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Hey there, JT, Co-founder of Tuft & Needle. To clarify, Daehee and I started with $6k in 2012 and have raised no investments to date. We took a loan in 2016 of

Hey there, JT, Co-founder of Tuft & Needle. To clarify, Daehee and I started with $6k in 2012 and have raised no investments to date. We took a loan in 2016 of $500k for our SF retail store (that year our revenues were around $40mm) but did not use it and paid it right back. To be honest, we were wanting to learn how to leverage debt for growth but immediately decided that it wasn't needed and didn't make sense for us at that time. We've been fully unfunded and profitable every year.

aero- 8y ago
Hey JT, That seems incredible. I guess I just don't understand how you could custom brand and design a physical product, find manufacturers and fulfill their MOQ's, store all of your product and market it for $6,000. Either way, I understand you approached this sector with a technology first mindset, and it's been a really impressive business model. I've approached similar D2C products in different markets using your method but the initial costs just to get a product to market before advertising is usually close to about 10 times higher.
- jtmarino 8y ago
  Thx! We were definitely a special circumstance. We found a tiny mom & pop manufacturer who had the equipment and had capacity. We negotiated 30 net terms (this was hard to get) allowing us to fund with negative working capital... customers buy the product, we paid mfgt 30 days later. My co-founder and I also have engineering/design/product backgrounds so we didn't need to hire anyone to build our initial dotcom or product. We ran it all for the first 1.5yrs before we could afford to hire our first customer service team member in 2014. Marketing expense was also kept to almost zero, branded search primarily, until around 2014.. we had to rely on word of mouth/organic. This forced us to build in such a way to keep costs low while ratcheting up the value prop which has translated into an efficient process we still have now. Our spend of advertising as a % of net rev is estimated at less than half of our next heavily funded competitor.

aero- 8y ago

Hey JT, That seems incredible. I guess I just don't understand how you could custom brand and design a physical product, find manufacturers and fulfill their MOQ's, store all of your product and market it for $6,000. Either way, I understand you approached this sector with a technology first mindset, and it's been a really impressive business model. I've approached similar D2C products in different markets using your method but the initial costs just to get a product to market before advertising is usually close to about 10 times higher.

jtmarino 8y ago
Thx! We were definitely a special circumstance. We found a tiny mom & pop manufacturer who had the equipment and had capacity. We negotiated 30 net terms (this was hard to get) allowing us to fund with negative working capital... customers buy the product, we paid mfgt 30 days later. My co-founder and I also have engineering/design/product backgrounds so we didn't need to hire anyone to build our initial dotcom or product. We ran it all for the first 1.5yrs before we could afford to hire our first customer service team member in 2014. Marketing expense was also kept to almost zero, branded search primarily, until around 2014.. we had to rely on word of mouth/organic. This forced us to build in such a way to keep costs low while ratcheting up the value prop which has translated into an efficient process we still have now. Our spend of advertising as a % of net rev is estimated at less than half of our next heavily funded competitor.