Editor's Note: Inc. Magazine announced its pick for Company of the Year on Tuesday, November 29. It's Riot Games! Here, we spotlight Casper, one of the contenders for the title in 2016.
If you listen to podcasts, spend any time whatsoever on YouTube, or ride the New York City subway, you've probably heard or seen Casper's whimsical sleep pun-filled ads. "Join the ZZZZZ list," one ad suggests. Another, which shows a woman entering her bedroom with a briefcase full of piglets, reads: "The perfect mattress for bringing home the bacon."
The two-year-old New York City-based mattress maker gained notoriety after videos of customers "unboxing" their mattresses began proliferating online. The mattresses, which are compressed into a box the size of a small doghouse, unfold accordion-like in an instant. Naturally, with the internet fame, its sales have skyrocketed. Last year, in its first full year of business, Casper reported $100 million in sales. Philip Krim, the company's co-founder and CEO, says it's on track to double that figure by the end of 2016.
Neil Parikh, another co-founder, takes that forecast even further, giving Casper a trajectory rivaling the sales of giant public companies like Adidas and McDonald's. Just how big might Casper get? "Twenty to 30 billion dollars," Parikh deadpans.
They'll need to sell a lot more product to get there. According to PrivCo, a New York-based private company research firm, the top eight mattress companies in the world--all of which have brick-and-mortar stores--dominate at least 38 percent of the industry's retail market share. They're led by Mattress Firm, based in Houston, which made $2.5 billion in 2015 revenue. The company was acquired in August by South Africa's Steinhoff International, a holding company and discount retailer, for $3.8 billion.
"The advantage of Casper is that they're going against a very old-school industry that just doesn't care," says PrivCo investment analyst Kashif Sheikh. "It's taking advantage of a unique situation right now, but the incumbents will catch up at some point. These guys are seasoned."
Casper, of course, doesn't plan to lay down on the job. The company now has more than 200 employees, with plans to double that by the end of next year. It expanded into Europe after opening an office in Berlin this past July. Its product line continues to expand beyond mattresses, too. Last year, it began selling selling sheets and pillows. This year's new offering: dog beds that, according to Casper's website, resulted from 11 months of dog sleep studies.
All that movement makes the company's once-common founder-only meetings increasingly rare. On a recent morning in the company's New York office, four of Casper's co-founders (the fifth, Jeff Chapin, works out of Casper's San Francisco facility) gathered to discuss Casper's milestones--and somehow, the conversation veered to the nature of German cream cheese. "Even this is a nostalgic moment," Krim observed as the room broke into laughter. "Because we don't get to spend as much time as the founders and devolve our conversations into hour-long epitaphs about cream cheese and whatever."
Instead, the co-founders recently decided to open the company's big decisions up to an 11-person leadership team, including senior executives hired away from companies like Google and Kate Spade. "I think all of us are very bright, intelligent people--but we have, to different degrees, limited experiences in all the aspects that are necessary to run a successful business," Chapin explains. "Time will tell if those decisions we're making collectively now as a bigger group--which are informed by all these different worlds people are coming from--are good for Casper or not."
One decision, acted on this past June, stands out: a partnership with West Elm, the 13-year-old furniture chain owned by Williams-Sonoma. Casper mattresses are now physically available in brick-and-mortar stores for the first time--a concession that customers love to touch or lay on mattresses before buying them, even if that doesn't actually determine which mattress will provide quality sleep.
"It gets very expensive to launch a lot of retail," Chapin says. "That's one of the reasons that we can charge less money. So how do you get that trial experience for more people at very low to little cost? And that's where West Elm comes in."
In 2017, you can expect more of that experimental attitude, says co-founder and chief creative officer Luke Sherwin. He won't go into any kind of detail about what's to come, except to say: "Next year, completing the core things that people need in a bed is definitely our first priority."