An article by Alex Hern from THE GUARDIAN, 21 September 2016:
WHY ARE MATTRESS COMPANIES ACTING LIKE TECH STARTUPS
If you’ve glanced at the ads for Simba, Eve or Casper, you’d be forgiven for thinking they were flogging some kind of new gadget. They have the aesthetic of tech startups everywhere, tout the research and development that went into their sparkly new products, and offer eye-catching, venture capital-funded deals. If you look more closely, however, you’ll see they’re actually selling mattresses.
But why would companies selling foam, springs and fabric be posturing as Silicon Valley brands? The answer is mattress -- selling has changed. At the heart of the ad battle is a three-way fight between companies all promising to use the latest technology to both produce and sell you a mattress. British startups Simba and Eve are taking on each other, as well as the better-funded American competitor Casper, in a war of words, technology, and a lot of billboards.
To be clear, these companies aren’t selling “smart mattresses”. Those exist, made by companies like ReST and Sleep Number, and are your classic internet of things devices that can record things like your sleep patterns and automatically adjust the firmness of the mattress to help you get a better night. Instead, the mattresses sold by these new startups are -- well, mattresses.
Nonetheless, Jas Bagniewski, the chief executive of Eve, says his firm sees itself as a technology company. “Whether you think of the technology in the website, the technology used to compress the mattresses for postage, or the technology of the ERP [enterprise resource planning] system that links the warehousing to the stock control,” he says.
He likens it to Amazon a decade ago, or his previous employer, the e-commerce site Zolando: just selling things online doesn’t necessarily make you a tech firm, but if you do it with a sufficiently innovative approach, you can be one, even if what you sell isn’t technology itself.
Bagniewski concedes that it’s “a stretch” to call Eve’s mattresses “technology”. “Some people would say yes, some would say no. A lot of technology goes in to developing the product. But is a Nike shoe technology? Is Gore-Tex?”
James Cox, the founder and chief executive of Simba Sleep, says he “definitely” sees his company as a technology firm. “The mattress market was one of the last venues that hadn’t seen any change. The simple direct-to-consumer offerings that the likes of Casper came up with were clever, but more from the marketing than the product side.”
As for Casper itself -- no surprises: “Casper is indeed a technology company,” the company’s co-founder Constantin Eis tells me. “We have an army of web developers that allowed us to build and scale software to enable one of the fastest growing brands of all time. Our tech hardware is our sleep product line. The engineering team at Casper is based in San Francisco, where they researched, designed, prototyped, and iterated on the mattress, pillow, and sheets.”
Not to be outdone, Cox says Simba’s mattress is “the most advanced in the world”, not only in terms of actually sleeping in it, but also in how it’s built from the ground up to be sold online and posted to customers: even the springs are slightly conical, so that they can be compressed fully flat. “We’re the only ones that have truly used technology to create a superior product,” says Cox.
Nonetheless … it’s still foam and springs and fabric. Three types of foam, and conical springs, but still: does making really fancy foam and springs turn you into a technology company?
Perhaps not. Perhaps the link isn’t really in the product, or even the way the product is sold, but the way the company is run. “We’re a tech-enabled business,” says Cox: “We acquire clients in the most strategic way possible, and we acquire them for the least amount of money.” That means things like heavily targeted Facebook adverts, smart lead generation for sales, and canny investment in growth.
Indeed, the attitude to growth is perhaps the single biggest thing that unites all three companies against the Warren Evanses of the world. All describe, in different forms, what’s come to be known as “growth hacking” as core to their approach: rapid experimentation in marketing and development with the aim of quickly identifying and putting into practice methods to build their business. For Eve, that included offering a chunk of its company directly to Channel 4, leading to its first TV adverts; for Casper, branching out from mattresses to similarly fancy pillows and sheets; for Simba, a smart manufacturing line that lets it identify faults from returned mattresses and monitor across batches for similar problems.
And behind that attitude to growth is another similarity: the money. All three companies are structured more like a high-growth tech startup than a staid physical goods retailer, and they have the investment to match. Simba shares investors with Made.com and Lastminute.com, Eve with Shazam and Happen, and Casper with Twitter and Snapchat.
Until recently, if you wanted to make a $100 million USD in a year, you probably wouldn’t have started selling mattresses. But the internet changed that, opening up the possibility of a company like Casper going nationwide faster than ever before -- and the money provided by the venture capital system, which matured in the forge of Silicon Valley, made that possible. That, then, is the real technology legacy flowing in to all three companies: the belief that with a big bang and big bucks, it’s possible to jump into a whole new market and fully reshape it in your image.