Let’s be honest: most startups don’t make any revenue, let alone profit. That seems ridiculous to me. But that’s why I love Casper, a mattress startup based out of New York.
Launched in 2013, Casper did an astounding $1 million in revenue in their first 28 days of business, making a profit on the first day. Described as “Warby Parker for mattresses,” Casper conveniently packs their mattresses in a small box and ships them directly to customers, giving them 100 days to commit to the purchase.
And so far it’s working. Since launching three years ago, Casper has done over $100 million in revenue and raised $70 million in funding.
So how did five guys who knew nothing about selling mattresses end up with an award-winning product, $70 million in funding, and $30 million in their first year of sales? We explain it all in this week’s Hustle Con infographic.
And if you want to hear one of Casper’s co-founders tell their story and learn how he grew the company, then come to Hustle Con on May 13th. Ticket prices go up soon, so book now.
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What’s Casper?
Casper is a startup that sells mattresses directly to consumers through their website. Where old-school mattress companies offer endless varieties of over-priced mattresses, Casper sells one perfect mattress in six sizes.
Their award-winning mattress is made of a combination of latex and memory foam that’s a third of the cost of an average mattress. It’s delivered directly to your door within days of ordering, and comes in a box the size of a mini fridge, complete with a handwritten note and a 10-year warranty. Casper offers a 100-day trial risk-free, revolutionizing the way we shop for mattresses.
Founded in 2013 by five friends, Casper now has over 100 full-time employees, 100 thousand happy customers, and more than $100 million in lifetime sales.
By the numbers:
2 showrooms (NYC and LA)
26 years – the average time humans spend in bed (according to Casper’s research)
5 co-founders
6 sizes of mattresses offered
10-inch thick mattresses
0 – # of springs in Casper mattresses
41 x 21 x 20 inches – the size of the Casper box
1 minute – the time it takes for a Casper mattress to completely unfurl
100 days – amount of time you have to try out the mattress risk-free
$14 billion a year – current U.S. mattress industry
$69.95m in funding
$500 – price for twin mattress
$950 – price for king mattress
$100+ million in lifetime salest
15,000+ people accepted into Casper Labs – a program to test out new products
30k Instagram followers
2 – the number you can press on their hotline to hear a reading of Peter Rabbit
$1 million in revenue in their first 28 days
$20m in sales in their first 10 months
Jeff’s Story
1976: Jeff is born in Anchorage, Alaska.
June 1998: He graduates from Princeton University with a BSE in civil engineering and geological engineering. Thinking that he wants to be a geology professor, Jeff spends the summer after graduation in Iceland, doing geophysics research on hot spots beneath Iceland.
August 1998: He enrolls in Stanford’s PhD program in structural geography, and realizes that academic research is keeping him isolated from his peers. He leaves the program after a few months.
1999 – 2000: Finds himself in Silicon Valley at the peak of the dot-com boom. Applies for a job at IDEO, but never hears back. Joins a software company that builds risk analysis software for natural disasters, which they sell to insurance companies.
August 2000 – June 2003: Learns about a product engineering program at Stanford from a friend. Re-enrolls at Stanford, this time in the Master’s program for in Product Engineering.
2004-2008: Reapplies to IDEO, and this time is hired. Works on organizational improvement projects for large companies, including several major mattress brands. Through organizational audits, learns about what is broken in the sleep industry, especially as it applies to the consumer experience. Learns that the major hurdle for most mattress companies is the trial period, or lackthereof. Recognizes that the overhead costs are driving up the price of mattresses.
2008: Begins a series of sabbaticals, where he spends 5-6 months in developing countries to improve their local sanitation and public health systems. Moves to Cambodia, where he helps build the “easy latrine,” a sanitation solution that eventually spreads throughout Southeast Asia.
2009: Continues his sabbatical in Vietnam, where he works with a small team to design a hand-washing system to improve public health throughout the country.
2010-2012: Works with NGOs full time. Spends 6 months at a time living in East Timor, Kenya, and Nigeria working on long-term projects that are funded by government programs and private entity.
June 2012: Future Casper founders Neil Parikh, Luke Sherwin, and Gabe Flateman graduate from Brown University. They move to New York City and launch Consignd – a platform to enable designers to sell their products directly to consumers, effectively cutting out the middle man. Join a startup incubator called Entrepreneurs Accelerator Roundtable, where they meet future Casper CEO, Philip Krim, who is working on his own company.
September, 2013: The guys notice that fellow members of their shared workspace brag about how little sleep they got the night before. They also notice how sleep impacts their productivity, health, and happiness. Recognizing that the sleep industry is stale and painful, they decide to build a company that addresses these issues. Luke and Neil are roommates, and sharing a king-size air mattress. The air mattress lasts three months.
November, 2013: Casper is founded. But they need a product. Neil calls Jeff, whom he met and befriended while Neil was in med school with Jeff’s fiancee. Jeff is living in Rhode Island, but agrees to head up product development while working part time with non-profits abroad.
December 2013: Jeff begins testing mattress materials. As part of the experiment, he creates a mattress that has memory foam on one side, and latex on the other. During testing, he flips the mattress over periodically to test the difference. Jeff even tries sleeping with weights on his chest to see what it would feel like as a 250-lb person. Meanwhile, the other founders are pitching the idea to investors, who want to try out the product. But without the capital to create a mattress, they don’t have a product to test.
January, 2014: The founders bring Jeff to a meeting with Ben Lerer. Ben’s been interested in the sleep space for a few years, and agrees to invest $1.85m. Once they have their term sheet, the founders find an office – about 2,000 square feet in Noho that would allow Casper to grow the headcount to 20 people in 12-18 months. They outgrow that headcount in less than six months.
April 22, 2014: Casper officially launches. They have eight employees, and sell out of their stock on the first day. The founders expect to sell $1m in their first year, but they hit that goal in their first 28 days.
April 23, 2014: Jeff’s production team starts designing what eventually becomes a one-for-all pillow. They buy dozens of popular pillows, rip them apart, and research the materials. Casper research shows that all sleepers move around when they sleep, so they set out to make a pillow that will be comfortable in any position.
strong>July 2014: Casper cannot produce mattresses fast enough to fill orders in the time they promised. Customers are waiting a month to receive their mattresses. Casper responds by sending out thousands of air mattresses to people without mattresses. They also put people up in Airbnbs and hotel rooms.
August 2014: The company raises $13.1m in their Series A, led by New Enterprise Associates. The team has 20 employees in their NYC headquarters. Buyers now have 100 days to try out the Casper mattress. If they don’t like it, Casper will pick up the mattress and issue them a full refund. The used mattress is then donated to a local charity. Meanwhile, Casper investor Ashton Kutcher tweets a picture of a Casper box sitting on a doorstep in NYC. It gets 729 likes and is retweeted 175 times.
November, 2014: Casper starts shipping mattresses to Canada.
December, 2014: Season 30 of The Real World airs on MTV, and every bed in the house is a Casper. Casper’s blog offers hilarious synopses and commentary on each episode, noting each important moment that happens on a mattress. There are a lot.
February, 2015: Casper does $20m in sales in their first 10 months. This is a significant increase from the $1.8m they anticipated when they first launched. Their only marketing initiatives are a Twitter account and thousands of evangelists. They open their second showroom, this time in Los Angeles, where people can test out the mattress, check out the views of the Hollywood Hills, listen to music, and hang out with the Casper team.
April 22, 2015: Exactly one year after launching Casper, the founders launch Casper Labs, a new research division of Casper where customers can sign up to beta test new sleep products the company is creating, like pillows and sheets. The founders expect that a few hundred people will sign up. More than 15,000 do.
June, 2015: The Casper team expands to 70 people. The company launches Van Winkles, an editorial website dedicated to sleep culture run by a team of five journalists and editors. Casper funds the site but operates Van Winkles as an independent publication focusing on the creative, social, and scientific elements of sleep. Casper raises $55m in Series B venture funding, and plans to use the additional runway to grow the team, increase mattress production, and lay the groundwork for international expansion. The company begins offering same-day delivery in San Francisco.
September 2015: Casper launches The Nap Tour. For seven weeks, the “Nap Mobile” – a mobile showroom featuring four octagon-shaped nap pods outfitted with mattress and recordings of fairy tales – travels the country, allowing people to test out the mattresses in real time. Casper is named as a finalist for Fast Company’s 2015 Innovation By Design award for product design, alongside Google’s Cardboard VR and Ikea’s wireless charger.
November, 2015: Casper launches a new line of sleep products, including a pillow, sheet set, and duvet cover. The company surpasses the 100-employee mark. Over 100,000 people now happily own a Casper mattress, and Casper has seen $100 million in lifetime sales, making them one of the fastest growing consumer brands in the United States.
How Casper makes money
You’re not sleeping well. Your hand-me-down mattress has developed two large craters and squeaky springs have you tossing and turning all night long. You finally decide it’s time for a new mattress.
You think about going into the mattress store downtown, but the sleazy salespeople are always hovering over you. You get the sense that they care more about upselling you than the quality of your sleep. Plus, how are you supposed to know how a mattress will actually sleep if you only test it out for two minutes?
Then a friend tells you about Casper – a mattress startup that revolutionized the sleep industry. You check out their website and are blown away by how simple the process is… and how reasonably they’re priced.
They make one mattress. Just one perfect option. It comes in six different sizes, all under a thousand bucks. Within minutes of browsing the site, you know where the materials are sourced (the United States), what it’s made out of it (a combination of memory foam and latex), and why it’s different (it’s comfortable, supportive, sleeps cool, and doesn’t give you a feeling of being stuck).
You’re tempted. Then you see the Casper promise: a 10-year warranty and a 100-day risk free trial. You start to get the sense that this company cares about your sleep. They want you to feel rested, be productive, and stay healthy.
So you order a Casper. It arrives within five business days right to your doorstep – or within one day if you’re in NYC, San Francisco, or LA.
When it arrives, the packaging surprises you. Most mattresses come wrapped in all sorts of plastic with no easy way to carry it up your stairs or through your door frame. But this mattress is in a box that looks too small to fit a mattress. It looks like it could fit your labrador retriever and not much else.
You slice open the cardboard, slide the mattress out of the box, and wait 60 seconds for it to completely unfurl. You notice a card that’s fallen out of the box… it’s a handwritten note from one of Casper’s customer support team members and you know you’re in good hands.
You don’t need the full 100-night trial; after one night you’re sold. You find yourself greeting each morning with a smile, and your co-workers notice an extra bounce in your step.
Meanwhile, you learn that your friend is moving to a new apartment but doesn’t want to ship her lumpy mattress across the country. You have the perfect recommendation.
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