Bootstrap, Scale, Repeat: Inside Cozy Earth’s Patient Path to Scale

0:00The content that we make is a product. 85 million organic views. It's insane. Tyler Howell's founded Cozy Earth out of a personal desire to conquer Night sweats. His efforts resulted in luxury bamboo bedding and a premium $100 million lifestyle empire. If you want to be showing up in those search results, you have to be seen as the authority on that subject. Tyler is here to reveal how a personal problem can spark your next major business idea and what it takes to future proof your brand using cutting edge AI tools. Tyler, welcome. Thank you so much. It's great to be here. Good to see you. Does this really start with night sweats? Yeah, I mean, for me, it's kind of a combination of two things. One is when I was a kid, I was 11 years old. My mom was like, what do you want for your birthday? And I said, honestly, I want the softest sheets we can find. And she was nice enough to drive me all over town and feel all these different bedding that was out there. He's been as 11-year-old. I was like, there's not any thing different about each one of these. They all kind of feel the same. Maybe one would be like a

1:02different thread count, but it didn't feel like markedly different. I thought if I was going to waste my birthday present on something, I wanted it to be something that really made a difference in my life. And I'd always been that way with clothing and everything. It was either not soft enough for it was scratchy or whatever. And so I'd always been really tactile. And also, when I first got married, my wife was having hot flashes. So I kind of really set the table as I was working with fabrics and looking at different things. I found bamboo. And then I realized that it had all these amazing qualities to it. It was exponentially softer than anything else I'd ever felt. And it felt better temperature when I slept. And so that really kind of got the ball rolling where I thought, hey, if I could, if I could accomplish this for myself and my own family, maybe other people would jump on to. But the entrepreneurial journey is pretty colored. So you start in hard-refloring, you're then into hair extensions. At some point, compress natural gas, come into the mix, body shops. Yep. Auto shop. Yep. What's the through line here? I don't mind change. And I don't

2:02mind figuring out new things. And I like to learn on the fly. And so when I first started, I just took whatever I had. Starting out, I was early on. I was like a sophomore in college still. And so I didn't have a lot of experience resume-wise. But I had some unique talents or abilities. I think one was I learned Mandarin Chinese, which is super valuable. And I said, well, that's my like one thing. Maybe I can use that to my advantage in some way. You know, I was just having conversations with people and they told me that, you know, there was a desire for me to like see if I could find hardwood flooring that was interesting and eco-friendly and well-made. And I was like, well, I could do that. I could speak the language and maybe kind of get further in the supply chain. And so I started doing that. That's how I started to get going with manufacturers and factories. And I realized early on that, you know, it wasn't so cut and dry. Like most of the people who are buying things overseas are importing them or buying them through middlemen and trade companies. And they've got a lot of kind of things that are in the way. And I was like, well, let me cut through that and use that language in my knowledge of the culture and understanding kind of what

3:05they're doing to get further back in the supply chain. Understand how things are made and then make like real change and make things better. And so the through line for me was really just quality craftsmanship and like transparency. Those were things that like kind of connected all of these things that I'd worked in. I worked with another company that was working in hair extensions and I helped them for a little bit just on the business side of things of what they were doing and could kind of observe how they were doing things and see if there's some changes that I wanted to make. And then, you know, 2008 housing crisis came down. Building wasn't really happening. So hardwood flooring wasn't going to happen either. So I had moved over to compress natural gas for cars, which has zero emissions. It's better for the environment. It's probably another through line of stuff that we work on more eco-friendly. And so I just worked on something for a year there trying to see if there's a way we could create something. We did that, but there's a lot of regulatory things around that industry and they were really favoring electric, which has now taken over. Sure. After that, I had no job. Nothing worked there. It was like these are things that kind of look

4:06promising and then didn't really work out. And in that process, I met a mechanic, a really cool blue collar guy that became a good friend of mine named Eric and I said, sure, we'll start out auto shop. So we did. It's still going today. It's got like 10 bays and it's been a great shop, but during that process, I got back to my roots of making products and I started cozier during that period of time. Are you going overseas and sourcing product from manufacturers? Yeah. And that was chapter one of this. Yeah. Chapter one of it was just cutting through all the middlemen to get to the actual finishing factories of each part of the supply chain. And it started in China. Now we're in cozier, this is making in 10 or 12 countries with different products. Well, we go is wherever the best technology is, wherever we can get something unique that's just for us. And it's really bespoke for what we make. So yeah, to get started, it was like how do we go beyond what's kind of everybody else is doing and make something really unique for just us? So your first six years though in the business, it's just you. Yes. You are the founder. Yeah.

5:10To do this for six years, you had to have had some kind of conviction right around what you wanted out of this company. Yeah. What was the mission? You know, for me, I tried the product and I knew it was life changing. I know it sounds like hyperbole, but it really did change my life. I told you, since a kid, I was searching for something that was better and I'd found it. And so for me, it was just trying to figure out how to broadcast that to the masses. I don't know that starting at that time was the perfect time to start as a DSC company, but what it did for me is it created some disciplines. I attended trade shows and I worked like hand-in-hand with interior designers, high-end interior designers who had very exacting specifications of what they wanted to see and it helped me make the product better, refine it and then also refine kind of our business model of how we'd work and kept us disciplined to make a profit and to build a really strong business. My understanding was you were chasing these interior designers all over the US, going to various conferences, pitching them on the product, getting them bought in before scaling up, so to speak.

6:12That's not typical of a go-to-market strategy. You would say like most people would think, let me test broad. Let me see if there's a market for this. Instead, you go very niche, right? You're going after designers making sure they're bought in. What was the thinking around that? Yeah, I think it was necessity, right? There's no VC companies funding my type of company at that time. For me, I was like, let's find a customer who would have a very high standard, help me make the product better and that you would give me their honest opinion about what they had and interior designers were perfect for that. They still are. They're still a part of what we do. They still put our products and houses all over the world. They were just really good for me to work through that and it was quick immediate feedback on what we were doing. Then also just became a microcosm for the actual customer that was going to use our product. They gave us that feedback that we needed early on. What was the first cohort of customers? Do you remember that moment that you thought, I've got the interior designers bought in. I really trust the quality,

7:16the attention to detail around this brand, around this product, around this idea. Now, let me go to market. What did that look like? The interior designers got us to our first real cohort of customers, which was very wealthy people. One of them was Oprah. She used our product and loved it. A lot of other people who could afford to hire interior designers did that too. They actually started to find us online, which was fun. They did it organically. I thought, wow, this is really good. If we could run ads, we could connect more to these types of people, then I think more people will jump in and try it out. When your product lands on Oprah's favorite things, what impact does that actually have to revenue to your audience, to your customer base, to your e-commerce site? What happens? She's one of the biggest influencers ever. Before even social media came around, she validates the product, but she's very authentic. One thing I was skeptical before we got on Oprah's list the first time. I was like, I don't know, maybe they're making money somehow,

8:18or maybe you got to pay someone to get in there, find a certain PR person. No, she uses the products. If she likes them, she'll put them on her list. She doesn't ask for anything in return, which I thought was really cool. She's helped launch a ton of small businesses. But a big part of it is, your product has to stand up. You need to be able to do that, too. The customer service has to be there. You have to have more good ideas. You can't just have one product because it's going to flame out and go down. I think it's a great validation for the product. It helps people feel comfortable to try it. They trust her. I think also, for us, we were able to just use it as a strength and a platform to really get our message out and really push it even further, which took a lot of extra work. You really have to be able to execute just like you would if you got a great celebrity or a great influencer to back it up. You have to execute the next steps to it. How are you capitalizing this business, really, on? Are you bootstrapping? Did you raise a friends of family around? We had a family member that really enjoyed the product that we had. He had

9:20used something similar with a comforter, him and his wife. We'd like to give it as a gift. Do you think there's a business here? I said, well, let me do research. I said, I think so. Then he asked me, he said, how much do you think you're going to need to get this thing started? He started naming off all these numbers and I was like, wow, I mean, he's like, is it 100,000? Is it it? 500 a million? I should have said a million. I should have said more, actually. I wanted to impress him and show him that I had the fortitude to really work it and make it work. I just looked at what the inventory cost on the first buy. I said that number, which is 60 grand. I took a 60 grand check and then went to work. I started going to trade shows. It was very hand-to-hand trying to work it and then I sold out of everything. I think a lot of entrepreneurs who work in an industry like me, like with consumer products, they know what it's like. It's like, if you're successful, great, but then I have to buy more the next time. To get that flywheel going actually takes this very significant amount of capital, which I had to learn the hard way. So during that process, I was like, is it, can I get a little bit more money to buy this next order? A little bit

10:23to buy the next one. Once I started getting it really going, it took many years to do it that way. Six years, like you said, by myself. Then I took a small, a little bit bigger check, about 700K from friends and family. Then we were off to the races. The company started doubling every year. You're north of 100 million. Today, as we said here, you're 16 years in. It's been a remarkable story yet you haven't taken one venture capital dollar. No. Which is incredible. In a testament to the way you've been able to run this business, was there ever a moment that you could have or maybe should have taken a VC round? You know, I think not. I think that it allowed me to build a true brand. And that's what I'm really working on doing. I think a lot of these companies that were funded by VC, they're on a timetable. Sure. And you get really quickly on this conveyor belt where you have to make decisions. And that totally changes your decision making of like urgency of trying to get something done. And for me, it was just like, I was always trying to make the decision what was best for the brand

11:23and the products that we were making. I wasn't like sweating like, hey, I got to return capital to a bunch of investors all the time. And so it really let me build the brand I have. And I actually did recap out my family with like a family office in Utah, which has been great. And that's that group has just been super patient and super supportive of what we're doing in me building the brand and trusting me to kind of get it to where we think we can maybe has potential. For those listening, a recap is a recapitalization of the cap table, meaning that a family office comes in and takes out the existing shareholder and provides them with that ROI, right? But there's a recap. What was best for us was to try to really just focus in the business with a little bit more professional group. And they were happy to do that. And I also wanted to get a nice return for that friends and family as a thank you for what they done. And then bringing in this group, it was just a small little family office at a Utah, but they're very successful and they're investing and they've been really good mentors and helped to me. But what they did is just came in and said, hey, simplify things for us. And then we could just hit the ground running from there. So yeah, it's different than raising like institutional capital where you got a bunch of LPs that

12:29are raising into a fund. And then people, everyone with different kind of desires and needs. And then you got a bunch of money that's in there that needs to be returned very quickly. That was in this case. What else do you think founders should understand about raising, bootstrapping, angel investing, whatever? I mean, there's so many founders listening to your story thinking, you know, I've got a product, I've got a business. Maybe I have early product market fit, but I'm running out of cash, right? Because growth sucks cash. A lot of people don't understand that, but it does. Yes. So what advice would you share with those founders that maybe in your shoes, 16, 15 years ago? Yeah, I think really depends on your personal energy, your ambition, and also like your patients. So it's always, I really do believe like the tortoise always wins the race. I probably have too much patience, but if you have patience and you enjoy what you're doing, you can build something really great. You know, this lifetime's longer than you think in this, in this regard. And so you can really build a great thing. But some people are like, no, I want to get in and get out. And that's

13:31totally fine. That's for a certain type of person. Obviously, if that's your kind of inclination, and that's what you're trying to do and move on to the next thing, then there's actual wisdom in that because, you know, things change. The environment can change around you. But in my case, we're building a brand that has many different product categories, which has been able to diversify ourselves better. And building a brand is actually long term, arguably more valuable in some cases. Because, you know, you're building up brand equity with customers, you have a name, and then you actually really are producing products that people can rely on. How do you decide what product categories to expand into next? We really don't try to put a cap on what we're able to do. We just, we let the customer decide. We get to take a lot of customer feedback. We hear from them. Usually they're making suggestions to us and we love it when they do. Like, that was how we got into a peril. The peril is a big part of our business now. It seems kind of weird to have bedding, bedlinens, bath, and a peril. But for our customers, it was just a natural bridge. They're like, I want to feel like this all day, the way I'm feeling in my bed right now. And so they're like,

14:32can you make, can you do this with clothing? And we're like, for sure, we know how to manufacture and really make amazing fabrics. Let's kind of translate that to every day. And that's kind of where we are today. So they help guide us around. We listen to the customers. We hear what they want to do. And then we say, okay, how far can we take this and how many categories can we get into? One thing you're doing, which has been pretty unique is you've got a series of full-on YouTube series called bedrock challenge, bedrock challenge, which is like the survivor, but on beds. Exactly. Exactly. Like the last person at a bed wins $100,000 or something. Yes. It's fantastic. Yeah. It's wild. For sure. It's a wild premise. It's a wild premise. We're always trying to think outside the box. Okay. So for us, we're like, we have this really amazing product. We need more people to pay attention and feel it and try it. If they try it, we know they're going to love it and they'll be changed forever. And so we're like, how do we get that information out? And we always try to come up with ideas. And we're we had with some meetings at the office. And this idea came up, like, hey, why don't we have a competition with the employees in the office? Who can stay in bed the

15:33longest? There was this trend out on TikTok about bed rotting, which is people just it's kind of a sad commentary, but they're just sitting in bed, doom scrolling on these social media. So we're like, man, that's so depressing. Like, what if we made it more communal and fun? And people could like, you know, compete and like, they could win money, you know, and have them fun times. So we're like, let's kind of flip it on its head and make it more of a fun experience and an activity and show everyone our sense of humor. And so what we did is we said, okay, let's just do this with the office. And we live streamed it with like three people, three or four people in the office. And they're just sitting working in bed all day and people are watching it and they're engaging, they're asking questions. And it gave us a chance to engage with our customer. And then they're like, we want to see more. And so we did we did more. We're on our fourth season, 85 million organic views. Yeah. And it's insane. Like how how well it's been received and we're making it better every season. So there's much more to come, but it's worth checking out. So end of the season, there's a winner who takes home $100,000 check. 100 grand. Yeah. Plus the cost of production,

16:33plus the cost of the contestants, the talent, whatever. Do you look at this as purely a content slash brand awareness initiative? Or do you look at it as a marketing initiative that needs to have some sort of ROI to it? I think to start with, we didn't have an ROI in mind. So we really were saying, Hey, this is a spaghetti at the wall kind of thing. It was much lower budget at that time when we first started. And that's how it suggests doing any of these to see if you get any engagement interaction. And then we started to invest some more. And now we're starting to see that ROI. But we measure it in all kinds of ways. It's not just transactions that come through, although we're our seeing that. But we're we're also trying to get the content awesome. The content that we make is a product. I see it the same ways I see our, you know, loungewear or our activewear or our our bedding. Like it has to be, I always say it has to be 50% better than anything else is out there. And so we're trying to refine the product right now with content. We're not a media company. We're we're slowly becoming one. So we have to make that product good. We have to make

17:37it awesome. And then I think commercializing it's a lot easier once you have a really great product. Just like, just like what the bedlin ends are the, are they a peril? Have you done collaborations with other influencers? If so, have they been effective? Have they been profitable? Yes, thousands of influencers we have worked with thousands of influencers. They've always been awesome ambassadors for our brand. And we love them all. I think big and small, right? And nowadays it's kind of funny because it's been democratized with TikTok. You don't really need a huge following to make an impact. And so what we've been able to see is like, yes, like there are people who don't have big followings that actually drive revenue and can convince people of what they love. But our big thing with influencers is like, we won't work with you unless you love the product. And that goes all the way up to the top celebrities that we've worked with or want to work with us. We'll say, hey, like, like tell us what you think about Cozy Earth. Why do you want to work with us? Because we want us to be authentic. Over a 16 year span from 2010 to where we sit today, marketing has changed a ton. And you've experimented with so many different marketing angles.

18:43What have you learned on the marketing front? And which strategy drives the most return on investment? So if you asked me at the very beginning, I'd say, you know, SEL, right? If you could rank high on Google back in the day, like, that was the first way to go. And so if you could put that money in, you're like, okay, I could capture a certain amount of the addressable market. And then I could grow the business from there. But like you said, every year, every six months, it's changing, you know, of how this all works. And also the pricing to get in is different. So like in 2014, 15, the cost per click was much cheaper than it is today. The cat was much lower than it is today. What I tell everybody is it's similar to the way you build your business. Look at it like an echo chamber. And even if you're doing a small echo for now in PR, or an affiliate, or Instagram, or a small podcast, or a little bit of content that you're producing yourself, the more angles that you can get to create that echo chamber, the better. And it really does start to magnify as you start to grow your business, you can continue to invest in that and

19:43it'll grow. Of course, you know, our business needs digital ads to continue to kind of foster that engine. But starting with digital ads, I wouldn't recommend today because there's a lot of ways to get free exposure on some of these platforms that are really rewarding engaging content. TikTok, YouTube, are two big ones. I mean, reals to an extent. There's definitely a pay to play one way or the other. Like if you're using these products, another are free, even for the user, you either have to watch the content, right? They need the eyeballs or you need to provide it. And so you can do that through ads or you can do it through your own content. I think making your own content, there's a lot of wisdom in doing that today. It can get expensive, but it doesn't have to be, especially when you're first starting out and trying to tell the customer your story. Are you leveraging artificial intelligence as it relates to your marketing efforts today? It's now completely permeated our business, right? I mean, everybody's using it in the whole business from end to end. I would say some of our content is benefiting from AI a little bit. It's getting more so. We're actually just made a higher related to this just recently in AI

20:49that's been very promising for us. But also, we've been trying to rank with search similar to SEO days, right? With chat GPT and Clawed at getting our website and all of our content optimized to show up on these platforms, which is really good too. So it's getting in there. It's still in the early days. I think people are still figuring out exactly how you could make you know, turn it for dollar for dollar. Like we're going to put inputs and get information out that's immediately going to make us money. But it's definitely enriching what we're doing. And it's giving us a lot more to work on. That's for sure. So do you think about leveraging AI as a discovery mechanism, meaning that more so than a pure acquisition play, you can leverage it so that your brand surfaces first in these various tools like people are shopping using chat GPT and asking for an unobiting recommendation. Sure. Right. So are you trying to manipulate what's surfacing there? I mean, if I could manipulate it, I would for sure. But you know, I think, you know, what we're trying

21:52to do is make sure we're optimized. So it's very important for I think everyone understand, if you want to be seen, and this is the same thing in the search engine days, if you want to be showing up in those search results, you have to be seen as the authority on that subject. Right. And so I think to do that, you have to create tons of content, tons of authentic, genuine stuff that actually helps the customer. And you have to have great products and people that agree with you and go across that. And I think AI is doing that really well. It's doing it better than search ever did. There is some buying happening, some conversion happening through the AI. We're seeing it more and more. And you have to assume it's going to get very, you know, very prolific. Okay. So that's the acquisition side. What about the retention side? So leveraging AI for things like customer service, customer lifecycle management, anything there on the retention side of the business that's been helpful. Yeah. You know, some retention companies that we're using and partnering with, they're already implementing AI into what they do to help us get better insights into our data. But one thing that's really helped me recently is just, you know, understand how we orient the

22:56company. Remember, we're across a lot of different products. And but you have to be oriented with some kind of flagship and how you do how you kind of proceed in what you're going to what you think you're going to grow and scale in. And I can tell you like just using AI for me personally, as the CEO and founder, it's really helped me look deep into our data, understand how our customers cross pollinate between categories, which ones could result in the most lifetime value. And then where thereby where the strategy and overall kind of, you know, orientation of the company should be and what direction everyone should be rowing. And so I wouldn't have been able to do that two or three years ago to the extent and with the confidence that I have today. That's interesting. So following the customer and looking at how they behave across these various categories within our company. Wow. Yeah. What about with respect to pulling in customer feedback online, say, through Reddit or elsewhere, what people are saying online about Cozier's are you able to use these tools to pull in feedback that way that's informative? Yeah, we have done that to an extent.

23:57We like to be a part of the conversation too. So we can see mentions and we can participate in the conversation. It helps build our community. And it helps us kind of, you know, empathize and let the customer know that we're hearing them. It's helped us with customer service for sure. I know that they've been able to find things that way as well. Right now, I think the theme in our company has been digging into our own data and seeing what we can find within ours because we have, you know, over 11 million customers in our database. And we're able to kind of, we're able to see a lot of cool information. Good nuggets in there that we that we otherwise wouldn't have been able to find. You're purely on the channel at this point. So what have you learned from storefronts? I wouldn't say it's a totally different business, but it's a different system. And we've had to learn it, but we've been successful so far, which I'm so excited about. And I laugh, I say we have this crackpot teams, just the people at Cozier, like, Hey, let's let's roll up our sleeves and try to figure this out and see how we can get our product in the in the hands of customers. Our product is a touch and feel product. So the fact that we've had this much success, like, like predominantly

25:00D to C is pretty amazing. And I saw some surveys too that showed that like, you know, most people even with betting would prefer to feel in person before they buy it. And so I said, well, we have to get it in front of them, but how what's the best form factor for that? So these stores for a chance for us to really test if that could even work. And what we've seen has been super promising. It's been making us want to open a lot more stores. But at the same time, you know, building that world of Cozier and like letting them feel what it's like to actually experience, you know, what our vision is for that world, right? I didn't know a lot going in, but I've learned that it's probably the best way to show our customers the product and really get them comfortable with the brand. And it's also a great way for us to build our community. How do you look at the risk when you're thinking about opening a store? I mean, there's a lot of thought and strategy and obviously finance that goes into these decisions. It really depends on the attitude and intention of your investors and yourself, right? So for me, I'm all about investing more

26:04in our customers and our company. And so when you look at it, you're like, well, we're doing well, we're making a profit. We have choices to make, you know, we can return it to ourselves, we can put it into the business. And so when we look around, we're like, well, where's the white space for our company to be able to really extend and grow into more customers and get more people to face us? So one way to do that's advertising, right? I mean, that's setting up a billboard or sending out a mailer or finding someone on a meta or on Google. Those are all ways for us to get outside of our comfort zone and invest and see them to see the product. I see the store is the same thing. It's a form of advertising, first and foremost, but economically, it needs to be able to stand on its own two feet. It's not just like a store that, hey, this is the same price as a billboard or similar. And if we lose a little bit of money, it's okay. I think for us, they have to be successful and stand on their own two feet so we can continue to invest in them. And so we can continue to invest into the products. So each and every store has to be profitable. You can't

27:04have one that's a lost leader. Exactly. Looking back on yourself as an entrepreneur, so over the 16 years, it's an incredible story. But what I find interesting is that it's a very different scale set to start something that it is to scale something, that it is to optimize something. And you've been through it all. I mean, you're north of $100 million at this point in revenue and you're still growing and you're still expanding. So what have you learned about yourself as a founder as an operator? And are you the best person to take the business to the next chapter? I'm a student of other companies. So I really try to look at how other companies grow. And I not just ones that are in D to C, I try to look at, you know, Berkshire Hathaway, or I try to look at American Express or these huge companies that like over time, like how do they iterate? How do they grow? Who stayed with them? I think that if the founder is focused, one, like hyper extremely

28:06focused on the company and has a ton of passion for it, there's, and then has enough humility to get the right team members around them to take over whatever they can, right, to just make it better than I think it's in no better hand than the founder's hand. But I think if the founder is using it as a project for like self-aggrandizement, like on one hand, they're trying to build a business and they're also trying to become an influencer or a huge star. Or if like, they're trying to just make a bunch of money to achieve a certain lifestyle. And then yeah, we're going to have this business kind of on the side. The business always suffers. The people who work there always suffer. And typically it doesn't usually really end up well. So it really depends on your personal kind of compass of where you're at, what you're oriented on. And for me, I'm like all in on cozy. I love this company. I love the products that we make. I love hearing from the customers, the experience that they're having. And I know there's so much more potential. And so for me, the big thing is to kind of get out of the way. And now that the company and everything's kind of going and really focus on

29:10the brand, the product and the vision. And then if I can get the right people in the right spots, our team is insane. They're amazing. They elite. I can just trust them to do their job. And then we can all kind of go together. And hopefully that energy kind of carries through. It's an awesome story, man. Thank you so much. The conviction has certainly paid off. Congrats. Thank you. Thanks for being here. It's been a pleasure. I really appreciate it. And thank you for watching. Subscribe and tune every week for brand new episodes. And we'll catch you next time.