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 middle men that touch the product before it actually gets to the shelf in whatever store,” he says. “The incumbent here is not another brand, it’s another channel,” he says, he says, adding, “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 style, started with that Kickstarter effort in 2014 in 2014, has bypassed the various channels that come between textile plant and consumer. On the revenue side, the company says it closed 2015 with $2.5 million; 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,” Fulop says of the Twill collection. “So it’s made in Porto and northern Portugal. It’s really old, small factory like a family business, essentially. We took a really long time to find them, not because of any reason, we were just really picky about the materials and having it soft to the touch; and responsible manufacturing and all that.” (No sheets are made in East Asia because of various accountability challenges, but none are made in Brooklyn, either.) (No sheets are made in East Asia because of various accountability challenges, but none are made in Brooklyn, either.) The trips to Portugal are a far cry from the early days, when he 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 casual insanity 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 could be best summed up as an execution of the internet-disruption model of business: Find a segment of the population that’s underserved in an area, research that area to scholarly levels, market perfectly to that segment, and put the salesp 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, as well as trendy coffee shops. The 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 he knew he was onto something. The toughest aspect, perhaps after cold-calling and emailing textiles factories in far flung locales (Brooklinen sheets have been made in Israel, Portugal, Canada, Germany, and India) and hoping they’d get a reply, was blocking out “haters,” he says.
“There’s 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, 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. So, it’s no surprise that one of the bedding sets was named the “Hardcore set.”
Yeah. Premium sheets can be hardcore, Brooklinen messaged to dudes on the internet.
“There’s a lot of naysayers, and you have to be able to believe in what you’re doing and persevere.”
“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, which is one way Brooklinen seems to be changing old-school, department-store focused sheets.
But it’s not alone in sort of disrupting bedding via the internet and a focus on brand-building: Parachute, started in 2013, is based in LA and specializes in “high-end bedding,” and like Brooklinen, is focused on building its brand and a community. The company adopts similar advertising tactics as Brooklinen, taking out ads on the subway and sporting a slick 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 jokes, “We don’t have enough time to talk this, I’m so immersed in this.” The company uses vast amounts of user data to 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. Listening to Fulop rattle of scenarios can be a little dizzying, or if you’re a cynic, confirm suspicions that marketing algorithms know your behavior better than you know it yourself.
“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 (percentage of people who visit a site that also buy something), basket size, time to repeat visit, buying on a repeat visit, and more.
Despite the reliance on data, Fulop’s predictably 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, and avoid middle-men.