A software developer goes to buy a bed and sets off a chain of developments that leads him to co-found a mattress company. It’s an unlikely story, but sometimes a bloated supply chain begs to be disrupted.
In 2012, John-Thomas Marino was working as a developer for Mulu in Palo Alto when he and his wife went bed shopping. At two stores they visited, pushy sales people led them to models yielding the biggest commissions. The couple found the experience so off putting they bought online instead.
When it arrived, however, it didn’t feel anything like $3,200. “I realized that I’d more or less spent three grand on a block of foam,” Marino says.
His friend, Daehee Park, shared his distaste for spending a large sum of money on something to sleep on. The two of them compiled a “hate list” of things about buying a mattress, thinking there might be a business in remedying some of that.
What they found with some digging surprised them. The $1 billion American mattress industry was so packed with middlemen and retail shenanigans that the cost of goods and price at sale bore little correlation to one another. They learned that the $3,200 mattress Marino had bought could be made for as little as $300. And so it was that two software developers quit their jobs and started a company called Tuft & Needle.
But it wasn’t easy. The mattress industry is such a closed shop, made up of small, family-run businesses, that unravelling it was like a detective story. Many weren’t even online, so they had to navigate by phone. “There’s a lot of copycatting, there’s no spot leadership, no real example set by anyone,” Marino says.
The two ground it out, getting one guy on the phone and not letting him hang up until he’d given them the name of someone else to call. No manufacturer would come near them, but eventually the two found a few disgruntled suppliers who helped them out with samples and offered a small amount of credit.
Their first product, a cotton mattress, came out in early 2013. Marino describes the early process as he and Park going into a room together and building prototypes themselves. Tuft and Needle’s first mattress was only five inches thick, a minimalist response to most mattresses being needlessly filled with material that serves no purpose but to make it bigger.
With both of the founders such complete outsiders to the industry, they decided early on to improve the original product in line with customer feedback. Tuft & Needle’s cotton version was a bust. So the company switched to foam, which did better. By the end of 2013 the mattress had risen to being the number-one rated mattress on Amazon and the company’s media materials boast to selling half a million dollars in mattresses in the first two months of 2014. And today the company announced the Tuft & Needle Ten, a bigger ten-inch mattress that can fit on standard-issue bed frames.
Bonobos CEO Andy Dunn was introduced to the Tuft & Needle founders two months ago and has since taken an advisory role. “I admired their approach,” Dunn says. “They struck me as incredibly scrappy. The traction they’d had, relative to their paid in capital, was some of the best I’ve ever seen in e-commerce.”
Dunn says that Park and Marino’s focus with Tuft & Needle on customer satisfaction, leveraging the credibility of strong Amazon reviews and company testimonials to boost brand reputation. While many new companies want to be the “Warby Parker of X,” Tuft & Needle’s direct to consumer, low-cost entrance into a market where the norm was overpriced goods with little brand affection puts it in a position to make good on the hype.
It is a promising start, with still high risk ahead. As Dunn himself points out, Marino and Park are smart, solution-driven entrepreneurs, but neither have brand building experience in connecting a product to a wider market. Nevertheless there’s an undisputed opportunity here. The mattress market is as unpopular as Tuft & Needle’s co-founders say.
The Mattress Underground, a bedding information site run by a network of distributors, puts an “avoid” rating on the five largest brands, which together control 73 percent of the market. But Tuft & Needle is microscopic as a company and to scale will require large investments of time and capital, all the while likely attracting new competitors.
Meanwhile the mattress industry has tried to write off Tuft & Needle so far as a boutique offering more akin to a futon.
“On forums, there are people attacking us,” Marino says. “And almost every time they are obviously someone from the mattress industry. They’ll talk about board feet. Only people in the mattress industry measure things in board feet.”
The company will have to grow a lot more before it becomes more than just an existential threat, though, but Marino likes his chances because there is no one big company dominating the market,
“No one anywhere is psyched about the brand of mattress they bought,” Dunn says. “There’s no Apple of the mattress world.”