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There are something like six of these boutique foam mattress startups, of which Casper is one of the newest, cutest, hipster-i-est versions. I've had a Keetsa m
by timr 12y ago
There are something like six of these boutique foam mattress startups, of which Casper is one of the newest, cutest, hipster-i-est versions. I've had a Keetsa mattress for about five years now. It's fine -- it was about 20% cheaper than a TempurPedic when I bought it, and the fact that it came vacuum-packed was a gimmick that made it possible to get it into my apartment. It's a little on the firm side, but that's what you get when you have no choice.
(As an aside, nearly twenty years ago, I bought a mattress from the Denver Mattress Company, who were (and are) selling and manufacturing great mattresses for a fraction of the price of the big players. You want to talk about innovation? Talk about those guys, not three hipsters in Brooklyn who got some VC money last year and used it to buy generic foam mattresses from a Chinese supplier.)
That said, there's no way in the world that this market is big enough to support this many startups. Mattresses weren't sold in stores because the companies didn't think people would buy them online; mattresses are/were sold that way because they're like cars -- people buy a new one once a decade. It's hard to build a big business unless you're extracting maximum margin per item sold. It's even harder when five other identical "scrappy insurgencies" are competing on price in the low end of the market.
But hey, cheap VC dollars means cheap mattresses for you. Everyone is thinking about gross revenue and "disruption", but nobody is thinking about business models.
- solve 12y agoSuppose this is why the "Why now?" question keeps getting more important to VCs. Imagine a few decades from now, when practically every type of software startup will have been already been tried 100+ times. Maybe the increasing focus on startup "team quality" that's already happening will be a big part of the answer to that question.
- timr 12y agoI think the early players in the space probably have/had a good argument for that question -- if you're Denver Mattress in 1998, or Keetsa in 2008, you could (perhaps) plausibly claim that the fundamentals of the market had shifted, and make a convincing speculative argument that you could take over a largish industry. But the rise of five new mattress startups in the last few years? That's just sloppy, herd behavior. Investors are piling into whatever sector seems hot, without doing even the most cursory analysis of the existing players. Why should the 7th startup in this vertical be seen as compelling? Is it because they have bike messengers?
- notahacker 12y agoAlso, despite the VC's claims, the competitors here aren't incumbents deluded into believing nobody would buy mattresses online, they're incumbents who do sell mattresses online, not to mention scrappy entrepreneurs dropshipping mattresses on Amazon for thin margins. If mattresses were a regular purchase I'd believe a startup could corner the market by doing it much better, if they generally cost in the $xxxx-$xx,xxx range I'd expect they could corner the market by eliminating operational costs that need not exist. But I'm not really sure what assumptions they're challenging here, other than perhaps the assumption that retailers should be profitable?
- deleted 12y ago[deleted]