About that time I was stuck on a private island with Richard Branson …
Yea, it actually happened to David Wolfe.
“I’m so lucky, I mean Richard Branson is one of my entrepreneurial heroes,” Wolfe says. “When I found out I’d have this opportunity I knew I had to make it count and ask him sharp questions.”
Wolfe had recently co-founded Leesa, a luxury mattress ecommerce firm, and certainly didn’t waste a golden opportunity to get inside the mind of one of the greatest entrepreneurs of our generation. When Wolfe asked Branson for his secret to business success, Wolfe says Branson responded by telling him to focus on just two things; creating a high-quality product and customer experience.
“We want to own a piece of peoples’ lives,” Wolfe explains. “That part is where people begin thinking about going to bed through the time they don’t want to get up. We want to own that entire experience.”
It might be a noble goal and partly inspired by Richard Branson. But the giants of the mattress industry were poised to kill Wolfe’s dream.
Betting Half the Farm
A year prior to launching Leesa and ultimately winning a contest that earned Wolfe a spot on Branson’s personal island retreat, Wolfe bumped into an old friend by chance. That friend, Jamie Diamonstein, was a mattress industry veteran whom Wolfe wanted to run an idea past.
“What if we cut out the middleman,” Wolfe wondered. “Could we ship luxury mattresses directly to consumers?”
“Funny you should ask,” Diamonstein responded with a grin. The mattress industry, according to Wolfe was broken:
- Overly complicated spring and foam combinations
- Marketing gimmicks that made comparing prices on similar mattresses nearly impossible
- Distribution and sales models that required customers interested in testing mattresses to awkwardly lay down while salespeople gawk
The industry’s top manufacturers and retailers have consolidated, Wolfe contends, leaving consumers with fewer choices and less bargaining power. “We wanted to create a simple luxury product and sell it for one-third or one-half the price of equivalent mattresses,” Wolfe says.
The idea was to reimagine the sleep experience by selling a mattress without all of the bells and whistles the industry had added over the years to justify increasing prices. What Leesa came up with was a three-layered mattress the company says feels as good as it looks:
- One made entirely of foam
- One that rolls up to fit in a box a bit bigger than a large suitcase
- One customers can open, unroll, and watch expand
- And one that promises a 100-night trial and free returns for anyone who doesn’t love it
Wolfe, a serial entrepreneur, quickly put a team in place, began building an ecommerce platform from scratch, and put the titans of the mattress world in his entrepreneurial crosshairs. “We didn’t bet the whole farm,” Wolfe teases. “But we did bet at least half the farm.”
But moments before the launch there’d be a dramatic reversal in course. One that could sink Leesa and prevent Wolfe from ever impressing Richard Branson.
The $30 Million Decision
If you ever get to meet Frank Galarraga, Leesa’s Chief Technology Officer, you’ll immediately notice an inviting smile, affable demeanor, and a quiet confidence that comes with being darn good at programming an ecommerce site. But imagine what it must have been like for Galarraga in the Fall of 2014 under the following circumstances:
- The branding work for Leesa was done
- Galarraga was nearly finished building the company’s ecommerce platform
But Wolfe was having second thoughts.
“I called Frank,” Wolfe recalls. “I asked him where we were on the build because I was thinking about going in a different direction regarding platforms.”
Approximately 48-hours later, Wolfe and Galarraga scrapped their original plan and decided to launch on Shopify Plus, an enterprise-level ecommerce solution for high volume merchants.
Without Shopify, we would’ve run out of money before launching,” Wolfe says. “Instead of selling mattresses we would have been fixing bugs but Shopify fixed the bugs for us.
The Virginia Beach company shipped its first mattress in December 2014 and now does business across three sites serving the U.S., U.K., and Canada. “We turned on Canada in ten days and everything syncs nicely,” Galarraga says proudly. “With Shopify, we’re able to move so much faster and accelerate growth.”
Speaking of growth, the company did $800,000 in sales in its first full month and went on to generate nearly $30 million in 2015. Instead of working on a backlog of technical bugs as it once expected, the team at Leesa is now focused solely on what it does best; marketing and selling mattresses.
“Shopify takes away one piece of the jigsaw puzzle and allows us to focus entirely on executing,” Wolfe says. “I like to work with people I admire and I certainly admire Shopify.”
Kind words but Leesa has been keeping a secret.
A Mattress With a Purpose
Think about your key differentiator.
What clearly sets you apart from competitors in the eyes of customers?
Okay, now consider hiding that feature from the world. Make no mention of it on your website. Strip it from much of your marketing and don’t shout about it from the rooftops.
But that’s exactly what Leesa has been doing; hiding its key differentiator and often refusing to tell a story that ought to be told.
Understand it’s not just Leesa’s ability to move faster than competitors that allows it to compete with much larger entrenched brands (of which it’s most proud). Nor is it the Discount API Shopify offers that positions Leesa to programmatically and generously offer discounts to veterans and first responders.
There’s more to a Leesa mattress than foam.
We measure success not only by our bottom line but also our impact on the world,” Wolfe says. “When someone buys a mattress from us they’re helping someone else sleep better as well.
Over the last 18-months, Leesa has quietly donated more than 4,000 mattresses to homeless shelters, organizations that provide transitional housing, and non-profits working toward practical solutions to the underlying problems related to homelessness. The mattresses that are donated aren’t simply returns but specially made six-inch mattresses that are a better fit for tight quarters, rather than the ten-inch mattresses the company sells online. In some cases, it’s the first time some of the people Leesa has helped have slept on a real bed in years.
While Leesa may be a bit shy about telling its story, some of the homeless shelters the company helps aren’t. Here’s how one shelter documented the impact Leesa has had on homeless men in New York City:
It’s called Leesa’s Social Impact program, and the goal is to donate a mattress for every ten the company sells. Shelters from New York to L.A. now have Leesa mattresses for those they serve. Not only is the company providing the homeless with a better place to sleep, but a pathway to a better life.
“This isn’t a marketing idea,” Wolfe insists. “From day one we’ve wanted to make a difference not because we thought it would help our business financially but because this is the kind of business with a purpose we wanted to build and be proud of.”
A Business With a Soul
On the other end of the social spectrum, Wolfe and the team at Leesa also rub elbows with a Who’s Who list of celebrity investors from the entertainment, sports, and business worlds. The company raised $9 million in venture capital last year led by Titlecard Capital, a private equity firm with investors such as:
- Jimmy Kimmel
- Kate Hudson
- Adam Levine
- Jonah Hill
The money will position the company to achieve its lofty goals of expanding internationally, growing existing distribution channels, and introducing new products. “I believe we are widening the gap between ourselves and our competitors,” Wolfe says.
It won’t be easy though as Leesa will undoubtedly face stiff competition. What can’t be imitated or copied though, according to Wolfe, is the mark Leesa’s 38 employees are leaving on the world regarding the homeless people they’re helping sleep more soundly and dream of a better tomorrow.
“We’ve built a business with a soul,” Wolfe says. “And that’s what differentiates us from competitors.”
It’s a soul Richard Branson would no doubt be proud of as well.