the internet. HostGator.com/mixergy will give you up to 62% discount unmetered disk space, unmetered bandwidth. I’m not going to go through the yada yada ball of pointless. Just go check them out. And thanks by the way, guys, for using the /mixergy at the end of HostGator URL. HostGator.com/mixergy. I own that now to DesignCrowd.

All right. You know what? The thing that sticks in my head about you opening up the mattress and trying to figure out how to do it is, your first version was a mockup, just used stock photo to create the website. Why not say, “You know what? We’re going to start by just selling any mattress that we can. We’ll buy it cheap, we’ll sell it a little bit more expensively, and then we’ll figure out how to make our own mattress and deal with factories and that whole thing.” Why?

JT: Oh, the primary reason for starting this was customer pain and it wasn’t just the shopping experience, it’s also the experience with the product. So I’m a product developer and designer, so I mean, I’m sort of biased that way. So, if we’re going to start a mattress company, we need to develop our mattress. It’s just how we wanted to start it.

And we wanted something . . . And looking at how the industry was set up at the time and now it’s certainly transitioning to a new form, it’s going to take a few more years, there’s no feedback loop of people, the people that you’re selling to and your customer base. So, if you have a customer who’s upset and it has something to do with the comfort or how it’s delivered or what are your controls in order to make improvements. So, by starting with a product that we’ve designed and figuring out the supply chain and that whole process, we now had something that we can mold and shape based on customer feedback.

And you really do have that flexibility which we did early on to be able to iterate very quickly, like software, so that essentially, the first, I don’t know, first few thousand customers, I called them. I called them or emailed them and asked, “How did it go? How do you like it? What do you like? What don’t you like?” And it was very qualitative. And I would take that feedback and that would backlog for the next iteration with the mattress. And it was the same thing when it came to the usability of the site, deliverability of the mattress, the return process, the price, all of those things.

Andrew: So, I get that about the site and I get how you can understand what something’s confusing and change the site, clear up a pixel, change the content. But when it comes to making a mattress, don’t you have to buy in bulk? Don’t you have to deal with the factory that has to take some time to create it, time to ship it over? No?

JT: Oh, you do. And I couldn’t get a single factory to really agree to anything without in-person meeting. Actually, most of them didn’t even take a phone call or would hang up on me, so I had to rent a car and I made my list and I just drove to them. And there was a couple. I literally like walked in the factory, the door was open and I couldn’t find the front door, and I just found someone and I’m like, “Hey, do you have a salesperson here or like an account manager?” And I had also been kicked out of a few factories, but for the larger ones that would take the meeting, the threshold or the minimums in order to actually start were so high, and we were we were bootstrapped because we only had $6,000 in the account, so we knew we couldn’t really guarantee and kind of a PO.

And I was trying to negotiate essentially paying with terms as many as we would sell. And ended up being a small factory in Southern California, a small mom and pop shop that knew how to make mattresses and was really good at it but their businesses really small who said, “Great idea. We want to help you with your vision of disrupting this industry. Yeah, sure. We’ll give you the terms and you can sleep in the factory if you need to for the few days you’re here, like, working on prototypes.” And that’s essentially how we got started. So we started as their smallest customer selling onsies, twosies to now by far their largest customer.

Andrew: And you literally slept in their factory, asked them for what you needed, bought one or two mattresses at a time?

JT: Yeah, basically. So this is a few months after cutting my mattress open. But when you’re actually inside of the factory and in the supply chain, you see everything that’s available, you see all the options that are available. So we formed a hypothesis of like the formats and what would be . . . What do you need in the mattress? We need pressure relief. We need supports. We want to sleep cool. That’s really the basis for a good mattress and it’s not very complicated, but to achieve comfort for most people, it is a very complicated thing.

So, yeah, making prototypes on the factory floor with the factory workers and testing them out. It really was N equals 1 because it was just me. Daehee wasn’t with me at the time. And it came to a point of, “Okay. This is version one.” And that’s what we started selling. And then from there, staying right near the factory, I could take the feedback, go right back in and make some tweaks and tweaks until we optimize the actual design and the materials. There’s a lot of factors and variables in the material, so there’s a few things that you can tweak and even more things that you can even affect in how it’s constructed.

We essentially maximized the version. So we had bumped the version I want to say 30 to 40 times within about 12 months, and then we hit a wall. And so with all the available materials out there and even sourcing more materials that the factory didn’t provide, we weren’t able to figure out how to get return rate down and more satisfaction up more and we essentially zoom forward to today. Like, that day was the most modern, the mattress and advances we could really develop it and that was the point when we needed to find a foam chemist to actually get into the chemistry and the raw materials to break . . .

Andrew: You’re talking about the first year it was you having a mattress made, calling the customer who bought it, saying, “How was the experience of being on the mattress?” Taking that feedback, going back in and adjusting it based on the feedback, creating a new mattress, we’re talking about multiple times a month you did this, and bring out that new mattress to the next customer.

JT: Yep, that was me. And I did a lot of other things at the same time.

Andrew: And so what kind of feedback would they give you that would influence the way that you created a mattress?

JT: It could be that it sleeps hot or maybe there was a tear in the fabric or something felt weird about it or . . .

Andrew: How many customers did you talk to to understand whether one person sleeps hot and they’re just kind of weird or overly sensitive, or is it something that multiple people have an issue with?

JT: Oh. So, I mean, sometimes I would get one phone call and I immediately go and make a change or try something. And sometimes I would log it and wait for more people to really complain about it before I would prioritize them to change [inaudible 00:32:22]

Andrew: You’re blowing my freaking, dude. And I guess I . . . Because I always think of physical products as being something that’s on a factory floor, but you know what? I was just talking with Leslie Voorhees Means, she used to work for Apple on the Apple Watch and she said, “Everyone imagines that there are these big machines producing this stuff nonstop. It’s actual people. Factories are made of people and they’re screwing in all the little screws in your Apple Watch you’re buying.” So, I guess in my mind there’s a factory that makes these mattresses, but it’s more handmade than I imagine. Am I right?

JT: Oh, it’s true. There’s a lot of labor involved. So, yeah. The way the foam is made, that’s produced on a big machine and that goes quick but you have to cut it, you have to glue it, or assemble it and glue it. And the fabrics, there’s multiple pieces, different types of pieces and that has to be cut and sewn.

Andrew: So you could keep asking for these changes and change it. How would you log the changes and how people reacted to it considering that you had what you said 40 different variations the first year?

JT: Oh, I just used a spreadsheet.

Andrew: Just going to spreadsheet, we made this change, let’s see how people respond. Turns out five people said it’s too hot. Got it. Okay. How did you get your early sales beyond that first Google Ad where you didn’t really have the product? What did you do next?

JT: Well, family and friends helping spread the word. That was one. Another was the online communities. Reddit was huge, huge for us. I mean, the Reddit community really, really embraced us and helped us start our company. And what we did is we would reach out and just ask for feedback. Like, “This is the company we’re starting,” or, “We’re doing this. We’re doing that. I’m asking for opinions.” And it’s almost like as soon as people realize that you really cared about them and this was a problem that was so prolific and so terrible that everybody sort of feels like they’re in the same boat with mattresses and something you didn’t think about until somebody is asking you, “What don’t you like?” that it really . . . then you start to get that camaraderie and support. And so the online communities and then the third was . . .

Andrew: The support on Reddit. You know what? I was kind of like a reluctant to admit it, but I’m going to. I couldn’t find it. I was . . . I’d love to find the early stuff that you posted to get a sense of how you are interacting with people on Reddit. I can’t figure it out. Which section of Reddit were you on? I know today you guys have your own Tuft & Needle section. Sorry.

JT: Yeah. Buy It for Life was one of the subs. I want to say, yeah, Minimalism was another sub that was very supportive, and I honestly I don’t remember the other . . .

Andrew: So, you’re just going in there, and then what were you seeing? So, I see by the way on Buy It for Life, the first response . . . the first Google hit that I saw for your name and the word Reddit was someone’s review of buying Tuft & Needle and having it on for over a year. So I get it, but how much could you possibly post in there? What kind of questions would you post in there? What kind of things would you post in there to get people to care about a mattress?

JT: Oh, just asking for opinions like, “Hey, we’re building this company,” or, “We just released this,” or just asking for opinions on like what we’re doing and sharing that. Another one was we, about a year . . . Well, let’s see. It was in the, I want to say, November of 2013, we posted on Hacker News. It was a Show HN post. And we wrote just sort of a snippet of the success that we’ve had in bootstrapping, like, how, not sort of a success, but like how we bootstrap to the number one mattress on Amazon. You can probably find that and you’ll see a lot of mattress folks, I can say mattress guys because the industry is mostly men, raging on us in there. It’s pretty intense. But that post was really the catalyst.

So, we had all these community support, friends and family, some Google AdWords, but when it really took off was with this post because of this post, the Hacker News community really started to embrace it. That’s when the VCs and investors started to reach out. And that’s when a journalist that, it was Fortune wrote, “Meet the Warby Parker of mattresses.” And if you see when that Hacker News post hit and then when we got that Fortune post, you can see sort of the time difference and when that happened. And we, at that time, had gotten our return rate way down, way, way down. Our satisfaction up, our delivery figured out, our returns figured out. All of those things were in place and ready to scale and we were really waiting for something to hit, something to catch and that article in Fortune was what did it and then that’s when we really start to explode.

Andrew: I see that post on Hacker News. Well, I wouldn’t have believed that this post would do so much for you. You know what? I vaguely remember even reading it at the time. All right. I see it. When you say that you got your shipping right, how were you able to ship a mattress? You don’t do the “We take the big mattress, we fold it in origami style into a tiny box and ship it to you.” Right? It’s an actual mattress?

JT: Well, it depends on what time period. So back when I was doing those prototypes in the factory, it was a table and this long . . . It was really a dowel, a wooden dowel and we would put the mattress in a mattress bag and we could tape it shut, and we’d use this dowel to . . . Oh, I skipped the very important step. We take a shop vac on the opposite side and it would suck all the air out and we tape it, get on top of the table and you use your knees and you would roll it and then tape it and slide it into a box. That’s how we started. We were trying to figure out how we . . .

Andrew: I had no idea. Okay.

JT: Yeah. We were trying to figure out how we could ship this thing. That then moved to a machine we bought that was really a metal trash compactor that we affixed a heating element so that we could seal the bag so that you put the mattress in the bag in this thing and it would saw slow because it’s meant for like metal, but it would compress the mattress and then the heating element would come down and seal it, and then we’d have to get on our knees again and roll it on the table. But that helped speed up the process a bit and then we commissioned an automatic machine that would actually compress it from the sides, the top, roll it, and then spit it out the other end and put that . . .

Andrew: So, what would cost you to ship a mattress?

JT: So, originally, I would say somewhere around 100, about $100 in the box.

Andrew: Wow.

JT: And now it’s below $50.

Andrew: Wow. Still a lot. And then you do shipping to the customer. Did you charge for shipping?

JT: No.

Andrew: And then returns you offered, I think, in the very first version of your site that I saw there was 30-day returns. Now you guys do 100-day returns. Am I right?

JT: Yeah. So, it was another feature that we pioneered, which is a real return, and you get all your money back, and we’ll take it back. The very first return was sort of a nightmare, but that’s sort of like taking a pragmatic approach where you wait for the problems to happen before you really solve them. And we got our first return and we asked the person to go to a UPS Store and see what the UPS store would do to help them and that ended up being about $300 and then plus the return, so we ended up having to cut a check. There was no way to send them the money digitally before we finally had this idea to donate it.

And actually, the first phase of donation was working with social services for foster care kids. And so we donated to local government services and then they would distribute them. And then we started calling donation centers, and the first one that was open to the ideas was Vincent de Paul and now Salvation Army does it and now a ton do it. So we helped create that movement as well. So now we have a process that when we do get a return, most of them do get donated and the rest get recycled.

Andrew: By the person to you? Does it come to you and then you guys donate it, or do they donate it directly?

JT: So when you message us that you’d like to do a return and use our form, we will call you and let you know that . . . Well, first, I’ll make sure you’re okay with donating it rather than us picking it up to have it recycled. And we have a database, so, I mean, we type in your zip code and we know all of the . . . Because we’re national now, we know all of the different donation centers, and they know us, and we just schedule a pickup and so you put it outside your door, and someone will come and pick it up, and it goes to get donated.

Andrew: Wow. All right. Let me take a moment to talk about my . . . And by the way, the reason I don’t know it is, I’ve seen you ads. I don’t see anywhere on your website where you talk about how you ship. Your ads aren’t about how we ship and stick the mattress in a box. Your ads were, at one point, all over San Francisco and they all were black background, white text and it said something like, “Mattress stores are greedy. Mattresses costs way too much.” And then it was tn.com. That was your ads.

JT: Yep. That’s our ads, yeah.

Andrew: Why? Is there a big problem when people say, “Mattress stores are greedy,” as opposed to, “I’d like to sleep better”?

JT: Well, it’s . . . So, the main issue that we’re solving and we’re innovating on is just simply putting the customer in front, putting them at the center of our business, and shipping in a box . . .

Andrew: But here it feels like you’re putting your competitors, the local mattress stores, in front as opposed to putting me in front and saying, “We’re going to make sure you sleep really well and that you’re happy with it.”

JT: Well, those are not our only ads. We do have ads that talk about like really the value-add and . . . We’re not so much feature-driven in our advertisements. We’re more benefit-driven, but yeah. I mean, it’s a problem and those boards resonate and you wouldn’t believe how they resonate because people see it and they’re like, “Yeah, they are greedy.” And when you go to tn.com there’s a video there that sort of tells the rest of the story and it’s more about like what we’re doing here. We have a purpose, we have a why, and we figured it out all the rest of it for you but we started with like you with this pain. So, it’s really going straight to the point and being a little bit polarizing. And yeah, it’s a black board, white text, it’s very different, it’s not fancy because we . . .

Andrew: They definitely stuck out for me, number one, because they were all over the freaking city, number two, they were black. There was like no design, no color, no nothing. So, I had to go check out what TN was and I heard of Tuft & Needle but I didn’t know someone had tn.com, so I guess it worked on me.

All right. Second sponsor is a company called . . . What is it called, actually? Who is the second sponsor? Second sponsor is Toptal. I’m at the point where I talk so much, JT, about Toptal that people expect when they meet me in person to always carry this mic, number one, and number two, to tell them a Toptal ad before I talk to them.

Here’s the thing about Toptal. I freaking love them. And the reason that they keep buying ads here and they locked up the whole year was it just works. People are out there looking for developers. It’s a problem. It takes a long time. And what Toptal decided they were going to do is make it easy. They have a network of developers who’ve all gone through their tasks, who’ve all been vetted, who all just a really proud to be in the Toptal network because within the developer community, it means something. It means that you went through a really tough test, you went through a really rigorous process, and you’re the best of the best. Even if you never get hired through Toptal, having done that, says a lot as a developer.

So, when we’re out there looking for developers, we have access to these people who’ve been tested, who have been vetted. All you have to do is go to the URL I’m about to give you, hit that green button, and you can schedule a call pretty freaking fast. I think within like minutes you can get on a call with someone from Toptal and tell them what you’re looking for. If it’s a good fit, they’ll find you someone and they won’t get back to you until they find the right people. And if you like them, have a conversation and do the interview, make sure you’re comfortable with them. But I found that people who get introduced to two or three developers and any one of them end up being perfect because the matchers at Toptal do such a good job.

Anyway, if you like them, you can get started within days. Hire one person, team of people who all work well together, full-time, part-time, whatever you need. All you have to do is go to this special URL where you are going to get 80 hours of Toptal developer credit when you pay for your first 80 hours and that comes in addition to the no-risk trial period of up to two weeks. The founders of Toptal were early Mixergy listeners too and that’s why they’re giving it to Mixergy fans only 80 hours of Toptal developer credit. That’s toptal.com/mixergy. And by the way, be sure to see that 100% satisfaction guarantee right there on that site. toptal.com/mixergy.

All right. If things were starting to take off for you, you’re starting to figure it out. When you say, by the way before we continue, that, “We figured out refunds.” What did you figure out to reduce refunds? What did you figure out to get customers to be happier?

JT: Well, when it comes to a return for a mattress, it’s generally it’s either not comfortable or there’s something like a defect, so the process that you have in your [inaudible 00:45:27] control is a factor buyer’s remorse. But it really is one of those three. So, and the biggest of those is the comfort of the mattress. So, collecting the feedback and making iterations and improvements on the product itself is really your best bet to fixing those.

As opposed to what you see or have seen in the industry, a lot is, you know, mattress companies essentially make it almost impossible to return. So much friction, you’re going to have to take a day off, you’re going to have to have a contractor come in and take a look at your mattress, measure it, look for stains and marks, which is really weird. And then you can do your return and then there’s a restocking fee, and you only get a credit. And also, all those discounts no longer apply. That 80% discount you got, it’s not there anymore. So, it’s just sort of a nightmare and . . .

Andrew: Oh, you mean the next time when I take the money, the credit that I have I can use it but I’m not getting the 80% discount like I did . . .

JT: Almost sort of incentivizes for sending that customer home with a bad mattress so that you would come back and pay a bigger price. That’s not all mattress companies, but it’s definitely is one of the issues. But yeah. So it’s actually a real return process and that we want the feedback. We treat all of the negative and criticisms as the gems because if you get one complaint, the likelihood that you’re going to get that complaint in the future by someone else is high. So, we do whatever we can to possibly fix it. So, now our return rate if you see it, it’s almost linear over time and how it’s dropped with each iteration and breakthrough that we’ve made that we’ve been able to have a single mattress work for the most amount of people possible. It’s a very democratically designed almost like a truly universal mattress. Our return rate is below 5%, which is the one of the lowest, if not the lowest return rate in the entire industry.

Andrew: It’s below 5% you said.

JT: It’s below 5%. Originally, it was double digits.

Andrew: What’s one cool thing that you did, something you’re especially proud of that reduced return?

JT: I mean, the first thing that came to mind was when we . . . The way the fabric is cut it’s only so wide, and so there was a seam that would be on the top of the mattress near the foot of the bed that some people didn’t like. I mean, I didn’t like it, but we were trying to figure out how to get around it, and I had a customer call. And I honestly just spent probably 30 minutes with him on the phone and how annoying it was. It was okay but it’s just like this annoying ridge we had gotten returns [of it 00:48:15]. It’s like really early. There’s a lot of other examples, but this is the first one that came to mind.

And I remember going into the factory and where we’re doing a cut and sew and figuring out how we can change the way we cut and sew the actual envelope that the foam is encased in to fix that issue and then immediately fired off a sample to him and asks, “What do you think of this one?” And he’s like, “Perfect. It’s exactly . . . ” Then he went and wrote us a five-star review and then that became the version for everybody. But it was like lots of examples like this. Now it’s more in the chemistry level because a lot of those easy low hanging fruit fixes and iterations were hammered out in the first year, year and a half. So, now we have to figure out how do we optimize our support factor curve and heat diffusion, heat transfer, airflow, those types of things.

Andrew: And that’s what you were starting to say earlier where I cut you off. You said, “About a year into it we knew we couldn’t take it any further. We needed to have a chemist come in and help out.”

JT: Exactly. So, we went out and found the world’s foremost chemist, and just did a lot of collaboration and deep dives, bringing in a lot of the customer data and issues and then all of the specifications and tests. And we actually developed our own testing machines because this industry doesn’t want to test. They don’t want specs. They want people to shop and prepare based on like performance of materials. So we had to develop some of our machinery just so that we can measure exactly the specifications of our mattress so that . . .

Andrew: Measure what? What would you measure?

JT: Like heat diffusion is an example. So, you use a special camera that measures heat and how it diffuses and you can literally segment certain zones within the mattress and you put a heating element on top of it and you let it sit and then you can measure the length of time that it takes for it fully diffuse. And so you can measure, say, B23 and then B24, which has some change and some variation and you can see if it’s been improved or not.

Or you can take . . . We built this a box that you slide a mattress and fully seals it and it has an input and output that we blow air and it measures the amount of pressure, so we can see the full airflow through an entire mattress, how much air can flow through it. Air is a big factor in the mattress sleeping cool. So, that’s an example of some of the research and development that we’ve had to actually do just so that we can understand and be sure that we’re making improvements because the stuff just isn’t done in this industry at all, so we had to sort of invent all of these things.

Andrew: You know, you mentioned David Heinemeier Hansson. It was either him or somebody who works with him who yesterday tweeted out that “You can’t listen to customers for answers. You have to understand their problem and then understand why they have their problem, and then find the solution yourself.” Do you have an example of that of the time where somebody said, “I want this,” but really that’s not what they needed, what they were expressing was a problem that it was up to you to find a solution to?

JT: I mean, a good example of that would be going to one mattress. So, a person when they’re going shopping for a mattress they want a mattress that’s comfortable for them. “I like soft. I like firm.” But what we’re hearing is they actually, most people don’t really know what they like. That’s just what they’ve been sleeping on or accustomed to. They think their mattress is soft but it’s actually not soft when you actually sleep, lay on a soft mattress and like, “Oh, I don’t actually like that.” There was so much confusion so we went to one. So, that was a clear example of if you . . . What is it? If you ask customers if they wanted to ask for a faster horse [inaudible 00:51:44]

Andrew: Right. Henry Ford. Yeah, I saw that the first version of your site had two different . . . I think two different mattresses, a classic futon, and a [shiki 00:51:51] bed. Right? And then you guys were initially thinking two mattresses or was it . . . How fast did you go to one?

JT: So, yeah. As far as what you’re looking at there, we had one when we first started.

Andrew: You started from the beginning. Okay.

JT: So, when it comes [inaudible 00:52:10] we didn’t just go to the broader market, we really, really had to hone into a small niche. And we didn’t even know, like I said, that this was going to work. So, we focused in on minimalists, Japanese Americans, and people who are just okay sleeping on the floor, just want to simplify their lives, and we made a product that nailed that value of proposition. So, we had this big scope, this big idea, but we knew we needed to start . . . This is what we were advised on. What we’ve learned in business is you start with a small niche, small community that has a problem specifically, and then once you’ve accomplished it for them, you could broaden your scope. And so . . .

Andrew: And the niche was the people who don’t really have a big bed. They just have a little bit of wood off the ground or sleeping on a mattress.

JT: On the floor.

Andrew: Or directly on the floor with a mattress.

JT: Directly on the floor or they have very small apartments or etc. So, our first product really catered to that small group. And then as we developed new products . . .

Andrew: How did you know that was a group to go after? That wasn’t you? You were spending $3,500 on a mattress. You weren’t sleeping on the floor, were you?

JT: No, I wasn’t. I was sleeping on a . . .

Andrew: So how did you know they were the right people to go after?

JT: It was through research.

Andrew: What kind of research do you do that tells you that these people don’t have the right mattress?

JT: Oh. So, I mean, like, it’s taken me back maybe six years or so. But as we were investigating all of the problems that people experience with the mattress and sleeping and looking through forums and looking online, and we kept seeing this recurring theme, somebody who’s just so frustrated just wanted something simple. “I’d even just sleep on the floor.” All you need is like a thin mattress like I slept on in Europe or I slept on when I was in Japan or something like that. So, we saw that as an entry point to get some of the early traction.

Andrew: Okay. And that’s why when I asked you about the sections of Reddit that you’re on, it was the Minimalists sub Reddit that you were a part of.

JT: Yeah. Exactly, yeah.

Andrew: These are the people who don’t have big beds and so on. By the way, do you ever feel like . . . Actually, I do know that you do. You feel a little bit bored. Like, “We’re in the mattress business. Now we’re mattress salespeople. We came to Silicon Valley to be new entrepreneurs and now we’re selling mattresses.”

JT: Oh, yeah.

Andrew: Talk to me a little bit about that.

JT: Yeah. So, I would say our first year was our most challenging year, and it was really because we didn’t really have a lot of cash to really grow, so we had to really rely on word of mouth and customer satisfaction. We had to rely on our customers and a little bit of advertising we were able to do. And at the same time, we weren’t sure how big this problem really was. So we did validate it with an initial attempting sale. We found a small niche that we can make a simple product for, but the big question was, “Can it still solve this issue that we hypothesize that most people have experienced which is the broader market in mattresses?”

Also, you’re right, it was a bit boring. There’s not a lot of technology available to us and the barrier to entry to inventing new material was out of our reach in that first year and we wanted to be proud of something that was innovative and something that was really, really groundbreaking. And so we would meet up. Daehee and I sort of had this cadence, it was usually over a hookah. And the hookah shop when we first met, we met at hookah so it’s sort of just like a symbolic when we talk deep. And we’d ask each other, “Is this really what we want to do? Do we want to keep going?”

And that’s why when we had that big bang and we saw it start to really take off that’s, “All right. This pain is big, and this is a huge problem, and we can make this coo.” And we’ve worked really hard at that. And I think you can see there’s a lot of people talking about mattresses right now. And back then we were . . . Our friends and family thought we were totally nuts. I couldn’t hire a single person from the tech industry. Now we have people apply every day.

So that first engineer was the hardest one, the first designer was the hardest, even the first architect. Later on when we started getting into architecture with our retail stores, it was the hardest one. And as you grow and as you become known and as people see, like, “Hey, the mattress thing is was actually pretty cool because it’s not about mattress, it’s about sleep, and sleep is awesome, and sleep is important.”

It’s sort of redefining. It’s category redefining and it became more exciting and sort of correlated to success as we got traction, as we saw more happy customers, as we made some breakthroughs and we continued to iterate honestly as we hired people. Just having people to work with, you’re less lonely. So you have somebody to talk to, someone to like after work and go and grab a drink or play basketball or something with and then later that night going jam on some more work. I mean, those are big . . . Those are important things. We didn’t have the capital to go and raise and build a team out like we have in the past with our previous company.

So, anyway, yeah. It wasn’t really exciting and exhilarating that first year, but our second year it sure was and we were really fired up. And I could say I still dance into the office. I’m so excited about what we’re doing. We’ve catalyzed disruption, and there’s this movement, but we still have a long way to go.

Andrew: Okay. You know what? A couple years after you started, other competitors came in. And I talked to you about it before, you said, “You know, Andrew, if we start getting into names, some of them are pretty litigious and I saw that if I started getting into specifics, we weren’t going to get anywhere because we’d have to be careful about who we talked about.” What I’m curious, though, is still, now you see them come in. They raise money. Why didn’t you raise money? They come in with, I don’t know, with affiliate programs. Why don’t you one up on them? How are you dealing with that?

JT: Yeah. It was definitely interesting because as we began to evolve and expand into the broader markets, we went from a five-inch mattress to a 10-inch mattress. Now we’re starting to hit more Middle-American customers rather than just the early adopters. Everything’s going smooth and then our first competitor launches. And the beautiful thing about really being first and having developed and figured out how to innovate and solve this pain is there wasn’t really anybody to compare you to other than the status quo, which the bar is like super low. So, as soon as a competitor starts and replicates a lot of what you do, even uses a lot of your advertising slogans, even in cases uses our photography, our designs, etc.

Andrew: Really?

JT: Oh, yeah. Oh, yeah. There’s actually . . . There’s a company that uses Daehee . . . There’s an unboxing video that we filmed and he’s in it and it’s a Korean-based company that took that video. Daehee is Korean, so it fits perfectly in with their demographics. And we see this and it’s literally about stories and how they found it and literally say exactly almost word for word the same thing. What it’s really done, so, first off it was exciting because something started to happen. Secondly, it was great for us because companies are raising a lot of capital and spending a lot of money on advertising and raising awareness.

And one of the things that we did, a lot of things, we got a lot of those pieces right. Customer service, shipping, product, all those things are right, and those are things that a lot of these look-alike startups that came after really didn’t spend a lot of time to figure out. So, we knew we’d beat them in customer satisfaction and they were spending all this money raising awareness was essentially driving a lot of new customers to us, so it helped our growth immensely . . .

Andrew: You saw more sales come in when that happened when they were starting to advertise?

JT: Oh sure, yeah. Yeah, because they’re advertising for this new way to buy a mattress and people are starting to see it and then they start to do research. When you’re buying something that’s expensive, you do research. You look to see what’s around you and read reviews. So that is definitely something good. We’re honestly we’re raising the tide for each of us, but the one thing that caused serious pain for us was we are . . . Cognitive dissonance and the customer’s pain and confusion and misinformation was one of these areas that we’re trying to solve, and when all of these competitors spawn, there’s a few people probably have heard of but there are 100 or 200 more behind them that have started since then, it causes even more confusion. So, people are trying to figure out “Which one is good for me? Which one’s better?”

And so now it’s essentially like the Internet has become the new mattress store. So when you walk into a mattress store, and that’s what it is, and then the affiliate bloggers are doing these reviews, they’re like the mattress’ salesman. And so it’s like the reincarnate and the new form. So, now we’re trying to figure out, “All right. So, how do we deal with that?” Definitely, staying true to improving our service and product and all of that, launching your product is one way. But yeah, that was definitely a learning experience. It was good. It was bad. It was fun. It was . . . It caused me a lot of stress because I had to figure out like how to answer some of these questions.

Andrew: I’m surprised you didn’t even take money off the table and say, “You know what? I’m going to raise some money just so I have a little bit put aside. We’ve hit a big milestone here. Let’s bring some investors in.” All right. Let me close out with this one final question, actually. Here it is. I’m looking at my screen and I see what someone on Reddit said is a well-placed ad and sure it absolutely is. It’s a picture of Brooklyn Bedding and on top of it is one of your billboards and it says, “Honk if you think mattress stores are greedy,” and it says, “Learn the truth tn.com.” TN is a phenomenal domain. How much did it costs to get tn.com?

JT: I’m actually bound by contract not to reveal that number, but I can say it was in the millions. It was one of the biggest checks I’ve ever written.

Andrew: Millions?

JT: Yeah. Yeah. Well, there’s not that many two-word domains left. But we are . . . All right. Well, first off, tuftandneedle.com is a long domain to write for a customer teams. TN is a lot easier.

Andrew: Well, tell us a story of when you went in to buy it and then the check. The thing that you were telling me before we got started.

JT: Oh. Oh, okay. So, Daehee handled like the negotiation and all that stuff, but he wanted me to go and do the wire transfer for the payment. And I remember, so I’m walking out of my apartment, had sunglasses on and the baseball cap and I was holding [a car 01:03:17] and I walked into a local bank branch and I remember calling him and I’m like my hand is shaking and I’m like it . . . Because he . . . Daehee manages . . . He manages the finances and a lot of the logistics and all that operational stuff on that side and I’m here writing the biggest check I’ve ever written in my life and I don’t normally handle the money side of things. So I’m just calling him, like, “Are you sure? Are you sure? Am I making a mistake?” He’s like, “No. We’ve decided. We’re doing it right. Do the transfer. You’re all good.”

So, I walk up to the bank teller and I’m like, “I’d like to make a wire transfer.” And she’s like, “Okay, great. For how much?” and I said the number and her eyes got super huge and she’s like, “One minute.” And then the manager came out and all these other people came out like a SWAT team from the bank. But yeah. I mean, I would say that it was expensive, and it was definitely a little bit of a risk. We were always very careful.

Daehee and I are actually not huge risk takers. Contrary to what they say about entrepreneurs, we’re very methodical, and we test before we really jump in. And our goal with this domain was to make it easy for customers to type something that was a little bit more memorable and run in some simple math and worst case it may pay for itself in the first year, maybe not, we’ll see. But I can say we’ve been using it for a few years now, and I’m really glad we made that purchase.

Andrew: It’s a great domain. All right. Anyone who wants to go check out the business, it’s tn.com, Tuft & Needle. I’m hoping that there’s somebody listening to this right now who years from now we’ll come back and do an interview and say, “It was that Tuft & Needle interview. I heard that. The guy is . . . I see how they came up with the idea. I see how they bootstrap. We decided we’re going to do the same thing.”

All right. My two sponsors for this interview are HostGator. If you want to build landing pages and other sites fast, hostgator.com/mixergy. And when you’re finally ready to hire the best developer ever, go challenge them at toptal.com/mixergy. I’ve hired great developers from there. I’m grateful to them for sponsoring. All right. Thanks so much for doing this interview.

JT: Thank you


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