This Week in Startups - E1001: Eight Sleep CEO & Co-founder Matteo Franceschetti pioneered “sleep-fitness” with smart heating & cooling technology; shares insights on product iteration, delighting customers, innovating in D2C, raising $40M from LAUNCH, Founders Fund, Craft & more

Episode Date: November 15, 2019

1:03 Jason's thoughts on the exploding DTC movement 4:10 How Jason discovered Eight Sleep 7:15 Jason intros Matteo Franceschetti 8:18 Matteo describes starting Eight Sleep and The Pod 15:48 What was M...atteo's history before Eight Sleep 16:27 What did Matteo learn from his prior career in Solar Energy? 20:11 What has Matteo learned about users' sleep through data analysis 22:54 How does the thermo alarm work? 26:52 What is Eight Sleep doing with their sleep data? 29:36 What does the future look like for Eight Sleep? 36:50 What has Matteo learned about DTC marketing? 40:20 Dealing with returns 42:46 Which marketing channels does Matteo capitalize on? 46:30 What were Jason's instructions for reading Eight Sleep ads? 46:55 Are pop-up locations a possibility? 49:03 What is the endgame for smart-fitness products like Peloton & Tonal? 56:04 Eight Sleep's $40M raise

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Starting point is 00:00:00 This week in startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com for a free trial. When you're ready to launch, use offer code twist to save 10% off your first purchase of a website or domain. NetSuite by Oracle, the business management software that handles every aspect of your business in an easy-to-use cloud platform. Get NetSuite's free guide, seven key strategies to grow your profits when you go to NetSuite. suite.com slash twist and tonal get a full body workout with hundreds of moves and 200 pounds of resistance without ever leaving your house visit tonal.com to learn more and use promo code twist to get
Starting point is 00:00:46 $100 off tonal's smart accessories that's t-o-n-a-l dot com and use promo code twist apply for the next launch accelerator cohort applications are due December 23rd learn more and apply at Launchaccelerator.co. Hey, everybody, welcome to this week in startups. I'm your host, Jason Calacanis. And this is a program where, for almost a thousand episodes, we've studied startup companies over the past decade. And one of the trends that's happened in the second half of that decade, 2015 to now,
Starting point is 00:01:19 is something we call in Silicon Valley D2C, direct to consumer. What does it mean? It means you sell something directly to the consumer, not through a middleman, not through a distributor or a retailer. What are examples of this? Well, you might have bought Tommy John underwear. And you might have said, hey, wow, this Tommy John is amazing. It's delightful.
Starting point is 00:01:39 I've never had underwear this great. Or maybe you did Dollar Shave Club. Or maybe did Harries, the other shave club. Or maybe you did Casper, the mattress company. All of these companies did really well because they studied the consumer. And I love DTC companies because they are very focused. not on trying to please a distributor, a reseller. They're not trying to get Macy's or Saks Fifth Avenue or Sears or Target to carry their products. No, that's not their customer. Their customer is
Starting point is 00:02:16 me and you. And what that does is it frees them up, all of those resources that they would have been spending on a channel that goes to consumers, goes towards building. a better product. And additionally, they get a feedback loop that previously they were shielded from. So when you were a D to C company, when you are a D to C company, you get people giving you direct feedback because they bought the product from you. You get the return information. What happens if I return my Calvin Klein's to Saks Fifth Avenue or to Macy's? They throw it in a bundle. They send a number to Calvin Klein and say, hey, we have this many returns. They say, great, throw them away, donate them. They don't know why. They don't know, oh, you know, it ripped in the seam or it was too
Starting point is 00:03:03 tight here. They don't have those little micro adjustments they can make. And this is why, even though we all thought Amazon was going to run the table on retailers, they have run into an unexpected roadblock, the D to C movement. It turns out that people extremely focused on just one thing, whether it's a way travel, I don't know if you've tried those travel bags, these things are incredible. They are kicking butt because of that relentless product obsession. Now, there's also Peloton and Tonal. If you listen to podcasts, you would know this because you'd say, wow, I'm always hearing these podcast ads, right? And you may have tried these products. And they all offer a 100-day return guarantee because, hey, they have to because they don't get the glow
Starting point is 00:03:53 of being in Macy's or Saks Fifth Avenue or on Amazon for that matter. they don't get the glow of that retailer validating them, anointing them as, oh, these underwear are great. Oh, these glasses are great. Oh, these shoes are great. Anyway, I find myself as a podcaster for the last decade running into these brands all the time because, well, they advertise on podcasts because it's a great way to reach you the consumer. I've also started investing in these companies. And I was delighted when, I don't know, six months ago, somebody said, hey, we got another
Starting point is 00:04:34 mattress company. And I said, okay, that's great. I think we had a Casper come on the pod. And they may have advertised. And they used the Casper. We had it. It's a great bed and incredible value. But there wasn't any technology to it.
Starting point is 00:04:47 And they said, there's a smart bed. I said, wait a second. What's a smart bed do? And they said, well, it tracks your sleep. And I said, oh, like my Fitbit? And they said, oh, even better. And I said, oh, that's interesting. me more. And they said it thermo regulates you. And I'm reading the ad cop and I was like, thermoregulate, that's something that I'm very interested in. Because my wife and I sleep in the same bed and she sometimes is too cold and I run too hot. Sound familiar? Well, if you're married, it's doubtful that you and your spouse want to sleep at the exact same temperatures. In fact, it's probably doubtful that any two people do.
Starting point is 00:05:25 And I got this eight sleep mattress. And I was like, you know, I'm fine. The response or I'll check it out. I'll, and I always buy one. And I try it. And I take out my phone. And I'm like, oh, my Lord, I can set this to a 10 out of 10 in cold. And my wife can make it a 10 out of 10 hot.
Starting point is 00:05:46 And my wife's very skeptical. She sleeps in the bed. And she's very particular about mattresses. The amount of money I've spent on mattresses is ridiculous. She buys, like, the mattress from the four seasons or the St. Regis or Ritz-Colton, that's, like, the level of mattress I've been sleeping on. This eight sleep bed was better for me. And with the thermo-regulation, I would sit there. And on a hot summer day, we have, like, some Indian summer days here in San Francisco.
Starting point is 00:06:11 I put that on 10. I don't have to put the air conditioner on because I'm in this nice ice-cold sheets. You know those ice-cold sheets? You slide yourself into those ice-cold sheets, how amazing it is. And then on some cold days, we got the door open, they got the Bulldog. going outside, whatever. And you wanted a little toasty. Oh, so you almost got too hot.
Starting point is 00:06:31 I was like, whoa, this is seriously hot. And my wife used to have one of those heating blankets. So she'd have a heating blanket on our side. Oh my God. The whole thing was crazy. She fell in love with the eight sleep. And I said, I've got to look into this. And I decided not only would I become an advocate for this.
Starting point is 00:06:49 I'd invest in the company. And my friend David Sachs from Kraft invested in the company. I invest in the company. my friend Matthew Delavidova who plays for the Cleveland Clavelyers and who's an angel investor and we invest in companies he's into it
Starting point is 00:07:00 all of my friends are talking about this it's an incredible product and I just thought to myself this D to C movement is going to change everything because obsessive founders are going to make every product we use delightful
Starting point is 00:07:13 well that obsessive founder is Mateo and I'm going to give this a shot Mateo and we'll do it together Francescetti That's perfect. Francescetti.
Starting point is 00:07:26 Francescetti. Yep. So you're Irish like me? No. No. I'm Italian. You're Italian. Yeah.
Starting point is 00:07:34 Which means your ancestors came from Greece. So we are like brothers. Okay. Because the Italians came from Greece. We know this. It's a little bit of a source part. Yeah, there are some debates. Some debates.
Starting point is 00:07:47 The Romans, the Greeks. The Romans and the Greece. So Italians have their own opinion. They have their own opinion. But, yeah. Listen, these are two great cultures. And I really, thank you for letting me invest in the company. Thanks for sponsoring the pod.
Starting point is 00:08:01 You know, we're sold out. So we have our choice of advertisers. But I have to say, the product was amazing. Now, the one I have, I believe is called the Pod model POD. Yep. What version is that? Is that the first second or third one you ever made? Fourth one you have ever made?
Starting point is 00:08:16 How long you've been doing this for? Yep. So the company started in 2015. Okay. But the pod has a revolutionary feature that is the thermoregulation. So none of our products before the pod had thermal regulation. So it's really the pod 1.0 for now. So you made a couple of versions before that.
Starting point is 00:08:38 And those versions were nice mattresses that recorded your sleep. Exactly. So they had sleep tracking, but they were not able to really enhance your sleep through temperature. Pod is the first device in the market that doesn't just track your sleep. It enhances your sleep. So I, you heard my little introduction about the power of D to C. Your first idea was to use, to make a bed that tracked how you were sleeping to just give feedback to people who were into the quantified self, correct? Yeah. Did you know that you were going to add thermal regulation or did you discover that at some point because you got feedback from your users?
Starting point is 00:09:19 Yeah, so let me tell you a funny story. So when we were doing customer discovery before launching on Indiegogo, our first product, we started hearing from people, oh, what really matters to me is I sleep hot, my partner sleeps cold, or I just sleep hot at night and I need something to cool me. And so we launch on Indiegogo with the sleep tracking. And then we open a forum with all our customers. We sold 6,000, 7,000 units in pre-orders. And the number one feature they wanted us to build next was cooling. And it was like 80% of the customers saying, you need to build cooling as soon as possible. Wow. So the same day we launch on Indiegogo, we discover what to build next. Interesting. And so when you then realize this is what people want, you have to do product discovery
Starting point is 00:10:13 and some amount of technology to figure out how to cool a bed. Now, I have to say, you've got the installation. And I don't know if it's just because I'm a VIP that I got some special VIP treatment. But the guys who installed it were really good. They came, they knew what they were doing, they rolled it out, and they put this little box on the side. They showed me how to do it. You put water in. You turn it.
Starting point is 00:10:36 And I would say it's about the size of like a bread basket. Yep. Maybe like a small laptop. Yep. A little bit fatter. And then you sync it with the app. Yep. You take out the app and you name each person on the side of the bed.
Starting point is 00:10:51 So we have Jason and Jade, my wife and I. And then we start setting the temperature. And here it is. I guess we have the video here. But it also records your sleep score. So it gives you an idea, which I had in my Fitbit. So this was great for me because it was confirming what I already knew. And it gives you a bunch of information about the temperature you're sleeping at, I guess, your respiration.
Starting point is 00:11:14 Yep. Yeah, we track everything about your sleep, but also by your heart rate and your respiration and also temperature. How do you make the bed cold? Is that little box on the side, I guess, heating the water and cooling the water? Yeah. So there is a thermal engine. And through the thermal engine, we can change the temperature of the water anywhere between 55 degrees and 1.10 degrees.
Starting point is 00:11:39 So I'm sleeping essentially on a water bed, but it does not feel like a water bed. Nope. So is there some like filament or some tubing in the mattress? Yeah. So there is some tubing in the mattress. We call that an active grid. A grid. Yeah.
Starting point is 00:11:53 And there is where there are the sensors and there are these tubes and the water runs. And substantially what the water does is it takes away your body heat. That is now from a physical standpoint how you get cold. Right. That's how temperature works. You got a hot glass of water. You pour some cold in there. It gets cooler.
Starting point is 00:12:10 You got a cold glass of water. You pour some hot and it gets warmer. And each side of the bed, as you were saying, can have a completely different temperature. And what I was amazed that is, when we go to bed, I'll turn this thing on, I turn the app, I put her on all the, you know, it's typically six, seven, eight hot. I put myself on six, seven, eight cold. Yeah. It takes less than five minutes to get there.
Starting point is 00:12:30 How long does it take to get to temperature typically from a cold start? Yeah, from zero, like 15 minutes, you are at the maximum cold. Oh, at maximum cold. Yeah, and the warm is usually faster. The warm's faster, and heating water is easy. Yep. But cooling water, isn't that hard? Yep.
Starting point is 00:12:46 Yeah. No, it has been a pretty complicated process to develop it. So we spent almost two years to develop the technology. Two years to develop it. Yep. And is there some specific technology? Because it's using the same water. It's flowing it through.
Starting point is 00:13:04 Is that some existing technology that exists to make water cold? I didn't know you could just... It's really this thermal engine that is able to create the heat exchange. And so we have two different parts inside the hub, which is the one that sits on the side. And there is where we can change the temperature dynamically. Because on one side, there is the hardware technology, but then there is all the software technology. We use a lot of ML and AI to keep adjusting temperature during the night. All right. So when we get back, we now know how the hardware works. And we know that it does
Starting point is 00:13:39 sleep tracking. What I want to get to is what have you learned, because you now have have thousands of these beds out there. You have a lot of data points anonymized, of course. But you are starting to learn something about sleep. And you're starting to give people suggestions. I want to know what those suggestions are and how you make us sleep better. We'll make it back on this weekend startups. Do you want to turn your amazing idea into a website? This way you can do things like blog or publish content, sell products, maybe even sell services, promote your physical or online business, and announce events or special projects. Well, Squarespace is the answer.
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Starting point is 00:15:35 Let's get back to this amazing episode. All right. My guest today, Mateo, Fran Chesquetti. Fran Chesquetti. Fran Chesquetti. I am trying to get every last name perfect, Francescetti. And you are from just north of Venice, Italy. Yep.
Starting point is 00:15:53 When'd you come to the States? When did you come to America? In 2011. Why did you come to America? I wanted to start a new business, so I sold a business in Europe, and I came to replicate the same one here. It was in solar, so in renewable energy. You were in renewable energy first.
Starting point is 00:16:11 Yeah. What were you doing, putting solar panels on people's roofs? We were developing large utility scale solar plants, and these plants were able to generate electricity for public entities. Oh, amazing. It is amazing. I was talking to a friend of mine who is an energy investor. He told me now, solar has become so cheap to install. And the panels are 90% cheaper than probably when you started.
Starting point is 00:16:36 This is true. Yep. that just doing the maintenance and the retrofitting of a coal plant, like fixing it, was greater. The cost of doing this would be greater in many cases than just putting in solar. Is that true now? Have we crossed that? Yeah, we cross the grid parity. And so now solar is cheaper than regular energy.
Starting point is 00:17:02 So solar is cheaper than regular energy, which means because of capitalism, and economics and free markets, we will solve coal burning and dirty fuel in what? The next 10, 20 years, just by economics? Yeah, obviously, it depends a lot of, you know, the geographical position of this, but in a lot of areas like in Italy, where I had my first company in solar, southern Italy, there is clearly a lot of sun. And so there is where the economics were working extremely well at the time. But at the time, there was a feeding tariff from the government. Now is not needed anymore. because the price went down. So even Germany, which is not the sunniest place in the world, is making this work.
Starting point is 00:17:46 Yep. So do you worry about dirty fuels and fossil fuels and this kind of stuff? Now that solar is so cheap? I think there is a huge opportunity with renewable energy. So between wind and in particular solar that is even more effective, I think the challenge is still how to storage this energy because it's produced a certain time of the day. Yeah, but you have power walls, right? Elon's power walls, they just work. Elon might solve it.
Starting point is 00:18:13 I think he solved it already, like these power walls are the same. I think a larger scale, right? Oh, right. Instead than for just units and houses, how can we store massive amount of energy produced by plants of 100, 200,000? I mean, he's doing this in Hawaii. He did it in Australia. Yep. It just works.
Starting point is 00:18:32 Yeah. It's not a big deal. Yeah, that's happening. We should be optimistic. Everybody's freaked out about global warming. warming in these issues. But this problem is solved. It's just a matter of deploying the solution.
Starting point is 00:18:43 We have the solution, don't we? Yeah. We need scale and it needs to be distributed. This is where governments can actually do something right. They cut in the subsidies right at the moment where subsidies would make this go really fast. We need to have somebody in government who says not only are we're not going to cut the subsidies, we're going to increase the subsidies so that people are acting against their own financial self-interest if they don't do this.
Starting point is 00:19:09 Like, make it ridiculous. Don't you think? Yeah, I mean, that is how you work in Europe at the time. That's how I was able to start the first company because a lot of private equity funds were coming to Europe just because there were all this government. Yeah, he started in Spain and then Italy and then Germany. Then they stopped. And so all the investors left, but then the price dropped.
Starting point is 00:19:32 And so now it's probably a valuable business again. Yes, see, we have to put the incentives back, and then we have to do tons of nuclear. So we have both. The nuclear is the backup to the renewables. That's the ultimate solution, right? In Europe, they don't do nuclear anymore. No. They're shutting it down.
Starting point is 00:19:50 Yeah. This is a mistake, right? I mean, I'm not an expert, so I don't have a formal opinion yet. Where I can bet is solar works and is a cleaner. I'm not an expert either. It's not going to stop me from having a very strong opinion. Let's go back to something you do have an opinion on, which is sleep. Yeah.
Starting point is 00:20:11 What have you learned about people's sleep? Because we with watches, whether it's the Apple Watch, the Fitbit, the 8th sleep bed, we're starting to know people's sleep patterns, and what makes people sleep deeper and get the healthy sleep they need? What have you learned about temperature as a vector to quality sleep? Yeah. Let me start from two obvious things. People sleep hot. People fight with their partner on temperature. And people don't want to wear a wearable while they're sleeping, most of the people, right? I would rather not. Yeah. So they want to charge it, is uncomfortable, in particular if you are a side sleeper.
Starting point is 00:20:51 So there is where we perfectly fit immediately. So we have a couple of different data. First, we have qualitative feedback from our customers, 84% of our customers. 84% of our customers are reporting better sleep with the pod, which is pretty strong. Yeah. Pretty strong. It's ridiculous. I mean, you were these 16 people who didn't get better sleep? They must have had perfect sleep to begin with. Yeah.
Starting point is 00:21:13 They probably didn't have an issue. Yeah. Or, you know, they might be skeptical or whatever, right? When you start seeing an 84%, it's really indicative. These are like yoga instructors and meditation yogis. They have no stress in their life. They're already sleeping like babies. They don't need it like founders.
Starting point is 00:21:28 But then we also have hard data. Right. And so we are seeing major impact in toss and turns, like a 25% drop. In tossing and turning? Yep. So does that mean people were tossing and turning? Less. Because the temperature was uncomfortable? It's our hypothesis. Yeah, mine too, because when it's hot, I would try to find a cold part of the bed or a cold pillow and try to adjust.
Starting point is 00:21:52 Yeah. You've done that move. Yeah. So 25% drop is significant. Very significant. We are seeing an increase in deep sleep by 17% up to 17%. Yep. And this is supported also by clinical studies.
Starting point is 00:22:08 There is a book Why We Sleep from Matthew Walker. And in the books, there is a paragraph about thermoregulation. And Matthew says that there is evidence that cooling can increase your deep sleep up to 20%. Wow. So our data seems supporting that. we see people falling asleep faster, 10, 15%, and we also see less wake up in the middle of the night. So less people live in the bed, waking up and living the bed,
Starting point is 00:22:39 and then coming back, probably because they are at the right temperature, they are comfortable and they stay in bed the whole night. And it's waterproof, so if you need to go to the bathroom, you just go right in the bed. No, you don't have that technology yet. Not yet. Not yet. Maybe in the future.
Starting point is 00:22:52 But there is a feature. where you can set it to change the temperature through the night. Now, I haven't perfected this yet, but it says that you can make it colder in the morning when I want to wake up. If I pick the wake up time of 8 o'clock, you'll start making it cooler at what, like 7, and then my heart rate goes up because it's cold
Starting point is 00:23:15 and that wakes me up naturally? Yeah. Is this proven by science? Is this just a technique? Yep. And do you still believe that's the case after deploy? in the product? Yeah.
Starting point is 00:23:27 So two things that are really important. So the first one is the thermal alarm. So this morning I woke up at 4 a.m. I was flying here from New York. And I used thermal alarm. Thermo alarm. Yeah. So we cool you while you are in bed and we wake you up through cooling before the
Starting point is 00:23:45 sound goes off. And the reason is simple. By cooling you, we accelerate your heart rate. And by accelerating your heart rate, you get out of deep sleep and REM and you start waking up. And so a couple of minutes before the alarm goes off, you're up, and you're ready to go. So that is how I woke up at 4 a.m. So it really works.
Starting point is 00:24:04 Now, what about just generally having the temperature adjust to me through machine learning and artificial intelligence? If you have so much data on me and other people, you know my age, you know my gender, I want to know are you going to be able to and when dynamically change my temperature if I give you permission in order to make me sleep better when we get back on this week in startups. Hey, everybody. I'm here with my friend Jason Maynard, who works at NetSuite. Tell everybody, what do you do, Jason? You know, I do many things here at NetSuite, but I run the field operations for the business unit. Fundamentals matter. They do. I mean, I think it's part of the promise of what you're doing on NetSuite is to make sure people have strong fundamentals.
Starting point is 00:24:53 So the business itself, which is going to be complex, which is going to have ups and downs, but you're going to face competition. You're going to face losing employees to other companies. You're going to face accounting or cash flow issues at some point. You want to have all that stuff tight. Everybody says this is like the most chaotic time in business, and I can't remember any period in business that wasn't chaotic. It's always chaotic.
Starting point is 00:25:15 It's always change. So the key is, how do you become resilient as an organization that you can withstand change? And I think that's one of those lessons you learn. If you've been around for a little while, 20 plus years. We've been through nothing but change. Part of it is you've got to be a grinder. You've got to embrace the mundane. You know, whether you're a basketball team or a football team or a software company, you've got to embrace that everyday practice grind and it's not always super sexy. All right. Right now, NetSuite is offering you valuable insights with a free guide. The seven key
Starting point is 00:25:45 strategies to grow your profits. So go to netsuite.com slash twist, netsuite.com slash twist and get that free guide. Seven key strategies to grow your profits. We appreciate the work you're doing in the startup community. It's great stuff. Thanks, pal. Thanks. All right. We'll be back one more. Okay, Mateo's with us from Ate Sleep. He's the CEO and co-founder. Full disclosure, they were an advertiser. And then I begged him if they would let me invest a little bit. They got a little room on the cat table. Yum, yum, yum. I'm excited. That worked out for you. Buy a couple of ads. Thank you so much. And then I ship back 20 times that amount in that that ad cost me a lot of money. But I like it. You know, I think this D to C thing is going to be big, right?
Starting point is 00:26:25 you're learning so much. Yep. And meanwhile, these mattress companies, they're dumb, they're dumb mattresses. They're learning nothing. And these dumb mattress companies ship it to a dumb retailer. And the dumb retailer tries to sell it to you. And you don't know even what you're getting or why you're buying it. And they have no data and no science.
Starting point is 00:26:46 You have all this data. So we went to the commercial break. What I wanted to know was, are you going to just take all my sleep data, dump it into an algorithm and then have it change my temperature based upon what you learned about me from the last hundred or a thousand nights of sleeping in it? Yes. When? Does that start?
Starting point is 00:27:06 So, it's already in beta. So I'm already sleeping on it. It's a software release that we are going to release hopefully by the end of the year. Wow. So we have been testing it for, for months now. And so temperature will automatically change as you fall asleep. And the reason is for you to fall asleep, your core body temperature needs to drop. And when you are in deep sleep, a colder temperature will facilitate a longer and prolonged period of time in deep sleep.
Starting point is 00:27:37 So that is what we are doing. Because what happens, your body temperature already changes during the night. This is part of your body. It goes with the circadian rhythm. And it does a U-curve. What happens right now, if you sleep on a dumb bed, is that the bed is becoming warmer, and warmer because it absorbs your body heat. Yeah.
Starting point is 00:27:58 So temperature keeps going up. It's got a giant lump of coal in the bed known as you. Exactly. The temperature in the bedroom stays flat, whatever you have set 68, 70, but your body temperature keeps changing. So what our product does is is able to listen to your biometrics and automatically adjust the temperature based on what are your needs. That is how we maximize and enhance your sleep quality.
Starting point is 00:28:21 All right. You look at yourself as a mattress company. or a sleep company, which is it? Yeah. Whereas the first sleep fitness company, right? What does that mean? We will provide everything you need to improve your sleep quality. What if in 10 years for now you could sleep only six hours and get more rest than when
Starting point is 00:28:41 you were sleeping eight hours? That's what we are going to achieve. Really? Yeah. That is an incredible vision. Yeah. And it's only possible through data. So like Tesla, they put the self-driving and the cameras in all these cars and
Starting point is 00:28:55 then they had like this like level one self-driving level two they now have billions of miles have more miles of data than anybody yeah you're going to have all this sleep data but now i know this sounds crazy but sound and light are a big part of this as well yeah so if i buy the pod can i expect in the future that maybe it will have speakers built in and maybe even on the side table a lamp that you make or something that, you know, they make these lamps now that, you know, do light. And I tell it, I want to wake up at a certain time. I want to go to bed. You play me ocean sounds.
Starting point is 00:29:33 You test different sounds to gently get me to sleep. And then you test different sounds and lighting to wake me up. Have you thought about those two features, sound and light? And what role do they play? Yeah. So part of this enhancement, so 20% enhancement, 25% enhancement, will come from controlling the environment. So in five years from now, we will control every piece of the environment.
Starting point is 00:29:56 It will go down to oxygen, humidity, light, noise. There is where we are going as a company. We are not a mattress company. We are a sleep enhancement company, and we call it sleep fitness. Oh, my God. This is such a great investment. I'm so glad I did it. So that little box on the side of my bed could get a little bigger and maybe know the humidity in the room.
Starting point is 00:30:17 100%. Does it have that in it yet or no? We already have sensors. don't show it outside. So you'll know the humidity. If it's too dry, I might wake up because my sinuses are too dry. Is that what happens? Where my throat gets dry?
Starting point is 00:30:31 And then you would make it more moist? Think also just in terms of skin, right? How can we help you with longevity? How can we help your skin? Right? Because even if we compress from eight hours to six hours, it's still a lot of time. So what can we do for your body to extend your longevity and keep you young for as long as possible. Amazing. So oxygen in the room, too. You could monitor oxygen levels. Does oxygen
Starting point is 00:30:57 correlate with sleep? Yeah. Think about altitude tents. You know a lot of athletes. They're sleeping altitude tents. Who is going to take that to a mass consumer, the first live fitness. Wow. That'd be amazing. So you could have a tent to go above the bed. So right now, what is the pod cost? Like two or three grand? Yeah, $2,300, $2,500. $2,500. And so compared to buying a mattress, you might spend on a dumb mattress 500 to 1500? Yeah, the cheap ones are around 1,000. The expensive are at 5 to 10K. So we are really in the middle.
Starting point is 00:31:32 So we are a mid tier. Are you selling them at a loss now or break even just to get all the data and then you'll make money later? Is that the idea? Or do you have a profit in there? We try to just cover all our cost of acquisition, right? So to go break even and then build a relationship with the customer over time. Yeah, it'd be very interesting if you could connect to smart bulbs. So if I put smart bulbs in my room or my light and you were connected to them, you could authenticate them and then do it through smart lights.
Starting point is 00:32:02 Yeah, and use it to wake you up together with the cooling and maybe other features we are building. So oxygen humidity, temperature, light is a big one. Every time I've moved into a new house or over the last decade, I get out my Gaffer's tape. I got a roll of the gaffers tape you use like on a movie set. And I ripped tiny little pieces and I put them over every LED. The number of LED light sources in your room. This is a great tip for everybody is ridiculous. And then I go to a hotel room.
Starting point is 00:32:34 I don't know if you've had this happen. You close those curtains and then you pinch them shot. You try to make it perfect. And then there's like 18 different things lit up in the room. Those little LEDs. Those are screwing with our sleep, aren't they? Yeah. They're too goddamn bright.
Starting point is 00:32:51 Yeah. Light and sound are too big things, right? That is another thing. Probably data will tell us more. But let's say there are spikes in noise in the middle of the night. Let's say there is the garbage track at 5 a.m. Yeah, you're from New York. You know that garbage track.
Starting point is 00:33:07 Yep. Yeah. And that now wakes you up. Maybe you don't even notice it, but that might interrupt your deep sleep or your REM. So there are all these environmental factors that needs to be optimized to gain. to gain 20% efficiency.
Starting point is 00:33:21 What do you use against that noise? How do you solve for that? You can't steal a person's room. Do you put background noise? Yeah, so right now I use double windows that are thicker, but part of our roadmap is to solve that problem too soon. Sound machines work? They cover the noise.
Starting point is 00:33:40 They don't eliminate the noise. And so our end goal is to be soundproof. I like the, I like the, I like the, these new eye masks, we have some foam ones that are incredible. They're like little eggshells. So they are, you almost look like a superhero wearing them because they're curved. They're like a half of a big eggshell over your eyes. So when you blink your eyelids, they don't touch anything.
Starting point is 00:34:04 Because the sleep mask is touching my eyelids and I hated it. Now they have ones that have the space and you get them on Amazon for 20 bucks. They're like gel. I think you know what you're talking about. Yeah, they're pretty amazing. Do you use one of those? Yeah. I bring it when I travel now, it's been a lot.
Starting point is 00:34:18 life changer for me. Yeah. I like the rounded one and sometimes the mask they always bother you around the years, right? Yes, you got to adjust. Yes. So you should just throw that in. That should be part of your AitSlee package. Just throw them in. All right. When we get back from this quick message, I want you to give us a crash course in marketing a DTC brand. What are the best practices in getting people to trust you and to acquire customers for a brand that doesn't have a huge budget and doesn't have retail space. We get back on this weekend startups. You think about going to the gym today? You're thinking about finding parking. You're thinking about waiting for a weight machine. You think about the crowds. You think about the cost. You're thinking about the drive time. And then you
Starting point is 00:35:07 think, you know what? I'm going to Netflix and chill. Screw it. I'll skip the gym. I'll go tomorrow. That's what happened to me for a long time. Then I got the tonal system. I mounted it on the wall. Beautiful screen. And I got it. to do over 200 exercises, and I'm bringing the cannons back. It has been amazing for me. Life-changing product. You can, in 20, 30 minutes, get the workout that would have taken an hour and a half, plus an hour of travel time, plus paying for parking, all this nonsense.
Starting point is 00:35:32 And the reason it's so efficient is because it sets the weights automatically for you. It learns about your body. I've been using this thing, and it saved me so much time. The workouts are great. It's all these great video instructors. and it's super affordable.

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