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Casper, Mattress Maker, Raises $170M and Plans I.P.O

nytimes.com

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Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#31

Post by ericd »

Pulcinella wrote: post #13
peterkshultz wrote: post #11

Earlier quoted context omitted.

"It's exceptionally rare for startups to be killed by competitors—so rare that you can almost discount the possibility." - Paul Graham ( http://paulgraham.com/startupideas.html )

Yes we all remember when Facebook failed to defeat MySpace...

The point is that you're very unlikely to get to that spot, and you don't have to think about that in the beginning. And even then, if you focus on your own company and execute well, you generally don't have to worry about your competitors - it's yours to lose.

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#32

Post by austenallred »

ekianjo wrote: post #29
tdeck wrote: post #14

Worth listening to this story from Marketplace: Why are there so many mattress stores? https://www.marketplace.org/2016/05/02/world/why-are-there-s... Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money.

> Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money. then, is there any reason why no-one disrupts the market with cheaper mattresses?

That's what's happening

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#33

Post by RealityNow »

DrJokepu wrote: post #7
smaili wrote: post #5

Any owners here care to share what Casper's "killer app" is?

Their products are more affordable than much of their competition, they are very comfortable and easy to assemble. They only have online retail presence, no physical retail locations. The only thing I dislike about my Casper mattress is that sitting on the edge of the bed is a bit uncomfortable.

In terms of comfort, they're nothing special. A bit too firm for my tastes.

They're definitely fantastic at marketing though.

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#34

Post by rtpg »

ekianjo wrote: post #29
tdeck wrote: post #14

Worth listening to this story from Marketplace: Why are there so many mattress stores? https://www.marketplace.org/2016/05/02/world/why-are-there-s... Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money.

> Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money. then, is there any reason why no-one disrupts the market with cheaper mattresses?

I imagine that the initial capital costs are ....quite high. At least for brick and mortar stores. You need a lot of space to show off mattresses after all.

Combine that with the not-so-great retail story and a bank probably doesn't want to give out loans for a huge retail space that it might not be able to resell.

Though... I bet there's some opportunities when you look at all the malls that are closing down.

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#35

Post by diogenescynic »

I tried a bed in a box from another well rated brand and didn't like it. Felt fine for a few days but gave me back problems after a week. I think there's a reason hotels aren't using these foam mattresses--most people don't like them. I see this as a fad to be honest, but I could also be wrong.

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#36

Post by mahyarm »

ekianjo wrote: post #29
tdeck wrote: post #14

Worth listening to this story from Marketplace: Why are there so many mattress stores? https://www.marketplace.org/2016/05/02/world/why-are-there-s... Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money.

> Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money. then, is there any reason why no-one disrupts the market with cheaper mattresses?

IKEA seems to be doing that. Or are they selling matresses at 100x markup too?

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#37

Post by SOLAR_FIELDS »

tdeck wrote: post #14

Worth listening to this story from Marketplace: Why are there so many mattress stores? https://www.marketplace.org/2016/05/02/world/why-are-there-s... Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money.

The other part of it that the podcast only briefly touches on but I think is integral to the whole story is that mattress stores do not have to hold a large inventory. Mattresses are ordered upon purchase and delivered either to the store location or directly to the consumer as necessary. High markup + low inventory requirements are really what pushes the surplus of mattress retail locations.

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#38

Post by SOLAR_FIELDS »

beager wrote: post #9
02thoeva wrote: post #3

In the UK, Eve, a rival maker also just (around a month ago) IPO'd here in the UK. Their figures are scary at the moment, with a CPA hovering around £250-£300 and returns of 15% on the mattresses with the 100-night trial. All that with an average order value was only £450, on a product people buy every 10 years! They lost £11.3m last year on earnings of £12m, so no wonder their shares have been on the decline since I…

That is a staggering CPA vis a vis product cost. Is that just based on the congestion of keyword bidding? Or does CPA actually mean conversion/sale and the path to close is very difficult? I feel like Amazon could swoop in with a competitive offering and obliterate the competition, if marketing and acquisition were the only barriers to success. They've also got a lot of distribution infrastructure they can leverage,…

Part of the success of Casper is the lack of choices - this is briefly touched on in the article. They seem to want to take the Apple approach - offer few choices and do them right, charging a healthy premium along the way.

I don't see any competitive advantage that Casper offers beyond that - Amazon and WalMart have similarly lax return policies as Casper without the premium. I can likely get the same quality mattress at one of the two above retailers for slightly above half-price of the equivalent Casper offering.

I do see Casper billboards in Austin in the Domain, which is a mid-to-high tier shopping center where the demographic skews younger. I've also heard ads on podcasts. So they are advertising, though it doesn't seem like they are targeting the typical channels for a mass audience, but rather are marketing to the younger demographic.

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#39

Post by interfixus »

JumpCrisscross wrote: post #28
interfixus wrote: post #23

Yet another little corner of life where I'm left wondering out in the dark. Absolutely not denigrating anyone's preferences - it's just that I simply don't get it: Give me a slab of foam rubber - and maybe give me a new one after five or ten years - and I couldn't be happier. Fancy mattresses range - in my limited view - from quite on a level with foam down to way too squishy .

> I simply don't get it...give me a slab of foam rubber I drink my coffee black and my espresso unadorned. I'm not "wondering out in the dark" why some prefer a cappuccino or venti frappé whatever-the-crap. People have different preferences.

May I recommend a little more wonder and a little less hostility?

Re: Casper, Mattress Maker, Raises $170M and Plans I.P.O

#40

Post by givemefive »

tdeck wrote: post #14

Worth listening to this story from Marketplace: Why are there so many mattress stores? https://www.marketplace.org/2016/05/02/world/why-are-there-s... Basically, mattresses in the US are sold at a very high markup (couple hundred times the cost) so it's an easy way to make money.

couple hundred times?

So you're saying my $800 mattress cost $4 to make and deliver?

ok dude..

I could see the markup being twice or even a little more than twice, but not 200x

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