They Make Money While You Sleep
It took five years and $14 million, but this June, three young entrepreneurs launched a smart alarm clock that helps consumers track their personal sleeping habits and adjust them in order to achieve the right amount and type of shut-eye.
Jason Donahue and Eric Shashoua, two former graduate school dorm mates at Brown University, with the help of Ben Rubin, envisioned a clock that collects sleep data and launched Newton, Massachusetts-based Zeo, to make and market the product.
The system has three components: a headband that monitors the user's passage through the four sleep stages (deep, light, REM, and waking sleep); an alarm clock that charts the depth of a person's sleep, including how many times the user wakes up in the night, how long they sleep, and how much restorative REM sleep they get; and MyZeo.com, a website that combines the data collected with questions about other sleep-related factors such as caffeine intake and sources of stress and then tailors an individual step-by-step program.
A Zeo smart alarm clock costs a hefty $399, but that includes six months of access to the online sleeping coaches, Donahue says, and "one question to think about is 'what is the value of a good night's sleep?"
Lisa Shives, owner of Northshore Sleep Medicine, a private practice based in Skokie, Illinois, says Zeo should have an ample market for their product. The United States is preoccupied "with sleep because we neglect it more than other countries," she says.
Donahue says, "We've been very pleased with the response we've seen to the product. We see a lot of growth in our future." The company is distributing Zeo online for now but they have plans to partner with stores that stock healthcare technology.
All three founders had previous small business experience. Shashoua started a company that sold text-to-speech software to college students, Rubin started a company that made built-to-order PCs for businesses, and Donahue spent some time at a cell-phone gaming company in Beijing.
The device has gained the support of sleep scientists such as Charles Czeisler at the Harvard Medical School, who sits on Zeo's board, but some researchers were dubious when they first heard of the alarm clock. Shives thought all the data might further aggravate insomniacs, making it even harder for them to sleep, but she also conceded that Zeo could be good for "teaching people very good sleep habits and offer a complete lifestyle review."