Waking Up the Slumbering Sleep Industry
Casper is an online mattress manufacturer and retailer founded by five young entrepreneurs who met in a New York co-working space in 2013. CEO Philip Krim reveals how he and his partners have created a $550 million business by defying convention.
Philip Krim launched his first company while he was still a student. Now 33, he is the Co-founder and Chief Executive of New York-based Casper, the bed-in-a-box mattress manufacturer that counts Leonardo DiCaprio among its celebrity investors and is shaking a staid industry from its slumber.
Casper’s business proposition is simple: it sells a single type of mattress made of springy latex and high-density memory foam. Its design and materials have been chosen after testing thousands of prototypes. The mattress is then delivered directly to customers in a box approximately the same size as a small refrigerator.
On opening, the mattress self-expands to full size, an event in itself that has become a social media phenomenon. Surprised buyers have taken to posting YouTube videos and Instagram posts of the mattress unfolding, generating even more buzz. The brand has a millennial, techy feel, but Krim says the market for Casper products cuts across all age groups.
Investors are also enthused, with Casper raising $70 million in venture capital in three rounds of funding, resulting in the company’s valuation of $550 million.
Philip shares more about his journey with us.
How was Casper born? Why mattresses?
P.K. I met my Casper co-founders in a co-working space, and the five of us got really excited about changing the way the world thinks about sleep products. We were talking about how buying a mattress was still one of the worst shopping experiences you could have. Through my first company, I saw what retailers were doing to consumers when it came to mattress buying. I learned how every retailer can claim "lowest price guaranteed”. I learned how the oligopoly on the manufacturer side works very closely with the retail monopoly to create an opaque marketplace. We got really excited about Casper when we had the conviction that not only could we offer a better experience by disintermediating the retailers, but we could also do so with a product that was really best in its class.
What is the illusion of choice in the mattress sector?
P.K. There was a paradox of choice in the industry that was created intentionally to drive people to think they have to go to a mattress store to find the right mattress. In reality, you can sell one mattress that’s comfortable for everyone — the hotel industry realised that, and that's why people generally love how they sleep at hotels. We took the same idea and decided to just create one model that is universally comfortable and eliminates confusing choices.
For part two of this interview, click here
Can you describe your entrepreneurial journey?
P.K. I started my first venture when I was a sophomore at the University of Texas — very much by accident. I was teaching myself HTML and I learned what e-commerce was. I owned and operated [the e-commerce firm Merrick Group] for about 10 years. I was then in New York working on Vocalise Media [a mobile technology and advertising firm focused on SMEs], which provided mobile leads to local businesses, and I took that company through an accelerator program.