How to Build Hype with Matteo Franceschetti | Where It Happens

0:00we are so excited to share this conversation with you we had mateo in from eight sleep he's amazing greg what'd you have on it mateo gets community he has basically identified athletes moms lawyers etc and tried to reverse engineer how to get them talking and creating a community driven marketing approach that i absolutely love um if you're into consumer if you're interested in community interested in marketing this is the episode for you let's just dive right in i hate banking most banking products suck so when i was starting all these new businesses and going on this new adventure i turned to mercury mercury is banking four founders by founders they

0:42make everything so easy and a beautiful elegant design there's free wires virtual and physical debit cards they even have a raising platform where they will connect you with other investors out in the ecosystem have you tried mercury i have and let's be honest when you log into traditional banking websites and apps it's hideous when i go into mercury it's like a walk in the park so i love using it feels fresh and i can't use anything else you should definitely check it out at mercury.com it will completely change the game for your banking experience i guarantee it appsumo is the number one place for entrepreneurs it is a marketplace where

1:24entrepreneurs can find the products they need to build and scale their businesses its founder noah kagan is a creator he's a builder and he understands what you need in order to scale so he's created a marketplace where you can find those things it's amazing i've found so many unique products there and as a creator you can make and list your products at a super low cost and have this incredible discovery engine to go sell and scale your business i highly recommend you check it out today go to appsumo.com backslash the room it's red where are we starting musk your boy um musk my boy that's your god dude elon

2:04musk no he isn't huh oh my god i thought you were a tesla guy you love tesla don't you i never owned drove in in a ball that's true actually drive a volvo that's true are you anti elon musk no i think elon musk is like a big visionary okay i like that he lived in canada oh that's right queen's college queen's yeah yeah i think my like very briefly queen's college queen's university oh is that different okay yeah i don't know anything about queen's college in new york queens college is in new york that's where alexander hamilton went right or he was trying to go yeah i remember that

2:39from hamilton so elon musk interesting guy visionary consumer does some weird stuff from time to time to drum up intrigue online and recently he does this twitter poll that has caused a ton of stir he basically tweeted out about all the stuff that people are talking about with unrealized capital gains and the idea of like taxing billionaires on their wealth and he tweets out this poll that just says uh you know do you support me selling 10 percent of my tesla shares to pay taxes basically because he doesn't take a salary he doesn't take a bonus whatever so this would be the way that he pays taxes um

3:20what did you think of this what i like about elon he's like he gets the internet yes he gets the internet yeah you know so i don't know how many people voted do you know how many people like millions 50 million yeah crazy yeah so i think like he got them bought in on this decision and what was it like 50 something percent said do it yeah 55 45 something like that yeah so i think like now he has okay how many of those were like burner accounts of like nancy pelosi yeah probably they wanted to be in there just like box hitting yes probably but i

3:57think like the cool okay what did he achieve step one is he achieved just like elon musk getting out there his name getting out there tesla getting out there so like good good work and step two is now he has carte blanche to sell like a billion dollars of stock 20 billion 20 billion dollars insane yeah 20 billion the thing that i think is just i i like it right he he understands the internet i think you're totally right he knows how to drive intrigue without it being like a tesla ad right all of this benefits tesla at best benefits uh spacex boring company all of

4:32his things because it's like elon musk halo that he creates around all this stuff but there's kind of a dark side to it right like what if he knew about some bad developments at tesla and he tweets this out knowing that like the yes is probably gonna win and want him to sell and then he goes and sells 20 billion of stock which like is technically insider trading i think if he knew that there was going to be bad developments coming out about it but now he he's like oh i have to abide by the twitter poll so i got to do it that way so i think there's like

5:00it's it's gray area it's sketchy territory especially given he's gotten in trouble in the past for the sec for what he did a few years ago with the whole like funding secured when there was clearly no funding secured can you remind me what happened again he tweeted out thinking of taking tesla private at 420 per share which is obvious joke 420 um and said funding secured and there was no funding secured and he basically said like saudis or someone was going to fund this deal and at the time tesla was trading at like 350. so the stocks spiked and then the next day it was like

5:32funding's not secured the stock collapsed so a bunch of people got smoked lost a bunch of money then it bought in thinking that he was being real and so he got like sort of slapped on the wrist like he has to have a twitter babysitter now effectively but yeah to me elon is like a typical entrepreneur yeah always pushing the limits like asking for uh forgiveness yeah rather than approval rather than approval and he just gets the internet yeah so like i honestly like kudos to him like he dude i think tesla's at a trillion dollar market cap way over yeah way over a trillion dollars and it's all

6:09not all through memes like they have a great product but the lesson there is like memes plus great product equals good things happen yeah the hype machine and the fact that they don't spend a dollar on marketing he's doing it all without marketing these car companies are spending hundreds of billions of dollars and he doesn't have to because of what he's created when you go into a tesla showroom you you can't like test drive a car right you can't buy a car yeah i mean it's a different experience for sure it's a completely different you got to buy it online you got to buy it online yeah like but they have showrooms

6:38like all over the world yeah he understands the internet you're absolutely right and it actually feeds into what i want to talk about today so let's get our drinks going and we can dive into the conversation which is all related to building hype on the internet so it's morning so good morning accordingly we're going to have mimosas how do you feel about that you're a music guy um i just flinched i like literally just flinched for no i was like do i trust you with like even though you know i've never seen you open that you know what do you think i was gonna do spray

7:10you yeah i don't know you're unpredictable [Laughter] all right so you know what this is going to taste like so i don't feel like we need to describe the experience of drinking a mimosa but i am excited for this because this is better than drinking whiskey at nine in the morning or whatever time it is um so what do we want to talk about today building hype building hype how do you build hype on the internet okay in the context of mischief on the contract yeah let's talk let's talk michelle cheers man cheers oh that's delicious okay all right mischief what is it mschf for those at home what is mischief

7:59so i think they've been doing it a group out of new york been doing it probably for three four years yeah 2016 they got founded 2016. they've done about 90 drops and they come up with ideas for how to create hype yeah um and sell some stuff so what is it is it a collective like is it a creative agency like how do you even define it so you've seen some of their stuff yeah like you saw would you see jesus shoes was a big one yeah let's actually talk about a couple of those things so they became really well known it's his former buzzfeed employee gabriel wally

8:36or whaley starts this thing in 2016. they're like the island of misfit they didn't want to fit in they didn't want to do anything the normal way and they started building this insane credibility and hype via these crazy drops and they were all viral so they did this jesus shoe that you just mentioned which was literally a nike shoe and they had taken water from the river jordan and put it into the sole of the shoe and they sold it like what did they do a thousand of them or something there was like very few pairs they marketed it it went totally viral sold all of them out

9:10then they had the little nazaks yup um satan's shoe which was from his music video montero and they put like drops of blood in the soul of these guys i mean it was crazy it was completely nuts but went totally viral had a lawsuit with nike because nike was like we didn't allow you to use our shoes to do this they have this product you know a voluntary product recall which was like you can give your shoes back if you want but no one did all these celebrities are wearing them they did the guns to swords that was really cool they like if you traded in

9:39your guns you could get them melted down converted into a sword and returned to you and like grimes took one of those swords on the red carpet was all around so they do this insane insane product drop stuff and they sell out immediately and there's unbelievable virality around it and did you see their they're resawing what was the reason with the andy warhol oh yeah let's talk about this because it relates to nfts too it's like a similar concept tell them um so andy warhol the artist um they bought a piece an andy warhol original for twenty thousand dollars one it's like uh we'll post it online it's a

10:19basically like a pencil drawing i mean i'm not an art savant but it looks like a pencil drawing to me and they bought this piece and they went and created 999 identical forgeries of it and they like documented the whole process you know the pencil drew it out they like aged the paper made it all look exactly the same removed any trace of what the original was they like put it into the stack with the 999 forgeries and then they sold a thousand mischief forgeries basically for 250 a piece so they had bought the original piece for 20 grand and then they made 250 grand on selling these

10:58thousand forgeries immediately and that's the cool thing about mischief is if you go to their website which is it's actually a really cool website um they every single one of their drops has a bunch of press so like the warhol thing had a bunch of press it was everywhere jesus shoes had a bunch of press it was everywhere like everything they do like they reverse engineer getting coverage yeah uh like on on blogs and stuff like that yeah and i think that's a really interesting way of like building a startup or or building a company or building a product which is okay what a what what can i build so that

11:37people will will write about it so i'll give you an example yeah uh april 2020 quarantine you know uh covet is already happening for a month two months now people's hair hair was getting long so uh we created like checkout created a website called you probably need a haircut and it was this way that it paired you up with virtual barbers okay to cut your hair okay and it guided like you know your wife would you know it would be a face time with like a barber in in new york and and and she's cutting your hair and she's like telling you how to do it telling

12:16uh he's telling her how to do it like this cut like that yeah and it went completely viral okay um you know today's show you know on fox abc real viral real viral like tens of millions of wow of visits and views and stuff like that and and we built it in under four hours yeah you know from conceptualization to to building it in under four hours yeah and what's the realization like what was the insight you had there is it just that like in the modern viral digital age hype is the ultimate currency what what mischief understands really well is that when you understand culture

13:01you could create products around culture so at the time with you probably need a haircut everyone like the cultural vibe was like oh my hair is getting long i'm growing up my hair everyone was just kind of talking about their hair and you couldn't get a haircut so we were like okay let's let's come up with like an interesting like viral name you probably need a haircut.com and build something around that yeah um so to me like the future of marketing is around drops yeah like you probably need a haircut like mischief yeah um and it's all we and it's about reverse engineering these you know

13:46cultural moments yeah that you can you know that you can create these products around it and the best part about it is that in software i mean it's harder to go and create you know get blood and put it into a shoe but with this whole world we live in where no code it you know is a thing and you can go and just build a website you don't have to know how to code yep and piece things together uh there's just a lot of opportunity just to come up with interesting viral ideas yeah slap it together yeah i think what you're hitting on is something that i've

14:18thought about a lot it's like the framework i have around it is it's like the modular economy i don't know what the right way is to talk about it or call it but that's kind of how i think about it which is basically if you have if you can create hype and you can create that buzz and you know that you can kind of build that and stoke that you have all of the tools necessary to go and build a business that is highly profitable from day one and i think it's funny because like mischief we've talked about this they raised venture money which i i actually just don't really get

14:51i don't really understand why they went and raised venture because they seemed so anti-normal establishment and so like the idea of raising money maybe they needed it for some of these things i mean maybe the processes around like replicating these things light aging them and doing all that maybe it's expensive and maybe like the net profits on these i don't know i mean on that one it was 20 grand to buy the warhol they made 250 and gross profit on it but like maybe there was a bunch of costs that sit in the middle of that that i don't know about so you need money because you're lost making but if

15:20you can do you could start a business today and say like in clothing if you have a designer like someone that can design a really cool product you could do a limited drop of like a thousand of something or 100 of something if you had a designer someone that understood distribution so maybe they have a big audience or maybe they um you know just understand how to go through different marketing channels drive virality and then an ops person basically just someone to like do the back end of getting it but you can do these things now in a very easy way and just like sell out before you actually

15:52go buy the inventory and that's the brilliance of it yeah that's why i don't know why they raise venture so what like i actually do do you know the story of why they did i have no idea they raised from founders fund and a few i know they raised like at least you know at least five million dollars yeah to me it's like you're building i i you know i didn't get the pitch yeah but i imagine like the pitch was something like we're we're building a brand like supreme that's internet native yeah um around drops and stuff like that yeah um which i totally get but what i don't get

16:25is just do drops that are profitable yeah like just make money on your drops yeah and use that money to fuel the business yeah it's hard to scale coolness this is like another framework right like i mean elon musk to go back to elon musk has somehow managed to scale intrigue and coolness to an insane level and it's never going to end in that way but like supreme i don't think of is quite as cool as it used to be where i think to me it's authenticity yeah like elon musk how old is elon musk 45

16:55i don't know making up a number 45 50. okay so let's say he's 50 years old yeah like i feel like elon musk of as a 50 year old today is the same elon musk yes 25 and he's just but his audience is you know a thousand you know 10 000 50 000 times bigger yeah 50 or millions of times bigger right so he's scaling he's just scaling himself and he's being authentic um supreme you can argue lost its authenticity over time it started off in new york in skateboarding culture right yeah now does mischief mischief to me seems extremely authentic amazing they've done 90 or so drops

17:351 through 90 have been super cool and they've been learning and stuff like that but it seems very authentic now what venture does a lot of the time is it takes you from being inauthentic sorry authentic what venture does a lot of the time it takes you from being authentic to inauthentic because when you have the venture influences you to grow grow at all costs yeah and when you grow at all costs you have to compromise yeah sometimes yeah you do different things you make different decisions and i mean to their credit so first off i've talked to the guys at mischief they're amazing and they are

18:17very different and they think differently about all this stuff but it's a um it's a different vibe the people they raise money from to their credit like founders fund thinks differently about venture versus others and so maybe they're able to continue to bottle it up and scale it but these drops are insane so cool yeah i mean we honestly we should bring them on the pod yeah i would love to i'd love to we'll get them on to a future episode we'll talk about some of their drops but one thing i wanted to do because we have a guest today who understands hype and has done a really good job building

18:46hype around you know what's kind of like a niche consumer product in beds and sleep and he built out in front of a completely changing consumer perception for lack of a better way to put it no one really cared about sleep five ten years ago it wasn't cool it was like hustle culture was in its prime and it wasn't cool and so mateo founder of eight sleep um super interesting they're building around sleep science and they're building this hype wave in front of people actually caring about it at scale and so i want to bring him in and i want to talk about it with him because i think it'll be

19:18really interesting yeah that sounds like a perfect person yeah to talk to let's bring him in all right so we are so excited to welcome in matteo franceschetti did i pronounce that okay yeah yeah we got it mateo is an amazing founder ceo founder of eight sleep we talked about it a little before but completely revolutionizing sleep performance and sleep technology so really excited to have him in to talk about everything hype and consumer and how you build this like amazing amazing company out in front of a changing perception and consumer perception so thank you for coming in no thank you for having me appreciate it to share more so what we

19:59were talking about before you joined was we were talking about it in the context of mischief this company that does these amazing product drops and drives all this like crazy intrigue um and marketing hype around their drops and it struck us that you in particular have built something that is like this industry that's not necessarily sexy right mattresses like no one really thinks of mattresses as sexy but you've created this amazing technology overlay and this amazing hype and marketing engine around it so we'd love to just like start there how did you do that what was the insight you had and why did you start there

20:36yeah um i mean all the credit honestly goes to my co-founder alexandra she came up with this concept of sleep fitness and i think that is what changed everything right because you start thinking of sleep not like a boring time of your day that is just wasted but like a moment for your body to recover so we always tell everyone that going to bed is like going to the gym you're doing something for your body to recover to stay fit healthy and so she she came up with with this concept of sleep fitness and once we defined that name we started understanding our strategy that is all

21:14around athletes top performers and recovery and so now if you look at what we do you know we we have a bunch of athletes there was a major fight in in new york last week and you know the the athlete was is an eight-sleep athlete uh we just signed justin who is the number one crossfitter in the world he just won the crossfit games i think in july and so we are signing athletes and we power their sleep because now they are all educated and knowledgeable enough to know how important sleep is for the recovering performance uh but there is really no other brand that is doing that right you can think

21:54of us like a red bull but instead then giving you a drink we give you power through sleep yeah i think what was cool about red bull as a as a business and as a marketing engine was it was super aspirational yep right so they they signed surfers skateboarders um and it's like i wanted to be like one of those people yeah um so it's interesting that you're taking sort of a similar model but applying it to a completely vertical yeah i never thought about that actually the red bull example that you just brought up is a really interesting one mario our friend mario gabriel over the generalists wrote a

22:29great piece on red bull a while back about the engine that they've created and it is super fascinating because they do all these things that you just it's not related to energy drinks like they have the formula one team they did the like crazy jump from space that the guy did um the parachute and they're generating so much buzz and hype around something and just around the name brand and so when you bring it up like in the context of athletes you're creating that same hype by having someone that's this crazy high performer all of a sudden talking about sleep and how it changes them because if

23:01i mean the first principle is the same is to give you energy right to achieve whatever you want to achieve in your life you could be a mom you could be a doctor you could be an athlete and so actually we are looking at some other sports like you know winter sports and and surfing because the content is really cool these athletes they have a lot of energy they do they now they make the impossible possible and for that to happen you need to have the energy and you need to be fully recovered and that matches our story when you when you when you and the team came up with the

23:32idea around or the insight i should say around sleep fitness were you like okay this is going to be huge let's go create you know mattress product or like can you walk us through a bit about how you came up with the idea and and why it you know because i look at i'm like a software guy i look at it like oh my god how does he deal with supply chains how does he deal with um it's hard designing you know it's hard so i'm just curious like how you how you got from a to z so i would say there were almost two phases for us as a

24:04company there was phase one there was 2015 to 2017. we launched was the first product it didn't even have cooling so it was more like really a sleep tracker okay uh we sold 8 000 units in pre-orders go to yc i moved to china for a couple of months to build the units but we didn't have sleep fitness at the time and then everything changed when uh um keith akita boys invested in us and so we raise our a um and that is the moment where we decided to substantially rebrand and the money was also used to build the pod which is the current product which

24:44is not the the one that now is really ninety percent of our sales and so at the time i have been an athlete all my life keith uh obviously you know he's really into into fitness he's like a thousand day streak of barry's boot camp or something like that right it's crazy on the same they invested together and so i mean we were just speaking the same language and we said this is not a it's not a mattress company at all we don't even have a mattress expert or a film expert but we always and immediately thought of this like you know from a fitness angle

25:18then alexandra came up with this word and now looks so simple and obvious but when you have never heard of sleep fitness you never think of matching these two words and we started pitching to people and some people love it some other people were saying does it really make sense but then we started developing the whole brand strategy and then this started looking awesome and we went all in for that yeah it's really interesting when you kind of bring up like how it all played out that way because like i in every industry and in consumer in particular there's always someone doing the same thing and it's like how do you

25:51bottle up something much more exciting drive intrigue around it like i remember it's probably 10 years ago now there was this thing called the chili pad that i remember like seeing out there it was like is a pad that had like tubes in it that you could feel and it would put cold water into your bed and it never went anywhere right like it had an insight and there's probably something to it and it helps you sleep but you guys have created something obviously a better product and i love the product i'm a huge fan of it by the way i was talking to greg about it yesterday

26:18and just like trying to convince him on it to buy one now but it's something different about the way that you bottled up like coolness alongside this amazing product and science insight that is so intriguing to me when you say coolness do you mean like temperature cool no no no like sexiness around sleep which that that piece of it i think is so amazing because sleep is something that no one has ever thought of as like this sexy fitness thing everything's all about working out you want the like muscles and you go barry's boot camp and all these workout companies but suddenly science started to build up that sleep was actually the

26:55most important thing for longevity for your health for the way you have energy on a daily basis but also for how long you're going to live and so it's just interesting because you built out in front of that and you had built this thing and now people are starting to realize it you go listen to some of my favorite podcasts like hubermann or some of these other science podcasts like half their episodes are about sleep and how important it is now so it's pretty yeah and this angle at the beginning was quite controversial even inside the company we we had a lot of people inside the company that they

27:25say um but this now is going to be a very small segment it's only about athletes but at a certain point i realized look i mean this is what i like i used to be an athlete so even if you guys really want me to be the face of this company be out there and be passionate about taking a flight to do something it needs to be about something i like and and so that is how we force yeah this thing a little bit and i think now is proving to be not to be successful because it's aspirational right we are making sleep aspirational and it's all

27:57about recovery and energy it's the same thing if like i always go back to frameworks but it's the same mental model as what nike did with making athletics yeah aspirational anyone was an athlete like they did that whole brilliant campaign just do it stuff when they first started launching it which was it's not just michael jordan it's not just tiger woods it's not just serena williams or whoever it is it's you it's the normal person on the street getting up and grinding away and going to the drive a truck and wants to go for a walk to be healthier on a daily basis and like that it's almost an

28:26emotional reaction that you feel associated with it when you have that feeling where you can take something that was previously only for the elite and suddenly it's applicable to everybody exactly we call them we call all our users everyday athletes yeah and you don't have to be an athlete again you can be a doctor you could be a mom you can be whatever we want to unlock your full potential yeah it doesn't matter what you want to do we want to give you the energy to achieve you know your peak performance and your peak happiness yeah and that starts with sleep right and then there are couples

28:57fighting around different temperature uh there are athletes that want to recover faster there are people that are just sleeping hot there are women in menopause that have hot flashes so then the category or or the audience is pretty broad but again and and that is the key thing that we had to really explain internally is it's not that we are for athletes athletes are just the the maximum expression of the energy that we want to give to our now 100 000 200 thousand users but every person is a user exactly like nike nike and so knack is a perfect example for us now companies that we

29:33really admire is nike in terms of branding of the peloton um and from a technological standpoint tesla yeah yeah we were talking about elon musk earlier and how he has this unbelievable capacity to create hype um around and he scaled authenticity you said that very well like he has managed to despite how big he's gotten as a person continue to scale the authenticity of tesla and these other things he's building so i think it's a great it's a great example i have to ask you about supply chain stuff because we're in the midst of what is probably a generational disruption to supply chains globally i assume you have asia

30:10manufacturing to some extent how are you managing what are like the key things you're focusing on as you try to work through a period of disruption like this is the show um i think that the team is doing a pretty good job i mean at the end of the day the the way we are the simplest the most expensive way for us to fix the problems to airship units which obviously for us is quite problematic because they're big it's not like a wearable right but we are so in in terms of having all the units and all the components we're fine it's just really a problem of catching up with demand

30:54because we are seeing a lot of demand on our side plus obviously ocean shipping right now is not really an option with the holidays so we are shipping a lot of units and that is costing a lot of money yeah the hope is that in the second part of december we will be able to switch to ocean shipping again yeah it's a really crazy environment right now because the ocean shipping obviously is the more traditionally the most cost effective air freight somehow has been better for a lot of companies and getting things over and you take the margin hit because you just need to fulfill the orders you guys have

31:25the benefit of being direct to consumer is that 99 your business or all of your business and so what i've seen with some of the companies i'm involved with is like the wholesale orders are the hardest part because if you're delayed they just cancel the order and now that's revenue that's gone you're never getting it back for you guys i imagine you own the customer you own the relationship you've built that relationship with them and so if it comes in four weeks versus six weeks people survive and they'll wait until they can get it and you're also building something that there's not really an alternative to

31:55you're the only business out there that's really building on the forefront of this yeah i think the only challenge is now with the holidays because that is a hard deadline if it's a gift yeah um we were so in when we are perfect we ship within a week this year multiple times we were shipping within three to four weeks because we couldn't catch up with demand good problem to have yeah a lot of demands yeah now we need to make it on time right for for the holidays uh obviously not the the the port in long beach right now is uh is now getting your units on time

32:33more than anything it's really hard to predict when you will get your units and so you have to de-risk and by the risking you fly in units and that is super expensive so that is what we are doing um just to make sure we can respond properly to demand so greg and i have an ongoing discussion and debate that i feel like is a common thread that goes through a lot of these discussions around raising venture capital and raising capital and the process around it and why to do it versus companies that don't necessarily need to do it we talked about it in the context of

33:07mischief that company we were talking about earlier that they raised money actually from founders fund as well um and i think keith is probably involved and it doesn't strike us as one where they necessarily had a big need to raise capital in front of it so can you talk a little bit about your thoughts on venture capital why you should raise versus companies that maybe don't need to yeah i mean for us it was not even really an option because you know hardware at least for us when you develop cutting-edge technologies are expensive right there is no way you can do it without raising money i still think if you raise money from

33:42the right people uh they are extremely valuable um we there were a couple of things that worked really well for us first obviously you know the ron being led by some of top vcs now from from keith and then trey and now antonio antonio gracias with valor i was the first investor he's fantastic yeah he's fantastic i know him actually quite well personally he's fantastic it's a great group so antonio has been on the board of tesla since 2007 and now he's with us so that type of experience has no no price right another thing that worked really well for us was we raise money from a lot of

34:20individuals operators that are extremely valuable now uh patrick and john collison naval uh pomp um and yeah people with big audiences a lot of friends in tech right exactly so then they can open door their doors they can help you with recruiting they just become friends so you can pick their brain as as needed another great investor for us was yc right so we built a very close relationship with them we i also just went through the yc growth program right so that was amazing because you know there are great speakers coming in um or no you just work work with the partners and so they tell you okay the company is

35:02reaching a new level and inflection point is what other ceos need so you just need to cherry pick the right people yeah but these people they can connect the value of the business because of the of the knowledge that you transfer yeah could you talk more about your yc experience and how important that was yeah um you know do you recommend people look into it and yeah just a little more color there yeah i would say it was a major inflection point for us we got rejected twice uh yeah i love stories like that yeah yeah you guys kept coming back and now clearly i mean it's a multi-billion

35:38dollar business amazing business i love that uh yeah it's a funny story because so we apply we get rejected we reapply we get rejected and so we say okay and then i think a new i mean a new partner specifically for hardware just got higher i i meet him and he says oh you have to apply and i say no i don't want to apply again to be rejected at the same time i have a dignity at certain point you say no you have to apply so i go back and with my co-founders we say do we do it we don't no and we say we do it but we apply within one hour

36:13right so we're not gonna waste more than an hour on the thing so if it doesn't work who cares and then we get in but even even after we apply there is a funny story because okay we apply and then if you get selected then you have the in-person meeting okay and you go there they interview for 10 minutes but it's known that to be successful you want to show your product the problem is our product is freaking huge right so we rent a truck with with a bed and a cover but part of the experience was also with lights and other stuff that you know the

36:47nest that you were having in your bedroom because it was an iot connectivity so we also bring nightstands and the lights that go on the nightstand and we go to y combinator and in the hallway we substantially build the bedroom so we take the interview i don't think they were really convinced during the interview they were a bit probably skeptical about the opportunity of the business but then like after nine minutes it's a ten minutes interview after nine minutes we say oh come to see the product and they say what do you mean we have the whole mattress right there so you can see it and so they come out and they

37:23try the product and i think they were so shocked that we know that we were there with the whole now that we built a bedroom inside y combinator office that probably they said these guys are resourceful enough that it's worth giving them a chance but that was pretty weird because in in this hallway there were all the other founders for now that they were taking interviews but they were there just with their laptop because most of them are software founders and then there were no we were there with our mattress so i love that i love it it's so funny it's like i keep coming back to this whole idea of

37:56like variant perception have you ever heard that concept variant perception it's like you have a perception of what the future is going to be like that is different from the consensus and time and time again you see these amazing businesses that have been built basically where a founder had or a founding team had a variant perception of what the future looked like and then they were proven right and this is a classic example of that to me like shopify toby had this variant perception that the future was going to look very different in terms of how people shopped online and that ecommerce was going to take over the world and so he built

38:26something that enabled that future at the time when he had the idea no one really was thinking about it and so you capture all the alpha from that because you're the first one to really have that idea and go build something and you guys i see it in the same way of you have this variant perception that sleep is going to become a mainstay and a pillar of people's fitness performance life health etc and you build something out in front of that that trend and so it's a it's a classic example of that to me and it's so cool to see those like pound your head into a wall failures and then

38:57it breaks through and you end up kind of having that moment and now you're clearly you know you're at the beginning of your s curve and you're you're starting to see it so it's really exciting i call the same concept you need to be contrarian and right yes that is the only way you can be successful and we are far from being successful but very successful people they were contrarian so they were saying something no one else was seeing but then you also need to be right because just being contrient doesn't mean anything yeah you screw up your decision there are a lot of contrarians out there not all of them

39:25are right that is true and remarkable right like i feel like who else is setting up a bedroom in a hallway right who else is sponsoring pro athletes for this particular vertical like you know seth godin the author talks about remarkable being something that you make a remark over and i think that that's the key to great marketing and great storytelling is and and it gets you far in life yeah being willing to do that one thing we want to yeah one thing we always language we always use the with our board was to cut through the noise right because particularly in consumers there is so much noise so you

40:05need to do something different or no one is going to pay attention to you and then the other thing that is working well for us is really word of mouth even if our product obvious is kind of expensive right it starts at 1500 but 20 25 percent of our revenues worth of mouth yeah uh so that helped us to scale really fast yeah customer acquisition cost consumer acquisition cost drops uh yeah yeah that's interesting the um the whole idea of like driving word of mouth with consumer businesses and like how did how did you actually do that like how did you bottle that up and kind of try to

40:44drive that as a core business strategy honestly it just happened i could try to say that we were super smart yeah i mean i think the way we did it is is because people like the product so at the end of the day is it's product driven so if we deserve any credit because of that it's like in software they talk about um product led growth yeah like the same thing within consumers and i still think there are a lot of tactics that we didn't we are not leveraging yet um that will uh probably accelerate word of mouth yeah but the main concept is on one side

41:20probably is also branding so it's what we were saying earlier right people start being proud of having innate sleep like do you have any sleep or no you're missing out yeah right it's a bit like having a tesla obviously on a small scale yeah but there is not that kind of connection with the device then on the other side we are solving a problem right we are improving your sleep if you sleep hot we are helping with that if you are fighting with your partner like 50 of the couples we are helping with that and so it starts becoming a very easy conversation when people have like

41:51dinner with friends and they start talking about the device and the other thing we did we we we focus uh we call it concentration right so because it's not an impulsive purchase and so what we do is we try to focus on specific communities and try to um dominate the community right and that is kind of happening in tech where now if you go on twitter everyone talks about eight sleep and so that is driving a lot of word of mouth instead then just being a drop in the ocean in many different places i call it narrative domination you just dominate the narrative around the community but it's it's so

42:27interesting for sleep in particular because with a tesla you bring up the example of tesla it's a physical status signal because you see me in it i drive around i don't drive around my bed you don't see me when i walk around the street or like even nfts now you can have it as your profile picture it's like a physical manifestation a status signal that you can put out into the world with a bet it's much more difficult so you really do have to perform above and beyond so that people do naturally want to talk about it with people i think that's that's fine that's the challenge yeah it

42:55is it's an it's a really uh it's an interesting challenge um well this was awesome i i know we're uh we're running up against the end of time before you leave i gotta ask one question because i live in miami you live in miami not far from here yeah how how has the city of miami been supportive of the business and are you happy that you live here yeah i love it i used to be in new york and then we moved here now probably a year and a half ago so we were really early um but i love it because first not the tech community

43:28right now in miami it's great it seems to be in san francisco in 2015 right so i play tennis with friends in tech i have dinner tonight with you guys and a bunch of other friends in tech you know so um that was probably my biggest fear when i moved here no a sort of fomo well instead what happened immediately after now i was so lucky there are more people here in tech than than there used to be new york yeah but then at the same time you live in a beautiful place where i can play tennis i can do some sports sometimes i wake up early i

44:00go running at the beach and then i can keep pushing during the day to build the business yeah it's amazing to see what mayor suarez has done in terms of fostering the tech community here and i know keith has been a huge proponent of miami tech and bringing people in and it is really cool i mean in a short period of time here i'm spending time with more amazing ceos and founders than in any other city i've been to i was in san francisco for 12 years i now live in new york and i'm down here and i can feel the energy of it so it is very very cool to see yeah i

44:28mean for me i was living in new york too before when i moved to miami my stress levels just went down yeah and it's similar to like when you have a good night's sleep too right yeah you have a good night's sleep unlocks creativity good things happen when you're like when your stresses yeah sunlight like the weather like yeah i feel like it's a good situation to be very creative yeah and then there is also a secondary order effect where even if certain people don't live here right now everyone is visiting let's say really november to may and people start knowing maybe you know that we are here yeah and so they ping

45:07you and so these people if you were flying to san francisco some of these big guys they would never meet you because they're super busy but when they come to miami then they want to meet as many people as possible right and so you have the chance to meet them right and so there are ceos of public companies that came here they are sleeping on the pod and so maybe they ping me and say oh mateo i'm in miami yeah and i had the chance to meet them which would have never happened before amazing amazing i love it well i'm long miami so i'm looking forward to coming back here

45:33thank you so much for spending the time with us this has been a blast thank you for having cheers and where can people find you guys 8sleep.com and the pod is the pod pro yep and it comes as a cover or as a mattress or you can retrofit any mattress you have with our cover or if you're just looking for a mattress you can buy the the lamborghini beds just go on eightsleep.com and i am a user so i can personally vouch for the fact that this thing is amazing and has completely completely changed my personal sleep so i appreciate you thank you thank you thank

46:04you guys awesome that was an awesome conversation with mateo absolutely loved it what did you have for your one big takeaway my big takeaway was be remarkable if you're creating a product if you're creating a drop you're creating marketing you need to be remarkable to cut the noise yeah i love that i loved when you brought that up in the seth godin quote for me it was variant perception like this whole idea that you get paid for having a different view of what the future is going to look like and then being proven right like the whole thing i think matteo said it of being contrarian and then correct um i really

46:40loved that and i came away with that so what do you think we can get into the community and uh hammer around with i feel like we've got a lot of smart people in the community yeah and i actually think we've got a lot of contrarian people in the community so i want to know what so what sort of contrarian ideas that you can share that we potentially could work on together yeah uh so just share it in the discord yeah so let's jump in the community after this episode drops we're gonna get in there with you let's bat around some ideas contrarian views of the future that we think are

47:13going to be proven right let's jump onto that and we're looking forward to it we'll see you in there contrarian right remarkable is the number one place for entrepreneurs it is a marketplace where entrepreneurs can find the products they need to build and scale their businesses its founder noah kagan is a creator he's a builder and he understands what you need in order to scale so he's created a marketplace where you can find those things it's amazing i found so many unique products there and as a creator you can make and list your products at a super low cost and have this incredible discovery engine to go sell and scale

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