← Making It with Jon Davids
Making It with Jon Davids
236 - "We Hit $680M Last Year, But It Started as a Joke" | Shawn David Nelson, Founder of LoveSac
00:45:29
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- [00:00]
A
A product based business at least requires an incredible amount of capital, way more than you ever think it should. And that's a lesson I had to kind of learn the hard way over and over again. As we were growing, you know, just, we were constantly running out of money, even when we were making money.
- [00:16]
B
This is Sean Nelson. Last year, his company did almost 700 million in sales. And he started by selling beanbags in college. More like foam bags. It was actually kind of a joke. And this business should never have happened, but it did. It's called LoveSac. And people, people really do love it. Sean's here now to tell me how it all happened, why learning Chinese probably saved his business, and why every entrepreneur needs to learn this one skill. My name's John Davids. If you're getting any value from this, give me a, like a comment, a share. Hit that subscribe button and let's get to the show.
- [00:54]
A
You're listening to Making it with John Davids.
- [01:01]
B
Sean, you have almost one of those fairy tale sound entrepreneur origin stories where you made something, people all of a sudden started to tell you they like it, they want it. And now fast forward a few decades. You did 680 million in revenue last year. Can you just take me back to 1995 and tell me what it was actually like?
- [01:21]
A
Oh, God. It was survival and it was just a funny thing to do in college. Lovesac was my side hustle through college. You know, I'd made a big beanbag, not, not a beanbag full of foam, like a gigantic pillow that would suck you in. And everywhere I took it, everybody wants one. So started making them for friends and families and needed a name that was, you know, love Peace, Hate war. Hippie, Beanbag. Love bag. Love sack. There you go. And meanwhile, I'm working a regular job. That's what it was like. I was waiting tables, paying my way through college because this little company thing kind of took all my money. You know, the, the shredder would break, the foam shredder, you know, have to fix that, the van would break down. Had to fix that, you know, to make deliveries. And this little love sack side hustle was a pain in the butt, but people loved it and kind of kept it going until the end of college when I was ready to take a real job and shut it down. And people were like, no, you can't close Love Sack. I love my love sack. And convinced me to give it a try. So we ended up at a trade show in Chicago to show it to big companies to see if we could Sell more than one at a time.
- [02:34]
B
So you actually did have customers that were saying, no, no, this can't go away. That really is a dream scenario for any entrepreneur. Something that if you took it away, people would be really upset with you.
- [02:44]
A
Yeah, we had exactly that. I mean, look, there were just a few, but it was at least enough to make me try. And so we tried this trade show with putting the product in front of bigger companies. We had sold 50 to Red Bull Energy drink for their tents at the bottom of the snowboard hill as they did events and things like that. And they used them, by the way, for like two decades after that. But I thought, man, if we could only be selling 50 or 100 at a time and actually got no orders from this trade show, you know, credit cards to get us there. Our first big event, and nothing came of it. But I was a week later back at the little factory, stuffing a love sack on our little foam shredder. And my phone rings. It's an out of state number. So I turn off the shredder, brush the foam out of my hair, and answer the phone. You know, loves that corporation. And it's a. It's the biggest retailer in the United States at the time. The Limited corporation wanted to buy 12,000 Little Love sacks for Christmas for their little girls stores at the time that you would know today as justice. And anyway, we hustled and built a factory around it, took the order, and here we are today.
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B
How did they find you and make that phone call?
- [04:08]
A
Well, they discovered us at this, again at this trade show that we kind of credit card our way to. And. And they told us that they loved the product. They had called us up after, obviously, and said they want to place this order, but it needs to be out of this blue fuzzy fabric with little silver specs in it. They FedEx me, the fabric has to be for this low, low price. Has to be done in four months so they can be ready for the holiday season. So I hustle. I find the fabric of the biggest trade show for fabric in America. It's way too expensive to hit their price, and I'm about to give up again. But this guy, the fabric sales guy in his fabric booth has these boxes behind him with Chinese writing on them. That's the address of the fabric mill that makes the fabric. And part I left out of the story is I speak Chinese. I was just graduating from college with a degree in Mandarin Chinese. I had served a mission for my church in Taiwan at 19 years old. And I could read this Box. And I flew to China and walked into the fabric mill and said, I'm Sean. I'm here for the Limited 2, the name of that company, and I need 30,000 yards of this blue, fuzzy fabric that you make. And I did this in English. And the salespeople, of course, they can speak English. And they said, sure, no problem. It's five bucks a yard. I said, no, no, no. I need it for, like, half that. And they start talking amongst themselves in Chinese about how much it costs to make the fabric. And so I knew, because I could understand them, that they could hit my price. And I just sat there and negotiated for three days and got the price down and placed the order.
- [05:58]
B
This episode is brought to you by my Playbook social media selling machine, available right now@johndavids.com Playbook. Playbook. Let's be real. You don't want likes. You want sales. You want to know that customers are going to show up every day from the content you're already posting. This Playbook shows you how that's done, how to turn social posts into cash flow, and how to scale in a way that's simple, repeatable, and on brand. Grab it free right now at johndavids.com playbook. That's johndavids.combookbook. this story gets better and better. So, okay, so you actually are looking for the fabric. You see across the table, the box with the name of the vendor on it. You fly to China, you are able to negotiate because you actually speak Chinese. They don't know it. So do you remember what you got the price down to? They wanted five bucks. What did you pay?
- [06:51]
A
So they ended up coming down to about half that. They're going to cut it and sew it and send it to us. But of course, we have to stuff them back in America, shred the foam and stuff them. So that created a whole new problem. Meanwhile, by the way, they said, we're going to need a $65,000 deposit to get started. And I'm a waiter, right? Like, I literally had to take time off to fly over to China and go do this. And so I go back to my hotel room and I call it the Limited Corporation, which at the time, bear in mind, this is Bath Body Works, Victoria's Secret, Limited Express, biggest retailer in North America. I said, hey, I'm here at my factory in China. I'm ready to complete your order. I just need a $65,000 deposit to start it. And they said, well, you know, we're the Limited. We don't give Deposits. I said, we're lovesac. I've never done a deal without a deposit. What's wrong with you? Anyway, they finally wire me $65,000 to my university of Utah credit union account, which is all I had. I wire that to China and I'm off and running. But now I have to stuff 12,000 sacks on the other end. So I drive out to farm country to find more of these grain grinders, which was the machine we were using kind of like a little wood chipper to shred up foam in the back room of this old sofa factory that kind of let us use the scraps from their sofas to stuff these sacks. And I said to the farmer, do you have anything bigger? And he shows me this 8 foot tall hay shredding machine that's meant to shred up those 2,000 pound rolls of hay that you'll see out in farm country. And sure enough, when I threw the first bag of scrap foam up into it, it just jammed up the machine, wrapped around the blades and killed it. So we had to make some alterations. And they're making alterations to a hay grinder because I couldn't afford a half a million dollar German shredder done properly. Anyway, we make it work and I end up getting an agricultural loan from the US Government to purchase a hay buster shredder. But it's powered by a John Deere tractor. So I had to get a tractor. And we get this shredder up into the factory and the tractor up on this platform outside, and we have a tractor powered foam shredding factory to stuff these 12,000 sacks that appear on a container in September of 2001. And using this farm equipment and, you know, a couple dozen temp laborers, we complete the 12,000 sacks in time to get them off ship five truckloads of shrunken little love sacks to the Limited Corporation in Ohio, but made no money doing it because 9, 11 happened. Price of foam went up, price of shipping went up, and we broke even on the order.
- [09:50]
B
Okay, this story you're describing sounds like an enormous undertaking to make. In the end, no money. Although you did start the company, you got the proof of concept, you got an order, you got a big logo, so I get all that. But at every point in there, it sounds like you're just solving problems endlessly. Where did that come from? Were you born with this or did you have to figure this out? Because the muscle of solving problems is probably the most important one. I can't think of a more important one in business. Did you Always have that?
- [10:19]
A
I think so. I certainly developed it and I think to this day, you know, so fast forward, it's been 27 years since starting the company and I don't feel any different. I feel like my, a big part of my job. We're a publicly traded company on NASDAQ. We have 2,000 plus employees. You know, we're obviously not Coca Cola, but we're not tiny anymore. And it's still just an effort in problem solving. The problems just change. You could say they get bigger. Not always. Sometimes they're quite small, but they're complex, they're difficult, they're new, they're always new. Every year is new. I've lived through so many different economic cycles and macro backdrops and you're constantly solving new problems. So I would say I agree with you. I think the number one skill of an entrepreneur is problem solving. And by the way, you know, I got the chance somewhere along the way to go to the top design school in the country. And design is actually nothing but problem solving. It's just a different kind of realm of that. So I think that it's a great call out. It's something that's not often talked about in the, on those terms. But yeah, problem solving is, is kind of everything.
- [11:42]
B
And if you think back to getting those first 12,000 orders out and fast forward, you know, probably in the last two years, here we are at the end of 2025. I'm sure tariffs have been on your mind and all kinds of new issues and concerns that we have in the business community. But you've been doing it. You've had so many reps along the way that I'm sure it's just another day at the office for you.
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A
Yeah, perhaps. Great example, tariffs. You know, these come out of nowhere and you have to upend an entire business model. We have factories, you know, that have hundreds and thousands of employees that have to uproot and maybe move geographies. A few years ago we made a big exodus from China to Vietnam. And now, by the way, we're repatriating everything to the United States. These are gigantic changes that are kind of thrust on a business from the outside that you didn't plan on. And by the way, business is already hard. You know, you've already got all kinds of issues day to day, week to week that you got to deal with. And on top of that, you have these things kind of thrust on you. And so it maybe is another day at the office. And I think that in the end, if like they say, you know, if it was easy, then everyone would just do it. But it's not easy. It looks easy from the outside. I think entrepreneurship and business is so celebrated and, I don't know, worshiped on social media and this sort of thing and like, you know, the private jet posts or whatever that people see. But the reality of it for almost anyone, unless they're just incredibly lucky and that happens too. But for almost anyone, it is just hard. It's a slog, it's work and it's problem solving, even when it looks like it should be easier.
- [13:33]
B
I was talking to Harley Finkelstein who runs Shopify, and he described it as a highlight reel. We have entrepreneurship highlight reel culture. Everyone just sees the highlight reel, the private jets and the money and the ringing the Bell at the IPO. But 85, 90, 95% of the day is, as you said, slugging it out and just solving problems in the dark when nobody is looking. And that's.
- [13:56]
A
Yeah, that's right. And so we continue on and I would say that we've been at Lovesack. We've been both. We've had these times where we have been incredibly lucky and other times where it's just been a slog and you have to have the stomach and the, I guess the, the wherewithal, the deal with both.
- [14:25]
B
Tell me about the financing part of it. So I. Early on you said basically you had vendor financing. Somebody paid that first $65,000 deposit, which was awesome. That's how every business should start. Have your customers pay. Looks like you raised a bunch of money and you eventually went public. A few years ago, did you have to raise money constantly throughout the journey here or did you bootstrap for a long time?
- [14:47]
A
A product based business at least requires an incredible amount of capital, way more than you ever think it should. And that's a lesson I had to kind of learn the hard way over and over again as we were growing, you know, just we were constantly running out of money, even when we were making money paper, you know, by. On the profit loss statement. Because you're. If the business, heaven forbid, the business is growing, you always need to be buying more inventory than you're actually selling at that, at that very moment. And so it's very difficult. And I was always raising money in one form or another. In the beginning, it was just credit cards that maxed out every credit card I owned building that factory. In fact, when we finally opened the first store in 2001, right after we completed that big order, and by the way, we only opened the first store because all the furniture stores rejected us. They didn't want our product. They didn't think our name was good. They didn't. They didn't want it. So we opened our first store just to kind of keep the factory going. And I. And we maxed out my cousin's credit cards because that was all we had. And. And it was great, though. We couldn't believe it. It worked like people were buying our product and buying our hoodies and T shirts for an unknown brand called lovesac. And we did. We were on track to do, like, a million bucks in the first 12 months based on our run rate through that Christmas. We couldn't believe it. And we took the money out of the drawer and went and opened the second store and the third. And before long, we had good stores and bad stores once again, causing us to. To lose money along the way. And so we raised venture capital. Their first idea was to bankrupt the company and get out of the bad stores and start over again, which was humiliating and painful.
- [16:25]
B
Was that 2006?
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A
What's that?
- [16:28]
B
Was that 2006?
- [16:29]
A
2006, yep. And had to.
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B
So I saw that you guys declared bankruptcy, and that was actually part of the strategy. You had VCs telling you to do that.
- [16:37]
A
Yeah. And I mean, I think that probably there were other strategies that could have played out. Unfortunately, that was the one kind of thrust upon us by our financial owners, which was terrible. It was embarrassing and humiliating. And it was on the heels, by the way, of the year before me winning a million dollars on TV with Richard Branson. But at the time. Talk about highlight reels. At the time, Richard Branson had a reality TV show on Fox in 2005 that I won. But at the time, you know, he writes me a check for a million dollars. I had 2 million in debt, having built, like, a few dozen Love Sack stores, you know, in creative ways. And so it was just a roller coaster, man. But we got through the chapter 11 reorg. It started over with a dozen clean Love Sack stores and a dozen people. And having moved and upgraded my young family to Connecticut, where they wanted us to be, near New York, where they were based, and spent the next decade slogging it out, trying to grow the company from kind of nothing again back to profitability. Somewhere along the way, raised private equity. It took out those venture capital partners and then eventually had the opportunity to go public in 2018. And even. Even, you know, I remember a few months before going public, still being really nervous about being able to kind of last that long to even get through the ipo because we needed financing at the time just to survive that period of growth that we were living through at 70 stores. So look, from no locations to seven to 70, the pressure doesn't cease. And now we're at 300 locations. And while we're profitable and cash flow generative, we've got public company investors all over us to do better and put up better numbers. And, you know, they're constantly disappointed one way or another, and we're battling tariffs and repatriating factories. And so it just doesn't end. And so, at least from my point of view, you better have a stomach for that or it will eat you alive.
- [18:51]
B
Quick break. So I can tell you about Influicity. That's the little marketing agency I speak started in my apartment about 10 years ago. Well, fast forward, it is not so little anymore. Influicity works with some of the biggest brands in the world, building customer communities that drive revenue. We do this through influencers, podcasts, paid media, social media, content, AI and so much more. You can learn more@influicity.com and hey, while you're there, check out our case studies. We have a lot of them. That's influence. Influicity.com Was there a time that you felt escape velocity, where you felt like you weren't just on this hamster wheel? Or do you still feel that?
- [19:31]
A
Sure. But as you're experiencing that, obviously, look, we 10x the company every eight years, one way or another, from 2000 to 2008, 2008 to 2016, 18, where we went public, we 10x'd it again. From 2018 to today, we were at 70 million hours, roughly 700 million projected for this year. So in that last time period, especially since going public, sure, I mean, it was exciting. We were growing the company like mad. But once again, when you're living through that kind of growth, you have to be hiring different talent who can handle that kind of scale, which means you have to be exiting some loyal talent that you love and has been a part of it. Or, you know, people can't hang necessarily. Some can, some can't. So that's painful in its own way. Meanwhile, you're once again, the stakes are higher. You've got outside investors watching every move, trying to, you know, believe in your future or not believe in your future. And so even when you're achieving radical growth, profitability, and the excitement that comes from that, you're still dealing with layer after layer of problems. And so you Know, pick your poison. It's all hard. It's just different types of hard.
- [20:55]
B
You level up the hard. One of the things that happens that really people don't talk about, but I see it all the time, is as you're scaling, so you've gone from 0 to nearly 700 million in revenue. As you're scaling, whether it's from 1 to 5 million to 10 to 20 to 50 to 100, there are breaking points where you actually have to let go of people that you really like and bring on new people and wondering what the breaking points were for you. Or do you remember moments in the growth milestones along the way where you thought, okay, this is a whole different game. We're playing from 1 million to 30 million or 30 to 100. What were those breaking points for you?
- [21:32]
A
We could put numbers on them because it's easy to do that, but they're not quite as distinct as that, and they're nuanced and layered. Right. So, like, there are certainly the level of. Let me start with where we are today, the level of talent that we can finally attract to this little company. You know, you look at our board of directors, we just made a new announcement. You know, Wan Ling joined. She's on the board of Alibaba. She was on the board of Uber. I mean, these. This level of people shouldn't even necessarily be interested in little lovesac, even at today's scale. But they are, because we've created a vision that's interesting and I think will have the chance to double and triple again and become something really beautiful. And we can explain that to people that understand that and that want to be a part of it, whether on management or on the board or take your pick. So we're kind of reaching that. Let's call it escape velocity in that realm where we can attract the best talent in the world to be a part of this. And that's. That's my number one job today, is to attract that talent and to retain that talent. Because these people, you know, my entire top team run this company and do a great job of it because they're very good. They've been trained by the best universities of the world, which are the best companies in the world on how to do this at this scale. And I feel very lucky. But they didn't all come at once. We had to attract them along that path from, let's say, 100 million when we went public until where we're at today, approaching a billion, hopefully, over the next few years. And it wasn't an overnight thing. It's not like, oh, out with the old, in with the new. Regime these, let's call it a regime if you want these change over time. And it's kind of one, almost one person at a time. Obviously like a key leader, like my, my key partner Mary, who is, you know, my president and coo. Look, she ran a division of Walmart. She ran Bic North America before this. And obviously like she will have a major impact on the talent that she recruits to work, you know, for her, with her. But that didn't happen overnight and we're still, you know, refining the team and that will never end. And so I think definitely that 100 million mark was impactful to us. It's where we got to again, IPO and go public and everything that's ensued from then until now has been on its own continuum. And I think before that it's a continuum. I think obviously at 50 million it's very different than even 100. It's very different than at 700.
- [24:22]
B
How do you think about distribution? Because you guys have done. You talked about a constraint earlier on where you had to build your first store, which I've heard from a number of retailers actually that the first store was a result of, hey, I had all this merchandise sitting at the dock. We had to get it somewhere so we opened a store. I've heard that from a few big retailers. That's one way I know you've done qvc, mall kiosks, e commerce, you've been in Costco. What about channel strategy? What works there? Or is it just you need to be everywhere?
- [24:51]
A
We're not everywhere. You can currently only buy Lovesac from Lovesac. And Costco is kind of new for us. We appear at Costco, but heretofore it's only been through lovesac pop up shops that are staffed by our people and presented in our way and are actually our sales through our actual system that we just happen to operate at Costco. And that's starting to change a little bit. Like we're just barely on Costco.com now and you can find us there. And we're very careful about our channel strategy because we don't necessarily believe in being everywhere. That's not the kind of brand we're building. I'm not saying that's wrong. You have to build a channel strategy for the kind of brand that you want to build. In our case, Lovesac is. Look, it's surprisingly expensive, people. It's obviously like his goofy name. And we started with Giant Beanbags, but even our giant beanbags were a thousand dollars. You know, our sectionals, these sectional sofas that are now are by far our biggest product are 5, 10, 15, $20,000 a whack, depending on how you load them up. And, you know, they're not 9.99 sofas. And so to continue to elevate that brand, which is the brand, we're trying to build a brand that's known for its quality. Look, our stuff lasts forever. This, this sectional that I'm sitting on, it's 18 years old. It's. It's made with brand new pieces. It's got its 10th set of covers. Our stuff lasts forever, and we build it to last forever. And we've designed it to evolve with you as your life changes. So, like, Even though it's 18 years old, it looks and smells brand new. Because again, you can change the covers, you can reconfigure them, you can, you know, add new pieces, all these things. That's totally unique to Lovesack. There is not another brand on the planet that does what I just described, period. And we will do it across many other product platforms. So we didn't always have that vision, that point of view, but we do today. And to support that point of view, the brand, which is really just a reputation, that's what a brand is. It's the level of trust you build. And what's behind that trust, in our case, it's. It's super, super high quality. And this evolutionary sort of way of designing, well, we have to craft that. You can't be haphazard with it. So, no, it's not about being everywhere. It's about being very intentional about where you want to be. Now, if you're just trying to sell a bunch of stuff, then sure, maybe it is about being everywhere, but that's not what we're trying to do.
- [27:22]
B
And is that something that evolved over time? Because I'd imagine, you know, I totally understand channel strategy. You want to be places that make sense for brand and then elevate it. But that's also a luxury. So I'm imagining that evolved over time. That wasn't on day one.
- [27:37]
A
Well, the whole thing evolved over time. Look, as I described, I made a big beanbag, people liked it, and then we just tried to sell a few and survive. And we were on a survival strategy for the first number of years. And there's nothing wrong with that. Like, I think, like, we live in a day where, you know, you're meant to go find your purpose and build A purpose, LED brand and all this stuff. And by the way, nobody is more an advocate of that than I am. Our stated purpose at LoveSac is to inspire humankind to buy better stuff so they can buy less stuff. And I'm proud of that. And that's the reason, by the way, a big part of the reason why the top talent that I described earlier comes to a place like this, because they want to be part of that. But it was a decade of just surviving in the beginning, and so that we could find what I just described to you along the way. You know, we. We made the first couch because people came into the first Love Sack store, saw the couch in the corner, was just there to look pretty, and said, well, how much is that? I don't know, man. Go to Raymore and Flanagan. Like, it was just there to look pretty. But after hearing that, enough, we said, well, let's. Let's sell couches. But we can't deal with couches. They're too big and bulky. So we invented sectionals to be able to ship them, and. And along the way, figured out by doing that, we can change the covers and make them skin tight and all these other cool things that come of that. We just evolved. We just kept doing the next thing. But more importantly, as we saw success, let's say with sectionals, we asked the question, why are they winning? And when you really peel back that onion enough, you come to this purpose that we arrive at. We made something that was built to last, but can evolve with you as life changes. That's quite unique. Forget couches. That's a unique philosophy. And now. So it's like that. We had the chicken. It was the couch, started with the sack, led to the couch. We had this chicken. It then gave us the egg. That is the philosophy we call designed for life. And now everything we make from here on out will be designed for life and rolls into this purpose I described. So all this came over a decade. It just slowly evolved into a very distilled strategic guide that even informs. Back to your original question. Our channel strategy that is commensurate to the kind of brand we're trying to build, where, again, admittedly, we didn't even know what that was a decade before.
- [30:01]
B
Vision is a luxury that you can have when you don't need to pay the bills right now. And it sounds like you got there over time.
- [30:09]
A
Well, and look, in fairness, we had different vision statements, mission statements, purpose statements along the way, and none of them were bad. They all helped us rally the company and Create a cohesive plan of attack, a strategy that could work for that time. I think that I'm very proud of the vision, purpose, mission of Lovesac today. It is a luxury that came over time, but it wouldn't have come if we wouldn't have always been searching for it. Trying on the clothes of those previous strategies, living to them, operating to them, driving success with them. That then gives you more capital, more talent to refine it and refine it and refine it to what it is today. And by the way, 10 years from now, while I think a lot of it will play through because it's expansive now and solid, some of it will be different than it is today because a business is a living organism that's constantly evolving.
- [31:10]
B
And then does that also translate to the brand? Because one of the things I was thinking is I talked to a lot of people. In fact, my former head of sales was a. It wasn't is and a massive fan advocate loyalist to love Sack. And I noticed that when I talk to people who are customers, they love the brand. You guys have a cult, like, following. Was that really natural or was there a point along the way where you said, okay, we got to do these things to really build this. This advocacy that we now have today?
- [31:37]
A
Yes, it's both. You know, you have to have that spark. You don't have to. You can build a business that just sells stuff on Amazon or something, and it's just about dollars and cents and, you know, it's just whatever. It's just stuff. But to build a brand that really means something in the world, you have to have that spark. And it's kind of like the X factor, you know, like if you watch one of the Dancing with the Stars or like, I don't know, one of these, like, singing shows, there are amazing singers on all these shows, but there are just some people who just have that X factor. They just. They like people, they have a charisma that somehow sets them apart. I think the same is true with a company and a brand. And look, I don't. Whether it's something to do with me, the founder, whether it's just the name Lovesac, whether it's like the product and like that product ethos or maybe some combination of all of all the things, I don't know. But it was there in the beginning. I would take a giant sack that filled the back of a truck to the drive in movie because it was a funny thing to do. And it's like, dude, where did you get that? Like, it always had that sort of like, wow factor, even just in the original product. And then in the first store. Think of it, we were. We sold more hoodies and T shirts than we did furniture.
- [32:59]
B
Did you really?
- [33:00]
A
No one had ever heard of Big, but the name's ridiculous. And I had investor after investor trying to get me to change the name because it was. They didn't like it or their. Their wife didn't like it or whatever. Right. But we stuck with it. And I think today it's one of our greatest assets because whether you like it or hate it, it doesn't matter. You don't forget it. And. And I think in the end the name will come to mean, like, think how ridiculous it would have been in 1982 to say, I work at Banana Computer Co. But that's what Apple sounded like.
- [33:31]
B
Yeah.
- [33:32]
A
And so name becomes something over time. And I think that's been the case with Lovestack. I think it's always had a little bit of that spark, but it had to be cultivated. So we are very intentional about everything, from our channel strategy, where we show up, where we sell, where we don't sell, to our pricing, obviously, to our presentation, to obviously our advertising. And by the way, we still leave a lot on the table. We have a lot to be desired. We have actually, we don't even sell any hoodies or T shirts today. I think we should get back to it. There's that opportunity to get the brand right. So you're going to see us do all kinds of things over time to cultivate that brand that you speak of in a very intentional way. But we've always had a little bit of that spark, and I think that's necessary.
- [34:20]
B
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- [35:26]
A
That people love, always be building. What I mean by that is you have to live through these survival phases, and to some degree, it never ends. But there are periods that are just tougher than others where the number one objective on the table is just survive, just make a profit. You know, pay off your debt, survive. But even as you're living through those, always be trying to uncover that purpose, trying to have a stated mission, a vision for the company, a vision for the brand, and then make your decisions on channel strategy, on hiring, on pricing, on product. Let that strategy always be reflected in those decisions. And over time, if you do this fastidiously, it's pretty cool. We have this strategic guide at Lovesack that we adhere to that I'm really proud of. It's this whole framework, it's this little pyramid thing. It's got our purpose, mission, vision, values, all those things. And there's a lot of frameworks out there you could utilize to do this. But I can go through my drafts dating back now almost two decades and see how that strategy has evolved. And it's very different today than it was back then. But we were always trying. And because we had a strategy, we were making intentional decisions. And as long as I think you're open to making an effort to actually build that strategy and adhere to it at the time, you're going to end up with something that's better than a haphazard, the haphazardness that comes from just surviving. And so even through the survival mode, you have to always be reaching for that, looking for it, refining it. And when you ever have the wind at your back and you have a few, you know, great years or, or months or whatever it is, make sure you're not coasting. That's when you should be investing the most and thinking very carefully about the brand, where it's going, what you want to build, what even are you trying to do, you know, what do you want to. Where do you want to be in 20 years? As opposed to just hoping that, like, I don't know, you're super rich or something? Because at the end of the day, like, that's neat, but nobody's motivated by that, you know?
- [37:45]
B
No, you get anti motivated by it. And when things get easy, just to zoom in on what you Said when things get easy, people think, I could take a breather now. No, no, that's when you have to actually double, triple down. Because that's going to be your only opportunity to do that hard work.
- [38:01]
A
That's right. And especially double down on the stuff that you've been putting off. Double down on that strategic work. Double down on just your deep thinking. I know that sounds weird, but like I, I have different things that I do, including when I travel. You know, sometimes when you're, when you're traveling for work, like I gotta go to Asia, visit our factories and things like that. And sometimes you end up with a day where like, or even a half a day where like you don't have something. Now I can go sightseeing or I don't do it. And that's cool. But like I look so forward to a chance to just maybe sit in a sofa with a good view or, or lay starfish on a king sized bed in a hotel for 12 hours. Thinking. Thinking, yeah, Quietly, you know, staring out the window of an airplane with the right music playing. Thinking. Because you know when you land, you got to go back to survival mode sometimes, you know, don't. I know it sounds really strange, but don't miss that opportunity to think deeply, plan deeply. Be intentional about again, building the plan and strategy for the outcome that you really want. Besides just hoping that you can make a bunch of money or something like that.
- [39:13]
B
You know what, it sounds counterintuitive, I think, to a lot of people listening, but not to me because I actually practice this. The idea of, I try to keep to calendar zero as much as possible. I like to see my calendar not look like a Jenga board, but something that's actually kept pretty blank because I will fill in that time with creative work that is exponentially more valuable than me sitting in a meeting, which could have been done in a, in a text. And so if you have those opportunities and it's great, you know, you're, you're at a $700 million revenue business and the fact that you can find the time to think, that's probably your most valuable contribution to the company today.
- [39:48]
A
Maybe so. And it is great to be intentional about it. And, and, and there are lots of ways to do that. And it's not just in these big moments. It's also, of course, a daily practice. I'm a big believer in morning routines and things like that. But yeah, I think you have to be intentional about it.
- [40:08]
B
Can you talk a little bit more about this pyramid you have with Mission Culture, values. I think a lot of people get caught into the mush of. My value is going to be integrity. My value is going to be honesty, which is in my mind kind of nonsense, because what's the anti. You're going to be dishonest and you're going to have no integrity. What do you think goes into really crisp, useful company values?
- [40:34]
A
Look, I'll recommend a few books that have been just foundational for me. Patrick Lencioni, the Advantage, number one. Number two, Jim Collins, Good to Great. Number three, Simon Sinek, the Power of why AG Lafley, Where We Play How We Win. These are the books that I stole bits of my own framework from because I never found a framework that I felt was holistic. And I'm very proud. If I had, look, if I had time, I'd write a book about my framework. I'm very proud of it because I feel like it's a more holistic framework than any of the pieces. But for instance, you talk about values a big reason and Patrick Lencioni does such a good job of this in that book. The advantage big reason why a lot of people that work for, let's say big companies, that, or any company that puts some values on the wall and feel like it's a bunch of hypocrites is because they don't. These companies don't take the time to really do it right. And by right at LoveSac, again thanks to Lencioni, we have core values, we have table stakes values, we have aspirational values and we bucket them that way. So just as an example, and we're very intentional about this, I've been intentional about this for a couple decades now. What is a, you know, core values? Pretty straightforward. You hear them everywhere. But there should only be maximum three or four of them and they better be true, even if they're not pretty. You know, one of our core values at lovesac is, is being willing to sweep floors. That's not a very pretty thing, but it's true. And if you listen to the story I told you where I was stuffing sacks by hand, like there's nothing in this company that I will ever ask you to do that I have not done and I will continue to do. I spent every Black Friday of my adult life working retail. I just did it again a few days ago from, from literally before dawn until it's dark, right? And I will never stop doing that. And that's a cultural thing. Now, what are aspirational values? This is the reason most companies get in trouble. One of our aspirational values at lovesac is operational excellence. We bucket it. Because if I accidentally put that just in our list of values and I hire people from the best companies in the world to come here and they discover like, well, actually you kind of suck at this and that, and that's one of our core values. I'm now a hypocrite. So by putting it in this bucket called aspirational values, it means these are things that we're not, but we wish we were and we're trying to be and we're honest about that. And by having these different buckets of values, things that we're not, but we're trying to be things that we must be, things that we are truly. And things. And then, you know, table stakes values. So for instance, honesty, integrity, that kind of stuff shows up in table stakes values because duh, like you better be these things just to come here. And so for instance, and they're all, well, use these values differently. As I'm sitting here on an interview, like if I were interviewing you to you work at LoveSac, I would be looking at my list of table stakes values and trying to surmise if you're like those things. Because if you're not, you know, like, you may have the perfect resume, but one of our table stakes values at Love Stack is positivity. And you do, like, you check all the boxes, but you're kind of a downer, you know, you're just kind of like a man. But that's okay. Like all the box. Guess what? I can't offer you this job because table stakes at Lovesack includes positivity like I need generally, because that's the culture we're building now. I'm not worried about core values. If you cook in this soup long enough, you'll become those things anyway, you know, and aspirational values hopefully you're going to bring to us. But like, my point is you have to be very intentional. And so I'm still stuck on the values page of that pyramid that I just described to you. But that's how crazy we are about it here at Lovesack. And I could go through mission, purpose, vision, all of it, and break it down just in as great of detail.
- [44:30]
B
Sean, it's such an amazing story and truly rags to riches, stuffing The LoveSacks to 700 million in revenue. Thanks for so much for sharing the story here.
- [44:41]
A
Thanks for having me.
- [44:43]
B
Thanks for listening. Get my best stuff to your inbox@johndavid.com I'll talk to you next time. This episode is brought to you by my Playbook website selling machine, available right now@johndavids.com playbook. Most companies want websites that look nice. But a lot of nice looking websites don't sell. What you really want is a website that grabs attention, builds trust, and turns visitors into buyers while you sleep. That's what this Playbook gives you. Based on 10 years of work we've done at Influicity optimizing websites for 7, 8 and 9 figure brands. Download the Playbook now at johndavids. Com playbook. That's johndavids. Com Playbook.