ABOUT THIS EPISODE

Do you ever wonder what keeps the founder of Casper (https://casper.com/) awake at night? How they came to dominate podcast advertising? And how much your startup's name matters? (spoiler alert: not much)
In this episode of Collective Wisdom, Micah Rosenbloom (https://twitter.com/micahjay1) distills a dozen actionable tips from Casper's Philip Krim (https://twitter.com/pkrim), the mattress king of Brooklyn.
English
United States

TRANSCRIPT

00:00:00pardon the language you said buying a mattress and socks and someone's going to change that
00:00:14hi I'm Michael Rosenblum host of collective wisdom the podcast where we interview Founders to learn what gets them out of debt each morning I'm a venture capitalist with founder collective in early-stage VC firm that is invest in companies like uber BuzzFeed in Periscope the co-founder and CEO of Casper mattresses I recently sat down with Philip to find out how we drummed up the idea for a mattress company and what keeps him up at night as his company grows last number one there's a big difference between being inspired by their company and creating just another cookie cutter clone but we never called ourselves the war before mattresses and then we consciously stayed away from kind of any parallels too kind of other companies because we didn't want to get pigeonholed because I think you have to think about doing things independently and every business will have to do things differently and and Jeff said to us early on that yeah I'm flattered when company say on the you know Harry's for Exxon the Warby of Acts but don't do that own kind of what you're doing talk about how you have your ear
00:01:14home business model with your own ideas and I'm sure there are a lot of parallels but often times I think those short hands get out there just because people need a really quick way to understand what the business is and so I think it's a quick kind of way to describe the business model but I think two entreprenuers I wouldn't get overly focused on staying how do we take our business our product are category and fit into what we did or what Casper did or what Harry says and you know hopefully all those businesses have something interesting and appealing but almost certainly none of them will be exact cookie cutters for other Industries in and I don't think it's healthy for entrepreneurs to think about it that way the probably just saying that you're worried for this or before that is that it's easy to copy a business at the surface level and ignore deeper learnings many Founders think that the secret to success which great design or PR marketing but it was really there for site to select the market that was dominated by a company with a near-monopoly and overpriced products the word a lot of unique
00:02:14specs to the eyewear industry that isn't true in a lot of other Industries in this created the unique opportunity for Warby topper a better product at a lower price while still enjoying healthy margins
00:02:25what's the number to you need to really understand why you're Market works the way it does in order to improve it when you check into a hotel you don't look it up really complicated Matrix of what kind of firmness of bed you need because in reality once one kind of furnace can suit almost every type of sleeper Inn in body type and the reason why mattress stores have 60 or 70 different choices is to drive you in to get you to start at 1 price spend a lot more than you have to and to have a commission sales person who knows what's on the floor navigate your entire sales process where you have no information so the information asymmetry in the Paradox of choice were two things that we talked consumer stated about traditional mattress my experience and something that we didn't think added anything to the ultimate goal which was to get a great night of sleep until we really set out to build one perfect mattress that was perfect for everyone that provided Universal comfort and support and you accomplish that by using the latest materials that are Dynamic to do respond to different body types and and I think we accomplished that we still sell one type
00:03:25and that's what we will sell going forward and we think it's perfect for everyone and we started asking ourselves why wasn't there a brand like Warby Parker in the space that was exciting fun connected with people in the end went direct to Consumer and said my background was in e-commerce and you know I knew you could sell this product direct-to-consumer and then I met one of my co-founders Jeff who had a background edit industrial design for a minute I do and he actually had work on the mattress space before until we started talking about how the idea would get really interesting if we could make one of the world's best mattresses and I we wondered if there was a construction that would make sense that you could go direct and we would not have to worry about kind of retail sales presence in any of that kind of cheesy stuff cuz that that skews how people build mattresses and we started combining latex foam and memory foam we should never really been done before and so that's what our final product ended up having it a marriage of two different kinds of phones that creates a wonderful sleep surface we have a patent on a construction in between the product in the brand we we launched April 22nd
00:04:252014 and and have been Off to the Races ever since then just come up with a cool name and it's like website he took full inventory of the industry he found that a couple companies owned most of the brand and there hasn't been any meaningful innovation in 20 years most of the products are targeted towards Baby Boomers with bad backs and frankly the purchasing experience in this industry is awful mattress dealers make used car salesman look like standing Citizens Trust Me dude in looking for Mattress you know what I mean about the patented approach to manufacturing the beds and figured out how to ship them in really small boxes and before he tried to revolutionize the industry he figured out what was really broken lesson number three we don't need the Internet of thread count I don't wear a wearable anymore but I went through the job on face and I think that was really interesting especially on the sleep tracking side my frustration is a frustration that you've heard from a lot of people and white people stop wearing wearables is because it's great to see this data and chart although I often do if I got a good night of sleep early
00:05:25or bad night of sleep but then there's nothing I could do about it and so I think that Gap in the marketplace to something that's really interesting and something that we talked a lot about is that if you can't do anything with the data than what what good is tracking at work studying the data or having that and so we do see a world where potentially data ends up influencing an interesting conversation to have and think about I think we're a ways away from that and haven't seen anyone do anything interesting not every product needs to be hooked up to the Internet and Casper has been disciplined about not just adding technology to their products for TxTag I'm sure they could have added sensors the track how you sleep when you got up you know when you went to the bathroom but that wasn't what he said out to build Founders often shoehorn certain Tech elements in a product to make it more attractive to DC's or at least what they think feces want to hear and ultimately that can be counterproductive
00:06:18last number for if you can hide it flaunt it people do more than sleep in their beds but you never know it by what you hear in their advertisements Casper was unafraid to talk about what happens when we turn off the lights you know how passionate Kindle reading hardcore wrestling over covers and some playful it was something that was consciously part of our design so mattresses are used for both sleeping sex and one of the big knocks against kind of pure memory foam beds was all the times you feel like you get stuck in it and I think that's the beautiful part about marrying latex phone with memory foam is that you get the best of both worlds and none of the deficiencies so you never feel like you get stuck in it it doesn't absorb all of the energy you get the traditional bounce that you wanted a mattress through the latex you get air flow to the latex you also get the comfort and support from memory foam being in the middle and so that's why we think it's a very inventive design that that kind of is the best of all worlds available to someone who's looking to get a great night's sleep but knows that you're using your mattress for other things as well
00:07:16lesson number five don't worry about your name too much one way co-founder Luke's roommate at the time was in Casper actually Casper with the K and we all thought it was kind of funny when we were working from Luke's apartment that we would look at Casper and he was on a twin mattress but it was a guy that was about six six we didn't quite fit on it and it's something that we just kept coming back to and at some point we had to make a decision and in Castroville we going with be judicious when crafting your marketing plan but don't obsess over finding the perfect name get something that hasn't been trademarked and where the URL is still available but the naming process for Casper wasn't deeply considered and they didn't hire big agencies things seem to have worked out just fine for them less number 6 position your brand but be open to thinking bigger when we first had the idea I remember in our first pitch deck it said mattress for Millennials but will be seen as they are sweet spots actually execute a little older than that and that we spend really wide and so well I do think that Millennials shop.
00:08:16currently in and look for a kind of different qualities I think there's certain universality of a great product at a great price so directly to you where you could avoid traditional retail especially in a category like mattresses wear traditional retail so terrible that that kind of appeals to everyone at all ages in the event of people outside your target demo fall in love with your product be prepared to capitalize on it must number 7 building a company not a colt and we've always stayed away from like the prescriptive content around you need your 8 hours of sleep and you have to do this before bed and had it before bed and this when you wake up because for most people just not practical and it's not reality and took our belief was always whatever sleep you can get it to do the best sleep so you need to the basics you need a great mattress you need a great pillow you need a great set of sheets in & Beyond that there are other things you can do and if you have the time and inclination great but not not necessary people have been sleeping well for a very long time and then we'll continue to
00:09:14Mission driven startups have a place but sometimes it's okay just to make a product that works better is less expensive and easy to buy lesson number 8 make the cash register ring before advertising on subway cars you need to start with the most measurable marketing channels to start before scaling up the last measurable options and it's still something that we we struggle with we debated we talked about the way that we thought about it originally was that we kind of wanted to work our way up to buy final until we looked at in a starting with very transactional very end of fun old media so retargeting was kind of the first effort that we did we then went up shame a little bit to search then to some display that was layered with some some pretty specific targeting around the demos that we are looking at and you know today we stand where we're kind of doing full funnel marketing all the way from TV down and I think that's just the way that we thought about going to play Ring into different things and I think one thing that we do have to make sure no one is that it all works together that you can't look at at
00:10:14segments are overly siloed because especially with our product it's a highly considered purchase it something that happens over a long period of time and so consumers naturally are in multiple channels consuming multiple types of media and so it if you're smart about how it all works together then I think it it becomes very creative
00:10:33lesson number 9 if customers go crazy for your product jump on the opportunity over 26,000 people have made these unboxing videos showing how the Casper mattress expands enormously after being released from the shipping box
00:10:51just hear that
00:10:55it sounds like it's blowing up
00:11:00Angelina
00:11:02all of the snow that looks so, this isn't something the team plan in fact it's great free marketing but when they saw it they made it a feature of their marketing plan
00:11:15yeah so I'll definitely admit that we never expected the unboxing process to be something that was so highly shared I know it like we spent a lot more time thinking about the mattress design and we thought people would take pictures of the mattress wants it was unbox and share that and so we spent I think a lot more time focus on that we did decide that we want to make every staff of the experience wonderful and in something that was really thoughtful on our end and it shows people that we really put the care and every staff and that includes the unboxing and the packaging design in what ended up happening was it that became way more sure than anything else and it was really awesome to see people share it and and just your enthusiasm about it because it comes in a very different form factor than you're used to I remember one of our first customers put on Google Glass and in film incredible and at the end you just hear Cheyenne in satisfaction while he's laying on it and it was really awesome and then we had seen that happen with other brands it wasn't something that we thought would happen with ours but we're very happy that it has because it definitely become a
00:12:15source of Sharon
00:12:17bus number 10 culture needs to be cultivated culture is a real important asset for companies what works for 5 people isn't necessarily what works for 50 and the culture has to evolve is he get to 500 employees and this is an important job for the CEO what are the tools that we recommend is our portfolio companies will strike you what you can find out more about a culture iq.com it's hard to know what the day today is like a as a company scales when you've never been in a company that large and so it's it's very different today than it was 6 months ago and that was very different than 6 months before that I would say the one Trend that continued is that I still spend a lot of time on recruiting and trying to build the team and it's still something that I'm very focused on and that all of the founders are very focused on and we've been on that focus on that since day one I think the things that have changed or that you're not have a bigger organization and their kind of things that you have to think about that that we never had to think about it a small organization about how you maintain culture how you build can
00:13:17patience throughout the team is the teams grow in all of that is something that we're trying to be very thoughtful about that we we try to stay ahead of we talk to other companies that have grown quickly and kind of what mistakes I've seen and try to get smart on that you know of course there's there's no easy solution to it I think hopefully that the company continues to grow and grow rapidly and that will always present it at a different challenges and you see certain CEOs like a Mark Zuckerberg who who just stepped up beautiful in and can manage of really large and complex business and you know you've heard him talk about I did that's not something that you're a groom to do day one it's something that you just have to learn over time and then hopefully we stay aware of what the potential pitfalls of pitfalls are in and learn quickly and then get good advice on along the way
00:14:05bus number 11 CEOs need to believe in continuing education
00:14:10yeah I think that's exactly right although I'm happy to see kind of a shift in the investor thinking where it's not that you have to replace the founder because they've gone they've become outgrown it's more that you have to supplement the founder with a management team that's been there and done that and is more of a partner and Coach to you and you see that with with Mark and Cheryl you see that with the Google Founders and I think that's the better way to think about it because I'm a little biased but I agree with that the sentiment of certain investors that that there certain Founders DNA that that needs to stay within the company and and needs to be there to continue to innovate and I think that was Lessons Learned by Apple and in others that came before yeah I mean I think this thing I've learned is that Founders who are self-aware and getting the help themselves to figure out where they need support or coaching or a CEO or CFO or whatever and are often able to go the distance there is that reject help that that's the sign and I and I think self-awareness probably more than any other skill and my mind is the great the most important
00:15:10yeah I think it's critical we talked a lot about being self-aware being empathetic and in being thoughtful and and it's certainly something that I think we hire around to every position and it's certainly something I think my co-founders have through and through and I think it's it's critical to kind of just understanding what what's coming ahead of us in and trying to stay ahead of the curve there
00:15:34bus number 12 as your startup grows the problems doing change they just get harder it's an interesting frame of mind to realize that it doesn't get any easier and I remember when we were raising RC drowned we were so jealous of companies that have raised a few million box and then you know we raise our feet on your so jealous of companies that raised and you just think that all of these Milestones will make it easier and then you'll have these hires it'll make your life easier and in reality it doesn't get any easier if anything gets harder but that that means that you should stay focused on kind of the short term of what you need to do and then what you need to execute on and not get overly focused on kind of big valuations or or what the future may hold other than the future you want to build because every step is very interesting and in very I think informative what future steps for your company will holds and so to me that it was kind of always staying focused on building the right team building agriculture executing on fewer things better as opposed to trying to do too many things and that was it by so we got for my board and
00:16:34and I think that that's been good advice that that we tried to Heaton and I think it's it's staying focused on kind of your core Mission and what you want to accomplish and not getting distracted by the opportunity to do too much or what may come in the future you know in that Spirit we had the last episode San Diego and actually the day he took match group public match Tinder OkCupid and I was asking him about what it was like they're on the road Show pitching to hedge funds mutual funds in his IPO and you said you know it's a lot of money for your numbers in your point it's like actually gets harder but it's not that it's different in the scale but all those same challenges don't go away you know how many convincing others who may be skeptical about the business for the category there just bigger in there sitting on a bigger pots in money than we are here at a seed fund but but it's amazing how much the same skills are required throughout the journey
00:17:34if your Founders having trouble sleeping at night consider investing in a Casper mattress available casper.com if you need Venture Capital reach out to us contact us to contact at founder collective.com and if you like the show please follow I said f Collective on Twitter on Snapchat and please leave a nice review on iTunes if you like what you heard collected wisdom is produced by Joe Mancuso and Joe Flaherty here in New York City

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