Fame & Fortune: LoveSac founder Shawn Nelson
His appearance on F-O-X tops his M-B-A -- Page 2

Bankrate: How did the business take off from there?

Shawn Nelson: We were doing boat shows, trade shows and then we were discovered by the Limited Too stores. ... who didn't know who we were and ordered 12,000 LoveSacs. I took the order and basically said, "Of course we can do it, we're the best at what we do." Then we built a factory on credit cards and located a source of the fabric I wanted, using my contacts in China. In 2001, after finishing that order, I was 21 years old and $55,000 in debt. I had barely broken even on the Limited order, and so I needed a way to pay that off. I didn't have any more customers because I wasn't out there selling -- I was out there making Sacs, so my partners and I decided to open a retail store, and one month into it it brought in six figures, and we started opening up franchises. It just exploded.

Bankrate: Billionaire Richard Branson and the crew of his reality show also discovered you. ...

Shawn Nelson: Yeah, the crew of "The Rebel Billionaire" came here to Salt Lake and this was their first stop out of L.A. And while they were here, they went to the University of Utah asking about local, young crazy entrepreneurs, and people said call the LoveSac guy, and they came and found me at the mall, at one of my stores. I was on a plane to London soon after and out of touch with my wife and company for two months.

Bankrate: You went on to win the show. What was the grand prize after those crazy skydiving dares?

Shawn Nelson: I took home a million dollars which went right back into the company, and I was president of Virgin Worldwide for three months, which was amazing. I was in London, New York, Australia and basically all over the place.

Bankrate: What else? What was the biggest lesson that you never would have gotten out of business school?

Shawn Nelson: I got to know the CEOs of all the divisions of Virgin, from the airline, to the mega stores, to the record label. I learned a lot. It was neat to see a mature business and work backward -- to see how it got there. Basically, it was an enormous paid internship with the keys to the kingdom, it was a lot of fun, and the experience taught me patience. Their corporate office isn't that big, they try to run very lean, and I learned that if you're patient, you're able to achieve a lot. For Richard, it took 40 years. And I'm still in touch with Richard. ... still talk to him weekly; he's a great mentor. And really the exposure from the show was amazing for my company. When the show aired in November, hits on our Web site reached 150 per second, and traffic is nearly double that now.

Bankrate: So what are the next moves for LoveSac?

Shawn Nelson: They're as ambitious as Virgin's ever were. We're in the business of building the biggest hard-core leisure brand in the world. We're here to build a brand, not to build bags, but a lifestyle. We make changeable furniture, where you can change it around, change the cover. We have LoveSac limos. In 2004, the company had sales of close to $30 million, and this year we're aiming for $40 million.

Bankrate: Plans to go public?

Shawn Nelson: Maybe, someday. We have plans to go into China -- we're already manufacturing there -- and we have three stores in Australia.

Bankrate: Even though a lot of people could mistake you for a student, you're actually the one giving lectures on campuses. What do you talk about?

Shawn Nelson: Entrepreneurship. From opening a store on credit cards to manufacturing overseas. And I talk about what not to do, like not asking enough questions, if you see a chance.

Bankrate: So is there a LoveSac in each of the Virgin offices?

Shawn Nelson: There are quite a few, but there are a lot of offices, too. ... so we have a long way to go.