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October 25, 2019

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Founder Spotlight: Matt Hayes of Leesa

We are pleased to welcome Matt Hayes, VP of eCommerce and one of the founders of Leesa. Leesa has quickly become one of the top direct to consumer mattress brands in the industry. The company is not only promoting better sleep through high quality mattresses, they're also making a huge difference. Since its founding, Leesa has donated over 35,000 mattresses to organizations and provided those in need with a safe place to rest.

Tell us a little bit about yourself and a little bit about Leesa got started, and the mission behind it.

So I'm one of the founding team members at Leesa. I've been there since day one. 2014 is when we launched and Leesa is a tremendous company. We're a direct consumer premium mattress brand with a very strong social mission. And so the origin story of Leesa is we actually were born out of an innovation agency and kind of a startup studio of which I was a partner called, Brand Journey. Brand Journey really focused on helping big companies bring new ideas just to life. And we saw this opportunity as one that we could really tackle for ourselves. You know, we were looking at a lot of different industries and we saw mattress spaces being tired, somewhat sleazy, someone outdated. And we thought that we could introduce a better product and really just a way better consumer experience to what had traditionally been out there. So we partnered with a guy named Jamie Diamonstein, who came from the traditional retail mattress industry.

He really knew how to build a mattress, construct it, he knew the industry. And so he brought that very unique expertise and a brand journey partners brought a unique expertise around building an online presence. And together we built the Leesa brand over the course of about six months and we launched it in late 2014 and kind of the rest is history. I mean it took off pretty tremendously, but I think the one big differentiating factor is from day one we really set out to build a different kind of company. So we built our social mission right into the core DNA of the company, which is that we donate one mattress for every 10 that we sell. And five years later now we're a certified B corporation with the likes of Toms and Patagonia and Allbirds. And we're really focused on helping at risk children. That's kind of our narrow focus now. And to date we've donated over 35,000 mattresses to people in need.

Now, Leesa is one of the top disrupters for mattress brands that are out there. What are some of the challenges with scaling as the company has grown so rapidly? And what advice would you give to other brands that are going through this journey?

I mean we grew incredibly quickly. I mean, and obviously with that comes a lot of challenges. So, when we first went out into market and early 2015, late 14, there was a handful of us. Casper was out there, Tuft & Needle were out there. Fast forward to today and at last count there was probably 175 direct to consumer online brands. So firstly that competition has increased significantly. Secondly, it's a really compelling factor and it's very topical, is the cost of acquiring online customers
has risen tremendously. I mean, it is probably four or five X what it was when we first launched the business. And so we've had to grapple with this notion of launching as a pure play direct to consumer brand and then really building a team and an infrastructure and a playbook that really embraces omni-channel. So wholesale and retail as well.

So I'd really say as my advice to someone who's thinking about launching a DTC brand in 2019 or 2020, is you really need to think about a diversified channel strategy from day one. I really believe that almost no one, unless you're Allbirds or Away, can survive as a pure play direct consumer brand. And even those guys are making their push into retail now. And so I really think you need to focus on great brand storytelling and a great differentiated product... The story. And then building community and content and kind of organic levers for growth. Because the days of using purely performance marketing to build a brand I think are gone. So you've got to be more thoughtful about how you do it. 

Yeah, absolutely. Were seeing Away expand into new product, new product categories outside of just their mainstream suitcase, Allbirds opening up brick and mortar retail locations that they own fully own and are branded as Allbirds. How did Leesa think about the different options in terms of partnering with more traditional brick and mortar retailers, doing pop ups or opening up its own locations?

Yeah, I mean, I think in the early days we went down the route of opening a few of our own stores and really experimenting with pop up retail, both of which were very informative and to our larger strategy. So I think that testing with pop ups or there's a lot of these kind of brand in a box business models that are popping up that allow you to like share retail space with other DTC brands. I think those are great ways to dip your toe into larger wholesale partnerships and really figure out
merchandising in a store, what the economics look like. And so for us, we were thinking about it not only from the logistics side but also kind of the economics and how it breaks down relative to what we had understood. Our direct to consumer economics being the cost of acquiring a customer online was call it $100 and we're giving that same $100 away to a wholesale partnership. At that point it really becomes impressions or eyeballs and we're looking to get exposure in a bunch of different channels.

Yeah, that makes a lot of sense. Now as you've mentioned, there's now countless companies and competition in the direct to consumer mattress business. What strategies or tactics have you used to really differentiate Leesa versus these seemingly unlimited companies now?

Yeah, I mean a few things. I think for one, our social impact program, it's very authentic, it's impactful. And from day one, I think that's been a differentiator in the mattress space that is
persisted. Secondly, it's really around our product design and we designed some core signature elements into our mattress. Our iconic four Leesa stripes, which started on the mattress itself is kind of permeated across all of three mattresses. It permeates our packaging and our store design and our collateral. And so it's to the point where now when people see the four stripes they think of Leesa. And so I think having some level of a signature element that is a recurring theme and thread throughout all of your customer touch points is important to stand out. And I think in the last five years we've done a lot of fun, cool, creative and diverse marketing activations that really get people's attention.

I mean, we've obviously done a lot of performance marketing and been in all the channels that you would expect, but we've had great celebrity ambassadors like Michael Phelps and Damon
John and Aly Raisman. We do great organic, authentic endorsements with podcasts like Comedy Bang Bang. We play a lot in the comedy space and we really let those guys kind of go wild with their endorsement and their particular take on our product. We partner with guys like Parcel Sports who are also tremendous and product endorsement as well. And then a lot of experiential marketing, whether it's speaker series in our Soho store, pop up shops, out of home. I think there's a lot of ways experientially to engage customers, and I think it's important for DTC brands to start to embrace some of those tactics.

Customers oftentimes are wary of buying a large ticket item site unseen. I know you've partnered with West Elm so people can really experience Leesa in person. Tell me about that and how else do you create consumer trust and continue to drive your online or digital conversions?

Yeah, so I think fairly early on we recognize that there's a lot of consumers that are still going to want to try a $1,000 product before they buy it sight unseen. And so that's when we really started to look at how do we get a physical footprint and make it economically viable. And so we looked at partnerships, we looked at our own owned retail and West Elm was really a great partnership for us. I think first and foremost we treat it very much like a brand partnership, less like a wholesale arrangement. And so we're their exclusive mattress provider, we're in about 100 of their West Elm stores and we're online with them. But we do co-marketing together, we do events, we donate mattresses together.

And so it's really the basis of a lot of core shared values with core design, aesthetic, shared customer demographics. And we really treat it like a partnership, and that's why it's so successful
for us. And then I think the online translation of that is we make it really easy to buy online and we'd give you a 100 night trial. We allow free returns, we have optional mattress removal. And so from a customer experience perspective, we're doing all that we can to ease your fears and say if you do buy online, you can try it for 100 nights, you can return it if you don't love it. And then we're validating with a lot of third party validation, whether it's through thousands of customer reviews we get and we amplify on paid social.

We leverage great partnerships with some trusted affiliates like Wirecutter, like Business Insider. Those are unbiased properties that rank the Leesa mattress number one out of like 40 that they test. And so that's great third party proof for our customers. And then our customers are created as
ambassadors. I mean our refer a friend program encourages people to share and a lot of times they love it so much that they, they share it without even using the program. Word of mouth is huge for us and it, it always has been. And so I think all of those things help us create trust.

That's so great to be able to hear. And really interesting to think about how you guys think through all of the different components from the social proof to the press coverage, which is earned. It's not something that you can just throw money at all the way through to your guarantee of making sure that your customers are happy and kind of pulling the risk out of the purchase. So we're in the customer service business. So a question that we always like to ask, what's your favorite customer stories since Leesa started?

I mean there's so many and I actually pulled our CX team to get their take on it. We have one that's great, and it happened fairly recently. So we have this incredibly cozy Leesa blanket that we
used to sell, but we recently discontinued it about a year ago. And one of our customers, this guy has one and he absolutely adores it. He travels a lot for work. He brings his Leesa blanket with him on the road, takes it to hotels. And at one point it was either taken or stolen from his hotel room and he was just devastated. So his wife actually wrote to us and our CX team recently, and she was like, is there any way that you guys can send a replacement blanket? So our CX team basically scoured our entire headquarters office and found one last remaining Leesa blanket.

So we boxed it up, we sent it to him for his birthday and his wife actually filmed his reaction, which was amazing. He was just thrilled. And so they sent really the sweetest note to our CEO and head of our CX team and I'll read it for you. It says, thank you so much for sending the last ever Leesa blanket. You've provided us such exceptional customer service and exceeded our expectations, the quality of the blanket, your service and your determination to satisfy your customers is second to none. So I thought that that was a great story and it just goes to show you how important our CX team is to the lifeblood of our company.

Yeah. And those are the stories where you know you're really creating brand evangelists, folks who are going out of their way to tell their story about engaging with the brand and really building longterm relationships.

 If you would like to learn more about Leesa mattress, you can check out your closest West Elm store or head over to leesa.com. With over 13,000 five star reviews, Business Insider called it the best mattress that you can buy online, which is quite the testament. If that's not enough, over at the Wirecutter, the Leesa hybrid was a crowd pleaser. The staffers wrote about how they just loved this product. Thanks, Matt!

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