Lexington-based Tempur Sealy International, Inc., netted $2.75 billion in sales in 2017, employs some 7,000 workers at its 58 manufacturing facilities—35 of them international—and is credited with forever revolutionizing the mattress industry, thanks to its innovative TEMPUR® memory foam material, a true novelty when it was first marketed in the early 1990s.
But the story of how Tempur got its start is decidedly less grandiose—full of dogged marketing calls to retailers, free pillow samples to chiropractors and an initial marketing plan that targeted truck drivers as a key market audience. (In its earliest days, the TEMPUR material was marketed as a mattress topper, rather than a full mattress.)
Tim Webb
Company founder Bobby Trussell was inducted into the Kentucky Entrepreneur Hall of Fame in 2016.
Robert “Bobby” Trussell—Tempur’s founder and former president and CEO who, despite retiring in 2006, continues to serve as the company’s board vice chairman—shared the success of his epic and unexpected pivot from a background in horse racing to becoming CEO of a publicly traded mattress company in a recent podcast of NPR’s “How I Built This” with Guy Raz. “I’m just a little horse guy. So, the mattress thing, we learned it as we went,” said Trussell, a native of Milwaukee, who fell in love with horse racing as a teen and moved to Lexington to work in the industry. “I could hardly spell ‘mattress’ when we started. But I swerved into this extremely exciting product, and the next thing I know, 10 years later, I’m ringing the bell on the New York Stock Exchange.”
In both a recent interview with Business Lexington and in the NPR podcast, Trussell emphasized that luck and persistence were key factors in Tempur’s success. He sees his unexpected business turn as testament to the power of being in the right place at the right time, or perhaps even an answer to a prayer.
A soft market
In the early 1990s, after the failure of a series of Thoroughbred investing and advising businesses during an industry downturn, Trussell found himself nearly a million dollars in debt, with two mortgages and a wife and young children to support. He turned to his faith, started attending Mass daily, prayed for help and vowed to put himself in a headspace where he would say “yes” to any viable business opportunity that came along.
After a few failed ventures—including an ill-fated company that marketed a negative ion air purifier, as well as a 900-number to offer daily horse picks for tracks around the country—Trussell didn’t know which way to turn next, he said. Then, a call came from a Swedish horse chiropractor friend Trussell had met through his various European equine dealings. He wanted Trussell to meet Mikael Magnusson, a Swedish businessman who, with his partner Dag Landvik, had adapted a material initially developed by NASA to absorb G-forces during flight into their own, proprietary memory-foam prototype. Trussell met Magnusson in fall 1991, slept on the product, and immediately sensed he had something special. At a time when spring mattresses were the only thing on the market, Trussell knew the foam had the potential to disrupt the industry.
After bonding over a shared love of horses, Magnusson agreed to give Trussell exclusive North American distribution rights for his product, providing he could sell at least 10,000 mattress toppers in the first year. He sold 70. And yet despite the sluggish early start, Magnusson stuck with Trussell, who had founded Tempur-Pedic to market the product in 1992. “He was like my Swedish alter-ego. We talked every day for 12 years,” Trussell said.
Trussell secured initial funding for his venture mainly through family and friends and former horse industry investors who, he had to assure would make money on this newfangled mattress concept, despite it being outside any of their areas of expertise.
During the early days, Trussell sold equity in the firm to keep things going, even though entrepreneurs are often advised against that approach. “I’d rather have 5 percent of something really big than 51 percent of something small,” he said in the podcast.
Meanwhile, he was relentless with his marketing, focusing at first on getting Tempur pillows into chiropractors’ offices and catalogs for direct sales and then into retail stores. He called the purchaser for Brookstone daily, until after a few months, the guy returned his messages simply to ask Trussell to stop calling. But that was the foothold Trussell needed.
While on the phone, he asked the buyer to be sure to at least take the sample pillow out of its box and try it before he said no. A few minutes later, the rep called back and placed an order for 500 pillows. “That was a huge moment” for the company, Trussell said in the podcast. “Within two weeks we were the hottest-selling new product at Brookstone.”
"Others in the industry looked at us like we were going to be another flash in the pan, like waterbeds. They kept looking at us like that until it got to the point where we were growing so fast that we could have bought any one of the major mattress companies easily.” — David Fogg
That success started the company’s upward trajectory and eventually allowed Tempur to begin aggressively marketing its now full-sized mattresses in the United States and expanding its production facilities, which until that time had still been solely Swedish-based.
“We had a functionally superior product, which really changed the mattress industry,” said David Fogg, one of Trussell’s first investors, who went on to serve as Tempur’s president of sales for 12 years. As Tempur started to grow, “others in the industry looked at us like we were going to be another flash in the pan, like waterbeds,” Fogg said. “They kept looking at us like that until it got to the point where we were growing so fast that we could have bought any one of the major mattress companies easily.” (Tempur, of course, did end up purchasing Sealy in 2012 for $228.6 million.)
Well-supported positioning
Not only did the material itself upend the mattress industry, but Tempur’s marketing and pricing approach did as well. While spring-based mattress companies had traditionally worked with retailers to encourage seasonal sales and discounts, as well as shared, locally driven marketing, Tempur did none of that. Its mattresses retailed for a single set price, hundreds of dollars more than the previous market average. And instead of ads in local daily newspaper, it designed its own national ad campaigns in top-flight publications such as USA Today and the Wall Street Journal—to the tune of some $60 million to $70 million a year.
“I give credit for that approach to my previous partner Mikael Magnusson,” Trussell said. (Magnusson and Landvik sold their shares in the company in 2002, when Tempur was purchased by two private equity companies, before it went public in 2003.) “His view was, when you have something that no one else has, you don’t discount the technology.” Turns out, the higher pricepoint and added cachet that came with it helped fuel the company’s success. “Discounting would have compressed our margins, making it more difficult for us to grow at the rate that we did,” Trussell said.
Early advertisements touted Tempur-Pedic’s space-age technology and therapeutic benefits.
Trussell’s marketing savvy—and willingness to take risks, a skill honed from his years in the horse-racing industry—helped launch Tempur Sealy into the multi-billion-dollar international company it is today. Trussell was inducted into the Kentucky Entrepreneur Hall of Fame in 2016. “Bobby just has a great feel for business, and his ‘superpower’ is understanding product positioning and the customer’s need,” said current Tempur Sealy International CEO and chairman Scott Thompson, who took the helm in 2015.
These days, Trussell, 67, is enjoying semi-retirement with his wife of 32 years, Martha, and his three grown children, son Robbie and daughters Anne and Emmy, both of whom work with him in his new business endeavor, Clean Media. Launched in 2016, the venture matches “family friendly” ads with Christian and other family-focused websites. Trussell is also an active advocate and financial supporter of a national Catholics Come Home outreach campaign—work he sees as a way of paying back that long-ago answered prayer.
In his work with Tempur, something always resonated with Trussell, as much or more than the bottom line: the product’s ability to make a difference in people’s lives. On the podcast, he talked about receiving heartfelt personal notes from customers who credited their Tempur-Pedic mattresses with ending excruciating back and neck pain.
“When I was in the horse business with my live-foal company [before the bust], we were making money. We were arbitraging stallion season and doing really well. But I felt like I wasn’t really helping anyone. I was just helping one rich guy sell something to another rich guy,” Trussell said. “And when I got into the mattress business, I saw that we were really helping people, and it felt amazing.”