How would you describe the act of buying a mattress at a store?
T. Luke Sherwin, co-founder and creative director of e-commerce mattress startup Casper, calls it "millions of square feet dedicated to a false premise." More specifically: "That if you try a bed for two minutes while you're awake, you'll find the best long-term mattress for you."
He's omitting other potential drawbacks, such as feeling swamped by a vast array of products and prices, and worrying about logistics of delivery, setup, and returns.
Casper's business model is all about alleviating these pain points. For example, Casper sells only a single brand--its own--in six different sizes, ranging in price from $500 to $950. Casper designs and makes the mattresses itself, with final assembly taking place in a plant outside Atlanta. And the company sells directly to consumers through its website--and nowhere else.
Then there's delivery: Casper's mattresses are shipped in a mini-fridge-size box: 41 by 21 by 20 inches, to be precise. That's small enough for bike couriers to provide same-day deliveries in New York City. It's compact enough for customers to maneuver within doorways and stairwells, so the boxes can reach bedrooms.
And what happens when boxes reach bedrooms? An act known as the "unboxing," wherein the mattress, cut free from its compressed wrapping with the help of an enclosed Casper-branded slicing tool, expands to full thickness (10 inches) in one minute. YouTube videos of unboxings--and it's hard to watch just one--have generated superb publicity.
As for that whole "try before you buy" premise Sherwin's referring to: Casper encourages customers to audition the mattress in their homes for 100 days. If at any point during those 100 days you no longer want the mattress, the company picks it up and issues a full refund.
If you're thinking you've seen this business model before, but you can't quite place it--you're right. There are elements of Warby Parker and Bonobos in Casper, to the extent Casper is building a designer brand and attacking a consumer product category by obsessing about the full range of the customer's buying experience.
And like Warby Parker and Bonobos, Casper's prices are below those of traditional retailers in the category. Moreover, Casper has two mattress showrooms: one in Manhattan and another in Los Angeles. These showrooms--where customers actually can lie down on a mattress to try it out--are analogous to how both Warby Parker and Bonobos complement their e-commerce channels with offline presences.
How did Casper get started? The story begins at Brown University, where the company's three under-30 co-founders--Sherwin, Neil Parikh, and Gabe Flateman--met. After graduation, they co-founded the consignment marketplace Consignd in 2013, running it from the Entrepreneurs Roundtable Accelerator, a shared workspace in Manhattan.
There they met former IDEO designer Jeff Chapin and serial entrepreneur Philip Krim, whom they nicknamed "the mattress mogul," since Krim had formerly sold beds online from his UT Austin dorm. From this mix of talents Casper was born, combining Krim's sleep-industry savvy, Chapin's design chops, and the Brown trio's skill in creating smooth online user experiences.
In short order, Casper has already made a name for itself in the $13 billion U.S. mattress industry, which remains predominantly in the hands of traditional retailers and powerhouse-brand manufacturers. To say the mattress establishment is atremble at the prospect of a Casper-led disruption would be a strong exaggeration, notes Joshua Borstein, a furniture industry analyst with Longbow Research.
While the company reported $20 million in annual revenue in 2014, Casper is still a small-time player. Indeed, notes Borstein, "they are a needle in a haystack compared to Tempur Sealy, with its $3 billion in sales." In his view, mattress giants are monitoring the startup, but as yet, they're unmoved.
That's fine with Casper, which has raised $15 million in venture capital to date. Krim says that the company's investors, rather than seeking a quick flip, are encouraging the team to "go slow, do it right, build it right, [and] provide the best product and service for all the customers you get in front of."
Down the road--Krim won't put a timetable on it--Casper plans to launch other products in the sleep category. "We want Casper to be the first end-to-end brand around all things sleep," he says. "To the extent any product touches sleep, it's something we're interested in pursuing."