Tell HN: How we bootstrapped to the #1 rated mattress on Amazon.com
About 12 months ago we founded a bed company called Tuft & Needle. The HN community has been a great source of inspiration/education and we're proud to share our progress. We recently reached the #1 "Top Rated" rank in Mattresses and #2 in Furniture on Amazon.com.
Website: https://www.tuftandneedle.com/ Amazon.com: http://www.amazon.com/gp/top-rated/home-garden/3732961/
Problem: Painful shopping experience and extremely high margins in the mattress industry.
Solution: We make a good bed without any gimmicks. It is comfortable, safe and attractive without falsely advertised features or fraudulent discounts.
Business: We launched with a MVP and a simple landing page to test our ideas. Then about 4 months ago, we listed on Amazon and it's caught up to be a significant sales channel on its own. In the last quarter we've had 100% month-over-month growth. We don't spend on advertising, and more than half our sales are from word-of-mouth referrals and social media.
Technical: We take a pragmatic approach with everything including the storefront, sales tools, inventory tracking and fulfillment processes. We use 3rd-party services for payments (Stripe), bitcoin (Coinbase), shipping labels (EasyPost), CRM (Intercom), etc. Stack: Rails+AngularJS+Heroku.
Lesson Learned: Our primary success factor was starting with a rough draft. We didn't like our v1 much—an all cotton tufted mattress—but that didn't keep us from launching with it. This gave us a chance to experiment with problem/solution and to start collecting feedback right away. We had to do quite a few returns at first but we iterated constantly until our customer satisfaction was high enough for us to start getting referrals.
We would really value the community's opinion. We want to get as much feedback as possible to make sure we're going in the right direction.
JT & Daehee at T&N
Published in 2013, this chronicle by @johmas details the mechanics of building a profitable, self-funded business without venture backing.
The community focused on B2B customer acquisition channels, cold email vs SEO distribution, and balancing full-time employment with side-project development.
Being someone that considers himself literate in the mattress industry, as my wife runs a humble mattress storage and distribution firm I totally agree that the prices I could see visiting on the US are way over the top. If I lived there, well, making/selling mattresses must be a profitable business from the retail pricing I could see. Mind you I was on Silicon Valley which I imagine must be very pricy.
The website is really beautiful. Well done. It almost makes you feel I have to buy this!!! I think that's the key point.
Because apart from that... well... there's a rule in business that is you get what you pay for. Even if mattress retailers are making a fortune on margins, well you guys also have margins too. And a retail price of $299..to..$499-king tells me that your mattresses are very low end.
So the website is beautiful but very misleading. Like the infographic about the cost of making a mattress. It probably should title it "Here is how a cheap mattress is marked up". Because there is mattresses and mattresses. Tons of variations, fabrics and qualities. And well.. you're not even selling mattresses or at least we don't call that a mattress here ( Spain ) but a mat instead. It is just too thin. Less than half the thickness of a regular mattress. Then of course, the fact that is made of foam only makes it worse as with that thickness it will unavoidable deform with usage. Who tells otherwise is lying or just very new to the business plainly because all foam mattresses deform to some degree.
Then there is the foam density, that I can't see anywhere in the specs. And as you can guess when you import materials the bigger the density the more expensive the foam sheets are. But hey, people today demand cheap prices. But anyways, mattresses these days tend to have lesser foam densities as people want cheaper prices. But of course that comes with the cost of deformability and that's why mattresses these days don't last that much as they used to in the past.
One thing that tells how good your marketing efforts are is that the mattress is foldable. Someone not used to mattress would think: AWESOME. Some used would think, oh no another crappy sofa-bed mat. I'd never recommend anyone to buy a foldable bed unless for an apartment with very low space and of course... for a sofa-bed!
So my summary would be: really well done making attractive a low-end product. The marketing is excellent and you definitely found a market out there. The website is beautiful but well.... you sell what you sell, tons of half-truths on it.
I've got two suggestions. First, the foam materials; what are they? The last mattress I bought was through amazon and, having researched for a few hours, I came to know some of the basic traits foam mattresses can have (talalay latex, dunlop latex, polyurethane, high density, low density, and ways of mixing those different types within one mattress). Most online buyers will do some research, they need straight up information. You can mention quality and care over and over agian, but if you don't have some believable reason to back it up people can be put off by it. For example tempurepedic's marketing commercials and pamphlets usually mention some kind of micro-bubble foam. Which is bs, but people see that and somehow forget to look for another opinion. It's better if you give me the information than if I have to go out and find the facts or psuedo-facts from somewhere else.
Second, your website shows your "team". It also says you manufacture them yourself; not in those words, but that's the gist of it. There is no way those 6 people meet the demands of manufacturing and all the other things involved in running a product company. Nowhere does it say that the team is the whole company, but mentioning "we" so often puts a spin on the only staff you can see or hear mention of. It makes the reader think we're a small company and we do everything ourselves...and here's our pictures. Show some care for the whole company and everyone involved. I personally think very highly of companies who do that.
I thought I'd seen a similar post on HN before so I searched and found https://news.ycombinator.com/item?id=1701914 (Ask HN: review my mattress startup, 1182 days ago) with almost no discussion, but they are still around. (I recall a post with more discussuon about a mattress startup based in DC but I can't find that post. Maybe it was the same folks.) Anyway, this has apparently been tried before, so while the idea may not be completely novel, congrats on the execution so far.
Personally when my wife and I needed a new mattress about ten years ago, I knew that mattress shopping was a miserable experience, but I had recently stayed in a Weston on business, found the mattress quite comfortable, and learned that they sold their bed. So after my trip I put my wife up for a night at a Weston, she agreed about the bed, and that's what we ended up with. I think it's much more common now for the hotel chains to offer their beds for sale, but I beleive the Weston was one of the first chains to do so.
I'm quite sure this was a great way to overpay for a mattress, but even if it was $1000 (which I think it was for the king), amortized over the decade of use a mattress is good for doesn't seem too bad.
Most of the debate seems to have centered on perception vs. price, with some very amusing points.
It seems clear that by vertically integrating they have cut out a huge chunk of price to the end-consumer. This point in particular has zero to do with mattress quality.
This also happened a few years ago in the diamond industry. Online retailers cut out the expensive jewelry chains with their 1000% markups and sold directly online at cost + 20%. As diamonds can all be graded and compared accurately we can see how for exactly the same quality you can get something for much less.
New models can maintain quality and reduce cost. It happens all the time. The main proponents of the price = quality concept are marketers who are really hoping you will pay up.
I also find it interesting that one the main critics on this thread happens to be a middle-man who stands to lose his shirt because of T&Ns business model. I feel for you, man.
Lastly, I just wanted to congratulate the T&N team on a great success in a crowded space. Great example of the lean startup. Very impressed also that advertising is $0. Wish you all the best in the future!
Putting myself in your shoes, this seems like a scary way to go about things. I'd think, "those first returns are from unsatisfied people. They'll give the product bad reviews and that will put the score in a negative rut it won't be able to pull itself out of. Yes, the next version will be amazing because of the initial feedback, but now we'll have bad reviews so people won't even give it a chance."
Would you mind explaining how I'm thinking about this the wrong way? Perhaps you never put v1 on Amazon and that's how you avoided my concern? But doing so seems like it could limit the feedback you get on v1.