Founder Spotlight: Scott Tannen from Boll & Branch

We got the opportunity to talk to Scott Tannen, co-founder and CEO of Boll & Branch. Boll & Branch isn’t your average home goods company. The direct to consumer bedding brand is on a mission to change the world. Every single product is made with sustainability in mind and has been ethically sourced in order to make a difference. Fast Company wrote that there’s a dark underbelly to the global cotton industry and organic fair trade bedsheets company. Boll & Branch is setting out to change that.

Tell us a little bit about Boll & Branch and how it got started and your mission behind it.

So Boll & Branch, we launched in January of 2014. My wife, Missy, and I started the company. Neither one of us have a background in textiles at all and maybe with 20/20 hindsight, that was a bit of our secret weapon, but when we set out to really create the kind of products that we wanted as customers and consumers and couldn’t find, which to be honest, was just predictably really great quality bedding. As we started understanding the textile industry we had sort of always heard what everybody’s heard, that maybe textiles doesn’t have the best reputation in the world as an industry, and we found that that not so great reputation was pretty well earned.

We began to take a step back and said, “Look, if we’re going to go out and create not only a better textile, better bedding product for people, how do we do it in a way that we as parents and just humans can feel really proud of?” And also use what we thought were our skills in terms of building a business to help people that needed opportunity and brought back opportunity and maybe set a kind of example for not only textile companies, but startups of all kinds to say, “Look, if you have the opportunity to start from scratch, what would you do? How would you do it and what would be different as a result?”

That’s great. Yeah, and I think you’re completely right. As a consumer on the other side of it, it’s so hard to tell the difference between different products. What differentiates them? I know for me standing in that aisle is just overwhelming. You’re looking at all these different packages. You can’t really
even feel all of them. Maybe you can just get your finger on one of them and not actually understanding where it’s coming from, what the material is and what makes it different than something else. At Boll & Branch, all your products are ethically sourced and sustainably made. What’s the biggest challenge with sourcing materials to be able to meet such a high standard?

It’s hard, you know? The biggest challenge is that the supply chain that we wanted to support didn’t exist. So we had to go out and build it, and especially when it’s not an industry you’ve used, you’ve grown up in, or have built your career in, the challenge was, how do we find people that have the right amount of experience but aren’t so overly jaded by “the way things have always been done,” that have the appetite, the interest and the passion to really make a fundamental change? I look and there’s tons of other startups out there, even successful ones, and I know where they’re sourcing their product from and they’re simply private labeling it, and look, that’s their choice. I just think that it’s a little bit of a shame that they, like we, had an opportunity to chart a different path and they took the easy route and that easy route leaves not the best trail and sort of continues to help perpetuate a lot of not so great things for people that again, they just need opportunity and they need people to speak for them in a world where they’re marginalized and can’t always speak for themselves.

So going into this, because it’s not an industry that you spent decades in, what were your first steps? How did you go about learning these different materials and even something as basic as who to reach out to first?

Yeah. Google’s your friend in this case and again, our starting point was make a better product and we started where I think everybody would start, which is, you very quickly can figure out who the large scale importers are and the large scale factories in the world. It takes about 10 minutes of research. The problem is is that when we went and met with these folks, we just weren’t satisfied by the level of transparency that existed. Our plan from day one was to fund this business ourselves with our own money out of our own pocket, and in doing that, we wanted to really understand how we were spending our money, with whom we were spending our money, and it was only as we started learning more and asking more questions that we started to realize, there’s a pretty dark underbelly to textiles and it’s one that, you have a lot of big companies that are very, very happy for that underbelly not to be exposed because they rely on it.

They rely on it for the efficiency of their business and they’re not willing to take a step back and rethink things because, at least at the point we were starting, there was no consumer demand for more thoughtful manufacturing or more sustainability in the category, and just like food, a brand like Boll & Branch comes along and now we’ve become one of the largest online retailers of bedding and we’re one of the most well-known brands in the whole category. So what we’re starting to see in a great, great way is that a lot of these established players, five, six years later, are actually starting to look at their own process and try to make improvements. I wish they’d do more, but they’re moving in the right direction because now consumers are demanding it.

Yeah, that’s great. So you’ve talked a little bit about kind of the supply side of building the products and that product using incredible materials, crafted
without compromise, treated with respect, sustainable, and good for the planet. Now on the consumer side, you said there was no demand. How did you go about figuring out who that ideal customer was, what that persona looked like and how to reach that customer?

I’d love to say that it was hugely scientific, but at the end of the day, you have to start and say that … especially when you look at this category, the reason that sustainability, ethics and sort of transparency hasn’t existed in this category is that customers haven’t known to care, right? And so you start with the belief system and that’s where the passion comes in, right? What Missy and I found ourselves becoming very passionate about the impact of the choices that we could make, and so we felt from very beginning that, look, if we’re faced with distinct choices of a better quality product that’s made in a better quality way, that doesn’t cost me anymore, versus status quo, we choose the better, and so our challenge from day one had really been to, let’s present that optionality to customers and ultimately see who latches onto it.

So we didn’t really spend a whole lot of advertising for a year, year and a half, after we launched, and our approach was so different that folks like The Wall Street Journal, The LA Times, Chicago Tribune and loads of other press just started writing about us. They said, “Here’s a company. We all talk about the fast fashion, but here’s people that are taking on fast fashion meets the home,” and a lot of people that believe the things that we believed just started coming to the brand, and it took us 18 to 24 months to simply even get to the point where we were keeping up with demand and then could start spending money on advertising, and at that point, we had already built a reputation. It was a lot of hard work, a lot of good luck and a whole bunch of guessing.

Yeah, and something else less written about but equally as impressive in those 18 to 24 months is, under your leadership, the company has been profitable since 2016 owned and operated as a family business. You recently welcomed L Catterton into the Boll & Branch family, and in that round you raised 100 million dollars as an investment from L Catterton. What would this next round of funding do towards this growth?

Yeah, I mean it’s going to supercharge it obviously, but I think it’s, to me, one of the most profound statements that can be made. I mean, as I’m sure you’re familiar, L Catterton has a tremendous example. Their portfolio companies include Peloton, Restoration Hardware, The Honest Company, brands that they’ve worked with from an early stage and helped become household names, and for a firm like L Catterton to back a business like Boll & Branch, that thinks about measures beyond the bottom line, I think is an enormous statement about where consumer goods is going, where it’s not just important enough how much money you make, how much profit you make and your volume, but really looking at how you’re playing the game, and obviously if we hadn’t been commercially successful, I don’t know how interested they would be, but their ethos and our ethos collide perfectly, and it’s a fantastic marriage where they believe what we do.

It takes money to make sure that everybody in this country and in the world knows Boll & Branch and has an opportunity to purchase Boll & Branch products in whatever place they’re most comfortable purchasing products. So what you’re going to see from us is a very fundamental change over the next several months in terms of how we’re engaging customers. Certainly there won’t be an American that doesn’t understand that they have choices that they can make when they’re buying textile products, when they’re buying bedding products for their home, and it has a great impact on their health, their well-being, and also that of thousands of people, and that’s exciting to me.

So one of the things that you just said that really stands out to me and the audience of this podcast knows all too well, online customer acquisition costs are increasing and I’m sure that for you, as you see increased competition in the home goods space online as well, that you’re even seeing kind of like a hyper drive version of that. Now you just said you want to reach customers in the place that they’re most comfortable learning about Boll & Branch. How do you think about the different channels going forward?

A lot of people talk about digitally native or that kind of thing. I mean we were digital first
because you know, it’s a lot more cost efficient to open a digital storefront than it is a physical storefront, but we still know that people like to buy products. Nobody says, “I’m going to go buy some sheets from an online company. Let’s figure out what online company I’m going to go buy from,” right? That doesn’t exist. The only people that talk that way are in the industry, and so yes, customer acquisition costs are always rising. They’re rising, then they’re falling. I mean they’re up and down. You can make yourself a day trader, but the reality is, I think we’re at a time where values-based businesses, businesses that aren’t just applying a set of values to a brand that’s been around for a couple of years and they say, “Oh, you know, sustainability makes sense. Let’s start highlighting that.”

I think customers are becoming smart enough to really understand who’s doing it right and who are the brands that we trust and those brands that have built that sort of trusted engagement with customers, which we have. I mean, our repeat customer rate is really, really high. Our word-of-mouth is still the strongest element of our marketing mix, and so we certainly see paid customer acquisition costs moving around, but when your business is completely reliant on those for growth and sustainability, it puts you in a spot where you have outside factors that are driving your business, not you as entrepreneurs or as a core team.

So we have a strong product. It’s a product people love, that people want more of in their house, they show great loyalty and again, we just know we need to get in front of them, start the conversation and ultimately what we’ve seen is that once they try and enjoy the product, they do stick around and that also enables us to do a lot more good with the trust that they’ve given us is, we don’t just sort of take the money and throw it in our pocket, we reinvest it back into our business, back into our art, back into these communities and have made a real impact with it.

Yeah, that makes a lot of sense. Now, you’ve had some very quick growth since your launch in 2014 and a few holiday seasons under your belt. What’s the biggest lesson that you’ve learned from your previous holiday seasons and how are you gearing up for this year?

I mean, holidays, it’s a great season, right? Not only are people looking for good deals, but
they’re looking to share the products that they love with the people they care about, and so we’ve consistently found a really unique space over holiday periods where we introduce a lot of
limited time items. It started with our flannel sheets. We’ve made flannel now for a few
years. It is unbelievably popular. There’s a lot of science that’s gone into making what we feel is truly a luxury flannel product, and one of the first insights, I remember Missy hearing it from a customer saying, “Gosh, I wish I could just wear these sheets around with me.” So a couple of years ago, we started doing limited lines of flannel pajamas and things like that at the holiday season. These are at very giftable price points and really effective.

We also love the holidays because it gives us the chance to sort of step out of our core neutral aesthetic and really think about how we’re going to brighten up people’s homes for the holidays and give them items that they can place around their house that makes it more festive, but look, we’re a family business and even, I think, everybody that works here, we do feel like a family, and so when we think about the holidays in general, we’re as focused on our own employees in being able to invest time with their families as we are with our customers, and part of that is, is we know we have products that bring people together and we try to make sure that, as we think through the holiday, which is a great sales period for us, we also think about how we can make sure to continue to impact families everywhere and knowing that every set of sheets we sell generates another order, right, that we have to place, which triggers this whole chain of goodness, from cotton we have to acquire, to factory orders and workers and jobs and things like that, and that’s what drives us at the holidays, is our performance and what happens in our business, which again, we’ve been very lucky, that’s going to trigger a whole lot of good things for a lot of families everywhere.

That’s great, and we’re in the customer service space. So a question that we always like to ask, what’s your favorite customer story?

Well, one of my favorite things to do, I don’t know that our customer service team loves it because they say I tend to go off script too much, but I answer the phones a lot. All the time I answer the phones, emails, as well as during the holiday period. I think Missy and I get into a competition of how many tickets we can close. But my favorite story, this is a great story. When we first launched, an individual gave me a call and he hadn’t known what size his fiance’s bed was. He ordered the wrong size and I just took care of it, just like I would because he was planning on giving her the gift the next day. I said, “Tell you what, I’m going to drop into an Uber, I’m going to send you a set of sheets so it gets there. When you have time, send me the other ones back and we’ll deal with it then. I’m not going to charge you extra. We’re just going to do the right thing and take care of you.” He was, I guess, very taken back by that and the gift went perfectly and he ended up becoming our first investor when we raised money, and it was just totally a random occurrence.

I’ve been on the phone with celebrities that are calling in and I’m taking down their name and I’m like, “Wait a second,” but it’s awesome. I mean, look, as much as we sell sheets, we are in the customer service business. That’s what we do. It’s the most important thing that we do. It’s the most important thing that I do and the opportunity to engage with customers and know that, especially from a customer service standpoint, look, things don’t always go perfectly, and it’s what you do as a business and how you handle things when they don’t go perfectly, that I think really shows the character of a company. Yeah. So it’s a fun time of year. I mean, obviously the phones are off the hook starting in about two, three weeks from now and they don’t stop until January.

Yeah, and it sounds like you guys go all hands on deck. What are your other strategies for temporarily surging up the capacity over the holidays?

Our team is ready and they’re geared up, but it truly is an all hands on deck. Every single
person in our company is trained from a customer service standpoint because again, we talk about that a lot. All of our jobs start with customer service and end with whatever it says on our business card, and so whatever is needed to be done to make sure that our customers and the customers that choose to rely on Boll & Branch for their holiday items or even just a random Tuesday in July. Those people buy two things from us. They’re buying a great product and they’re buying great service, and again, not everything is always 100% in our control, but we are 100% responsible and accountable for everything that happens from the time a customer places the order through the life of that product, and that’s what we’re committed to as a business.

Thanks so much for joining us Scott! To learn more about Boll & Branch, check out bollandbranch.com.