Brooklinen's CEO Reveals the Biggest Lie in the Sheets Game
Rich Fulop explains how he started a sheets company from nothing and what he saw along the way.
The biggest misconception in the sheets game goes back to Martha Stewart if you ask Rich Fulop, the CEO, and co-founder of Brooklinen, the bedding startup that he co-founded in 2014.
“Thread count. That’s the one metric people cling on to,” Fulop says when I ask him for the Tallest Tale in the Sheets Biz. It’s a stat that’s touted on the packaging of bed sheets in stores everywhere.
“Martha Stewart made it up actually,” he says. “It’s because people need that metric to cling to. It’s not total B.S. — it’s not. But the real value of it is B.S. It is a thing, but a higher thread count doesn’t mean that it’s better.”
If you’re in the market to buy new sheets for the winter, the sweet spot is between 200 and 500 on thread count. Anything too low and it’ll be rough, anything higher than that and it’s probably the result of some creative math. Sometimes companies will weave three low-quality yarns into one, then weave them for a 200 thread count sheet, then multiply the 200 figure by three to market a bed set as 600 thread count.
“There’s really no policing of that,” says Fulop, 32, who runs Brooklinen with his wife Vicki, the co-founder and chief communications officer. If you haven’t guessed already, the business is run out of Brooklyn, New York.
But thread count inflation isn’t even the biggest lie in the sheets game.
The biggest lie in the sheets game is about the actual cost of sheets, a result of hand-offs in the supply chain, one that Brooklinen’s business set out to up-end when Fulop started the company as a school project while at New York University in 2013. Vicki Fulop told Forbes last year that high-end bedding has a 10x markup. Fulop won’t disclose margins for Brooklinen, but says “they’re not as egregious as that, not even close.”
“All of the middlemen that touch the product before it actually gets to the shelf in whatever store drive up the price,” he says. “The incumbent here is not another brand, it’s another channel. It’s double the price, double the price, double the price. That’s the biggest lie. By the time you get there, you’re not getting good value.”
Brooklinen’s direct-to-consumer model started with that Kickstarter effort in 2014, has bypassed the various channels that come between textile plants and consumers. On the revenue side, the company says it closed 2015 with $2.5 million and closed 2016 with more than $25 million. It expects to bring in $60 million in 2017. The company won’t answer questions about any upcoming IPO, saying it’s focused on “owning the bedding category.”
The next step to owning that category is the company’s fourth collection — a diagonal twill bed set marketed as “soft and cozy” for winter — was released this month. Fulop’s working on a spring set now.
“It’s made in Portugal; in Porto and northern Portugal,” Fulop says of the Twill collection. “It’s a really old, small factory — like a family business, essentially. We took a really long time to find them. We were really picky about the materials and having it soft to the touch and ensuring there was responsible manufacturing in place.” (No sheets are made in East Asia because of various accountability issues, but also, none are made in Brooklyn, either.)
Those trips to Portugal are a far cry from Brooklinen’s early days when Fulop would email factories and hope they’d take a chance on the new business. Even then, their first order, included in a shipping container from Israel, was seized at the port, all part of the chaos of starting a new business.
“We were a new importer with no record; someone out of the blue, bringing in a container that’s shared with others, so I had to drive out to some warehouse in Jersey where they are inspecting it. It was interesting, I learned on the fly,” he says.
What Brooklinen’s done in the past few years is an excellent example of disrupting an industry moving forward on its own inertia: Fulop identified a segment of the population that’s underserved in the category, he researched that area to scholarly levels, marketed perfectly to that segment, and put the sales on the internet.
Before Brooklinen released its first collection of percale sheets (the crisp, cool ones you often find in hotels), he spent weeks at big box stores interviewing people in the bedding aisles and outside coffee shops. His entrepreneurial leap was met with some skepticism.
“My parents weren’t too pumped about it,” he recalls. The initial goal on Kickstarter was to sell $50,000 in sheets in the first month. “They questioned if we’d ever sell $50,000, forever.”
But Fulop knew he was onto something. The second-toughest part of those early days was blocking out the haters. (The first was cold-calling textile factories in Israel, Portugal, Canada, Germany, and India)
“There are a lot of naysayers, and you have to be able to believe in what you’re doing and persevere; you just have to feel that you know better,” he says. “Especially when it’s in the early stages.”
He says he knew he was onto a good idea because nobody was trying to sell this product to him in the way he wanted to buy things while researching them online. “Guys particularly like the more accessible solution. I could speak from personal experience on that. I created that so it’s not a surprise. I came into thinking that guys would be low-hanging fruit. I was the market,” he says. It may come as no surprise that one of the male-marketed bedding sets was named the “Hardcore set.”
“People that buy bedding are typically 80-20 female to male, ours is about 50-50, so it’s way more accessible to guys,” Fulop says.
Brooklinen is not alone in disrupting the bedding industry. Parachute started in 2013, is based in LA, and specializes in “high-end bedding." Like Brooklinen, it's focused on building its brand and a community. At first glance, the company adopts similar advertising tactics as Brooklinen, with ads targeted to subway riders and an intuitive website. Parachute’s inventory is already much broader: It has a $68 mug, napkins, dryer balls, and detergent on its menu that’s as large as a Greek diner’s but without the lower price or fried food.
Fulop says no such expansion is in the cards just yet. “The short-term plan for the next six to twelve months is deeper, more bedding, more patterns, more designs, more colors, more collaborations with our materials so we can really solidify ourselves as the bedding experts,” he says. “We want to drill down as deep in this category before we spill over into the next.”
But the near-term focus on bedding doesn’t mean Fulop won’t one day entertain a future for Brooklinen that goes beyond mere beds on Earth.
“There’s going to be someone sleeping on Mars,” he says. “There’s going to be sheets the bed, on the cot, whatever it is. That’s going to happen inevitably. I’d love to be the fabric that’s there.”
Precisely seven days after I first made an account on the Brooklinen website, Rich Fulop emailed me. “Can I Help?” was the subject line.
My name is Rich Fulop and I’m CEO and one of the Founders of Brooklinen. I see you previously checked us out but haven’t purchased just yet so I wanted to see if there’s any way our team can help you find what you’re looking for.
The email goes on to include the phrase, “If you’re ready to jump into bed with us right now…” Of course, this wasn’t the actual Rich Fulop emailing me, but a marketing email (I had been getting Brooklinen emails every few days since signing up and adding a few items to my basket). When I ask Fulop about how much Brooklinen pays attention to data, he says, “We don’t have enough time to talk this, I’m so immersed in this.” The company uses vast amounts of user data on its website — plus any reviews its customers post about the products on its site or surveys they fill out — to not only develop new products but to sell existing ones.
“We know that when we buy ad space, we know what color to put up there based on what people are most prone to buy their first time,” he says. “So we used that data and bring it back.” There are also closely watched statistics on sessions, repeat sessions, time-on-site, conversion rate, basket size, time to repeat visit, buying on a repeat visit, and more.
The data points aside, Fulop remains adamant about his sheets: “The product has to be awesome,” he says. “If you’re an entrepreneur, if you’re launching anything, your product has to be awesome, first and foremost.”
Just don’t lie about thread count.