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We Need a Warby Parker for Mattresses

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Re: We Need a Warby Parker for Mattresses

#121

Post by hapless »

MartinCron wrote: post #111
oostevo wrote: post #101

Earlier quoted context omitted.

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.

Westin and 'W' hotels are the #2 and #1 "tier" hotels in the same company, Starwood. And it seems that the 'W' bed costs about $500 more than the "Westin" version. Fitting.

Re: We Need a Warby Parker for Mattresses

#122

Post by eru »

muraiki wrote: post #56
twoodfin wrote: post #22

Earlier quoted context omitted.

The problem is that many people like to lie on a mattress before they buy it. Sure, that's a little silly since lying on it for a minute or so is unlikely to capture the experience of tossing and turning on it for a night, but it's clear that it's a competitive advantage to let the consumer compare a few models in a physically direct way. Warby Parker can get away with the similar consumer requirement for glasses bec…

My wife and I almost got a Sleep Innovations mattress, but in the end we felt that we couldn't buy a mattress that we hadn't had a chance to try out. We both like a very firm mattress, which can be difficult to find. While it's true that lying on a mattress for a few minutes won't tell you whether it's the best one or not, it sure did help us rule out many mattresses. We ended up getting an Ikea mattress, which turne…

Ikea also seems to be the only place in the UK that sells decent slatted frames to put under your mattress. I guess British people aren't familiar with the concept.

Re: We Need a Warby Parker for Mattresses

#123

Post by eru »

stcredzero wrote: post #26
ryanwaggoner wrote: post #3

Like any startup idea, there will be objections. Shipping mattresses is expensive, people want to lie on them first, mattresses require research and development spending to develop, a mattress purchase only happens once a decade, etc. All these objections might be right, but they all sound surmountable. They might be surmountable, but that doesn't make this a better opportunity than a lot of the other opportunities o…

> a mattress purchase only happens once a decade This is a cultural artifact. We've reached a point in manufacturing technology where this should no longer be true. > disrupting the mattress industry as a manufacturer AND retailer...Like IKEA,... The most comfortable mattress I've ever slept on: A Sultan Fonnes mattress, with an egg crate foam topper from http://www.foambymail.com/ on a platform bed, no box springs.…

Have you ever tried putting a slatted frame underneath your mattress? In Germany you usually put the slatted frame in a bed, but I found you can also just put that on the floor (plus mattress) to have a very low bedstead.

Re: We Need a Warby Parker for Mattresses

#124

Post by eru »

itsprofitbaron wrote: post #48
MartinCron wrote: post #41

Earlier quoted context omitted.

Imagine if the cultural norm went from spending a lot on an expensive diamond where the money went to a textbook evil corporation to spending much less on a cheap manufactured diamond of higher quality and donating the difference to the charity of the lady's choice.

It would require an incredible amount of ad spend to change cultural norms which have been created by advertisers over generations. The chances of it happening are miniscule, and the startups who are attempting to do it would go bankrupt several times over before it was even close to being achieved. It actually reminds me of a Warren Buffet Quote “If you gave me $100 Billion and said, ‘Take away the soft-drink leader…

$100 Billion is more than half the market capitalization of Coca-Cola. So for that amount of money, one might be able to buy considerable influence with the company (e.g. via voting rights that come with stocks), and run it into the ground.

Of course, he's probably talking about using the $100 billion to build up a competitor, and make some money.

Re: We Need a Warby Parker for Mattresses

#125

Post by stcredzero »

eru wrote: post #123
stcredzero wrote: post #26

Earlier quoted context omitted.

> a mattress purchase only happens once a decade This is a cultural artifact. We've reached a point in manufacturing technology where this should no longer be true. > disrupting the mattress industry as a manufacturer AND retailer...Like IKEA,... The most comfortable mattress I've ever slept on: A Sultan Fonnes mattress, with an egg crate foam topper from http://www.foambymail.com/ on a platform bed, no box springs.…

Have you ever tried putting a slatted frame underneath your mattress? In Germany you usually put the slatted frame in a bed, but I found you can also just put that on the floor (plus mattress) to have a very low bedstead.

> Have you ever tried putting a slatted frame underneath your mattress?

No, but I know people who really like slats and none who dislike them. (I wanted to write that I know people who swear by slats and none who swear at them, but that would be an exaggeration.)

I can't have my bed on the floor, because I have my platform bed on risers and 10 big plastic bins underneath so I have a storage bed.

Re: We Need a Warby Parker for Mattresses

#126

Post by stcredzero »

tptacek wrote: post #115
notJim wrote: post #67

Earlier quoted context omitted.

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.

> When a market is dominated by risk-averse incumbents, it is probably ripe for disruption.

Who originally formulated this idea? Was it you? This sentence is fantastic.

Re: We Need a Warby Parker for Mattresses

#127

Post by stcredzero »

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.

> Basically you're using PE as a proxy for a measurement of attractiveness.

How about PE as a proxy for "incumbency?" That is to say, you're looking at companies who figured out a formula to "print money" then let themselves get complacent and fat, thereby becoming targets for PE. This would explain why they tend to be not so agile.

I just had an image of a cabal of attractive young women, somewhat resembling James Bond villainesses, but who are trained in business and economics, who seek out dalliances with PE firm executives in order to perform industrial espionage.

Re: We Need a Warby Parker for Mattresses

#128

Post by msandford »

MattRogish wrote: post #29

"By the time a customer buys a mattress, it costs them ~74% more than the production cost of the product." I'm not arguing that the mattress industry isn't ripe for disruption, but very rarely is value delivered directly related to the cost of production. COGS is often difficult to accurately estimate (how much do you allocate R&D and other overhead?). An iPhone 5 may only contain $110 worth of silicon, but the value…

Someone there couldn't math very well.

First you mark up 50%. Okay, a $100 cost mattress gets sold at $150 wholesale. Then the retailer marks it up 100%, to $300 total. That's 200% of the production cost, not 74%.

What they meant to say is "production cost represents only 26% of the final cost of a mattress" but totally flubbed it.

Re: We Need a Warby Parker for Mattresses

#129

Post by 001sky »

winterchil wrote: post #93
notJim wrote: post #67

Earlier quoted context omitted.

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?

This is a brutal generalization so take it with some salt. I also don't subscribe to the "all PE guys are evil and unnecessary" philosophy but with just this teaser description it would be easy to think I support it. Anyway, on to your answer. Private Equity firms typically want to run their portfolio companies as profitably as possible. This means cutting down service, R&D, technology, etc as lean as possible withou…

Counter-examples, or a couple examples of the salt: skype, getty images, doubleclick, etc. sometimes, it really does makes sense to add capital and/or shield the company from the public markets. When going through change, etc. builders and flippers are co-mingled though. just like vc presumably.

Re: We Need a Warby Parker for Mattresses

#130

Post by stcredzero »

twoodfin wrote: post #22
Fluxx wrote: post #14

I'm not sure if you can count this as a startup, but I bought my King-sized Sleep Innovations (memory foam) mattress with Amazon Prime for $530. And if I wanted the less-think 10" one, it would be $400. http://www.amazon.com/Sleep-Innovations-12-inch-Memory-Mattr... The damn thing was ~100lbs in a giant box, and I got it shipped to me free. It's super comfortable and well worth the money - remember you sleep for like…

The problem is that many people like to lie on a mattress before they buy it. Sure, that's a little silly since lying on it for a minute or so is unlikely to capture the experience of tossing and turning on it for a night, but it's clear that it's a competitive advantage to let the consumer compare a few models in a physically direct way. Warby Parker can get away with the similar consumer requirement for glasses bec…

> The problem is that many people like to lie on a mattress before they buy it.

One can get all of the benefit of this by selling a single mattress, but also sending 3 or 4 foam mattress toppers to choose from. Correctly designed packaging would let the customer re-roll the topper, then use a vacuum pump to collapse the rolled topper back into a compact form for return mailing. (The pumps would be cheap and disposable, so wouldn't be returned.)

Using a system like this, one could become the Zappos of mattresses. There would still be a restocking and return fee for the mattress, but one could let the customers exchange and try toppers to their heart's content, so long as they took good care of the merchandise.

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