John-Thomas Marino is one of the co-founders of the mattress company, Tuft & Needle. Him, along with his co-founder Daehee Park, founded Tuft & Needle in 2012. The two met in college and worked together at the same startup when they came up with the idea of Tuft & Needle. Now, the company is the #1 rated product in the bedroom furniture category on Amazon and is growing every year.
Let’s start at the beginning. Can you tell me about Tuft & Needle and how it started?
Daehee and I were best friends in college and we worked together for several startups. When we thought about starting our own company, we didn’t want to develop another software company and we didn't want to take on any investor money. We didn't want to chase the stars. We wanted to solve a problem of our own and do it slowly and methodically. If we couldn't do it bootstrap we would abandon it and find something else.
We outlined what a company would look like if we found it, and that dictated what we did. After about two weeks we did a retrospective on our lives, searching for a problem. An issue that came to the top of our list was one that I had: I recently had gotten married and was shopping for a mattress. It was basically a nightmarish campaign that was worse than shopping for a car. I ended up spending $3500 on a mattress, that I didn’t like and couldn’t return.
It was a fairly emotional experience for me and one I was passionate about.
So the next thing we did was get a legal pad and wrote “Hate List” at the top of it and listed out everything we hated about shopping for a mattress and everything we hated about mattresses. Then we listed out everything we would do instead. And that was our blueprint!
So we built a single page site, described what our mattress and service would be like. We launched without a product and with some Google advertising made a sale within 15 minutes. At that point, we shut that site down and got to work.
That’s how we got going and 6 months later we launched Tuft & Needle.
2013 was just Daehee and I and we did about $1 million in sales. In 2014 we did about $9 million. Last year was about $42 million and this year is gonna be a lot more than that.
We started working with a marketing team about a year ago. But we are still about 70% growth by word of mouth.
Our approach is very iterative. We don’t believe the product is ever done so we are always finding ways to continuously improve it.
That’s the in-a-nutshell Tuft & Needle. We have one model, we compress it in a box and ship it across the United States. The one model works for about 95% of everyone. If you like hard or you like soft, you’ll still love it.
Now with all the growth you have, where do you see your vision or where do you see Tuft & Needle going in the next few years?
It's challenging to keep up with all the growth and we’re just scratching the surface. Two years after we launched we got our first competitor. Since then, we’ve had like 60 competitors start. Even despite all the competitors and having been in business for 4 years now, we're still scratching the surface.
Something interesting is that Tempurpedic launched their quarterly earnings, and they’re down. Their stocks are 25% down and so we’re starting to finally see the incumbents really being impacted. They’ve launched new brands under the masks of new names but they’re not working.
The next couple of years we are staying focused on scaling. The scaling problem is challenging. There are so many people. Everyone needs a mattress. It’s not an easy supply-chain to scale.
"Stay totally focused on all the complaints. Complaints are your gems. Every time I get a complaint, I know that that complaint will come back to me if I don’t fix it. It will always come back forever. So when one comes in I squash it."
You and your co-founder both have a background in software and you both built a physical product. Do you have advice in how you built a consumer product for other entrepreneurs with a similar background?
Your background in software will tell you to take a similar approach. Fast iteration, collect feedback and never finish. When we first started our churn rate was much higher, and now it’s much smaller and we’re still trying to reduce it.
The iteration cycles and sprints are much longer. You can’t do a deploy every day, or every hour, or even every week. When we make a change, it’s monthly. In the beginning, it was about every other week.
I’m still leading product development and one tip I would say is stay totally focused on all the complaints. Complaints are your gems. Every time I get a complaint, I know that that complaint will come back to me if I don’t fix it. It will always come back forever. So when one comes in I squash it.
Another tip I would say is to meet your suppliers. All of our competitors, like 99% of all the new ones, one of the core founders is a mattress guy. We’re not mattress guys. So when we started we had to rent a car and literally drive to different factories and meet the suppliers face-to-face to pitch them on our vision. Most of them said, “no, not interested.” The ones who said yes are the ones we’re still working with today.
The ones who see your vision and believe in it, are the ones you want to work with.
The ones that don’t see it or don’t care, you don’t want to work with.
When you get face to face with suppliers it makes a really big difference.
Not even Skype or phone calls?
Meet them face to face. I was hung up on so much. I would send them an email like ‘hey, I’m starting a company and driving through, do you have fifteen minutes?”
There are people who say no, but you can’t stop.
Getting to the version 1 prototype was not easy. And the development cycle is really slow, especially if you’re not a massive customer.
If you’re ordering prototypes, it moves slowly. It’s very frustrating.
As you were scaling, what kind of tools were critical to your company as you started to grow?
I was using the platform as a service, Heroku. By removing a lot of that work like servers, I was able to focus on growth and product. And honestly, growth really came from product and service, so Heroku was one critical tool.
The other was a ticketing system for managing all the customer support. Support and service are totally key when it comes to a physical product. So we use Help Scout for that. I used a lot of other tools but a lot of ticketing software is designed for software companies and it’s like they're geared for software customers and not regular people.
That’s why I like Help Scout. It has a very simple interface. It looks just like an email to a regular person, to a customer.
We used Asana for to-dos and stuff like that.
Another great tool, that isn’t software but is an activity, is team meetings. Company-wide team meetings. When we hit about 30 people, team meetings became unproductive and we switched it from weekly to monthly and now it’s town hall style. We get in front of our team with microphones and people ask whatever questions they want.
Doing daily stand-ups with your team is also a really great tool that I don’t think should be limited to software development teams. Those are effective for any team.
One-on-ones are really great too. When you hit about 40 people, giving them direct feedback and understanding what pains people are having is really useful.
For other customer service tools, which did you feel like leaned too much to software customers?
We started with Zendesk but found that customers didn’t understand the whole “reply above the line” thing. Zendesk can work really well if you’re a SaaS company and your customers are other SaaS companies or business type of people. But for us, it didn’t pass the mom test.
Then we tried Desk, and then we tried Intercom. I’m from the software world, and those are the ticketing systems I know. So I always start with what I know. Intercom was great because they did develop a couple of features for us, but we outgrew them and needed something a little simpler, a little more streamlined. It was really oriented more towards SaaS companies.
For us, Help Scout has been key. It’s by far the best for a B2C company that has a physical exchange of a product from what I’ve seen.
How did you find out about these critical tools for your company?
They were tools that I personally used. The way I discovered them back in the day was through friends or through other software developers, or through Hacker News. Product Hunt has also recently been more helpful.
That’s generally how I would have found tools in the past.
"That’s a big differentiator. We are not setting ourselves us to be flipped, acquired, go bankrupt, run out of runway or anything like that."
Earlier you mentioned about the competition coming out. Are there other ways that Tuft & Needle really sets itself apart from the competition?
We are very product driven. We are product guys. We’re not marketing guys and that sets us apart. I don’t want to name names, but the bigger ones you probably know--they are using standard materials and there’s nothing special about their product.
We’re disrupting not just on the process by how we sell and ship directly to consumers, we invent new materials.
We hit roadblocks in our product development because we couldn’t achieve what we wanted to achieve using things like spring, or memory foam or foam. So we are inventing new materials and making the next iterations of those things.
That’s one big difference.
Another is that we only have one model. That’s what we pioneer. We weren’t the first company to sell online. Tuft & Needle was the first to make a universal mattress that works for everyone. A lot of other companies that sell one model have a high return rate because they’re using standard materials.
We’re also building the company to last hundreds of years. Daehee and I are not interested in selling. Our goal is not to exit. We’ve had many offers and it’s just not interesting to us. We’re interested in being part of a really great company with smart people and solving a really hard problem. We have a long way to go.
That’s a big differentiator. We are not setting ourselves us to be flipped, acquired, go bankrupt, run out of runway or anything like that.
It sounds like you’re building a really nice company culture. For hiring and having a company culture, what have been key points for Tuft and Needle?
Your culture is you. It’s your personality. You can’t come up with a bunch of adjectives and say “that’s who we are going to be.” You have to come up with adjectives that you actually really are. You have to be honest with yourself. That’s your culture. Then to sustain that culture you need to hire people that share those same values.
Daehee and I are very genuine and honest people. So we look for very genuine and honest people. If we don’t feel like we are getting them from someone, then we pass.
We look for those specific things when we hire. Rather than trying to force concepts or ideas, or design a culture and make the company become that--I don’t think that works. It’s about knowing who you are and finding people that are like you.
If you’re an asshole, then your culture is going to reflect that.
If you have an ego, your culture is going to reflect that as well.
If that’s who you are, don’t try to change. Just embrace it and use it to your advantage and find people that are like that. Then as you go along, if you find decisions being made that don’t fall in line with how you want decisions being made, you give feedback. Then if someone joined that really isn’t who you thought they were then it’s better for both of you to part ways.
As our company has grown I have wondered “how do you create culture?” and that’s what I’ve learned.