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- [00:00]
Guy Raz
Wonderyplus subscribers can listen to How I Built this early and ad free right now. Join WonderyPlus in the Wondery app or on Apple Podcasts. This episode is brought to you by American Express. In today's ever changing landscape, business owners like you are constantly adapting to new challenges you're always on, relying on your instincts while seeking partners and solutions to help flex and grow. That's where the American Express Business Platinum Card comes in. It works just as hard as you do to help you pursue your passions. With its world class business and travel benefits, you can get more for your business wherever it takes you. Like earning five times membership reward points on flights and prepaid hotels booked on amextravel.com, so that going the extra mile for your business is even more rewarding. And with complimentary access to more than 1400 airport lounges worldwide, including the Centurion Lounge, you can keep your business running while you're on the go. See how the Amex Business Platinum Card gives business owners like you the tools and rewards to do more of what you love. Terms apply. Learn more@americanexpress.com AmExBusiness you know what I love most about listening on Audible? It lets your imagination soar. Whether you listen to stories, motivation, expert advice, any genre you love, you can be inspired to imagine new worlds, new possibilities, new ways of thinking. There's more to imagine when you listen. I've recently been listening to Table for Two by Amor Toles, an incredible collection of short stories and a novella that takes us back to a character from his book Rules of Civility. And as an Audible member, you can choose one title a month to keep from the entire catalog, including the latest bestsellers and new releases. New members can try audible free for 30 days. Visit audible.combilt or text built to 500500 that's audible.combilt or text bilt to 500500 to try audible free for 30 days audible.combilt with Amex Platinum you can really.
- [02:22]
Missy Tannen
Be in the now Access to resi priority notify yes 4pm checkout with fine hotels and resorts booked through AmexTravel. We needed this and dedicated card Member entrances at select events.
- [02:37]
Guy Raz
Let's go.
- [02:38]
Missy Tannen
Means you can focus on the present moment. That's the powerful backing of American Express. Terms apply. Learn more@americanexpress.com withamex card member entrance access not limited to Amex Platinum Card.
- [02:57]
Guy Raz
You took a line of credit against your house to spend $2 million on an ad campaign on Howard Stern?
- [03:04]
Scott Tannen
Yeah, I took the Most amount of debt I've ever had on anything in my life.
- [03:08]
Guy Raz
Wow.
- [03:08]
Scott Tannen
Just to advertise on Howard Stern, you're.
- [03:11]
Guy Raz
Putting all your eggs in that basket.
- [03:13]
Scott Tannen
Yeah. Without a plan for what I was gonna do if it worked. But I believe so strongly that somebody like Howard was gonna put us on the map. I believed it was possible.
- [03:23]
Guy Raz
Sounds kind of nuts.
- [03:26]
Scott Tannen
It does, actually. Now.
- [03:35]
Guy Raz
Welcome to How I Built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Scott and Missy Tannen fell into an industry they knew nothing about, made their lives even harder by setting a high bar, and grew Bowlin Branch into one of the country' top betting brands. Even if you think of yourself as a risk averse person, it doesn't mean you're incapable of taking risks. We do it every day. Walking down the street is a risk. Going swimming is a risk. Getting into an Uber is a risk. The last seven Ubers I've taken have driven like crazy maniacs. But all of these things are normal, mitigated risks. The chances something will go haywire are pretty low. And if you think about the risks you take starting a business, there's a pretty wide spectrum. Many of the stories we've told on the show are about businesses that started as a side hustle. The founders kept their day jobs and one foot in the startup just as a hedge. But sometimes people who have a greater appetite for risk just go for it. They quit their jobs, give up the benefits and health insurance, and throw everything they've got at the idea. Or in the case of today's story, they take out massive loans, mortgage their house, and live with crushing debt for several years, knowing that the business could also fail. When Scott and Missy Tannen launched Bull and Branch, they knew nothing about bed linens. Well, they knew what the average consumer knows. Thread counts, Egyptian cotton, Turkish linen. And they discovered that all of those things can be somewhat misleading, which we'll get to. But what they also did was take a big swing for the fences early on a $2 million advertising bet that was financed through loans and lines of credit. But as you will hear, that Gamble and others they took paid off. Today, Bolenbranch is one of the leading luxury linen brands in the U.S. the company also sells home decor, mattresses, even furniture. As for Scott and Missy Tannen, they both grew up in the 1980s and 90s. Scott in New Jersey, Missy in Ohio. They met at college when they were both juniors at Vanderbilt University in Nashville.
- [06:10]
Missy Tannen
We got set up on a blind date. My girlfriend Marnie was going to a football game with Scott's friend Drew. And they were both like, hey, it's the day of the game. Neither of you have a date. Why don't you go together and set us up? This was back in the 90s where you had to have a date to go to a football game. At Vanderbilt, it was Southern. The girls would wear cocktail dresses and the guys would wear, you know, coats. It was crazy. And ties.
- [06:39]
Guy Raz
Wow.
- [06:40]
Scott Tannen
And I love football. And at Vanderbilt, people generally go to the games at halftime. I was like, that's. Nope. I'm going. When the team runs out of the tunnel, I'm going to be there the whole game. And my buddy Drew was like, come on, take this girl, Missy. And I'm like, I'm not going with some girl that can't find a date. Like, I actively don't want to date. And then Marnie, who was Missy's friend, was like, come on, Scott, Just. Just go, well, the four of us will hang out. It'll be great. And I said, if she can be here by kickoff, I will take her. Otherwise, I'm out of here. At the end of the first quarter, Missy shows up, and I still went with her, thank goodness. But I was. I was. I was a little upset that I missed the first quarter of the game.
- [07:14]
Guy Raz
And that's it. You become a couple. And when both of you graduated in 1999, you must have been kind of serious, because, Missy, you moved to. I think you moved to New Jersey with Scott, right?
- [07:28]
Missy Tannen
Yeah. So graduation was kind of a bittersweet moment, I would say, for us. Unfortunately, a month before we graduated college, Scott's dad passed away. So that kind of really shook our world. By the time we graduated, you know, a month later, there wasn't even a decision to be made. It was more like, okay, we're moving to New Jersey. We're going to help your mom get her feet on the ground. We're going to help you get your feet on the ground. But this will be our two to three year plan.
- [08:00]
Guy Raz
I'm sorry to. I'm sorry. I mean, I know this happened over 25 years ago, but it must have been really hard. Was your father ill, Scott?
- [08:11]
Scott Tannen
No, he was born with a heart defect, and he just happened to be at dinner with my mom and, like, massive heart attack out of nowhere. And so none of us were prepared, you know, I mean, the whole period of time is such a blur, and I was so close to my dad, and Certainly idolized my dad in so many regards that I was made to become an adult really fast over that month long period because coming back and getting into that space of okay, you know, I've got to figure out how to close down my dad's business and find a job myself out of college and find a place to live and help my mom get back on her feet. And there's no question that my mom and I would not have gotten through that summer were it not for Missy, because she basically lived with us. And so from that point on, we were, we transitioned from being kind of college boyfriend, girlfriend to like really a couple.
- [09:10]
Guy Raz
Yeah, but of course, I mean, you had to start your life too. And I guess Missy, you worked, you started work as a third grade teacher and Scott, you went to go work for Nabisco sort of, I guess on the digital end of things. And eventually, I guess you kind of helped them kind of reimagine a website that they had into what, like, kind of like a gaming site for kids. Like a gaming site that promoted Nabisco products.
- [09:40]
Scott Tannen
Yeah. So I kind of really was able to convince the organization to, look, let me run with this, but let's make this a real gaming website for these kids so that it is valuable real entertainment for them that they would otherwise pay for or get somewhere else. And then we'll own all the advertising inventory in that experience.
- [09:58]
Guy Raz
This is candy stand, candystand.com and just describe, give me a basic sense of what it was.
- [10:05]
Scott Tannen
So you have to take your mind back to the Internet in the early 2000s. So you actually loaded a website that was like you would see on the corner in New York City and it looked like a candy stand, but underneath it was links to different games. So we ended up over time creating 200 unique online games. So it might be billiards and on the pool table was Breath Savers or Home Run Derby and it's Big League Chew all over the side in the stadium. Miniature golf was one of our most popular games. And each of the holes you were maybe hitting it through a Lifesaver or bouncing it off of a piece of gum that would have more bounce and elasticity. These were really casual, fun games like what you play on your iPhone today. But it was just delivered over the.
- [10:50]
Guy Raz
Internet just to compress the story a bit here. I think a few years later in 2008, you actually wind up co founding a company. It was called Fun Tank. And that company acquired this thing, Candy Stand, and you basically start running it, right?
- [11:10]
Scott Tannen
Yeah. And it really caught Fire. I mean, we were doing 20 to 30 million people a month were coming to this website.
- [11:18]
Guy Raz
Wow.
- [11:19]
Scott Tannen
Which was nuts and totally unmonetized.
- [11:21]
Guy Raz
And that was because, what, you didn't have advertising, like, wow, what was the challenge there? I mean, what was your plan to monetize it?
- [11:28]
Scott Tannen
We just had to insert advertising inventory on the website.
- [11:31]
Guy Raz
Okay. And could you do that? Did that work?
- [11:35]
Scott Tannen
It did. It worked immediately. And then we went out and solicited partnerships from folks like Disney and Coke and American Express, where we were creating branded games for them.
- [11:47]
Guy Raz
I mean, it seems like this was going to go, you know, just stratospheric. Right. I mean, you guys managed to acquire this website. You've got tens of millions of people visiting. You've got advertising on it. But ultimately that didn't happen. In 2010, you guys sold the company to Publishers Clearinghouse, I'm assuming, because it didn't actually quite take off in quite the way you thought it would.
- [12:14]
Scott Tannen
It actually crushed it for the first two years.
- [12:17]
Guy Raz
Okay.
- [12:17]
Scott Tannen
I mean, like, you've heard the term born on third base. This fun tank was born on third base, and it was rounding third, heading for home. And the iPhone came out, right? And people's behaviors with games changed overnight. It was actually not when the iPhone came out. It was when the App Store opened up.
- [12:36]
Guy Raz
So all of a sudden, people migrated away from playing games on websites to playing them on their phones.
- [12:41]
Scott Tannen
That's right. And it decentralized everything, too, because there's no need to go to a website where when you download from the App Store, you're just choosing the games that you want to have on your device. So discovery changed. And so we were in a world where we paid nothing for customer acquisition. It was all viral. People were coming to us, and we were left with a great portfolio of IP but a very rapidly dwindling consumer base. Revenues plummeted.
- [13:12]
Guy Raz
I don't believe that candystand.com exists anymore. Did you walk out of that deal with Publishers Clearinghouse with a lot of cash? Except for life, it seemed like it was going up and up and up, and you owned 50% of it. And then it got acquired. Right.
- [13:33]
Scott Tannen
I'll say this. It was a cash deal. It wasn't like I got three magic beans for it, but it was the equivalent of a few years salary, candidly, and enough to give me a cushion to do something else. But I also actually felt weirdly satisfied taking a business and leading it through an acquisition and diligence process. I learned how difficult that is, and it was very challenging. But unfortunately my story takes a bit of a turn there in that within a few weeks, my mom gets diagnosed out of nowhere with pancreatic cancer. And so the blessing of it all was that I had less financial pressure and I was able to take the time. And the publisher screening house people were amazing about it. You know, I spent the year with my mom while she was fighting it and had the surgery and did all those and she ultimately passed a little over a year later. But you know, that what fun Tank and that acquisition brought me was, was that opportunity, which I can never, I can never give back and never thank everybody enough for.
- [14:38]
Guy Raz
Yeah, so you knew. I mean, wow. I mean both your parents you lost in basically a period of 10 years, but now you had a little bit of a cushion with the acquisition to take a couple years off, but that was about it. You would have to go back to work 100% because I think at this point. Missy, how many kids did you guys have at this point? We had three daughters, three young kids. Yeah, but it sounds like in your mind you were already thinking about the next thing. I mean, you had to because. Right. And the next thing, was the next thing in your mind going to be, I don't know, going to work for somebody else, maybe join a VC firm? Was it? Start my own thing? Did you have an idea in your head?
- [15:26]
Scott Tannen
You know, the easy thing was consulting and I just didn't love it. And I didn't love it because I'm a hands dirty guy and it's like you're playing with someone else's toys and you have to put them away at the end of the day. And I think it was that process that made me realize that, you know, I'd always say I'm not an entrepreneur because I always thought I was too conservative and too afraid of risk and kids and that sort of thing. And I realized at that point that like, I've got to give it a shot to go start something myself. I just wasn't sure in what. But I also really missed tangible products.
- [15:59]
Missy Tannen
But I think, don't you think that time in your life when you were consulting, I feel like we both got to just see and hear about these emerging brands and startups and people trying things differently. But also there was always like, I felt like a human, like a tangible charitable piece to most of the brands you were working with, similar to like a Tom's model where they would have a give back or a donation as part of their brand. There was something just inspiring about business at the time too. That it didn't have to just be business for business. It could also make a change.
- [16:40]
Guy Raz
So tell me a little bit about some of the ideas that you started to think. I mean, you were doing consulting, but at what point did you start to think about, maybe I should look into starting my own thing?
- [16:53]
Scott Tannen
Yeah. You know, I was working with a company called Alton Lane, which was doing made to measure menswear. And I started to realize that brought me eye to eye with brands like Bonobos that were just starting at the time and looking at how they found one thing. In their case, it was khaki pants that they did really well. I bought them. I'm like, wow, they're delivering on it too. I started to realize, wow. Warby Parker Bonobos, yes, they're making a product, but they're playing customer acquisition arbitrage. They are just trying to acquire a customer for a little bit less than they're making and scale that profitability. They're playing in categories where they're competing with really, really big folks, but those folks are not nimble, and they're probably not playing with the current deck of cards when it comes to the sort of digital media landscape. So I felt that, okay, I just need a product that I can go compete with in a fragmented market with big players and win on customer acquisition arbitrage.
- [17:54]
Guy Raz
And so you started to think about what could it be? And you mentioned, okay, men's suits and what other things kind of crossed your mind?
- [18:03]
Scott Tannen
I thought about laundry detergent. I thought about food products as well.
- [18:07]
Missy Tannen
Toilet paper.
- [18:08]
Scott Tannen
Toilet paper was a big one. I still think there's a market for the world's first luxury toilet paper.
- [18:13]
Guy Raz
Luxury toilet paper.
- [18:15]
Scott Tannen
Why not? Right? It's a shitty business.
- [18:16]
Guy Raz
What would luxury toilet paper do? It's a shitty business. Yeah, it would be. I mean, would it be like, thicker toilet paper? Because that exists.
- [18:24]
Scott Tannen
No, I see. I think it's not thicker. I think it's figuring out a way to get the experience you get with a bidet off a roll.
- [18:34]
Guy Raz
Oh, interesting.
- [18:35]
Scott Tannen
Less paper, less consumption, better cleaning. I obviously didn't go this route, guys.
- [18:43]
Missy Tannen
And I don't think I would have been involved if this was the route. No idea is a bad idea.
- [18:47]
Guy Raz
No idea is a bad idea. So you're thinking of things and you're doing consulting work, but clearly you're looking for something. So tell me about your experience with bedding. I mean, you just. You just what? You got a new bed, you wanted to get better sheets? What was it? What was it? Yeah, go ahead, missy.
- [19:05]
Missy Tannen
We Were renovating our bedroom, and for the first time of being married 15 years, moved from a queen bed to a king bed. And I know that sounds so cliche, but that was what was happening. We go to department stores, specialty retailers, and, you know, after doing this renovation for a year, everything feels like a big decision, you know, and you'd already spent so much money on all the different, you know, construction and finishing elements that it's like, I just wanted to know what I was purchasing with these sheets and sharing these troubles with Scott of how I didn't know, you know, what was thread count. Does Egyptian cotton. Does that mean it's from Egypt? Does that matter? Like, what really matters? And all I really wanted were some soft sheets. It was literally overnight that Scott woke up, and he was like, this shouldn't be a problem. I mean, that. That really was the light bulb moment, that now in his mind, he had this product or this category that was underserved. No one was playing in it. You know, could he. At the time, I wouldn't even say I was part of this quite yet. Is this something that he could lean into?
- [20:17]
Scott Tannen
That's really what it was. Like, the starting point was, oh, my God, this is so easy to make. These are giant squares of fabric. There are a million suppliers that would love to sell me them and private label them. Like, this is just what I was looking for.
- [20:31]
Guy Raz
Yeah.
- [20:32]
Scott Tannen
So when you start a business, you would think that when you start a business, you first research, then you order, and then you sell. I actually was planning to cut out the research part of it and just order and sell. I wanted to go as fast as I possibly could.
- [20:45]
Guy Raz
So just find there's tons of these factories around the world. You just slap your label on it.
- [20:50]
Scott Tannen
Because that's what happened is I googled suppliers, and I live in New Jersey, and fortunately, they're all here. They're all in New Jersey and New York. So I was like, this is great.
- [21:00]
Guy Raz
These are suppliers who produce the material in China or wherever, but they basically.
- [21:04]
Scott Tannen
They'Re the local sales office for factories in India, China, Italy, Portugal, everywhere. And I walk into the showrooms thinking, like, all right, I just want pricing on this. And they're like, okay, great. Well, what are your size requirements, labeling requirements, and which trim detail do you like? I was like, phone a friend.
- [21:25]
Missy Tannen
Yeah. Scott would not be the person in our household to make any betting textile decision, so let alone try and make sheets for the country. That just wasn't going to fly. So that's really when I jumped in with Scott. To just. Even in the beginning, it was so simple and innocent. Like, hey, I'll go with you to a meeting. I'll pretend like you have a company, you know, and we'll go ask some questions together. And we didn't know anything. And so we also, at those meetings were asking the questions, like, well, so tell me, this is so exciting. Where's the factory? Where's the cotton come from? Like, and that's when they couldn't even tell us, you know, where the locations were or what was going on. And that's when we really decided to take a beat, let's step back and really research this.
- [22:18]
Guy Raz
So, for example, something is labeled Egyptian cotton, right?
- [22:23]
Missy Tannen
Yeah.
- [22:23]
Guy Raz
1000 thread count Egyptian cotton. And I think most people assume, oh, that's cotton made in Egypt. And by the way, I don't know any. Or you hear, like, Turkish towels, you know, like Turkish bathrobes, like, and I don't know anything about this. I'm just assuming that that means it's really great.
- [22:41]
Scott Tannen
Well, it's like, I mean, you think about Egyptian cotton, right? Like, you close your eyes and you imagine somebody on the banks of the Nile river, like, cultivating this rich soil from Cleopatra's time. And the cotton that comes out of it is the finest. And one of the very first suppliers that we met with, which was selling Egyptian cotton sheets, and I'm like, well, I'd love to go see the farms. They looked at me like I had seven heads. I started to realize that these folks had no idea what their own supply chain looked like. They couldn't trace their own supply chain. And they were the ones selling me the product. I actually took it upon myself to reverse engineer their supply chain because I tend to get a little bit crazy about this stuff. I don't have an answer. I dig and I dig and I dig and I dig. So I was calling their factories. I was finding, you know, and I found that these Egyptian cotton sheets that they were selling me were woven in China. They just named a plant, a cotton plant in China. Egyptian cotton, so that they could call it that.
- [23:38]
Guy Raz
So wait, the cotton was grown in China?
- [23:41]
Scott Tannen
In China.
- [23:42]
Guy Raz
It's not like champagne. That has to come from champagne, you.
- [23:45]
Missy Tannen
Would think, but no.
- [23:46]
Guy Raz
What were you. I mean, basically, I mean, again, you guys want to find out how this is sourced and how this whole process works. And if so, why were you so interested in that? Why was that so important?
- [24:01]
Scott Tannen
We just kept. It was sort of like when you ask someone a question and they give you an answer and you're Like, I can tell they're not being totally forthright with me. We felt that in all these meetings with these suppliers. But then when you start diving into your own research and. And doing it online, you come across a lot of news articles and you start realizing, like, okay, you know, deep inside, I kind of know the textile industry has a crummy reputation, and you start realizing why. Yeah, we both were really drawn to organic cotton after reading an article in the Guardian that talked about farmer suicides in India and how the conventional cotton business, the farmer, is extremely disempowered. And the article talked about how, you know, they were actually drinking the pesticides in the fields, committing suicide. And it's like you learn these things and you start saying, okay, there's a system here. And, like, Misty and I just kept looking at each other like, we can't be a part of that system. There's gotta be a better way to do this or it's not worth doing at all. And that was how we started learning about organic farming. And so we start seeing these sort of. These alternate paths out there that the whole system is ignoring.
- [25:16]
Missy Tannen
Maybe even before this, I would say when we were on our research and exploration, we reached out to anyone, you know, whether it was a mill that was weaving fabric or an importer. We just wanted to see the landscape. Just, we didn't know, you know. So I would say we got in. I don't know What, Scott, maybe 20, 30 different types of fabric from all over the world. So at that time, we weren't. We didn't know where we'd end up manufacturing. And what I did was I took all this fabric or these pillowcases, and I would just go around myself, friends, family, and we would do blind field tests. Which one is the softest? I wanted to know how it would hold up, how it would feel. And really, that led us to India. I would say when we started thinking about cotton and their expertise there with growing cotton, weaving cotton, they have a long history there.
- [26:18]
Guy Raz
Once you started to gather all this kind of information, you were paying attention to the TOMS and other DTC companies that were sort of social enterprises. Is that. I mean, did you start to think, well, that's what we should be doing. We should be focusing on sourcing this in, let's say. And I hesitate to use the word the most ethical way, because I. Full disclosure, I have some personal issues with this whole idea. We've had lots of businesses on the show, and it's complicated, right? I mean, there are great brands that don't always source things in the same way that other brands do. But. But just for argument's sake, here, did that idea of sourcing this in a way that you felt was to your own personal ethical standards, did that become critical from that moment on?
- [27:15]
Missy Tannen
For us, it wasn't about sourcing a product. It was about making it and making it from scratch and knowing everything about it from start to finish so that we could be proud of what we were making. We just wanted to know that the people on the other side of the world who were making our product weren't being taken advantage of. That was really important to us and that they were safe. At the same time, I remember just being consumers, just being normal people watching the news. And Rana Plaza also collapsed at that time.
- [27:51]
Guy Raz
And this is a huge disaster, I think hundreds of people or killed in this fire in this factory in Bangladesh.
- [27:57]
Scott Tannen
And so that was the moment right, where we'd abandoned the notion of, okay, we're going to work with one of these importers and source our products. That was gone.
- [28:08]
Guy Raz
You wanted to work directly with a factory in India.
- [28:13]
Scott Tannen
Correct. But we kept. Because it was going to be way harder to do this the way we wanted to do it. And then late April 2013, Rana Plaza collapses. We're watching it on the news, and I can vividly remember sitting in our family room and Missy and I looking at each other saying, that's the system. We can't be a part of the system. Because at this point, look, you're a year plus into this. Our friends know we're working on this crazy betting idea. We were past the point of no return, like we were going to launch a betting business. And so that was the point where we said, let's forget this conventional route. We've got to go the route of full traceability from end to end. We'd never, at that point, had never walked or stepped foot in a textile factory, nor had Missy. And yet we were about to determine where we were going to do all of these things to achieve the product. And so, you know, what if we're not just building a business, but we're proving something like, can it be done.
- [29:08]
Guy Raz
When we come back in just a moment, why an industry insider tells Scott it probably can't be done. And why Scott and Missy refuse to listen. Stay with us. I'm Guy Raz, and you're listening to How I Built this. This podcast is brought to you by Squarespace. Squarespace is the all in one website platform for entrepreneurs to stand out and succeed online. Squarespace can help any business owner craft a strong web presence and sell anything from products to content time, all in one place, all on your terms. With Squarespace Blueprint, you can build a completely personalized website optimized for every device, with powerful SEO tools that help you grow the way you want. Squarespace makes checkout seamless for your customers, accepting credit cards, PayPal and Apple Pay and in eligible countries, Afterpay and Clearpay. And you can easily manage your clients and invoices, from vetting leads to receiving payments in one streamlined, customizable workflow. So check out squarespace.com for a free trial and when you're ready to Launch, go to squarespace.combilt to save 10% off your first purchase of a website or domain. If you've been listening to me for a while, you know that I'm really interested in health and fitness. And for the past year the single biggest game changer for me has been a biowearable. Why is it a game changer? Well, because it's helped me figure out which foods leave me energized and which ones make me foggy and sluggish and even hungry. And that matters because it turns out 88% of us have suboptimal metabolic health. That's why I'm so excited about Lingo. It's a new biowearable from Abbott that tracks your glucose in real time and gives personal insights and science backed recommendations to eat in a way that works for you. To see how your body responds to food and learn what you can do to improve your metabolism, try Lingo. It starts at $49 for a two week plan, no prescription needed for a limited time. Save 10% off your first order by using the code hibt@hello lingo.com the Lingo Glucose system is for users 18 and older not on insulin. It is not intended for diagnosis of diseases, including diabetes. For more information please visit hellolingo.com us you know when you're shopping for like a new car or even a new bike, which I was shopping for recently, and you want to find one with all the right features, something that fits exactly what you need? Well, that's the way it feels today, trying to find the right AI tools for your business. You want to get it right, but it's not always clear which tools are actually going to help. Grammarly is designed to fit your business's unique needs and works right away to help contribute to your overall success. Grammarly works effortlessly with the apps I already use every single day and it saves me so much time while I'm writing. With its super helpful AI prompts, Grammarly works where you work from docs to messages to emails, integrating seamlessly across 500,000 apps and websites. No cutting, no pasting, no context switching. Join 70,000 teams and 30 million people who trust Grammarly to work faster and hit their goals while keeping their data Secure. Go to Grammarly.comenterprise to learn more. Grammarly Enterprise Ready AI. Hey, welcome back to How I Built this. I'm Guy Raz. So it's late 2013 and Scott and Missy are aiming to start a bed linen brand with a pretty high bar. Super soft cotton, organically sourced and made in India at a factory that treats its workers fairly. And to accomplish that, they find an Indian manufacturing partner named Rajat.
- [33:23]
Scott Tannen
Rajat was somebody that. Look, we sent our life savings and then some to Rajat in India, hoping he would send a boat back in eight months without us ever visiting. Like that is sometimes when I'm not sure if I'm an entrepreneur, I think back to those things. But the reality was when this became important to us, the validation and understanding and certification is critical. You can't have one without the other. Otherwise you get into a space of greenwashing or you can be accused of greenwashing. And number one is the cotton. And if it is, if we're marketing it as organic, I want to know that it's actually organic. Right. We're also paying a lot more money for it. We worked with Gotts, which is the global organic textile standards, to ensure that they were certifying it for the product to be certified and the company to be certified. It means you need traceability certificates. You have to have full documentation from the moment the purchase order is placed. You have to have full documentation that accompanies essentially the bushels of raw cotton that come out of the fields and stays with the cotton as a finished product when it leaves the factory. The second piece we had to think about was factory. So that's where bringing in fair trade was important because they were looking at. They looked at two things. Number one, and what they're most famous for is ensuring that workers are paid a fair wage, which puts them above the living wage, which in many countries the minimum wage is below the living wage. That became very important. But they also do consistent inspections and audits of the factories themselves. Are the fire exits clearly. Are the workstations lit properly? Are people allowed to unionize? And all of those things. So from our very first PO until today, the tenets of that same system exist. Every dollar we spend with a farmer or at a factory, we are ensuring and validating independently that no cycle of poverty is being continued.
- [35:23]
Guy Raz
I'm curious, did anybody say, you know, people just don't care about transparent. They don't care about the ethics of. They just want good sheets, they want a good price.
- [35:33]
Scott Tannen
Everybody said that people don't care about anything but price. You know, you don't eat the sheets, and nobody really cares about organic. And that was kind of the consistent message I got. But then separately, I reached out to folks that were in the world of sustainable textiles, whether that's through T shirts and apparel and things like that, and they were all extremely skeptical of Missy and my intentions because they're like, well, you're not one of us. You haven't grown up in this space with us, and now you're coming in. Are you just trying to, like, see a commercial opportunity and exploit it?
- [36:07]
Guy Raz
Yeah. And you can understand that skepticism 100%, you know, and thinking, hey, you haven't paid your dues. I started out in the factory sweeping the floors, and now I'm running the company. And who are you guys, exactly?
- [36:20]
Scott Tannen
I mean, who are we? And probably a fair question. So I found it was really hard to get clear information. There was nobody out there that I can remember that validated what we were doing. And I'll tell you a funny story, guy, the first time I went to our factory, Rajat's factory in Calcutta, his dad, who had started the business, was in his late 70s at the time, and he took me to lunch after I had spent a week there. And. And he said, scott, I think what you're doing is a very bad idea. I'd already ordered. I already spent my entire life savings on sheets through him. And he's telling me, I think this is a bad idea because I just don't know that there's a market for what you're trying to do. And when I look back, that was some of the biggest dose of bravery that Missy and I had to have, was that we just couldn't find anybody that would sort of say, yeah, I get what you're doing. This is going to be awesome.
- [37:13]
Guy Raz
But you felt like it didn't matter. I think that it's going to be. It's going to work.
- [37:20]
Scott Tannen
I felt, what's the worst that can happen? Like, you're supposed to say, I had this vision of it all coming together. I was like, well, worst comes to worst, give me a couple years, I can liquidate it and we'll get some of Our money back. So why not go for it?
- [37:33]
Guy Raz
Yeah. Let's talk about the name. Because you're going to start a brand, right? And so you decide to, you start to think about names and you come up with bowl and Branch. Tell me about the name.
- [37:48]
Missy Tannen
It was probably Scott, wouldn't you say? We played for about a month with the name and kept thinking of so many different ideas. But then the third grade teacher in me, I was just so inspired by what we were doing through this cotton plant. And so I just googled what are the parts of a cotton plant. And you know, there's a bowl and that's the pod where the fibers, the fluffy white fibers grow and it opens and that's what you think of the cotton fibers and you know, grows on a branch.
- [38:23]
Scott Tannen
Wow.
- [38:24]
Missy Tannen
And so we tried all different iterations, you know, branch and bowl, bowl and branch, got the URLs and really just sat with it and we were like that's it?
- [38:35]
Guy Raz
Yeah, it's amazing. Cause I just assumed it was like a made up name. Like two names of people like Fitzwilliam and Guilford. Like you see that are like soap brands that are, you know, that are not that old but they look like they come from, you know, jolly old England.
- [38:50]
Missy Tannen
Yeah.
- [38:51]
Scott Tannen
When I'm in retail stores, half the people ask me, are you bowl or branch?
- [38:54]
Guy Raz
Right.
- [38:54]
Scott Tannen
You know, but you know what's funny, like when you think about where the category was because it was all dominated by private label and everything was like, sounded like British royalty, the Buckingham Betting collection. And so we really did want to take a departure from that.
- [39:09]
Missy Tannen
Yeah. Everything was like regal or elegance or you know, like that was supposed to mean it was good.
- [39:15]
Guy Raz
Right. Okay. So you have this name, you've got the order in and you want to get, you want your products to be ready for Christmas of 2013. Right. Because that's when you can, I mean you've got a significant. I think you put in almost half a million dollars which from what I gather was absolutely every penny you had in savings.
- [39:36]
Scott Tannen
That was it. I was only planning on spending about 350.
- [39:40]
Guy Raz
Yeah.
- [39:41]
Scott Tannen
And then we put about half a million in.
- [39:43]
Guy Raz
And that was to buy, that was to design and to buy all like as you say, at least one container, shipping container full of linens.
- [39:52]
Scott Tannen
Yeah, that's exactly right.
- [39:54]
Missy Tannen
So that was just white and ivory sheets.
- [39:57]
Guy Raz
White and ivory sheets. They're going to be fitted and flat and pillowcases. Pillowcases. So it was just going to be. The initial order was going and you were going To. Because you were direct to consumer, you were going to sell this online.
- [40:11]
Scott Tannen
Yeah, 100% online. That's right.
- [40:13]
Guy Raz
Okay, so you guys, you have to pay in advance, right? You didn't get, like, terms on these sheets. You have to pay for this in advance.
- [40:20]
Scott Tannen
I paid for all of it in advance because I didn't really know that you were supposed to ask for terms.
- [40:26]
Guy Raz
Right.
- [40:26]
Scott Tannen
I was just like, oh, you know, it's like Amazon. I order something and I pay for it.
- [40:30]
Guy Raz
All right, so you order what, 1,000, 2,000 sets of this stuff?
- [40:35]
Scott Tannen
Yeah, a little over. I think about 2000 sets. Sounds about right.
- [40:38]
Guy Raz
And you had to be just going back to the tracing, the transparency of it. How were you able to be sure that every part of the process was up to your standards? The cotton, the actual workers in the factory? I mean, was it. At this point, you just had to trust that everybody was reporting this to you correctly.
- [40:58]
Scott Tannen
So that was the initial plan. So we placed that initial order in late May of 2013. And so up here in the Northeast, the community pool opens on Memorial Day, and.
- [41:11]
Guy Raz
Community pool.
- [41:12]
Scott Tannen
Community pool.
- [41:13]
Guy Raz
Pool.
- [41:13]
Scott Tannen
Okay.
- [41:14]
Guy Raz
Yep.
- [41:14]
Scott Tannen
So maybe like a weekend or so after that, Missy and I are up at the pool, and we see our friend Chris, and we're like, hey, Chris. And Chris is in the socks business. Guess what? We're starting a sheets company. He's like, you're doing what?
- [41:28]
Missy Tannen
We think it's really funny.
- [41:29]
Scott Tannen
We're like, this is great. This is what we're doing. This is where our life is. And he goes literally white as a ghost. He's like, what do you know about what you're doing? We're like, oh, no, it's great. We found this amazing factory and blah, blah, blah. And he's like, you don't have boots on the ground there. How are you inspecting? What are you doing from a quality standpoint? And then Missy and I start looking at each other. This is the first of many times where we're like, oh, geez. We thought we knew a lot, and we don't know anything. And Chris literally pulls out a cell phone. This is a Sunday. And he calls this guy Sal, and he says, sal, I'm here with my friends Missy and Scott, and I need you to talk to them. And so Sal. Sal is a company called Pacific Wave. He's from India originally and lives here in New Jersey. And he has a team of folks, and they provide boots on the ground inspections that monitor your entire manufacturing process. So that you're getting reporting not just from the factory, but you're getting it from an independent source or somebody that is essentially an extension of your team.
- [42:31]
Guy Raz
All right, so you guys have somebody on the ground now making sure that this is up to scratch. But I guess In November of 2013, you get the initial samples that. That are coming in from India, and these are the samples that you just want to look at and kind of sign off on so you can get this huge container of sheets to start to sell before Christmas. But there's a problem, guy.
- [43:01]
Missy Tannen
We had only made white and ivory sheets. That was it. White and ivory sheets. For our first launch. The white sheets come in, look beautiful. The ivory sheets come in and have this greenish tint to them. You couldn't see it during the day, but once it got to be the nighttime, there was this, like, limey, creamy green color that these sheets cast. And I was like, I can't. I can't sell these. So here we're up against Scott saying, okay, we need to launch. They need to ship these. You know, everything was finished. We need to ship these sheets. And I was like, I just can't do it. I can't tell my friends, my family, go buy the white ones, don't buy the ivory ones. Yeah, it delayed us, you know, another three months of weaving and dying fabric and then making the sheets again. But we will never look back, because at least we launched with what we knew in our hearts was the very best that we could do.
- [44:07]
Guy Raz
All right, but you could not. You were not able to participate in that Christmas.
- [44:12]
Missy Tannen
We could not.
- [44:13]
Scott Tannen
I mean, that was a killer for us. Yeah. Because, you know, I looked at it, and I'll be honest, I was like, it's close enough. Like, can't we just.
- [44:21]
Guy Raz
Let's just sell them.
- [44:21]
Scott Tannen
Let's just sell it and ship it. Like, let's go. And I was. I was. You know, it shows you when you're in a tight financial spot, you will make shortcut decisions. Because I just wanted to see the money start coming the other direction and start paying this back. I relented. And, like, you know, I mean, Missy wins every argument by default. That's why we have such a good marriage. But no, I mean, realistically, like, that was a brutally difficult thing that was saying, hey, we're going to suspend the idea of money coming the other direction for three months. We were sitting personally with, like, maxed out credit cards at that point, like, the bank account was empty. And that was a hard moment. Really hard.
- [45:00]
Guy Raz
So basically, you had to wait until early 2014 to really launch the brand, because I Think you didn't launch until January 20th of 2014. And initially it's very quiet, very few orders, which isn't surprising to me. You're an unknown brand, but really not much in sales.
- [45:24]
Scott Tannen
I mean, the first three days were amazing because everybody I'd ever met bought this sheets.
- [45:28]
Guy Raz
Yeah. All your friends.
- [45:30]
Scott Tannen
Yeah. And so it's like. And I think that's the typical thing, right? You're like, okay, this is going to be great. And then all of a sudden you're searching the orders for someone you don't actually know that's buying. And it's like, okay, three days in, we got one. And I'm like, is it weird if I call her the next day and see if she likes it? Yeah, probably is. But at this point, we launch at late January. By the time we get through February and into early March, it's getting to the point guy where I was getting frustrated seeing zero dollars, and I would go in and buy something just so that the report didn't show zero dollars, which is ridiculous. I don't know why I thought that would make me feel better. It did, though.
- [46:10]
Guy Raz
Yeah. You guys didn't have a PR agency at this point. I read that you were just like picking up the phone and calling different people in the media to try to get some buzz. And finally I think you got a break. Like a pretty big break.
- [46:27]
Scott Tannen
Yeah. I had taken a call with a woman named Christina Binkley who wrote at the Wall Street Journal, but wasn't. She had said, like, listen, I don't know that I'm gonna write about this. I'm just really curious because I've read a lot on your website and whatnot about your business, and I don't understand how you can be all of these things that you say you are from a sustainability standpoint, an organic standpoint, and yet your cost is kind of in line with the mass market products. Are you just losing a bunch of money? How is this working?
- [47:03]
Guy Raz
She just assumed you were selling a premium product for less than you're paying for just to acquire customers.
- [47:08]
Scott Tannen
Correct. So she just asked me, she's like, how are you doing it? And so I was trying to explain how we put this supply chain together. And one of the things that we were able to do was suck out a lot of the extra costs, like reduce transportation time, looking at small things that we can do to improve efficiency. And by the way, by going direct, there's an importer somewhere that's used to making a 50 point margin on this stuff that's just not going to get it right. She calls me back and she says, hey, you know, I keep thinking about your business and I've told a couple people and I still just don't believe it. I was like, well, how about this? Like, what if I just showed you my books and I'll show you what we're paying for everything? And she's like, oh, that. I'd love to see that. So I showed it to her and she calls me back after that. We spent probably a couple hours together. And she's like, you know, I talked to my editor. If you're willing to let me publish your cost of goods, like, I would write a story about you guys. I was like, wow, okay, that's interesting. And of course, I call people like Sal and everybody, no, don't do it, don't do it. And I was just so, like, at the point, there were no sales coming in. We needed some energy. We needed something. And so I was like, you know what? Sure, why not? And we had a trip planned to go see Missy's parents who live in Florida. And we have like four straight days of no sales, which we had not gone that long with no sales. And her parents aren't there yet. And Missy's like, do not tell my parents. They are going to freak out.
- [48:38]
Missy Tannen
They already think we're crazy.
- [48:39]
Scott Tannen
They already thought we were crazy. They end up coming in town and we still have no sales. And they surprise us and say, hey, you guys have been working so hard. We're going to watch the kids for a night. We're going to send you over to Miami for a night. And the two of you. It was our anniversary coming up. So they're like, the two of you are going to have a night together, which was so needed. And we're going across Alligator Alley, which is like this highway of limited cell reception in Florida. And my phone starts blowing up. I was like, what's going on? They're like, did you not see the video that Wall Street Journal posted? So we get to our hotel, I open up the computer, and I see this three minute video about us and what goes into the cost of a set of sheets. And I look and we had done $7,000 in sales. Biggest day by far we'd ever had. I couldn't believe it. So I emailed Christina and she's like, oh, yeah, there's going to be an article. Pick up the paper tomorrow. It should be good. So we wake up in the morning and I pull open our system and we had done over $100,000 in sales.
- [49:41]
Guy Raz
Wow.
- [49:42]
Scott Tannen
And this is like 10:00 in the morning and by 2 in the afternoon we were completely out of inventory. By the time the day and the next couple days were done, we did almost a half a million dollars in sales. Still to this day, we've not had anything like that that has ever happened.
- [50:01]
Guy Raz
When we come back in just a moment, why Scott and Missy decide to take another leap by advertising on the Howard Stern show and why in order to do that, they have to put their own house on the line. Stay with us. I'm Guy Raz and you're listening to How I Built this. I love a great deal as much as the next Guy, but I'm not going to crawl through a bed of hot coals just to save a few bucks. It has to be easy. So when Mint Mobile said it was easy to get wireless for $15 a month with the purchase of a three month plan, I called them on it. But it turns out it really is that easy to get wireless for 15 bucks a month. In fact, the longest part of the process was the time I spent on hold waiting to break up with my old provider. To get started, go to mintmobile.combilt there you'll see that right now all three month plans are only $15 a month, including the unlimited plan. All plans come with high speed data and unlimited talk and text delivered on the nation's largest 5G network. You can use your own phone with any Mint Mobile plan and bring your phone number along with all your existing contacts. To get this new customer offer and your new three month premium wireless plan for just $15 a month, go to mintmobile.combilt that's mint mobile.comb cut cut your wireless bill to 15 bucks a month at mintmobile.combilt $45 upfront payment required, equivalent to $15 a month. New customers on first three month plan only speed slower above 40gb on unlimited plan. Additional taxes, fees and restrictions apply. See Mint Mobile for details. As a B2B marketer, you know how noisy the ad space can be. If your message isn't targeted to the right audience, it just disappears into the noise. With LinkedIn ads, you can precisely reach the professionals who are more likely to find your ad relevant. LinkedIn's targeting capabilities allow you to filter by job title, industry, company and more and reach your customers in a respectful environment. You'll have direct access to and build relationships with decision makers on a platform with a billion members, 130 million decision makers, and 10 million C level executives you'll be able to drive results with targeting and measurement tools built specifically for B2B. In the technology space, LinkedIn generated two to five times higher return on ad spend than other social media platforms. And 79% of B2B content marketers said LinkedIn produces the best results for paid media. And we know this because we hear this from the founders who are on this show every single week. Start converting your B2B audience into high quality leads today. We'll even give you a $100 credit on your next campaign. Go to LinkedIn.com BuiltThis to ClaimYourCredit. That's LinkedIn.com BuiltThis. Terms and conditions apply. LinkedIn the place to be. To be. Hey, welcome back to How I Built this. I'm Guy Raz. So it's the spring of 2014, and with a boost from a newspaper article, Bowlin branch linen starts to sell so fast that Missy and Scott cannot keep up.
- [53:27]
Scott Tannen
Not only did we not have enough inventory, we couldn't figure out a way to make it fast enough. You know, from that point on. I mean, it sounds exciting that you have all these backorders, but I was on the phone with customers nonstop from that point forward for like a year with folks because we could never catch up. It took us almost a year to catch up with demand. And it sounds like, oh, someone would say that's a champagne problem. It is a champagne problem. But ultimately you're in the business of satisfying customers. And they go from like, at one point they're like, oh, yeah, I'll be patient, but PayPal's patience will wear out at some point. And so, but the benefit was they were preordering. So we were kind of getting interest free financing on our next purchase orders.
- [54:06]
Guy Raz
Oh, because your customers were pre paying and waiting.
- [54:09]
Scott Tannen
Yeah, because I didn't have the tool within the system to not charge them until it shipped. So I was just charging them up front. And we were honest about that.
- [54:16]
Guy Raz
And then you got all this cash to order more inventory.
- [54:19]
Scott Tannen
So we were like flush with cash, light with inventory, and at the same time, because we looked at all the cash we had and Missy was like, it's time to change the product to add more stuff.
- [54:32]
Missy Tannen
Yeah. I mean, so here it was like, there's a whole world out there. So that's when we started adding like a light gray, a dark gray, a light blue, a dark blue. You know, like, I didn't even know. I didn't even know Pantone was a thing I'd never heard of. Pantone in my life. And I was just finding fabric shirts, you know, like, oh, I like this blue. I'll cut it up and send it over. Because they were just like, you need to set a standard. What's the standard? And I was like, I had no idea. You could. Yeah, you could use a tool like Pantone and get actual cotton fabric in that color, you know? And so when they'd send the lab dips back, I remember for our blue, I just carried those around with me for, like, two weeks, taking it to soccer practice, to friends, like, hey, do you see the difference between these two? Do you like this one? I like this one. And I think within the next six months, Scott, I feel like I added like 150 SKUs, all with the same fabric, of which then it was like, you know, I thought everybody needed three euro shams, the king shams in front of it, and a lumbar sham. So we had all these just pillowcase shams, you know, that I guess people didn't really need all that.
- [55:41]
Scott Tannen
And then we also hired somebody to help us with customer service because it was the 800 number, really, for our first two plus years in business. Rang my cell phone. So it was great. We offered 24. 7 support. The downside of that was that I offered 24. 7 support.
- [56:00]
Guy Raz
The support line was literally your cell phone.
- [56:02]
Scott Tannen
Literally my cell phone. My favorite moment was I one time we were taxiing to the Runway, and I was trying to do an exchange for somebody, and the flight attendant's, like, yelling at me to put the phone away. And I'm like, missy, cover me. And that's how it was really, until mid-2015. We didn't add onto our team in any sort of experienced or professional capacity.
- [56:26]
Guy Raz
In that first year, because I think you guys did about a million and a half dollars in sales, and you were profitable by year, by the end of that first full year. And presumably you want to increase sales. Right? And so at this point, I guess the options are do more social media ads, try and figure out maybe get some more earned media, etc. What were you thinking about? How are you thinking about ways to acquire new customers?
- [56:54]
Scott Tannen
Well, my goal for 2015 was to turn on customer acquisition. And my initial thought was to do exactly what I had perceived Warby Parker and everybody else to be doing and I had set out to do, which was to turn on the digital customer acquisition engine through primarily Google and Meta, and it was not working at all. At the end of the day, I was paying a lot in media, not seeing a lot for it. And I thought about my own media consumption behaviors, and audio was really interesting to me. There weren't a lot of brands playing in audio, but when you looked at their CPMs and you look at the total audience, really, really big. And so we started doing a couple very small tests on SiriusXM. And when you think specifically about SiriusXM, radio is free for everybody. So you're a certain subset of person if you're actually willing to pay for it, which to me was an indicator of a luxury customer, a customer that might be open to a more luxury experience or more premium experience, and it gives you a national footprint. Buying radio media, especially when you're small, is really, really hard because it's so fragmented. And so we started advertising in SiriusXM. We saw, even though it was a very small spend, we saw some kind of immediate elasticity there. Like this thesis was working. And I felt like I wanted to take that step up to the big leaks. I was like, I really want to try Stern.
- [58:30]
Guy Raz
You want to be on Howard Stern?
- [58:32]
Scott Tannen
Desperately.
- [58:32]
Guy Raz
But I'm imagining that that's much more expensive.
- [58:36]
Scott Tannen
The minimum to get on Howard Stern was $2 million.
- [58:39]
Guy Raz
$2 million just to do a. And that's what, a year Campaign or something.
- [58:43]
Scott Tannen
So it would be a commitment over the course of the year. There probably would have been some cancellation terms where I could get some money back, but it was a big number.
- [58:50]
Guy Raz
You gotta put $2 million in to get on Stern. Okay, Absolutely. I mean, they pay him a lot of money. They gotta get that money back.
- [58:56]
Scott Tannen
Exactly, exactly.
- [58:58]
Guy Raz
I remember before he went to SiriusXM, you talk about Snapple when he was on commercial radio. Snapple, Snapple, Snapple. You could argue he made Snapple. He really turned that into a big brand because he talked about it. But they had this minimum requirement. It wasn't like, hey, you can just buy an episode or two or three. You had to buy $2 million. You couldn't just put in 100 grand.
- [59:20]
Scott Tannen
Correct.
- [59:20]
Guy Raz
I mean, you're doing, like, maybe $3 million in revenue, and you're gonna spend $2 million on a Howard Stern ad. It sounds kind of nuts.
- [59:31]
Scott Tannen
It does, actually, now that you say it. I mean, we had done a million. Yeah, like a million and a half in our first year. We had planned to double. That was our plan and our inventory plan against the next year.
- [59:43]
Guy Raz
And putting all your eggs in that basket.
- [59:46]
Scott Tannen
Yeah. Without a plan for what I was gonna do if it worked, because that would be a lot more inventory. But, you know, the truth is Is that I just. I believe so strongly that somebody like Howard was gonna put us on the map.
- [60:00]
Guy Raz
Yeah.
- [60:00]
Scott Tannen
I believed it was going to happen. I believed it was possible.
- [60:04]
Missy Tannen
Well, and you were one of his audience members who. You had the squatty potty. You had Tommy John's underwear. Like, everything he was telling you, you.
- [60:13]
Guy Raz
Know, avian tequila, like all these brands that he really.
- [60:16]
Missy Tannen
You buy.
- [60:17]
Guy Raz
Yeah.
- [60:17]
Missy Tannen
And that was the same thesis.
- [60:19]
Guy Raz
To make it authentic, he'd have to use the product.
- [60:22]
Scott Tannen
Yeah. And so before we ever broached the subject, we had to get product to him. So we had to have him custom made because he has a custom sized bed.
- [60:31]
Guy Raz
Oh, because he's like 6 foot 5 or 7 or however tall he is.
- [60:34]
Scott Tannen
Exactly. Because he's very tall and his wife is very tall as well.
- [60:38]
Guy Raz
He had a long bed.
- [60:39]
Scott Tannen
Yeah. So we made them the sheets. We sent them out. And it's like, you wait. And all of a sudden I get a message from. From somebody that, oh, my gosh, Beth loves these sheets and so does Howard.
- [60:50]
Guy Raz
From somebody at SiriusXM, the AD team, or.
- [60:53]
Scott Tannen
Yeah, somebody. It was actually one of his producers.
- [60:55]
Guy Raz
They said they love the sheets.
- [60:56]
Scott Tannen
They're like, no. And it wasn't like, hey, we want you to advertise with this. It's like, can he get more? And do you make in purple? Because Robin Quivers would like him in purple.
- [61:06]
Guy Raz
And this is no promise to endorse it or talk about it or anything.
- [61:10]
Scott Tannen
It was just nothing.
- [61:12]
Guy Raz
They like it and we're famous and we want more free sheets.
- [61:15]
Scott Tannen
I know. And so, of course, like, that only fuels what I'm like, they actually legitimately like the product so much, though, that I'm like, there's gotta be something here. And I finally decided to take all of the equity out of my house and then some. And I got a two million dollar term loan from the Small Business Association.
- [61:37]
Guy Raz
Wow. You took a. You took a line of credit against your house to advertise to spend $2 million on an ad campaign on Howard Stern.
- [61:46]
Scott Tannen
Yeah. And the great thing about the SBA is also the dangerous thing is that you don't need to have anywhere close to the collateral of the amount of loan you take. I did not live anywhere close to a $2 million house. And so I took the most amount of debt I've ever had on anything in my life just to advertise on Howard Stern.
- [62:04]
Guy Raz
It's interesting that earlier you said, I'm not really an entrepreneur, I'm not a risk taker, but this is a massive risk yeah.
- [62:12]
Scott Tannen
Looking back, it is a massive risk. At the time, I was just so focused, and I really believed you have to think about back to where the business was at this point. I had demand I couldn't keep up with. So I was like, this thing's a runaway train. I need to feed it before someone else comes along and takes the opportunity that we're not taking. I was. I had the fear in me of not moving fast enough. It wasn't. Look, I make it sound like it was an easy decision when you realize when Missy and I are sitting in a lawyer's office for a closing on a $2 million term loan, it is very real.
- [62:51]
Guy Raz
Yeah. Meantime, there are two other competitors that had started around this time. We've done some of your competitors on the show. There was Brooklinen. There was Parachute. Were you worried also about those brands cutting into your share, your market share?
- [63:08]
Scott Tannen
You know, it's interesting. The reality is this small businesses that are all running up against the system are helping each other more than they're hurting each other. So I'm rooting for all of them as long as they're in second or third place, because I'm a competitive guy, and I want to win. And so, to be honest, our products are not competitive. We're not reaching a similar. Those are mass market products that are conventional, and we're creating something entirely different for an entirely different customer.
- [63:36]
Guy Raz
All right, so most people were probably putting their money into maybe at that time, early influencers and Instagram, which is still early days, but that's where their dollars were going, which was well spent at the time. You're thinking, hey, how about old school Radio?
- [63:53]
Scott Tannen
Howard Stern, the first time he read, we did three times what we thought we would do in sales from one reading, and it was outrageous. And still to this day, we have an hour advertised on Howard. In a couple years, we still have people walking into our retail stores saying, oh, yeah, I know you from Howard Stern.
- [64:15]
Guy Raz
So that just spiked sales almost overnight.
- [64:19]
Scott Tannen
Almost overnight. I mean, actually overnight, literally, in 2015, thanks to Howard, we ended up going from a million 5 in sales in 2014 to almost 13.5 million in our second year.
- [64:33]
Guy Raz
Wow.
- [64:34]
Scott Tannen
And the only thing that really changed was Howard in the mix. And to keep up with demand, we spent millions of dollars airing in goods just to have it here on time so that we could satisfy demand. So it's the only year in our history we ran a loss. We lost $200,000 that year. But really, as a result of Howard, we were on our way all right.
- [64:58]
Guy Raz
So now it's the middle of 2016. Things seem like they're doing pretty well, but you run into a cash crisis that year. What happened? I mean, like, not just a mini crisis, a significant crisis that would require you to do some pretty dramatic things to make sure the company didn't go under, which is nuts. What was going on?
- [65:26]
Scott Tannen
We were playing this game of keeping up with demand, and we have to get caught up. We did that in 2015, and I think met demand. But along with that, you're making a lot of decisions really quickly. I didn't know at the time, but we had placed an order for 10 times the number of boxes that we needed.
- [65:44]
Guy Raz
Cardboard boxes to ship things.
- [65:46]
Scott Tannen
Cardboard boxes.
- [65:47]
Missy Tannen
The branded cardboard boxes.
- [65:49]
Guy Raz
Okay, but accidentally, you ordered 10 times the number you needed.
- [65:54]
Scott Tannen
Yeah. There was literally an extra zero added at the end of the purchase order.
- [65:59]
Guy Raz
And nobody was like, wow, they're really crushing it. There's a lot of.
- [66:03]
Missy Tannen
Not even the box company who now gets 10 times the amount of order.
- [66:07]
Scott Tannen
I mean, it's a case where you're a growing business and you don't have your system of checks and balances. So at that point, we had hired a planner.
- [66:16]
Missy Tannen
It was an accident.
- [66:17]
Scott Tannen
We were relying on a lot from her, but she made a mistake. It was late in the summer, and we were starting to get our invoices against our holiday purchase orders. Business is doing really well from a consumer standpoint, but our cash position is weak. What's happening here? And we realize at that point, when we get a shipment that delivers to our warehouse with these boxes, and the warehouse calls us and says, we can't. We don't have enough space to store all this. Like, what is this? And it's kind of like, you know, the world goes inside out in a moment, and you suddenly realize what's shown up is it's not just, you know, miles and miles of cardboard boxes, but that's cash. That's all of our excess cash and then some. Meanwhile, I have my entire supply chain waiting on more cash from us because we have to pay our bills on time. And at this point, we do have terms. Right. So we're trying to pay these bills, and it's the most stressed I've ever been in the history of this company, because I was like, this obligation to the folks that we really rely on overseas and all of the social programs that are attached to this money, like, I didn't want to let them down by delaying payment. I couldn't raise debt from the SBA fast enough. To pay these bills. And it was at that point, you know, I had enough people that had been knocking on my door to invest in the business that you needed the capital. I needed the capital and I needed it fast. So I put aggressive terms out there, reached out to the true definition of friends and family. And I needed about $2 million and I closed it in a week and a half.
- [68:11]
Guy Raz
So how much of the business did you guys have to give up?
- [68:14]
Scott Tannen
It cost us at least 15 to 20% of the business.
- [68:18]
Guy Raz
Wow. This mistake could have, you know. Right. It could have put you in a really bad. It did put you in a bad position, but it could have. It could have been worse.
- [68:29]
Scott Tannen
Yeah. I mean, you know, in those moments, I just feel like if I've learned anything, and maybe it was the benefit of being in my, like late 30s at this point and not a 20something entrepreneur where I was like, what I have to do is solve this problem. I have a cash problem and the only thing I can worry about right now is solving the cash problem.
- [68:48]
Guy Raz
Yeah.
- [68:49]
Scott Tannen
And had I not been able to raise that money, like what's. When does the business go out of business when they can't pay their bills? Like, that's it.
- [68:55]
Guy Raz
Yeah. There was another kind of. I don't know if maybe catastrophic is the right word, but you had to raise more money again in 2017, and it'd be really interesting to hear about what happened.
- [69:11]
Scott Tannen
Yeah. What happened in 2017 was interesting because the business was really, really going strong. But. But we had really under forecasted our growth. We got to a point where our inventory build for holiday and what we needed to meet demand, it was going to be a bigger build than we had the cash to build against. We're paying for our goods largely upfront. We got into a very big cash crunch towards the end because we increased our positive to really try to capture that growth. So again, I had to shake the can down the road because I had, at that point I was already sitting with $5 million in personally guaranteed debt from the SBA, so there was no ability to raise additional debt. And so at that point I realized that I needed to raise equity. I mean, separately, I tried to refinance my house during that period of time, and the bank rejected us because we had too much debt in the business.
- [70:10]
Guy Raz
So in order to have the cash to pay for the orders, you had to raise more cash. I think in 2017, you went back to your previous investors or your shareholders and said, hey, we need an emergency infusion.
- [70:26]
Scott Tannen
Yeah. That was the first Time we brought in an institutional partner. We brought in a group called Silas Capital. They had been advisors for us. And, you know, they look, they jumped at the opportunity because again, when you have a crunch, you have to put an aggressive offer out.
- [70:42]
Guy Raz
And the terms were probably really attractive.
- [70:44]
Scott Tannen
They were very attractive. Right. So, you know, but. But I felt that they were the right partner. I could close it quickly, I could solve the problem and get back to focusing on the business, you know, and so that's what we did.
- [70:57]
Guy Raz
Yeah.
- [70:58]
Scott Tannen
And so even though we were now bringing in more of a professional investor, I was very hesitant to let go of any kind of control of the business and where we were going. So in exchange for really good terms, they had to trust Missy and I to operate this business. And that was a trade we were willing to make. And candidly, I think we would make again.
- [71:20]
Guy Raz
I mean, I think it makes a lot of sense because you probably had to give up more of your ownership at that point. Significant amount.
- [71:26]
Scott Tannen
Yeah, it was about another 10%, which.
- [71:29]
Guy Raz
I think it makes sense to me that a lot of founders are unwilling to do that. But I think that there are many instances where it makes absolute sense to do that because now you've got additional stakeholders who are invested in the success and the growth of the brand.
- [71:49]
Scott Tannen
That's right. At the end of the day, you're worried about your fully diluted share for two things. You're worried for control, and then you're worried about what it means for you financially and an outcome at some point. Missy and I operated from day one and still do today. We are not focused on an exit. It's not something valuations are not things that we talk about internally in the business. We're committed to this business and running this business for a long period of time.
- [72:17]
Guy Raz
And you got a big investment, I think $100 million from a private equity firm, El Catterton, in 2019, which presumably means that they are the majority owners of the business now.
- [72:30]
Scott Tannen
Yeah, they are. At that time, we took in that investment, but they also took everybody else off the cap table, including in that Missy and I wanted liquidity opportunities for our employees as well. We made sure that that happened. Now Missy and I rolled over our shares. I think unlike a lot of Catterden businesses, Missy and I are very significant shareholders. The dynamics changed. None of those early investors are with us anymore. Most of them honestly made somewhere between 12 and 15x their money, which isn't bad for a 3 year investment.
- [73:10]
Guy Raz
Yeah, not at all. In terms of how you guys handled working Together. I mean, I've said this before in the show. I work with my wife. I think it's great. Plenty of people we've had on the show are like, I could never work with my spouse. It just wouldn't work. And then others have. We've had others who've divorced while they're running a business. How did you guys make it work? I mean, is it just that naturally, you were both interested in different parts of the business?
- [73:42]
Missy Tannen
Yeah, I think that's the biggest key to it. You know, Scott has such a command for the marketing side, the business side, and I trust him wholeheartedly with anything he makes a decision on or wants to do. Even, you know, me signing away our house to Howard Stern. Like, you know, I trust him wholeheartedly, but I think, conversely, he would trust me wholeheartedly with anything having to do with products. But at the same time, so much of it is intertwined. And, you know, from the beginning, it was like, if I could make it, Scott could sell it.
- [74:20]
Guy Raz
Mm.
- [74:21]
Scott Tannen
You know, look, I love this company. I love what we're building. I don't know that I. That I would love it as much if it wasn't Missy and I doing it together. And now, you know, with daughters that have grown up with this business, I think having lost my parents young, that even further enhances the importance of family and the closeness of family. And I think had we not been doing bowl and branch together and either one of us been doing this independently, it could have broken us either as individuals or as a family going through some of the tough times we've gone through. But the fact that we're in it together, and we both trust the fact that we're doing the best we can.
- [75:05]
Guy Raz
Yeah. When you think about the journey you took and where you are now, how much of this do you attribute to the work you put in? And how much do you think has to do with luck? I mean, there were, of course, lucky moments. Right. Like meeting that guy at the pool and also finding this guy in India in this factory. But how much of where you got to do, you think, just has to do with good fortune? And how much do you attribute to the work you put in?
- [75:34]
Missy Tannen
I think there's been a little luck along the way. I think it's been all that we've put into it. I think it's all about heart and grit that our team has and that we have that make it.
- [75:45]
Scott Tannen
Look, if you don't have luck, the lack of luck's gonna kill you at some point along the way. There's no doubt about it, right? But it comes back to a lesson. And I just can remember in the early days sitting around the dinner table and Missy just saying like, look, no matter what, no one is going to outwork us. So much of it is the if you're willing to do the dirty work, right, you're willing to take the trash out at the end of the day, you're willing to come into the office when nobody else is here on a weekend because you got to just push something over the finish line. Not because we expect other people to be here or anything like that, but it's just this fierce commitment to our business. And Guy, I'm going to be honest with you, it is not lost on either of us when you step foot in our factories and you look across the knitting tables and you see faces and people whom now we've known for a decade and you realize like, we're also doing this for them. And it sounds cliche, it sounds like a little much, but that's where the grit and determination comes from when you know that the goodness you're creating goes so far, it's just powerful.
- [76:55]
Guy Raz
That's Scott and Missy Tannen, co founders of Bolin Branch. By the way, in 2024, the brand made a surprise appearance at the Met Gala in New York. The theme of the event was Sleeping Beauty, and so Boll Branch provided bedsheet cotton for the gown actually worn by tennis star Maria Sharapova. And appropriately, it was a gown in a color described by one criticism is tennis ball yellow. Hey, thanks so much for listening to the show this week. Please make sure to click the Follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas and lessons from some of the world's greatest entrepreneurs, sign up for my free newsletter@guyraz.com this episode was researched and produced by Katherine Seifer, with music composed by Ramtin E. Sarah Bluey. It was edited by Neva Grant, and our engineers were Robert Rodriguez and Gilly Moon. Our production staff also includes Alex chung, Carla Estevez, J.C. howard, Sam Paulson, Devin Schwartz, Chris Messini, Kerry Thompson, John Isabella, and Elaine Coates. I'm Guy Raz and you've been listening to How I Built this. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey Klaviyo powers smarter digital relationships from more than 151,000 successful brands, including Headley and Bennett, Fishwife and Dagny Dover. Klaviyo's unified data and marketing automation platform turns your customer into personalized connections to make every moment count across AI powered email, SMS analytics, and more. Build smarter digital relationships with your customers. Visit klaviyo.com to make every moment count.