Let me get this straight... Casper starts (or at least, helps start) the bed-in-a-box revolution, and private investors get in early.
The moat they had was people don't buy a bed sight unseen off the internet.
They literally burn piles of money to normalize the act (100 day return policy, 0 questions asked, insane marketing spend...)
They succeed in normalizing it...
But the fact is that any bozo can call a manufacturer and get literally the same product out to your door for the same costs as them. They didn't have any exclusive manufacturing process, as the boom of bed-in-a-box raged on, everyone benefited from economy of scale as this has taken off, not just them.
There's no need for a cheap imitation, because what they sell is already the cheap option.
And there are very few mattress brands that have loyalty because people don't buy beds for brands. Tempurpedic and Duxiana are the only two manufacturers I can think of that I've ever seen leverage customer loyalty in marketing, and there's a reason for that (they exist at a completely different price point)
So now there's hundreds of these companies, and Casper's standing out of all of them is not particularly special.
So they go public at a half a billion dollar valuation for a glorified drop shipping operation and leave institutional investors holding the bag?
They claim the combination of different foams as differentiation, which is utterly ridiculous because anyone can copy them, none of the densities they use are unique.
All the interesting patents in foam and gel are already owned by bigger players (like Serta Simmons... which sued Casper...)
We bought a full sized foam mattress from Amazon for under $200; they even let you spread the payments out over several months at no additional charge.
Yeah, I got a Zinus from Amazon a few years ago. I thought it was just a generic brand that swooped in to capitalize on the craze, turns out they're a 40 year old Korean company that has specialized in bedding longer than Casper has existed. For some reason, it feels better to buy a mattress from a proven bedding company that adopted new technology than a new tech company that decided to disrupt bedding. Keep in mind Casper has existed less than the lifespan of a typical mattress. Their longevity is still a gamble.
I don't want foam. I'm not sure if it's the competition or what, but I wanted to replace a mattress from Ikea that had gradually self-destructed (springs sagged and broke) and found that a regular furniture store was selling regular mattresses under a brand name (Serta or Sealey or something that's been around forever) for like $300 (maybe less, I don't remember exactly). I did not want to spend $600, or $1000, or $2000, and I expected buying a mattress to be like buying from a used car dealership and was surprised it wasn't. I feel like things were different in the early 2010's. And because it wasn't mail order, I was able to take it home the same day.
The marketing for these mattress startups has always put me a bit ill at ease. They're very slick, with attractive couples falling into a deep relaxing slumber. They'll tell you everything about how awesome their mattresses are, but won't actually give you a price.
Are they assuming that the general public are so interested in mattresses that they'll go on the website to check it out, instead of just picking something up at Ikea, or their local discount mattress provider?
They're all identical in how they pitch it too: lots of "science of sleep" factoids and thousands of customer reviews (as if those can't be gamed).
I get the same vibe with them as I do with stuff like Dollar Shave Club; a 'lifestyle brand' that's hoping for an acquisition by an established brand.
If you're anything like me, your exposure to the marketing has come almost exclusively through live-reads on Podcasts. I can see wanting to avoid price talk for this format of ads because the listener may be listening months or years after the episode was recorded and may be frustrated if they hear one price mentioned on the podcast, but another when the go to the site.
They plastered their ads all over the Toronto subway system in 2018 and 2019. Yeah, they show up on podcasts as well, but thankfully you can still FFWD through those, so that's not the primary point of exposure for me.
> Are they assuming that the general public are so interested in mattresses that they'll go on the website to check it out, instead of just picking something up at Ikea, or their local discount mattress provider?
Going to a website to check pricing is more effort than the other two options you stated?
The purpose of the ad is to motivate the user to check out the website.
This is a commodity product that has numerous alternative vendors with brick and mortar stores. So not only will customers choose partially on price, but I'd think they'd prefer to buy something they can actually test out first. Giving customers a 100-day return policy isn't a solution, as it requires the customer to make the purchase and then deal with the hassle of a return.
It's not unreasonable for a little-known startup to display a "starting at $X" to at least give some idea of what price point they're competing in.
I just bought a bed. I saw all the flashy ads then did some research and bought from a company in Arizona that does less flashy ads but have better prices. sleep-ez.com
Relevant article about the online mattress industry: https://www.cnbc.com/2019/08/18/there-are-now-175-online-mat....
"“Barriers to entry are low, but barriers to profitability are high,” he said. “It doesn’t take that much to design a mattress, a marketing campaign, put up a website, and have one of these big companies like Carpenter do the fulfillment for you,”"
The majority of bed-in-a-boxes outsource their manufacturing...They’re literally calling around to producers saying, ‘we need a finished product and here’s what we think it should look like.’ Sometimes, they don’t even know what they want it to look like...Most of the outsourcing is to just four major manufacturers
Maybe it's me, but I fail to see how this is relevant to HN. The Market Watch article doesn't say much other than what the title already states.
To showcase the irrelevance, let me just copy/paste the whole article.
> Casper Sleep Inc. CSPR, +0.00% lowered the price range for its planned initial public offering on Wednesday to $12 to $13 a share from a previous $17 to $19, a move that reduces its valuation to just over $500 million. The company is planning to offer 8.4 million shares to raise $109.2 million at the top of the range. With 39 million shares outstanding expected once the IPO is complete, the company would have a valuation of just $507 million, below the $741 million it would have had under the previous price range and now less than half the $1.1 billion it garnered in its last private funding round. Eight banks are underwriting the deal, led by Morgan Stanley, Goldman Sachs and Jefferies. Proceeds of the deal are earmarked for growth and general corporate purposes. The company will list on the New York Stock Exchange, under the ticker symbol "CSPR."
I think it points to how the public markets are getting better or were always good at spotting when a mattress maker claiming to be Tech/Mattress as a Service doesn't justify the multiples. So the trend of high priced rounds meeting IPO reality continues.
The HN guidelines say, "Anything that good hackers would find interesting. That includes more than hacking and startups." Casper is a startup, and the valuation of startups and their IPO prospects are quite important to a lot of people on here.
It is a short article, and there are probably slightly better ones out there, but all of the important information is in this article: the current range and valuation, the prior range and valuation, and the valuation at the last funding round. This tells you a lot.
People post things from Twitter all the time that have even less.
It implies the market is more skeptical of the transformational power of a standalone mattress maker.
It's relevant to the HN community!
You have a company that was valued over $1B during funding rounds that has seen that valuation cut in half. That's an example of how the rise of the mega-companies like Amazon and Walmart are suffocating new entrants. Your reinvention of the lounge chair probably won't be a startup now, when Amazon can have a knock-off pushed out the door in a couple of months.
The moat they had was people don't buy a bed sight unseen off the internet.
They literally burn piles of money to normalize the act (100 day return policy, 0 questions asked, insane marketing spend...)
They succeed in normalizing it...
But the fact is that any bozo can call a manufacturer and get literally the same product out to your door for the same costs as them. They didn't have any exclusive manufacturing process, as the boom of bed-in-a-box raged on, everyone benefited from economy of scale as this has taken off, not just them.
There's no need for a cheap imitation, because what they sell is already the cheap option.
And there are very few mattress brands that have loyalty because people don't buy beds for brands. Tempurpedic and Duxiana are the only two manufacturers I can think of that I've ever seen leverage customer loyalty in marketing, and there's a reason for that (they exist at a completely different price point)
So now there's hundreds of these companies, and Casper's standing out of all of them is not particularly special.
So they go public at a half a billion dollar valuation for a glorified drop shipping operation and leave institutional investors holding the bag?
Is there something I'm missing?
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https://www.forbes.com/sites/laurendebter/2020/02/05/casper-...
Well I guess some of the private investors are taking a bath as well...