10 Things I've Learned in 10 Years as CEO

Generally speaking, I’m not a backward-looking kind of guy. My focus has always been on the future—what’s the next challenge, how can I take my business to the next level, what’s the newest innovation or technology that will give me an edge. But making it to the 10-year mark with Saatva feels like the right time to pause and look back, especially now, when so much about the future seems so unpredictable. 

I think of the coronavirus as an accelerator: Companies that were struggling, especially in retail, are finding themselves even deeper in the hole, while those like ours that were well positioned for the consumer shift to online shopping have benefited. I still don’t know what the “new normal” looks like, but I know that every step we’ve taken over the past decade has positioned us to not just survive this crisis but emerge from it even stronger. 

Here, year by year, are 10 things I’ve learned in my 10 years as CEO. 

Year 1: You never know where your next great idea will come from 

Ten years ago I was 47 years old and fresh off running a chain of 219 furniture stores around the country. That meant I had been on a plane three to five times a week for the prior 15 years. Suddenly I was home, and I noticed my wife and daughter spending an awful lot of time on websites. And not just casual time, really engaged time. That’s when it hit me. I’d been traveling to every store so I could teach sales staff how to communicate with customers. On the web, I could put all that knowledge in one place—every bit of information I wanted the consumer to know. And if I didn’t have to worry about 200 stores and the overhead that came with them, I could sell a product for tremendous value. The challenge was going to be how to translate that retail language into web language to get a consumer to buy. 

Year 2: Understand what your customer needs

The first time a stranger halfway across the country bought a mattress from us online, we couldn’t believe it. But if we were going to do it again and again and again, we needed to really understand the customer’s needs. Our second year in business is what I call “the year of consumer behavior.” For 10, sometimes 12 hours a day, my cofounders and I would watch the customer move on the website. What turned people on? Which pages did they engage with? What was the pattern of behavior that got them to a close? We didn’t have sophisticated data analytics yet, but by watching shoppers move around the site we learned the customer journey, the pain points, and began to focus on “user experience” before we truly knew what it meant. Ditto for digital product—we were creating on the fly, iterating and adding efficiencies as we went. 

Year 3: Build your moat

In year three we began building the moat that separates us from our competitors today: a huge national manufacturing and delivery infrastructure that puts us within 60 miles of 85% of households in the continental U.S. for efficient white-glove delivery. A lesson here is that timing plays a role in every company’s success. Because the online mattress space was less crowded in 2013 and marketing was cheaper, we could afford to spend years building and nurturing relationships with dozens of manufacturing and delivery partners. We learned from our mistakes until we got white-glove delivery logistics down to a science. To do that today would be so cost prohibitive that it’s practically impossible. That’s why there are 170 bed-in-a-box companies and only one Saatva.  

Year 4: Meet your customers where they are

It may seem obvious now, but as a career retail person, I didn’t really understand that on the web, the store never closes. As we began to scale our business, I realized we needed an “always on” operation, with around-the-clock customer service. Tony Hsieh’s Delivering Happiness was a huge influence on me in the early years. I made the decision to never put a customer on hold, to be available any time of the day or night to help anyone who had a question or complaint,  to empower customer service agents to be guides and problem solvers. That level of service remains a differentiator for us today, particularly since the mattress industry has long had such an awful reputation for customer service. 

Year 5: Master the art of online search

The online search game is an art as much as a science, and mastering it has been a key to Saatva’s success. As we expanded into other categories of mattresses, we got better at understanding how to use those products to expand our online search real estate. We built a strategy around having multiple brands: the original Saatva innerspring mattress, memory foam (Loom & Leaf) and 100% natural latex (Zenhaven). Being able to offer multiple products in multiple categories, and hand-deliver them to the consumer, worked to our advantage as dozens of indistinguishable foam beds in a box started to saturate the mattress market. 

Year 6: Build your brand

The first five years were all about a laser focus on ROI and reaching in-market customers who found us through search. Some brands go all-in on awareness marketing out of the gate; we took a more deliberate approach (and we all know how it turned out for some companies that spent a ton on brand recognition without a solid business model first). By year six, we were comfortable in the knowledge that we had built a business that worked—we’d gotten our manufacturing and delivery network humming, we understood search, we were profitable—and now we could start thinking about ways to increase awareness and build our brand. 

Year 7: Diversify your marketing mix

When you’re trying to build a business, you never want to put all your eggs in one basket. As we became the largest spender in our space on search, we knew we had to diversify. That’s when we started seriously looking at social media, influencer marketing, and working with affiliates as ways of growing our business. Additionally, one of the best decisions we made was to start investing in our own content, which has turned out to be one of our most successful marketing channels and has the most potential for growth in our future. By offering high-quality content that answers the questions people are asking about mattresses and sleep, we’ve been able to drive increased traffic to our website while we build our reputation as the most helpful brand in the mattress space.  

Year 8: It’s all about the data

To be successful today, any DTC company needs a robust data and analytics operation. When I look back, if there is one thing I would change, it’s that I would have invested more heavily in data earlier. As we’ve grown the business, moving from lower-funnel channels like search and affiliates to upper funnel channels like television, podcasts, and physical retail, we knew we would need an attribution model that would allow us to understand which channels worked best for us. Also, in order to differentiate ourselves from over 200 mattress competitors, we need the insights data gives us to create more personalized customer experiences across our entire ecosystem than we ever have before.  

Year 9: When you’re ready, step on the gas

Last year, after nearly a decade of profitable growth, we decided to take on an equity partner. I could have gone out and raised a lot of money a lot sooner, but that wasn’t my philosophy. There’s a narrative in the startup world that to be a success, first you have to raise a round of seed capital, then keep pulling in VC money to fund your growth. We didn’t do any of that. Instead, we grew methodically, developing our infrastructure, our people, and our products. Maybe we grew a little slower than the venture-backed unicorn brands you read about, but taking our time let us build a healthy and sustainable business. Especially now, investors want to know how a business works and that it can make money. By the time we were ready to stake our claim to becoming a billion-dollar brand, we had a great story to tell. 

Year 10: Timing is everything

Nobody was truly prepared for the events of the past few months—a pandemic that shut down huge swaths of the economy and social upheaval that is still playing out across the country and around the world. Because we sit at the intersection of two trends right now, DTC retail and spending on the home, we’re in a strong position coming out of this crisis. But one thing is clear: All of the long-term choices we’ve made in the past 10 years—painstakingly building our logistics and operations network, offering multiple products at different price points, providing an unmatched customer experience, investing in data and analytics—have enabled us to survive the most devastating two months in American economic history. Had we made short-term choices like so many others, I might not be writing this anniversary post today.