
Loading summary
A
What's up, guys? JD Here. And on today's show, I'm talking to Eugene Aleto, founder and CEO of Bed Gear. This is a company that Eugene started and bootstrapped to over $100 million in revenue. A great story and what an inspiring entrepreneur. Really solid lessons around how to build a business without venture capital, without taking on huge debt, but really just having your customers finance your growth, doing it in a very smart way. And Eugene is such an accomplished entrepreneur. That's coming up in just a sec. If you're a fan of this show, make sure to leave me a review on Apple Spotify. A rating goes such a long way. Haven't asked you guys in a while, so go ahead, take a second and do that. If you're getting any value out of the show, of course, get my best stuff to your inbox@johndavids.com and now let's talk to Eugene Aleto, Foreign.
B
You're listening to Making it with John Davids.
A
So, Eugene, you start Bed Gear after a pretty successful career in retail and a lot of accomplishments there. What was the initial spark that got you to start this company? And then I'd love to understand what the growth has been like because it's been a tremendous growth trajectory. But give me day one. What was that like for you?
B
They call me now a serial entrepreneur. I don't know if that's a positive or negative, but my entire life, I guess I've been in search for doing something on my own. And I would say that there was not like a moment. And I think that's the big myth in being an entrepreneur. I don't think there's one moment. I think there's a shit ton of moments that all come together and collide and until they finally somebody either says something or something happens to you. And I'll tell you, it was a customer I was selling furniture to at wholesale. I was in Providence, Rhode island, and there was this really tough furniture buyer at a furniture store that I was calling on as a wholesaler. And he looked at me out of the blue. He's like, what are you doing? And I said, what do you mean? He's like, why do you keep building other people's brands and other people's companies? He goes, you're so good at what you do when it comes to cover, to frame and merchandising. Why don't you do something for yourself? And whatever reason, it was just the right time. I was, I was open to the comment and it got me thinking and I didn't like run out and start bed gear then. But it planted a seed in my mind. And over, over a 12 month period that year that I was working and pushing furniture, I became more heightened and aware of my surroundings and looking for a way for me to crack in. And what's interesting is I didn't go very far away from the industry that I've been in for many years. So a lot of times, you know, if I was, I'm not making medical devices, I'm not creating. I'm not creating any, you know, drugs or, you know, cancer fighting medicine. I'm still in the home furnishings. And I think a lot of times what happens with entrepreneurs, as I now reflect back, is that we're looking at all these huge verticals left and right. But even like if you look at Elon Musk, right, like he's in a narrow, focused role and everything he's doing is feeding off of what he's already good at and what he's wired and interested in, does that kind of make sense?
A
A hundred percent. It's about finding your zone of genius and just sort of making three degrees to the left, three degrees to the right, but not jumping ship. You know, the grass is always greener, but once you get really good at something, you should kind of keep going with it and just get better and better. So it was, it was furniture for you. And then why bedding? And why, like, performance? What was the angle that you kind of came up with?
B
So in the furniture companies, you know, no matter where you go and buy furniture, they're always selling warranties, right? Like extended warranties. And it used to be a spray business. They would spray the fabrics. Today it's a dry warranty. So. So you go to Best Buy, they ask you, you buy a $2 item, they want you to buy a $2 warranty to extend the warranty. A percentage of people will buy that warranty. But when you buy a mattress, they give you all these crazy long, like, oh, it's a 10 year, you know, your mattress will last 10 years. And if you get a stain on it, it voids the warranty. So they were used, they used to spray mattresses. So I was in the warranty business as well as the furniture business. Because if I'm selling you furniture and I see that they're very motivated to sell this warranty. I found a way to be a distributor of a fabric protection company. So I started learning about extended warranties and how that works. And when I started to see the mattress industry, they were spraying Mattresses, like, chemicals on mattresses before delivering them. It was, like, barbaric and insane. And then I had a kid, my son. Crazy story is that he was, like, 8, 9 years old. My middle boy, he had allergies, and he had dust mite allergies. So we went to an allergist. They said, hey, you got to put on a cover to put on his bed. And it was a vinyl cover. We had to go to what's called a surgical supply store, which probably don't exist today, but it's basically a vinyl cover that keeps all the dust and dander out of your sleep environment. And literally, he woke up 12 hours later after suffering for over a year. He had no issues. It was solved immediately. But when we went and checked on him, he was boiling up. He was hotter than you could ever imagine. He became like, that sweaty kid. And the reason for that is that what happens when you put a membrane on your mattress, it's gets. You get very hot because it doesn't breathe. And there was nothing other than, like, terry cloth and these weird products to put on the bed. And I'm like, this is crazy. Like, there's nothing to solve this kid's problem where he doesn't have to sweat all night and be disrupted with that. And it just. For whatever reason, I'm. I'm a. I was a lacrosse coach, ski coach, you know, with all my kids, and, you know, putting on my son's look. He. I. It was. He was going to practice, and he was putting on his lacrosse clothes, and it was like in the morning, him coming out of bed sweaty. And I'm looking at the lacrosse outfit, and, you know, it's all moisture wicking materials. It's breathable. It's got, like, little pinholes in it. And I remember me playing lacrosse and sports, and everything was cotton and everything was tight, and you'd sweat through your material. And it just hit me because it was in his room. I'm putting on his lacrosse clothes. He's coming out of a. Of a sweaty environment in his bed. And I'm like, this is nuts. How come there's nothing like this? So I went online, I talked to people, and there was nothing. And the reason there was nothing is that athletic apparel is manufactured in a small width for our bodies. And you think of a mattress, how wide a mattress is. So there was no fabrics, there was no performance materials, and there was no. No materials that were used from the athletic world into the mattress game. And that's where I cut a piece of his Lacrosse shorts and sent it over to a friend of mine because I've been in the furniture business forever. I've been to overseas, I've been to Mills, and I started to develop a fabric and that's where our first patent came from.
A
So the V1 of this was you cutting up like a jersey and then sending it off and just having it made like that.
B
Well, he'll tell you. He'll tell you the real story in lacrosse shorts. Actually have pockets in them, like hidden pockets. And so I cut the inside of his pocket, didn't tell him about it. So, you know, obviously he had a hole in his pocket, but. But yeah, I know it sounds stupid and it sounds like storytelling, but God's honest truth, that's really where it all started. Where it was this connection of needing a moisture wicking fabric that's got tons of airflow. And that's what really revolutionized the industry because people are so hot in bed to begin with. And we started solving my son's problem. And then we got that into the next milestone for me was how do I convince a consumer who's been buying cotton and high thread count to go buy athletic material for their bedroom?
A
If your business is doing a million bucks a year or more in sales and you think you could be growing faster, head over to JohnDavids.com grow. I want to show you the growth system we've used at Influicity with over 200 clients in just the last year. Go to johndavids.com grow. Watch the short video and if it sounds like it could be helpful to you, book a call on that page. And one more thing, guys. If you already have a marketing budget, spending on Google Ads, Facebook ads, Instagram ads, TikTok, LinkedIn, do not skip this. Go to johndavids.com grow and I'll see you there. Right, so that's interesting. So I love the origin of this and solving your own problems. A dad solving a problem for his son. And you also had the experience experience and you had the connection. So that all makes sense. Then you have to train a consumer to do something or to buy something that they, that they haven't done before. So I'm sure there's. There's sort of a lot of a lot of stuff here. But what was the turning point there? What was the aha moment where you hit on something that would make people see the benefit of this?
B
I'm going to sound like I know what I'm doing, but I promise you, I didn't know shit. I'M just. I'm not going to lie. Like, that's the God's honest truth. However, this goes back to being into perspective, right? So I probably knew more than I realized. But being in a position of, like, I had a really good product, I had no marketing money in terms of, like, I'm going to go out and, you know, break the Internet by promoting this great new product.
A
What year is this?
B
This was in two. This is even before bed gear. We weren't even called bed gear. It was called Guardmaster. And that was in 2009, 2010. So I had a customer. I'm in the furniture business, and I started to realize, like, wait a minute, I remember. I know how to sell furniture. People come into stores, they have a sales team. They're highly commissioned and motivated. I sell warranties, furniture protection warranties. I have to convince consumers that they need it. I don't need to be selling direct to consumer. That's going to take a lot of money, and I'm going to lose money before I can convince them. But if I can create the right packaging and the right messaging and sell the salesperson in a mattress or bedding store, I could have an army of people helping consumers recognize the value of a good night's sleep. And that's where connecting my past and my future came together. And it was taking that moment, John, and realizing that who I had to convince that this was a good product wasn't the consumer. It was a educated salesperson who was going to see the consumer when they come in to buy a mattress because they need a good night's sleep is to provide the customer with information at the point of sale. That is the best place to start for this type of product. And that's how I got this thing cranking.
A
So that's so interesting. You had to influence the influencer. It's almost in my world of Internet marketing, it's the equivalent of an affiliate. I'm not gonna. You know, if I'm selling something to homeowners, I could go directly to every homeowner in the United States, or I could go to the people that service them. Maybe it's the handyman, maybe it's the realtor, maybe it's the banker who speaks to lots of homeowners, depending on the type of service I sell. So that's really interesting. Did you take the scenic route to get there? Like, did you actually try to sell this to consumers and then realize, wait, this is the wrong way to go?
B
So, yes. And if you look at how many companies in our space have failed. Right. Like Casper is still trying to figure how to make money. Purple stock is like 60 cents. Now, all of these direct to consumer models have not worked financially because they're all chasing the same thing. They're trying to. Their cost of acquisition is huge. And how many times do you buy a pillow, sheet, mattress or protector? It's not like you're drinking something and that tomorrow you got to buy more liquid to drink. This stuff you buy and you keep it for several years. So the length of time that a customer buys this category and the cost to acquire that customer to begin with, that lifetime value that you all market as you all talk about is you got to get all your money up front. And so it's really a hard business to make money on direct to consumer if you're just going to try to buy the customer online.
A
I want to double tap on that for a second because you mentioned Casper and Purple. So these were. And these are DTC mattress companies. And even at the very beginning with Casper, whatever year that was, 2010 or 11 or whatever, I remember thinking to myself, why would you have a D2C company with a super expensive thing that I'm going to buy once every 10 to 15 years? It just never made sense to me. Do you think there was logic to that or do you think it was just doomed from the start?
B
Well, I think if you're a marketer and you're not from our industry and you don't know our industry, but you, you know, you, you did a thesis in college or whatever, whatever prompted the founder, I give, I give that person a lot of credit for trying. And I'm, you know, I'm, I'm sure they had some kind of an exit that, that was successful for the original founder. But in terms of the investors that was, those are the people I would question. Like what were they thinking? I think the fat, you know what I mean? Like, I think the founders had something, they made it convenient. You know, a box shows up on your stoop and you don't have to go to a bedding store. But the reality is, is that what's shifted, that convenience was what the Internet was today. That's not what the Internet is. That's not what shopping online is today. It's, it's educating and understanding what, what it is you need. And then you start to go out and shop. Before it was like, hey, this is cool as shit. I need a mattress. I don't have to go to a store. It's relatively cheap. It shows up on my door. Sure. And I can send it back after 365 days. Like, why not? So between a 30, 40% return rate, you know, an $80 cost to go get a customer to click on an ad, it just. The numbers don't add up. So the point is, I was faced with looking at that model and seeing that it didn't make sense and seeing that they would just keep raising capital. And then I had my. My furniture business with. With connections, and I said to myself, how am I going to do this? So I found one customer. I didn't focus on a million customers. I said, look, I have this idea. I think every customer is overheated in bed. All the mattresses, when I did the research, they're all memory foam today or have some kind of foam or polyester component. So what happens? That's an insulator. It insulates your body while you're sleeping, so your body can't naturally regulate its temperature. You got two people, most of the time in bed together, both at 98 degrees. You throw one cover over you, and all of a sudden you have. Somebody's going to be miserable and going to be hot in bed. So it's a huge opportunity to solve a problem, not just for my son, but for the whole world. And the best way to do that is that 80% of the customers still buy in store. So I can influence the outcome by getting the sales team the knowledge and having that interaction with the consumer, you know, I know. Was it easy? No. But did I get traction right away? Yes. So now I had proof of concept. Customers loved the product. You know, we have now, like 300,000 reviews just on a mattress protector. It started with a mattress protector, and that's what kind of like led us down this journey of just quality sleep and getting people into a sleep system.
A
So that first strategy of talking to the salespeople and educating them and getting your product into the store so they could sell it and do the legwork for you, how far did that take you? Did that go from one to a million? Was that a $10 million strategy? Is that still what you're doing today?
B
Primarily, yeah. So that. That got us from zero to today. It's still a very important component to people. Right. You can't think about it, John. You can't wash your mattress. So you're going to go home and you're going to have all of your dead skin cells, your. Your heat, your moisture, what comes out of your mouth, your nose, your pores, and you're going to. You're going to put a sheet that's porous on top of your mattress, on top of your pillow, and then you want to keep it for five to eight years. Your mattress, your pillow starts becoming dirtier than your toilet bowl. And that's the God's honest truth. So you can't wash those things. So we've just gotten better at the mattress protectors because everybody should have one. And what we focused on is protecting you from what your body lets out throughout the night, letting it go into your mattress, and then focusing on airflow and making sure that it doesn't overheat you. So it's still an important piece. Now, how did we get, you know, how do we go from zero to, you know, a hundred million? It's certainly not a one product, right? So it started with creating value for the consumer. Like, we love this product. It created value for the salesperson. We like selling the product. People like it. We make money on it. So when you have that. What's called that, win, win for everybody, there was. Everybody was motivated to buy and sell the product. And so we created a brand of a mattress protector. That's all. We had one thing, just like Nike had a. Had a, you know, a running shoe, right? They didn't have golf and this, and they didn't have basketball. They had a running shoe. But I think a lot of times marketers and merchandisers, we try to build out these big lifestyle brands in the beginning, and then it's super hard to get sticky. And because you have to sell and try to sell something to everybody and you become nothing to nobody, you got to stay in a very narrow focus. And again, I go back to, like, an Elon Musk, right? Like, I don't know if you've ever read his. His. His book, but if you really. He obsesses over, like, one thing. Even now, he obsesses over, like, you know, whatever that one thing is. And he. His message is, like, all in your face on one thing. So I highly recommend to people not to go deep and wide early. Be very shallow. Test early, fail early, Keep modifying it, get it right, get the perfection, then get sticky, and then you can expand and go deep and wide.
A
That's really interesting. And the idea of you can't be nothing to nobody. As you said. There's a quote. I think it was Peter Chernin, who's an entertainment executive, who said, you know, when you're thinking about a movie, this is back in the. In the 90s and 2000s with thinking about movies, he said, you Know, a movie can either be everything to someone or something to everyone. And something to everyone is incredibly hard and incredibly rare and very expensive. But being everything to someone is actually what 99% of successful businesses are. You just have one customer, and it's a big world out there. If you find one customer, one type of customer that just loves your product, you could sell that product for 50 years. I mean, there's no limit to it. So can you talk about identifying. So you've, you've obviously scaled this business, you know, substantially. Can you talk about identifying the customer early on? And did you, was there a moment where you said, okay, if we focus on this particular customer, then we're going to do great. And when we start to go over to the left and to the right, we just, we miss the mark. Did you have that experience?
B
Yeah. So we found people that want to optimize their lives, people that want to optimize their products, someone that actually cares is who our customer is. So I now tell people we want people that are checked in, not checked out. And that's where the whole. We weren't even a brand. We had no branding, nothing. But when we started to see what the consumer that was interested in our product, someone that was willing to make the investment, investment into their health and wellness, even when that wasn't a thing, you know, 12, 13, 14 years ago, right now it's the new craze, you know, now we're getting kudos for being first and we look like a brand new company.
A
You were 10 years earlier.
B
We were right, but it, but, but the customer was there, right? So even this wellness and this longevity, you think that all of a sudden, you know, we have all new people in our population that discovered wellness. We've all been there, but it wasn't a sexy. Nobody marketed it. It wasn't sexy. You had to go find them. So I would tell you that our customer, John, is a customer that wanted to make the investment in themselves and understood the value of quality of sleep and the importance. And the best part, John, to find the customer, is that if you have to get in your car, put on a pair of pants, drive to a mattress store or a furniture store to go lay on a bunch of beds, nobody likes to do that. The only time you do that is that when you're really desperate because people unfortunately keep mattresses and pillows way longer than they should, those things should be changed out every three to five years minimum. People buy $50,000 cars every three years. People buy sneakers every three months. If you're a runner. But then you have people that do that and then have mattresses that are 10 and 15 years old. So think about the customer. They're getting in a car, they don't even want to do that. They want to optimize their sleep because they're having a poor night's sleep. So it was, it wasn't. It wasn't that I was so smart as it related to understanding who my customer was. It was the choice I made based off of seeing how companies like the Casper's of the world and everybody else that's selling online were not successful in terms of financially. They sold a shit ton of product, but they had a hard time making money. That said, well, I don't want to go down that path because, one, I don't have investors, I don't want to. I don't have other people's money to lose. What else am I going to do with this great product? So it, it goes back to tell you that if you stay within your lane and you become, you. You become aware of your surroundings, you start to do building blocks. And then once I knew who my customer was, now I can optimize it. And that's where my pillows, my mattresses, my sheets, my. All of a sudden. But everything has the same theme that's optimizing people's sleep by increasing airflow to the body. Because the customer who doesn't want to be overheated is the same customer who doesn't want to be overheated. Well, the protector is only one component of the things you sleep with or sleep on. So then we started to take that same process that we manufactured our protector and, and we started laying that into the pillows and the mattresses. And obviously those things are much bigger in volume than a mattress protector. But if you think about it, John, too, is I didn't just sell you that you're wearing a black T shirt. I can't see what's below your waist, but I'm assuming jeans or something you have to wear. You have to wear more than just a T shirt. So my goal is, if you come in to buy that T shirt in my store, I want to make sure that I have the proper other parts that you would wear that T shirt with. Right. So that's that concept of, you know, lifetime value and, and the average unit selling price and all the other things that are important. Especially if you're an online marketer, you want customers to buy more than just one thing from you. But the problem that I see marketers do is they don't have relevancy to the customer and to the actual category in which you are selling. You have to stay relevant so that the customer makes that connection with. If they came in for the black T shirt, of course they're going to buy those cool jeans or that pair of underwear or whatever it is that attracted to you, that black T shirt.
A
If you spend any money on Google Ads or Meta Ads, I've got something that you're going to love. It's Influicity's AI Ads generator. And you can get it right now for free@johndavids.com ads. So here's the deal, guys. We took a decade of our best ads that we've been running for clients at Influicity. Literally something like 6,000 different ads that have all crushed on Meta and Google over the years. We put them into a database so that you can make ads that are just as good. Seriously, we use this thing internally all the time to come up with copy ideas, and it's so good. So if you spend any money on Google or Meta ads, I want you to head over to johndavids.com ads. Get it now for free. Yeah, I mean, what you're talking about here in a larger sense is brand. And I think people can get very fuzzy with brand. Cause it's, oh, I spend all this money and building my brand, whatever that means, but I'm not seeing sales. But what you're talking about is the fact that when they associate one thing they liked that's bringing pleasure and benefit to them, they're going to want to seek out other things from that same company that brought them the first thing. And there's also a relational. So if I trust the mattress protector, I'll trust this for my pillow. I'll trust this for my comforter or what have you. So. And that really starts paying dividends as you scale. Can we go back to the beginning? Because I want to talk about. We've sort of been glossing over the money side of this. I mean, none of this is cheap. Did you raise money early? How did you pay for the first bunch of inventory, the first factory? Where did the money come from?
B
So the money came from profit.
A
The money came from profit. Wow, I don't hear that enough, Eugene. That's great to hear.
B
I have the saying, like, toilet paper should have an roi, right? So why I say that is you buy toilet paper in your company for a reason for people to use it. And if you think about this for a minute, without toilet paper, it would be pretty messy. So If I have 10 rolls and I have 10 people and 10 rolls last me a month. If the 10 rolls go to 15 rolls of toilet paper, I still have 10 people. Either someone stole 5 rolls or someone sick in the company. So if you look at every metric, you can actually see what's going on within your organization, within your company. The problem is, is that when it comes to funding a business, it's very easy to say that. My evaluation is this, I'm going to go raise money for that. Well, it's harder and harder to raise money on companies that don't make profit. And what people do with their existing product is they actually say, well, I'll make money someday. This is my, what's called a lost leader. I'm going to sell this. I know I'm breaking even. Maybe I'm making, I'm losing a little bit of money, but I'm going to get the consumer to buy these other things, which is how I'm going to bundle and get them to buy more stuff. And that's how I'm going to make my money. So I made sure from the day I sold the very first product, I made sure that there was profit in it. And I have a good reputation in our industry when it comes to buying materials. I've been in the business a long time. So I sat down with my suppliers. I chose someone who I've known for several years. I said, look, I don't have the money to buy containers of these fat of fabric, but what I do have is I have a commitment and an order from the retailers. You have my word I will pay you, but I need 60 day terms. I went to my retailer and I got 30 day terms and I, every time I delivered a product, I had profit and I had a couple of weeks to pay the invoice. So it's old school. But if you have anybody that's listening, that's trying to bootstrap something, if you're an honest human being and you have a good track record and you're, you got a clean bill of health where you know that you're not, you're not someone that's got issues and stealing money from people, people trust people. Especially in a world today where there's such fake and BS all over the, all over the world and human nature is to help each other. If an entrepreneur wants something and you can't help convince somebody to help you, then you're not really an entrepreneur. You have to always be selling on both sides. So that's how I bootstrapped it. I went, I negotiated terms with vendors, I negotiated terms with the retailer. I showed value in the product where they were willing to take the terms and they sold the product. They made money and they bought more, and the more they bought, I made money. And that's how I did it. There was no magic. That's how we put it all, pulled it together.
A
It was customer finance growth. You got the cash. It was a combination of we're going to have the product made, then we're going to sell it, we're going to get the cash a little faster than we have to pay it, and we're just going to keep doing that. And how far did that take? I mean, that makes total sense. And I love the simplicity and the effectiveness of it. It really does work as long as you can, as you said, build the trust and show the value. How far did that take you? Like, were you, were you doing a million bucks and still kind of doing that? You know, was it still like, hey, let's just pay for the next batch by pre selling it?
B
I'm extremely frugal. Like I mentioned about toilet paper. I metric everything. The other big problem that, you know, someone who scales, you know, there's a lot of businesses that start and then stop. They don't, you know, so they're entrepreneurial, but they don't, they don't actually get a large company. It's a lot of that has to do with the inability to operate and control expenses. I know what I'm. My limitations are as a human being. I'm a really good storyteller. I'm a good marketer. I understand merchandising and I'm a good sales guy. I am not somebody that can sit around and worry about flowing merchandise and manufacturing. I understand it, but it's not what I have a passion about. So that what really got us to where we are is knowing my blind spots. Like, I'm like, holy shit, I'm getting all these orders, but I don't know how to flow the goods. Like, I can't. How do I stay in stock? So the very first thing I did is to make sure that I hired somebody as my second, my right hand that was extremely operational and understood all of the back end stuff. Even if, even if they don't understand everything, they understand that type of way of thinking. So it was a really, really important next step was to get that second person to backfill all the crap that I'm terrible at. And that made a huge, huge Difference in the business. So I'm a hard charger or driver. But not having somebody back home like double checking, making sure we had stock, not too much stock, making sure that what I set up in terms of profit was constantly there for us. And that to me, John, is probably the biggest success that most entrepreneurs have. And that's finding a very strong second.
A
I want to double click on that in one second. The only question I have is did you ever like, did that Runway ever run out? Did you ever raise funding or is this still operating on cash flow?
B
Yeah, so we, we are debt free. It's been since the day I started. We've never had to raise money. And it goes back to the same principle. If you build a product that has high value and you can't figure out how to maintain your margin, then your product doesn't have high value. Right. So customers will pay for something that works. There's nothing to be embarrassed about being profitable as long as you are a good steward of the money and you do it and you use it for good. So we're very important for us is philanthropy. We give back to our community. We coach a lot of young people, we take a lot of people out of, out of colleges, we take a lot of young people and push them in their careers. And so I think, you know, I don't think money is evil as an entrepreneur. I think it's a tool and if you use it right, you can scale your business and you can help your community and you can help people around you.
A
That the, the finance part of this I love. I mean clean and, and, and really simple and a really smart way to grow. A lot of people take pride and they flex when they raise capital. I always say, you know, you call it equity, it's debt. Make no mistake, you owe that money back. It's not free money. Let's go over to the team building side. So you're obviously the hard charging entrepreneur. You're the visionary, you get it done. The second hire is an ops person who can figure out inventory management, logistics, suppliers, all that kind of stuff. What did the team build out look like? What were the milestones that you hit where you said, oh crap, we need finance, we need marketing, we need this, we need that.
B
There's going to be one surprise in these comments and it'll come in a minute. So let me just take you through that. Yes, I realized I needed ops. I didn't have the money to hire an entire team, but I found a Swiss army knife, someone that, that understood my chaos My craziness that would mesh well with my personality and just fill in the blanks. And what I. What I would ask, what I would tell people to really ask themselves is if you have to give. If you're not good at those things or you don't like them, that means you can't really give good direction. A lot of times we think as entrepreneurs, oh, I'm going to go hire this person. They're going to do it. And then we tell them everything that we want them to do. Well, if we suck at it to begin with, why are we telling them to do that?
A
Right?
B
So I always. So what I learned, and it's again, not because I'm smart, but because of just trial and error. I hired somebody who could operate in the gray area. So instead of me telling this person what to do, they just did it. So all of my. We have 300 patents and trademarks on our pillows, our mattresses, our protectors. 300 for a small company is insane. I didn't even know that we had patents until we had one. And it's because this person was like, hey, you got all these cool ideas. We better protect them. So it gives us time to get out to the market. I had no idea what she was talking about. So she started filling out patents, and we then wound up with a lawyer. So I would. I would highly focus on your second, because a lot of times it's hard to define what that second is. And that second should be able to operate in the gray area. If you're operationally sound, then go find your sales marketing person. If you're the sales marketing person, then go find your operations person. But find someone who doesn't need clear direction, that just kind of knows how to, like, fill in the blanks and is extremely curious. Extremely curious, because that's what motivates them to go figure things out on their own. So that's.
A
And if you can't give them direction, Eugene, because I totally agree with you, I'm not going to tell you how to do finance if I have no idea how to do finance. How do you. Do you tell them what outcome you want, or do you literally just stay silent and say, hey, look what I'm doing, and you figure out how to make this better?
B
Yeah, I purely focused on sales marketing and storytelling and driving the business. And then if you get this curious person, they pick up those. Those, you know, visual cues of what's going on, and they just kind of fill in the blanks without a lot of conversation. And that's when you know you have that, that's a true second, right? And. And this person even said to me, and this is no joke. This is exactly how it happened. And I started the company before, and I was selling, I was making good money. So she came along a couple years later, and I asked her, I'm like, well, what do you want to do? She's like, I want to be a good second. I'm like, what? Now I'm a hard charger, right? I never wanted to be number two. I always wanted to be number one. It's just like, who would ever say they want to be number two? It was like, it took me. I actually went home and had to think about it. I'm like, that's kind of interesting. So I started realizing, because I'm pretty into perspective in. In the way I think. I'm like, wait a minute. There can't be a number one if there's not a number two.
A
It's so simple when you say it like that.
B
And there can't be a number two without a number one. So there is no such thing as being first. You have to go together. So we as humans think one is better than two. As it relates to, I'm the top dog. The reality is there is no top dog with not 2 or 3 or 4 or 5. So after now hundreds of employees, you start to recognize that the growth in the story isn't just the product. It's the people, and it's what they bring to the vision. It just keeps compiling and compiling, and everybody's story is now told at Bed Gear by each person we hire. It's like magic.
A
Yeah, I love that.
B
So you gotta give people room to bring their ideas, their passions and come together. And what's amazing is when you talk about hiring, it's not about just the finance person. It's about the humans that come together to try to solve problems for the world. And what's really exciting is that we have 43 different countries that are represented within our workforce. We have 58% females. We have females that manufacture mattresses. We have females that run departments. Everybody, like, we have Muslims and Jews and you, every religion operating in our company. We have a prayer room because a Muslim woman said, because we just redid our. Our office. And she's like, hey, do you think we could get a prayer room? I'm like, what's that? I'm honest. I'm like, what's that? She's like, oh, we have to pray. So now I have a Quran in my office. Because she gave me a Quran so I can learn more about her religion. Like, yeah, who, who is it for? Me as a Catholic, you know, growing up, I'm confident in what I believe in, but does that make me the only thing that, that the world should believe in? And the reason I share this with you is that the more you make it comfortable for humans to come together to share their stories, the bigger the company keeps growing.
A
I totally agree and this is a really interesting insight, especially as you scale, you know, like I work with a lot of clients in different countries as, and they have again you said different histories, different religions. But even, you know, you can think about religions, but even cultures, you know, if you have clients across the United States, a 50 year old who grew up in Houston, Texas is very different from a 22 year old who grew up in Brooklyn. Like they're different. It's like they're down different planets and just understanding the motivations of people, the, you know, the incentives, the goals, you know, everybody's unique and different and, and getting, getting to know them on a personal level helps you with everything. It helps you get more out of the company, but it also helps you just enjoy what you're doing every day.
B
Totally. And I promise one surprise that I would never have said this 10 years ago. When you get to a point where you can afford and you have enough people getting a right hand in the company to help you navigate the human capital, which we call HR in a lot of companies, we call it human capital. Getting someone to help you with the people is the most unbelievable eye opening thing for me. I cycle through someone in to do payroll and do basic hr, you know, compliance. Obviously, you know, the world's complex today when it comes to hiring and just, you know, all the rules and regulations and the labor laws. You want to, obviously you can outsource that if you're tiny. But don't screw around with that like know what you're doing, it's like really important. But when you get to a point where you have critical mass or you want to have critical mass, you find that person who understands your culture, understands you as the entrepreneur. And literally you cannot believe how you can transform yourself through one human being that is able to take and interpret your craziness and your chaos throughout your entire organization. So we have to catch up.
A
Hold on a second. So you're talking about human head of human capital, which, which is the head of hr. That person came in and helped interpret your personality, your vision for the whole organization. Is that what you're trying to say, yeah.
B
So when you're entrepreneurial, you're. You're crazy. Like, you don't realize it, but certified people look at you like you're freaking nuts. Right.
A
Guilty.
B
And why. And while you're spewing stuff and, you know, screaming and yelling all these great things to people, and you're charging forward and you're. And, you know, you're willing to just, you know, die for the cause, you have to stop and realize that not everybody interprets what you're doing as normal. So you start to see that, you start shedding people. So we went through a phase where I have someone that just retired because I. This is not my first rodeo after 32, 34 years. She was my first employee, and she was with me for 34 years. And then I have people that are in the company for 30 days, and then there's a bulk in the middle. But we started as we were scaling and hiring. We had a burn rate. Like, we were hire. We hire 10, lose 5. Like, it was that. It was crazy, and it really was stressful to me because as an entrepreneur, you don't want anybody to leave you. You believe that. That your mission is the most important mission, and you should join my mission. Right? Like, that's. That's how you think. And so I had this. This aha moment. I'm like, there's something wrong. Like, I shouldn't be losing that many people. So I went around and I did a. I did my own little interview with everybody that's been with me forever. And those that were starting to leave, and I had a. I found a commonality. I don't call it the vision and the mission. These are words that define our culture. It's humble, hungry, curious, and clever. Those are the four core words I started with. Now, my head of human capital, being a millennial, she had to have the last word. She added community and humanitarian, or committed and humanitarian. So everybody that we now interview, no matter what, we define the words, we talk about the words, and we analyze our conversations with you to see if you have an equal balance of those six words. It has changed and transformed everything. So our. The reason I share this is that we started to realize that the people that loved the entrepreneurial spirit were the ones that were building the company. It wasn't me. And the ones that were leaving didn't feel part of that. So it wasn't that we had bad people or a bad company. We had a bad fit. So what we've been transforming over the last 10 years. Is to ensure that we bring people in that can easily understand and value those six words because that's what binds us together. And so this HR director, this woman that came in to understand this craziness, took these six words. Well, the four, then turned them into six. And she turned them into action.
A
Yeah. And the role, I mean, you're calling it hr and that's, that's probably their title. But really what you're describing, I would almost think of like a coach or somebody who's, you know, this organization already exists. You already have stars and you already have a business that is profitable and growing. But what you need to make sure of is that everybody who gets in the door is a real fit for not only the hard skills, but the soft skills. And, and that's really, that's another layer because when I think about hr, I think about what you said, you know, it's, it's benefits, it's, it's hiring and firing and that sort of thing. But what you're talking about is really an insightful, I've really never heard that before. Bringing somebody in who meshes with the culture of the business and being able to measure that. How long did it take you, Eugene, to come up with those four and then eventually six values?
B
Well, like I said, the wake up call was when we had the biggest, the big turnovers. So it, I cycled through the factories, warehouse, office, staff. It took about four to six months to define the words. And then after we defined the words, it took a good 18 months to see the real value. Like, I didn't give up on it. So now when you turn on your computer at the company, it lists the words when you walk in to every, every building in the room. And the words are on the wall, right? And they're in your face every single day. And we're a very transparent company. So flatline, which means no matter who, everybody's in charge.
A
Okay, so talk about the next level here. So I think you said you've gotten to $100 million or maybe close to it. What do you think has to happen over the next five to ten years for you to become a billion dollar company? Or do you have that North Star in your mind?
B
Yes, so we have a. So one is, yes, we've been able to scale and we are on track to start chasing that billion dollar dream, if that's such a thing. But I temper everything with, we will be as big as we will be based off of what we do with our product. And what is the consumer looking for So I am not building an organization to be just a billion dollars. I am building. Building an organization that will be nimble and will. Will constantly adapt to where we are and where we're going. And our team members will, if you ask any of them, it feels like Groundhog Day every day, because we are 100% always changing. And the reason for that is that if we don't, if we don't continue to adapt new ways, regardless of how big we are, we will fall behind in an era with, you know, we're early adopters of AI. We're always early adapters of everything. So we keep growing and we are saying, yes, we could be a billion dollars, we're on that trajectory, but we're not going to be a billion dollars because some private equity firm put that as an evaluation. We'll be a billion dollars because we sold a billion dollars. Right? That's what will make us a billion dollars. And if the consumers are out there looking for our products, we will be a billion dollars. But if we're not, we're going to be the biggest profitable company at the. At where we're at. And I think a lot of times entrepreneurs put these north stars and that's all they drive to, regardless of expense, regardless of the quality of the product, regardless of all of those things, because they're chasing money. And when you chase money, you always seem to fall short. If you chase happiness and kindness and love and aspiration and desire to please, the ability to show gratitude, if you spend all of your time focused on those things, it's amazing how big your company is. But more importantly, it's amazing the lives that you touch, which as you get older in life, it's that group of people that when you're dead and buried beyond your kids or your wife or your family members, if you as an entrepreneur focus more on the ability to touch people's lives, and literally that's what changes the world.
A
I think the biggest sort of takeaway here in this conversation with you, Eugene, is, and I hope the listeners get this too, is at every single point here, the theme is just real focus on the business as opposed to the valuations, the fundraising. You know, what do these guys think about me? Like, you funded the business or you built the business because you had a real problem. You funded the business with customer financing. You then said, well, we'll become a billion dollar company when we sell a billion dollars, not when a private equity firm values us at a billion dollars, because what the hell does that mean anyways? So the Focus on the real fundamentals, I think has taken you clearly very far because a lot of people who are quite talented spend so much of their brainpower focusing on the gamification of business instead of just providing value to the customer.
B
Totally, totally. And look, every industry is different, right? I mean, your software, solving for a problem bed, gears, mattresses, are solving for a problem. It's, it's. If you're not, if you're focused purely on just an exit and some people are successful at that, that's just not me. I, I'm not focused on an exit. So my game, you know, that you talk about gamification, mine is, is a daily gamification like I, I gamify everything I do. That's how I learn. Right? So to me, I'm always leveling up. I'm always looking, you know, to buy, you know, buy my way out of a problem or I'm always gamifying everything. But I'm using, I'm using that mentality every day. I'm more focused on community and more focused on the employees. And I'm more focused on the customer now than ever before. And that, to me, is what propels you forward.
A
Well, Eugene, I love this story. Thank you so much for sharing it. And I know people are going to get a lot of value out of this. So thanks for joining today. Thanks for listening. Get my best stuff to your inbox@johndavids.com we'll talk to you next time. If you sell B2B products or services and you want to generate more qualified sales opportunities, I want you to head over to JohnDavids.com grow. I'll show you the growth system we've used at Influicity with 40 B2B companies in just the last year. Go to JohnDavids.com Grow and watch the short video. And by the way, if you're already spending money on LinkedIn and trade shows and sales enablement and all the rest, this is even more important because it could give you a huge advantage in the marketplace. Go to johndavids.com grow and I'll see you there.
Episode 262 – How To Build a $100M Bedding Brand | BEDGEAR Founder, Eugene Alletto
Originally aired: June 16, 2026
Host: Jon Davids
Guest: Eugene Alletto, Founder & CEO of BEDGEAR
This episode features an in-depth conversation with Eugene Alletto, the founder and CEO of BEDGEAR, a bedding company bootstrapped to over $100 million in revenue. Jon and Eugene break down the myth of the “overnight success”, discuss why direct-to-consumer (DTC) often fails in low-frequency product categories like bedding, and dive into the nuts and bolts of bootstrapping, team-building, and customer-centric growth. Eugene shares candid reflections, practical strategies, and memorable stories about company origins, operational discipline, and staying relentlessly focused on fundamentals over hype.
Finding Your ‘Second’:
Culture & Core Values:
Diversity & Inclusion:
This rich and candid episode demystifies hypergrowth, showing how staying laser-focused on people, product, and operational rigor can build not just a $100M company, but a brand people love and trust.