Good Life

Mattress startup founders, Penn State grads, not resting on early success

John-Thomas Marino, left, and Daehee Park are the co-founders of Tuft & Needle, a direct-to-consumer mattress startup based in Phoenix.
John-Thomas Marino, left, and Daehee Park are the co-founders of Tuft & Needle, a direct-to-consumer mattress startup based in Phoenix. Photo provided

When they were undergraduates in Penn State’s startup community, Daehee Park and John-Thomas Marino didn’t dream of getting into the mattress business. But after Marino got married years later, his search involved a $3,300 mistake: The mattress was a dud, and the shopping experience was just as uncomfortable.

To find a job they loved, they had to untangle a process they hated.

“We saw a clear pain in the way mattresses were being bought by customers in both the shopping experience and the product itself,” Park said. “So based on that, we created our ‘hate’ list — everything we hated about shopping for a mattress and the mattress itself. And that’s what we worked off of to build the company.”

Then working at a Silicon Valley startup, the pair decided to quit their gigs and start Tuft & Needle, a direct-to-consumer mattress company that shot to $1 million sales after year one, $9 million in year two, then $42 million, then more than $100 million last year. Park said the company is expecting similar levels of growth in 2017 in what is a thriving industry.

Since its founding in 2012, the Phoenix startup has grown to 150 employees. The company was ranked No. 1 in terms of company culture for 2017 by Entrepreneur Magazine, and its product, a foam mattress ranging from a $350 twin to a $750 king, has become one of the top-selling mattresses on Amazon. Along with competitor Casper, Tuft & Needle was rated the highest in overall satisfaction in a Consumer Reports survey.

Though mainly online, the company has opened stores in San Francisco, Phoenix and Scottsdale, Ariz.

Park, 28, attributed the growth to the duo’s initial vision: a company that was more fidelity than Faust, more substance than style. Rather than taking venture capital like many competitors and other startups, the pair bootstrapped the business, initially investing $3,000 each — or less than the price of Marino’s McGuffin.

“What matters more to us is building a company that lasts and building a company that we love to work for,” Park said. “We didn’t want to sacrifice those things for the sake of short term.”

Below, Park shared his vision for the company besides advice for recent graduates looking to break into the startup scene.

Q: What got you interested in business and entrepreneurship?

A: I’d always been interested in tinkering with websites. When I was in high school, just for fun I launched an e-commerce jewelry website: I knew somebody who had a jewelry distribution business. Once I got into college it became more serious in terms of making money that way, because I supported myself through college. I had my daughter when I was in college, so I needed to provide for the family, too. So my entrepreneurial activity was more needs-based. That’s when I realized I could monetize my hobby and my passion.

Q: What advice do you give recent graduates?

A: One of the main things we talk about — we see this pitfall quite often among aspiring entrepreneurs in college — is solve a problem that actually exists, solve a pain of your own. What I mean by that is people often chase business opportunities: “How can I hack my way to building the next billion-dollar app?” That’s the kind of mindset people have in starting a business, and that’s typically what Silicon Valley is crowded with: ideas that are cool but they need to buy growth, because it’s not really solving a clear pain out there.

What we typically share as advice to aspiring entrepreneurs is first and foremost solve a problem that matters, and that’s how we got into the mattress industry. When you work off your own personal “hate” list, it’s a bit more emotional. But it’s also it’s more real and tangible, too.

Q: You’ve mentioned how customer feedback is integral to how you iterate and operate as a company. How do you winnow down that feedback and use it to shape each iteration?

A: One of the most important metrics that we measure as a company, and it’s something we’ve done since the beginning, has been net promoter score: How likely are you to recommend this product or this store to a friend?

There’s a big community around that metric, and we’ve been measuring it pretty hardcore since the beginning and we continue to prioritize that. For us, having bootstrapped the business and not taking outside capital, it’s very important to us to have that viral aspect to our product so we don’t have to lean on buying growth with a marketing budget. We market, but we don’t market like a venture-funded company does. That’s a constraint that we’ve placed on ourselves and we like it that way because our product has to be so good, our store has to be so good that it sells itself so people are talking about it.

Q: What is the culture you like to see in your company?

A: I call it a “flat” culture, rather than a hierarchy. As we’ve grown, we’ve had the need to add leaders and levels of accountability, but flat culture is still important to us: Feedback is happening in the open from leadership to individual associates. We’ll prioritize employee happiness and experience over short-term growth. For example, one of the things we’ve done for the past two years is we’ve shut down the company for a week to take everyone up to Lake Powell for what we call “R&R” and it’s an opportunity for us to slow down and introspect and build trust among team members. That’s been really great, and we’ll continue doing that.

Q: What’s your favorite memory from your time at Penn State?

A: For me, it was doing a lot of hacking away at business ideas and projects in the HUB, the IST building, around campus. J.T. and I and other people we knew, we would kind of hop around from building to building and really use the campus as an opportunity to do a lot of collaboration. For us it’s really around the startup community at Penn State — that was the primary track of our Penn State experience. And the professors who supported us. All that was very eye-opening and helped normalize our world view for what’s possible.

Roger Van Scyoc: 814-231-4698, @rogervanscy