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Priyanka Salot reveals the science of D2C brand-building | The Sleep Company
258 Plays4 months ago
Priyanka Salot’s entrepreneurial journey began with her search for a good night's sleep. As a senior marketing leader at P&G, she made the bold decision to leave her corporate role and start The Sleep Company to help India sleep better. Drawing on her experience in building legacy brands at P&G, she guided The Sleep Company to the top of the market, securing over $50 million in funding. In an insightful conversation, she breaks down what it takes to build a strong brand and discusses the strategic decisions that enabled The Sleep Company's rapid growth.
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Read more about The Sleep Company:-
1.Work, sleep, repeat: The Sleep Company & the right doze
2.The Sleep Company Reaches 500 Cr Annual Recurring Revenue Milestone
3.How The Sleep Company is disrupting the way people sleep and sit in India
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Transcript
Introduction & Background
00:00:00
Speaker
Okay. Hi everyone. Good morning. This is Priyanka Salot. I am the co-founder of The Sleep Company.
00:00:19
Speaker
If you think that marketing is an art, then building a brand is the job of artists. Then you really need to hear this episode. Priyanka Sanoth was a senior marketing leader at P&G when she decided to give it up and start The Sleep Company. And once the trigger was a personal pain point of getting a good night's sleep,
00:00:37
Speaker
She brought along with her the deep expertise and the science of brand building that she had learned at PNG g and that is probably the reason why the sleep company has raised more than $50 million till date and is today a leader in the D2C mattress space. In this insightful conversation with your host Akshay Dutt, Priyanka breaks down the science of building a brand and talks about some of the savvy decisions she took which allowed the sleep company to scale so successfully.
00:01:02
Speaker
Stay tuned and subscribe to the Found a Thesis podcast on YouTube or any audio streaming app for more such inspiring conversations with founders.
00:01:19
Speaker
so Preka, let's start with your origin story. you know what ah Looking back, can you connect the dots on what led to you becoming the founder of the Sleep Company? well What's your background? Where do you come from?
00:01:34
Speaker
I split my life into three phases. and right The first is um I was born in Rajasthan. That's where I spent first decade of my life. ah Then you know the next decade was traveling away from a home, which is all my education. I did my engineering like a typical kid in India who does engineering, and then I decided to go for my MBA.
00:01:54
Speaker
And that's where um in MBA is where I met my co-founder and my partner in real life, Harshal. I think after um you know MBA, I decided to do marketing. I was with PNG. g That's where I spent almost a decade of my life.
00:02:08
Speaker
That's where I found two things. One, I found the fact that I love consumer brands. I love anything which is tangible, ah where you can really make a difference and maybe change lives of your consumer. right I started loving what I was doing. But I think one thing I was always clear, I wouldn't say from childhood, but I think I was always clear um you know when i start ah when I went for my MBA that I wanted to start something of my own.
00:02:37
Speaker
and i And I think I always joke about it. I read a lot of autobiographies and I think they played a huge role in me taking that plunge.
Identifying Market Gaps
00:02:46
Speaker
um So I think when I was in PNG, I was always tossing around with a lot of consumer business ideas, right? A lot of products, a lot of categories.
00:02:55
Speaker
And this category happened in a very, very interesting ways. A lot of people ask me you know from selling Ariel and Tide and Pampers, you know why why mattresses? And I think that's what um has been a little interesting. Two things triggered, I think, why mattresses. ah yeah when you know In 2019, 2020, I was pregnant.
00:03:21
Speaker
and i think um I was like any new mom. right When Ayan was born, my my son, when he was born, like any new mom, I think one thing I faced was sleepless nights. I think you pick any mom and ask them what do they want the most when they just deliver a baby. The thing they will tell you is they want sleep.
00:03:41
Speaker
They really, really want to sleep, even a few hours of sleep. And that's what I was struggling a lot with. ah you know i was I couldn't sleep at night. I was having a lot of bad pain issues. And hence, I tried a lot of products um you know that were available in India. There were a lot of products that were sending online. And I tried a few of them.
00:04:01
Speaker
And I think coming from a consumer product background, it just stuck me that the quality of products ah that were available in India were far behind than anywhere else in the world. And you know I saw a lot of brands were trying to ah you know make the i would say make ah availability better by offline to online, but nobody was trying to change the product.
00:04:27
Speaker
And i I saw we were sleeping on form matrices or memory form matrices, which were there before even we were born, which were there even before our grandparents were born. So something, and it just stuck that something where you spend almost one third of your every day, which is one third of your life,
00:04:47
Speaker
was still those old age form mattresses. And I think that's when I got obsessed with changing that. And I said the product needs to become better. And the analogy I always give is the mattresses were like your feature phone existed. Before I was born, our phone became smart, our TV became smart, our house became smart. The only thing that didn't change was mattresses. I think that's when we decided to make our hands dirty.
00:05:21
Speaker
And we decided that let's change the product where we spend one third of our life. And that's how I think you know the R and&D work on the sleep
Innovation & Collaboration
00:05:30
Speaker
company started. I decided to leave P&G. And I decided that I need to spend a lot of time on R and&D. And I think we were um lucky that we met Dr. Tripathi, who's been in the industry for over 40, 50 years. We worked with him for more than two years on R and&D before the sleep company was born.
00:05:52
Speaker
Okay, so Dr. Tripathi is like a material science kind of a role. like Yeah, and yeah. So Dr. Vijay Tripathi, he is our R and&D head. He has worked with India Defense Labs, which is DRDO as a scientist, as a material scientist for decades. ah right We were ah lucky we got in touch with him. We told him the brief, very simple, that we need to make the matrices much better. We need to make the matrices that can make people sleep better.
00:06:21
Speaker
ah right And then we worked with him for two years. as We worked on literally thousands of formulations, thousands of products, ah multiple multiple trials, and so much back and forth for those two years. And I tell everybody, actually to those were the two years which were the most difficult years. We didn't know will we be able to crack it.
00:06:42
Speaker
um at right And I think after two years, when we saw the product, we did a lot of trials and we launched it. And after that, I think it's been a fabulous journey. ah you know ta You are from a marketing background. It wouldn't have been too hard for you to launch with a product which is not a 10 on 10 because you would have been able to do the marketing for it. ah Why did you wait two years? what What were you looking for that you got at the end of those two years in terms of the product? but Why not start with, you know, most founders do like start with a six or 10 and then build your way up. i Yeah.
00:07:25
Speaker
itating ah so I'm just curious why you took that approach. What was it you were seeking? Sure. So I think the easiest route Akshay was to take a product that existed in the market, right? You would see hundreds of brands doing that. Pick a product, just package it with your brand name and sell it online. That was the easiest thing. And as you said, that could have been done literally in a month's time.
00:07:49
Speaker
You know, you get a website, you list on marketplaces like Amazon Flipkart and you just, what do you need? You just need your brand logo and your packaging. And that's what we realized everybody was doing. But I think one thing I credit to my experience at PNG, I always tell people this. I think one thing I learned in the decade of handling amazing legacy brands was that if you want to build a long-term brand,
00:08:13
Speaker
and right? You have to have a product which one actually solves a consumer problem, which is differentiated, right? Which is truly, truly superior, differentiated and solves consumer problem. And that is the reason we spent two years on R and&D right before we launched the product because What I always tell, I don't want to create a new age brand. I want to create a legacy brand which can stay for decades, which consumers love, and which actually change our consumers' lives. And that is the reason we decided to spend two years on R&D. We wanted to be sure that we have a product that can make that happen.
00:08:54
Speaker
ah From a technical standpoint, what was that product?
Product Development & Smart Grid Technology
00:08:57
Speaker
What did it do at the end of two years? What did you achieve? Sure. Let me maybe a little bit step back and tell you a little bit about the mattress category. right If you see mattress category, old age, hundreds of year back, you would see people using cotton mattresses. right Cotton mattresses evolve to something called coir. Coir is the scrap of coconut trees. and night After coir, you started getting form mattresses.
00:09:24
Speaker
and i Then you started getting a little bit evolved former form of form matrices. Form is polyurethane form. People would say high density form, HR form. Then some buzz came memory form. Memory form was found in 1960s before I'm sure anybody in this room was gone. It was not formed for the purpose of sleeping.
00:09:48
Speaker
It was developed for the purpose of scientists in NASA. right so And that became the buzzword. right And after 1960s, you've truly not seen any any innovation. What we did was invent a completely new material type in this industry. And that material type, we call it smart grid. smart and So you see this blue grid structure. right You would see this in across all our experience centers.
00:10:17
Speaker
And I, so we developed a literally Asia's first and only smart grid mattress, which is made from a polymer, right? And what is the properties of this polymer? Let's understand this. Why is this better than a form mattress or a memory form mattress, right?
00:10:33
Speaker
It's a polymer which is organized in the form of a grid. What it does, two things very, very differently compared to a form or a memory form mattress. One, because of the grid structure, our body is not a straight line. You have a head which is popping out. You have shoulders which is popping out. But then you have a back which is a bigger surface area.
00:10:54
Speaker
This grid structure changes the softness and firmness depending on what body part is it, right? On smaller body part which are curvatures, the grid will be soft which means you get pressure relief whereas on a bigger surface area like your back, you know something which is like for example a bigger surface area the grid will be firm.
00:11:16
Speaker
No mattress can be both soft and firm, which is what this polymer-based smart grid mattress can be. I think that's one thing. So it doesn't matter what your body shape is. you know Are you a fat person? Are you a thin person? Are you a tall person? And it doesn't even matter what your sleeping position is. Are you a side sleeper, back sleeper? The grid will adapt and change the softness and firmness basis your body needs.
00:11:44
Speaker
which a typical form mattress cannot do. So I think that's one thing. Second, the grid is 90% air. you know it's A typical king size mattress has more than 2,500 air channels, which means when we sleep, typically a form mattress will retain body heat and get a little suffocating and hot. A grid is a very cooling material.
00:12:10
Speaker
Third, which is very, very important to understand, most mattresses sag over time. That means they become a little bit uneven. They lose their support properties. A grid has high longevity. It's a very, very durable material. right And that's the reason I always say that the two years of work, work today also, every single day, we continue to work on on how to keep on making our products better.
00:12:36
Speaker
Superior products is really the DNA of the sleep company. How does it achieve this firmness and softness both ah depending on which body part? like Can you go a little deeper on that? oh sean I would love to. and you know We also demonstrate the same thing to all our customers who visit our experience centers. We have something called a sleep lab, ah which we keep in all our experience centers. This is just to make sure that we educate people and it's proof of pudding, right? And theyre to show consumers how the smart grid works. but Let me just show you with a very, very simple demonstration of how this works. So actually, if you see this material, right? This is what is we call smart grid, and this is what goes in all our matrices.
00:13:25
Speaker
If you see this material is a very, very stretchy kind of a material, which is not the case with a form mattress. and Right now, let me tell you how this works. Because of the grid structure, right let's say your head, it's a curvature and it has a smaller surface area. Let's say when you press it, you have only few walls under your surface area and they buckle down because it's a very elastic and responsive material.
00:13:54
Speaker
It goes down. Can you see? Yes. But now let's look at your spine and your back. It's a much bigger surface area. So now let's imagine you know I'm taking a ah book to show how this works. Imagine this to be your spine or your back, which is a much bigger surface area. That means much many walls come under that surface area. So you need a lot of force. Actually, under force also doesn't go down.
00:14:22
Speaker
right That means on a bigger surface area, because there are more walls, they withhold the pressure and they give you more support. So it's like they give you support where you need support. They give you cushioning where you need cushioning.
00:14:38
Speaker
Which if you look at, let's say a form or a memory form mattress, either it will be soft under every body part and it'll literally buckle down, right? Or either it will be very, very hard, which one could say is good for the back, but very, very uncomfortable.
00:14:56
Speaker
okay and This grid is like a layer in the middle with form on top and bottom or is it on top or how is the construction done? Yeah, so we've got different type of matrices, you know, different variety of matrices depending on, you know, do people like a little softer version, do people like a firmer version? So grid, most of our matrices is always the top layer, right? Because that's what your body gets in touch with and that's what provides either support or pressure relief.
00:15:27
Speaker
Okay. Okay. yeah okay and There is a foam base underneath that. Yes. Okay. Okay. Okay. Okay. and Understood. So, you know, you had that advantage of coming from a consumer brand, which is PNG, one of the ah best known global consumer brand companies. How did that advantage translate into how you launched the product and, you know, the approach of selling it, your go-to-market
00:15:59
Speaker
Yeah. so i would I'll tell you how did it help and how still I felt very lost. all alright so Let me talk the second part. so I think when I and launched, and it was a digital first brand, we launched in October 2019. We created a website on WordPress, and which took us a few weeks to do, and then we launched on Amazon and Flipkart.
00:16:24
Speaker
And I still remember my early days and I was lost on how to reach consumers, right? Because I had worked on legacy brands, detergents, diapers, where you reach your consumers mostly through TV, right? Digital played a very, very small part of our media mix.
00:16:42
Speaker
And I used to wonder that I've spent 10 years in marketing, and I don't know how to reach my consumers. you know Is Google the right touch point? Is Meta the right touch point? And I was so lost. And I think that's what you learn. You learn. And every brand is different. I always tell people every category is different. Every brand is different.
00:17:04
Speaker
and right So there is no fixed recipe that works for on how to reach your consumers, um how much money should I spend on Google, how much money I should spend on Meta. So one thing which is very very important and specifically ah you know as you start up and even through the journey.
00:17:20
Speaker
Having that experimentation is very, very important. You know, you make sure you're doing 100 things, right? Even if 90 fails, that's okay. But you will learn and you will know what doesn't work. And the 10 succeeding will tell you what works.
00:17:36
Speaker
And i so I think even though I had 10 years of experience, I was equally lost. But I think what I would say, which really was a big, big benefit, and I would completely credit it to my experience. um And I think I think of brand building. How do you build a brand to be more of a science and not art or creativity? um and right And I think that's That to me is something my experience taught to me and we are very careful and about how we look at the sleep company as a brand and you know um and you know how do you build a strong brand. I think that's what I would say ah is more of a science.
00:18:20
Speaker
What is, can you, how did that philosophy that brand building is a science, not an art, how did that translate into real world actions at the Steve company over the last and five, six years? Like, can you give me examples of, you know, how branding is a science?
00:18:36
Speaker
Yeah. Maybe let me you know highlight like three, four things that we are very paranoid about at the sleep company right and why I say ah brand building is a science. right I think let's let's look at when you anybody launches any brand. First, I think it's very, very important as founders because you know what you think of your brand is what will translate.
00:19:00
Speaker
As founders, we need to be very, very clear of first, what kind of a brand is it that we want to build? And what do I mean by that? Think of your brand to be a human persona, right? Let's say if your brand was Akshay.
00:19:14
Speaker
yeah right What kind of tonality your brand needs to have? What kind of a look and feel your brand needs to have? For example, when I say tonality, is your brand a more professional, serious brand? Is your brand has a tonality which is more witty? Is it more science-led? Is it more emotion-led? like I think that clarity can only come from founders. and On what kind of a brand you want to build?
00:19:40
Speaker
Build and you need to be very, very clear on that. right So I think we were very clear that we wanted to build a brand which is based on science. right A brand which has understood human ergonomics, human body, developed products which are patented, which are disruptive, and hence our DNA was superior science-led products.
00:20:03
Speaker
And that is the tonality of the brand, right? Second to me is, um you know, who is it actually you want to sell your brand to? Who's your target audience, right? And which will define actually your tonality of the brand as well. I think very, very important. Who are you targeting?
00:20:20
Speaker
And I can, I tell people you need to make be, you know, we sell consumer brands. So what is the first word is consumer, right? So you need to place the consumer at the epicenter and then design everything around it. Third, very, very paranoid um about something I call consistent assets.
00:20:42
Speaker
And i let me tell you, what do I mean by consistent assets? And um you know when I say consistent assets, everything you do, it doesn't matter. Is it a Facebook post? It doesn't matter. Is it a Google display ad? Or is it a 30-seconder YouTube video or a TV copy? What are the one or two things which will go everywhere in your communication? right Those consistent assets are very, very important. For example, one thing that you see, the blue that you see at the back.
00:21:10
Speaker
and right The blue is the blue you would see everywhere from the sleep company and it's not shades of blue. and Let me give you an example. Coke, bottle, Coke log logo. right It's red color. Do you see that changing? No. no and i Do you see different shades that suddenly they become bored and you know do you see an orange shade there or a lighter red there? No. Brands are built with consistent assets communicated over decades and decades.
00:21:39
Speaker
And sometimes I feel ah so sad when I see some brands, new age brands, and their Instagram pages. you know One post is red, one post is yellow, one post is blue. Because you know they want to look, because maybe, and this was a joke at P&G. And I'll tell you, and once my manager told me that we marketeers get bored of a communication, but go meet your consumers even if 10% know what you stand for.
00:22:09
Speaker
You know, it's a win, which doesn't happen. It takes years to build that. And fourth is very consistent communication. I'll will give you an example from day zero of our launch. We've been saying we are India's first and only smart grid mattress. And we have been communicating the same thing for four and a half years.
00:22:31
Speaker
Every single communication that we have has that same tagline for four and a half years. I think it takes, and I always say, we want to build a legacy brand. We want to build a brand which will stay for decades to come, which will make Indians sleep and sit better, right and where people which consumers love, right? So we are not building a short term on new age brand. We are building very disruptive new age products, but we want to build a legacy brand. Okay. I want to zoom in on some of these things.
00:23:05
Speaker
ah Is it possible that you could, ah and hypothetical question, is it possible you could have selected a wrong persona? Like you said, you, you need to, what does your brand stand for? You decided it stands for science backed product. ah So is it possible that a brand could have selected a wrong persona and then it's okay to change it? Absolutely. Okay. How do you evaluate that? Is this the right persona or not? Like have I selected the right positioning of the brand?
00:23:36
Speaker
Yeah, so I think that depends something, you know, you would hear the word a lot, Tam, right? What is your total addressable market size, right? And I think that today generation, it's easiest to check product market fit, and right? And obviously, what you're communicating, who you're targeting is that the right target audience for your product.
00:23:56
Speaker
and digital gives you that, right? You can launch a product online, like literally in weeks, if not weeks, even in days, right? And then you, you don't need to be PNGs or you may leave us. You don't need to have a store network of millions of store to test something, right? Or that kind of money to test something. You need to be passionate. You need to have a product that you believe in.
00:24:20
Speaker
right? And you can launch it online and very quickly by listening to your consumers, by talking to your consumers, by seeing how the early trends are, right? You can easily learn one if the product is right to what you're communicating is right or not. And if you feel that it doesn't work, you need to change it. And I'll give you an example in the first three months of our launch.
00:24:43
Speaker
You know, me and Harshil, we literally talked to every single consumer who bought our products. A lot of consumers who were based out of Bombay, we went for their deliveries. We used to talk to every single consumer. We made hundreds of iterations literally in the first three months of our launch, and right? And that's what, it's always an iterative process, right? Today, also any new product we launch, I wouldn't say their success on day zero.
00:25:11
Speaker
Okay. ah Is there a science to how you listen, how you listen to consumers? ah like I know big companies use focus group and all, ah but for a startup founder, what advice do you have on how to listen to your consumer and figure out if your communication is resonating, if what the brand stands for is resonating or you need to change it?
00:25:34
Speaker
Yeah, I think there are multiple things, right? I wouldn't call it science, but I think there are multiple ways to do it. um ah right And I'll tell you some of the things that we use at the sleep company to do it. One, I think, and that's the best part of being in today's ecosystem, which is so digitally led.
00:25:52
Speaker
um ah Right? And ah today, you know, though our business has a lot moved to, I would say, Omni, consumers still find us, discover us online. So how do you make sure you listen to your consumers? And there are a few things that we at the sleep company do. One, today, we make sure everybody in our team, not just let's say customer experience team or the team which are responsible for managing online reputation, but every senior leader, even Harshil and I, we would make sure we talk to consumers every month. We would make sure we are reading reviews online, we're reading comments which people are leaving online. I think that is one of the best ways I would tell you to understand how consumers and what consumers are talking about you. And I'll give you some examples of that, right? Obviously, there are tools that you can use.
00:26:43
Speaker
which are available in the market, which gives you an understanding of, for example, word cloud on the digital ecosystem, right? What people are talking about you more, what people are talking about your less, your positive ah word cloud, your negative word cloud, right?
00:26:59
Speaker
Third, I think which video? The yeah their product reviews, the comments on posts and all. Absolutely. but i Yes, but I think I'm a hardcore believer that i as leaders, as founders, ah you know, we need to be very, very close to what consumers are talking about it and digital enables that two-way conversation.
00:27:21
Speaker
Third, that we do a lot. We do a lot of quantitative and qualitative consumer work, which is a typical old world, I would say, FMCG way of doing a lot of consumer work. right We talk to at least qualitative focus group, at least 100 consumers every month. right We would do a lot of quantitative survey, not just to see how consumers are liking our product,
00:27:46
Speaker
but also to see what more they want to see from the sleep company. I'll give you an example. And I think two very strong pivots that have happened in the sleep company journey. And i one, we started as a sleeping product brand, like Mattresses, right? Make people sleep better. We realized our customers started to tell us that we love your products. We love the tech. But I spend you know ah half of my day um on a chair.
00:28:14
Speaker
can you make that comfortable? And right and we again started R and&D. We said, how can we make sure that we made this polymer, this grade, even the chair is more comfortable with this? Because the properties are pressure relieving properties, which is even you know when you sit, it's on your body. So I think that you know from making people sleep better to pivoting to making people sleep and sit better is all consumer feedback.
00:28:40
Speaker
Second, I think very early in our journey, we're just a four and a half year old ah you know brand. We realized consumers wanted to touch and feel the product. you know You're buying a mattress for typically seven to 10 years, and you want to make sure you touch and feel. And specifically for our technology, people wanted to see what does it look like. We went only very um ah you know actively ah in our journey, and that was all because of consumer feedback.
00:29:08
Speaker
And I think that is, but that culture as founders, we need to set up in our organization, those processes we need to set up in our organization. For example, what I would always do, and I'll just give you one idea, in my let's say business review meetings, I would tell every single team, not just let's say a brand team, that everybody has to travel to the stores or meet consumers every month and come and present your learnings. Doesn't matter which function you are from.
00:29:38
Speaker
ah Right. And then we take those learnings and we action them immediately. Okay. Okay. Interesting. The chair you're currently sitting on, which has that, uh, smart label, uh, this is a sleep company chair. Yes. So absolutely. We launched this brand called our smart by the sleep company. Right. So it's a new brand, which is actually designed for again, very disruptive, new designs, new chairs, only for, you know, office chairs and home chairs.
00:30:06
Speaker
Okay. Very interesting. So I will do a deep dive on this brand extension piece in a bit. There are a couple of questions I want to ask first. ah you know Can you do a little one-on-one on qualitative and quantitative listening to consumers? Sure. So I think, let me do the typical, say, qualitative are when you are either doing one-on-ones or you do multi-on-one, right? Multi-on-one is your focus groups.
00:30:33
Speaker
And I always tell people before you go for quantitative, do qualitative. What qualitative help us understand? Let's say I have a business problem. okay I want to understand um you know what are um let's say ah what are the spaces to play in office chairs. you know Is it long lasting comfort? is it um ah you know I don't know what are the spaces that I could play. What I do is first do qualitative.
00:30:59
Speaker
deep dive where you're talking to consumers. Don't try to understand only the category you want to focus on. First, understand your consumer. What does his or her life looks like? you know What does their day look like? Their other category behaviors. Then obviously get into your category. What qualities help you do is form three or four hypotheses.
00:31:20
Speaker
You know, seems like, let's say, from a chair, people expect long lasting comfort, or seems like people expect back support, right? Or seems like ah people want more cushioning. Qualitatives help you get, um you know, three or four hypothesis.
00:31:39
Speaker
But now I don't know which one is a bigger space. you know Do I want to play and design a product which helps with long-lasting comfort? Do I want to design a product that stands for back support? Now I got the spaces. Now you And you could do a survey with 200, 300, 400 people depending. And then you figure out, out of these four spaces that I got from quantitatives, quantitatively which one let's say has the highest either time addressable market or which one creates a better purchase intent or you know which one is not cluttered where I could establish my brand. right So I think that's how we look at qualitative and quantitative.
00:32:25
Speaker
so okay okay ah When you lost the ah mattress, ah did you understand what is the time for this and like what what were some of those early runnings? Yeah, I think maybe you feel you've got PMF.
00:32:42
Speaker
Yes. No. So I think early learning, obviously, when we launched the product and before even we went into the R and&D, and I would say not even when we launched the product, but even before we decided that this is the category we want to venture into. I think two things were very important. One, can we get a product um that can solve the problem? right That we knew will only time will tell after we start R&D.
00:33:07
Speaker
right But before we start, even the R and&D work, is this a market which is a big in enough market where let's say you want to venture into. right And we saw that, um you know just to give you a context, Mattresses in India is a $2 billion dollars market.
00:33:22
Speaker
Mattresses globally is a $40 billion dollars market. and right So it's a huge market. We saw a few things happening in this market, which were very encouraging signs. One, I think, which is happening in a lot of categories, you see people moving from unbranded to branded, which you call from you know unorganized to organized, which is the consumer behavior got a lot triggered with COVID and accelerated with COVID. today So that was one.
00:33:49
Speaker
you know I don't want to buy these local made mattresses. I want products which are better. I want products of you know known brands. So I think that was one change, consumer change we started to see but before we ventured into the industry. Two, I think the change that we've seen in this industry over the last five, six years, which is also very encouraging, people want to buy products that are good for them and their family.
00:34:14
Speaker
And I i am okay to invest in products that I feel are good for my health and my family's health. And I think that consumer behavior change in India in lot of categories you are seeing, which I think is very, very good for the category. So I think understanding the time, understanding the category was the first step.
00:34:37
Speaker
Second, even in the category, for example, we saw that the experience of buying a mattress in India was very bad. 90% of the consumers will still go to this 100 square foot retailer outlet where you don't even see the products, you see the small mock-ups and you know the experience of buying is is is is not good, you have hundreds of products, retailer is pushing the product where they get the maximum margin. So I think that whole experience was bad, product was bad, market seemed like a huge market and we said, let's crack the product. How do your second point, how do you, you know, when did we figure out product market fit, right?
00:35:18
Speaker
I still remember and it used to be a big surprise for me in the early days, right? um So when we launched on um um you know Amazon and we had our website, thesleepcompany.in, we would talk to every consumer who were buying us and we started to see a lot of reviews coming in and we start we used to take a lot of feedback from consumers even on the call.
00:35:38
Speaker
and And I always joke about me and Archie were the first literally a call agents at the sleep company. And you know, I remember reading the reviews where people used to say, one, two, three things have been stuck in my head since five years, right? One review was that it's the best medicine to cure insomnia.
00:35:57
Speaker
and if you ah One, people said that my cervical pain has reduced drastically, my spondylitis has gone. And in the beginning, I used to wonder that, you know, um like really like amazing and we would talk to those consumers, we would call them back, we would understand in detail and we realized the product delivers.
00:36:17
Speaker
So for the first one year, we were both strapped. and you know and we were ah and But I think within a few months, when we saw one great feedback coming from consumers, though we started to see numbers grow drastically, I think is when you realize that, OK, the product's working. Now, depending on you know every founder has a different vision for their company, we wanted to make sure that we become one of the leaders in this country.
Financial Growth & Funding
00:36:45
Speaker
And hence, we wanted to make sure that every single consumer can try our first knows about our product and can try our product. We decided to go more aggressive. And that's when I think we decided to raise our first round of money. yeah Because we wanted to drive a lot of awareness. and And we got our first brand ambassador also. right We decided that we needed to drive awareness and educate our consumers on smart grid technology.
00:37:13
Speaker
And um and you know I think, yeah, that's how then the next set of our journey began. OK, amazing. ah When you raised your first round, what ANR were you at at that time? I think 21 is when you raised it, right? Yeah, but so I think um when June 21 is when Fireside Ventures came on board. um I think when we we always say that when we signed the term sheet, ah we were doing around one and a half CR um a month.
00:37:42
Speaker
right shot twelve fifty at m twelve eighteen car ara I think within three months, of by the time the term sheet was signed, or by the time the final money came in, we were doing around 50 CRR.
00:37:58
Speaker
right But that's how in 21 we were. yeah Amazing. Amazing. And after that, you had a series B within a year, I think about roughly $20 million. dollars Yes. Yes. We got a brain G on board and we think of ourselves to be a chip.
00:38:16
Speaker
you know, we were very clear what the business objective in 21 was and in 22 was. And that's why I think we say that for us, both our investors were literally a match made in heaven. And, you know, we got very, very ah high quantity of investors. um And fiscal 22, which is around ah August, September 22 is when Premji Invest came on board and we did our series B. We actually just did the series C in October where Premji and Fireside Ventures both wanted to invest and ah you know make sure they could put in more money and we raised our series C from our existing investors. beau Amazing. amazing ah In what way were both these investors like a perfect match? What did each of these bring to the table?
00:39:02
Speaker
Yeah, so I think in earlier days, um actually, when we were just one year old, right, we were a digital first brand. And I think what we wanted was two things we wanted. Obviously, if any founder wants money, right? You want money to grow the business.
00:39:16
Speaker
Other than the money, what is it that we wanted? We were clear that we wanted an investor, one who understands consumer brands, who can understand what is it that we are trying to build. um And um ask anybody, I think, who runs a consumer brand startup, they would tell you Fireside is at the top you know to really understand consumer brands. I think that was very, very important for us, too, which was important for us as founders, when you you know specifically when you're a first-time entrepreneur.
00:39:46
Speaker
you know We wanted to make sure that we get access to learnings, resources of what other digital first brands are doing and how are they building their brands, right those playbooks. ah you know The thing that I said is meta the right thing or is Google the right thing. Obviously, you learn on your own, but learn ah you know some if you see what other brands are doing, you know what to experiment as well. I think that's why I say fireside the perfect fit um you know after one year of our journey.
00:40:14
Speaker
You know, in 22 what changed and why, ah you know, I think Premji was the perfect fit to came on board. I think that june around June 22, we decided it that we wanted to go omni.
00:40:31
Speaker
and i And what do I mean by only, it's a very loosely ah used used word today, but I'll talk more about that maybe later. um We decided it that we needed to open our own experience centers. And we didn't want to go the distributor, retailer route, that was not our DNA. We decided we wanted to open experience centers and Premji obviously comes with huge experience of investing in brands that are a lot, let's say offline focused.
00:40:59
Speaker
and i And I think that's when we decided we've launched our first Experience Center in Bangalore in um June 22 to just learn on how the Experience Center and Omni route work for us. And I think that's how I say Premji was a perfect investor for us to bring on board for our Omni journey.
00:41:20
Speaker
okay okay Okay, interesting. ah You had once a little back spoken off, keeping consumer in the epicenter of everything you do. ah Can you give me examples of that? like What is that? i lots of I think everything we do is for the consumers and a lot of examples. We designed the product, right? We decided to get our hands dirty and not do what everybody was doing, keeping consumer in the center, right? We didn't launch a form address, which we could have launched in one month, and right? We decided to spend two years um to develop a product that can make consumers sleep better.
00:41:59
Speaker
Right? So I think, um you know, when we decided to go um offline, if you look at mattress industry, actually as I was telling you, it's a $2 billion dollars market, um you know, i'm very unorganized. If you see the branded players, most of the branded players sell through dealers and distributors.
00:42:19
Speaker
What does that do? We were selling online, so we were selling direct to consumer. We could talk to every consumer of ours. We could control ah how is the experience before they buy, and how is the experience after they buy, because it's our consumer. We have access to the consumer. Now, in this industry, most people sell through dealers and distributors. What does that do? Two things. One, dealers and distributors care about the margin they get.
00:42:47
Speaker
in the industry operates at a 30 to 40% margin. So as a retailer or a distributor, I would push a product which gives me the maximum margin. I don't care about the product. I don't care about the technology, and right? We cared about the technology. We cared about the product. So it just didn't fit the DNA, right?
00:43:06
Speaker
I think that was one thing. Second, we realize the customer experience of shopping in these stores is far, far less. It's really bad. You should actually go and visit some of the mattress stores and you'll realize it, how how the experience is.
00:43:25
Speaker
And I think our DNA being digital first was we wanted to make every single consumer delight, delighted, right? We wanted to delight every single consumer. So I think we decided it to go the harder route. We decided we need to open our own experience centers. Okay. Tell me about the journey of ah figuring out pricing. What price point did you launch at? Is it still roughly the same price point? and How does your price point decide your time?
00:43:53
Speaker
Yeah, no, so I think for us, we were clear one first was to for us to crack the product, right? um The way we calculated the price point, we have a certain product and there is a certain cost of the product.
00:44:06
Speaker
And if you look at your P&L, there is a certain gross margin you need to operate at. If you don't operate at a certain gross margin, you cannot build a long-term sustainable business. Now leave the brand, right? But you need to build a business that can pay out for its shareholders, for its consumers, for its employees, right? And I think it was simple that what is the category gross margin? What is the gross margin we need to operate at? And hence, I think that's how we decided the pricing.
00:44:35
Speaker
And then you learn with time that is that pricing and product. And that's what I think is a big part of product market fit, right? When you launch a product in the digital ecosystem at a certain price, are consumers ready to buy your product at that price for what do you deliver to your consumers? I think that's a big part of product market fit. What price did you launch it?
00:44:57
Speaker
So I think when we launched our typical king size mattress, ah which is your six and a half feet by six feet, a six inches thick mattress was around 24, 25,000.
00:45:10
Speaker
And how does that compare to other similar, I mean, obviously every mattress has a different technology behind it. How does that compare in terms of, is that like? Yeah. So if you, if you look at the offline market, which is 90% of the mattress category of any big brand, any, you know, any brand that you would take, which has been there for decades.
00:45:32
Speaker
TSC is very, very competitively priced. And the reason is because we send our products directly, literally from our manufacturing unit, from our plant to consumer houses, ah right? So we can offer far better technology.
00:45:47
Speaker
and quality at, I would say, a little lower or competitive prices, whereas a lot of other brands, as I was just telling you that it's through dealers and distributor, they end up paying such a huge 30-35% margin to dealer distributor, which automatically will be passed to the consumer, and consumer is being penalized for it. Right? Yeah.
00:46:12
Speaker
You know, the thesis of direct to customer is eliminating middleman and giving consumer better pricing is, so i mean ah as far as I understand is not really true because D2C brands need to spend on marketing. So it works out to be the same. Like your customer acquisition costs will replace what you would have otherwise paid to your dealers.
00:46:36
Speaker
Yeah, so I'll split it into two points, Akshay, and I'm glad we're having this chat, okay? um So it depends on category to category, right? Let me take an example because I've spent time in FMCG and maybe i'll I'll give you an example. Let's look at our typical beauty personal care brand from FMCG. Okay, you have a dealer distributor retailer margin of around 10% plus minus, right? It's not a high margin, it's a 10%.
00:47:02
Speaker
And a marketing in a typical PNG is Unilever for that kind of a category would be again a 10%. but i which becomes total 20% expenses. Now, when you're building a digital-only brand, you're right. Digital is not a cheaper medium to drive marketing, and the cost of acquisitions are high. A lot of brands would be spending around 25% to 35%, which is, yes, you're right, 5%, 10% higher than what a typical company would spend. And maybe with scale, you can drive those efficiencies, and hence, pass those efficiencies to consumers.
00:47:40
Speaker
and I think that's how you look at a typical category. But let me tell you mattresses and why is it little different? Eight mattresses, it's one of the categories that at least I have seen where the margins are very, very high. And I'll tell you why the margins are high. It's 35% margin, which is not a typical consumer product margin. And the margins are high, I'll tell you. And without naming maybe, let's look at the market leader in this category. you know A market leader in this category it does around 1,000 CR business.
00:48:10
Speaker
to 2000 CR business, they have 10,000 dealer distributor net um touch points. Now to enhance the throughput per outlet is very, very low.
00:48:24
Speaker
Now to make sure your dealer and runs that outlet, you need to give him money, right? Otherwise, if I don't make any money, I'm not going to sell your product. Given the sale per outlet is so less because it's so fragmented, the margins are very, very high.
00:48:43
Speaker
And hence today for the sleep company, I'll give you an example and and that's where I would say only also really helped us because of the only because today our marketing costs are far lower than that.
00:48:56
Speaker
Right. So the only route is actually helping me with better efficiencies. And that's the reason I don't spend so much on marketing. and Right. And that's the reason one, we run a business, which is very, very sustainable. And two we can ensure our products are given at a pricing, which is far, far competitive than any other legacy brand in this country. Interesting. Why is, uh,
00:49:24
Speaker
ah why Why is the sale per dealer so low? Is it that they are selling multiples? Because you see a... One of them or what is like? Two reasons. One, you see a dealer every 500 meters.
00:49:38
Speaker
Okay. it's a very high product you can' deny That's how the category has been created. It has been created very hyper local, but we decided that can we change that, right? Can we focus more on the product, the consumer experience, ah right? And make people travel at least 15 minutes of distance.
00:49:58
Speaker
So I think that is what we decided and we've seen amazing success, um obviously long, long way before we make India sleep and sit better. But I would say, um you know, making sure that we don't have a middleman, making sure that we can delight our consumers, we can educate them on our technology, and right? As I was telling you, all our experience centers have a sleep lab.
00:50:21
Speaker
You can go and see for yourself, how does the product work? And today's consumer, trust me, um and I tell this today, consumer wants to do a lot of research before they buy the product um you know for themselves or their family. And that's what I think you know we decided to offer them.
00:50:38
Speaker
Yeah, but but this is a long-term investment for a consumer. It's not a and like a consumable item, it's an asset. I mean, you you spend on it like you spend on an asset, basically. You spend twenty six literally calculating 26 years of your life on a mattress. So you yeah like better be sleeping on the right one.
00:50:59
Speaker
what percentage of your, ah what is your marketing cost percentage? Like you said, typical DTC brand is about 25 to 35%. So actually, we are much lower than that. ah Right, because we see, um you know, very good conversions. And we see, um you know, oh so as we we run our business in a very, I would say efficient way, ah we want to make sure this year we become profitable. And we want to Create a long-term brand and a business so I think for us the cost are much lower than what I told you um and you know we are Yeah What is working for you in marketing? What all do you spend on ah how much of this is performance marketing? How much is education? ah Like just help me understand
00:51:47
Speaker
So for us, what we realize, we consumers discover us online. And you know then they read about the sleep company. They read about the technology, the smart grid technology. And you know then they want to go to our experience centers and touch and feel the product. and They also want to figure out that from the range of ah six, seven mattresses that we have, what works best for them. night So it's a digital discovery, we spend you know bulk of our marketing spends are online.
00:52:17
Speaker
And it's mainly two things, as you said. One is awareness and education, where we leverage a lot of YouTube. The second is um performance marketing, which is about people who are searching for mattresses. How do I make sure ah you know i come I make myself discoverable? And that's where Google plays a very strong role for us. So again, two mediums that play a very strong role for us is one is YouTube, and second is Google.
00:52:44
Speaker
Okay. So YouTube is essentially like a content focus where you have the like either customer testimonials or explaining the ah technology and the mattress or things like that. like Like what kind of content do you do? both things Both things. One, I would think of it to be a more awareness driver so that I can make more and more people aware about the sleek company and the smart grid technology.
00:53:11
Speaker
to a very strong role in the bottom funnel, where a lot of people before they buy, they want to know how the product is, you know what how you know what are the features of the product, um how what does how does the product work for back, or how does the product work for overall body, or how smart, great, different from memory form or form. right That is little long format content. So I think we do both ah a lot on YouTube.
00:53:40
Speaker
Okay. You know, when I did my MBA, which is about 20 plus years back, we like and I didn't specialize in marketing, but obviously in first year you do everything. yeah We learned about marketing as ETL and BTL are the two ways to do your marketing spends, which today I think is converted to bottom of the funnel, top of the funnel, middle of the funnel. Can you just educate me on what is a modern marketeers approach towards what spend do you do for what objective?
00:54:08
Speaker
Yeah, so you know the way I look at it is either not ETL, BTL, or not even top funnel, bottom funnel, right? I think today's consumer is very fluid. What do I mean the consumer is very fluid? is It's not that I first see you on Google, then I go on YouTube, then I go and see a print, and then I will open my TV, and I will see a TV. Today, I can enter from any place and exit from any touch point.
00:54:37
Speaker
right And I think the simple logic is you need to be where your consumer is. You need to surround your consumer across the ecosystem. to drive either your awareness or consideration for the brand. and i And I think that's how we look at, we have certain communications which are driving awareness, which could be, for example, you should know what the sleep company is and what the smart grid matrices are. And to driving consideration, why you should buy the sleep company or smart grid matrices, what other the ABC they offer.
00:55:14
Speaker
and i or you know you got 109 trial um you know and if you don't like your mattress, you get 100% refund. So I think you need to see what is it that drives awareness and what is it that drives consideration or purchase. And hence you need to target consumers with different communications on different touch points wherever your consumer is available.
00:55:38
Speaker
Can you go a little deeper on this? Give me examples of awareness spends and examples of concentration spends. Yeah, so I think for us, we do around 35, 40% of our spends on, I would say, very hardcore video driving awareness for the brat. And rest, we would do on performance marketing, which is about um you know people who are actually looking for a mattress. How do I make sure you know they can see the sleep company popping on Google?
00:56:08
Speaker
right and how Once they come on my my website, how do I redarget them and drive purchase in intent? and right Now, you are aware of me, but i need to read because you know what we've realized that the people do research for anywhere between a week to two weeks before they actually make a purchase. and right So I think it's important for you to then educate your consumer on what are the features or what is the technology and you know um why buy me?
00:56:39
Speaker
So ah performance marketing is a consideration spent. Yes. Okay. Anything to drive performance marketing is anything that will drive purchase. chase You know, where do you want optimizing things for purchase awareness is where maybe you're optimizing things for views. I want people to view my ad. I want people to be aware of me, and right? You're not worried about, Oh, is this going to translate into sales or not?
00:57:07
Speaker
So that typical ATL like ah TV. Yeah, you could take that as a TV. Exactly. There's no way for you to qualify. How does TV directly translate into sales, right? But you do TV to drive awareness.
00:57:23
Speaker
and let's say typical FMCG word, I drive TV to, you know, I put TV to drive awareness. as Now people are, let's say, aware about a brand area. Right now I go to a, you know, Dmart or a big bazaar and i so I'm aware of the brand. And then what do I, how my experience is, what are the features I see, et cetera, will drive consideration. And, you know, so I think that's how we look at it.
00:57:46
Speaker
So, I think your ARR today is 200 CR plus, right? I think 250 or something like that. 450 CR plus. 450, wow. Okay. For the founder, ah what advice would you share in terms of when you're in that 0 to 100 ARR, what should your spend be on? And when you are in that 100 to 500, what should the spend be on? And then when you cross 500, what do you think that spend will be on?
00:58:11
Speaker
Yeah, I don't think Akshay one answer fits every everyone, and right? Specifically on what, where your spends should be on. I think it's very different for every single category and every single brand, right? But I think what I would tell the founders is it doesn't matter which part of your journey is in 0 to 1, 1 to 10, 10 to 100. And the first thing is what works in 0 to 1, 1 to 10, 10 to 100 could be different.
00:58:39
Speaker
and right So don't get stuck up that you know this was working till now and you know and hence keep on doing the same. My point is keep on experimenting is very, very, very important. and right So because the different things can work in different parts of um the journey. So I think making sure that you keep experimenting with whatever you want to do, which even YouTube, Google, Meta, even even if you want to do you know non-digital, which is let's say your TV, your print, um you know, holdings, test things, but make sure you understand when you're testing, you're very clear on how you're going to measure it. That's very, very important. Otherwise you'll just spend money and you wouldn't know if it's working or not.
00:59:22
Speaker
and So I think that experimentation, agility is super, super important. We all vote you know are in an ecosystem of startups, and right? So I think that's very, very important. Though I think it's very important, whatever you do, and I think going back to your question of keeping consumer at the epicenter.
00:59:40
Speaker
Talk to your consumer, you know, even if you're doing, a ah you know, make sure that you're running, um you know, whatever qualitative is, quantitative is to understand how your consumers are discovering you so that you know what's working. So I think staying close to the consumer is the secret sauce for everything. What were some of the payments you went through? Like when you realized that at our stage now we need to change our approach, that's something which was working.
01:00:09
Speaker
Yeah, I think a lot of pivots not on how to build the brand in terms of communication, but how to reach consumers. and As I said, you know, till last year, ah Our online business was our majority business. ah right we were a lot um Even marketplaces or our direct-to-consumer website. Today, we realized offline or our only business is a big chunk of our business. right so That's a big pivot. so you know so How do you make sure that you drive awareness for your stores, that you know the sleep company has experience centers within 15 minutes of your driving distance? That becomes important.
01:00:48
Speaker
more hyper-local advertising. Yes, absolutely. right Because I want to make sure that you know somebody who's searching for me in, let's say, Andheri or Bombay knows about my stores in Bombay. People who are searching for me in Bangalore knows about my stores in Bangalore. So I think that is why. So how you reach your consumer can keep on changing. and Today also, we're experimenting with a lot of things. But I think it's important for us to understand what is paying out and what is not paying out.
01:01:17
Speaker
How do you measure if a sale was generated through offline or online? Because it could happen that someone walked into a store but then bought it online. or like How do you ah you classify if this purchase is attributed to a store? or is ah like ah yeah no you You know, it's difficult. And I'll tell you, we understand our consumer journey very, very good. We have a lot of ah tools that we have created in-house. So I don't think we need to attribute is it offline and online. Because as I was telling you, it's not black and white. No consumer would either just spend time offline or just online. Very few of them will be doing that. Most of them are fluid. I come online. I see you two, three times. I come offline. I see you two, three times. And then I will decide where I want to buy.
01:02:05
Speaker
So, I think it's important to understand what is the role that online is playing? What is the role that offline is playing? Basis that you do your go-to market. Not about, you know, is this consumer bought Is this consumer and online consumer and an offline consumer? We don't worry too much about that. I think we're very clear. We want our consumers to find us online, and we're very, very happy. And we want them to go to our experience centers, touch and feel our products, see the smart grid technology, experience amazing, amazing products in our ah centers. And um and then you know they can buy wherever they choose to, but whichever is convenient for them. We don't worry about that.
01:02:47
Speaker
What are the investments you made in marketing technology? You said you built some in-house tools. Just take me through your MyTech stack. Yeah. You know, we do a lot of things there, Akshay. One is, um you know, all our tech stack, which is for our only, right? Because we wanted to, in short, from day zero, when we opened our first experience center, that the customer journey doesn't matter. They buy online or offline. It has to be exactly same.
01:03:16
Speaker
and i And hence, we want we developed our own proprietary tools to make sure that even if a sound consumer is buying offline or online, the order is created exactly the same way, dispatched from the same warehouse, delivered in the same exact way, exactly same message going to the consumer so that the journey is seamless.
01:03:36
Speaker
um and right So I think those that is one tool that I would say. Two is, as you told me, you know understanding how the consumer journey, even let's say post purchases. First, did I um go on your website and then visited the store? Or did I first visit the store and visited the website? So your CRM systems. That's also something that we've developed, and um you know which really helps us understand the whole consumer journey.
01:04:01
Speaker
you know what What is the first point of contact? What is the last point of contact? Average number of contacts, right? So I think we use a lot of data internally ah to understand what's working on the business and what's not working on the business. Okay. When a consumer is visiting a store, you are able to identify that this is the consumer who has gone to the store and then ah able to also map that he also visited our website. No, absolutely.
01:04:30
Speaker
Okay, but like you make him fill out a like a form with his number or or how do you? It's a very high intent purchase, Akshay. And as you said, people are buying this for at least seven to 10 years. And a typical consumer actually spends around half an hour in our stores. And you know we've got a team of great ah you know ah store managers, and we call them sleep experts at our store. right Their job is to make sure that they can
01:05:02
Speaker
understand the consumer needs, they can educate the consumers, they can make them experience the products, and make sure that they get the best product for their body type or their body shape. right So I think we focus a lot on education and experience. um And I think um you know that's what we see consumers love us for, and you know and that's what is the DNA of the sleep company.
01:05:30
Speaker
Okay. How do you, ah you know, I want to go on the supply side of this. Like, how did you build the supply for it? Do you manufacture in house or is it third party? And ah how is it, how does it reach the consumer's doorstep?
01:05:44
Speaker
yeah and So something we're very proud of, Akshay, from day zero. It's endto end-to-end in-house, and the reason is twofold. One, we had a tech, or we have a tech which is very proprietary. ah right And we have patent, actually, for our smart grid technology.
01:06:02
Speaker
We have multiple patents granted. We have patent granted in India. We have patent granted in Japan. We have patent um granted in Saudi. We have patent granted in UAE. And right so we have and you know in multiple countries like Europe, US our patent should come in any time.
01:06:19
Speaker
right So we have patent granted in multiple countries. So I think for us, it was important that you know things are managed in-house. Two, I think when you are doing things in-house, specifically you're manufacturing your supply chain, you can control customer experience far, far better. but Today, I'll give you an example because of that.
01:06:39
Speaker
In mattress category, it's a little complicated. You have standard sizes, which are typical your king, queen, single sizes. And then you have infinite non-standard sizes, which are custom sizes, which is what the sleep company also does, right? You want those 76.35 inches.
01:06:59
Speaker
into 61.75 inches, right ah which is all non-standard sizes. So today, because we control the supply chain, let's look at top five metros. Any standard size, we can deliver in 48 to 72 hours to your doorstep. Even a non-standard size, because we make it in-house, we can make sure it is dispatched in 48 hours.
01:07:24
Speaker
and right If we didn't have our own manufacturing, our own supply chain, I don't think we could have delivered a great customer experience. um ah right and So I think that's why for us to ensure, again going back again, to make sure we delight the consumer, I think owning the manufacturing supply chain internally um is very, very important. And we've been doing that from day zero. And do you own the delivery also? is that with a No, we don't own the delivery. Akshay, this category is a heavy and bulky, ah right? So I think with heavy and bulky, there are a lot of challenges that come in the delivery ecosystem. Now, I think India ecosystem has evolved a lot. Thanks to companies like Amazon, Flipkart, you have tons of partners out there. We work with very, very strong quality players in this category.
01:08:15
Speaker
and you know we which are our 3P partners. And we make sure we leverage them to deliver our products to customers. What we have done internally, which I think is a again to ensure we have a great customer experience, we have a team of um you know delivery experts that we call them, ah which is our control tower. These people literally hourly are monitoring every single um order of hours and ensuring it is delivered as per the commitment we made to the consumer. right wow And I think that is very, very important. And you know if you ask me, are we able to deliver 100% on time? If I say yes, it's a lie. right it's It's today because of the ecosystem. and you know Let's say a truck, something happened on the road. It just didn't reach or whatever. So I would say,
01:09:06
Speaker
We deliver more than 98% of our orders on time. We do have one to 2% orders that we are not able to deliver on time. But we make sure that we get those learnings. We make sure that you know we talk to those consumers, very transparently communicate to them why it got delayed, even if it was a one-day delay. And right and we learn from those mistakes, and we try and fix them.
01:09:30
Speaker
well amazing Amazing. I think delivery is typically where customer experience is affected with a lot of other D2C brands, which I think through the delivery expert team, you have managed to make sure that that doesn't happen.
01:09:44
Speaker
yes okay okay ah you' You've got ah patents in multiple countries. Is there a plan to global? ah Yeah, so absolutely long term. Yes, absolutely. We want to become world's best comfort tech brand. you know It's not just India, which is sleep deprived. The whole world is sleep deprived. And that's sadly the part, right? I mean, if you read any survey, any reports, world is becoming sleep deprived. you know Something which was taken for granted, something which is so important, sadly, is very, very difficult to get sleep.
01:10:21
Speaker
and i And we believe with our patented product, with our technology, ah we can um you know make create a made in India global business. But I think today our priority is India. we keep ah We are experimenting with one or two countries and we will see how it pans out and then we will go more aggressive. But I think today the focus is India. um um grow Continue to grow exponentially um and then we will definitely go more aggressive internationally.
Brand Strategy & Legacy Goals
01:10:51
Speaker
yeah there's a lot of rubinate yes yes You know, so from sleep tech to comfort tech, this will just need some sort of a rebranding. I mean, even the name itself is the sleep company. Now you're also doing chairs. What what is the approach there? Will you treat them as separate brands and like GoSmart have a separate brand for chairs? Or is it better to have one single brand so that both categories benefit from that awareness? Because otherwise the awareness spend will double, right?
01:11:24
Speaker
Yeah. So I think it depends, Akshay. And you know what is the challenge for us? um you know We have Uber ads. The sleep company is for products which are about sleeping, which is, let's say, our mattress smart grid mattresses, our smart beds. We've got smart grid pillows, right? um ah So that's the sleep companies for that, right? Because as you said, the name suggests sleep.
01:11:47
Speaker
like The need that the consumers have from products that can help them sleep better is very different from the need that consumers have from products that can make them sit better. And Argo Smart is our brand, which is for sitting products. ah right Today, we've got office chairs, right smart grid. We are world's first smart grid office chair. We've got smart grid lounger.
01:12:11
Speaker
and i So I think we have two different brands. The way to drive efficiency is today both our brands sit in one experience center. um right And that's where they discover both the sleep company, consumers discover both the sleep company and are go smart by the sleep company. Okay. But you will keep them accepted brands. like ah Yes.
01:12:35
Speaker
Okay. so Okay. But the way to, you know, the way to drive, I would say efficiencies is it's always smart by the sleep company, right? Because the technology is the same, right? We want to make sure that the same, we have the same brand but ah brand values, right? Very tech enabled science, enable disruptive products, patented product, um you know, very advanced technology that can actually make people sit better, right? We spend almost eight hours every day on an office chair, seven to eight hours, right?
01:13:06
Speaker
That needs to be comfortable. So I think the brand values are exactly same. The go-to market is same. And hence for us, it doesn't drive inefficiencies. Do you see Argosmart as an upsell or as a business of its own? As a business of its own. Okay.
01:13:27
Speaker
ah Isn't it too early to a littleto invest in two categories? and I mean, wouldn't you spread yourself too thin in terms of resources? Actually, this has come from consumers. They wanted us to launch this product. It's doing phenomenally well. and i Today, D2C, the consumer direct, see, chairs again is a very, very fragmented market. It was more of a B2B market. You know you have lot of old age brands selling B2B. What I think happened with COVID is a lot of hybrid started. People started to think about chairs. People started to buy their own chair. That's how this category evolved.
01:14:07
Speaker
Today if you check in the D2C consumer chair brand, Argosmart is the biggest brand in the country today. like Already the biggest brand in the country today. I think now for us the intent is how do we make more people aware about it and we drive it. like Because there is a need for a better, designed, a more comfortable chair out there.
01:14:33
Speaker
and Because earlier it was, for example, you know the HR of a company or some team, admin team, purchase department is sitting and deciding the chairs in the office. Today, when I experience a chair, I can influence what chair is used in my office. right And there is a need for better quality, better designed products that can make people sleep or sit far more comfortably for the long sitting hours that we all do. right Okay. what What percentage of your ARR is from ArgoSmart? So I think today around 20% of our business is on ArgoSmart. Wow. So it's so almost like a hundred karol ARR category. Wow. Amazing. Amazing.
01:15:16
Speaker
ah You spoke about signing up your first celebrity. Talk to me a bit about a celebrity endorsement. When does it work? At what stage? ah What is the most efficient way to use it? Because I know a lot of brands spend on celebrity endorsement and they don't get bang for the buck. ah So yeah what's the thing about that?
01:15:38
Speaker
I think we think about it in two or three ways, right? And for I think every brand it's different ah oh every category is different, right? Now the way is first, you need to be very, very clear on what is it that you want from a celebrity, right? Are you trying to break the clutter, get more eyeballs and drive awareness for your brand? Are you trying to drive some voice of authority, voice of um authority on your brand and drive um ah you know Or are you trying to drive some trust, some credibility, whatever? So I think that is very, very important to understand. I think where it doesn't work for a lot of brands, you take a celebrity just because it's a famous celebrity, you put it on, you forget the brand actually, the celebrity becomes the ad. And I think, and you know for maybe some it would work, for some it wouldn't work, right? I think we were very clear that we wanted to get somebody on board for
01:16:34
Speaker
Two things. One, drive education about smart grid technology and drive awareness about smart grid technology. Two, we were very clear the product has to be the hero. and right We sell a very disruptive, we sell an amazing product which we wanted consumers to see the smart grid matrices, how it's great for your back, how does it relieve pressure on curvatures, how it has got 2,500 air channels. right So, product was always the hero. We wanted to bring out, stay true to science, but bring it out in a way that can be delivered in a credible, trustworthy way to consumers because that's what the brand values are, right? And I think that's where we found a great fit with Anil Kapoor.
01:17:21
Speaker
um that i he He goes very, very well with the brand ethos. Very credible, very trustworthy. um you know ah Could deliver science in a very strong way for us. um right I think that's where we've been now um you know working with him for the last three years. and um and you know As I always say, I'm a big fan of consistency. and Even if you do the same thing for 10 years, it's going to help the brand.
01:17:49
Speaker
unless and until you say the thing is not working, right then you change. and i So I think that is the reason that literally within one year of our launch, one one and a half year of our launch, we decided that we wanted to bring somebody on board to drive education about our products, our product first, and then the celeb, right? And you have to make sure that the celeb has a strong sync with your brand, and right? Otherwise,
01:18:17
Speaker
nobody will know which product ad is this. I think that's how we decided on Anil Kapoor and ah we continue to work very strongly with him. Okay. Who's your ideal customer profile or which demographic are you targeting?
01:18:37
Speaker
Multiple, but I'll give you who's my, you know um I would say the core prime prospect. I think we you know we look at um males typically in the 30 to 40 years of age, working couples, you know the new ah millennium but millennial population, um staying in the top 30, 35 cities. Yvonne, doing a lot of research, launch products which are good for them, their family, is what I would say is our prime prospect.
01:19:06
Speaker
Right. They would also have the ability to spend a little more for like to look at it as a long-term investment. and Not just that, no and I wouldn't say that because I'll tell you, I'll just give you an example. Today, the sleep company products, amazing mattresses, smart grid tech are available at 25k. Akshay, they're going to last you for 10 years, right? That's a typical lifetime that people say. So that's like 2,500 rupees per year. Think of a phone that all of us use. We spend almost more than 50k on a phone, which people change every two to three years. so i First, I don't think it's a high investment, even if you get a local made product.
01:19:48
Speaker
you know it's It's not that low anymore. Two, my point is you're getting a product which is going to be great for your back, which is going to be great for your spine and will make sure that you have a peaceful sleep after a tiring day. and Right? So I don't think pricing is a problem that we see. I think it's more about what are you delivering to your customers for that price, and right? And how is it worth for that 10 years of my life?
01:20:14
Speaker
right right write call it okay ah Let me end with the this. You said you read a lot of autobiographies. What are some people that you've been inspired by?
01:20:26
Speaker
I think a lot of them, but maybe I'll i'll point out too, and I'll tell you, um I think those two really forced me to the fence. Those two books really forced me to the fence to, ah you know, get out of a cushiony job, which was very secure. You know, I always say, um you know, P and&G and companies are amazing, but they have a bubble, and right? Where you feel very safe, very secure, and you're happy.
01:20:49
Speaker
ah But I think the two books that made a change, one was um you know Phil Knight's book, The Shoe Dog. And I still remember this ah ah reading this dialogue which said ah that you know once he says that I didn't know what I wanted to do, he said I knew only two things. One is I didn't like to have a boss. And two, I didn't want to be no one.
01:21:12
Speaker
And I think that's what we really believe in the at the Sleep Company. you know What is it that you're going to leave behind ah that you can be remembered remembered for? And at the Sleep Company, we want to build a legacy brand that can make millions of people sleep and sit better. And that's what we want the Sleep Company to be known for.
Inspiration & Entrepreneurship Advice
01:21:30
Speaker
right So I think Phil Knight was, the shoe dog was born. Though I think that really, really motivated me was, I think the whole reading about um Amazon and the Jeff Bezos, I think really made my mind, you know, this that digital is the, you know, his is the place.
01:21:51
Speaker
and When you're not in the ecosystem of startups, your ecosystem is very different and you don't really realize the power of digital. right and I think that book changed my perspective and made me re realize the power of digital and we said, okay, we are going to build something great. and I think that's when I decided this category stumbled on me and you know I took the plunge.
01:22:14
Speaker
um I always tell entrepreneurs, if you want to start something, anybody, you know, doing a job, anybody, if you want to start something, just take the plunge. Don't think of, you know, the idea is not there. My co-founder is not there. Just take the plunge and things will happen. And Amazon is also, of course, like their role model for customer obsession. Absolutely. yeah thing that they And that's the only way to win. Yeah. Yeah. Yeah.
Conclusion & Listener Engagement
01:22:38
Speaker
Thank you so much for your time, Priyanka. It was a real pleasure. yeah Thank you, Akshay. Absolutely loved my conversation. Thank you so much. And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.