Digital Social Hour - LoveSac: The Billion-Dollar Beanbag Controversy | Shawn Nelson DSH #825

Episode Date: October 24, 2024

🔥 LoveSac: The Billion-Dollar Beanbag Controversy is here, and you won't want to miss it! Dive into the fascinating journey of LoveSac with founder Shawn Nelson as he reveals the secrets behind transforming a "dumb idea" into a billion-dollar brand. 🚀 Discover how LoveSac pivoted from giant bean bags to groundbreaking technology with Stealth Tech, shaking up the home furnishings industry. Join the conversation and hear how their passion and perseverance overcame skeptics and created a cult following. 🎉 Packed with valuable insights into building a lasting brand, this episode is a must-watch for aspiring entrepreneurs and home decor enthusiasts alike. Watch now and subscribe for more insider secrets. 📺 Hit that subscribe button and stay tuned for more eye-opening stories on the Digital Social Hour with Sean Kelly! Don't miss out on this wild ride! 🌟 #kickstartyourentrepreneurjourney #howtobecomeaprofessional #businessenglish #loganpaul #impaulsive CHAPTERS: 00:00 - Love Sack Manager Fest 01:06 - Shawn's Home Love Sack 03:36 - Overcoming Challenges 06:32 - Catching Up with Shawn 10:27 - Lovesac’s Durable Products 12:48 - Lovesac’s Human-Centric Model 15:22 - Shawn’s Book: "The Lovesac Story" 17:30 - Finding Shawn Online APPLY TO BE ON THE PODCAST: https://www.digitalsocialhour.com/application BUSINESS INQUIRIES/SPONSORS: [e-mail] GUEST: Shawn Nelson https://www.instagram.com/shawnoflovesac/ https://www.instagram.com/lovesac/ SPONSOR: Lovesac: https://www.lovesac.com/ LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

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You! With Admi on the new Google Pixel 9 Pro, never rely on a stranger again. Add yourself to any group photo through the magic of AI. Get yours with TELUS at telus.com slash pixel 9 pro. A lot of times investors will meet me and they'll be like, how are you so passionate about Lovesac? 26 now, years in. And what's wild is I think I'm like more excited today than I've ever been.

A thousand times where, you know, thought of quitting, thought of getting out, thought of exiting. But now that we're big enough to matter, I think we can grow this thing to be a brand that's here for 50 years. All right, guys. Sean Nelson part two and we're on his Love sacks so it all started right this is it product this is it the sack it was uh dumb idea and here we are 25 years ago man in your garage and now your event has what 700 people yeah that's i mean we're over 2 000 employees just down the street we have our big annual manager fest. So we'll have 400 from our headquarters, another 300 or so showroom managers.

And Flo Rida tomorrow night, big party. A few days of training, you know, all that stuff. And then big party. Hopefully you guys can make it out. Yeah, it's going to be fun. What made you want to put this on for your employees? You know, I mean, look, we started, I mean, we were kids, we were in our twenties, so we always wanted to party. And so the minute we had, we were making any money, it was like, you know, the, we actually had in our, I think our first year, I think every

year we've been in business, man, we threw a party. It was originally a new year's party. So this is like way back early two thousands, just a bunch of 20 year olds building the retail chain. And, and, you know, I mean, you got corporate money, like let's throw a party. And, uh, and now today, I mean, we're doing it right. We, you know, we're, we're finally able to afford real head. I want to turn it into a music festival that like, you can't get in unless you're in, you know, like, you'll come. You're a friend. We've got all these friends of Love Sack.

We've got a lot of celebrity friends that rock our product. We invite them all. A few of them will show up. I've got a few dozen friends, you know, that are unrelated to the company showing up this year. A few hundred, ultimately. And we'll just keep growing it like that organically. Nice. You can't come unless you're on the list.

I mean, that just speaks to the quality of the product if these people are flying out to go to something like this you know it's wild it's wild i mean i love it man i got the satchel in the movie theater oh my gosh good dude it's been working out you're a tall dude so a tall dude you arranged it deep i presume yeah we did the deep setup we got the speakers built in yeah that's projector that's game changing right dude game changing like have you ever heard something in a in a that projector that's game-changing right dude game-changing like have you ever heard something in a in a soundtrack yet that you didn't know was there before you know what i mean like yeah you feel it too you feel it yeah it's uh stealth tech is what we call it and um really proud of that product and you know it's the tip of the iceberg we're gonna so we've gone from sacks

big bags full of foam made us famous to the sectionals the modular you know furniture and stealth tech has really changed the you know the whole perception of the company and ultimately we'll do a ton with technology and no one else is doing that in our world and what a pivot right because a lot of people rely on that one product and it's very rare to have that success again in another product yeah well we've got more we i mean, but yeah, Stealth Tech has grown, you know, into a very meaningful business for us, which was hard coming out of like beanbags and couches into real technology. But yeah, I think Lovesac will prove a lot of people wrong. I mean, we've been doubted. We're still doubted. We're a public company, traded on NASDAQ. There's always

a huge short position. I think there's a lot of, you know, like investors are like, what? Like these clowns. But we're not joking around. We'll do some very big things. Do you still feel like you got that chip on your shoulder? Oh, you have no idea. Wow. Yeah. Like I'm, it's funny because a lot of times investors will meet me and, you know, we'll, we'll talk. Cause as a public company CEO, I spent a lot of time with investors that own pieces of the company that want to know more about the company, where we're going, etc. And they'll be like, how are you so passionate about Lovesac? 26 now, years in. And what's wild is I think I'm more excited today than I've ever been.

Wow. And it wasn't always the case. Like I've had a thousand times where, you know, I've thought of quitting, thought of getting out, thought of exiting, you know, different times where maybe I should have, but now that we're big enough to matter, right. We did 700 million last year. I think we'll grow up past a billion, no problem the next few years, but small enough still, can have fun. We can still build a strong culture. And with some really cool products on the way that we can't talk about, I think we can grow this thing to be a brand that's here for 50 years. You know, like a Nike.

That's like what I want to do. And no one's ever done that out of home furnishings, let alone giant beanbags. But I really think it'll take another 25. You're playing long game out here. Playing long game. And it's actually really liberating. It's wild.

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BetMGM operates pursuant to an operating agreement with iGaming Ontario. never rely on a stranger again add yourself to any group photo through the magic of ai get yours with telus at telus.com slash pixel 9 pro thinking about it that way and when i switched and i'm like i'll just go as long as it takes it's it's really it's really kind of cool because then like you have a couple bad years like right now terrible for home furnishings really Really? What happened? Post-COVID. So COVID, everyone went out and bought couches, bought couches with speakers in them, bought all the stuff for the home. And then post-COVID, everyone goes back to travel. Everyone's got their stuff.

Grills were blown. Everything for the home was blown up. And big hangover for the home category. Love Sack's thankfully grown through it. Slower growth than ever, but we've grown through it, and we're the only one. My point was,

when you have a couple of bad years, for us, slow growth is bad years. So what? If you're playing a 20-year game, you can weather anything. You know what I mean? You're playing like a 20-year game, you can weather anything. You know what I mean?

You're not impatient. You're not making bad decisions. You're not settling. You're just going to slow down, run a good business, wait for the economy to be better for this category, and then we'll rip again. Love it. And that's what's really freeing. Yeah, a lot of people want that fast money, that instant gratification, right?

And then they see a bad year, a bad month, and they start freaking out. Yeah, or it wrecks their plans. And then what do you do? And then you're scrambling, and then you start making bad decisions. And, you know, I mean, you and I have both been around, first of all, like I can't believe it's only been a year and a half, man. Crazy. You were one of the first episodes.

I didn't even realize that. Yeah, I think you came on a few months in, maybe five months in. I mean, you have crushed it. It's been a lot of filming, yeah. You too, though. I want to talk about your pod. All right. Well, you know, my.

Thank you, though. No, but, like, it's really amazing to see what you've built so fast. I mean, I can't avoid your social media. You guys are just so good at it. Um, and that's the game. I mean, I'm playing the game because, you know, in this day and age of branding, you got to be there, but, but, you know, you and I both met plenty of a hundred millionaires, billionaires, or just, you know, uh, very successful people. And if you're around enough, you realize like, you know, you you don't you don't need that much money to

have a great life a great time have a lot of freedom and so for me the chance to build this culture i'm so glad you get to come to the party tomorrow night like you'll see it you'll understand what else would i want to do i got 700 my best friends they love what they do. We love what we're building. Like, why do I, what do I want an exit? And I don't mean that like in a unambitious way, but what I mean is like, how about instead I take this amazing group of people and we build something that's here in 50.

We build, it's like, it's almost like a sculpture. It can outlive me maybe. And to me that that's now in 50. We built, it's like, it's almost like a sculpture. It can outlive me maybe. And to me that that's now really satisfying. And so my whole mental framework shifted. That's incredible, man. Yeah. Maybe you could pass it on to your kids one day. Yeah.

I mean, I don't even, I mean, on that subject, I don't even necessarily want that for my kids. I want them to be what they want to be. If they, if one of them really wants that, that could be cool. Yeah. But, but but um i just am really intrigued because i think building a business is actually one of the hardest things i mean you know you guys are building a business i mean you guys grind like

people they see you as celebrities they see you and now you're in dallas now you're in vegas now you're you know but it's a grind you it never sleeps but on the other hand it's a grind. It never sleeps. But on the other hand, it's also a multifaceted grind, right? Like you learn finance, you learn relationships, you learn human psychology, let alone social media and the other tactics. That's pretty cool, right? Like you're getting smarter and smarter and smarter every day. You're working with more and more capable people every week.

And you're building a complex thing that's more than just one hustle yeah so to me that's like that's the satisfaction agreed a lot of personal development in business I've been able to find myself through business yeah like 100% like you can't hide in business you know your true colors are going to come out oh yeah i mean that's that's so my podcast let me save you 25 years is all about these well the first season was just the 25 lessons as it were in my book called let me save you 25 years and i unpack them one each with some very successful people right and so like with you right on my podcast we'll talk about this topic see who shows up because as you've seen i don't even know these guys but i guarantee you've had people that show up and other people who kind of like say they'll show up yeah and we'll talk about that but but what's cool

is when i go deep on these one topics with very successful people, I get some really cool content out of them that I don't hear from them on their regular stuff. Like Gary V, Mark Cuban, like I, you know, cause we, we go deep on one idea and what's cool though, is that we all learn the same things. Like you and I will learn the same lessons if we put ourselves through this meat grinder. That's interesting. Yeah. I can't wait to dive into that. That's a very unique discussion topic. Yeah. Yeah. It's fun. So, so that's been pretty successful and, and I've enjoyed that and I've learned a lot and I continue to learn a lot. So yeah, man, we're playing the long game,

but Love Sock is cool too, because we make long-term products. Like, here we are, right, at the Witch Witch headquarters. Yeah. And just got to meet the founder, and he pulls out a Love Sack pillow from, like, 2004. Like, these sactionals you bought, here's the coolest thing, Sean. Like, you're way younger than me. I have sactionals older than my daughter. She's 16.

Wow. Those same sactionals that are in your basement, if you choose, you'll have them like the rest of your life. Crazy. You can change the fabrics. You can rearrange them. You can get new components, new cushions, whatever. And that's designed for life.

We didn't have that in the beginning. We have this whole philosophy now around that. And it separates us from our competition. It's the reason we'll be successful. It's the reason we can invent other products. And it's just really fun now. I love it because I've gone through so many couches, 3,000, 2,000, like $4,000 couches.

Yeah. I could just buy one for like, like you said, 20 years plus. And isn't it crazy? You could spend that much on a couch, even from a nice place, and they're actually not that well built. They're not. I've actually gone to like Chinese suppliers to see what they're paying for some of them and they're marking them up like crazy yeah it's gross we won't even use those factories like but you'll see like the way we build sectionals

because we don't make very many things right we make the sacks even the sectionals you know you buy a bunch of seats buy a bunch of sides but they're uniform therefore we can put a lot of care into like the design, every joint, every seam, et cetera. And so we try to make things that are built to last a lifetime and designed to evolve. That's the harder part. Like designing that couch so it'll even work for a dude as tall as you.

Right. Or a woman as short as my wife. The same couch. Because the way you can turn them deep or long, the same pieces even. Yeah. And someday when you, you know, you grow your family and you change, like it'll blow your mind.

Like if you choose, those pieces will be in your life. That's why I love the couch because I could buy on additional pieces when we have kids. That's right. And fit them in. Yeah. So that's not an accident. I mean, that's literally how now we think about all the products. So then you'll say, well, oh, what's next from Love Sack, Sean? It'll look, look, it's simple. Look around

your life and think, man, what would be cool if it could be built to last a lifetime, but could evolve with me as my life changes. And that's what we'll do. That's so cool, man. Are you guys using AI at all within the company? Uh, we're dabbling. We're trying to figure out where it fits. In fact, I just gave a speech on it today. Oh, yeah? Well, not a speech on AI, but I mentioned it. We're a very human-centric company. We have these physical showrooms,

and it's because we make these products that look pretty simple, but actually they're fairly complex. As you saw with your sax, I probably took a whole Saturday of your life. Oh, it was a process. I know. I'm sorry. I apologize. No, I hired someone on a, what was that app? The person told me to use this app. It was some app where you could hire a contractor. Yeah. TaskRabbit. Yeah. TaskRabbit. Okay. Yeah. Someday, so someday we'll provide those services and help you and stuff. And we'll even help you like change

it and upgrade it. That's coming. But in the meantime, we have these complex products that require, you probably interface with someone to help you plan it, get all the pieces right, right? That's what it takes. And so, yeah, sure, we could train an AI model to do that. But in the end, we actually value our relationship with you. You know, like whoever helped you and even my relationship with you. You know, like whoever helped you and even my relationship with you.

Like we value people. And I think fast forward 10 years, that will also help set us apart from all these companies that will just go totally virtual. And so look, I respect it. Don't get me wrong. Like I think there's a place for total virtual, lean into AI, be super efficient. But I actually, I think there's a place for total virtual, lean into AI, be super efficient.

But actually, I think it's creating a future where companies that really commit to the human touch may be even more competitive because they're so rare in the future. I agree. So that's kind of where we're heading. Yeah, because more and more companies are getting away from that human feel these days right yeah but but humans still exist and they're going to exist and and i think that you know if it's done correctly and efficiently and that's the cool thing about love sack is like in the end we sell like the biggest thing in the mall out of the smallest store. Wow. I didn't even think about that, but yeah, you do. That's right. So it's good economics. You follow? Yeah. And we, and it was an accident. Like in the, look, we were just selling beanbags. We're trying to survive.

And we, we've, you know, you can read the book, like the whole story's there. But as we find ourselves today, now that's, that's strategy. And the human side of it is a piece of it. We'll leverage AI, but ultimately, I think it will be a real differentiator. That's cool. How's the reception been on the book so far? Good. The book's been a bestseller on Amazon, and we're really proud of it. Let Me Save You 25 Years is a book I wrote for me when I was 20.

It's like, man, I wish that I had something like, I tried to be really honest. I mean, I talk about, you know, Love Sack's been through every up and down, full. I mean, I won a million dollars on TV with Branson. We had to file bankruptcy and start over in the middle. Humiliating, terrifying, embarrassing. we had to file bankruptcy and start over in the middle humiliating terrifying embarrassing but I learned so much I think I learned more from that than anything I've done in business and that was a long time ago but I try to be really honest about all the mistakes

and miracles and lessons that came along the way and And that's what, that's the subtitle for the book. And, and so, yeah, I'm really proud of it. It's short and really like 90 minutes and, uh, it should be the book that you give to like your,

your nephew who's like 18, but he's got ambition and wants to do something or, or your niece or whatever. And love that man. Shout out to Branson. I just went on my first Virgin cruise. Oh, did you?

Yeah, it was a blast. I can tell he really cares about his customers. Yeah. Was he on the cruise with you? He wasn't, but I bought like the VIP package and he makes you feel like VIP. You should think about coming to Necker with me in March. I'd love to. That's his island, right? There's a really cool opportunity.

What's he doing out there? Um, I have a friend who runs this, uh, really cool, uh, venture called, uh, principal business summit and a lot of good people gather. So I'll rope you in. Thank you, dude. I'm big on community and providing value. Yeah. I mean, I love what, I love what you're doing, man. It's, it's crazy to see how active your uh podcast channel is with all of all of the guests i've been able to connect with and yeah we drop three episodes a day so by the time this one comes out we might be at a thousand that is insane we got a three month backlog congratulations yeah it's a blast dude but thanks so much for your time and where can people uh you can talk to yeah yeah connect with me i'm sean Lovesack on every social media channel.

Let me save you 25 years. The book, the podcast, of course, lovesack.com. Check it out. Link it all below. Thanks for watching, guys. As always, check out Lovesack's stuff below in the description. I'll see you next time.