When you have an investment banker, a business strategist and a marketing expert joining a business school, would you ever guess that the first thing they do is look for a mattress? But Jerry Lin, Kristian von Rickenbach and Adam Tishman found out the hard way that finding a good mattress in Philadelphia was even more difficult than finding a house, when they signed up for an MBA at Wharton School, University of Pennsylvania. This was in 2013. Their sleepless nights had turned their frustrations into a business opportunity.
“The ergonomics of a mattress is definitive to the efficiency of a person at work,” says Adam, adding that the problem was the same across the world. “People do not give their mattresses much of a thought. It can have an impact on the body. Bad mattresses are in hotel rooms while you travel on work. At homes people buy expensive mattresses without giving a thought to how it suits their bodies,” he says.
So the trio began researching about the problem in 2013. They started talking to students and friends across the US to understand if there was a market for customised mattresses. To their surprise, people had no idea that their mattresses can be customised and that it could have a remarkable impact on their quality of sleep and, consequently, during their waking hours. They also found out that people paid more than $1,000 for a luxury mattress and still not happy with their experience. The three problems they found were bad product fit, pricing and lack of customer experience. They also realised that people who ordered online could not trust reviews as the fundamental problem of body ergonomics remained unaddressed.
The next thing you know, the three of them, while still studying, went to Europe to form a partnership with a sleep and body ergonomics scientist. They devoured studies conducted on body positions during deep and intermittent sleep, and finally HelixSleep was born in the middle of 2015.
According to UCLA Ergonomics Lab, an average person sleeps about a third of his life and a good mattress allows a person to avoid back pains, which becomes an additional stress in one's daily life. According to several studies, the bad effects of sleeping on the wrong mattress range from bone problems to reduced libido. Ergonomics studies look at human efficiency in the work environment, and good sleep means that a person is efficient at work.
So, what is a good mattress? HelixSleep's scientists have designed mattresses for different body types and sleeping positions. This information is fed into its website engine. People just log onto the website and fill in basic questions of height, weight, sleep patterns and positions.
While they were out hunting for the right supplier, by sheer coincidence, Adam ran into a person at a restaurant who introduced him to a mattress manufacturer. “I was discussing our startup idea with my father when a man overheard us and barged into our conversation to shake hands. He introduced me to one of his friends who owned a mattress manufacturing unit that could make customised products, and that’s when our website went live last year,” says Adam.
Indeed, Helix Sleep's USP is that they have been able to convince a manufacturer to make customise mattresses. Usually, a mattress is a standard platform of spring, coir, memory foam, latex foam, PU foam and orthopaedic. So, imagine a couple, wherein one body type sleeps better on memory foam and the other body type needs a spring mattress. HelixSleep combines the two for the couple so each gets a goodnight's rest.
Many large brick-and-mortar retailers and every e-commerce retailer in the world sell mattresses and they are competition to Helix Sleep. These mattresses range from $300-2,000. But there is no customer service to address the ergonomics of sleep. “The world is moving online and we offer a complete solution for consumers,” says Adam. There is a 100-day trial period for the mattress and the product is delivered to the doorstep of the consumer in 10 days with a 10-year warranty.
The combination of science, manufacturing innovation and e-commerce opportunity led the founders to raise $8.15 million in two rounds from six investors, led by Double Jay Capital and Great Oaks Venture Capital.
Many believe that this sort of customisation and customer service will render brick-and-mortar outfits obsolete soon, unless they can play catchup. “These digital-first businesses are changing the way people deliver services to the world. They have combined the best of manufacturing and retail experiences to create a seamless physical and digital experience,” says Ganesh Ayyar, CEO of Mphasis Ltd.
In India, the likes of Amazon, Flipkart, Future Group, Lifestyle, Shoppers Stop and Reliance Retail sell mattresses. Future Group acquired Fab Furnish for less than $3million this year, to bolster the group’s physical retailing prowess with an online store for the millennial consumer. “Retailers will eventually focus on an omni-channel strategy and serve the customer in every channel,” says Kishore Biyani, Chairman of Future Group.
For the three men from Wharton, their theory on happy sleep is proving to be much more valuable than their college degrees. However, they are yet to set their sights on India. “It’s a large consumer base,” admits Adam, leaving the thought on India to their global expansion plans in the years ahead. At least for now, they have surprised the US with their unique business model.
Although the company did not want to disclose revenues Adam reveals that they are working on a negative working capital cycle, which means the business is generating cash to run operations and pay off their vendors.