Oct 22, 2018 · 1h 2m · how-i-built-this
Tempur-Pedic: Bobby Trussell
0:00 / 0:00
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of How I Built This, host Guy Raz interviews entrepreneur Bobby Trussell, chronicling his improbable journey from severe debt in the collapsed thoroughbred horse industry to building Tempur-Pedic into a multi-billion-dollar publicly traded memory foam 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 27.8% of the talking time here. How this is scored →
Guy as informed peer 1.8 Guest teaching 2.5 Guest disagreement 0.0 Guy pushing back 1.0
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 38:03 Bobby leverages Sharper Image against Brookstone
Bobby recounts playing hardball with Brookstone's CEO, refusing to pull products from rival Sharper Image unless Brookstone agreed to carry full-sized mattresses.
Hardest push from Guy ▶ 21:57 Guy Raz questions the implausibility of the licensing dealGuy interrupts to press how completely implausible it was for a Swedish manufacturer to grant exclusive North American rights to an unknown horse trainer without due diligence.
Biggest teaching moment ▶ 42:40 Bobby explains direct response advertising economicsBobby educates Guy on how switching to direct-response 800-number magazine ad rates slashed page costs from $25,000 to $6,000, unlocking mass-market reach.
Guy holds their own ▶ 51:33 Guy Raz outlines competitor landscape and consumer adoptionGuy demonstrates detailed market awareness regarding major mattress incumbents and cheaper retail alternatives entering the memory foam space.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Live Show Announcement in Los Angeles | 1 | 0 | 0 | 0 | Segment contains promotional announcements, podcast introduction, and an opening narrative summary from Guy Raz setting up Bobby Trussell's journey from horse racing to memory foam. | |
| Bobby Trussell's Early Passion for Horses | 2 | 3 | 0 | 0 | Trussell shares stories of his youth and early career working as a hot walker and groom at Belmont Park, educating Raz on horse racing terminology and barn life. | |
| Success at Gainesway and the Horse Industry Crash | 2 | 2 | 0 | 1 | Raz inquires about the scale of Gainesway Farm's bloodstock investments and how Trussell transitioned into starting his own horse consulting business before the market crashed. | |
| Financial Crisis and the Swedish Air Purifier Flop | 1 | 3 | 0 | 2 | Trussell candidly describes severe debt and his ill-fated venture selling Swedish negative ionizers in the US due to voltage mismatches and expensive translation calls. | |
| Discovering NASA Foam and Securing Distribution Rights | 2 | 3 | 0 | 2 | Raz presses Trussell on how memory foam was created and how a horse breeder managed to secure exclusive North American rights for the technology from Swedish developers. | |
| Raising Startup Capital and First Year Struggles | 2 | 3 | 0 | 3 | Raz pushes back with astonishment that Swedish partners gave exclusive rights to someone with no mattress experience, and Trussell details pitching skeptical family members. | |
| Pivoting to Cervical Pillows for Chiropractors | 2 | 4 | 0 | 1 | Trussell details pivoting from unsuccessful mattress overlays to mailing cervical pillows directly to 500 chiropractors with a purchase-or-return offer. | |
| Breaking into Retail Stores with Brookstone | 2 | 3 | 0 | 1 | Trussell recounts his persistent outreach to Brookstone buyer Steve Rich, explaining how retail pricing power and high-end positioning fueled product demand. | |
| Developing the American Mattress and Direct Response Ads | 3 | 4 | 0 | 1 | Trussell explains designing thicker mattresses for the American market and unlocking explosive growth via discount direct-response magazine advertising rates. | |
| Industry Skepticism, Corporate Merger, and Going Public | 3 | 3 | 0 | 1 | Raz and Trussell discuss navigating corporate consolidation with the European manufacturing entity, subsequent private equity acquisition, and an IPO on the NYSE. | |
| Stepping Down and Reflecting on Entrepreneurship | 2 | 2 | 0 | 0 | Trussell reflects on why traditional mattress brands initially dismissed memory foam as a fad, his decision to step down as CEO, and the balance of luck versus perseverance. | |
| How You Built That: Bat B&B | 0 | 0 | 0 | 0 | Separate feature segment featuring Chris Ranifors explaining the founding and development of Bat B&B followed by show credits. |
Statements from this episode (26)
Trussell got two jobs after writing to top ten horse trainers
“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.”
Gainesway Farm bought Kentucky Derby favorites for $10M pre-race
“We were buying Kentucky Derby favors for ten million dollars a month before the race.”
$10M Kentucky Derby favorite finished last after Trussell's syndicate bought him
“That horse, his name was Proud of Peel, and he eventually ran last in the Derby”
Late 1980s thoroughbred horse industry crash bankrupted the sector
“This is in the late eighties, yeah. Prices started going down. And essentially, everybody went broke.”
Trussell went $1 million into debt after thoroughbred business collapsed
“I was probably a million dollars in debt.”
Trussell's imported Swedish air purifier cost $500 against $50 competitors
“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 foam was originally invented by NASA for astronauts
“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.”
Trussell secured North American distribution rights for Tempur-Pedic in 1991
“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.”
Trussell raised $500,000 to launch Tempur-Pedic in North America
“Well, it was undefined, but I was supposed to raise what is needed, so I raised about 500,000 dollars.”
Tempur-Pedic distribution deal required selling 10,000 mattresses in year one
“The other condition was we had to sell 10,000 mattresses the first year in order to maintain exclusivity.”
Tempur-Pedic sold 70 mattresses in year one against a 10,000 quota
“We were supposed to sell 10,000 mattresses the first year, and we sold 70. So we missed the goal by 9930.”
Trussell traded 10% of Tempur-Pedic for a $75,000 product shipment
“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.”
Direct mail to chiropractors drove $300,000 in first-year Tempur-Pedic sales
“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…”
Tempur-Pedic became Brookstone's hottest selling new product within two weeks
“Within two weeks, we were the hottest selling new product in Brookstone.”
Discounting Tempur-Pedic pillows to $30 would have hurt sales
“I think if you sold it for 30, you'd sell less.”
Suppliers acquired 45% of Tempur-Pedic North America via inventory 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.”
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.”
Trussell leveraged Sharper Image rivalry to force Brookstone to sell mattresses
“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'll …”
Adding an 800-number dropped New Yorker ad costs from $25K to $6K
“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…”
U.S. distribution drove over 60% of Tempur's worldwide sales before merger
“We were 60 to 65% of their world sales. So their company was only valuable pretty much because of that contract.”
Founders should prefer 5% of a big company over 51% control
“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.”
Tempur-Pedic's $350M PE deal primarily bought out the original Swedish owners
“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.”
Private equity investors made 10x in under a year on Tempur-Pedic
“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.”
Tempur-Pedic held 5% of 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 would have sold Tempur-Pedic to Sealy in early 2000s
“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.”