Where do you think confidence sits in the collection of qualifications that somebody should have for business leadership?

Nelson: I think that effective leadership is a lot like a mixing board, if you imagine a recording studio with a mixing board, and you analogate that to human characteristics and strength. I think we have all witnessed successful leaders who are more introverted, more extroverted, more engaged at the micro level, more engaged at the strategic level. Confidence is absolutely a fundamental core slider on that mixing board. It’s actually a bank of sliders that are connected to confidence. 

As an example, we can project confidence in our mission, in our purpose. We can feel or have or project confidence in ourselves and our own personal ability. We can feel or have or project confidence in our team and those around us. There are probably, if you really dissected it, multiple layers to that attribute. 

Confidence is a core fundamental necessity for an effective leader, but it can manifest very differently amongst different personalities or in different scenarios.

Lovesac was a startup—a business category made up of lots of really great ideas that don’t make it, and some, like yours, that do. What does a leader need to be able to get their great idea from startup to established company?

Many people on Earth have the desire to be an entrepreneur in some way, shape, or form. It’s because people fundamentally are creators. Humans can literally create life. Humans are driven toward innovation. We are attracted to facilitating innovation. Otherwise, we’d still be living in caves and not doing much with fire, which fundamentally was an innovation.

What does it take? It takes a hundred things. It takes a thousand things. And attributes, confidence underpin many of those things. 

One of the hardest things that I experienced building Lovesac was raising money: persuading other human beings to part with their resources to take a risk on you. Being able to multiply it is not just a function of a good idea, a competitive product or a competitive solution. That’s a huge part of it, but a bigger part of it is you, the individual, asking. 

Being an investor myself, when I’m looking at a startup, of course I’m evaluating the idea, the market fit, the momentum, all these things. But even more so, I’m evaluating that captain, because I know through my own experience that that individual is most likely going to need to go through this process multiple times in order to get it to where it really pays off. 

It’s not just a question of: Should I invest in this thing? It’s a question of: Can this person not only develop a product idea, technology, whatever, but develop a team to scale it, attract the team, retain the team, and simultaneously—like a unicycle or spinning plates on sticks—raise the next round of funding necessary to take it to the next level that I may or may not even choose to or have the chance to participate in.

That’s a lot to ask from any individual: These fundamental attributes like confidence, ability, intelligence, career charisma, leadership connections, networking, your personal networking resource, resourcefulness, problem-solving. I could go on and on and on. What’s required is so multifaceted and interdisciplinary that that’s ultimately what makes it so difficult and somewhat rare.

What can leaders who aren’t working for challenger brands that need to prove themselves learn from your story?

No. 1, be wary of wealth extraction. Wealth extraction is not often talked about, but a very fundamental force that can be productive and radically deleterious to an organization’s ultimate and continued success. But if it overextends its place, it will lead a company to its demise. We see this over and over again in private equity-owned situations in the pursuit of higher profits, therefore higher multiples, therefore bigger outcomes. You have a lot of good things happening in the sense that an organization’s getting lean and profitable, but in the longer arc of things will usually lead to a company’s hollowing out demise. So there are short-term gains for long-term costs. The root of success is self-awareness. So in the case of an organization, whether it’s the leader, the leadership team or the organization, being aware of wealth extraction and its healthy or unhealthy manifestations within the organization, both of which are real. 

Another one is the leader or leadership team finding ways to always be challenging: A, B, C. If you are a leader in a category, like Lovesac, it is a classic principle to lean into and promote into strength. We will not take our eye off the ball of developing more ancillary products in that realm, shoring up our own position, continuing to challenge ourselves on our advertising communications, all these things. At the same time, lest we become complacent and eaten by other challengers, we must fail into new water, chasing new wind in our challenger sail. Truly dynamic leaders who have more driving them besides wealth extraction will naturally seek out challenge, because that’s their personality. 

And so it does come back to personality to some degree. If we’re talking about bold product stuff with a culture that actually sustains, you need to be sailing into new waters to chase new wind. And that is scary, that is risky. To some degree, it’s wealth extraction playbook because of the fundamental risk involved. That’s why big organizations, to some degree, become so risk averse: They are being incentivized to be risk averse by those who don’t want to see their piles of wealth put at risk.

You’ve got to always be challenging, or you will die. It may not be a complete death, but you will be unseated. I would rather unseat myself than be unseated.