We Need a Warby Parker for Mattresses • Hacker News Board

Re: We Need a Warby Parker for Mattresses

#161

Post by wisty » Sat, Sep 15, 2012, 7:48 AM UTC

orangecat wrote: post #151

itsprofitbaron wrote: post #48

Earlier quoted context omitted.

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…

Go after the cultural norms with celebrities. Get Oprah and Ellen and Kate Middleton and Cosmo and Glamour on board, and arrange for high-profile weddings to have manufactured diamonds and large charitable donations. Things like this can change pretty fast when it's made obvious that there really is a right side and a wrong side. Gay marriage is a recent example, and that has the extra hurdle of having to overcome st…

But you'll never replace diamonds with manufactured diamonds. The whole point of them is they are expensive.

Expensive, scalable (huge diamonds for celebrities, small ones for poor people, and everything in between), durable, small enough to slip in your pocket (to surprise them), and backed by a monopoly supplier.

You could try it with another rare gem (rubies, emeralds, opals) but you won't have a monopoly supply, so you can't compete with the advertising dollars of the diamond miners.

You could try to switch the marriage tradition to something completely different (look at China, where are house and car are generally a pre-requisite for marriage), and hope that the practicality of the tradition wins over big advertising dollars. The problem is, celebs don't care about a new car the same way a newly married couple do.

Or you could try to encourage an "experience" gift. Paris could set itself up as the city to propose in, and smaller cities could also compete.

It's just hard to think of everything with all the advantages of diamonds. The disadvantage is their lack of practicality, and their slightly unethical origins, but nothing seems to have displaced them so far.

Re: We Need a Warby Parker for Mattresses

#162

Post by bosch » Sat, Sep 15, 2012, 9:10 AM UTC

mmanfrin wrote: post #97

ktsmith wrote: post #86

Earlier quoted context omitted.

You might want to actually know what you are talking about before commenting. Inmates earn an hourly wage (not great), training on how to do the work, etc. The money they earn gets split up in a few different ways such as going to restitution if applicable and some is available for the inmates to spend at the canteen or save for when they get out.

In Nevada they earn 13 cents an hour. http://prisonlaw.wordpress.com/2010/12/16/prison-labor-and-t... That's slave labor.

Perhaps you'd rather have these exceptional citizens just staying in their bunks not doing anything or even better, back in society?

Re: We Need a Warby Parker for Mattresses

#163

Post by forgetcolor » Sat, Sep 15, 2012, 10:10 AM UTC

mmanfrin wrote: post #97

ktsmith wrote: post #86

Earlier quoted context omitted.

You might want to actually know what you are talking about before commenting. Inmates earn an hourly wage (not great), training on how to do the work, etc. The money they earn gets split up in a few different ways such as going to restitution if applicable and some is available for the inmates to spend at the canteen or save for when they get out.

In Nevada they earn 13 cents an hour. http://prisonlaw.wordpress.com/2010/12/16/prison-labor-and-t... That's slave labor.

13 cents PLUS room, board, power, water, garbage, etc

Re: We Need a Warby Parker for Mattresses

#164

Post by olalonde » Sat, Sep 15, 2012, 11:35 AM UTC

I'm starting to wonder if priceonomics.com shouldn't pivot to become a full-fledged data driven publication. They have been publishing some amazingly high quality content lately.

Re: We Need a Warby Parker for Mattresses

#165

Post by justincormack » Sat, Sep 15, 2012, 2:26 PM UTC

UnFleshedOne wrote: post #142

muraiki wrote: post #53

Earlier quoted context omitted.

You could sell the custom sized mattress at cost, but then charge a premium for the sheets. That way you make money off of the sheets, which wear out more quickly than a mattress anyways. Edit: I'm joking...

Patent the square sheet form factor and you can lock out competitors and/or get hefty licensing fees. (as well as method and application of turning a sheet 90 degrees to hide coffee spots under pillows that you will then license at no cost to buyers of your brand of sheets while suing buyers of competitor's sheets)

Square with rounded corners of course...

Re: We Need a Warby Parker for Mattresses

#166

Post by justincormack » Sat, Sep 15, 2012, 2:34 PM UTC

novaleaf wrote: post #158

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.…

> This is a cultural artifact. We've reached a point in manufacturing technology where this should no longer be true. I hope you are not implying what I think you are. If you are: rabid consumption is fucking this world into oblivion. Just because we can produce/buy more easier/faster, does not mean we should. "There is no such thing as sustainable growth"

Maybe he has a plan to grow mattresses or make biodegradeable ones or something, but they will have a shorter life?

Re: We Need a Warby Parker for Mattresses

#167

Post by jonnathanson » Sat, Sep 15, 2012, 4:18 PM UTC

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.

Are they actually committing themselves to the incumbent role, or do they recognize an industry in decline and then suck whatever profits they can out of the businesses before flipping them? Layoffs, pension raiding, fat trimming, etc.

It's fairly easy, in theory, to take a bloated and inefficient company, cut it to the bone to reduce overhead, then position it as more profitable for resale. On paper, sure, it's more profitable. In reality, it's just a similarly bad company that's been trimmed up and given a new paint job. It's very similar to the real estate playbook: buy a delapidated property, touch up the exterior, then flip it as if it's shiny and new. (The beauty of PE, over real estate, is that PE firms can rig the game to benefit one way or the other, due to debt structuring. If they can flip the company for a profit, they win; if the company goes bust, they're insulated from the damage.)

I would say that an overpresence of PE in an industry is a decent indicator that the industry is in trouble (or is ripe for disruption). But I think PE guys realize that, as well. They're just in it to make the quick, easy buck, rather than take on the burden of reshaping the industry. I wouldn't call them "risk averse" so much as I'd call them opportunistic. It's just a different kind of opportunity, and arguably a less socially valuable one.

Re: We Need a Warby Parker for Mattresses

#168

Post by tptacek » Sat, Sep 15, 2012, 7:34 PM UTC

jonnathanson wrote: post #167

tptacek wrote: post #115

Earlier quoted context omitted.

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.

Are they actually committing themselves to the incumbent role, or do they recognize an industry in decline and then suck whatever profits they can out of the businesses before flipping them? Layoffs, pension raiding, fat trimming, etc. It's fairly easy, in theory, to take a bloated and inefficient company, cut it to the bone to reduce overhead, then position it as more profitable for resale. On paper, sure, it's more…

I'm not sure what this comment has to do with the question at the root of this thread. You're obviously not a believer in PE. I have no opinion about it. Either way, the issue is, are PE-dominated markets ripe for disruption?

Re: We Need a Warby Parker for Mattresses

#169

Post by jonnathanson » Sat, Sep 15, 2012, 7:57 PM UTC

tptacek wrote: post #168

jonnathanson wrote: post #167

Earlier quoted context omitted.

Are they actually committing themselves to the incumbent role, or do they recognize an industry in decline and then suck whatever profits they can out of the businesses before flipping them? Layoffs, pension raiding, fat trimming, etc. It's fairly easy, in theory, to take a bloated and inefficient company, cut it to the bone to reduce overhead, then position it as more profitable for resale. On paper, sure, it's more…

I'm not sure what this comment has to do with the question at the root of this thread. You're obviously not a believer in PE. I have no opinion about it. Either way, the issue is, are PE-dominated markets ripe for disruption?

"I'm not sure what this comment has to do with the question at the root of this thread."

It was a response to a particular point raised in the previous comment, specifically, about the position that PE companies are taking in the marketplace. I rambled a bit after addressing the point, and I editorialized a bit. I won't deny that much.

"You're obviously not a believer in PE."

Not generally, no. But I'm a believer in a (relatively) free market, and as such, PE is one of those "I don't agree with a word you say, but I'll defend to the death your right to say it" topics. I think PE has its place, but as most common practiced, it's most often counterproductive in the long run.

"the issue is, are PE-dominated markets ripe for disruption?"

I believe I answered that question in the affirmative. Admittedly, in a discursive way. But yes. I think the presence of a lot of PE players in a market is a pretty good signal that the market can be disrupted.

Re: We Need a Warby Parker for Mattresses

#170

Post by winterchil » Sat, Sep 15, 2012, 10:22 PM UTC

001sky wrote: post #129

winterchil wrote: post #93

Earlier quoted context omitted.

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.

Absolutely. And the distinction between "growth equity" and "private equity" gets ever more blurry over time.