Jul 6, 2020 · 58m · how-i-built-this
Tempur-Pedic: Bobby Trussell (2018)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
This episode of How I Built This chronicles how Bobby Trussell pivoted from one million dollars in debt as a thoroughbred horse advisor to founding Tempur-Pedic and transforming viscoelastic memory foam into a multibillion-dollar global bedding empire.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 26.6% of the talking time here. How this is scored →
Guy as informed peer 1.1 Guest teaching 1.3 Guest disagreement 0.1 Guy pushing back 0.3
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 31:14 Mattress vs pad debate with chiropractors
Bobby vividly describes arguing with skeptical chiropractors who refused his framing of the 3-inch overlay as a mattress, insisting it was just a pad.
Hardest push from Guy ▶ 23:14 Raz presses on the implausibility of the Swedish dealGuy Raz interrupts Bobby to aggressively question why Michael Magnuson would hand exclusive US rights to an inexperienced horse trainer with zero due diligence.
Biggest teaching moment ▶ 43:45 Direct response ad rate economicsBobby explains the major realization that having an 800 number slashed national magazine advertising costs from $25,000 to $6,000, enabling ubiquitous direct marketing.
Guy holds their own ▶ 46:35 Host analyzes distribution contract vulnerabilityGuy Raz demonstrates sharp business acumen by pinpointing how vulnerable Bobby's exclusive distribution contract was before the global subsidiaries merged.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Podcast Updates and How I Built This Book Announcement | 0 | 0 | 0 | 0 | Guy Raz delivers announcements about the show, book, and live resilience series before playing a brief archival clip of Bobby Trussell. | |
| Show Introduction: The Unlikely Pivot to Tempur-Pedic | 1 | 0 | 0 | 0 | Guy introduces the episode's narrative arc from horse racing to memory foam, and Bobby recounts his childhood introduction to horseback riding. | |
| Arriving at Belmont Park and Sleeping on Bare Springs | 1 | 0 | 0 | 0 | Bobby describes arriving at Belmont Park and sleeping on bare springs for two weeks, which Guy humorously contrasts with his future mattress venture. | |
| Working as a Groom and Training First Racehorses in Kentucky | 1 | 1 | 0 | 0 | Bobby details moving up through the horse racing ranks to Gainesway Farm in Lexington, followed by launching an independent advisory business before an industry recession. | |
| Accumulating One Million Dollars in Debt and Adopting a 'Yes' Mindset | 1 | 1 | 0 | 0 | Bobby candidly explains sinking a million dollars into debt, leaning on faith, and committing to a 'yes mode' mindset for any incoming business idea. | |
| The Failed Ionizer Venture and an Unforeseen Meeting in Sweden | 1 | 1 | 0 | 0 | Bobby recounts his disastrous negative ionizer venture with a non-English-speaking Swedish owner, which inadvertently opened the door to meeting Michael Magnuson in Sweden. | |
| Discovering NASA Foam and the First Overnight Mattress Test | 1 | 2 | 0 | 0 | Bobby explains the origins of NASA foam, Danfoam's testing on bedsores in Copenhagen nursing homes, and his own first night sleeping on the overlay. | |
| Drafting the Marketing Plan and Securing Exclusive US Rights | 2 | 2 | 1 | 3 | Guy interjects with skeptical pushback, questioning why Magnuson would grant exclusive US rights to an inexperienced horse trainer without due diligence. Bobby clarifies the personal rapport and control dynamics. | |
| Early Fundraising Mishaps and Missing the First-Year Sales Quota | 1 | 1 | 0 | 0 | Bobby describes raising $500k from previous investors, the mishap with an uncle's check left at a Burger King, and missing their first-year 10,000 mattress quota by selling only 70. | |
| Mid-Episode Break and Interim Reflections | 1 | 2 | 0 | 0 | Bobby details swapping company equity for inventory containers and shifting strategy to mail sample neck pillows to chiropractors, creating their first reliable revenue stream. | |
| Breaking into Brookstone and Establishing Premium Retail Positioning | 1 | 2 | 0 | 0 | Bobby shares how persistent outreach landed Brookstone as a retail partner and how a premium price point of $90 reinforced consumer perception of superior quality. | |
| Developing Thick Mattresses and Rapid Revenue Scaling | 1 | 2 | 0 | 0 | Bobby discusses laminating memory foam over high-density base foam to make full-thickness American mattresses, driving annual revenue growth from hundreds of thousands into tens of millions. | |
| Leveraging Retail Competitors and Direct-Response Advertising | 1 | 2 | 0 | 0 | Bobby describes using Sharper Image as leverage to force Brookstone into carrying mattresses, and capitalizing on low direct-response magazine ad rates via 800 numbers. | |
| Challenging Innerspring Giants and the $350 Million Private Equity Buyout | 2 | 2 | 0 | 1 | Bobby discusses competing against the four major innerspring giants, merging with the Swedish parent company, and navigating a $350 million private equity buyout. | |
| NYSE Public Offering and Validation of Sleep Science | 1 | 2 | 0 | 0 | Bobby reflects on ringing the bell at the NYSE IPO, high-end market dominance, and legacy mattress manufacturers wrongly assuming memory foam was a temporary fad like waterbeds. | |
| Stepping Down as CEO, Entrepreneurial Mindset, and Luck vs. Perseverance | 1 | 1 | 0 | 0 | Bobby discusses stepping down as CEO, embracing entrepreneurial risk at 40, and balancing luck with perseverance. |
Statements from this episode (30)
Only one top horse trainer replied to Trussell's post-college job letters
“So I wrote letters to the top 10 horse trainers in the country. And nine of them didn't answer, and one of them was John Nerud, N-E-R-U-D, who offered me two jobs, one at his farm in Ocala, and the other one at the racetrack at Belmont Park.”
Trussell was approximately $1 million in debt before founding Tempur-Pedic
“I was probably a million dollars in debt.”
Trussell resolved to accept any new business ideas after hitting rock bottom
“You know, I just decided, ok, if people come to me with ideas, I'm just gonna say yes.”
Trussell: Imported Swedish horse ionizers were priced tenfold above competing US products
“And then the retail price was 500 dollars for these, and there were products on the market that were similar that were 49 95 who could make the exact same claims.”
Tempur-Pedic's memory foam was originally unpatented public domain NASA technology
“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…”
DanFoam tested memory foam in football helmets before discovering mattress applications
“They had this squishy, squishy foam with slow comeback, and they had originally been interested in it for football helmets. But they made some three-inch overlays, and they put them in a nursing home in Copenhagen, and they were thinking maybe it would be good…”
Trussell decided to enter the mattress business after one overnight test
“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.”
Trussell raised about $500,000 to launch Tempur-Pedic distribution in the US
“Well, it was undefined, but I was supposed to raise what is needed, so I raised about 500,000 dollars.”
Trussell: DanFoam required selling 10,000 mattresses in year one for exclusivity
“The other condition was we had to sell 10,000 mattresses to The first year in order to maintain exclusivity.”
Tempur-Pedic missed its 10,000-mattress first-year sales goal by 9,930
“We were supposed to sell 10,000 mattresses the first year, and we sold 70. So we missed the goal by 9930.”
Dan-Foam swapped a $75,000 container debt for 10% equity in Tempur-Pedic
“We will swap that container for 10% interest in your company.”
Trussell: Tempur-Pedic mailed 500 free pillows to chiropractors to spur initial sales
“So we mailed 500 pillows to 500 unsuspecting chiropractors.”
Trussell: 25% of sampled chiropractors converted to buying four Tempur-Pedic pillows
“So, we got 25% of them to buy four pillows, and that was the major breakthrough that turned us out of the nosedive”
Tempur-Pedic became Brookstone's hottest-selling new product within two weeks
“Within two weeks, we were the hottest selling new product in Brookstone.”
Trussell: Tempur-Pedic would have sold fewer pillows at $30 than $90
“I think if you sold it for 30, you'd sell less.”
Trussell: Tempur-Pedic Swedish partners ended up owning 45% through equity-for-product swaps
“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.”
Trussell: Tempur-Pedic grew revenue from $300k in 1992 to $45M
“We did 300,000 in 92, then 2.6 million, then six and a half, then 13, then 28, then 45.”
Tempur-Pedic had 25,000 chiropractors selling its products in the US and Europe
“We had 10,000 chiropractors selling it, and of course they had another 15,000 chiropractors selling it all over Europe.”
Trussell leveraged a Sharper Image deal to force Brookstone to stock mattresses
“So I started selling to Sharper Image. Their arch rival. Brookstone had an absolute cow about that, and they called me, Mike Anthony called me, and he said, Bob, we want you to not to sell to Sharper Image. It's going to hurt our business. And I said, okay, I'…”
Sealy, Simmons, Serta, and Spring Air sold undifferentiated commodity mattresses
“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.”
Trussell: US distributor drove 60% to 65% of Swedish manufacturer's global sales
“We were 60 to 65% of their world sales. So their company was only valuable pretty much because of that contract.”
Trussell: Founders should prefer 5% of something big over 51% of something small
“Well, my philosophy is the opposite, is I'd rather have five percent of something really big than 51% of something small. And so my advice is, okay, you'd always like to control it, but you don't have to.”
Trussell: Tempur-Pedic's $350M buyout funded Swedish exit, not company operations
“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.”
Trussell: Tempur-Pedic triggered a $50M PE performance equity kicker
“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.”
Private equity sponsors made a 10x return taking Tempur-Pedic public quickly
“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.”
Trussell: Tempur-Pedic held 5%–6% of the US mattress market at IPO
“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.”
Trussell: Founders are more equipped for entrepreneurship at 40 than at 20
“I think you're more equipped for that when you're 40 than when you're 20.”
Trussell: Taking entrepreneurial risks is not risky when you have nothing
“You have to have the ability, though, and the mindset to take risks, but when you don't have anything, it's not so risky if you think about it.”