Transcription
What's your story? [Music] I mean, we bootstrapped this thing from day one, and we need it to be profitable. We didn't have any money to put in; we couldn't afford to lose.
This is Aaron Spivak, and he nearly lost everything launching a business. At first, he thought he was a Founder genius. We were doing 30k a month, 60k a month, 90k a month, but then realized it was just beginner's luck. You know, our first summer, we went to zero. It was a moment of, like, are you guys actually going to do this or not? So what happens when you're staring in the face of failure and your bank account is losing money every day? My co-founder, Leor, called me and he's like, "Hey, we gotta, we gotta shut this business down. Do you give up? We need to prove that there was something here, or do you jump even further into the abyss and go to the ends of the Earth just to find a way to make it work?"
We broke the internet; we went viral on Netflix for doing that for the first time ever. In that moment, I was like, "That's why we storytelling." This is the story of how two guys from Toronto turned four thousand dollars into 48 million dollars in four years. I'm Pat Walls, and this is Starter Story.
Growing up, Aaron was your typical young entrepreneur, hustling and starting just about everything: lemonade stands, party buses, and even starting his own juice shop in Toronto. But everything changed when he met Leor, his eventual business partner. He realized there was a bigger opportunity: starting an online business. I always wanted to really start a business with Lior. I thought he was just super smart; he was like, in that online world. I was opening up two shops and making smoothie recipes, and I actually wanted to sell cricket protein—that grinded-up crickets—and I brought it to Leor, and he's like, "That's disgusting, but have you seen this rise in weighted blankets?" And then we went on Google, and we saw that there were 300,000 people searching for weighted blankets in the coming months.
With enough proof of concept and validation, Aaron and Lior started developing a sample of what they thought to be the perfect weighted blanket. And the wild thing is that they were doing all of this while they were working their current full-time jobs. Like, I was opening my juice shop at 6 a.m. until like 2, 3 o'clock, and then I'd probably work out or eat dinner. Lior was running a software company the same time frame. We'd meet up every day at like seven o'clock at his apartment, and then we'd work till like one, two a.m.
After grinding it out for months, the plan started to fall in place. Aaron and Lior found a new audience to market these weighted blankets to and started running ads on Google. So we literally, with basic images and one sample, put up a pre-order site, and then we bought ads for the most expensive keyword, which was weighted blankets. First sale came in; we made, I think, like 20 bucks. The next day, we made three sales. I remember Leo and I took those three sales, extrapolated over the year, I'm like, "Oh my God, we're gonna buy Ferraris! Like, we're rich! Like, this is it!" We were doing 30k a month, 60k a month, 90k a month. With a little bit of beginner's luck, they were really successful out of the gate. We launched in January; we went from one, three, five sales to 20 sales a day. But they were not ready for what was about to happen. And our first July in Toronto—it's 30 degrees outside, which is the hottest month, month of the year—we went from all those sales to literally zero sales most days, and some days one. Our best day of the month, we maybe had two sales.
Aaron and Lior had made a huge mistake; they didn't forecast their inventory for the summer months, and this was threatening their entire business. They were running out of cash and sitting on hundreds of unsellable inventory. Lior even came to Aaron to shut the business down. You know, our first summer, we went to zero. My co-founder, Leo, called me; he's like, "Hey, we gotta, we gotta shut this business down because I'm not interested in a seasonal business. We have a seasonal product; we're stuck with all this inventory. Let's get rid of it as fast as possible. And you know, you've got juice shops; he had a software business; let's move on." In those moments, it was like looking yourself in the mirror from being like, "Am I actually the real deal? Do I wait? Do I actually know what the hell I'm doing? Like, do people actually like my… like, was this all an accident?"
The fast success started to collapse for Aaron and Lior, and the dark thoughts came pouring in as their bank accounts came closer to zero. So because we were broke, it was one of the most challenging years of our lives, and there was doubt, and there was uncertainty. I mean, we bootstrapped this thing from day one, and we need it to be profitable. We didn't want to—we didn't have any money to put in; we couldn't afford to lose. It was a moment of, like, are you guys actually going to do this or not?
If, even though things were tough, the boys were determined to figure it out. But with money running out, they had to do something quickly, and this is when Aaron had a brilliant idea. We needed to prove that there was something here, that someone wanted to buy this product, and once they got the product that they were happy with it, we weren't just good marketers with shitty product. It got to the point where I was like, "Hey, why don't we just call everyone? Because clearly they were buying it; they're not buying it now. Why are they not buying? Well, just ask."
And that's exactly what they do. In August of 2018, they sent out an email to all of their customers with a Calendly link. Their goal: to talk to every single one of their customers and ask them why they stopped buying the blankets. Every single person said the exact same thing: "Aaron, we love the blanket; it's so amazing; it's, it's incredible, but I'm sweating in places I've never sweat before; it's disgusting, so I'm putting it in my closet, and in the winter, I'll pull it back out."
And this is when Aaron and Leora have the biggest breakthrough in their journey. Instead of launching a product and hoping for the best, they realized the secret to building a business is talking to customers. And it was like a light bulb moment where we're like, "Wait a second, why don't we just make a cooling weighted blanket? Because if it was cooling, you would use it all year round. Like, of course we would! Of course we would!" So we spent all of September flying around, talking to suppliers and sourcing the coolest fabric ever. We ended up having to create our own fabric, which is called the Ice Fabric, which is the coolest fabric in the world. It literally keeps you cold without any water or fans going through your bed. But it was so expensive; it was a hundred thousand dollars to get the first roll of that fabric, and we couldn't afford it.
Aaron and Leor are faced with their biggest challenge yet: they need a boatload of cash to make more blankets, but they're down to their last four thousand dollars. Because they wanted to stay bootstrapped and keep 100% of the business, investors were off the table. So they decide to throw a Hail Mary and try raising a few thousand bucks on Kickstarter. They set a very low goal of 25,000 in hopes it will be enough to keep the business alive and make their next order. When the Kickstarter goes live, something amazing happens: the boys raised over one million dollars in the first 30 days.
So in 2019, we launched the 1.0, the Hush Ice, the world's coolest weighted blanket. It was a top 10 Canadian Kickstarter of all time. And when people ask us like, "What was the hack? How did you reverse engineer Kickstarter? Like, what it was, what was it a specific agency or a video style?" And it's like, "No, I mean, I had 3,000 people that literally told me on the phone that they would buy it if I made it."
Aaron and Leora realized they need to take the momentum from their Kickstarter and push it into something even bigger. They sit down and ask themselves this question: "How can we get these weighted blankets in front of a massive audience?" They come up with a plan: they're gonna weasel their way into one of the biggest shows on television that year. We then went on Canadian hit TV show Dragon's Den, and we went on the show, told our story, and had—in 14 seasons, so 14 years of the show—there's never been a pitch that came on and increased their evaluation on live TV through debate amongst the dragons, and we were the first. We broke the internet; we went viral on Netflix for doing that for the first time ever. It catapulted the brand.
As 2020 comes around, the boys continue to double down on their success, reinvesting every dollar they earn. They pick up the phone again and continue talking to customers, and this gives them a new idea: to create a new product, a pillow. They call thousands of customers and get feedback on what would make the perfect pillow. Then they launch it on their email list and sell 3,000 pillows in 72 hours. And I remember I post about it on LinkedIn; I'm like, "Hey, we just sold out 3,000 pills in 72 hours," and everyone's initial reaction is like, "What was the marketing? What was the email? What was the hype? What was the flow?" And it's like, "Well, no, actually, we're retired last year; we were talking to our customers, literally asking them, 'What pillow you want? Let me build it for you.'"
They realize they have a formula: talk to customers, understand their problems, and then create more products to sell them. So they do the same thing and launch the Hush Ice Blanket 2.0, and then do the same thing again and launch the Hush Ice bed sheets. That year, they do 20 million in sales; we over doubled the business again, heading into '21, where we just said, "It's time to shine. We want big goals; we wanted to do 40 million bucks. We really wanted to sell the business at that time."
With big plans to sell the business, Aaron and Leor need to find a final product to create that will increase their valuation. So they decide to do something that nobody expects: in an industry where it's nearly impossible to make a profit, we have the stupidest idea in the world, which was to launch a mattress in a box. No one makes money selling mattresses in a box, but for whatever reason, we thought we could, and we spent three months calling customers because we were so nervous; the inventory was so expensive. So for the next few months, they, of course, spend all of their time calling up their customers and asking them what would make the perfect mattress. And to their surprise, the biggest pain point was that their current mattresses were super uncomfortable when it came to making love. So we went out; we created a specific Zone technology that has specific springs and specific areas that keep you flat, no matter how you're positioned or how you're leaning up against something. We did a million and a half dollars on launch, which nobody believed that we can do.
Then, in October of 2021, the biggest sleep company in Canada gives them a call; they want to acquire Hush Blankets. We sold the business to the largest sleep company in the country. We went from zero to 48 million in 48 months, and it's been a really fun ride.
Along their journey, Aaron and Leora learned hundreds of lessons, but there's one lesson that stands out, and it's something they didn't realize until they sat down and really looked back: all of these phone calls and customer conversations created a community of super fans—customers that would buy from them forever. And it's actually what makes Hush stand out from the thousands of other companies selling the same products. We opened our first pop-up store, the highest-grossing mall in the country, fourth in all of North America, and Aloe also decided to come to Canada, open the same time as us, and they had 700 people come through their door on opening day; we had 1,500, and who came? Our people! There's a blanket behind you; someone's had a sign their blanket, and they gave it back to us as a souvenir. One of the executives from the company that purchased us was there, watched it happen in real time, and came up to me after; he's like, "I've never, in my 25 years in this industry, would think that someone would ask a guy that sells blankets to sign the blanket." In that moment, I was like, "That's why we storytelled."
Today, customers care more about the people behind a brand than they do about the product itself. Aaron and Leora documented their journey and got customers involved from the start. They weren't just selling blankets and pillows; they were bringing their customers along for the ride, being vulnerable and sharing all the ups and the downs. I think storytelling is the most important thing you can have when you're marketing a brand, and storytelling is the emotions, and it's the magic that people want to feel before they go out and purchase something. Like, if you think about Abercrombie, walking into a mall, there's two shirtless teenagers with six-pack abs and cologne that's like oozing out, and we're all like, "Yeah, that's us," you know, and like, now that story doesn't resonate, but that's who we wanted to be. We wanted to be that guys with the cool hair and the six-pack abs that the girl loves, and that we smell good, and we, we walked into the store, we bought those jeans, and we put them on, and we felt like those guys. That essence, that emotion, that magic is everything when building a brand. People can have that feeling with small brands and small businesses, and I don't know why, I don't know why Founders are, are not leaning into that, perhaps they think it's beneath them, but that's how you build community.
From four thousand dollars in the bank to 48 million dollars, Aaron and Leora have proved that thanks to the internet, anyone can build something huge, as long as you're willing to pick up the phone and tell your story. Anything is possible. What the internet afforded us was guys like me are able to go and compete with the big guys because, previously, you needed to go and knock on the doors of these retailers and beg for them to take your product. They'd put you in a shitty corner, no one would try to have no sales, you have returns, and like, it was the barrier to entry was so big, but now there's a story for the underdog; there's a story for the guys shooting on their cell phone that gets to be that way. I do that to me. [Music]