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Bootstrapping an Online Mattress Brand to $168 Million: Ricky Joshi and Ron Rudzin, Co-Founders of Saatva Mattress (Part 3)

Posted on Wednesday, Mar 1st 2017

Sramana Mitra: Are you selling your own branded mattress? All this calculation that you did about the raw materials, did it lead you to the decision to do your own branded mattress?

Ricky Joshi: We were always going to create our own brand. That was part of the whole operation. You look at the history of the Internet. You have a lot of resellers that came on early on. My part of the research showed that all they’re really doing is providing a different delivery system for the same product and experience.

Sramana Mitra: That’s not entirely true, right? There are companies that have differentiated positioning.

Ricky Joshi: There are companies with differentiated positioning but not really at accessible price points. You really can’t find a luxury product at the price point that we’ve offered it for.

Ron Rudzin: The point that I always like to make is that we don’t claim to be better than the Stearns and Foster. We claim to be the same as them. We are at the same level of quality.

Sramana Mitra: Let’s go back to 2010. What did you accomplish at the end of 2010?

Ricky Joshi: We had created an ideal product, which was eco-friendly. That is one big distinction. Across our brands, we’ve been focused on that.

Sramana Mitra: By the end of 2010, you had the product fully fleshed out.

Ricky Joshi: The product was fleshed out. The first brand was fleshed out. We actually have three brands.

Sramana Mitra: What about manufacturing? What about inventory and financing? How were you going to finance inventory?

Ricky Joshi: We started region by region. That is what’s interesting in our story. The initial capital injection into the company went around product development, tooling, and getting prepared in that first factory which was in the northeast.

Sramana Mitra: Where did that money come from?

Ron Rudzin: I started the company with $350,000.

Ricky Joshi: There was a small injection of capital by the initial founders. Over the course of the next few years, we grew throughout the United States. That was a process as well.

Sramana Mitra: When you’re talking about regional, does that mean you were doing a brick-and-mortar business? When you come to e-commerce, typically people are selling everywhere.

Ron Rudzin: We went to our manufacturer. When we’re going to a region, I’d work out something with the manufacturer. That manufacturer would go to several different cities whether it’d be Boston, Maryland, or New Jersey. We then Google market to those areas.

Ricky Joshi: We would sell the product nationally but because of the shipping costs, it’s prohibitive. As we went through the country, the delivery times would go down. Say for example, we launched in California. All of a sudden, the delivery times are significantly down. The shipping costs would go down significantly. We’d almost go and make it a viable market. Because it was viable, we would market there in terms of advertising.

This segment is part 3 in the series : Bootstrapping an Online Mattress Brand to $168 Million: Ricky Joshi and Ron Rudzin, Co-Founders of Saatva Mattress
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