How I Built This with Guy Raz - Tempur-Pedic: Bobby Trussell (2018)

Episode Date: July 6, 2020

At age 40, Bobby Trussell's promising career in horse racing hit a dead end. With bills to pay and a family to support, he stumbled across a curious product that turned into a lifeline: squishy-squashy memory foam. He jumped at the chance to distribute Swedish memory foam pillows and mattresses to Americans. Tempur-Pedic USA began by selling to chiropractors and specialty stores, providing one of the first alternatives to spring mattresses. Today, the company is one of the largest bedding providers in the world. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.ca. Hey, everyone, before we start the show, I just want to let you know that we'll be back online this week with our How I Built This Resilience series. Over the past few months, I've been having live conversations with business leaders about how they've been coping during the these tumultuous times. You can join us every Tuesday and Friday at noon Eastern 9 a.m. Pacific by visiting the How I Built This Facebook page, our Twitter account, or on NPR's YouTube page.

And be sure to bring your questions for the guests and hope to see you there. And one more really quick thing. How I Built This isn't just a podcast, but it is also now a book, a book filled with incredible stories and lessons from some of the world's greatest entrepreneurs. You can pre-order the How I Built This Book right now wherever you get your books or by visiting gairozz.com. Now on to the show. So over the past several very challenging months, our team has worked really hard to bring you 14 brand new episodes in a row in addition to our How I Built This Resilience series. So over the July 4th holiday, we all took a little break, which means that this week we're running a repeat. but this one is such an incredible episode.

In fact, every time I think about Bobby Trussle and the story of Temporepetic, I still cannot believe it happened the way it happened. And you'll see what I mean in just a few moments. This episode first ran back in October of 2018. Enjoy. How did you raise the money to start this venture at all? Well, that's a really good question, because I had to go back to all my basic same,

people who had invested with me in my other horse ventures. That failed, right? Yeah, that had failed and gone broke. So I had to convince them that even though we lost money in something that I knew a lot about, that we were going to make money in something that I knew nothing about. From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on today's show how Bobby Truzzle made one of the most

spectacular pivots ever from horse racing to memory foam and how we turn that gamble into one of the biggest mattress companies in the world. So even if you don't sleep on a temperaedic mattress, you may have tested one out at the store or seen one of those commercials where the people are jumping up and down on the bed next to a glass of red wine that does not spill. Well, either way, you probably know that Temporetic is one of these squishy mattresses that feels strangely firm and soft at the same time with this memory foam that molds itself to your body. And today, of course, plenty of other mattresses and pillows have memory foam. But back when Bobby Trussell first launched Temporetic in the U.S., it was a completely new idea, a new sensation.

Now, to be clear, Bobby did not invent memory foam. In fact, when he discovered it on a trip to Sweden, he knew absolutely nothing about foam, nothing about mattresses. He'd been making a living in an industry that couldn't be more different. Horse racing and horse breeding. Yes, you heard that correctly. The guy who brought Temperpedic to America, a $2.5 billion company today, was a horse breeder. But as we'll hear, at the time he discovered memory foam, he was also, shall we say, desperately in need of a new gig. And so what Bobby did was to see the incredible potential in a new kind of magic.

And then he basically gambled everything to launch it in the U.S. Bobby Tressel grew up in Milwaukee in the 1960s and was the oldest of seven kids. His dad worked in sales and his mom was a homemaker. And Bobby worked odd jobs from the time he was a kid, paper routes and things like that. But when he was about 11 years old, something happened that changed the course of his entire life. When my dad was, I think, early 40s, he was. went on a vacation with my uncle, and they rode some horses. And he came back and he said, I'm thinking I'm going to buy a riding horse. I was 11. And any kid who hears that is totally

music to his ears. And so I rode with my dad between the ages of 11 and until I went to college, he was 18, pretty much every week. And horse racing became my favorite sport. We would get issues of the Chicago Tribune, and I would cut out the race results and keep them in a scrapbook and try and follow when the same horse ran back. So I was totally enthralled in that. Bobby eventually went to Marquette University, but horse racing was always in the back of his mind. Pretty much, yeah. I majored in finance, but I would often be sitting in the back row of a lecture reading the racing form. And I would get my Marquette buddies, and we would get in the car, and we would drive in 90 minutes south to Chicago and go to the races at Arlington or Hawthorne racetrack.

And we would have a ball, but I know several times we were so broke on the way back we had to run the tolls. They didn't have the gates. You'd just breeze right through them and hope they didn't catch you. And so after college, I'm assuming you went to start working with race horses full time, right? Yes, the thoroughbreds who actually raced at the racetracks, and that's where my interest was. 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 Nehrued, N-E-R-U-D, who offered me two jobs. one at his farm in Ocala

and the other one at the racetrack of Belmont Park. Which is in New York, right? In New York, and I had never been on a plane before. So I went there with my bag, showed up at the front gate and told him I had a job with John Nehruh, showed him the letter, and they said, well, Mr. Nehruh is still in Florida. He's not going to be here for two weeks.

And I said, oh, no. And then he said, well, but his... assistant is here, he's got 10 horses here, you can go see him. So they put me in inside the track on the backstretch, they call it, where the barns are. And I went to meet the assistant trainer who was a Yugoslavian guy who spoke, you know, very broken English. And I told him the story, and he said, you have a college degree, boy? And I said, yeah, he said, what's you doing here, boy? I said, I want to work on the racetrack.

And he said, you can stay over the barn. Only one problem is we have the mattress frames came up from our Florida division, but we don't have the actual mattresses yet. So I said, okay, that's fine. So anyway, I slept on the springs for two weeks until the other horses and the mattresses came up from Florida. And who would have thought 20 years later you would have been sleeping? and a beautiful temperatechetic mattress. Yeah.

Isn't that amazing to think back? We'll get there, though. We'll get there. Let's hold our horses. So this is the mid-70s. You start working at Belmont, and what was your job there? Well, I started out as a hot walker, making $75 a week. What's a hot walker? A hot walker is a guy who walks hots. And hots are horses that come from their morning workout, and they're sweaty and hot,

and you need to walk them in a circle for about 30 minutes and you water them off slowly so you make sure that they don't drink too much water because that can make them sick. And then, because what I wanted to do was be a groom. A groom made 125 a week, and they assigned you three horses that were totally yours to take care of. To brush and to clean and...

To brush and to clean their feet and to put bandages on them and feed them and take care of them. So you're doing all that for a little while, but what's the thing you really wanted to do? Trainer. Yeah. Trainers is what I wanted to do. Right. But I did leave New York after two years and went to Chicago, and my dad bought me a really, really, really slow racehorse for like $1,500.

And so it got me my trainer's license, and I got in the game and ended up training my first winner. Was at Keenland. Where's Keenland? Keenland is the racetrack in Lexington. In Kentucky. In Kentucky. Lexington, Kentucky, presumably is where the great horses are trained. It's the horse breeding capital of the world.

Right, right. So this is like, I guess you're sort of hitting up against the early 80s. You're probably close to 30 years old at that time. By the way, were you married at that point? No. You're single guy. Single guy. Focused on horses.

Single-minded, single guy. Okay, so you're in Lexington. Kentucky. And I guess your career in horse fishing really begins to take off at that point, right? Right. Yeah. I got a job at Gaines Way Farm, and I had studied pedigrees while I was on my racetrack adventure and became something of an expert, and they needed that. And that was the best move I ever made in my young life because I was soon involved in racing at a very high level. Instead of with a horse that my dad bought me for $1,500, we were buying Kentucky Derby favors for $10 million a month before the race.

Wait, one horse for $10 million? Oh, yeah. Wow. And, yeah, that horse, his name was proud of Peel, and he eventually ran last in the Derby, but it was quite an experience. And we also had significant interest in European racing. We were just as interested in who was going to win the English Derby or the French Derby or the Irish Derby as we wore.

the Kentucky Derb, because we were looking for stallion prospects. And so I spent a lot of time, I went over following horses that we had made major investments in. At what point, because I guess at some point you sort of branched out and went on your own and started your own, like, horse lending or insurance startup? Right. That was in, so I was at Gangeway from 79 through 86, and then I decided to go out on my own with Jim Philpott. He was the general counsel, the in-house counsel for Gainesway. And basically you would be advising trainers on which horses to buy and sell and things like that?

Absolutely. So we started stallion management services to do the same thing we did at Gainesway, but do it remotely for farms that couldn't afford to have that infrastructure. And then we also had a company called Thuribret Advisory Group, which advised people on other horse-related transactions. And that was a very good idea, but very bad timing, because the horse business started to go into recession. This is in the late 80s?

This is in the late 80s, yeah. Prices started going down. And essentially, everybody went broke. Including you? Including me. Like how broke did you go? Well, I felt like I was the broke. man in America because, you know, I did get married when I was 34 in 1986. And so by this time,

fast forwarding to 1991, I had two little kids and we moved to a better location for kids than my downtown townhouse. But I couldn't sell the first house. So I had two houses, two kids, two mortgages, and no job. Did you have to declare bankruptcy? No, I never did. I owed everybody in town, but everybody else owed everybody, too. So everybody knew that suing isn't going to really help. And the big joke was if one guy could come up with $10,000,

he could pay a million dollars in debt because person A would pay B and B would pay C and it would come all the way back around to person A. So how badly in debt were you? I was probably a million dollars in debt. So how did you pay your bills? I mean, your business goes bust. You owe the bank. Two kids.

A house that you have a mortgage to pay on another house that you are living in. What do you do? Well, it wasn't easy because I would go to my office and my secretary would say, Bobby, we haven't paid the rent in a couple months. And the landlord was just down here. and they're going to turn off the electricity, and then I would go home, and my wife would tell me the same thing, you know, the gas company called.

So I really didn't know what to do. I would get in the mail, I would get pre-approved credit cards going, you're pre-approved for a $25,000 line of credit, you know, and I would say, you're really stupid, but I would take them up on it, and we would charge groceries, onto the credit card. Always figuring that, you know, things were going to turn around. But this was the period of my life where I fell back onto my roots, my Catholic education. And I had started going to Sunday Mass with my wife when we got married. She really, you know, moved me up quite a bit. But, you know,

I was still kind of going through the motions. So I kind of rolled up my sleeves and went to church and started going to weekday masses and literally just prayed that God would show me what to do. And I said, it doesn't have to be in the horse business. You know, I just decided, okay, if people come to me with ideas, I'm just going to say yes. Yeah. And my French horse trainer, Alain Follard,

he called me and he said one day, I know a Swedish horse chiropractor who knew a company in Sweden that makes an air cleaner that can clean the horse's stalls. Oh, like an air purifier. Right. It was actually a negative ionizer. It was kind of zap. Yeah, it was zap to the air.

And so my friend Alan said, this Swedish horse carpenter wants me to sell it in France. And he said, I'll go you one better. I know someone who'll sell it for you in the States. So I started a company called Nyon. Okay. And it turned out to be the worst company because the product over there it's 220 volts. Right. And over here it's 110.

So the product worked half as good here. Wait, you can figure this out before you got them shipped over? No. Oh, no, unfortunately. Sorry. Sorry. My market research was lacking. And then the retail price was $500 for these.

and there were products on the market that were similar that were 49-95 who could make the exact same claims. Right. You purify the air. Right. Plus, the company was owned by a guy in Sweden who's probably the only guy in Sweden who doesn't speak one word of English. Wow. So you could not communicate with them. No. So he would send me faxes in Swedish. And I would have to take them to University of Kentucky and get them translated. And when I talked to him on the phone, I had to use an AT&T language line operator, and each call cost me $300. Wow. So this was like the worst company with the worst product over 10 times the price that it should be.

And so this was going nowhere fast, but I had to go to Paris in October of 91 because I had horses over there, you know, still kind of in the business. and the Swedish horse carpractor said, called me. He says, Bobbi, you have to come to Sweden while you're in Europe. I said, why? He said, there's another company. It's a mattress, Bobby. You have to come see this mattress. And his name was C.G.

And I said, C.G, I don't want to hear about any more of your Swedish, crazy Swedish connections. But I still said, okay, I'm in yes mode. I went to Paris and I got on a plane and I went to Stockholm and I met him and he introduced me to a guy by the name of Michael Magnuson and that changed my life. Who's Michael Magnuson? Michael Magnuson is the guy, he and his stepbrother, Dog Lanvik, owned the manufacturing company which developed the first temperate products. And he told me that they had just launched it in Sweden the previous month and that they wanted to go worldwide with it. Launched what? What was it?

Well, it was a three-inch overlay. Like a three-inch mattress pad? Yeah, exactly. It's temperature sensitive, so it distributes the pressure over a wider area. So it was breakaway, you could put your hand on it, it would make a handprint. You take your hand off, and it would slowly come back. to where it was. Did you ask him about it?

Like, where did it come from? How did they invent it? What was this thing? 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... U.S. government invention. U.S. government.

There wasn't a patent on it. It was freely alienable. And my Swedish friends bought a company in Denmark called Danfoam, and they made it better and reproducible and more durable. And the idea was, let's turn this into a mattress to sleep on? Was that their idea from the beginning? No, that was the weird thing, is they really didn't know what they had. They had this squishy, squishy foam with slow comeback, and they had originally been interested in it for football helmets.

But they made some three-inch overlays, and they put them in inertia. home in Copenhagen, and they were thinking maybe it would be good for bed sores. And the reports they got back is that, yes, indeed, it helped people who had bed sores. And the other thing they heard, though, anecdotally, was, hey, the people who had back pain said it helped their back. And so that's when they said, hey, looks like we got something here. Like a mattress? Like for sleeping?

Like a mattress. That's when they launched it in Sweden, and that's when I met them. Okay, so you're in Sweden. You're meeting with this guy, Michael Magnuson, and as you say, he's looking to take this mattress foam worldwide. So what did you do? How did you decide that you wanted in? So I stayed at his house and slept on the mattress,

and I woke up, and he said, what do you think? I said, this is the most amazing product I've ever encountered. I'm interested. And when I came home after, my first Swedish trip, I told Martha, I said, sweetie, we're in the mattress business. And what did she say? She said, okay, but can you change the baby?

I mean, it is remarkable, right? You do this overnight. You're overnight in Michael's house, and you sleep on this thing, and you wake up, and you're just thinking, man, that was amazing. I want to sleep like this every single night. Yep. And so right then and there, you said, I want to work with you? or you just said, hey, this is kind of cool.

Can we keep talking? Well, given my position in life, I was more forceful than that. I said, I'm interested. I want to get involved if it's in any possible way. And he said, well, we want to go worldwide with it. We have nobody in the States. So why don't you go back and write me a marketing plan and we'll see. And I said, okay.

So I did so. I went home and wrote a marketing plan. I had some help with some old high school friends who eventually came on to work for us. And we wrote, which is perhaps the worst marketing plan ever written. And what was your plan? Like, we said, we're going to sell it here. We're going to distribute it there. Like, what was your pitch to them?

We said, we're going to sell this in truck stops. because it's only three inches thick. We thought it would fit great into the back of the cabs of the semis. Oh, right, because they sleep in like that sort of elevated part of the cab, right? Truck drivers do. Yeah.

We thought it would go perfect in there. And we were also going to put an ad in the chiropractor directory. So anyway, that was it. And he came over, Michael came over in 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. In exchange for? In exchange for two things.

Number one, I had to finance it because he said we don't have money to finance you. You have to raise your own money. How much did you have to raise? Well, it was undefined, but I was supposed to raise what is needed, so I raised about $500,000. Wow. The other condition was we had to sell $10,000. and mattresses the first year in order to maintain exclusivity. Yeah.

And so I said, sure, you know, I can do both those two things. Let me just interrupt this for a sec, Bobby, and forgive me for this. But I'm just trying to get into the head of Michael Magnuson. He is a Swedish guy who is starting a mattress company in Sweden and he's seeing some success. And he agrees to give you a horse trainer, a guy whose entire life is in the horse business. the exclusive distribution rights to sell memory foam in the U.S. Why would he ever have taken a risk like that? Like what, it just seems so implausible.

That's really a good question. But I had spent three days with him and the horse chiropractor, and we had hit it off on a horse level because he was in the horse business in Sweden. Okay. And so he was like my Swedish ultraltarkey. through ego. He was like a Swedish spirit animal. Right. Yeah. And so he got comfortable with me as a person, I guess. Wow. And number two, he wanted to control it. He didn't want to have some company in the U.S. that is going to have their own ideas. He had a certain idea in his head of how he wanted this to

play out. And he knew he figured anyway that he could control me, which he could. And so we had a collaboration. We worked together. You talked to him every day for 12 years, basically. And he didn't even do any due diligence. Like, you could have been a, you know, you could have been an ax murderer. Like, he didn't really know much about you. Like, you could have been, you know, a horrible person. Like, he just took this chance. He took a chance. But his ace in the whole was that I had to sell 10,000 mattresses the first year to maintain exclusivity. How did you raise the money to start this? venture at all? Well, that's another really good question because now I had to go back to all my

basic same people who had invested with me in these yearling partnerships we raised in Europe and my other horse ventures that failed, right? That had failed and gone broke. So I had to convince them that even though we lost money in something that I knew a lot about, that we were going to make money in something that I knew nothing about. Oh, my God. What was your pitch to them? You said, hey, guys, I know this horse thing didn't work out, but I'm getting into mattresses or memory foam, and I need your money. And did any of them say, are you out of your mind? Well, my dad, you know, he gave me $50,000 or something, and my mom did too. And they just did it because they love you, you're the son, sure.

Right. But the rest of them, I think they did it because, A, they were comfortable with me. But B, when they encountered the product, they had the same emotional reaction that I, did when I first encountered it. And this would include the first guy who invested Dave Fogg, who I had met only a few months earlier, told him the whole story. He said, well, bring me over the product. So I brought an overlay over to his house. It was January, and it was freezing. And one of the unique properties of the material is that it freezes as solid as a board at 50 degrees Fahrenheit. That's the temperature sensitivity. So the, the

mattress froze on the way over to Dave's house. And so I come in, I'm carrying this overlay, and I noticed luckily that he had a fire going in the fireplace. So I said, let's just, I'll just set this over here for a while. And we can chat. And he said, okay. And so we talked about it, and I'm kind of eyeing the mattress to see if it looks like it's uncurling. So anyway, it did thaw out. And he really liked it. and you wrote me out of check. So I think that's the answer to the question. The product kept bailing us out.

Michael Magnuson came over. I told him, I'm going to raise the money, but can you help me? He said, sure. So he came over. We met him in Chicago, and we went over to my Uncle Bill's house, and we showed him the mattress, told him the story. He could see that, you know, Michael was real. He wasn't some, you know, fictitious guy, because Uncle Bill had lost life.

lot of money in my yearly partnership. Okay. So Uncle Bill, he goes into the back room. He comes out 10 minutes later and he hands me a check for $50,000. Wow. So I am just absolutely overjoyed. I said, thank you so much. Michael and I left.

I dropped Michael off at O'Hare. He went back to Stockholm. I got in my car and drove back to Lexington. And on the way home, I stopped at a fast food restaurant. Ron. So the next morning was Saturday morning, and I get a call. I'm dead asleep. It's 930 and his Uncle Bill. And he said, he calls me Rob, and he says, Rob, I got a phone call from Connie at a Burger King in Lebanon, Indiana, who said she found a check for $50,000 on the floor. And I said, there's no possible way, so I'm going through my pants. pockets in my coat and I said, oh my gosh. And I thought Uncle Bill was going to say, you know,

maybe my money's not so safe with you after all. And then he said, can I overnight you another check? Wow. Bah, wow. And I said, okay. Okay, yeah, thanks. Wow. Uncle Bill. God bless him. All right. So you are now, you got some money. You got to sell 10,000 of these overlay mattresses. How did you do? We were supposed to sell 10,000 mattresses the first year, and we sold 70. So we missed the goal by 9,930. When we come back in just a moment, how Bobby Trussell managed to keep his company alive after selling just 70 mattresses. I'm Guy Raz, and you're listening to How I Built This from NPR.

Hey, welcome back to How I Built This from NPR. So it's the early 1990s, and Bobby Trussle has gone all in. on a business he knows next to nothing about memory foam mattress pads. And he's shipping them over to the U.S. in containers from Europe. And he's come up with a marketing plan that mostly targets chiropractors. But things are not going well. And the $500,000 he raised from friends and family, he burns through it in just a few months.

We were spending the money on well product. You know, the containers were 75 grand apiece. We bought two or three, and we had salary. I wasn't taking any salary, but I had two or three people working for me. And we were just had a burn rate. And so when you were out of cash, how did you continue operating? Well, we had a container coming over, and it was $75,000. And I called Michael, and I said, we have a problem.

And he said, what's that? I said, the container coming next Tuesday, I can't pay for him. and he said, oh, okay, let me call you back tomorrow and talk to Doug, his partner and brother. So the next day he calls back and says, okay, here's what we'll do. We will swap that container for 10% interest in your company, tempurpedic. And I said, okay, because I was in no position. We weren't going to make the $10,000 minimum, and I was out of money. and he could easily have just pulled a plug on us and said,

okay, sorry, it didn't work. We're going a different way. But he said, I'll swap that for 10% interest in your company. And I said, great. I mean, you got into that position because the mattress pads weren't selling. So why weren't they? Well, the chiropractors who we were trying to market these overlays through couldn't sell the overlays, they would say, Bob, it's a pad.

I said, no, it's a mattress. And these would say, what do you do with it? I said, you put it on top of your old mattress. They said, it's a pad. And how much were they cost? It were like $800 for a queen. So they weren't cheap. They still weren't cheap.

But the chiropractors kept saying, you ought to make a pillow out of the stuff. Because that was more in their comfort zone, selling pillows. They stole those anyway. And so they helped me design a pillow along with Danfoam. And they came out with a pillow probably right around then, right around, July of 1992. So then I said, okay, now we got another product. And I asked the chiropractors we were working with, how would you go about selling it if it were you? And they said, well, it's really a unique product you need to get it in people's hands. And I said, well, gee, there's 40,000

chiropractors in the U.S. We don't have any rep force or distribution. How am I going to get it in the hands of all these chiropractors? And I asked one of them, and I said, said, what if I just mailed him one? And the guy says, well, I guess it could work. So we mailed 500 pillows to 500 unsuspecting chiropractor. You just found their names in like a chiropractor directory? Yeah. And the pill, you just sent them a package with a temperapeutic pillow and what did it say? So here you go. Here's a pillow for free. Yep. You had a letter on top of the pillow and it's a big box and it said, this is a temperapidic Swedish neck pillow. It's, you know, the best thing since sliced bread, yada, yada, yada.

It's yours free if you order four. And if you don't like it, all we ask is you let us pick it up at our expense. So we got 25% of them to buy four pills. And that was the major breakthrough that turned us out of the nosedive. And so all of a sudden, from that 500 carpractors, we had 125 of them who were buying four pills a month. and we were selling it to the chiropractors for $49. So we did about $300,000 in sales that first year all in the last four months of the year, pretty much. Wow.

And I always will have a fond place in my heart for chiropractors because they really got us going. And we eventually sold or have 10,000 carpractors, which I believe we still do now selling the products in their practice. But of course, you know, turning this business into a business that just as true. distributed through chiropractors was not going to be enough. That was not how you were going to blow this thing open. Right. And we always wanted, of course, to get it into stores. And in November of 92, of course, now we're still broke.

I got no salary. And we went up to Cincinnati to the mall up there. And I would do some Christmas shopping, which is really more like Christmas browsing. You know, I'm bored to tears. And my wife, Martha, said, bring your pillow and you can find a store that'll sell it. You mean, like, go walk to the mall and find a store that would sell your pillow? Right. So we're walking through the mall, and she said, oh, there's Brookstone.

They sell pillows. Go show them your pillow. I said, okay. So I went there and I showed some, you know, 18-year-old kid the pillow, and he didn't know anything. and he said, well, I can give you the number of headquarters in New Hampshire. I said, oh, that's great. So he gave me the number of headquarters, and I called him the next week, and I got into the purchasing department, and he said, oh, you need to talk to Steve Rich.

So I left a message for Steve Rich, and I sent him a pillow, too. And so I would call Steve every day for weeks and weeks and weeks and leave him a message. And finally, I don't know, two months later, my secretary comes in and says, Bobby, there's a Steve Rich from Brookstone online too. And I said, I think I'll take that. And he was calling me to tell him to stop calling him because he had a note on his desk every day, Bob Truzzle, Bob Trussell, Bob Trussell, Temper Pied. And I said, okay, but all I ask is one thing, make sure you took that pillow out of the box because you can't tell by looking at it.

He said, oh, yeah, he's very nice, but we sell seven pillows, and we don't need any more, and yours would have to sell for a lot more than our other seven pillows. I said, okay, so we hang up. Ten minutes later, the secretary comes in. It's that Steve Rich and Brookstone again, and he said, you know, maybe we'll take this down to research after all. And he had not taken it out of the box.

and when he did at my, I made him promise, he had the same reaction, the emotional reaction with the slow comeback foam. So taking it down to research meant showing his wife. His wife slept on it, and she said, this is the best thing I've seen. So then he calls me back the next week, and he says, okay, you got me on your side. Now I have to pitch it to the purchasing board. And then he calls me back, okay, we're going to buy 500 pillows.

We've got 100 stores. We're going to buy four for each store, and you've got to give me 100 demos. And I said, okay, and I hung up the phone, and we'll talk about high-fiving. I mean, that was the seminal moment. We had never sold anywhere near 500 pillows. And within two weeks, we were the hottest selling new product in Brookstone. And if Brookstone was already selling a bunch of pillows, this was probably far and away more expensive than that. the other ones, right? Right.

He said, we're going to have to sell this, Bobby. We're going to have to sell this at $90. And I said, really? Because the chiropractors are selling it for more like $70. And he said, yeah, just to make the numbers work, I said, okay, whatever you want to do. So they sold it for $90, and it would absolutely start selling like hot cakes. Do you think the fact that it was so expensive was there was, like, added cachet, that, like, some people would go into a Brookstone and say, a $90,

dollar pillow, man, that must be amazing. I'm going to buy that. The answer is yes. Right. I think if you sold it for 30, you'd sell less. And that is what Michael Magnuson wanted. That's why he chose me is because his vision was this was not a product that would be discounted. And he was afraid any other company would discount it and it would become just like everybody else, we have something no one else has, so why should you discount? It's high-end, and it actually performs. I would get letters from strangers saying, Bobby, I've had a sore neck for 30 years, and now it's gone. That's when I knew we were really onto something when I got these letters, and that's what Michael, that was his vision, is how to position the product as high-end.

I just want to sort of pause and reflect on this for a moment. You were, I mean, You and Michael had only known each other for a couple of days when he agreed to give you this contract. But over the course of time, as your business really started to grow and you had to run this together, was there tension? Or did you actually continue to get along great? There was a lot of tension and stress, and we got along great. I mean, he was very exacting, and he had his own ideas of how to market. and sometimes I didn't agree, and we would kind of have it out. So there were some stormy days, but we trusted each other.

And one thing I learned about him is if you do what you say you're going to do, no matter how it turns out, you're going to be all right. And the same with me and him. He would always do what he said he was going to do. So we had a very close working relationship, and yeah, it was difficult. We had a lot of ups and downs. Yeah. So they owned a significant chunk of the company. Your investors owned a significant chunk of the company. How much were you able to retain? Well, that 10% interest that they swapped for that container of pillows, we had to do that four more time. So they ended up owning 45% of my company.

So me and my U.S. investors, we owned 55. And what was your revenue in like 97, 98? What were you doing 20, 30 million, 80? year, something like that? My goal was always to get to 100 million. That seemed like it took us forever. But we did 300,000, and 92, then 2.6 million, then 6.5, then 13, then 28, then 45. Wow. And mainly, mainly from pillows initially, right? Initially, but the mattresses came in about 1994. Because what we were able to do is customize the products for the U.S. market. In other words, we took that 3-inch overlay and we laminated it to a 5-inch base of normal high-density foam.

So now we had an 8-inch foam mattress, which almost doubled the price. So now we're selling a queen for like 1299 or 1399. But now we had something that could appeal to the U.S. market. So essentially it was a mattress, like what we think of as a thick mattress, you were able to create that and then start to sell it in the U.S. Right. How do people find out about them? How do they know about them?

Again, through chiropractors? No, the chiropractors never did really get going with the mattresses. They were kind of pillow people. But we started selling in a store chain called Relax the Back, who had like 30 or 40 stores, started in Texas. And when we first started marketing it, we marketed the mattress as, hey, if you have back pain, you've got to have. this mattress. Similarly to the analogy I use as Volvo when they started, if you're number one

concern is safety, you've got to have this car. Right. Exactly. Ah. We had this medical endorsement. We had 10,000 chiropractors selling it. Of course, they had another 15,000 chiropractor selling it all over Europe. And so that was our core, and we use that as a springboard. And so, okay, we're in Brookstone were going great guns. And I told Mike Anthony, the CEO of Brookstone, that I wanted to sell, wanted them to sell the mattresses also now that we had the American-style mattress thickness. And he said, Bob, our stores are tiny. We can't fit mattresses in there. We're a men's gift shop. And I said, okay. So I started selling to Sharper Image. They're archer rival. Brookstone had an absolute cow about that, and they called me, Mike Anthony called me,

and he said, wow, we want you not to sell to Sharper Image. It's going to hurt our business. And I said, okay, I'll pull out a Sharper Image if you sell the mattress, too. And he said, oh, man, okay. Wow. So he put a twin-sized mattress, and by this time they've got 200 stores, and they were selling one. mattress per store every six weeks. And I was waiting for the call from him to say, Bobby,

we tried. But he never, I never got that call because then it was one every five weeks. And then six months later, it was one every four or three weeks. And it ended up being like to a week as the product got more and more momentum. And the reason it got more momentum is because parallel to we had opened up another channel called the Direct Response Channel. And that's the other huge moment when we were able to figure out how to sell direct to the public. So I started advertising in the New Yorker magazine at first. And my main goal was to get our name out there. And so we started selling in the Wall Street Journal and USA Today.

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're eligible for direct response rates. I said, oh, okay. How much is that? He said, 6,000. I said, I've been paying 25,000, and I could be paying 6,000? And he said, yep, that changed my world, because now I could advertise almost indiscriminately.

I could be everywhere. And it was at this time that Brookstone was selling, trying to sell mattresses and people became gradually more and more aware. And they would walk into the store and say, that's the one I read about in the USA Today. And so that's what got us going with mattresses. Okay, so let's get a sense of the landscape of mattresses in the U.S. Like, at that time, like, who dominated the mattress market in the U.S.? And presumably temperate it wasn't even like a drop in that ocean. Right.

It was dominated by the four S's, Sealy, Simmons, Serta, and Spring Air at the time. And they all were Intersprings. And they didn't even try to differentiate as a product. It was a commodity, and they sold on price and turn. You know, it's 50% off and he never have to pay. That's how they sold it. So we came along with our message and our magazine ads saying, hey, we have something that's a better wheel. So, okay, so you have this growing business.

And, you know, you went from $2 million to $6 million to $14 million. First of all, at what point were you making real money as the CEO of the company? As far as my making money, personally, I never was able to pay much of a salary because we weren't making any money until we merged in 2000. The merger in 2000 was basically like all of the subsidiaries that were selling Temporetic around the world. They basically became one big company, right? Right, because from our standpoint, we just had a distributor. agreement with the Swedish guys. Ah, right.

And the day that they canceled that agreement would be a very sad day because we'd be out of business. Essentially, they could have at any point just gone directly to Brookstone and said, you're an exclusive distributor. Well, we did have a contract, but, well, that first year they sure could have, probably the second or 30 years, too. But then we probably were hitting it. But still a contract with the Swedish company, what have they challenged it? I mean, it was very flimsy.

But what I didn't realize is from their standpoint, they had the same problem. We were 60 to 65 percent of their world sales. So their company was only valuable pretty much because of that contract. So we both were very highly motivated to merge. The problem was, how do you value us? Because they had the manufacturing plant and they had the IP. and during the 90s I couldn't draw much of a salary, but what I did do is sell little bits and pieces of equity to friends and family and stuff.

So I was able to keep going based upon selling it down. So very many people I talk to who have startups will say, oh, I'm never going to sell controlling interest. I got a controlling. Well, my philosophy is the opposite is I'd rather have 5% of something really, big than 51% of something small. Yeah. And so my advice is, okay, you'd always like to control it, but you don't have to.

So, okay, so you merge, you end up with, you know, a certain percentage, probably, you know, five or about five percent. Yeah. Something like that. Yeah. And you are the CEO of this merged company. Mm-hmm. And I guess, like in early, the early 2000s, you guys took outside investment. You took a big chunk of money from a private equity firm, right?

Right. Two private equity companies came in and bought it, and we retained our 20% for our U.S. group. I think they put in like $350 million or something. In 2002, is that right? Well, there was a – in early 2000s, after we emerged, my Swedish friends decided that they wanted to sell a partial interest because they needed it for their other company. This is only one of their 10 or 15 foam companies. Yeah.

But the investors were slightly worried about having a minority interest with a private Swedish company that they don't really know that much about. And so the Swedes came back and they said, well, we don't want to be minority, so we'll sell the whole thing. So anyway, that's what the $350 million was. The purpose of the transaction was to take the Swedes out. Yeah. Not a ton of it went into the company, actually. So in 2003, this is no longer a Swedish company. Yeah, 2002, 2002, and so you're not calling Michael every day anymore? Well, they stayed on as a consultant for Michael did for a couple years, but not as much, no, certainly not.

And my bosses now was the board, which was two private equity companies. How did you deal with that? Did you like that? Well, it was a lot different because their thing was they wanted to buy into companies that they were already growing, already profitable, and they were comfortable with management. They didn't want to run it. So they pretty much let me do my thing. There was an equity kicker involved that if we hit certain numbers, we would get another 50 million, which they didn't really think we'd hit, but we blew the doors off and we hit it quite easily the next year. Yeah. 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 10x. So did you sell all of your ownership as well in that deal? No. We sold a little. I did get a little bit of a payday, but I got more options. And so now this horse guy, I'm CEO of a public company on the New York Stock Exchange. We're on ringing the bell there when we went public.

And so this is just, to me, the total answer to a prayer times 100. So you are, so now you're the CEO of this public company. You are, but still, like what percentage of the market did temperate? Tempetic control when you took the company public? We were probably then about, you know, 5, 6% of the U.S. mattress market. But we were a much larger percentage of the $2,000 and up price point. Because I should, we should point out here, temperatech mattresses are very expensive compared to ordinary mattresses.

Right, right. We are definitely in the high. you know, luxury or whatever you want to call it, we are able to operate exclusively there because the product is just so good. It really is a breakthrough in sleep science. It adapts to your weight and your shape and your temperature. And so your mattress is adapting to you instead of forcing you to adapt to it. What we always would say is, you know, an interspring pushes up against you,

whereas this breaks away from you. So you can see that we have a better product, and that's why we're able to charge more. Yeah. So, okay, so, Bobby, I remember there was a certain point in my younger days when I bought a memory foam mattress. I didn't buy Temporetic. I couldn't afford it.

I just bought one at IKEA. And it seemed like there was a point in, you know, sort of the, around 2006, 2007, when everyone got into this game. Because clearly, you, they, the other mattress company, just let you guys dominate the sector until they realized they could step in and take away some of your market share. Right. All those years back in the early, I mean, late 90s and early 2000s, I was expecting to get a call from an industry player like Seeley. To say, hey, we want to buy you out or something.

Yeah. And we would have said, okay. But I never got the call because I believe that they thought, that we would go the way of the waterbed, that this was a fad. And that was one of the main concerns of the investors. Is this real or is it a fad? And we were able to convince them that it's real and convince the public markets that it's real because it is. You stepped down, I guess, in 2006 as the CEO of the company, did you just feel like, you know what?

Been there, done that. I want to kind of enjoy life a little bit. not work so hard. That was part of it. And the other thing was I never really saw myself as a CEO of a public company talking to investors and there's guys who can do this better than me is what I knew from the start. And yeah, I felt like I had been in a long enough. I kind of wanted to cash in my chips and do something different. Yeah. I mean, the thing that's quite amazing about your story is that your entire identity, Bobby, was about horses. From the time you were a kid, like you loved horses, you rode them, you read the horse trades, you read the horse racing, you know,

newspaper section, you went to college intending to be a trainer, you went and did this until you were 40. This was your entire life. Your whole identity was around horses. And then you completely switched. I mean, you went to something that you had no natural interest. in. You just like the product. Right. I changed horses in the middle of the stream, you might say. Yeah. And I was in a situation where all that I knew had kind of dried up and gone away, horses. And when you're 40 years old and your resume says, horse, it's not like you can go get a job at a bank or an insurance company.

You really have to consider doing something entrepreneurial, which you were probably well equipped for because I think you're more, You're more equipped for that when you're 40 than when you're 20. Yeah. You have to have the ability, though, in the mindset to take risks. But when you don't have anything, it's not so risky if you think about it. And the other thing is I think it's important to have the propensity to think big. And so I always kind of had that. You know, my feeling is you just got to keep trying.

You've got to keep saying yes. and you've got to keep praying and things will break. I ask this question of everyone who comes onto the show, and it is a simple question, Bobby, which is how much of your success is because of your intelligence and your skill and how much because of just luck? Well, I think a lot of it's luck. I think it's a combination of perseverance.

You know, I'm going to pat myself on the back. It's for I kept trying different things. You know, I had the ionizer business and the horses. And, you know, I'm definitely not smarter than other people. I think I'm a risk taker and I got very fortuitously matched up with a product that was significantly better than what was out there. And it was something that no one else had. Yeah. So I think perseverance combined with luck is what got us where we wanted to be.

That's Bobby Trussle co-founder of Tempetic. By the way, back in 2012, Tempetic acquired its longtime rival Sealy mattresses, making it the biggest betting provider in the world. Bobby Trussle still sits on the board, and today, the company has a market cap of $3.5 billion. I'm just going to be frank with you for a moment. If you are a child, like between, you know, three and seven, tempripetic mattresses suck because you can't bounce on them. It's just, if you're a kid, you're like, oh, you got the temporepetic. The wine glass doesn't even spill over.

I can't jump on this thing. Yeah, they're better for sleeping. And thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. You can also write to us at H-I-B-T at N. npr.org. And if you want to tweet at us, it's at How I Built This or at Guy Raz. Our show was produced this week by Rund Abdelfata with music composed by Rumptina Arablui. Thanks also to Candice Lim, Derek Gales, Julia Carney, Neva Grant, and Jeff Rogers.

I'm Guy Raz, and you've been listening to How I Built This.