"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 rip

"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 delivered is a lot more than the raw material cost. Jony Ive's salary represents a tiny fraction of each iPhone, but his design and influence represents a significant chunk of the profit.