Casper Sleep S-1
sec.gov
sec.gov
https://www.fastcompany.com/3065928/sleepopolis-casper-blogg...
I would take any reviews of Casper's products with a grain of salt.
https://www.consumerreports.org
Some U.S. public libraries offer access to Consumer Reports for free with a library card.
sadly, consumer reports now gets money from purchases through amazon affiliate links
I would still place more trust in Consumer Reports than in for-profit review sites, but that trust has declined.
[0]: https://www.sleeplikethedead.com
[1]: https://www.sleeplikethedead.com/mattress-reviews-casper.htm...
That’s how i found a mattress that is still like new after 6 years of usage (and I’m extremely satisfied). And no, none of the “big” brand.
Here a rule of thumbs, avoiding a brand that start by “s” is already a good start. Then there is a few more to filter out.
Right now I have an incredible 14 inches of Queen memory foam I got for $400 that's incredible to sleep on. The brand? A no name.
What I've taken away from the mattress craziness is that if you exclude the fancy things like temperature adjustment and sleep number stuff, most basic mattresses come down to basic material and then secondly firmness. As long as you get those two things right they kinda all seem to be the same.
https://www.legalreader.com/ghostbed-vs-purple-mattress-laws...
https://nonbiasedreviews.com/was-honest-mattress-reviews-bro...
etc.
I bought their top of the line hybrid mattress then a few weeks later they had a sale which could be used on any of their products if you bought a mattress. We really wanted the lamps so we contacted customer service to see if it was possible to get the discount since we just bought the mattress. The girl was extremely rude making it seem like I was wasting her time. She told me that there was no way to add anything to an existing order so I couldn’t do it. I asked if I had to return the mattress and reorder it to get the lamps and she said yes that’s what I would have to do but no I was out of luck because they took too long to respond to me (called after they didn’t respond to any of my messages) so the promotion was over. The whole time she just seemed annoyed that I even tried to ask.
Sorry I spent $2000 on a mattress and wanted to spend more on another product. I just returned it and got a Novosbed for half the price and it was way better so I’m pretty glad it turned out that way. Keep in mind that Casper can’t sell a return so they have to donate it. The whole return was a mess to deal with as well. Glad they lost money on the return even if they get to write some of the donation off.
Guess my point is that I don’t think Casper treats their customers well. I wouldn’t touch them as an investment. I personally think they’re just cashing out at this point.
In my case, I contacted support to see if I could get a discount before making the purchase and they told me to wait two weeks for an upcoming promotion. Also quickly exchanged a defect mattress.
Not saying they're the best, but complaining because they don't have retroactive sales....
It was them not being good customer service, the general rule in customer service is basically try and do what ever the customer wants. In this case they wanted a coupon (probably for 10-20% off extremely expensive lamps) after buying a $2000 mattress. This doesn't matter and should have been given immediately.
The positive review of a single person is more important then losing 10-20% on a sale after a user already purchased another product.
Due to them not giving them a 10-20% coupon they lost a $2000 mattress sale and got a bad review on a site.
It is bogus "customer is always right" garbage, and incredibly entitled behavior.
I didn't remember it being that high, and checked Wayback and sure enough it was $850 in 2015, and $950 in 2017.
Given how many copycats are out there, many selling for much less, can someone help me understand how Casper gets away with selling a $1095 mattress + tax to a majority millennial crowd, who are supposedly cash strapped, and doing so successfully?
Because the mattress sellers in the bad part of town still charge 3x more.
The only Casper product I have is a dog bed and it's great.
Casper (or someone writing about them) once wrote a blog post about how they got into the mattress business because they saw unnecessarily huge margins and direct to consumer opportunity. Now they are opening physical stores and not even charging much differently from regular mattresses. I’m just going to keep buying cheap Chinese mattresses that don’t spend hundreds of dollars per purchase on advertising
The point is that the only reason Casper is “controversial” here is because IPOs have been elevated to a coveted version of success when it has nothing to do with anything aside from being unnecessarily rare.
Casper is just a vertically integrated mattress seller accessing the public markets now
> Because the mattress sellers in the bad part of town still charge 3x more [than casper].
Which is not true. I understand there are premium choices, but this was not what I was replying to.
HN from 2017: https://news.ycombinator.com/item?id=15321807
"Casper went to war with popular mattress review site, then financed its takeover"
i guess purchasing behavior is very different for things you buy very infrequently like a mattress?
looking at Costco and a highly rated foam comparable to Casper is $500...
There's also so much info on springs, foam, latex, rubber, on and on. It's overwhelming. Casper has good marketing and make it easy, and since it's so hard to compare, they just need to be close to other prices. They don't need to go full walmart
I thought the promise of all these direct-to-consumer products was to pass savings onto the consumer because they are vertically integrated and cut out scammy middle men.
Seems like all that's happened is they just keep fat margins for themselves.
In my experience you can just optimize the firmness to your liking with a pad. If suddenly its too firm or too soft, you can switch it out and not have to replace a whole mattress. Relatives visited and wet the bed? Throw it out and get a new one, your only out a few hundred dollars instead of $1000+.
For couples who want their mattress different ways, that is another market.
In contrast, our 4 year old Leesa mattress (which we're back on as a primary bed) is fine.
I'm sure that I overpaid with the $900 Leesa, but I don't know how to be sure I'll get a durable mattress if I get a cheap one.
Judging by their S-1, not so much... They're offering up $100M in shares on $200M of assets and $300M in debt. They spend about as much on marketing as they make from selling the goods, leaving shareholders to pay for all of the administration expenses. If it were a tech company it'd be easy to say this is another debt-fueled startup looking for an exit...
I don't understand this at all. You can Google and have all the prices right at hand, so comparison shopping by number isn't hard.
You can go to a mattress store and lay on a handful of mattresses and figure out pretty quickly what you like - is the pillow top or foam too soft? Do the coils poke too hard? Too firm? Too heavy for you to move when you need to do the sheets? - You admitted to doing this yourself.
I could never see myself buying a mattress from a company like Casper personally. Returning something like a mattress because you don't like it has got to be a level of hassle that I can't even begin to imagine being worth it, vs just making sure you bought one that you're comfortable with in the first place.
Yes, it is. The major mattress stores each have their own custom SKUs to defeat comparison.
> You can go to a mattress store and lay on a handful of mattresses and figure out pretty quickly what you like
To some extent, but there's a wear-in period on a new mattress. It takes my body a few days to a few weeks to get used to any new mattress; trying to figure out how that's going to go from a few minutes in a store isn't super effective.
It’s the same exact thing you seen in automotive sales, how do you tell if something is a good price? Well looking at the car compared to other cars in that area may help but what about one model vs another and so forth.
So go lay on a mattress or test drive a vehicle, all that does is tell you if you absolutely hate the item in question not if you actually like it so you add a wide range of prices on very similar items with unlimited reviews or information on them it’s incredibly overwhelming.
Caspar & others (Tuft & Needle) did a great job with the market by appealing to those concerns. 100 night free trial (T&N) and if you don’t like it, we’ll arrange to pick it up/drop it off at a homeless shelter or similar. Casper did something similar.
Once a decade or half decade larger purchases without a baseline is incredibly stressful for most consumers.
Well, we have Google now.
But if you're willing to buy something of that price range without doing a little bit of research then it's an issue.
I had to buy a mattress recently (because the one I had bought online - for a discount price - sucked). I went to the store and tested the different models.
Though I agree the once a decade thing complicates things.
if this was objectively proven to be the absolute best foam mattress on the market, I would generally agree that paying top dollar for the best is fine for something you spend a lot of time using, but there's nothing out there that suggests this is any better than anything else on the market. It appears as if it's mostly just good marketing.
So I bought the cheapest thing on amazon with the best reviews in the size that I needed, which was maybe 25% of the price of Casper or Leesa (and those are about half the price of a traditional mattress). It's absolutely fine. If anything, I sleep better knowing that if I destroy it or have to move, I can just throw it out and buy another one.
One note: if you read enough reviews, you'll notice that some budget foam mattresses can have a smell to them. I assume this is the main thing that "premium" foam mattresses have actually addressed, but obviously it's not advertised as "we have the least smelly product!".
It's really as simple as finding a well reviewed hunk of foam, or at least it was for me, as mine arrived odor-free.
It does make sense that Casper itself needs higher profit margins than Costco due to the differences in business.
I don’t know how places like Casper keep selling mattresses.
It’s worth noting European sleep preferences are different than Americans, tending to prefer much firmer mattresses, so different testing results make sense.
The market for a $1,095 mattress wouldn't be caught dead shopping at CostCo, even if it's the exact same mattress.
The "Select" branding isn't there to bamboozle them, it's to help them rationalize paying $500 more to be known as someone above shopping at CostCo.
Casper wants one person's $1,095, and another's $599, so they use branding and channel differentiation to scoop $1,694 from both sales, instead of $1,095 for just one, or $1,198 for both.
If we presume their cost is $400, then they go from $398 in margin (two sales at $599) or $695 in margin (one sale at $1,095) to $894 in margin. That's good business!
Costco isn't for the poors - if anything it's the preferred destination of the upper middle suburban class. they sell high ends things. a lot of it.
i'm guessing Casper's main customer base is, again, cash-strapped millennials, so to argue that these customers are somehow above Costco is a strange take.
That's quite an assumption you're making there. I buy a lot of what I need from CostCo, I also spent over $1k on a mattress and have spent further thousands on high quality bedding.
It's erroneous to conflate CostCo with cheap. They're a members only buying club which tends to buy high quality stock in huge quantities, taking advantage of the economies of scale on offer to them.
Plus Zuckerberg shops there. https://www.cnbc.com/2020/01/03/photo-facebook-billionaire-m...
“Darien (/dɛəriˈæn/) is a town in Fairfield County, Connecticut, United States 37 miles northeast of New York City. With a population of 20,732 for the 2010 census and a land area of just under 13 square miles, it is the smallest town on Connecticut's "Gold Coast". It also has the youngest population of any non-college town in Connecticut and has a high rate of marriage. Darien is one of the wealthiest communities in the U.S.; listed at #2 on CNN Money's list of "top-earning towns" in the United States as of 2010. Bloomberg's 2019 "America's 100 Richest Places" ranking placed Darien in the top 10, with an average household income of $341,090.”
https://en.wikipedia.org/wiki/Darien,_Connecticut
So Darien is where they put the Costco:
https://www.storeopeninghours.com/costco-darien-ct
Across the street further towards Norwalk are Homegoods, Walmart, Stop-and-Shop, etc. Further into Darien, Trader Joes and Whole Foods.
The 6 figure crossovers are all parked at Costco and the Darien grocers.
I spend a lot of time on my mattress... might as well buy a nice one I really like (Stearns & Foster)
I have a Casper. I found it way too firm as a side sleeper, but it was too late to return it, so I bought a $100 memory foam topper from Costco to make it more squishy. I could have saved a lot of money by buying Zinus mattress from Amazon and adding the topper, but oh well.
People often perceive a mattress as "very important," as sleep is important, and are willing to spend a bit extra if they think the quality will be there and they'll sleep better.
In reality I believe most of these "mattress in a box" companies are selling the same 2-3 mattress manufactured in the same factory.
Personally, I buy mattress in the $300-$500 range. When I was in college I just slept on a brick of foam because that was what I could afford.
1. We, the millennial crowd (tm), are insanely stressed on average. Whether it's objectively genuine or falsely perceived, brought on by ourselves or otherwise, it is something we enjoy having control over -- And choosing a "simple" mattress that is straightforward to research and buy caters to that desire perfectly. For awhile Casper only had one mattress, and it seemed like an irrefutably decent mattress. You simply chose the size!
2. If you don't like the mattress you can return it within a period of time. Mattress sellers often offer this, but Casper advertises it. It adds a sense of authenticity to the sale, and I think many people (not just millenials) feel more at peace about buying the mattress without trying it first.
3. It's shipped to you and comes in a box. Usually there's no talking involved. Nobody has to come into your home. Regardless, many of us don't even have a vehicle to pick up a mattress with anyway, nor the available friends to help bring it in through the front door. Maybe a delivery person would help but what if they don't? And what if you miss the delivery?
4. Monthly payments. I feel most millennials don't really care about the total cost of something, as long as there's a monthly payment option that is reasonable. Paycheck-to-paycheck is the format we're used to budgeting in, which easily puts a monthly payment into perspective. $35/month versus $350 upfront is way more manageable.
I know that's only tangentially relevant to the topic at hand, I'm just mentioning this since I had trouble finding much info on them. Latex is not promoted or advertised much, since they have very low markup compared to other mattresses; the store would much rather sell you a "hybrid" (usually 1/2 latex and 1/2 memory foam). But if you want to pay 2x as much to get something that lasts 4x as long, what you want is simple, boring, 100% natural latex.
The difference between it and normal spring mattresses is amazing though. I highly recommend them!
No affiliation, just a very happy customer. Never tested their customer service/returns/etc, so I don't know how good they are there.
Revenue - 312M COGS - 157M Sales & Marketing - 113M General & Administrative - 106M
Net profit (loss) - (67M)
First thought: How on earth are they spending $11M/month on G&A expenses?
On further reading -
Casper Labs, our over 25,000 square foot advanced research facility in San Francisco.
Ah, ok then...
Second thought: Why isn't R&D broken out as a separate line item?
There is a whole other way to look at products like this that is often missed if you haven’t done the time.
It’s very tiring to see engineers be tacitly assumed to need remedial time in other fields to gain sufficient appreciation for them, especially when the reciprocal deficiency of experience in engineering is virtually never raised for sales, marketing, etc. while engineers often do self-learn quite effective product and business skills.
Sleep Innovations Shiloh 12-inch Memory Foam Mattress
I've had others staying in our guest bedroom love it too and go out and buy one. At this point, with a number of moves and growing family, I've bought something like 5-6 of them.
I think Costco sells the same mattress under Novaflex or a similar name but at a slightly higher price point (the Amazon price varies quite a bit on the Sleep Innovations mattresses -- check CamelCamelCamel on it if curious).
"“Barriers to entry are low, but barriers to profitability are high,” he said. “It doesn’t take that much to design a mattress, a marketing campaign, put up a website, and have one of these big companies like Carpenter do the fulfillment for you,”"
The majority of bed-in-a-boxes outsource their manufacturing...They’re literally calling around to producers saying, ‘we need a finished product and here’s what we think it should look like.’ Sometimes, they don’t even know what they want it to look like...Most of the outsourcing is to just four major manufacturers
Would. Not. Buy.
They're essentially betting on "optimizing wellness" being a huge fad this decade, which I believe many others are predicting, and are using their current position to get more cash to get ahead of that.
I don't associate Casper with "a quality night of sleep", probably because I'm happy with my current mattress and have no need of their product, but at the same time I couldn't name a single one of the current applications that exist to track + "optimize" sleep / circadian cycles, and I'm sure I'm not alone in that, so who knows? Maybe in 2030 we'll all be moaning about Casper putting up their Nighty Night subscription another $7 for "HD dreams" and reluctantly acquiescing to it.
100 nights or your money back. After two days we didn’t like the mattress. Emailed support and told them we weren’t happy with it. The next day 1800 Junk truck came out and trashed the mattress. So essentially their returned mattresses go into the landfill and become waste if you’re not happy with it.
I bought a cushion for my desk chair from Amazon and it turned out to be garbage so I tried to return it. They said they could only give me a refund if I sent them a picture of the cut up cushion. I didn't have to send it back, just send a picture of it with a big gash down the middle.
I guess, at least with 1800 Junk there is a good chance a employee will pluck the mattress out and put it up on Craigslist.
Wholesale: 2018- $31M; 2019- $54M [75% YoY growth] "20.3% year-over-year net revenue growth for the nine months ended September 30, 2019"
"We have also expanded our gross margin from 42.8% in 2016 to 44.1% in 2018 and to 50.7% for the three months ended September 30, 2019"
Last thing to change would be another grand on new mattress.
[0] - https://www.fastcompany.com/3065928/sleepopolis-casper-blogg...
https://mobile.twitter.com/kevinwlordbarry/status/1215786907...
But I did wonder why it was so expensive..
"Casper is a very inefficient wealth transfer from venture capitalists to prestige podcast makers"
___[Big Well Known Consumer Products Company]___ is a very inefficient wealth transfer from ___[Blue Chip Stock Investors]___ to prestige ___[Traditional Media Companies]___
Just one night sleeping on a conventional mattress leaves me with weird back pains and a stiff neck.
Not only are they costly and a PITA to move, mattresses waste a lot of space too.
Traditional Japanese tatami mats are basically the same thing in terms of flatness and hardness, they're not known for having sleep/back troubles.
I love my Helix so much so that I convinced my parents to buy one. They didn't love theirs and sure enough, customer service was hassle-free with the return. So my n=2 recommendation: Helix is the way to go
That said those Glow Lights do seem pretty awesome
https://www.statista.com/statistics/270290/number-of-ipos-in...
Edit since I am rate limited: yes it is the best comparison. Let the public access more securities investments, the tools to manage risk are numerous.
It's so hard to find investments where a company hasn't hit their biggest growth period yet. It feels like you need to be in some inner circle of investors to get in on some of that action.
I probably wouldn't invest in Casper, but I hope the number of IPOs keeps increasing!
[1] https://www.statista.com/statistics/270290/number-of-ipos-in...
[1] https://theweek.com/articles/770020/americas-disappearing-ip...
[2] https://www.youtube.com/watch?v=sC7ht0CAQsk&feature=emb_titl...