A lot of people I talk to ask me what I would do if I were to start a new mattress company. Would I try to bootstrap or raise a bunch of money? What kind of mattress would I make? How would I go about marketing the product(s)? Well, I’m not going to start my own mattress company anytime soon, so I haven’t really given it much thought. I do have some thoughts on the subject though.
From what I can tell, of the newer companies, Tuft and Needle and Saatva made it all happen without raising money (T&N feature on CNN here). There’s certainly challenges when you don’t raise money. For one, there are a lot of upfront costs in starting a mattress company. Developing a website and product don’t come cheaply these days. If you can start the company with your own, then that’s amazing. It’s not easy to bootstrap in this industry, however. Another challenge is you can’t go out and advertise online very easily. I’ve seen the CPC rates for certain mattress-related keywords on Google, and things don’t look very cheap there either. It’s going to be hard in general to get people to hear about your company if you don’t have a lot of money to spend on advertising and PR. You might have made the greatest product in the world, but if no one knows you exist, you won’t easily be successful. Overall, bootstrapping makes it harder to achieve fast growth.
At the same time, raising money doesn’t come without its challenges as well. Off the bat, you are giving up a piece of your company. It will also take a while to figure out the best forms of advertising that can be effective for your company. Raising a lot of money probably brings more pressure with it, because if you don’t succeed you are not just losing your money, you are also losing someone else’s money too.
Regardless of whether you raise money or not, I would focus on the following:
-Make sure your product is immaculate. It’s hard to be a successful company with an inferior product.
-Bring on a smart, experienced marketing team. As I’ve eluded to, marketing in this industry is difficult and costly. You want to make sure you aren’t just throwing lots of money down the toilet. This is absolutely essential.
–Have amazing customer service. To stand out, it’s really critical to have very friendly customer service policies. This is something that is starting to happen in the industry, and it’s a great trend to see. Make sure you have a great warranty, return policy, and free trial period. This will make customers feel much better about buying your product and will ensure you will have a greater chance of having favorable customer reviews.
Again, I’m not starting a company on my own anytime soon, but these are some thoughts I had on the subject!