We Need a Warby Parker for Mattresses • Hacker News Board

Re: We Need a Warby Parker for Mattresses

#111

Post by MartinCron » Fri, Sep 14, 2012, 8:12 PM UTC

oostevo wrote: post #101

raldi wrote: post #69

If you attempt this, I suggest you make a deal with a motel chain: When a customer checks into a room, they discover a little sign on the bed. The sign says, "Like this mattress? Get a brand-new copy delivered to your home for $X00 by visiting mattressr.com and entering bed code MEDIUMSOFT-23."

Some hotels do something similar -- chains sell the mattresses that they use in their hotels to consumers.[1] [1] http://www.whotelsthestore.com/item.asp?curr_item_id=5

Westin makes a lot of fuss about how great their beds are and how you can buy the whole kit for your home.

http://www.westin-hotelsathome.com/bed.aspx

I was a little disappointed when I stayed in a Westin a few years ago, the bed was nice, but didn't live up to the high expectations.

Re: We Need a Warby Parker for Mattresses

#112

Post by MartinCron » Fri, Sep 14, 2012, 8:13 PM UTC

qq66 wrote: post #98

MartinCron wrote: post #28

Earlier quoted context omitted.

The real disruption will come in the form of widely available manufactured (not mined) diamonds. I used to think of diamonds as basically worthless rocks, until I went shopping for an engagement ring stone and looked at them under the jeweler's microscope, and thought "I want to be dressed from head to toe in these things". With mass-produced diamonds, that may become a reality.

Yes, they're nice to look at, but unlike, say, emeralds, they're not very rare -- they're simply controlled by a monopoly supplier. Manufactured diamonds will bring back a competitive supply which would exist if there was a healthy assortment of companies in the diamond mining industry today. I do question your judgment in wanting to cover yourself head to toe in diamonds :) Do you also want to drive this car? http:/…

No. I wouldn't drive a diamond-studded SL. I would prefer the more modest SLK, actually.

Re: We Need a Warby Parker for Mattresses

#113

Post by pkulak » Fri, Sep 14, 2012, 8:15 PM UTC

It's really easy to spot the industries that have ridiculous margins; just find the shops that stay open forever, yet seem to make about 1-2 sales a day. I've seen mattress stores that seem to be able to sustain one full-time employee and about 20000 square feet of showroom on a couple purchases a day. Some with sunglass stores.

Re: We Need a Warby Parker for Mattresses

#114

Post by chiphanna » Fri, Sep 14, 2012, 8:17 PM UTC

I actually had this idea while shopping for mattresses a couple of months ago.

It's nuts. I started thinking about the economics of a new mattress and couldn't get it to work out, financially. The biggest thing the big stores (like Mattress Firm, etc.) have is distribution and floor space.

You need to try out a new mattress. There's nothing around that. After trying over 50+ mattresses, I realized that. There are so many different kinds and not a lot in common. You'd be tough pressed to find 10 people like like the same mattress. It'd be like buying a car without test driving it. That never happens.

Then there's the economics of it: - Retail Price: ~$1,000 - Price of Materials: I'd estimate to be around $100. Labor, probably close to $25. - Modern Mattresses Companies put a TON into research/development/marketing. I'd estimate that to be about another $100 (on the low end) of the cost of the mattress. - Shipping, even freight, for something this size has got to cost at least $25. Right now, we're at $300 for a $1,000 item. - This is the (fairly) hard cost of making the item. I wouldn't be surprised if the Sealy's of the world sell it to the Mattress Firms for $500 and make a $200 profit (reasonable, to me).

Then, to pay for even more marketing, floor space, employees and delivery service - you better believe that Mattress Firm demands a 50% margin.

If we could somehow fix the distribution/store front option, we could get the price down - but that's the tough part.

In case you were wondering, after all of my research, this is what I ended up buying: http://chip-hanna.com/how-to-find-the-perfect-mattress-for-y...

It was, honestly, the best money I've ever spent. A great bed makes all the difference.

I'm not very sure of the legality of this, but one possible option is to have "If you like the Sealy Optimum Radiance, you'll like (insert new brand here)." That would drive people to the Mattress Firms of the world to try them out, but online to purchase (what happens with most products today anyway).

Re: We Need a Warby Parker for Mattresses

#115

Post by tptacek » Fri, Sep 14, 2012, 8:45 PM UTC

notJim wrote: post #67

rscale wrote: post #15

I believe that entrepreneurs could do well, generally, by looking for opportunities in industries that are dominated by private-equity players. If an industry is overweight PE, you can bet that the market analysis looks fantastically attractive (competition isn't too fierce, suppliers have little power, buyers have little power, not many substitutes, and little perceived threat from new entrants). If a clever entrepr…

Could someone explain for the… ahh… more financially naïve among us why private equity is the important signifier here? It seems like what rscale is talking about are markets which are opaque due to companies that have enough clout to force that inefficiency (e.g., by restricting information or making product comparisons impossible.) Why or how is that coordinated with private equity?

Private equity firms buy companies to make them more profitable and then flip them. They are essentially committing themselves to the incumbent role in Christiansen's "Innovator's Dilemma". When a market is dominated by risk-averse incumbents, it is probably ripe for disruption.

Re: We Need a Warby Parker for Mattresses

#116

Post by tptacek » Fri, Sep 14, 2012, 8:48 PM UTC

rohin wrote: post #31

mattmiller wrote: post #18

Earlier quoted context omitted.

How do you find industries dominated by PE?

Make a list of the top 20 PE funds (KKR, Bain Capital, TPG, etc) and then check out their portfolio from their website or WSJ articles.

There are a lot of KKR companies. Wow.

Re: We Need a Warby Parker for Mattresses

#117

Post by BroNamath » Fri, Sep 14, 2012, 8:49 PM UTC

I just got 5 frames from WP in the mail for "in home try on." The quality of the glasses are sup-par. They feel like frames you would find at the gas station. Yes the frames are stylish, but for anyone who has bought glasses their entire lives, you would know right away why these cost $95. There is a company that is the WP of mattresses: Ikea. The product is cheap and of low quality.

Re: We Need a Warby Parker for Mattresses

#118

Post by dminor » Fri, Sep 14, 2012, 8:53 PM UTC

antidaily wrote: post #39

startupfounder wrote: post #10

We need a Warby Parker for Diamonds! 1. Oligopoly market structure CHECK 2. Insane gross margins CHECK 3. Opaque and misleading product naming CHECK 4. Expensive distribution through unpleasant channels CHECK CHECK CHECK

And where are the flawless manufactured diamonds Wired featured 8 years ago?

I bought my wife's engagement ring from them, but sadly they are no more: http://en.wikipedia.org/wiki/Apollo_Diamond

Re: We Need a Warby Parker for Mattresses

#119

Post by dminor » Fri, Sep 14, 2012, 8:57 PM UTC

lesterbuck wrote: post #50

storborg wrote: post #4

Earlier quoted context omitted.

They also have by far the best customer experience. Their website is fantastic and fulfillment is lightning-fast, neither of which can be said about the competitors that I've tried (framesdirect.com, zennioptical.com, glasses.com, 39dollarglasses). It's not just PR. Unfortunately, their range of styles is still very narrow, which is presumably dependent on their manufacturing capabilities.

I used zennioptical.com in 2008 and was very happy. Lacking any fashion sense, I ordered some computer glasses that I hoped would completely disappear on my face - #804811 titanium shape memory rimless, single vision, high index of refraction, with various coatings delivered for under $40. After two years, the nose bridge broke and I took it around locally to see about a repair. The local repair guru quoted me $45 to…

I just ordered a pair from Zenni. Their site is pretty slow, but for $30 for a pair of glasses I'll happily put up with it.

Re: We Need a Warby Parker for Mattresses

#120

Post by marklabedz » Fri, Sep 14, 2012, 9:07 PM UTC

notJim wrote: post #99

marklabedz wrote: post #89

Earlier quoted context omitted.

At the risk of putting words in rscale's mouth, its not that PE creates these conditions or that PE is even necessary for these conditions. Instead, PE tends to find and play in highly attractive industries (See Porter's 5 Forces for a classic view of "attractiveness"). PE involvement in an industry can be a good signal...

Ahh, very cool. That makes a lot of sense to me. Basically you're using PE as a proxy for a measurement of attractiveness.

Yes, that's a good way to look at it. Its really important to recognize the crux of rscale's point though - you have to render the high barriers to entry condition false. If you can't figure out how to enter, the remaining conditions don't really matter.