In early May, the online mattress startup Casper celebrated its third birthday in whimsical style with an event, held in its New York headquarters, modeled after a 3-year-old’s birthday party. There was face-painting, piñatas, and—in a necessary concession to adulthood—a free-flowing open bar. They even hired a balloon guy. “He really put the artist in balloon artist,” says cofounder and CTO Gabriel Flateman, whose company has transformed the mattress business with smart design, low prices, and a clever business model. “He made me this intricate jet pack I was wearing around. I mean, he made a knockoff Chanel bag! But the magician canceled at the last minute, which kind of sucked.”
When Casper launched three and a half years ago, its five founders—Flateman, CEO Philip Krim, COO Neil Parikh, chief creative officer Luke Sherwin, and chief product officer Jeff Chapin—had no clue there would soon be so much to celebrate. They knew they had a strong idea, but back then their vision was modest. Mattresses were a $7 billion industry dominated by a tiny group of highly consolidated manufacturers and retailers. Markups were sky-high, sometimes topping 100%, and the shopping process was widely perceived to be unpleasant and confusing. It seemed possible that a nimble, low-overhead online player with a veneer of cool—the Warby Parker model, essentially—could capture a small-but-profitable slice of that market, despite the conventional wisdom that no one in their right mind would buy a mattress without at least flopping down on it for a few minutes at their local retailer.
So when, on April 22, 2014, Casper flipped the switch on its new e-commerce platform—selling just one model of foam mattress in twin, full, queen, and king sizes and targeting millennial Ikea shoppers—the founders had what seemed like a reasonable goal. “Something like $1.8 million in sales in our first 18 months,” says Krim. “But then, literally on launch day, we began to totally rethink everything.”
Before the founders had shipped a single one of their blue-and-white boxes, each packed with a near-magically expanding rolled-up mattress, it was clear they had hugely underestimated just how good their idea was. Orders came flooding in so fast that the company depleted its initial inventory on the very first day. Within eight weeks Casper had surpassed its original 18-month sales goal, and within a year the young company had dramatically reshaped the industry it originally planned to nibble at from the edges.
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