In 2015 Brenden Marquardt was a Texas-based investment analyst. He met a homesteader named Lori who made custom Murphy beds, those that fold up in a wall. Marquardt was looking for a side hustle, a part-time business to supplement his day job.
Describing Lori, he told me, “About 10 years ago, she started building wall beds one at a time in her garage. She eventually had more work than she could handle. We ended up buying her company.”
Fast forward to 2022 and Lori Wall Beds is an eight-figure direct-to-consumer business. Marquardt and his brother Kyle jointly own and operate it.
How does a side hustle grow to eight figures in revenue in a few years? He and I recently discussed that and more. Our entire audio conversation is embedded below. The transcript is edited for length and clarity.
Eric Bandholz: Tell us about Homestead Brands.
Brenden Marquardt: Homestead Brands sells furniture on the internet. We started with Murphy beds, which fold up against the wall when you don’t need them. That company is called Lori Wall Beds. It’s still our primary money generator.
As we built our team, we learned a lot about furniture and marketing to apply to other types of furniture. So we recently acquired a porch swing company that we’re trying to scale. It’s called Organic Swings.
We formed Homestead Brands as an umbrella company for the two companies.
The word “homestead” came from Lori Wall Beds. Lori is a real person. She’s a homesteader. About 10 years ago, she started building wall beds one at a time in her garage. She eventually had more work than she could handle. We ended up buying her company. What she really wanted to do was make art and then create a homestead for her family — build her house, raise crops, have a farm, that kind of thing. She wanted to live on the land.
Bandholz: Murphy beds. How do you manufacture them? What about shipping?
Marquardt: I initially thought I could take over the construction. Woodworking is a hobby of mine. Then I looked at the numbers and quickly realized there’s no way I’m going to spend every weekend doing this. I have a family. Making and selling Murphy beds was not my full-time job; it was a side hustle at the time.
Lori had a second product she was selling, a do-it-yourself plan to build the bed. People could download a PDF, buy the wood, and put it together on their own time.
My brother Kyle helped me strategize. He and I became partners in the business. We decided to jettison physical beds altogether, and we doubled down on the PDF plan. We started selling the hardware bag that goes along with it — screws, nuts, bolts. We took that as far as we could with the DIY carpenter crowd, about $250,000 per year.
That was pretty good for that product. But I wanted to quit my job and work on this full-time. So that’s when we started thinking about manufacturing the beds at scale.
Bandholz: How did you find a manufacturer?
Marquardt: We used Craigslist at first. We were looking for a local carpenter who wanted to build beds 24/7. That’s a rough crowd to try to do business with at scale. Eventually I started searching on Google for people who would cut the wood to spec. Most people who responded wanted huge minimums.
We eventually found one company that took on the job. It wasn’t without speed bumps, but they cut the exact pieces from the DIY plan, put them in a box, and inserted the same hardware bag we were selling. We found a fulfillment company to warehouse it for us. That’s how we got started with physical beds.
It’s similar to an Ikea product. It’s called flat pack — ready-to-assemble furniture. Customers follow directions and put it together. It takes about six hours. It’s not a small job.
Bandholz: Lots of folks love building stuff.
Marquardt: Yes. We’ve generated a community of sorts with customers who have put much effort into their projects. We have received very high reviews, with pictures. People are proud to share their projects and help each other with questions, answers, that sort of thing.
Bandholz: What’s the selling price?
Marquardt: Our average order is $1,600. That includes the stains, which have become popular. In the beginning, our average order was around $1,000.
Bandholz: How do you attract customers?
Marquardt: We’ve focused heavily on optimizing conversions on our site. That’s the first thing. Our site has lots of trust builders, such as reviews, seals, and things like that. Once our site was converting well, we started advertising to generate traffic. Paid search has been our best channel.
We also have a blog that generates organic search traffic.
Bandholz: You were doing $250,000 in annual sales. It sounds like you’ve grown.
Marquardt: Yes. We’ve grown considerably. Revenue quadrupled in 2020. My brother and I are both working full-time in the business. The pandemic was wonderful for sales. The growth continued in 2021. Murphy beds are helpful if you need to reclaim a guest room for an office, an exercise room, or a classroom to teach your kids.
Bandholz: Has your manufacturer been able to keep up?
Marquardt: Our supply chain became very difficult in 2021, partially because our manufacturer could not keep up with the growth. So we spent most of 2021 looking for a better partner and shoring up the supply chain that our manufacturer had taken care of. We’re now bringing some of that sourcing in-house.
Bandholz: How do you divvy up tasks with your brother?
Marquardt: We’re co-founders and co-CEOs. We make decisions together. He and I have a complementary skillset. We generally divide the work into the digital realm and the physical. Kyle lives in Spain, and he handles the digital side — marketing, website, influencers, anything that happens online. I manage more of the physical side — product, manufacturing, logistics, customer experience, and customer service. I oversee the financial side, too.
Increasingly, however, we have team members doing a lot of that work. Kyle and I supervise.
Bandholz: Switching gears, why porch swings?
Marquardt: I’ve had a concern since buying Lori Wall Beds that the market for Murphy beds was limited. As we grew, I kept thinking we were going to max out. We hope to push our ceiling much higher with small brands, such as Organic Swings, and grow them.
Nobody needs a second Murphy bed. No customer returns to Lori Wall Beds to buy again. I have to acquire customers every time, so broadening the product line we hope will keep customers coming back.
Bandholz: Where can people buy your products, support you, reach out?