What-if
Discounting Tempur-Pedic pillows to $30 would have hurt sales
“I think if you sold it for 30, you'd sell less.”
What-if
Trussell: Tempur-Pedic would have sold fewer pillows at $30 than $90
“I think if you sold it for 30, you'd sell less.”
Disclosure
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'…”
Insight
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.”
Insight
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.”
Assertion Not checkable as stated
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 …”
Insight
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.”
Assertion Partly supported
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.”
What-if
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.”
Insight
Trussell: Market expansion success depends primarily on the local manager
“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 …”
Insight
Trussell: Competitors entering your niche expands the overall market
“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…”
Insight
Trussell: Allocate 10% of sales revenue to advertising as a rule
“A rule of thumb is 10% of sales.”
Assertion Supported
Bobby Trussell: National Ads Cost Much Less Per Capita Than Local
“National ads are much cheaper per capita than local ads”
Assertion Not checkable as stated
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.”
Assertion Supported
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.”
Assertion Partly supported
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.”
Insight
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.”
Assertion Partly supported
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.”
Assertion Supported
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.”
Assertion Not checkable as stated
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…”
Assertion Not publicly verifiable
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.”
Assertion Not checkable as stated
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…”
Assertion Not checkable as stated
Trussell: Mailing 500 chiropractors secured Tempur-Pedic 125 initial distributors
“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.”
Disclosure
Trussell: Tempur-Pedic raised early seed offering 4x payback plus 1-2% equity
“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…”
