Solving Sleep, For All Of Us

We spend on average 1/3 of our lives asleep. And problems around sleep problems would fill up volumes, here is a snapshot from the American Sleep Association:

  • 50–70 million US adults have a sleep disorder
  • 48% report snoring
  • Insomnia is the most common specific sleep disorder, with short term issues reported by about 30% of adults and chronic insomnia by 10%
  • 25 million US adults have obstructive sleep apnea

So where are the companies that have succeeded around sleep? Pretty much all those with commercial traction are not tech companies — Benadryl (drug), Sleep Comfort (beds), Tempurpedic (mattress) — this post will posit three principles for startups to get there too.

Principle 1: Data Analysis Not Enough

Sleep provides a wealth of data but it falls under the same trap as many other quantified self companies — it’s interesting but not actionable. Some companies have created business models around personalized coaching but if the experience of Zeo (shut down) or Lark (pivoted) is any indication, this also has a low willingness to pay. The jury is still out on BigHealth whose sleep improvement program has been clinically proven to help overcome even long-term poor sleep without medicating. The challenge all these companies face is not that they don’t create value, it’s that consumers see poor sleep as mostly a function of behavior — and are resistant to changing. Data has diminishing returns over time whereas interventions that alter physiology in a meaningful way can provide a more sustainable benefit.

Principle 2: Leverage Channels

It will be interesting to see how companies like Eight, which sells mattresses and sheets tracking your sleep, fare in the next couple years. At least so far no company in sleep has got scale with a direct model. People may buy standalone gadgets over the Internet but when it comes to items like smart mattresses and pillows they want to try first. So it shouldn’t be a surprise that Sense, a voice-responsive monitor by Hello, has gone from Kickstarter into Target and BestBuy. The traditional retail channels still matter, a lot.

Principle 3: Improve Not Replace Clinical

A slew of companies have tried to replicate the doctor’s office. Take automated scoring of sleep as an example, there is good ROI in doing it through tech but physicians will tell you the manual calculation is good enough. You really need some additional differential to help guide treatment decisions for specific therapy. EarlySense shows a model that seems to be working — the mattress records also heart and respiration rates, as well as bed entries and exits, so that doctors can monitor the probability of a fall or cardiac issues. In other words, real-time and continuous monitoring that can’t be done easily in a hospital setting and catches a potential issue can save costs and potentially lives.

All opinions expressed here are my own. I work for Samsung’s innovation unit called NEXT, focused on early-stage venture investments in software and services in deep tech. Many thanks to Stephen Pittman for his great thoughts.