Tempur-Pedic

“Yeah, it was originally invented by NASA. For the space program to cushion the astronauts from G-forces, and since it was a public thing.”

“So next day he calls back and says, ok, here's what we'll do. We will swap that container for 10% interest in your company. . Tempur-Pedic. And I said, ok.”

“Well, it was undefined, but I was supposed to raise what is needed, so I raised about 500,000 dollars.”

“And then one day I got a phone call from the New Yorker, our first magazine, and he said, you know you guys have an 800 number. That means you, you're eligible for direct response rates. I said, oh, okay. How much is that? He said, 6000. I said, I've been payi…”

“We did 300,000 in 92, then 2.6 million, then six and a half, then 13, then 28, then 45.”

“Well, that 10% interest that they swapped for that container of pillows, we had to do that four more times. So they ended up owning 45% of my company. So me and my U.S. Investors, we owned 55.”

“Within two weeks, we were the hottest selling new product in Brookstone.”

“By the way, in 2012, Tempur-Pedic acquired its longtime rival, Sealy, making it one of the biggest bedding providers in the world. A company with a market cap of two and a half billion dollars.”

“We were supposed to sell 10,000 mattresses the first year, and we sold 70. So we missed the goal by 9930.”

“So, we got 25% of them to buy four pillows, and that was the major breakthrough that turned us out of the nosedive And so all of a sudden from that 500 chiropractors, we had a 125 of them who were buying four pills a month, and we were selling it to the chirop…”

“We were probably then about you know, five, six percent of the U.S. Mattress market, but we were A much larger percentage of the 2000 dollar and up price point.”

“All those years back in the early, I mean, late nineties and early 2000, I was expecting to get a call from an industry player like Sealy. Guy Raz: To say, hey, we want to buy you out or something. Bobby Trussell: Yeah. And we would have said, Okay.”

“It turned out to be one of the all-time great private equity deals for them, and then they took us public three months later, so it was like they didn't even have their money up for a year, And they made like, 10 X.”

“Late 91, and we met him in Milwaukee, and he and I negotiated that he would give me exclusive North American distribution rights for his products.”

“I think if you sold it for 30, you'd sell less.”

“So anyway, that's what the three hundred fifty million was. The purpose of the transaction was to take the Swedes out. Not a ton of it went into the company, actually.”

“The other condition was we had to sell 10,000 mattresses the first year in order to maintain exclusivity.”

“We were 60 to 65% of their world sales. So their company was only valuable pretty much because of that contract.”

“So, we got 25% of them to buy four pillows, and that was the major breakthrough that turned us out of the nosedive”

“Bobby Trussell still sits on the board, and today, the company has a market cap of three and a half billion dollars.”

“I was probably a million dollars in debt.”

“We were supposed to sell 10,000 mattresses the first year, and we sold 70. So we missed the goal by 9930.”

“We were 60 to 65% of their world sales. So their company was only valuable pretty much because of that contract.”

“Within two weeks, we were the hottest selling new product in Brookstone.”

“We will swap that container for 10% interest in your company.”

“Ah, there was an equity kicker involved that if we hit certain numbers, we would get another fifty million, which they didn't really think we'd hit, but we blew the doors off and we hit it quite easily the next year.”

“We had 10,000 chiropractors selling it, and of course they had another 15,000 chiropractors selling it all over Europe.”

“We were probably then about you know, five, six percent of the U.S. Mattress market, but we were A much larger percentage of the 2000 dollar and up price point.”

“Well, that 10% interest that they swapped for that container of pillows, we had to do that four more times. So they ended up owning 45% of my company. So me and my U.S. Investors, we owned 55.”

“Well, it was undefined, but I was supposed to raise what is needed, so I raised about 500,000 dollars.”

“Yeah, it was originally invented by NASA. For the space program to cushion the astronauts from G-forces. And since it was a public thing... U.S. Government. There wasn't a patent on it. It was freely alienable. And my Swedish friends bought a company in Denmar…”

“I think if you sold it for 30, you'd sell less.”

“So we mailed 500 pillows to 500 unsuspecting chiropractors.”

“It turned out to be one of the all-time great private equity deals for them, and then they took us public three months later, so it was like they didn't even have their money up for a year, Wow. And they made, like, 10 X.”

“We did 300,000 in 92, then 2.6 million, then six and a half, then 13, then 28, then 45.”

“By the way, back in 2012, Tempur-Pedic acquired its longtime rival, Sealy Mattresses, making it the biggest bedding provider in the world.”

“I said, this is the most amazing product I've ever encountered. I'm interested. And when I came home after my first Swedish trip, I told Martha, I said, Sweetie, we're in the mattress business.”

“So anyway, that's what the three hundred fifty million was. The purpose of the transaction was to take the Swedes out. Not a ton of it went into the company, actually.”

“It was dominated by the four S's. Seeley, Simmons, Serta, and Spring Air at the time, and they all were Innersprings, and they didn't even try to differentiate as a product. It was a commodity, and they sold on price and terms.”

“You know, even, even at this point in time, you asked most people, and we did this survey work before we started Casper, was what kind of bed do you sleep on? Almost no one could recall it, and if you could recall it was usually either Ikea or Tempur-Pedic”

“Mattresses, I realized, like, they had big margins. It's also an industry that was very slow to embrace the internet. They were doing a lot of direct response advertising, you know, Tempur-Pedic, Sleep Number back then were growing their businesses through dir…”

“You're only as good as the guy you got there. If you have a good guy in Spain, Spain's gonna do great. If you have a marginal guy, Spain's not gonna do well. So if you can get comfortable with the guy, and then, yeah, have the handbook, and have the rules and …”

“We didn't want to give up equity, right? But we were okay with giving up some, so we gave for, if you give me 50,000, I, you'll get either one or two percent equity in the company, and a four-to-one payback On your money. So you give me 50, I'll give you 200 p…”

“When we were selling to Brookstone that was one of our big breakthroughs. They were a major retailer, and we were, became their number one product”

“And the fact that competition comes in, that can be a positive thing, because what you want is your niche to get bigger. Right? You don't want to be the only fish in the pond. So what happened with us is people copied us or tried to, but they didn't do it as w…”

“We mailed the 500 chiropractors and 125 of them. Took up our offer of which our, which was, this pillow is yours free if you order four, so now we have a 125 distributors.”