Fresh out of high school, Shawn Nelson had a crazy idea: a beanbag big enough to cover the whole floor. He drove to the fabric store and got to work on his mom’s sewing machine. He swept a factory floor for cheap foam and sold the bags out of a hand-me-down van with Lovesac spray-painted on the side.

Furniture stores told him nobody would buy it, and he nearly quit a hundred times. Good thing he didn’t. That oversized flop chair is now a $700M-a-year brand.

In today’s issue, I share Shawn’s larger-than-life Lovesac story, along with:

Enjoy getting in the Sac with this story …LG

Shawn Nelson grew up in Holladay, Utah, a straight-A student and a troublemaker. He and his friends spent their teen years trying to outdo each other with stunts, mostly involving cars. They saw how far they could take a dumb idea, and it taught him he could pull off more than he thought.

Ten days after high school graduation, Shawn was sitting on his parents’ couch with a bowl of Cap’n Crunch, watching The Price Is Right. Watching Bob Barker sparked a new dumb idea. How funny would it be to watch TV from a beanbag so big it covered the whole floor?

Without thinking, he turned off the TV, got in his car, and drove to the store to start building.

THE GIANT PILLOW

At JOANN Fabrics, he grabbed six or seven yards of black and tan vinyl off the clearance table. At home, he rolled it out on the floor and drew two giant figure eights. It was the only pattern he knew would make a ball, the same shape as the two panels on a baseball.

He tried sewing it on his mother’s sewing machine, but the heavy vinyl quickly jammed it. A woman in the neighborhood who knew how to sew finished the shell and added a zipper.

Next came the stuffing. He cleared the shelf of beanbag beads at Michaels craft store and barely made a dent. Packing peanuts and old blankets did not work either. Finally, he found his parents' old camping mattresses in the garage and chopped the foam into squares with a paper cutter.

It took about three weeks to stuff. The foam turned it into something closer to a giant pillow than a beanbag, one big enough to fill the bed of a pickup truck.

Shawn and his friends took it to drive-ins, the lake, and camping trips. Everywhere they went, people asked where to get one. Shawn had no plans to make another. It was too much work.

That winter, after one semester at the University of Utah, he left for Taiwan as a missionary. He spent two years knocking on doors, getting turned away, and learning Mandarin well enough to read and write it.

The giant foam-stuff bag sat wrapped in plastic in his parents' garage, collecting dust.

LOVE, PEACE & HIPPIE BAGS

When Shawn returned to college, his friends planned a night at the drive-in. He remembered the bag and asked his neighbor, Dave Underwood, to help drag it out. They hosed it off and became friends.

The oversized bag went back into rotation, and so did the questions. After watching it ride around in the back of a truck, the neighbors talked Shawn into making them one.

If he was going to spend weeks making another bag, he was going to charge for it. That meant starting a business, and a business needed a name.

Giant beanbags reminded him of the 1970s, shag carpet, and lava lamps. So he started playing with words.

Love, peace, hate war.
Hippie bean bag.
Seventies bag.
Love bag.
Love sack.

Shawn laughed. It sounded ridiculous, maybe a little wrong, and that was the appeal.

He paid $25 to register the name, and the giant pillow in his parents’ garage officially became Lovesac.

THE SWEEP & SWAP

Shawn lived in his parents' basement, a 1,000-square-foot room his mother used to teach ballet. The dance floor became his cutting table. He tied a Sharpie to a string and swung it around to draw the figure-eight patterns for each Sac.

The biggest problem was foam. He looked up furniture makers in the Yellow Pages and found one nearby. The owners had piles of scrap foam they offered him for 5 cents a pound if he swept their floor once a week. He took the deal and hauled it home in his 1976 Ford Bronco.

Shawn cut the foam by hand with the paper cutter and stuffed it through a giant vinyl funnel hung from the ceiling. They called it the Funnel of Love. After about five Sacs, the process was so slow he was ready to quit.

Then the factory owners showed him an old grain grinder. If he could fix it, he could use it. He did. A Sac that once took weeks to stuff now took about an hour. Soon he was renting space in the factory, with a Lovesac sign hanging on the building.

His parents gave him their old Dodge van with a dead engine. Shawn and his friends rebuilt it, spray-painted the Lovesac logo on the side, and the business had wheels.

THE FLOP DOWN

Now they needed customers. Shawn started with his fellow students at the University of Utah. He paid $200 for a 10-by-10-foot spot outside the student union, laid out nearly every Sac they had, and played Bob Marley on a boombox.

Students walked over, flopped down, and stayed for hours. By the end of the day, they had sold 15 or 20 Sacs.

Soon they were known as the Lovesac guys. Fraternities and sororities ordered Sacs in their colors, made to order for $200 or $300 each. They started selling at boat shows, car shows, and festivals, moving nine or ten Sacs at a time.

Their biggest sale came through his girlfriend at the time, who worked for Red Bull. The company bought 50 Sacs for its snowboarding events. It was their first real business order.

A BALL AND CHAIN

But none of it paid. Every time Lovesac made a little money, something broke. If it was not the van, it was the grinder, and there was always more fabric to buy. Every dollar went straight back into the business, and then some.

Shawn went to class in the morning, made and delivered Sacs in the afternoon, and waited tables at a Chinese restaurant until 11 at night. The tips paid his rent and tuition. Lovesac took everything else.

“This business kind of dragged me down like a ball and chain,” he said. He thought about closing it a hundred times.

After three years, a way out appeared. Shawn took an internship in Shanghai, putting his Mandarin skills to work and Lovesac on hold. He returned for his final semester of college with a job offer waiting in China. It was his dream job, speaking Chinese and traveling the country for a big company.

Lovesac had never made him a dime. He decided to shut it down, graduate, and go.

One day his mother found him on his hands and knees in the basement, cutting fabric. She knew he could earn far more doing something else.

“Why are you doing this?”

“I just feel like I should.”

But when his customers heard he was closing, they pushed back. They loved their Sacs and did not want him to quit.

So Shawn made himself a deal. One last shot. If it failed, he would close Lovesac and take the job.

If Red Bull would buy 50 Sacs, maybe other companies would too. He put $15,000 to $20,000 on credit cards for a booth at a promotional products trade show in Chicago.

Nobody bought a thing.

He flew home ready to close Lovesac for good.

12,000 LITTLE SACS

A couple of weeks later, Shawn was stuffing a Sac in the back of the furniture factory when his phone rang. He turned off the grinder, brushed foam out of his hair, and answered, “Lovesac Corporation.”

It was Limited Too, a girls' clothing chain with stores across the country. They wanted 12,000 small, fuzzy Sacs for Christmas. They had no idea Lovesac was two college guys and a grain grinder.

"Of course, we're the best not bean bag company in the world. We got you."

But the fabric they wanted cost more than the order would pay. At a fabric show in North Carolina, Shawn found the material, but the seller would not budge on price. Then he noticed Chinese writing on the sample boxes. He could read it. It was the factory's address.

Shawn flew to Shanghai and walked into the fabric mill's office on the 32nd floor, asking for 30,000 yards. They wanted $5 a yard. He needed half that. The sellers discussed their costs in Mandarin, unaware he understood every word. Two or three days later, he had his price. Then he convinced Limited Too to give him a $65,000 deposit.

The fabric arrived from China as 12,000 cut and sewn shells. Shawn had 60 days to fill them. His grinder was too slow, so he bought a Haybuster, a massive farm machine built to shred bales of hay. The first time he drove a forklift into their old warehouse, it fell through the floor with him on it.

The goal for the first day was 500 Sacs. They made 30.

They ran two and sometimes three shifts a day and finished. Shawn was about $50,000 in credit card debt, working 19-hour days, sleeping at the factory, his hands cracked and bleeding. The order had eaten the profit. And now Lovesac had a factory and no customers.

THE MALL EXPERIMENT

Shawn took the Sacs to every big furniture store in the region. Buyers told him nobody wanted a giant beanbag, the name was stupid, and he should remove his logo. The malls turned him down too.

His cousin suggested opening their own store. One of the malls that had rejected them called back. It was a new mall downtown with empty space, and the Winter Olympics were coming to Salt Lake City. They offered him a spot for Christmas and the Olympics. Just don't make us look bad.

Shawn's credit cards were maxed out, so they used his cousin's to buy carpet, paint, and a neon sign. They made the store look like a living room, with a big TV, music, Sacs on the floor, and a plain couch in the corner.

People came in, flopped down, and bought. Ten days after opening, someone asked about buying a franchise. By Christmas Eve, the store was sold out. It did six figures in its first five weeks, and Shawn finally paid himself: $10 an hour, a college graduate with a Mandarin degree selling beanbags at the mall.

THE CORNER COUCH

Shawn began franchising and opening more Lovesac stores, expanding across the U.S. and eventually into Canada and Australia. Most of it was financed with credit cards and loans.

Back in that first store, customers kept asking about the ordinary couch in the corner. Shawn could not sell couches. They were too big and hard to move. But what if a couch could shrink down like a Sac?

He and his crew built rough pieces out of 2-by-4s in the garage and took their drawings to a furniture factory. Two weeks later, the factory showed him an ordinary sectional with a loose slipcover. The owner, who had been making furniture for 40 years, said Shawn's design would never work. A second upholsterer told him the same thing.

STARTING OVER WITH 12

A few years after opening his first store, Shawn competed on Richard Branson's Fox reality show, The Rebel Billionaire. In the finale, on Branson's private island, he won a $1 million investment in Lovesac.

On TV, it looked like Lovesac was taking off. In reality, the company was about $2 million in debt. Shawn handed the check straight to his CFO to pay down part of it.

The win made Lovesac famous and brought in venture capital. But it did not fix the debt. Lovesac had expanded too quickly, and when the next Christmas season came in weak, there was nothing left.

Within a year, the new investors wanted to put Lovesac through Chapter 11 bankruptcy and start over. Shawn was devastated, and the news was in the papers.

He posted an apology online. "To all of those who may be hurt by the actions of LoveSac, I am truly sorry."

Exhausted and embarrassed, he sat at his parents' table and asked his mother if he should walk away. She got emotional, stood up, and told him, “You can quit, or you can keep going.”

He kept going. Lovesac emerged from bankruptcy with about 12 stores and 12 employees in a small office in Stamford, Connecticut. They stopped franchising and closed the stores they should never have opened.

But Shawn had not given up on his couch. After three years and 45 versions, he finally found factories in Asia willing to build what the upholsterers said could not be done. He called it Sactionals.

Instead of one big couch, customers bought seats and sides they could rearrange without tools, with covers they could wash or change. Every piece shipped in a box, and Shawn patented the design.

For years, Lovesac also tried selling rugs, lamps, bowls, and baskets. None of it worked the way it should.

DESIGNED FOR LIFE

When a New York private equity firm bought a majority stake in Lovesac, Shawn went back to school for a master's degree in design strategy at Parsons School of Design.

His final project, tested inside his own stores, turned into a complete rebrand, with new stores, a new website, and a philosophy: Lovesac would only make things built to last a lifetime and designed to change as life changed. More kids, a move, a breakup: add pieces, split them up, swap the covers. He called it Designed for Life.

His own kids learned to walk holding on to the Sactionals.

Shawn cleared out the rugs, lamps, and baskets and doubled down on Sacs and Sactionals. A couch that shipped in boxes was made for selling online. Shawn liked to call it the only couch built for the internet.

THE SAC THAT WOULDN’T QUIT

Lovesac had grown to about $70 million in sales but still was not profitable. Shawn was teaching master’s students at Parsons his formula for success while his own company was running out of money. The private equity firm had nothing left to invest, and without new funding, Lovesac might be done in 30 days. He stood in front of that class feeling like a fraud.

He raised $10 million from new investors, just enough to keep Lovesac alive.

Around the same time, Shawn filmed his life every day for a year and posted it online. It did not make him famous. But when he visited his stores, employees and customers he had never met greeted him like a friend and asked about his kids.

With the new money, Lovesac took its biggest risk yet: TV ads. For years the company had spent almost nothing on advertising. Now people who had never walked past a Lovesac store saw a couch they could rearrange, wash, and ship in boxes. Sales passed $100 million for the first time.

About a year after the bridge round, Lovesac went public on the Nasdaq. But less than two years later, a pandemic closed every one of Lovesac’s 91 showrooms on the same day. Shawn braced for the worst. Instead, customers kept buying from home, and online sales more than tripled. A couch that shipped in boxes was built for exactly that moment.

Lovesac came out of it bigger. It opened showroom after showroom, from 91 to 284. Sales grew from about $100 million to nearly $700 million a year.

Nearly three decades after Shawn made the giant beanbag on his parents’ living room floor, he is still running the company. He has said he could go another 25 years.

And that couch in the corner? It now accounts for 91% of Lovesac’s sales.

Shawn Nelson understood something about building a brand: people remember what they experience, connect with brands that have personality, and buy from people they feel they know. He put those ideas to work long before Lovesac became a household name, and any founder can borrow them.

#1. Let the Product Tell the Story

Shawn didn't stand behind a table explaining why Lovesacs were comfortable. He scattered them across a college lawn, played Bob Marley, and let students flop down. They stayed for hours. By the end of the day, he'd sold 15 or 20 Sacs.

The experience communicated what no sales pitch could.

Action: Find a way for customers to experience your product's value firsthand. A demonstration, free trial, or interactive event can communicate your story faster than explaining it.

#2. Give Your Brand a Personality

Shawn didn't name his company Giant Foam Furniture. He called it Lovesac, inspired by the 1970s, hippie culture, and a little irreverent humor. The name was ridiculous, slightly provocative, and memorable.

The unconventional name matched the unconventional product.

Action: Look at your brand's name, personality, and messaging. Do they reflect what makes your business different? Find ways to express that personality consistently in how you communicate.

#3. Let People Meet the Founder

Shawn filmed his life every day for a year and shared it online. It didn't make him famous, but employees and customers he'd never met began greeting him like a friend and asking about his kids.

Action: Share moments from your life, challenges, decisions, and experiences. You don't need elaborate productions. Give customers and employees opportunities to connect with the person behind your business.

Shawn Nelson started with a beanbag full of chopped-up camping mattresses. The couch that came after it is another crazy story:

45 versions: how many prototypes it took to launch the first Sactional

6 years: how long Lovesac worked on StealthTech, surround sound hidden inside the couch

80,000 hours: the design and engineering time that went into the Sactionals reclining seat

140 patents: issued utility patents Lovesac holds worldwide today

91%: the share of Lovesac’s sales that now come from Sactionals

Not bad for a couch that started as the one in the corner nobody could buy.

First, check out Lovesac Founder & CEO, Shawn Nelson, Speaks at the Conscious Capitalism Summit. I met Shawn while filming him at the Conscious Capitalism CEO Summit, where he gave an energetic, photo-filled presentation that started with Lovesac's origin story and led to his philosophy of "Designed for Life." His humor, energy, and personal stories are on full display, giving you a glimpse of how this brand was built. Watch here:

Next watch How I Went From $0 to $1 BILLION Selling Beanbags. Shawn takes us back to where it all began, from his parents' basement to the original factory and first retail store. Packed with archival footage, early team interviews, and stories of wild decisions and setbacks, it’s a fun and fascinating look at the elements that built Lovesac. Watch here:

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