In the two years since mattress start-up Casper was founded by Gabe Flateman and a host of friends when they realised sleep was being vastly underrated by their yoga-practising, green-juice-drinking co-working-space colleagues, the company has become one of the fastest-growing consumer brands of all time.
Within two minutes of its official launch on April 22, 2014, Casper’s online store recorded its first sale. It may have been to a friend of the founders, but this was followed by US$1 million in sales that month and over US$30 million in 2015, Casper’s first full calendar year. The company has made over US$100 million since its launch.
The sales figures are no fluke. When the team of five – Gabe, 25, chief technology officer; Philip Krim, 32, chief executive officer; Neil Parikh, 26, chief operating officer; Luke Sherwin, 27, chief creative officer, and the ‘granddaddy’ of the group, Jeff Chapin, 39, chief product officer – set out to disrupt the sleep industry, they chose a product near the top of the ‘must-have’ scale for home purchases. They also deliberately positioned their product right at the most accessible intersection of the quality and price curves.
Add in a few strokes of user-experience genius – like encouraging customers to unleash their purchase by ‘unboxing’ it on YouTube – and the company hasn’t looked back.
As a self-appointed saviour to mattress shoppers across the US and Canada, Casper has reconfigured the traditional purchase process to one which focuses on the end user, offering “incredible product quality” backed by an “outrageous dedication to customer communication”.
In 2015, Time magazine named it one of the year’s best inventions.
The company’s core product is the Casper mattress; a springy latex and high-density memory foam mattress famed for having near-universal appeal. Unlike traditional mattress companies, Casper offers just the one model. To guarantee it’s the most anti-establishment mattress going, it’s sold exclusively online and, the best part, is delivered – often by bicycle –in a box barely larger than a night-stand.
Unsurprisingly, price point is key. In an industry expected to hit US$24.65 billion by 2017, the company claims a queen-size Casper (which retails at US$850) is around one-third the cost of some products of comparable quality in a store – the result of avoiding the traditional showroom model and supply chains where, according to Gabe, “there are points at which the price doubles”.
The mattress itself is the result of months of prototype testing with friends, “to the extent [they] would tolerate it,” and with sleep enthusiasts from the general public. (The company now also runs Casper Labs, its ever-expanding research arm). In the end, 108 prototypes were made and two dozen were A/B tested for 3420 hours all up.
(The name, by the way, was inspired by a tall roommate of Luke’s at the time, Kasper, who “was sleeping with a really crappy mattress and his feet poked out the bottom”. He is still sleeping on an early Casper-with-a-C prototype.)
To offset the obvious drawbacks of buying a mattress online, Casper offers a 100-night trial after which, for the undisclosed percentage “in the low single digits” who aren’t happy with the mattress, the company will arrange to have it taken away for free.
And for those who yearn for the comforts of a showroom, the company has taken demo Caspers to cities across the US on its Nap Tour – a travelling container that’s been converted into four sleep pods where potential customers can book a trial nap. (It logged more than 9000 naps in its first 11 stops.)
To meet the growing demand of people who want to sleep with Casper, the company’s total staff now number around 140, based mainly in New York, where the company is headquartered, and San Francisco, where its product team is based.
The original team of five, whose collective experience spans from e-commerce and the start-up arena to product design and marketing, still runs the show, benefiting from the advice of board members Ben Lerer (of Lerer Hippeau Ventures, which led Casper’s seed round, raising US$1.85 million in capital) and Tony Florence (of venture capital firm NEA). The company has also benefited from US$71.45 million raised from four rounds of investment.
In light of the fact the company has hit $100 million in sales in two years, and looking to the future, the founders say “nothing is off the table” when it comes to a public offering. In addition, overseas expansion is “definitely on the horizon”.
But for now, the focus is on consolidating Casper’s presence and establishing its products. And while Gabe says there will likely come a time when the company may have a physical presence of some description – although don’t expect a traditional retail outlet “with a Casper logo on top” – for now, digital is doing the job.
“We’re enabled by the internet and by how quickly and at scale we can talk to customers to build a better experience.
“We’re able to really change the way people interact with us and the ability to be a digital brand helps us grow quickly to have a better customer experience.”