LoveSac: The Billion-Dollar Beanbag Controversy | Shawn Nelson DSH #825

A lot of times investors will meet me and they'll be like, how are you so passionate about LoveSack?

26 now years in.

And what's wild is I think I'm like more excited today than I've ever been.

A thousand times where, you know, thought of quitting, thought of getting out, thought of exiting.

But now that we're big enough to matter, I think we can grow this thing to be a brand that's here for 50 years.

All right, guys, Sean Nelson part two, and we're on his love sacks.

This is where it all started, right?

This is it.

This is it.

The sack.

It was

a dumb idea, and here we are.

25 years ago, man, you arrived.

You would have thought.

And now your event has, what, 700 people?

Yeah, that's, I mean, we're over 2,000 employees just down the street.

We have our big annual manager fest.

So we'll have 400 from our headquarters, another 300 or so

showroom managers, and

Flow rider tomorrow night big party a few days of training you know all that stuff and then big party hopefully you guys can make it out yeah it's gonna be fun what made you want to put this on for your employees uh well you know we i mean look we uh started

i mean we were kids we were in our 20s so we always wanted to party and so the minute we had we were making any money it's like you know the we actually had

In our, I think our first year, I think every year we've been in business, man, we threw a party.

It was originally a New Year's party.

So this is like way back early 2000s.

just a bunch of 20 year olds building the retail chain and and you know i mean you got corporate money like let's throw a party and uh

and now today i mean we're doing it right we you know we're we're finally able to afford real headline i want to turn into a music festival yeah that like you can't get in unless you're in you know like you'll come you're a friend we got all these friends of love sack we got a lot of celebrity friends that rock our product We invite them all.

A few of them will show up.

I've got a few dozen friends,

you know, that are unrelated to the company showing up this year a few hundred ultimately and it will just keep growing it like that organically and nice you can't come unless you're on the list i mean that just speaks to the quality of the product if these people are flying out to go to something like this you know it's wild it's wild i mean i love it man i got the sactional in the movie theater oh my gosh good dude it's been working out you're a tall dude so a tall dude you arranged it deep i presume yep we did the deep setup we got the speakers built in yeah got the projector that's game changing right

dude game changing Like, have you ever heard something in a soundtrack yet that you didn't know was there before?

You know what I mean?

Yeah, you feel it too.

You feel it.

Yeah.

It's stealth tech is what we call it.

And

really proud of that product.

And, you know, it's the tip of the iceberg.

So we've gone from sacks, big bags full of foam, made us famous, to the sactionals, the modular furniture.

And stealth tech has really changed the...

you know, the whole perception of the company.

And ultimately, we'll do a ton with technology.

And no one else is doing that in our world.

And what what a pivot, right?

Because a lot of people rely on that one product and it's very rare to have that success again in another product.

Yeah, well, we've got more.

I mean, but yeah, Stealth Tech has grown, you know, into a very meaningful business for us, which was hard coming out of like bean bags and couches into real technology.

But yeah, I think LoveSack will prove a lot of people wrong.

I mean, we've been doubted the whole, we're still doubted.

We're a public company traded on NASDAQ.

There's always a huge short position.

I think there's there's a lot of investors that are like, what?

Like these clowns.

But we're not joking around.

We'll do some very big things.

You still feel like you got that chip on your shoulder.

Oh, you have no idea.

Wow.

Yeah.

Like I'm, it's funny because a lot of times investors will meet me.

And, you know, we'll talk.

Because as a public company CEO, I spend a lot of time with investors that own pieces of the company that want to know more about the company, where we're going, et cetera.

And they'll be like, how are you so passionate about LoveSack?

26 now,

years in.

And what's wild is I think I'm like more excited today than I've ever been.

Wow.

And it wasn't always the case.

Like I've had a thousand times where I've thought of quitting, thought of getting out, thought of exiting, you know, different times where maybe I should have.

But now that we're big enough to matter, right?

We did 700 million last year.

I think we'll grow up past a billion, no problem, the next few years.

But small enough still, we can have fun.

We can, you know, still build a strong culture

um and with some really cool products on the way that you know we can't talk about i think we can grow this thing to be a brand that's here for 50 years you know like a nike that's like that's like what i want to do and no one's ever done that out of home furnishings yeah let alone giant beanbags but i i really think it'll take another 25

you're playing long game out here playing long game and

It's actually really liberating.

It's wild.

Like, you know, it was always like chasing an exit, chasing an exit, thinking about it that way.

And when I switched, I'm like, I'll just go as long as it takes.

It's really kind of cool.

Because then, like, you have a couple bad years like right now, terrible for home furnishings.

Really?

What happened?

Post-COVID.

So, COVID, everyone went out and bought couches, bought couches with speakers in them, bought giant beams, bought all the stuff for the home.

And then post-COVID, everyone goes back to travel.

Everyone's got their stuff.

Grills were blown up.

Everything for the home was blown up.

And big hangover for the home category.

LoveSack's thankfully grown through it, slower growth than ever, but we've grown through it and we're like the only one.

But

my point was

when you have a couple of bad years,

for us, slow growth is bad years.

So what?

Like if you're playing like a 20-year game,

You can weather anything.

You know what I mean?

You're not impatient.

You're not making bad decisions.

You're not settling.

You're just going to slow down, run a good business, wait for the economy to be better for this category, and then we'll rip again.

Love it.

And that's really freeing.

Yeah, a lot of people want that fast money, that instant gratification, right?

And then they see a bad year, a bad month, and they start freaking out.

Yeah, or it wrecks their plans.

And then what do you do?

And then you're scrambling, and then you start making bad decisions.

And you know, I mean, you and I have both been around, first of all, like, I can't believe it's only been a year and a half, man.

You're crazy.

You were one of the first episodes.

I didn't even realize that.

Yeah, I think you came on a few months in, maybe five months.

I mean, you have crushed it.

It's been a lot of filming, yeah.

You too, though.

I want to talk about your podcast.

All right.

Well,

you know, mine.

Thank you, though.

No, but like, it's really amazing to see what you've built so fast.

I mean, I can't avoid your social media.

You guys are just...

So good at it.

And that's the game.

I mean, I'm playing the game because, you know, in this day and age of branding, you got to be there.

But, but, you know, you and I have both met plenty of hundred millionaires, billionaires, or just, you know,

very successful people.

And if you're around it enough, you realize like

you know, you don't, you don't need that much money to have a great life, a great time,

have a lot of freedom.

And so for me, the chance to build this culture, I'm so glad you get to come to the party tomorrow night.

Like, you'll see it.

You'll understand.

What else would I want to do?

I got 700 of my best friends.

They love what they do.

We love what we're building.

Like,

why do I want an exit?

And I don't mean that like in a unambitious way, but what I mean is like, how about instead I take this amazing group of people and we build something that's here in 50.

We build, it's like a, it's almost like a sculpture.

It can outlive me, maybe.

And to me, that that's now really satisfying.

And so my whole mental framework shifted.

That's incredible, man.

Yeah.

Maybe you could pass it on to your kids one day.

Yeah.

I mean, I don't even, I mean, on that subject, I don't even necessarily want that for my kids.

I want them to be what they want to be.

If one of them really wants that, that could be cool.

But

I just am really intrigued because I think building a business is actually one of the hardest things.

I mean, you know, you guys are building a business.

I mean, you guys grind.

Like, people, they see you as celebrities.

They see you in, now you're in Dallas, now you're in Vegas, now you're in, you know, but it's a grind.

It never sleeps.

But on the other hand, it's also a multifaceted grind, right?

Like you learn finance, you learn relationships, you learn human psychology, let alone social media and the other tactics.

That's pretty cool, right?

Like you're getting smarter and smarter and smarter every day.

You're working with more and more capable people every week.

And you're building a complex thing that's more than just one hustle.

Yeah.

So to me, that's like, that's the satisfaction.

Agreed.

A lot of personal development in business.

I've been able to find myself through business.

Yeah.

Like 100%.

Like, you can't hide in business.

You know, your true colors are going to come out.

Oh, yeah.

I mean, that's that's so my podcast, Let Me Save You 25 Years,

is all about these.

Well, the first season was just the 25 lessons, as it were, in my book called Let Me Save You 25 Years.

And I unpack them one each with some very successful people, right?

and so

like with you right on my podcast we'll talk about this topic see who shows up

because as you've seen I don't even know these guys

but I guarantee you've had people that show up and other people who kind of like say they'll show up yeah and we'll talk about that but but what's cool is when I go deep on these one topics with very successful people I get some really cool content out of them that I don't hear from them

on their regular stuff, like Gary Vee, Mark Cuban.

Like, you know, because we go deep on one idea.

And

what's cool, though, is that we all learn the same things.

Like,

you and I will learn the same lessons if we put ourselves through this meat grinder.

That's interesting.

Yeah, I can't wait to dive into that.

That's a very unique discussion topic.

Yeah, yeah, it's fun.

So that's been pretty successful, and I've enjoyed that, and I've learned a lot, and I continue to learn a lot.

So, yeah, man, we're playing the long game.

But Lovestock is cool, too, because we make

long-term products.

Like, here we are, right, at the Witch Witch headquarters.

Yeah.

And just got to meet the founder, and he pulls out a LoveSack pillow from like 2004.

We make, like, these sactionals you bought.

Here's the coolest thing, Sean.

Like, you're way younger than me.

I have sactionals older than my daughter.

She's 16.

Wow.

Those same sactionals that are in your basement, if you choose, you'll have them like the rest of your life.

Crazy.

You can change the fabrics.

You can rearrange them.

you can right get new components new cushions whatever and that's designed for life we didn't have that in the beginning we we have this whole philosophy now around that and it separates us from our competition it's the reason we'll be successful it's the reason we can invent other products and um

it's just really fun now i love it because i've gone through so many couches three thousand two thousand like four thousand dollar couches yeah I could just buy one for like, like you said, 20 years plus.

And isn't it crazy?

You could spend that much on a couch, even from a nice place, and they're they're actually not that well built.

They're not.

I've actually gone to like Chinese suppliers to see what they're paying for some of them, and they're marketing them up like crazy.

Yeah, it's gross.

We won't even use those factories.

But you'll see.

Like the way we build sactionals, because we don't make very many things, right?

We make the sacks.

Even the sactionals, you know, you buy a bunch of seats, buy a bunch of sides, but they're uniform.

Therefore, we can put a lot of care into like the design, every joint, every seam, et cetera.

And so we try to make things that are built to last a lifetime and designed to evolve.

That's the harder part.

Like designing that couch so it'll even work for a dude as tall as you.

Right.

Or a woman as short as my wife.

The same couch.

Because the way you can turn them deep or long, the same pieces even.

Yeah.

And someday when you, you know, you grow your family and you change, like you, it'll, it'll blow your mind.

Like if you choose, those pieces will be in your life.

Like.

That's why I love the couch because I could buy on additional pieces when we have kids and fit them in.

Yeah, so that's not an accident.

I mean, that's literally how now we think about all the products.

So then you'll say, well, oh, what's next from LoveSack, Sean?

It'll look, look, it's simple.

Look around your life and think, man, what would be cool if it could be built to last a lifetime, but could evolve with me as my life changes?

And that's what we'll do.

That's so cool, man.

Are you guys using AI at all within the company?

We're dabbling.

We're trying to figure out where it fits.

In fact, I just gave a speech on it today.

Oh, yeah.

Well, not a speech on AI, but I mentioned it.

Like, we're a very human-centric company, right?

Like, we have these physical showrooms, and it's because we make these products that they look pretty simple, but actually, they're fairly complex.

Like, as you saw with your SAC, I mean, you know, it probably took a whole Saturday of your life.

Oh, it was a process.

I know.

I'm sorry.

I apologize.

No, I hired someone on...

What was that app?

The person

who told me to use this app.

It was some app where you could hire a contractor.

Yeah, TaskRabbit.

Yeah, TaskRabbit.

Okay.

Yeah, so someday we'll provide those services and help help you and stuff.

And we'll even help you change it and upgrade it.

Like that's coming.

But in the meantime, we have these complex products that require like a, like you probably interfaced with someone to help you plan it, get all the pieces right, right?

That's what it takes.

And so,

yeah, sure, we could train an AI model to do that.

But in the end, we actually value our relationship with you.

You know, like whoever helped you and even my relationship with you.

Like, we value people.

And And I think fast forward 10 years, that will also help set us apart from all these companies that will just go totally virtual.

And so, look, I respect it.

Don't get me wrong.

Like, I think there's a place

for total virtual, lean into AI, be super efficient.

But I actually, I think it's creating a future where companies that really commit to

the human touch

may

be even more competitive because they're so rare in the future.

You know,

so that's kind of where we're heading.

Yeah, because more and more companies are getting away from that human feel these days, right?

Yeah, but humans still exist

and they're going to exist.

And

I think that, you know, if it's done correctly and efficiently, and that's the cool thing about Lovestack is like, in the end,

we sell like the biggest thing in the mall out of the smallest store.

Wow.

I didn't even think about that, but yeah, you do.

That's right.

So it's good economics, you follow.

Yeah.

And it was an accident.

Like, in the meantime, look, we were just selling beanbags, we were trying to survive, and we, we, you know, you can read the book, like, the whole story's there.

But as we find ourselves today now, that's that's a strategy,

and

the human side of it is a piece of it.

We'll leverage AI, but uh, ultimately, I think it will be a real differentiator.

That's cool.

How's the reception been on the book so far?

Good.

The book's been a bestseller on Amazon, and

you know, we're really proud of it.

Let me me save you 25 years

is a book I wrote for me when I was 20.

It's like, man, I wish that I had something like, like I tried to be really honest.

I mean I talk about

LoveSack's been through every up and down full.

I mean I won a million dollars on TV with Branson.

We had to file bankruptcy and start over in the middle.

humiliating, terrifying, embarrassing.

But I learned so much I think I learned more from that than anything I've done in business and that was a long time ago

but I try to be really honest about all the mistakes and miracles and lessons that came along the way and that's what that's the subtitle for the book and

and so yeah I'm really proud of it it's short you can read like 90 minutes and it should be the book that you give to like your your nephew who's like 18 but he's got ambition wants to do something or or your niece or whatever and love that man shout out to to Branson.

I just went on my first virgin cruise.

Oh, did you?

Yeah, it was a blast.

I can tell he really cares about his customers.

Yeah.

Was he on the cruise with you?

He wasn't, but I bought like the VIP package, and he makes you feel like VIP.

You should think about coming to Necker with me in March.

I'd love to.

That's his island, right?

Mm-hmm.

There's a really cool opportunity.

What's he doing out there?

I have a friend who runs this really cool

venture called Principled Business Summit.

And a lot of good people gather.

So I'll rope you in.

Thank you, dude.

I'm big on community and providing value.

Yeah, I mean, I love what you're doing, man.

It's crazy to see how active your podcast channel is with all of all of the guests I've been able to connect with.

Yeah, we drop three episodes a day.

So by the time this one comes out, we might be at a thousand.

That is insane.

We got a three-month backlog.

Congratulations.

Yeah, it's a blast, dude.

But thanks so much for your time, man.

Where can people people keep in touch with you?

Yeah, yeah.

Connect with me.

I'm Sean of LoveSack on every social media channel.

Let me save you 25 years, the book, the podcast.

Of course, lovesack.com.

Check it out.

Link it all above.

Thanks for watching, guys.

As always, check out LoveSack's stuff below in the description.

I'll see you next time.