April 9, 2024 • 52 mins
When Neil Parikh was in medical school, he called his parents to say he was taking a year off to move to NYC. At the time, they were furious, but little did he know that would be one of the best decisions of his life. He partnered with his friend, whom he met at a coworking space, to build a DTC mattress company. Their most recent valuation was at over $1 Billion. This is the story of Casper and the secret behind their viral growth.
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Episode Transcript
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(00:00):
It was probably the hardest growth I've everhad to go through.
(00:03):
We had no money, essentially, really beforethis.
This was the biggest deal in the entire world.
Like, when we found out I literally kissed theground.
Neil, thanks for joining.
Before we get into your journey, co founding a$1,000,000,000 company, I believe our early
years are fundamental in shaping the person webecome.
(00:24):
Are there any patterns or or things that youdid in your early years that you would consider
an anomaly that led you to the person you aretoday.
Well, first of all, thanks for having meexcited to be here.
You know, I didn't know this at the timebecause I would probably complain about it all
the time, but when I was a kid, I grew up inNew Brunswick and My grandfather owned a
(00:45):
comedian store on the Rutgers Shamus on EastonAvenue, and pretty much every day I go work in
the store.
And, you know, he'd teach me about packingboxes, taking inventory.
I was probably selling cigarettes, which Idon't think kids should have been doing, you
know, all kinds of like funny things, but itwasn't until much later in my life that I
(01:07):
realized that what that experience was wasteaching me about the physics of business,
right, that you have to buy some things at acertain price.
You have to sell them at a price that's higherthan you bought them for.
You have to make money on margins.
You have to treat your employees well.
You have to, like, form a community of peoplewho are influencers.
So we'd always have professors from the collegecampus come in, and my grandfather would always
(01:27):
treat them super or the police officers becauseyou knew they would bring in other people.
And so I sometimes look back on that experiencebecause at the time, I was like, why do I have
to be here and work in this store?
It was actually probably one of the mostprofound experiences for me later because I
think it really taught me the basics ofbusiness even if it was in like a really small
way.
And how did you use that experience in thatfoundational basics of business later on when
(01:53):
when you started your 1st company?
Well, I'd say it took me a long time tounderstand how business works, to be totally
honest.
Right?
Like in college, I tried starting nonprofitswhere We, help people get access to clean water
in India, and we tried to build, microentrepreneurs that would build little stations
inside of slums that would sell water filters.
(02:16):
So that my first experience was actuallyenabling people to set up stores and, resale
stuff.
And then over time, once we kind of, like,started thinking about e commerce and realized,
wow, we can actually get other people to sellstuff for on our behalf.
We started a startup called Consigned where theit was kind of like an influencer marketplace
where if you're an influencer and you wanted tosell watches, you could consign somebody like,
(02:41):
if I owned a Rolex, I could, you know, consignit to somebody else who would sell it to their
audience, but it was too complicated.
And so I think it over time, it just got methinking about this relationship between
people, how things are bought and sold.
And really, a lot of it's just like, how doeshuman psychology work?
You know?
I think those foundational lessons were kindakey to when you started, I guess, the big
(03:01):
company, which we're here to talk about, whichis Casper, cash for currently, or had 5 co
founders.
How did you all meet and come up the idea withfor creating a mattress company?
Online and selling mattresses online?
Yeah.
I think my favorite quote or story is thatthese things only make sense in reverse, you
(03:22):
know, So what happened is I was first inmedical school at Brown, and I thought I was
gonna be a doctor.
And after my 1st year, The thing that aboutmedical school is that it's a place where at
that time, they're not really looking for superinnovative.
Students.
Right?
They're mostly like memorized stuff, get itdone, go to your homework, come back and take a
(03:44):
test.
It's like the army.
And that didn't resonate very well with me.
So I told my parents, hey, I'm gonna take ayear off.
I'm gonna move to New York City, and I'm gonnafigure something else off.
So first of all, they had a heart attack.
My parents called me turn blue in the face.
They were very upset about the fact becausethey thought I might never go back to medical
school, which didn't.
(04:04):
But, but so what happened is I moved to NewYork and with some of my friends from undergrad
who had just graduated, we ended up starting aseries of companies, one of them being
consigned, which I just told you about.
And we were actually in an accelerator programin New York City at a co working space where I
(04:26):
happened to sit next to you by chance somebodywho became my friend named Philip.
And one day I heard him talking about how heused to sell mattresses online from his dorm
room.
I'm like, that's a dumb idea.
Like, who's ever gonna buy a mattress on theinternet?
Like, then you have to try it before you buyit, but my dad was actually a sleep doctor.
And so I guess I've been thinking about thestuff.
I've been medicine.
I was thinking about the, you know, consumerapplications of what could happen if you think
(04:50):
about you know, health Care And E Commerce.
And so we realized together that There was amoment in time where there were gonna be all
these industries that could be disruptive.
And I think sometimes, you know, businessesoften happen at, like, the right moment in
time.
So we saw Warby Parker, and we saw Harry's.
And we said, that's funny.
(05:11):
Matresses are like a terrible industry.
You have to, like, negotiate back then you needto, like, negotiate with some guy inside of a
store that's like a, you know, he wears like aa large suit and it's like, you go by a
mattress, and, like, you have to negotiate onthe price.
Like, what other object?
Like, we go by this water.
You don't go say, like, no, I'm gonna pay 80¢for it.
You know, but you'd have to negotiate on amattress price.
So we said, What if we could totally improvethe experience?
(05:34):
But more important than that, what if we couldbuild the Nike of sleep where we could figure
out how to create products and services andother things that could help people take sleep
more seriously, make it cool, make itinteresting, And so we started with a mattress,
and then we ended up, you know, over timegetting into many other categories and and
(05:55):
know, the co founding journey kind of involvedwith that.
Gotcha.
And when you started the business, you wereactually so confident in your ability to impact
the $39,000,000,000 mattress industry.
So you go to raise money from investors.
And after meeting with dozens of investors,what was the feedback from them?
What were you hearing?
Oh my god.
It's so funny because we were like, this is agenius idea.
(06:18):
This is a, you know, of course, it's gonnawork.
And so then we start pitching investors and 1by 1.
It's like Domino's falling, but like in a badway.
Everybody's like, nobody's ever gonna buymattress on the internet.
Right?
The feedback was nobody's gonna do this.
This doesn't seem like a good idea.
You have to try a product before you buy it.
The economics are never gonna work.
(06:40):
The mattress industry is super sketchy.
And back then to be fair, direct to consumerwasn't really a category.
Still warby and and Harry's were in their earlydays and people kind of thought this is a a
crazy bet.
And so we probably had 50 meetings of all notesbefore we got to our first yes.
At the very beginning, I saw this picture,which I think is pretty important from when you
(07:04):
were trying to get investors.
You gave a cash for mattress to a now wellknown investor, Ben Lara, and stored his old
mattress until he was convinced that he wantedto keep the new one.
What story does that picture share?
Okay.
So this is what happened.
So so we met Ben and, Ben had actually beenthinking about this category for a while and
(07:29):
had tried, I think, starting this company in adifferent way, and it hadn't worked.
So when we met, he was the first person thatwas like, I get it.
Okay.
So we're super excited.
He's like, I wanna lead you around.
I wanna invest, and I'm gonna write, I think itwas a $400,000 check.
And this was the biggest deal in the entireworld.
(07:49):
Like, when we found out, I literally kissed theground.
Sorry to interrupt this episode, but I have aquick 5 second favor to ask you.
If you're enjoying this episode, we'd love itif you subscribe down below helps the channel
more than you can imagine.
Thank you very much.
And back to the interview.
Because we had no money, essentially, reallybefore this alongside of maybe some angels and
our friend Ron who said he was gonna invest.
(08:11):
And so but Ben's one stipulation was, can I trythe bed before I say yes?
Because I wanna make sure it's good.
Okay.
Now here's the thing.
We didn't really have a lot of production beds.
We only had, like, you know, some littlesamples in but, of course, he's an investor.
You're like, yeah.
Of course.
So we overnight a bed from our factory.
(08:31):
We get it sent, and then we're like, but wedon't have it in didn't we hadn't build the
compression machines yet that kind of get itinto the Casper box that you see today.
So we're like, how are we gonna get into hishouse?
Okay.
So we we rent a U Haul we put the mattressinside from our office in Soho.
We drive to his house, and we go up into a Soholoft.
And we see his wife there.
(08:53):
And we're like, hey.
We're here to, install the mattress and shethinks, you know, the way the mattress delivery
guys.
So she's like, alright.
Cool.
Yeah.
It's in the back.
You can go do it.
So we go put the mattress in.
And of course, right as I'm swinging themattress around, we'll, like, knock over one of
his lamps.
It falls on the ground.
I'm doing oh my god.
I'm this is a disaster.
And so we finally we installed the mattress.
(09:14):
And then the other photo here is we took awayhis old one but the thing we didn't realize was
we didn't have a place to store it.
So we basically, we threw away his old mattressand we prayed that he was gonna like it because
if he didn't like it and he wanted his old bedback, we had no other options.
And so we, you know, we kind of didn't sleepthat night hoping that he was gonna have a good
(09:35):
experience and that him and his wife were gonnahave a good experience.
And then, luckily, the next day or 2 dayslater, we get an email that just says, like,
amazing and all caps caps caps.
And then and then then we knew it was gonnahappen.
And we knew that, like, the round is gonnahappen, but there's probably the most stressful
few days of our life.
You said before that, you didn't really haveany money, and you actually had to take out
(09:57):
debt to start the business.
How much debt did you guys have to take out?
I wanna say we probably had 5th 50 to a 100,000in credit card loans between us.
It was kinda like a revolving, you know, like,anybody who had some amount of credit, we'd
take it out.
And to be fair, Philip was the oldest.
And so he had by far the best credit.
And so a lot of it sat on him.
(10:19):
But I'd say that, you know, we werecontinuously just putting things on either our
credit cards or we'd go to suppliers and say,hey, you know, we'll pay you in 3 months.
Wink, wink.
We don't really have the money right now, butit really took a lot of people to believe on
us.
From the beginning.
Did having that much debt in the beginning?
Did that stress you guys out?
Yes.
(10:39):
But I don't think we really thought about it.
I think you have to have just this, like,eternal optimism that it's gonna be fine.
You know?
And so I think because we were working soquickly and there momentum.
We just didn't really think about it too much.
And then luckily, what happened is that fromthe time we had racked up that debt, to the
time we got money was probably only 4 to 6months later.
(11:02):
And so we were able to kind of get rid of itrelatively quickly and switch it on.
But, yeah, I mean, look, if we hadn't raisedthe money, we'd probably be sitting here having
a very different conversation today.
And when you were going up to investors andThey were saying this was a dumb idea.
A lot of them were saying that one person gaveyou a chance.
What was something you learned from thoserejections from the investors?
(11:24):
For 1 look later, of course, I want it to bespiteful and say, I knew it.
And, you know what?
You didn't believe in us and always wanna takethose things.
Like, sometimes it feels good to take itpersonally.
Like, it's in a front, and it can bemotivating.
But the reality is, like, looking back on it,because now I'm sure I've passed on investing
(11:48):
in many companies that ended up becoming huge.
It's like so much of this is just time andplace and somebody's mindset and their own
personal experiences with something.
And so, like, I think my lesson was, like, justdon't take that stuff super personally.
You know?
Like, you just it's a numbers game.
You just have to get out there and put in reps,and you're gonna keep getting better at telling
(12:10):
your story over and over again.
If you wanna raise a few million bucks, youmight need to have a few hundred conversations,
but, like, it's a really good test to see ifyou have the resilience for the other stuff
that's gonna happen later in your businessbecause, like, raising money is hard, but it's
definitely not as hard as all the other stuff.
You're gonna have to do one day.
Yeah.
The story component, how did that story ofCasper evolve from when you were pitching
(12:33):
investors to then a few years down the linewhen you started to sell mattresses and and
stuff?
Yes.
So for 1, we changed the name.
The original name is called Duke's, and we whenwe first started pitching the business, we had
a different name It was a bad pun, butbasically we we said that, you know, mattresses
have sizes in Queens and kings.
(12:53):
And we want it to be the Rogue Duke.
And so we called it Dukes.
Now the problem is this made sense to nobodyuntil we told the story, and we couldn't get
Duke.com because it may have belongs to someenergy company.
So the brand changed, the name changed, but notthat much about the core story of who we wanted
to be actually changed.
We always wanted to be a sleep company.
We always said we're actually gonna launch lotsof products and services related to sleep and
(13:17):
that mattresses would be our first way in, butthat we would very quickly follow with lots of
other products, in that.
And so I think what happened is that as we keptmeeting investors over and over again and some
of the, you know, the person who ended upleading our series a, Tony Florence at NEA and
Amit, We'd actually met them in the seed roundand they passed on us and said, this is too
(13:39):
early.
But by the time we met them again, you know, 6or 12 months later and they had seen some of
the progress, they you know, one, you get achance to they get this, like, reference point.
They say, oh, wow.
Like, I've seen the story and how they say it'sgonna play out.
And it actually played out the the way theysaid it was going to.
And so I think that, like, some consistency ofyour story is actually pretty important.
(13:59):
And when you got after you got the 400 kinvestment.
You get a cash injection into your bankaccount.
What was next for Casper and the team?
The the first thing we did the day the moneyclosed is we bought ourselves MacBooks.
So we went to we went to the Apple storebecause we had been working on these, like,
really potent computers that, like, sucked.
(14:21):
And so we got everybody a, like, one of those,you know, like, massive Mac displays and a
really nice, MacBook and, like, it was kind ofa weird gift to ourselves because it was just
so we could work more, but we were so excitedthat day about it.
But really what happened is we we we set up thebasics of our team.
(14:41):
So April 4 April 22 2014 is when we launched.
We closed the round a few months earlier thanthat.
And so what we needed to do is get the supplychain set up, get the branding done, get the
packaging done, get the website built, do ourearly marketing and then set up a lot of the
logistics and infrastructure so we could dosame day deliveries, all that stuff.
(15:03):
And we hired out an early team.
So we had a head of PR, a head of performancemarketing, a head of customer service, a head
of engineering, we had a few people that joinedus pre launch in addition to the founders.
A lot of it was just like getting that stuffset up.
We had hired a PR agency that helped us withour launch.
And so a lot of the funds went towards, yeah,kind of like setting everything up so we could
(15:25):
have one big explosive launch day.
And during that launch day, you guys sold a 139beds on the 1st day immediately resulting in a
supply chain shortage how did you get thatinitial traction?
Okay.
So we bought, I think, actually, only 40 or 50beds.
(15:46):
Because we thought they would last for a fewmonths.
And so we had no idea this was gonna happen.
Right?
We were like, okay.
Like, a good day would be we sell 10, 20 ofthese things.
And, and so for 1, in that time period, thereweren't that many cool DTC companies launching.
And so PR was a very powerful tool to be ableto get the word out.
(16:08):
And so we leaned very heavily into earned mediaand luckily, our story got picked up as like,
wow, there's this cool, interesting, tech,adjacent mattress sleep company.
What is this?
Why are there 5 founders?
Oh, interesting.
It's a new product.
1 of the co founders worked at IDEO.
Like, we kind of tried to figure out the storyand how it'd resonate.
Madan then over the course of that 1st month,we we also kind of just tried to lean into
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continuous storytelling.
So, you know, and then the thing is that onceyou have a shortage and the word starts to get
out there, it tends to snowball.
Right?
And so we ended up doing almost a 1,000,000 insales, I think, in our 1st month.
Wow.
And when you were you actually you mentionedyou hired, somebody to head PR marketing and
all those other departments, but you didn'thire somebody in logistics.
(16:59):
Why was that?
I did a lot of that.
Like, now what did I know about how to do that?
Nothing.
So I would say we just know, kind of figured itout together.
Now part of it's because part of our businessmodel, which we didn't real we kind of
architected, but it was also a bit lucky.
Was that our mattresses were actually made inthe United States.
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Now when you make products in the UnitedStates, the thing most people don't realize is
Most of the manufacturers here will drop shipproducts.
So unlike having to import them from Chinawhere you have to pay them bulk order when they
actually leave China, which ties up a lot ofyour cash, and you have to order, like, you
know, 100 or a 1000 or 10000 at a time, wecould order them one off from our factories.
And then because we had designed the box toexactly fit within the UPS specifications, our
(17:44):
products would actually just get made at ourfactory in Georgia.
We'd slap a label on them, and then they wouldship them direct to our customer via UPS.
Whereas normal companies had to set up thiswhole logistics infrastructure and trucks and
drivers and other people, we could just rely onUPS to do most of our deliveries.
And when you'd sold a $1,000,000 of mattressesin in 30 days, what was that inflection point
(18:07):
where you were able to sell a 139 beds on day 1and eventually do a 1,000,000 in revenue in 30
days.
I'm sure that's a lot of entrepreneur streams,but what did you do to to get the tap to that
point?
Oh, I mean, I think it was just beingaggressive about earned media and then
following up with paid media.
And the thing is, like, figuring out theinterplay between those 2.
(18:28):
So we'd always at Casper, and that was animportant skill we learned in that month and
that carried through the whole time.
Was trying to figure out how you can amplifyyour message with both earned and paid media.
Right?
Because and they serve different purposes.
Our media is often about credibility aboutfiguring out how do you get in front of people
when, they're maybe not in the mindset to buysomething.
(18:52):
And paid media is often about finding peoplewho are currently in market.
Now the thing about mattresses is, like, notthat many people wake up in the morning and go,
oh, yeah.
Today's a good day to buy a mattress.
Right?
Like, usually there's something happening inyour life.
You're moving into somebody's house out ofsomebody's house.
You're going to college.
You're moving out of your parents' house.
Like, There's usually some life event that'shappening.
And so a lot of what we spend our time on isthinking through.
(19:14):
How could we figure out how to tap into thoselife events?
And make sure that we're present right therewhen you need to.
Now look, the second thing is the amazing thingabout having expensive product, like our
product was $852,000.
Is like, you only have to sell a thousand bets.
So, like, okay.
Are there a thousand people that we can findthat could buy our product in in a month?
(19:35):
Now that I look back on it, it's like, it's notthat impossible to think about.
Right?
You're like, okay.
If I called up fifty people every day, could Isell a 1000 in a month?
Maybe.
Right?
And so, I think actually it wasn't soimplausible, but to be fair, a lot of things
had to go right at the same time.
And how did you tap into those life events thatpeople are having?
(19:55):
So over time, it was a lot of marketingpartnerships.
Right?
In our 1st year, we did things like, wepartnered with Uber so that in New York City,
there was like a little Casper button, and thenyou could call a Casper van that would show up
at your house.
And inside of that van, we'd built a littlebedroom where you could go try product.
And so instead of opening our own terms at thebeginning, you could get a share of room on
(20:15):
demand.
We'd also think about advertising.
So we partnered with people, who were doingthese, like, mailers to your house when you
actually move.
And so we figured out that, like, okay, rightwhen you're about to move, when you change your
address, That's probably a good time to messageto you because you're gonna be in the market.
Right?
We partner with colleges and figure out how dowe get things to you.
(20:36):
And so a lot of it was just like, on awhiteboard, you map out the user psychology of,
like, what is the exact journey, and then youtry to figure out what are all of the different
points at which you can go and find thosepeople.
The second thing we did for marketing, and Ithink a lot of marketing is honestly about
arbitrage.
It's like, how can you figure out how to getyour message people where other people aren't
(20:58):
talking as much or to different people whoaren't being reached today.
So One of the things that we were just early towas figuring out how to advertise on the radio
and in the subways and offline.
And so early days, we'd advertise on these,like, radio shows that nobody had ever heard
of.
And what we realized is that these radio hosts,when they would talk about how amazing Casper
(21:20):
was, to their audience in, like, Oregon or,like, places that were outside of New York
City, they would crush it.
You know, their sell through rates would beincredible.
And Well, a lot of our competitors were justadvertising in, like, you know, the traditional
New York and San Francisco.
We realized, like, there's just, like, so manypeople outside of the core demographic that you
expect that could buy your product.
And so you should really target more broadly,in other places too.
(21:43):
In some of those paid advertising campaigns,one of which, I remember when I was doing some
research for the show, started with sleep likea narcissist.
So, definitely not traditional corporatemessaging there.
And I think we see a similar thing with, like,a lot of successful successful companies that
break into old industries.
For example, I believe the hustle with SamParr, his welcome email is, like, kind of a
(22:07):
story of you diving into the office, all thehecticness going around the office, not like,
Hey, thanks for subscribing.
This is what we do.
What do you think that says about how we shouldthink about marketing?
I think you have to be creative and you'vegotta figure out, How to do things differently?
(22:28):
I mean, look, how many marketing campaigns canyou can the average person ever remember?
I bet it's less than, like, one handful.
Right?
And so what that means is that breaking throughthe noise is really hard.
And these days, when everybody's complainingabout how CACs are really high and LTV is
always an issue.
What they're inherently saying is it's hard tobreak out from the noise.
(22:48):
Right, because running traditional advertisingcampaigns, just everything blends in together.
Right?
So what we realized when it comes to that oneis that, nobody was advertising on the New York
City subways.
And if you ride the subway back then, the onlyads you would see are for these like
dermatologists who pop your pimples and, like,really weird stuff.
(23:09):
Like, there were no cool brands advertising onthe subways.
So we met the person who does the advertising.
And we said, you know what?
Maybe this could be interesting.
You have a captive audience.
They have to sit opposite this advertising fora meaningful amount of time.
And, maybe we could be a little bitcontroversial.
And so we started to put ads on, and then theystarted to work.
(23:30):
And so then we realized, well, what else shouldwe do?
So then we started launching puzzles where weactually put on either word games or other
puzzles that people could solve and whathappened?
They weren't really necessarily always aboutour product.
Everybody would start talking about thembecause they'd go, oh, man, did you solve that
puzzle for that, you know, that game?
So what happened is we turned an advertisingunit, which was kind of bad, into one that was
(23:53):
much cooler than end up having a captiveaudience that then people would actually start
talking about natively.
And so the the the extension was a lot furtherthan we expected.
Madan in terms of that balance between paid andearned media, how do you find a balance between
the 2?
I would say Look, earned media is much harderto control.
(24:14):
Right?
It's everybody wants to get in front of ajournalist and say, you know, tell my story.
I'm really important.
But the hard part is like the most importantthing is you have to be doing something
interesting.
If you're doing something interesting, thendownstream of getting your story to be told to
other people's much easier.
Right?
And so I'd say the first thing to invest in isto make sure that you actually have an
(24:36):
interesting story that's packaged for people.
It's like we were talking about earlier.
Right?
Like, people want to be told the story in a waythat they can package it and retell it to their
audience.
And so, putting in that work up front is reallyimportant.
The nice thing about paid media is that it'sreally under your own control.
And if you can figure out how to dial it, thenyou can have a little bit more ownership over
(25:00):
your own destiny because if you want to have abig month for a certain reason, you could turn
up the marketing.
If you are out of, you know, inventory, canturn it down.
And so there's, like, a little bit more controlover your end destiny.
But I think they're very synergistic and youkinda have to do both.
And I think one inflection point for Casper inyour growth was when Kylie Jenner posted on
(25:24):
Instagram of a Casper mattress what washappening behind the scenes after that post
went live?
And how did that affect you guys?
Oh my gosh.
So This is a good story about earned media.
Here's the thing.
Every time you have a big earned media moment,generally, for us, we would see a step change
difference in business.
(25:44):
And it's kind of weird because you can't figureout why.
Like, why did we suddenly go?
I don't remember the exact numbers, but let'ssay for easy math, how did we go from doing a
$100,000 a day in revenue to $130,000 a day?
And then all of a sudden, it just like levelsoff at that new number.
And so you're like, okay.
Interesting.
Like, I guess more people just know about us.
So what happened there is that we'd hired ahead of business development who lived in LA
(26:06):
and, we realized at the time that there weretons of celebrities and influencers who kind of
wanted to get into the tech industry and wantedto collaborate with tech companies Naz was
doing angel investing, you know, theKardashians were doing stuff.
And so we had figured out that Kylie was buyinga new house and actually needed a bunch of beds
for it.
(26:26):
And so we gifted her a few beds, for it underwith the understanding that when she posted a
picture about her new house for the first timethat there would be a Casper box in the
background.
And that one post broke website.
We ended up doing 1,000,000 of dollars in salesin the following few days afterwards, which is
(26:47):
incredible.
We we could never have imagined that that wouldhappen to us But in a way, it's because the
authenticity of the story aligned with whathappened.
Right?
Everybody was interested in her new house.
She was somebody who really loved her home, andeverybody was kind of expecting, like, oh,
like, I wanna hear about your new house.
(27:07):
What's going on?
And the way she talked about the brand was in avery loving way.
And so, like, when it all came together, itwasn't advertisement.
It was like, oh, this is just like a like, arepresentation of who she is relative to her
audience.
And so I think that's part of the reason itworked so well was that it didn't feel like a
sellout move.
(27:27):
How can entrepreneurs find opportunities likelike you did with with Kylie?
So
This is a hard one because you have to put inthe work to figure out Who cares about what?
How do you get access to those people?
And how are you relevant at the right moment intime?
(27:50):
Right?
Because Everybody's seen those deals where ifyou go to somebody's agent, you know, they
might ask you for 1,000,000 of dollars tosponsor or to join or something.
And Those definitely work sometimes, but ifyou're talking about this kind of deal, you
have to be in the flow of knowledge.
And so for 1, find people who are Right?
Find an advisor or find a person who seems verywell network that can help you tap into the
(28:13):
flow of things.
2, just show up, right, actually figure out howdo you get into LA or how do you go to these
places where people are and start trying totalk to people in person?
And then the the last one is I think thestrategy today would be a lot different, right,
in the era of micro influencers or placeswhere, you know, it's not like the classic
(28:37):
celebrities are the biggest movers of productanymore.
I would figure out Go on TikTok.
Go on Instagram.
Go message these people directly.
Talk about how you're the founder of a company.
You're really excited about what they're doing.
Try to set up a meeting.
But, look, there's no excuse for just doing thework.
You know?
And, I mean, at the time you were disruptingthe mattress industry, yeah, I'm sure
(28:58):
traditional mattress companies are starting totake note of what you guys are doing.
What kind of moat did you build so thattraditional mattress companies couldn't go
direct to consumer and just and just take youout of business.
So we got lucky in that Sometimes when you haveoligopoly industries, you actually have a lot
more air cover than you think.
(29:18):
So the mattress industry is an oligopoly in thesense that You have mattress stores who sell
product that are generally not made by them andare not their own brands.
And then you have the brands like Tempur Pedicor, you know, Sealy or Serta.
Who generally don't have their own stores, andthey have to sell through the stores.
Now what happens is that means that themattress stores are not gonna launch their own
(29:40):
brands because they need the product fromTempur Pedic.
And Tempur Pedic generally is not gonna go inopen 3000 stores because they need the
distribution of the mattress stores.
So what happens is you have a you have a youhave a industry where both are not gonna
encroach on each other's territory.
So now what happened is that when we came in asa third party that said, Actually, we can do
both.
(30:02):
It was actually years before they took noticebecause I think at the beginning, they were
like, no, that's never gonna be a big thing.
That's cute.
But, like, we have a multi, you know,$100,000,000 business, and they're not gonna
eat into it.
And so I would say we were able to fly underthe radar for 3 or 4 years before they started
taking us seriously.
And before they started thinking about, okay,structurally, how can they start fixing some of
(30:23):
the problems that they had?
The second one that we really focused on iscustomer service and customer experience.
Like, we were religiously focused on how can wecontinue to innovate on that customer
experience because that's something they can'tdo.
So we invented the concept of the 100 nighttrial.
Today, if you try a product on the internet andyou get a 100 days to try it, Originally, we
had 40 days, and we'd say you could try it out.
(30:44):
We looked at the return data, and we saw thatactually most people don't really return the
product after 40 days.
So why don't we just extend the return policy?
So we, like, invented a number.
We're like, you know, 100 days sounds good.
We launched it, and we actually saw that returnrates went down.
And so we said, you know what?
This is amazing.
We should just be more customer friendly andallow people more time to try the product.
(31:05):
And now that's been widely adopted across mostof ecommerce where you can often try a product
for a 100 days.
We also, like, had very like, very goodcustomer service, you know, even at the
beginning, you could call us on a Friday night.
And when we had a small team, like, it was myphone that would ring or our head of CX's phone
that would ring.
And I still remember I've, you know, donethousands of customer service tickets where
(31:28):
they could call us and we would respond tothem.
And, think being really close to the customerwas really important because it made those
people feel like they had a say in ourbusiness.
Right?
Like, they were helping us build it as we wentalong, and they were kind of coming along for
the journey.
And so you can end up building these, like,really excited advocates for your brand that
(31:49):
are gonna go and tell lots of other peopleabout it by building that community.
I was listening to this interview with, I thinkBen Francis.
So he was he's the CEO of Jim Sharp.
And he said, as an entrepreneur, people don'toften talk about this enough, but you have to,
like, completely change who you are as a personthroughout the growth of the business.
Did you encounter something similar?
(32:10):
And if so, how did how did you changethroughout the growth of the business?
It was probably the hardest growth I've everhad to go through.
I, you know, when we started Casper, I think itwas 22.
And when I left, I was a bit over 30, maybe 31.
And so I was going through 2 growth curves atthe same time.
(32:32):
I was going through the the curve of goingfrom, you know, responsibility, growing up, be
it becoming more of an adult, And in one way, Ifelt very lucky because there was a lot of
responsibility at a very young age.
And so I think when responsibilities thrustupon you, you sometimes just have to step up to
(32:54):
the challenge.
Like, what did we know about managing hundredsto thousands of people?
Nothing.
We had to go figure it out.
I think we got really lucky and that a corevalue of ours was to try to hire people who
were smarter and more experienced than usalmost all the time.
And so we wouldn't consider it a success if wewere the smartest people in the room.
(33:14):
We always said we want there to be people whoare smarter more experience around us because
we recognize that we don't know everything.
And so I consider that to be like a freeeducation learning.
I got to go learn from some of the best people,people, marketing people, finance people,
operations, people, ever who came from some ofthe best companies to come join us.
(33:36):
And then, you know, the other hard part is,like, your business goes through so many cycles
of being amazing and then not working and thenamazing and not working and, like, that
everyday cycle can be really hard on you.
Like, you think it's gonna be so glorious.
All of a sudden, like, you think that, like,okay, I find product market fit, and now it's
(33:57):
like done.
We're good forever.
I think most people don't appreciate that,like, I don't think your problems get any
easier.
As you grow and scale, I think you just getbetter at dealing with them.
Yeah.
I I've noticed that's a that's one of the bigthings that I've seen after interviewing a lot
of successful folks is we'll generally see theystill have big problems that they have to deal
(34:21):
with every single day.
It's just the way that they deal with themkinda changes over time.
You mentioned you you've scaled from 100 ofemployees to near a 1000 or over a 1000.
When scaling the business and scaling people,How did you get input from your employees?
Did you use a 360 feedback or somethingsimilar?
What was your process around that?
(34:43):
So to get feedback, we tried everything.
You know, we when we actually until the veryend, we had a Monday morning call hands meeting
for the whole team.
So at 12 o'clock, we'd get the entire companytogether from the very beginning all the way
through, when we went public because we feltlike it was an important thing to start the
week off together to talk about what's going onin the business, what's going well, what's not
(35:07):
working, how do we have teams present theirwork, And so that became a very important
cultural moment for a company every week thatwas really important where we could also take
questions from the whole company.
Anybody could raise their hand and ask aboutsomething going on.
Over time, we started to get moresophisticated.
You know, we do surveys.
We'd ask we'd have cultural ambassadors thatyou know, throughout the company at different
(35:30):
levels and in different groups who areresponsible for trying to get the on the ground
feedback as to what's going on, what could webe doing better, and you know, there's nothing
like FaceTime.
We had offices all around the world in Berlinand London and San Francisco, New York.
And so we would try to spend as much time as wecould in those different offices talking to
people and trying to figure out what's goingon.
(35:50):
And then later in our retail stores, like, howdo we go talk to our team on the ground?
And I generally find that if different kinds ofvalue, like surveys are really good to help you
get directional feedback, but they're reallyhard because you lose a lot of color in what's
happening.
(36:10):
And often, if you talk to enough people on theground, you can pretty quickly get a sense of,
like, what's going on.
You know, there's nothing like just hearing theunfiltered story you can also get a sense of
how important is that stuff.
And so we always felt like it was really,really important to have an open door policy
where anybody could come and talk to us aboutanything.
And out of all the things that you did try toand try to get feedback from your employees,
(36:34):
what do you think was the most effective one?
I'm actually not sure Yeah.
I think probably talking to people one on oneis the most effective one.
I'm being honest.
I mean, I like the surveys, like I said, and Ithink that they're helpful, but I feel like if
(36:55):
somebody has an issue that if we have a goodrelationship and they're willing to say it to
your face, it's something you should takeseriously.
Yeah.
I think I think that's a big thing.
Especially when you reach, I guess, the type ofscale that Casper did, sometimes people can be
intimidated by the founder or CEO in terms ofbringing up their issues.
But if they are able to bring those issues up,then it it is maybe something that you should
(37:18):
consider taking more seriously.
Yeah.
And and by the way, that's not to say thatthat's always perfect because I think the power
dynamic definitely exists, and that's one ofthe things that changes as you get bigger.
Right?
And it's That's the thing that I think oftenfounders are slower to pick up on is like that
power dynamic changing over time because inyour head, you're like, that's only been 3
years.
Like, Of course, I still know 50% of the peoplehere by name on any given day, and I know most
(37:42):
of them because I've seen them every day.
But the power dynamic definitely changes overtime as you get bigger.
And so I think it's important if you care aboutthat to, like, proactively seek that out.
Right?
Try to form a relationship and then alsoshowcase to the organization that if feedback
is important to you, when you get it, what areyou willing to do about it?
(38:05):
That's a good point.
And I guess as you are scaling the business,What was what do you think was the biggest
mistake you made during that scaling process?
So I think sometimes there's this idea that youcan do a lot of things at the same time.
And probably the big lesson I've learned isthat historically most businesses can only
(38:28):
really do 1 or 2 things at once.
And we took on a lot of complexity.
We had opened up our own stores, a wholesalebusiness.
We were expanding our e commerce business.
We opened an international business.
In 7 countries that had all differentlanguages.
(38:49):
And so we had a lot of initiatives going on atthe same time that were often competing for
priorities.
And in an environment where there's a lot ofcapital, sometimes that's fine, but it's really
hard to unwind those things later when you canend up in liquidity crunches or, when the
markets change.
And so I'd say like, the crux of it is probablylike focus.
(39:12):
Right?
That's like the single most important thing.
The second one is Really staying true to yourcustomer value proposition.
Like, really getting in there and understandingwhy is it that people are buying from you and
how can you continue to deliver value for thosepeople?
When I think about the Casper brand, Yes.
(39:35):
We were cool, but at its core, we cared a lotabout innovating on the sleep category.
And I think that distribution is reallyimportant, but At the end of the day, it's
still a pretty under innovated category.
Right?
When you think about how many companies arethere that are really changing the way we
sleep.
It's not that many.
(39:55):
Right?
And so and given that sleep is still, like, 8or 10 hours or 6 hours of most people's days,
I'd say on, like, a dollars invested per hourof your day basis is probably still one of the
most under invested categories out there.
And speaking of liquidity, you guys eventuallydecided to go public.
How much did you guys go public for?
(40:16):
And why did you decide decide to do so?
Going public was always kind of part of theplan, partly because we thought we could be a
great public company.
Often consumer brands are do well in the publicmarkets.
It's a way for your employees to get liquidity,for your shareholders to get be, it's a way for
(40:39):
other people to join the ride with you.
We had so many people that love their Casper isthat we're like, oh, I wanna buy into your
stock and, like, be a part of this journey asyou grow.
And so it was a great opportunity for all ofthat.
And plus we also could have used the capital,to help us further grow.
Now what ended up happening was that we endedup going public February 6 2020.
(41:06):
And that was like 1 month before COVIDhappened.
And so we picked in a way the perfectly worsetiming you could imagine to go public.
And so starting as a public company right inthe middle of the COVID chaos was challenging
for us.
(41:26):
But, yeah, I think it was always kind of likepart of the plan at some point.
So I think you you go public for around a$1,000,000,000.
How did it feel when when you guys went publicat that moment?
So we went we actually went public at abouthalf that valuation.
Half.
Okay.
Gotcha.
And, the which was So for 1st of all, it washalf the valuation of our last private round.
(41:55):
And, part of the the challenge then was thatthe markets had changed quite a lot, and it was
a good lesson in terms of, like, the timing ofthe public and private markets.
Right?
When we had last raised capital, the marketswere much more, tolerant of companies that were
still investing and growth mode versus, beingprofitable.
(42:19):
And then in September of 2019, it was like aswitch flipped immediately.
We work to try to go public.
They were not successful in doing that at thattime.
And, basically, the capital markets got closedbecause Public investors were like, oh my god.
We don't want, you know, companies that aren'tyet profitable.
So it was this weird conundrum because it'sreally cool to go public.
(42:45):
Obviously, you know, ringing the bell.
Very interesting.
You get to, you know, it's it's like In all thebooks for entrepreneurs, it's like the dream.
Right?
Like, oh, you take you take your companypublic.
It's really cool, etcetera.
But on the other side, being a public companyis really hard.
You know?
Like, I think the downsides people often don'ttalk about are the stresses of having to deal
(43:11):
with the quarter to quarter expectations andmanaging how do you deal with the long term
investments that you want to make to reinventyour company?
And the short term pressures aroundprofitability and, you know, responding to the
street and to analysts and managing that plusthe fact that, like, now often your team or the
(43:33):
outside world can reduce your entire existenceonto one stock price, which is often not even
reflective of all the amazing things that arehappening.
That part's hard.
So the would that mean after you guys wentpublic?
Was your day to day more difficult than waswhen it was when you were private?
I would say for our executive team, it waspartly because so for 1, there's just like a
(43:56):
lot of now access controls to information.
You can't tell the whole team about everything.
You want to protect people from having, youknow, MNPI.
It's really non public Madan.
You can't really put out forward lookingstatements.
You can't talk publicly about a lot of thethings that you're going to do like, there's
just like a lot of restrictions in place.
(44:17):
You have a lot of more admin Madan.
Right?
Your accounting has to get done.
Your forecasting has to get done.
And so, like, I would say that there's probablya 10 or 20 percent drag to time of being a
public company that you just, like, losebecause of the admin related stuff.
And then I think there's just like the teammanagement.
Right?
There's like distress involved with, managing ateam who sees their net worth going up and down
(44:43):
on a public ticker every day.
And perhaps yesterday, they could afford thathouse they really wanted.
And today, they can't.
And and there might be nothing you can do tocontrol that.
In terms of entrepreneurs who might be wantingto go public or or build that big company, like
you guys did, what would be your your one pieceof advice to them?
(45:04):
My main advice would be don't go public justbecause you think it's cool.
Like, really have a plan.
And what I mean by that is take a step back andthink about the why.
I think what's amazing is these days, weactually have examples of companies like Stripe
And SpaceX that have gotten really big withoutever having to go public.
And they've figured out the mechanism by which,they can operate as private companies still
(45:29):
have quite a lot of air cover and withouthaving to go public.
Now that said, there are not that manycompanies that are like them.
The vast majority of companies access the thepublic markets to get capital, to get
liquidity, and whatnot.
So I'd start by thinking about, like, what'syour long term plan?
Why do you need this?
Is it because you want money secondary foryourself?
Is it for your team, for your employees?
(45:51):
Do you need capital to help you fuel the thegrowth of your business?
Number 2, think about timing.
Don't kid yourself when it comes to where youare in the maturity of your business plan.
And, generally, I wouldn't recommend goingpublic when you're in the middle of trying to
yourselves because the public markets likeconsistency.
(46:11):
Right?
They like a story where it's like, you toldthem you're gonna hit this number.
And then you beat it by just a little bit everytime.
If you beat it by a lot every time, like whathappens with Nvidia and stuff, right, then all
of a sudden they bake in crazy expectations,and then you can miss that.
And if you miss it, it's a disaster, right,because they're like, you can't put, you know,
(46:32):
you can't predict your business well.
And so be really clear about where you are inthat cycle.
And don't be flipping about it.
After your time at Casper, we're now sittinghere a couple of years later.
What do you focused on now.
What what do you want the next 5, 10 years ofof your life or work life or personal life to
(46:52):
be spent your time
Yeah.
So a lot of my focus now is thinking about theconsumer applications of health care and AI.
So, through the Casper journey, what I realizedis sleep is really important, obviously.
And then thinking about what else can we do tooptimize people's health and wellness?
(47:13):
So, I joined the board of this company calledpsych hub where what we were doing was helping
train therapists to specialize.
And the idea was if we specialize therapiststhey can become a lot more powerful at helping
people get better faster by training onspecific modalities or disease states.
(47:35):
I invested in a bunch of companies in thehealth tech space.
And I started to realize that in the you know,in the in the realm of mental health, there's
like a 100 to 1000 to 1 shortage of how manyproviders there are for how many people that
need help.
I'm like, we all have this.
Right?
We all have friends who probably have gonethrough crisis, maybe family members who are
(47:56):
really struggling and Not only is gettingaccess to care really expensive.
It could be 100 of dollars an hour if you don'thave insurance, and a lot of insurance plans
don't cover a lot of sessions.
Not to mention that for the other seven billionpeople who don't have access to this care, they
essentially have nothing today.
And then if we believe that AGI is coming soonand that so much of our meaning in life comes
(48:22):
from our work and our purpose and our family,And then that over the next 20 years is gonna
change in a big way.
Right?
If I've been trained as a lawyer or a doctor ora writer or a movie, you know, filmmaker and
that all is gonna change.
I think the number of people who are gonna needhelp processing and figuring this out is gonna
increase quite dramatically.
(48:42):
So I'm starting to work on that as thinkingthrough, you know, what are the applications?
How can we build AI tools?
They're gonna help people free their minds, forthis you know, this big next chapter of change.
Yeah.
I'm excited to learn more about what you'reworking on, after the show.
But but before we wrap it up, I like to closetraditionally with two closing questions.
(49:04):
One of which is what is the best piece ofadvice you've ever received?
The best piece of advice I've ever gotten is torelentlessly invest in yourself.
I'm not a type of person that buys fancythings.
(49:26):
I think I learned early on that the only personwho's gonna believe in you as much as you do is
you and your mom, probably.
And so, like, you have to figure out how togain knowledge to gain skills, to try things
like you were a knife, and you were responsiblefor sharpening your own knife.
(49:50):
Nobody's gonna do that for you.
And so do whatever the hell it takes.
Right?
Find mentors.
Go read books.
Like, we live in an era where you can learnanything.
And the cool thing about being young is thatanybody will talk to you.
Right?
Like, I talked to lots of people who cold emailme who are, you know, 16 or 18 or we met you
(50:10):
know, outside of a conference.
And so I think that use that to your advantagein terms of figuring out how to build your
skill set And so you could take your owndestiny under your control.
I think that's a great piece of advice And Iguess our last one here is if I slid you over a
(50:31):
phone and you could call your eighteen year oldself, would you call?
And if so, what would you say?
I would definitely call.
I think about this all the time when I talk tomy inner child, And I guess 18 perhaps is not a
child, but maybe I was a kid.
I don't know.
(50:53):
I think I would say Like, keep doing whatyou're doing.
The thing is that it I could not have predictedfor you how things were gonna go this way.
Like, for me at 18, I had to go to college.
I had to drop out of med school.
I had to start 3 companies that went sideways.
(51:14):
That I had to happen to sit next to somebodywho became a friend and then a business
partner.
And then I had to go through that wholejourney.
And so, like, There's no so much of life.
We look for this linear path because it's howour brains work that we we think, alright.
If I do this, then this will happen, then thiswill happen, and this will happen.
But most of the most incredible things thathave ever happened in my life were either
(51:37):
chance or I could never have written the moviescript that way.
And so I just tell myself, like, keepbelieving.
Awesome.
We'll love to hear it.
First off, thank you very much, everyone, fortuning into the episode.
We'll have a link to Casper in the episodedescription, down below.
Thank you, Neil, for taking the time to jointhe show.
It was a pleasure, and look forward to maybehaving you back on when you announce your new
(51:58):
startup to the public.
Thanks for having me.
Awesome.
Thank you.
It was probably the hardest growth I've everhad to go through.
(00:03):
We had no money, essentially, really beforethis.
This was the biggest deal in the entire world.
Like, when we found out I literally kissed theground.
Neil, thanks for joining.
Before we get into your journey, co founding a$1,000,000,000 company, I believe our early
years are fundamental in shaping the person webecome.
(00:24):
Are there any patterns or or things that youdid in your early years that you would consider
an anomaly that led you to the person you aretoday.
Well, first of all, thanks for having meexcited to be here.
You know, I didn't know this at the timebecause I would probably complain about it all
the time, but when I was a kid, I grew up inNew Brunswick and My grandfather owned a
(00:45):
comedian store on the Rutgers Shamus on EastonAvenue, and pretty much every day I go work in
the store.
And, you know, he'd teach me about packingboxes, taking inventory.
I was probably selling cigarettes, which Idon't think kids should have been doing, you
know, all kinds of like funny things, but itwasn't until much later in my life that I
(01:07):
realized that what that experience was wasteaching me about the physics of business,
right, that you have to buy some things at acertain price.
You have to sell them at a price that's higherthan you bought them for.
You have to make money on margins.
You have to treat your employees well.
You have to, like, form a community of peoplewho are influencers.
So we'd always have professors from the collegecampus come in, and my grandfather would always
(01:27):
treat them super or the police officers becauseyou knew they would bring in other people.
And so I sometimes look back on that experiencebecause at the time, I was like, why do I have
to be here and work in this store?
It was actually probably one of the mostprofound experiences for me later because I
think it really taught me the basics ofbusiness even if it was in like a really small
way.
And how did you use that experience in thatfoundational basics of business later on when
(01:53):
when you started your 1st company?
Well, I'd say it took me a long time tounderstand how business works, to be totally
honest.
Right?
Like in college, I tried starting nonprofitswhere We, help people get access to clean water
in India, and we tried to build, microentrepreneurs that would build little stations
inside of slums that would sell water filters.
(02:16):
So that my first experience was actuallyenabling people to set up stores and, resale
stuff.
And then over time, once we kind of, like,started thinking about e commerce and realized,
wow, we can actually get other people to sellstuff for on our behalf.
We started a startup called Consigned where theit was kind of like an influencer marketplace
where if you're an influencer and you wanted tosell watches, you could consign somebody like,
(02:41):
if I owned a Rolex, I could, you know, consignit to somebody else who would sell it to their
audience, but it was too complicated.
And so I think it over time, it just got methinking about this relationship between
people, how things are bought and sold.
And really, a lot of it's just like, how doeshuman psychology work?
You know?
I think those foundational lessons were kindakey to when you started, I guess, the big
(03:01):
company, which we're here to talk about, whichis Casper, cash for currently, or had 5 co
founders.
How did you all meet and come up the idea withfor creating a mattress company?
Online and selling mattresses online?
Yeah.
I think my favorite quote or story is thatthese things only make sense in reverse, you
(03:22):
know, So what happened is I was first inmedical school at Brown, and I thought I was
gonna be a doctor.
And after my 1st year, The thing that aboutmedical school is that it's a place where at
that time, they're not really looking for superinnovative.
Students.
Right?
They're mostly like memorized stuff, get itdone, go to your homework, come back and take a
(03:44):
test.
It's like the army.
And that didn't resonate very well with me.
So I told my parents, hey, I'm gonna take ayear off.
I'm gonna move to New York City, and I'm gonnafigure something else off.
So first of all, they had a heart attack.
My parents called me turn blue in the face.
They were very upset about the fact becausethey thought I might never go back to medical
school, which didn't.
(04:04):
But, but so what happened is I moved to NewYork and with some of my friends from undergrad
who had just graduated, we ended up starting aseries of companies, one of them being
consigned, which I just told you about.
And we were actually in an accelerator programin New York City at a co working space where I
(04:26):
happened to sit next to you by chance somebodywho became my friend named Philip.
And one day I heard him talking about how heused to sell mattresses online from his dorm
room.
I'm like, that's a dumb idea.
Like, who's ever gonna buy a mattress on theinternet?
Like, then you have to try it before you buyit, but my dad was actually a sleep doctor.
And so I guess I've been thinking about thestuff.
I've been medicine.
I was thinking about the, you know, consumerapplications of what could happen if you think
(04:50):
about you know, health Care And E Commerce.
And so we realized together that There was amoment in time where there were gonna be all
these industries that could be disruptive.
And I think sometimes, you know, businessesoften happen at, like, the right moment in
time.
So we saw Warby Parker, and we saw Harry's.
And we said, that's funny.
(05:11):
Matresses are like a terrible industry.
You have to, like, negotiate back then you needto, like, negotiate with some guy inside of a
store that's like a, you know, he wears like aa large suit and it's like, you go by a
mattress, and, like, you have to negotiate onthe price.
Like, what other object?
Like, we go by this water.
You don't go say, like, no, I'm gonna pay 80¢for it.
You know, but you'd have to negotiate on amattress price.
So we said, What if we could totally improvethe experience?
(05:34):
But more important than that, what if we couldbuild the Nike of sleep where we could figure
out how to create products and services andother things that could help people take sleep
more seriously, make it cool, make itinteresting, And so we started with a mattress,
and then we ended up, you know, over timegetting into many other categories and and
(05:55):
know, the co founding journey kind of involvedwith that.
Gotcha.
And when you started the business, you wereactually so confident in your ability to impact
the $39,000,000,000 mattress industry.
So you go to raise money from investors.
And after meeting with dozens of investors,what was the feedback from them?
What were you hearing?
Oh my god.
It's so funny because we were like, this is agenius idea.
(06:18):
This is a, you know, of course, it's gonnawork.
And so then we start pitching investors and 1by 1.
It's like Domino's falling, but like in a badway.
Everybody's like, nobody's ever gonna buymattress on the internet.
Right?
The feedback was nobody's gonna do this.
This doesn't seem like a good idea.
You have to try a product before you buy it.
The economics are never gonna work.
(06:40):
The mattress industry is super sketchy.
And back then to be fair, direct to consumerwasn't really a category.
Still warby and and Harry's were in their earlydays and people kind of thought this is a a
crazy bet.
And so we probably had 50 meetings of all notesbefore we got to our first yes.
At the very beginning, I saw this picture,which I think is pretty important from when you
(07:04):
were trying to get investors.
You gave a cash for mattress to a now wellknown investor, Ben Lara, and stored his old
mattress until he was convinced that he wantedto keep the new one.
What story does that picture share?
Okay.
So this is what happened.
So so we met Ben and, Ben had actually beenthinking about this category for a while and
(07:29):
had tried, I think, starting this company in adifferent way, and it hadn't worked.
So when we met, he was the first person thatwas like, I get it.
Okay.
So we're super excited.
He's like, I wanna lead you around.
I wanna invest, and I'm gonna write, I think itwas a $400,000 check.
And this was the biggest deal in the entireworld.
(07:49):
Like, when we found out, I literally kissed theground.
Sorry to interrupt this episode, but I have aquick 5 second favor to ask you.
If you're enjoying this episode, we'd love itif you subscribe down below helps the channel
more than you can imagine.
Thank you very much.
And back to the interview.
Because we had no money, essentially, reallybefore this alongside of maybe some angels and
our friend Ron who said he was gonna invest.
(08:11):
And so but Ben's one stipulation was, can I trythe bed before I say yes?
Because I wanna make sure it's good.
Okay.
Now here's the thing.
We didn't really have a lot of production beds.
We only had, like, you know, some littlesamples in but, of course, he's an investor.
You're like, yeah.
Of course.
So we overnight a bed from our factory.
(08:31):
We get it sent, and then we're like, but wedon't have it in didn't we hadn't build the
compression machines yet that kind of get itinto the Casper box that you see today.
So we're like, how are we gonna get into hishouse?
Okay.
So we we rent a U Haul we put the mattressinside from our office in Soho.
We drive to his house, and we go up into a Soholoft.
And we see his wife there.
(08:53):
And we're like, hey.
We're here to, install the mattress and shethinks, you know, the way the mattress delivery
guys.
So she's like, alright.
Cool.
Yeah.
It's in the back.
You can go do it.
So we go put the mattress in.
And of course, right as I'm swinging themattress around, we'll, like, knock over one of
his lamps.
It falls on the ground.
I'm doing oh my god.
I'm this is a disaster.
And so we finally we installed the mattress.
(09:14):
And then the other photo here is we took awayhis old one but the thing we didn't realize was
we didn't have a place to store it.
So we basically, we threw away his old mattressand we prayed that he was gonna like it because
if he didn't like it and he wanted his old bedback, we had no other options.
And so we, you know, we kind of didn't sleepthat night hoping that he was gonna have a good
(09:35):
experience and that him and his wife were gonnahave a good experience.
And then, luckily, the next day or 2 dayslater, we get an email that just says, like,
amazing and all caps caps caps.
And then and then then we knew it was gonnahappen.
And we knew that, like, the round is gonnahappen, but there's probably the most stressful
few days of our life.
You said before that, you didn't really haveany money, and you actually had to take out
(09:57):
debt to start the business.
How much debt did you guys have to take out?
I wanna say we probably had 5th 50 to a 100,000in credit card loans between us.
It was kinda like a revolving, you know, like,anybody who had some amount of credit, we'd
take it out.
And to be fair, Philip was the oldest.
And so he had by far the best credit.
And so a lot of it sat on him.
(10:19):
But I'd say that, you know, we werecontinuously just putting things on either our
credit cards or we'd go to suppliers and say,hey, you know, we'll pay you in 3 months.
Wink, wink.
We don't really have the money right now, butit really took a lot of people to believe on
us.
From the beginning.
Did having that much debt in the beginning?
Did that stress you guys out?
Yes.
(10:39):
But I don't think we really thought about it.
I think you have to have just this, like,eternal optimism that it's gonna be fine.
You know?
And so I think because we were working soquickly and there momentum.
We just didn't really think about it too much.
And then luckily, what happened is that fromthe time we had racked up that debt, to the
time we got money was probably only 4 to 6months later.
(11:02):
And so we were able to kind of get rid of itrelatively quickly and switch it on.
But, yeah, I mean, look, if we hadn't raisedthe money, we'd probably be sitting here having
a very different conversation today.
And when you were going up to investors andThey were saying this was a dumb idea.
A lot of them were saying that one person gaveyou a chance.
What was something you learned from thoserejections from the investors?
(11:24):
For 1 look later, of course, I want it to bespiteful and say, I knew it.
And, you know what?
You didn't believe in us and always wanna takethose things.
Like, sometimes it feels good to take itpersonally.
Like, it's in a front, and it can bemotivating.
But the reality is, like, looking back on it,because now I'm sure I've passed on investing
(11:48):
in many companies that ended up becoming huge.
It's like so much of this is just time andplace and somebody's mindset and their own
personal experiences with something.
And so, like, I think my lesson was, like, justdon't take that stuff super personally.
You know?
Like, you just it's a numbers game.
You just have to get out there and put in reps,and you're gonna keep getting better at telling
(12:10):
your story over and over again.
If you wanna raise a few million bucks, youmight need to have a few hundred conversations,
but, like, it's a really good test to see ifyou have the resilience for the other stuff
that's gonna happen later in your businessbecause, like, raising money is hard, but it's
definitely not as hard as all the other stuff.
You're gonna have to do one day.
Yeah.
The story component, how did that story ofCasper evolve from when you were pitching
(12:33):
investors to then a few years down the linewhen you started to sell mattresses and and
stuff?
Yes.
So for 1, we changed the name.
The original name is called Duke's, and we whenwe first started pitching the business, we had
a different name It was a bad pun, butbasically we we said that, you know, mattresses
have sizes in Queens and kings.
(12:53):
And we want it to be the Rogue Duke.
And so we called it Dukes.
Now the problem is this made sense to nobodyuntil we told the story, and we couldn't get
Duke.com because it may have belongs to someenergy company.
So the brand changed, the name changed, but notthat much about the core story of who we wanted
to be actually changed.
We always wanted to be a sleep company.
We always said we're actually gonna launch lotsof products and services related to sleep and
(13:17):
that mattresses would be our first way in, butthat we would very quickly follow with lots of
other products, in that.
And so I think what happened is that as we keptmeeting investors over and over again and some
of the, you know, the person who ended upleading our series a, Tony Florence at NEA and
Amit, We'd actually met them in the seed roundand they passed on us and said, this is too
(13:39):
early.
But by the time we met them again, you know, 6or 12 months later and they had seen some of
the progress, they you know, one, you get achance to they get this, like, reference point.
They say, oh, wow.
Like, I've seen the story and how they say it'sgonna play out.
And it actually played out the the way theysaid it was going to.
And so I think that, like, some consistency ofyour story is actually pretty important.
(13:59):
And when you got after you got the 400 kinvestment.
You get a cash injection into your bankaccount.
What was next for Casper and the team?
The the first thing we did the day the moneyclosed is we bought ourselves MacBooks.
So we went to we went to the Apple storebecause we had been working on these, like,
really potent computers that, like, sucked.
(14:21):
And so we got everybody a, like, one of those,you know, like, massive Mac displays and a
really nice, MacBook and, like, it was kind ofa weird gift to ourselves because it was just
so we could work more, but we were so excitedthat day about it.
But really what happened is we we we set up thebasics of our team.
(14:41):
So April 4 April 22 2014 is when we launched.
We closed the round a few months earlier thanthat.
And so what we needed to do is get the supplychain set up, get the branding done, get the
packaging done, get the website built, do ourearly marketing and then set up a lot of the
logistics and infrastructure so we could dosame day deliveries, all that stuff.
(15:03):
And we hired out an early team.
So we had a head of PR, a head of performancemarketing, a head of customer service, a head
of engineering, we had a few people that joinedus pre launch in addition to the founders.
A lot of it was just like getting that stuffset up.
We had hired a PR agency that helped us withour launch.
And so a lot of the funds went towards, yeah,kind of like setting everything up so we could
(15:25):
have one big explosive launch day.
And during that launch day, you guys sold a 139beds on the 1st day immediately resulting in a
supply chain shortage how did you get thatinitial traction?
Okay.
So we bought, I think, actually, only 40 or 50beds.
(15:46):
Because we thought they would last for a fewmonths.
And so we had no idea this was gonna happen.
Right?
We were like, okay.
Like, a good day would be we sell 10, 20 ofthese things.
And, and so for 1, in that time period, thereweren't that many cool DTC companies launching.
And so PR was a very powerful tool to be ableto get the word out.
(16:08):
And so we leaned very heavily into earned mediaand luckily, our story got picked up as like,
wow, there's this cool, interesting, tech,adjacent mattress sleep company.
What is this?
Why are there 5 founders?
Oh, interesting.
It's a new product.
1 of the co founders worked at IDEO.
Like, we kind of tried to figure out the storyand how it'd resonate.
Madan then over the course of that 1st month,we we also kind of just tried to lean into
(16:35):
continuous storytelling.
So, you know, and then the thing is that onceyou have a shortage and the word starts to get
out there, it tends to snowball.
Right?
And so we ended up doing almost a 1,000,000 insales, I think, in our 1st month.
Wow.
And when you were you actually you mentionedyou hired, somebody to head PR marketing and
all those other departments, but you didn'thire somebody in logistics.
(16:59):
Why was that?
I did a lot of that.
Like, now what did I know about how to do that?
Nothing.
So I would say we just know, kind of figured itout together.
Now part of it's because part of our businessmodel, which we didn't real we kind of
architected, but it was also a bit lucky.
Was that our mattresses were actually made inthe United States.
(17:19):
Now when you make products in the UnitedStates, the thing most people don't realize is
Most of the manufacturers here will drop shipproducts.
So unlike having to import them from Chinawhere you have to pay them bulk order when they
actually leave China, which ties up a lot ofyour cash, and you have to order, like, you
know, 100 or a 1000 or 10000 at a time, wecould order them one off from our factories.
And then because we had designed the box toexactly fit within the UPS specifications, our
(17:44):
products would actually just get made at ourfactory in Georgia.
We'd slap a label on them, and then they wouldship them direct to our customer via UPS.
Whereas normal companies had to set up thiswhole logistics infrastructure and trucks and
drivers and other people, we could just rely onUPS to do most of our deliveries.
And when you'd sold a $1,000,000 of mattressesin in 30 days, what was that inflection point
(18:07):
where you were able to sell a 139 beds on day 1and eventually do a 1,000,000 in revenue in 30
days.
I'm sure that's a lot of entrepreneur streams,but what did you do to to get the tap to that
point?
Oh, I mean, I think it was just beingaggressive about earned media and then
following up with paid media.
And the thing is, like, figuring out theinterplay between those 2.
(18:28):
So we'd always at Casper, and that was animportant skill we learned in that month and
that carried through the whole time.
Was trying to figure out how you can amplifyyour message with both earned and paid media.
Right?
Because and they serve different purposes.
Our media is often about credibility aboutfiguring out how do you get in front of people
when, they're maybe not in the mindset to buysomething.
(18:52):
And paid media is often about finding peoplewho are currently in market.
Now the thing about mattresses is, like, notthat many people wake up in the morning and go,
oh, yeah.
Today's a good day to buy a mattress.
Right?
Like, usually there's something happening inyour life.
You're moving into somebody's house out ofsomebody's house.
You're going to college.
You're moving out of your parents' house.
Like, There's usually some life event that'shappening.
And so a lot of what we spend our time on isthinking through.
(19:14):
How could we figure out how to tap into thoselife events?
And make sure that we're present right therewhen you need to.
Now look, the second thing is the amazing thingabout having expensive product, like our
product was $852,000.
Is like, you only have to sell a thousand bets.
So, like, okay.
Are there a thousand people that we can findthat could buy our product in in a month?
(19:35):
Now that I look back on it, it's like, it's notthat impossible to think about.
Right?
You're like, okay.
If I called up fifty people every day, could Isell a 1000 in a month?
Maybe.
Right?
And so, I think actually it wasn't soimplausible, but to be fair, a lot of things
had to go right at the same time.
And how did you tap into those life events thatpeople are having?
(19:55):
So over time, it was a lot of marketingpartnerships.
Right?
In our 1st year, we did things like, wepartnered with Uber so that in New York City,
there was like a little Casper button, and thenyou could call a Casper van that would show up
at your house.
And inside of that van, we'd built a littlebedroom where you could go try product.
And so instead of opening our own terms at thebeginning, you could get a share of room on
(20:15):
demand.
We'd also think about advertising.
So we partnered with people, who were doingthese, like, mailers to your house when you
actually move.
And so we figured out that, like, okay, rightwhen you're about to move, when you change your
address, That's probably a good time to messageto you because you're gonna be in the market.
Right?
We partner with colleges and figure out how dowe get things to you.
(20:36):
And so a lot of it was just like, on awhiteboard, you map out the user psychology of,
like, what is the exact journey, and then youtry to figure out what are all of the different
points at which you can go and find thosepeople.
The second thing we did for marketing, and Ithink a lot of marketing is honestly about
arbitrage.
It's like, how can you figure out how to getyour message people where other people aren't
(20:58):
talking as much or to different people whoaren't being reached today.
So One of the things that we were just early towas figuring out how to advertise on the radio
and in the subways and offline.
And so early days, we'd advertise on these,like, radio shows that nobody had ever heard
of.
And what we realized is that these radio hosts,when they would talk about how amazing Casper
(21:20):
was, to their audience in, like, Oregon or,like, places that were outside of New York
City, they would crush it.
You know, their sell through rates would beincredible.
And Well, a lot of our competitors were justadvertising in, like, you know, the traditional
New York and San Francisco.
We realized, like, there's just, like, so manypeople outside of the core demographic that you
expect that could buy your product.
And so you should really target more broadly,in other places too.
(21:43):
In some of those paid advertising campaigns,one of which, I remember when I was doing some
research for the show, started with sleep likea narcissist.
So, definitely not traditional corporatemessaging there.
And I think we see a similar thing with, like,a lot of successful successful companies that
break into old industries.
For example, I believe the hustle with SamParr, his welcome email is, like, kind of a
(22:07):
story of you diving into the office, all thehecticness going around the office, not like,
Hey, thanks for subscribing.
This is what we do.
What do you think that says about how we shouldthink about marketing?
I think you have to be creative and you'vegotta figure out, How to do things differently?
(22:28):
I mean, look, how many marketing campaigns canyou can the average person ever remember?
I bet it's less than, like, one handful.
Right?
And so what that means is that breaking throughthe noise is really hard.
And these days, when everybody's complainingabout how CACs are really high and LTV is
always an issue.
What they're inherently saying is it's hard tobreak out from the noise.
(22:48):
Right, because running traditional advertisingcampaigns, just everything blends in together.
Right?
So what we realized when it comes to that oneis that, nobody was advertising on the New York
City subways.
And if you ride the subway back then, the onlyads you would see are for these like
dermatologists who pop your pimples and, like,really weird stuff.
(23:09):
Like, there were no cool brands advertising onthe subways.
So we met the person who does the advertising.
And we said, you know what?
Maybe this could be interesting.
You have a captive audience.
They have to sit opposite this advertising fora meaningful amount of time.
And, maybe we could be a little bitcontroversial.
And so we started to put ads on, and then theystarted to work.
(23:30):
And so then we realized, well, what else shouldwe do?
So then we started launching puzzles where weactually put on either word games or other
puzzles that people could solve and whathappened?
They weren't really necessarily always aboutour product.
Everybody would start talking about thembecause they'd go, oh, man, did you solve that
puzzle for that, you know, that game?
So what happened is we turned an advertisingunit, which was kind of bad, into one that was
(23:53):
much cooler than end up having a captiveaudience that then people would actually start
talking about natively.
And so the the the extension was a lot furtherthan we expected.
Madan in terms of that balance between paid andearned media, how do you find a balance between
the 2?
I would say Look, earned media is much harderto control.
(24:14):
Right?
It's everybody wants to get in front of ajournalist and say, you know, tell my story.
I'm really important.
But the hard part is like the most importantthing is you have to be doing something
interesting.
If you're doing something interesting, thendownstream of getting your story to be told to
other people's much easier.
Right?
And so I'd say the first thing to invest in isto make sure that you actually have an
(24:36):
interesting story that's packaged for people.
It's like we were talking about earlier.
Right?
Like, people want to be told the story in a waythat they can package it and retell it to their
audience.
And so, putting in that work up front is reallyimportant.
The nice thing about paid media is that it'sreally under your own control.
And if you can figure out how to dial it, thenyou can have a little bit more ownership over
(25:00):
your own destiny because if you want to have abig month for a certain reason, you could turn
up the marketing.
If you are out of, you know, inventory, canturn it down.
And so there's, like, a little bit more controlover your end destiny.
But I think they're very synergistic and youkinda have to do both.
And I think one inflection point for Casper inyour growth was when Kylie Jenner posted on
(25:24):
Instagram of a Casper mattress what washappening behind the scenes after that post
went live?
And how did that affect you guys?
Oh my gosh.
So This is a good story about earned media.
Here's the thing.
Every time you have a big earned media moment,generally, for us, we would see a step change
difference in business.
(25:44):
And it's kind of weird because you can't figureout why.
Like, why did we suddenly go?
I don't remember the exact numbers, but let'ssay for easy math, how did we go from doing a
$100,000 a day in revenue to $130,000 a day?
And then all of a sudden, it just like levelsoff at that new number.
And so you're like, okay.
Interesting.
Like, I guess more people just know about us.
So what happened there is that we'd hired ahead of business development who lived in LA
(26:06):
and, we realized at the time that there weretons of celebrities and influencers who kind of
wanted to get into the tech industry and wantedto collaborate with tech companies Naz was
doing angel investing, you know, theKardashians were doing stuff.
And so we had figured out that Kylie was buyinga new house and actually needed a bunch of beds
for it.
(26:26):
And so we gifted her a few beds, for it underwith the understanding that when she posted a
picture about her new house for the first timethat there would be a Casper box in the
background.
And that one post broke website.
We ended up doing 1,000,000 of dollars in salesin the following few days afterwards, which is
(26:47):
incredible.
We we could never have imagined that that wouldhappen to us But in a way, it's because the
authenticity of the story aligned with whathappened.
Right?
Everybody was interested in her new house.
She was somebody who really loved her home, andeverybody was kind of expecting, like, oh,
like, I wanna hear about your new house.
(27:07):
What's going on?
And the way she talked about the brand was in avery loving way.
And so, like, when it all came together, itwasn't advertisement.
It was like, oh, this is just like a like, arepresentation of who she is relative to her
audience.
And so I think that's part of the reason itworked so well was that it didn't feel like a
sellout move.
(27:27):
How can entrepreneurs find opportunities likelike you did with with Kylie?
So
This is a hard one because you have to put inthe work to figure out Who cares about what?
How do you get access to those people?
And how are you relevant at the right moment intime?
(27:50):
Right?
Because Everybody's seen those deals where ifyou go to somebody's agent, you know, they
might ask you for 1,000,000 of dollars tosponsor or to join or something.
And Those definitely work sometimes, but ifyou're talking about this kind of deal, you
have to be in the flow of knowledge.
And so for 1, find people who are Right?
Find an advisor or find a person who seems verywell network that can help you tap into the
(28:13):
flow of things.
2, just show up, right, actually figure out howdo you get into LA or how do you go to these
places where people are and start trying totalk to people in person?
And then the the last one is I think thestrategy today would be a lot different, right,
in the era of micro influencers or placeswhere, you know, it's not like the classic
(28:37):
celebrities are the biggest movers of productanymore.
I would figure out Go on TikTok.
Go on Instagram.
Go message these people directly.
Talk about how you're the founder of a company.
You're really excited about what they're doing.
Try to set up a meeting.
But, look, there's no excuse for just doing thework.
You know?
And, I mean, at the time you were disruptingthe mattress industry, yeah, I'm sure
(28:58):
traditional mattress companies are starting totake note of what you guys are doing.
What kind of moat did you build so thattraditional mattress companies couldn't go
direct to consumer and just and just take youout of business.
So we got lucky in that Sometimes when you haveoligopoly industries, you actually have a lot
more air cover than you think.
(29:18):
So the mattress industry is an oligopoly in thesense that You have mattress stores who sell
product that are generally not made by them andare not their own brands.
And then you have the brands like Tempur Pedicor, you know, Sealy or Serta.
Who generally don't have their own stores, andthey have to sell through the stores.
Now what happens is that means that themattress stores are not gonna launch their own
(29:40):
brands because they need the product fromTempur Pedic.
And Tempur Pedic generally is not gonna go inopen 3000 stores because they need the
distribution of the mattress stores.
So what happens is you have a you have a youhave a industry where both are not gonna
encroach on each other's territory.
So now what happened is that when we came in asa third party that said, Actually, we can do
both.
(30:02):
It was actually years before they took noticebecause I think at the beginning, they were
like, no, that's never gonna be a big thing.
That's cute.
But, like, we have a multi, you know,$100,000,000 business, and they're not gonna
eat into it.
And so I would say we were able to fly underthe radar for 3 or 4 years before they started
taking us seriously.
And before they started thinking about, okay,structurally, how can they start fixing some of
(30:23):
the problems that they had?
The second one that we really focused on iscustomer service and customer experience.
Like, we were religiously focused on how can wecontinue to innovate on that customer
experience because that's something they can'tdo.
So we invented the concept of the 100 nighttrial.
Today, if you try a product on the internet andyou get a 100 days to try it, Originally, we
had 40 days, and we'd say you could try it out.
(30:44):
We looked at the return data, and we saw thatactually most people don't really return the
product after 40 days.
So why don't we just extend the return policy?
So we, like, invented a number.
We're like, you know, 100 days sounds good.
We launched it, and we actually saw that returnrates went down.
And so we said, you know what?
This is amazing.
We should just be more customer friendly andallow people more time to try the product.
(31:05):
And now that's been widely adopted across mostof ecommerce where you can often try a product
for a 100 days.
We also, like, had very like, very goodcustomer service, you know, even at the
beginning, you could call us on a Friday night.
And when we had a small team, like, it was myphone that would ring or our head of CX's phone
that would ring.
And I still remember I've, you know, donethousands of customer service tickets where
(31:28):
they could call us and we would respond tothem.
And, think being really close to the customerwas really important because it made those
people feel like they had a say in ourbusiness.
Right?
Like, they were helping us build it as we wentalong, and they were kind of coming along for
the journey.
And so you can end up building these, like,really excited advocates for your brand that
(31:49):
are gonna go and tell lots of other peopleabout it by building that community.
I was listening to this interview with, I thinkBen Francis.
So he was he's the CEO of Jim Sharp.
And he said, as an entrepreneur, people don'toften talk about this enough, but you have to,
like, completely change who you are as a personthroughout the growth of the business.
Did you encounter something similar?
(32:10):
And if so, how did how did you changethroughout the growth of the business?
It was probably the hardest growth I've everhad to go through.
I, you know, when we started Casper, I think itwas 22.
And when I left, I was a bit over 30, maybe 31.
And so I was going through 2 growth curves atthe same time.
(32:32):
I was going through the the curve of goingfrom, you know, responsibility, growing up, be
it becoming more of an adult, And in one way, Ifelt very lucky because there was a lot of
responsibility at a very young age.
And so I think when responsibilities thrustupon you, you sometimes just have to step up to
(32:54):
the challenge.
Like, what did we know about managing hundredsto thousands of people?
Nothing.
We had to go figure it out.
I think we got really lucky and that a corevalue of ours was to try to hire people who
were smarter and more experienced than usalmost all the time.
And so we wouldn't consider it a success if wewere the smartest people in the room.
(33:14):
We always said we want there to be people whoare smarter more experience around us because
we recognize that we don't know everything.
And so I consider that to be like a freeeducation learning.
I got to go learn from some of the best people,people, marketing people, finance people,
operations, people, ever who came from some ofthe best companies to come join us.
(33:36):
And then, you know, the other hard part is,like, your business goes through so many cycles
of being amazing and then not working and thenamazing and not working and, like, that
everyday cycle can be really hard on you.
Like, you think it's gonna be so glorious.
All of a sudden, like, you think that, like,okay, I find product market fit, and now it's
(33:57):
like done.
We're good forever.
I think most people don't appreciate that,like, I don't think your problems get any
easier.
As you grow and scale, I think you just getbetter at dealing with them.
Yeah.
I I've noticed that's a that's one of the bigthings that I've seen after interviewing a lot
of successful folks is we'll generally see theystill have big problems that they have to deal
(34:21):
with every single day.
It's just the way that they deal with themkinda changes over time.
You mentioned you you've scaled from 100 ofemployees to near a 1000 or over a 1000.
When scaling the business and scaling people,How did you get input from your employees?
Did you use a 360 feedback or somethingsimilar?
What was your process around that?
(34:43):
So to get feedback, we tried everything.
You know, we when we actually until the veryend, we had a Monday morning call hands meeting
for the whole team.
So at 12 o'clock, we'd get the entire companytogether from the very beginning all the way
through, when we went public because we feltlike it was an important thing to start the
week off together to talk about what's going onin the business, what's going well, what's not
(35:07):
working, how do we have teams present theirwork, And so that became a very important
cultural moment for a company every week thatwas really important where we could also take
questions from the whole company.
Anybody could raise their hand and ask aboutsomething going on.
Over time, we started to get moresophisticated.
You know, we do surveys.
We'd ask we'd have cultural ambassadors thatyou know, throughout the company at different
(35:30):
levels and in different groups who areresponsible for trying to get the on the ground
feedback as to what's going on, what could webe doing better, and you know, there's nothing
like FaceTime.
We had offices all around the world in Berlinand London and San Francisco, New York.
And so we would try to spend as much time as wecould in those different offices talking to
people and trying to figure out what's goingon.
(35:50):
And then later in our retail stores, like, howdo we go talk to our team on the ground?
And I generally find that if different kinds ofvalue, like surveys are really good to help you
get directional feedback, but they're reallyhard because you lose a lot of color in what's
happening.
(36:10):
And often, if you talk to enough people on theground, you can pretty quickly get a sense of,
like, what's going on.
You know, there's nothing like just hearing theunfiltered story you can also get a sense of
how important is that stuff.
And so we always felt like it was really,really important to have an open door policy
where anybody could come and talk to us aboutanything.
And out of all the things that you did try toand try to get feedback from your employees,
(36:34):
what do you think was the most effective one?
I'm actually not sure Yeah.
I think probably talking to people one on oneis the most effective one.
I'm being honest.
I mean, I like the surveys, like I said, and Ithink that they're helpful, but I feel like if
(36:55):
somebody has an issue that if we have a goodrelationship and they're willing to say it to
your face, it's something you should takeseriously.
Yeah.
I think I think that's a big thing.
Especially when you reach, I guess, the type ofscale that Casper did, sometimes people can be
intimidated by the founder or CEO in terms ofbringing up their issues.
But if they are able to bring those issues up,then it it is maybe something that you should
(37:18):
consider taking more seriously.
Yeah.
And and by the way, that's not to say thatthat's always perfect because I think the power
dynamic definitely exists, and that's one ofthe things that changes as you get bigger.
Right?
And it's That's the thing that I think oftenfounders are slower to pick up on is like that
power dynamic changing over time because inyour head, you're like, that's only been 3
years.
Like, Of course, I still know 50% of the peoplehere by name on any given day, and I know most
(37:42):
of them because I've seen them every day.
But the power dynamic definitely changes overtime as you get bigger.
And so I think it's important if you care aboutthat to, like, proactively seek that out.
Right?
Try to form a relationship and then alsoshowcase to the organization that if feedback
is important to you, when you get it, what areyou willing to do about it?
(38:05):
That's a good point.
And I guess as you are scaling the business,What was what do you think was the biggest
mistake you made during that scaling process?
So I think sometimes there's this idea that youcan do a lot of things at the same time.
And probably the big lesson I've learned isthat historically most businesses can only
(38:28):
really do 1 or 2 things at once.
And we took on a lot of complexity.
We had opened up our own stores, a wholesalebusiness.
We were expanding our e commerce business.
We opened an international business.
In 7 countries that had all differentlanguages.
(38:49):
And so we had a lot of initiatives going on atthe same time that were often competing for
priorities.
And in an environment where there's a lot ofcapital, sometimes that's fine, but it's really
hard to unwind those things later when you canend up in liquidity crunches or, when the
markets change.
And so I'd say like, the crux of it is probablylike focus.
(39:12):
Right?
That's like the single most important thing.
The second one is Really staying true to yourcustomer value proposition.
Like, really getting in there and understandingwhy is it that people are buying from you and
how can you continue to deliver value for thosepeople?
When I think about the Casper brand, Yes.
(39:35):
We were cool, but at its core, we cared a lotabout innovating on the sleep category.
And I think that distribution is reallyimportant, but At the end of the day, it's
still a pretty under innovated category.
Right?
When you think about how many companies arethere that are really changing the way we
sleep.
It's not that many.
(39:55):
Right?
And so and given that sleep is still, like, 8or 10 hours or 6 hours of most people's days,
I'd say on, like, a dollars invested per hourof your day basis is probably still one of the
most under invested categories out there.
And speaking of liquidity, you guys eventuallydecided to go public.
How much did you guys go public for?
(40:16):
And why did you decide decide to do so?
Going public was always kind of part of theplan, partly because we thought we could be a
great public company.
Often consumer brands are do well in the publicmarkets.
It's a way for your employees to get liquidity,for your shareholders to get be, it's a way for
(40:39):
other people to join the ride with you.
We had so many people that love their Casper isthat we're like, oh, I wanna buy into your
stock and, like, be a part of this journey asyou grow.
And so it was a great opportunity for all ofthat.
And plus we also could have used the capital,to help us further grow.
Now what ended up happening was that we endedup going public February 6 2020.
(41:06):
And that was like 1 month before COVIDhappened.
And so we picked in a way the perfectly worsetiming you could imagine to go public.
And so starting as a public company right inthe middle of the COVID chaos was challenging
for us.
(41:26):
But, yeah, I think it was always kind of likepart of the plan at some point.
So I think you you go public for around a$1,000,000,000.
How did it feel when when you guys went publicat that moment?
So we went we actually went public at abouthalf that valuation.
Half.
Okay.
Gotcha.
And, the which was So for 1st of all, it washalf the valuation of our last private round.
(41:55):
And, part of the the challenge then was thatthe markets had changed quite a lot, and it was
a good lesson in terms of, like, the timing ofthe public and private markets.
Right?
When we had last raised capital, the marketswere much more, tolerant of companies that were
still investing and growth mode versus, beingprofitable.
(42:19):
And then in September of 2019, it was like aswitch flipped immediately.
We work to try to go public.
They were not successful in doing that at thattime.
And, basically, the capital markets got closedbecause Public investors were like, oh my god.
We don't want, you know, companies that aren'tyet profitable.
So it was this weird conundrum because it'sreally cool to go public.
(42:45):
Obviously, you know, ringing the bell.
Very interesting.
You get to, you know, it's it's like In all thebooks for entrepreneurs, it's like the dream.
Right?
Like, oh, you take you take your companypublic.
It's really cool, etcetera.
But on the other side, being a public companyis really hard.
You know?
Like, I think the downsides people often don'ttalk about are the stresses of having to deal
(43:11):
with the quarter to quarter expectations andmanaging how do you deal with the long term
investments that you want to make to reinventyour company?
And the short term pressures aroundprofitability and, you know, responding to the
street and to analysts and managing that plusthe fact that, like, now often your team or the
(43:33):
outside world can reduce your entire existenceonto one stock price, which is often not even
reflective of all the amazing things that arehappening.
That part's hard.
So the would that mean after you guys wentpublic?
Was your day to day more difficult than waswhen it was when you were private?
I would say for our executive team, it waspartly because so for 1, there's just like a
(43:56):
lot of now access controls to information.
You can't tell the whole team about everything.
You want to protect people from having, youknow, MNPI.
It's really non public Madan.
You can't really put out forward lookingstatements.
You can't talk publicly about a lot of thethings that you're going to do like, there's
just like a lot of restrictions in place.
(44:17):
You have a lot of more admin Madan.
Right?
Your accounting has to get done.
Your forecasting has to get done.
And so, like, I would say that there's probablya 10 or 20 percent drag to time of being a
public company that you just, like, losebecause of the admin related stuff.
And then I think there's just like the teammanagement.
Right?
There's like distress involved with, managing ateam who sees their net worth going up and down
(44:43):
on a public ticker every day.
And perhaps yesterday, they could afford thathouse they really wanted.
And today, they can't.
And and there might be nothing you can do tocontrol that.
In terms of entrepreneurs who might be wantingto go public or or build that big company, like
you guys did, what would be your your one pieceof advice to them?
(45:04):
My main advice would be don't go public justbecause you think it's cool.
Like, really have a plan.
And what I mean by that is take a step back andthink about the why.
I think what's amazing is these days, weactually have examples of companies like Stripe
And SpaceX that have gotten really big withoutever having to go public.
And they've figured out the mechanism by which,they can operate as private companies still
(45:29):
have quite a lot of air cover and withouthaving to go public.
Now that said, there are not that manycompanies that are like them.
The vast majority of companies access the thepublic markets to get capital, to get
liquidity, and whatnot.
So I'd start by thinking about, like, what'syour long term plan?
Why do you need this?
Is it because you want money secondary foryourself?
Is it for your team, for your employees?
(45:51):
Do you need capital to help you fuel the thegrowth of your business?
Number 2, think about timing.
Don't kid yourself when it comes to where youare in the maturity of your business plan.
And, generally, I wouldn't recommend goingpublic when you're in the middle of trying to
yourselves because the public markets likeconsistency.
(46:11):
Right?
They like a story where it's like, you toldthem you're gonna hit this number.
And then you beat it by just a little bit everytime.
If you beat it by a lot every time, like whathappens with Nvidia and stuff, right, then all
of a sudden they bake in crazy expectations,and then you can miss that.
And if you miss it, it's a disaster, right,because they're like, you can't put, you know,
(46:32):
you can't predict your business well.
And so be really clear about where you are inthat cycle.
And don't be flipping about it.
After your time at Casper, we're now sittinghere a couple of years later.
What do you focused on now.
What what do you want the next 5, 10 years ofof your life or work life or personal life to
(46:52):
be spent your time
Yeah.
So a lot of my focus now is thinking about theconsumer applications of health care and AI.
So, through the Casper journey, what I realizedis sleep is really important, obviously.
And then thinking about what else can we do tooptimize people's health and wellness?
(47:13):
So, I joined the board of this company calledpsych hub where what we were doing was helping
train therapists to specialize.
And the idea was if we specialize therapiststhey can become a lot more powerful at helping
people get better faster by training onspecific modalities or disease states.
(47:35):
I invested in a bunch of companies in thehealth tech space.
And I started to realize that in the you know,in the in the realm of mental health, there's
like a 100 to 1000 to 1 shortage of how manyproviders there are for how many people that
need help.
I'm like, we all have this.
Right?
We all have friends who probably have gonethrough crisis, maybe family members who are
(47:56):
really struggling and Not only is gettingaccess to care really expensive.
It could be 100 of dollars an hour if you don'thave insurance, and a lot of insurance plans
don't cover a lot of sessions.
Not to mention that for the other seven billionpeople who don't have access to this care, they
essentially have nothing today.
And then if we believe that AGI is coming soonand that so much of our meaning in life comes
(48:22):
from our work and our purpose and our family,And then that over the next 20 years is gonna
change in a big way.
Right?
If I've been trained as a lawyer or a doctor ora writer or a movie, you know, filmmaker and
that all is gonna change.
I think the number of people who are gonna needhelp processing and figuring this out is gonna
increase quite dramatically.
(48:42):
So I'm starting to work on that as thinkingthrough, you know, what are the applications?
How can we build AI tools?
They're gonna help people free their minds, forthis you know, this big next chapter of change.
Yeah.
I'm excited to learn more about what you'reworking on, after the show.
But but before we wrap it up, I like to closetraditionally with two closing questions.
(49:04):
One of which is what is the best piece ofadvice you've ever received?
The best piece of advice I've ever gotten is torelentlessly invest in yourself.
I'm not a type of person that buys fancythings.
(49:26):
I think I learned early on that the only personwho's gonna believe in you as much as you do is
you and your mom, probably.
And so, like, you have to figure out how togain knowledge to gain skills, to try things
like you were a knife, and you were responsiblefor sharpening your own knife.
(49:50):
Nobody's gonna do that for you.
And so do whatever the hell it takes.
Right?
Find mentors.
Go read books.
Like, we live in an era where you can learnanything.
And the cool thing about being young is thatanybody will talk to you.
Right?
Like, I talked to lots of people who cold emailme who are, you know, 16 or 18 or we met you
(50:10):
know, outside of a conference.
And so I think that use that to your advantagein terms of figuring out how to build your
skill set And so you could take your owndestiny under your control.
I think that's a great piece of advice And Iguess our last one here is if I slid you over a
(50:31):
phone and you could call your eighteen year oldself, would you call?
And if so, what would you say?
I would definitely call.
I think about this all the time when I talk tomy inner child, And I guess 18 perhaps is not a
child, but maybe I was a kid.
I don't know.
(50:53):
I think I would say Like, keep doing whatyou're doing.
The thing is that it I could not have predictedfor you how things were gonna go this way.
Like, for me at 18, I had to go to college.
I had to drop out of med school.
I had to start 3 companies that went sideways.
(51:14):
That I had to happen to sit next to somebodywho became a friend and then a business
partner.
And then I had to go through that wholejourney.
And so, like, There's no so much of life.
We look for this linear path because it's howour brains work that we we think, alright.
If I do this, then this will happen, then thiswill happen, and this will happen.
But most of the most incredible things thathave ever happened in my life were either
(51:37):
chance or I could never have written the moviescript that way.
And so I just tell myself, like, keepbelieving.
Awesome.
We'll love to hear it.
First off, thank you very much, everyone, fortuning into the episode.
We'll have a link to Casper in the episodedescription, down below.
Thank you, Neil, for taking the time to jointhe show.
It was a pleasure, and look forward to maybehaving you back on when you announce your new
(51:58):
startup to the public.
Thanks for having me.
Awesome.
Thank you.
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