This year, one millennial with a plethora of ideas parlayed a pun into a full-blown product company. Colin McIntosh’s Sheets & Giggles bedding consists of sustainably made, 400-thread count sateen sheets that are static-free, moisture-wicking, use no insecticides or pesticides and are half the cost of its store-bought competition. McIntosh is also part of a new wave of millennial entrepreneurs pushing conscious commerce, making eucalyptus his fabric of choice.
McIntosh moved to Colorado in 2015 to participate in Techstars Boulder as part of the founding team of Revolar, a wearable, emergency alert device company, and was let go last fall. Within a few months, he was working full-time on Sheets & Giggles; this May, the company’s crowdfunding campaign collected eight times its goal, reaching $215,000 in investment.
COLORADOBIZ: WHAT INSPIRED YOUR NEW BUSINESS?
Colin McIntosh: For starters, I’ve always wanted to start a business. People who know me would say I come up with a new business plan every two to three weeks. Also, I’m a serial URL buyer. I probably own a dozen domains, and I would say at least half of them are pun-based.
I was watching this movie with my girlfriend over a year ago now, in which the main character buys a bunch of bedsheets and goes around to a retirement community to sell the sheets. I was still at Revolar at the time, and things were going well.
CB: WHY, OF ALL THE PREVIOUS IDEAS YOU HAD, DID SHEETS & GIGGLES STICK?
CM: This is definitely something I think I can carve a niche in. I think a lot of entrepreneurs and founders, especially the ones I know in the Colorado area, tend to get really obsessed with a problem and a product.
I think one of the things I learned going through Techstars (with Revolar) is the best businesses tend to have really strong business models from day one. Founders don’t stop to think about product-market fit when they’re building grand solutions for some problem. Before building anything, everyone should ask, ‘Is this something people are willing to pay for?’ and build a sustainable business model around their idea.
I’m different from a founder who is obsessed with a particular societal problem. I’m more obsessed with the business and customers.
[With] Sheets & Giggles, you’ve got a large existing commodities market with zero brand differentiation across the main players. Plus, it is a highly traditional physical retail product, and because I’ve worked with every major retailer in the country at some capacity, I know the types of margins retailers are taking from companies like S&G. Retailers are made up of great people, but they just artificially raise prices across every product type, and they generally don’t have great shopping experience.
CB: TALK ABOUT YOUR OBSERVATIONS ABOUT THE CHANGING RETAIL LANDSCAPE?
CM: Nobody is blind to it at this point. Physical retail is less than what it used to be. It’s still a powerhouse, but it depends on the category.
I became really inspired by (e-commerce mattress companies) Casper and Purple because they came in with the mentality that we can sell better products for better prices without retail margins, give people a good customer experience, unlimited returns and full confidence in their products.
There are some other sheet startups that have raised some money, and I thought I could do it better and differentiate with the material and ideology behind my sheets.
Plus, because we don’t mess with retail, you’ll save about half of what a store would normally charge for this type of high-quality bedding.
CB: YOU DECIDED DECIDED TO FOLLOW SOME INITIAL FUNDRAISING WITH WHAT BECAME A WILDLY SUCCESSFUL CROWDFUNDING CAMPAIGN IN MAY. TELL US ABOUT IT.
CM: Leading up to the campaign, preparation is everything. We had 10 weeks of hard-core preparation. What we did was say, ‘Ok, before we spend any large amounts of money on this, we need to build a functional website, build some landing pages, collect emails, run some Facebook ads, test click-through and conversion rates, email capture for qualified leads and see what kind of social response we get. Within two weeks, we had conversion rates literally seven to eight times as high as even the top 10 percent rate you would normally find across all industries. The average conversion rate for an email capture campaign is 2.6 percent and we had conversion rates almost 20 times that.
That was our first indicator that we were really onto something – our brand voice, our customer engagement, the product itself and the sustainability angle.
The way the math works for a crowdfunding campaign, if you want to make $100,000, then 30 percent, or one-third of the funds need to come in the first 72 hours, and that held almost exactly true for us.
CB: HOW DID YOU CELEBRATE THAT SUCCESS?
CM: As a founder, you’re always looking for validation that you’re onto something, so that first day, I felt like I could exhale. My girlfriend made me pop a bottle of champagne. It’s important to appreciate milestones.
CB: WHAT'S AHEAD?
CM: I’m traveling to India in June to meet with manufacturers. We’re warehousing in Broomfield, and all goods ship before pre-orders go out to customers. June is really all about production and shipping. In July, we’ll get everything in the U.S., and August is when we’ll ship pre-orders. We’re looking at adding new product lines, other items built in eucalyptus and maybe a bamboo line.
This is a $10 billion commodities market in the U.S. alone. I would love to build a billion-dollar company that does something different in a pretty stale, boring industry.
CB: WE KNOW IT AIN'T THE SHEETS, SO WHAT'S CURRENTLY KEEPING YOU UP AT NIGHT?
CM: I think with physical product startups, there’s a special type of worry. Specifically, I mean running out of inventory. It’s a brutal problem to have. Production lines are moving on-pace to ship all pre-orders on time. But depending on the market’s reaction to this, what it looks like in September or October, we could run out of inventory before the holiday, and that can’t happen.