On this episode of Honest Ecommerce, we have Shawn Nelson. Shawn is the founder and CEO of Lovesac. He’s also the host of Let Me Save You 25 Years podcast, and the author of the book with the same name. We talk about defining your own success and timeline, staying patient amidst highs and lows, thriving in uncertainty as entrepreneurs, and so much more!
Shawn D. Nelson is the founder and CEO of Lovesac, repeatedly recognized as the fastest growing furniture brand in the US for over a decade.
Lovesac is publicly traded on Nasdaq, ticker “LOVE,” and is projected to exceed $1 Billion in annual sales over the next few years leveraging its rapidly growing fleet of more than 270 Lovesac branded retail locations.
From humble beginnings, Shawn founded Lovesac in 1998, making Sacs by hand for neighbors and friends while in college. He graduated from the University of Utah in 2001 with a BA in Mandarin Chinese before opening Lovesac’s first retail location in his hometown of Salt Lake City shortly after graduation.
In 2005 Shawn won a million-dollar investment from Richard Branson on his prime time hit reality TV show, The Rebel Billionaire, and was named acting President of Virgin Worldwide for a time.
Shawn later achieved his Master’s degree in Strategic Design and Management at the world famous Parsons, The New School for Design in New York City and continued on as an instructor there for a few years teaching courses on Sustainable Business Models, Leadership, and Innovation.
Shawn now holds over 50 issued patents across multiple product categories with dozens more pending. The majority of Lovesac’s sales today are driven by the ever-expanding product platform called “Sactionals,” the world’s most versatile couch and myriad Sactionals product extensions including embedded technology.
Shawn’s recent book, “Let Me Save You 25 Years,” celebrates Lovesac’s colorful history, and the many “mistakes, miracles, and lessons” learned along the way.
Shawn lives in St. George, Utah with his wife, Tiffany, and their 4 kids, 2 cats, and 1 crazy dog.
In This Conversation We Discuss:
Resources:
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Shawn Nelson
I think the fundamental attribute of an entrepreneur is the ability to tolerate uncertainty.
Chase Clymer
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce.
Today, I've got a great one for you. A CEO, a founder, an author, a fellow podcast host, Shawn Nelson, welcome to the show.
Shawn Nelson
Great to be here. Thanks.
Chase Clymer
Awesome. So I buried the lead there a little bit. For people that have been living under the rock, not necessarily understanding what's going on, I guess maybe your claim to fame would be what you've been doing over there with Lovesac.
Shawn Nelson
Yeah. I think more people might know me as that Lovesac guy. Yeah, Lovesac has been a 25-year saga. Name of the book. Let Me Save You 25 Years. The podcast. Let Me Save You 25 Years. The whole story to it that's actually pretty cool and entertaining.
And I've been able to break it down into all these little learning opportunities that I share out. And that's been my MO for a little while.
Chase Clymer
I love it. I love it. So let's just dive in. Take me back in time.
Do you remember where the idea for Lovesac came from?
Shawn Nelson
I don't know where it came from, but I remember when it came. I was sitting on my parents' couch watching The Price is Right. Bored out of my mind 10 days out of high school in the summer and I just thought it'd be funny to make a bean bag, like, this big, like me to the TV, the whole floor.
And I'm impulsive, I'm a doer. I get off the couch, drive down to Joanne's Fabrics, buy some vinyl, fake leather, bring it home, cut it out, start sewing it up. My girlfriend's mom had to finish sewing it, my skills were limited. And Lovesac was born.
It became my side hustle through college. And at the end of college, got a big order at some trade show we attended and had to build a factory. That got us into real business, and then none of the furniture stores wanted our name in them so we opened our own store in a mall in Salt Lake City in 2001.
And now fast forward to all these years later, we publicly traded on Nasdaq. We just finished a year at 700 million sales and we have 300 plus locations. So it's kind of wild.
Chase Clymer
That's an amazing journey. And there's a lot of... There's like a Reddit joke where someone is drawing an owl and they're like, well, you draw the wing and then you draw the... And then you just draw the rest of the owl, right? So I'm not going to let you get away with that. I'm going to dive into a few things here.
Let's talk about it being your side hustle throughout college. When did it go from friends and family buying this thing to there being some actual reaction from the market?
Shawn Nelson
I think that our market research was always just getting out there and selling these things. And that's the nice thing about a bootstrap, I knew every customer and I knew what they were asking for and I knew what they were saying. Whether they wanted a bigger, smaller, squishier, softer, heavier, whatever.
And so call that market research and pretty shortly after, and this is old, this is so long ago, in the late 90s, early 2000s, the internet was just becoming a thing, really, of any heft, and we figured out how to suck all the air out of them and shrink them, which allowed us to make them internetable, shippable via UPS FedEx, whatever. All these things were kind of coalescing.
Meanwhile, we were just kind of taking it a day at a time, trying to pay the bills. Trying to get more orders, trying to just keep moving forward.
Chase Clymer
Absolutely.
Do you remember what scale you were when you got that first big purchase order from a trade show?
Shawn Nelson
Yeah. So this was literally just selling to friends and families when we wanted to... I wanted to shut the company down and graduate and move on to a real job, but I couldn't quite do it because every time I talked about it, my friends and family would be like, “No, I love my Lovesac. You gotta keep going.”
Kind of like a last ditch effort. We registered for this trade show in Chicago for promotional products, like putting your logo on our thing. And it was the only… I'd asked around, I'd networked to it. It was just like this opportunity that was the right time. It was kind of aligning with the end of university for me.
And I just thought out, “Look, we'll take it there if we can get some kind of major order from someone, maybe we'll continue. If not, at least I will have tried. I knew it wouldn't work and we could move on.”
And sure enough, it ended up working. I mean, we got no orders at the show. I'd sunk 15, 20 grand into getting out there all this, which at the time was a lot of money on credit cards and stuff. And I came back home dejected and I was actually down there stuffing a sack on this wood chipper plugged into the wall in the back room of this furniture factory that just let us use it after school because they thought we were funny, this old foam shredder thing.
I remember seeing the ID on my phone, it was out of state, so I thought maybe it's from the show. So I turned off the shredder, brushed the foam out of my hair, and answered, “Lovesac Corporation.”
It's the Limited Too. You'd know it today as Justice, like little girls pink, purple, fuzzy stuff for their bedrooms, whatever. They want 12,000 little sacs for Christmas, not realizing it's me and a buddy in a college side hustle.
And I told them, no problem, we're the best in the world, which is true, you know, making what we were at the time. And they ordered 12,000 little pieces and we had to spin up a factory real fast. We ended up using farm equipment to shred the foam, an old tractor, a hay grinder, and just once again, just figured it out along the way.
And that launched us into the six figures, you know. So we went from like, I don't know, maybe 10,000, 20,000 a year total in sales to 200 grand in one order to, holy crap, let's keep this factory going. Let's open our own store.
We did six figures in five weeks, which for us was mind-blowing at the time. It was the first time I ever finally paid myself. I was always a waiter up until then. Paying my bills by waiting tables and Lovesac sucked all my money out as any new business does.
So it was just survival until that first store. And then even after that, of course, we opened good ones and bad ones and made every mistake under the sun and continued to live hand to mouth for many, many, many years.
Chase Clymer
Absolutely. Now obviously that great order from Limited Too... By the way, they're from Columbus, Ohio, where I'm from. That's a secret little mall capital of the world here in Columbus.
So with that big order, it pushes you to take that next step.
Was the growth plan from there like, “All right, let's try traditional retail and make stores,”? Or was that just one avenue that you were pursuing while pursuing other avenues?
Shawn Nelson
We honestly were just doing the next thing, I kinda talked about it in my book.
The plan became, “Let's open more stores.” And then 10 days into it, someone came to that first location and said, “Oh my gosh, this is great.” We've got the music bumping. It's good vibes. We spend a lot of money trying to make it look great.
He said, “Who do we talk to about a franchise?” And my cousin gave him my card and said, “Call this guy.” And I ran outside to answer the phone at the bridge outside of the store, “Lovesac Corporation.”
And they want to franchise. I said, “Well, what location are you?” And they said the Salt Lake. I said, “Oh, that's a good one.” And a month later, we're already selling franchises. And that was actually how we funded our growth at that time.
And through a complete reorganization shortly after we raise money through VC. Their big idea was to actually, Chapter 11, the company kind of start over with fewer locations that are all good, no bad ones. It was embarrassing and rough and difficult and whatnot.
Since then, we haven't had any franchise locations, so all our own. I've been through every high and I won a million dollars on TV somewhere in there with Richard Branson. I won the reality show, The Rebel Billionaire in 2005, which helped us raise that VC round.
The highest highs, the lowest lows, and every lesson that comes from each of those.
Chase Clymer
Absolutely. I was not going to let you get off of this show without talking about that kind of investment. That was basically, for those that don’t know, It's like Shark Tank before Shark Tank.
Shawn Nelson
Yeah. Look, Richard Branson, way back in the day, this is 2004-2005, wanted a show that was like The Apprentice, Trump's Apprentice. But better because he's Richard Branson and a different animal.
And so, instead of apprentices, he had all entrepreneurs that were running their own businesses come to compete and risk taking activities. So, besides the classic apprentice style business challenge, we were flying all over the world.
We'd land in Africa, “Okay, you have 48 hours to help this African village come up with an economic recovery plan as a team”, whatever. And then, we're going to go jump off Victoria Falls together and do something wild and crazy or walk between hot air balloons on a plank. All these risky TV worthy events are Richard Branson style.
I mean, what an amazing blessing. It happened one time. I'm the only winner and my runner up was Sarah Blakely, founder of Spanx–who's a good friend today. We joked that she won in life. I won the show. But whatever. It was a great group of people. Learned a lot.
I won a million dollars, but I had two million in debt. You can't ever believe what you see on TV or what you see on Instagram because you never know the backstory. At the time I was handed a check for a million bucks, I had two million in debt having built all these stores out and made all these business mistakes at 24 years old.
What's a million bucks? I don't mean to be a snob about it, but it was hugely beneficial. My point being, you just never know the backstory. You never know the struggles an entrepreneur is going through, and they're all going through it. All of them.
And the problem is you see these glimpses on TV or you see these headlines on social media, what happened with the real high flyers or the real outlying events? And you never really know what's going on behind the scenes. And so it's important to keep yourself grounded.
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Chase Clymer
I'm assuming that you talk a little bit more about that in the book and then some. What would you say are top 3 takeaways if someone was going to sit down and open this up?
Shawn Nelson
Yeah. Look, I read all the business books I can get my hands on. They've been my mentor through life. And so when I sat down to write mine, I wanted to do something different, you know, not something I'd seen somewhere else.
So it's loaded with photographs, it's gritty, it's almost like a coffee table, but it's very different. Sure, you could read it really quickly, but it's the whole story and I'm giving you pieces of it. In fairly vivid detail, I tried to really be honest about the toughest times and really be honest about my challenges.
So it's called Let Me Save You 25 Years: Mistakes, Miracles, and Lessons from the Lovesac Story. What I do is pair each of these 25 little chapters in the story with 25 little lessons learned from that period of time. I call them ‘Shawn-isms’.
I open with “Just do something.” Obviously, the story of me getting off the couch, ironically, at my parents' house to drive down and buy the fabric and make the giant not bean bag. I immediately did it.
I think taking action is something that sometimes is underrated. In this world of planning and execution and identifying your market, blah, blah, blah–by the way, there's action in that–but make something, prototype something, do something, sell something, build something.
So we opened with that. Shaw-nism. In between, I have all kinds of other bits of wisdom, including more flippant ones, like, “Play along the way.”
This company has sucked my whole adult life. From the time I was, I guess 21, to here I am at 47, had I not played along the way, had I always been waiting for that big payout, that big exit, I wouldn't have had a life. So I try to give, besides entrepreneurial advice, life advice somewhere in there.
I wrap with Shawnism #25, “Pair top ambition with infinite patience.” And it's something that's counterintuitive.
I think as entrepreneurs, builders, there is some utility in being ambitious and fast moving and sometimes impatient. But when you're able to pair your top ambitions, like listen, as much as Lovesac has done a lot of things, giant bean bags are the smallest part of our sales mix.
We've built it into other categories. We sell mostly couches now and all these other things, including StealthTechs surround sound. We have a lot more products to come.
But beyond just products, Lovesac will grow into the billions. We'll get into other categories and disrupt them with our really unique point of view on product design, which is making things that are built to last a lifetime and designed to evolve. We call it Designed for Life.
It innovates this organization. What's my point?
My point is, over these many years, I have had forced upon me the need to be patient for, sometimes, decades at a time as things worked out, as we caught up to our P&L, as we grinded through raising capital and burning cash and all those years of figuring things out, finding a market for this amazing couch solution that we invented.
Then finally, hanging on by our fingernails as we grew for probably a decade at like a 40% CAGR and are now approaching a billion in sales that I think have a point of view that will take us into the billions. What's my point? Patience.
I have learned how to pair this driving ambition that I think I have naturally as an entrepreneur–and many of us do– with the ability to…like right now, the furniture category is in a deep morass. Like following COVID, COVID was great for home categories.
As it turns out, everyone stayed at home and biked, which now seems obvious, but at the time was terrifying. I had to close around 200 locations at the time, and those drove 80% of our sales. I just closed them. I was ready for bankruptcy.
I was battening down the hatches, saving every penny, getting ready for mass layoffs, and then it didn't come. It all shifted to the web.
We survived that, and that gives you great… by the way, a hundred other setbacks along the way and you develop this thick skin where like right now, where the furniture categories in this major pullback after that major pull forward.
So what? So we'll be frugal, we'll be careful, meanwhile we'll still invest in new product development, all these things. And meanwhile, all these other companies will just fall away. All the high flyers that we used to get compared to. “Why aren't you more like these guys? They're growing at twice your pace,” “Why aren't you more like these guys?”
They're all gone. They're all dying. They're all zombies in direct consumer land for the most part. The one that will survive will be the weirdo Lovesac that never was a venture capital darling, that never did raise half a billion dollars and have articles written about it in the Wall Street Journal and New York Times.
We'll be the one that survives and is profitable and will go on and grow into the billions because of our patience.
We're not fighting this morass that we're found in. Like overtly, we’re rolling with it and we're using it to our advantage. I think that that is something.
And it's because, like me, I made the decision fairly recently to just keep going. I think there's great power and liberation in that because everyone's seeking some kind of exit, some big exit.
What are you going to do? You can surf for a year, get bored, and then go invest in another thing that may have less of a shot at whatever.
I've decided, and look, it's not for everyone, but my point is, by making that, at least for me, by making that decision, there's no end date. I could go until I'm 80 if they let me. Now what can I build? Now what can we build? And how maddening is it to be caught in an industry downturn?
And the answer is it's not. I've lived through half a dozen of them. Just roll with it. Because I'm not fighting some artificial timeline. I have some goal that I set for myself on a vision board. I'm trying to build something that's lasting and useful and meaningful and that people love and has a great culture and that does good in the world. And for me, anyway, that's very motivating.
Chase Clymer
I think that's fantastic. Not enough entrepreneurs talk about it's a marathon, not a sprint. I think a lot of people get caught up in growth for growth's sake. Hitting these KPIs that make their investors happy.
But does it make your team happy? Does it actually grow the business? Are you oversaturating your customers, your market?
And like you said, there's all these external factors as well. What's going on with the economy, with politics, with global health? And how does that drive the vertical that you're in? Yeah, just sage words.
And I'm excited to check out your book. I'll have one on the way soon.
What came first? Was it the book or the podcast?
Shawn Nelson
Hand in hand. We launched the book early this year. It's become an Amazon bestseller. I think it's… as someone who reads all the business books, I think it is definitely different than any one you've come across. I tried to make it that way, trying to make it useful. It's entertaining as well.
And then the podcast is really where I go deeper. It's not an interview podcast. Because I find myself even on podcasts…It's great. This Lovesac story is great. I'm always happy to tell it.
Instead, what I do is I take really high-profile people. I've had Sarah Blakely, I've had Coach Urban Meyer, Gronkowski, Shaun White the snowboarder, half a dozen different entrepreneurs and big names.
We just go right into one of the Shawnisms because here's the thing: you and I and all the other entrepreneurs out there, we've all learned the same lessons. If we haven't, we're going to. You will. We'll all learn the same things.
I gave him a little name. I gave him a clever moniker. But we go right into those and just go deep on them. And so I can go deeper on the podcast than I can on the book because I'm riffing off of someone else who's learned something similar. And I think it's really unique.
And so Let Me Save You 25 years the podcast is doing great. And I encourage you to check it out. And I appreciate the opportunity to share it.
Chase Clymer
I know, absolutely. We barely scratched the surface with your story and obviously with the book.
But is there anything I didn't ask you about today that you think would resonate with our audience?
Shawn Nelson
I think that we are living in the strangest of times. I have this wonderful gift of having gotten started. We were bootstrapping at Lovesac before that word, I think, was invented. I don't even think it was a word. It came along in the middle 2000s as people were...
Chase Clymer
I think it came with the rise of the internet startup. That whole fail fast and pivot stuff. I don't think it even existed before the 2000s.
Shawn Nelson
That's right. So I'm like this old guy that got started quite young. And our product is easy to understand because it's a giant bean bag. And it's not full of beans, it's full of foam. And it's great. We make great products. And now the couches, of course, are what drives us and they're amazing.
But I think with all of this time now under my belt, under one organization… It's a unique point of view. There are many serial entrepreneurs, I sometimes wished that I was one. Here I am running the same business I started in college.
Chase Clymer
The grass is always greener though, Shawn.
Shawn Nelson
That's right. That would be a good lesson to take away is that I don't go to a networking event or whatever. We’re not instantly jealous of whoever I'm chatting with because, like, “Oh my gosh, yours sounds so much easier than mine, so much better, so much more profitable.”
And by the way, it's not true. It's not true. It's all effing hard. All of it for everyone. And if it's not, it will be. And so it's very important that we avoid that temptation to wish our lot away. I mean, there are times where I think you need to pivot or read the writing on the wall or get out or change direction.
We've changed direction a number of times at Lovesac and I have wanted to quit and just leave it a hundred times, a thousand times, who knows? But somehow, I made that decision and that's a gut call. Look, that's why you're paid the big bucks is because you have the instincts to operate in uncertainty. It's another thing I talk about in the book, an underserved principle.
I think the fundamental attribute of an entrepreneur is the ability to tolerate uncertainty. I think that that's not talked about a lot because it's a weird, kind of abstract thing. I don't even think most entrepreneurs realize it because that's just how they're wired.
Most humans can't tolerate uncertainty in all of its forms. It's why we hate waiting to hear about a result from a medical test. It could be any kind of uncertainty, financial uncertainty especially.
Entrepreneurs, I think, naturally have this ability to tolerate it and to thrive in it. I talk about some of that and why that is and the importance of leaning into that. With it comes intuition, the ability to make decisions with limited information and be confident enough in it to move forward with faith and with vigor.
And I guess, with all those hundred opportunities I had to quit, give up, go do something else, invest somewhere else and probably should have, like if you look at it on paper, we were going through a full reorg, all my equity was wiped out. It was all these things that I've lived through that I should have probably quit. I'm grateful that I didn't, but that's not for everyone.
What's my point? That's why they pay you the big bucks. Entrepreneurs can make a lot of money. Business leaders, CEOs can make a lot of money because you are in a position where you have to make hard decisions. And those decisions, hopefully, will end up more of them right than wrong. And you'll hopefully end up on the right side where you can have good outcomes.
But that's why the good outcomes are there because it's hard. And so just embrace the hardness of it. Just embrace the difficulty of it. There's a reason it's difficult. There's a reason why the outcomes can be massive and huge. It's because it's hard.
Chase Clymer
Great place to end it, Sean. I am so excited that I had you on today. I know I'm going to have you back in the future. This was great.
So if I'm listening and I want to check out the book or check out the podcast, where should I go? What should I do?
Shawn Nelson
Anywhere you get podcasts, Let Me Save You 25 Years and give it a listen. It's worth it. The book is one to share. Anyone you observe in your realm that has ambition that needs a little bit of motivation or something will find it in this book called Let Me Save You 25 Years as well.
Available on Amazon or Lovesac or wherever you want to find it. Appreciate it.
Chase Clymer
Awesome. Thank you so much, Sean.
Shawn Nelson
Great to be with you.
Chase Clymer
We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
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