🗂 Overview
In 1942, 8 hours of sleep was the norm. Today, people get an average of 6.8 hours. On average, adults need 7-9 hours of sleep per night, while teenagers need 8-10 hours, and children need 9-12 hours.
According to the Philips Global Sleep Survey in 2019, more than 80% of people around the world said they wanted to improve their sleep.
The best thing about starting a brand in the sleep industry? Everyone sleeps and 80% of us want to improve it, meaning your TAM (total available market) is potentially 6.4 billion people.
With a TAM that big there are a lot of opportunities, so let’s jump into today’s newsletter.
📈 Stats
59% of Americans get seven or more hours of sleep at night, while 40% get less than seven hours. (source)
People are sleeping less compared to the past. In the United States, the average sleep duration has decreased by 1.5-2 hours over the past century. (source)
The global sleep market size was valued at USD 60.35 billion in 2022 and is estimated to reach USD 102.07 billion by 2031, growing at a CAGR of 5.91%. (source)
The cities with the highest rate of sleep disorders in the United States are Camden (New Jersey) and Detroit (Michigan), where 49.8% of adults reported short sleep. (source)
Insufficient sleep has an estimated economic impact of more than $411 billion each year. (source)
The global market for sleep aids should grow from $81.2 billion in 2020 to $112.7 billion by 2025 with a compound annual growth rate (CAGR) of 6.8% for the period of 2020-2025. (source)
🧮 Trends
Magnesium glycinate is recognized as the best form of magnesium to help with sleep because it's easy for the body to absorb.
The dotted line means incomplete data as it’s too recent.
⭐️ Examples
Why We Sleep by Matthew Walker is one of the most mainstream books on sleep and has led to increased awareness of the importance of sleep. It has 30k reviews on Amazon and has probably made millions in sales.
Eight Sleep is valued at around $500m and sells sleeping tech to improve sleep quality.
Groove Pillows aid sleep by improving posture with better-shaped and supported pillows. According to SimilarWeb, they get 145k visits every month. There are a lot of similar companies out there in this niche.
There’s a myriad of companies selling sleep supplements like Magnesium Glycinate. This has been shown to be one of the most effective supplements at improving sleep.
Smart mattresses like this help improve and track your sleep with inbuilt technology that can adjust firmness, support, temperature, etc.
Products like this sleep guard (another one here) aim to improve sleep by tackling snoring. There’s even an anti-snore pillow.
👎 Problems
The most common sleep-related problems around the world are:
Insomnia
Sleep apnea
Hypersomnia
Circadian rhythm disorders
Parasomnia
Mental health conditions
Physical health conditions
Restless legs syndrome
💡 Opportunities
Sell natural supplements
People are increasingly moving away from sleep medication and instead looking for natural and safe ways to improve their sleep (Magnesium Glycinate is an example of this).
Natural sleep supplements include:
Melatonin
Valerian root
Passionflower
Magnesium
Tryptophan
Lavender
GABA
These don’t have to necessarily be taken as pills or capsules. Could you develop them as a drink like Athletic Greens or tea, gummies, scents, etc?
Sweet Dreams currently sells gummies designed to help you sleep better. Their Trustpilot reviews are very mixed. According to SimilarWeb, they get 90k site visits a month so there’s clearly a demand for the product but still loads of room for a competitor to come in and improve.
Create personalized sleep products
Leading on from the opportunity above, you could create personalised sleep products. This could be like Nourished who create personalised vitamin gummies, but you could create them to target improving sleep.
Alternatively, you could create personalised sleep devices like anti-snoring products, masks or even personalised pillows.
Create smart pillows
Smart pillows can track sleep data, adjust to an individual's sleep position, and provide customized support to improve sleep quality.
They’re more affordable than sleep mattresses and easier to replace. It’s recommended to change your pillows every 1-2 years so you’re more likely to get repeat purchases.
Create affordable smart mattress tech
Eight Sleep has seen huge success with their sleeping tech, but they’re also really expensive and seem kind of bulky with the Pod. Can you find an alternative solution that’s cheaper and less bulky?
Mattress tech companies like Sleep Number offer a similar solution but built into the mattress, however, they’re also really expensive.
Companies like Simba, Emma and Koala emerged as very successful companies taking on the mattress industry - which was notorious for high markups and shady practices (like changing the names of identical mattresses across retailers to make it harder for consumers to compare).
This would require a lot more upfront investment but is there a solution to creating affordable high-tech mattresses?
Start a sleep clinic or sleep coaching
Sleep coaching services can provide personalized guidance and support to help people improve their sleep habits and overcome sleep problems.
As the sleep studies market is expected to expand, there is an opportunity to create sleep clinics that offer comprehensive sleep evaluations and personalized treatment plans for sleep disorders.
These would cost much more to setup compared to sleep coaching but it could be something you look into down the line if you start sleep coaching and want to move to the next level.
This would require some level of expertise. But you don’t need to be the expert, you can hire experts (or partner with them).
🛠 How to build it
Market Research: As with any business, you need to do your research. Learn what the market is lacking, what areas you can improve, what people want, what problems need solving the most etc.
Product Research: Once you’ve done market research you need to focus on researching the product and making it as good as possible. Hire experts, talk to manufacturers, talk to consumers, and run tests.
Find Suppliers: If you’re selling supplements or vitamins I’ve included a blog post with some useful links in the resources section. Below that link are some helpful links for other types of suppliers.
Craft Your Offer: Determine what makes your brand/product unique, why consumers should buy it, how it improves their sleep and why is it better than other offerings on the market.
Build Your Store: I recommend starting with an online distribution channel first to reduce startup costs. Start a website with Shopify and sell direct-to-consumer (DTC). Once you’ve gained some traction start selling on Amazon if it suits the brand.
Wholesale: This won’t work for all the ideas but if it suits your brand look at selling wholesale to retailers once you’ve gained momentum and can handle high levels of inventory.
🚀 How to grow it
Sell the outcome: As with any product ensure you are selling the benefits and the outcome of using the product and not just the features. If you mention the features, mention how they benefit the end user.
Influencers: Partner with a mix of expert & non-expert influencers to promote your products. Partnering with sleep experts will give you more authority in the market as they’ll be seen as trustworthy advocates. Look at how Athletic Greens worked with Andrew Huberman for example.
Press coverage: You can use tools like Brand Push or Qwoted. This company also helps small businesses get media coverage.
Referrals: Get customers to refer their network for a commission. A happy customer is the best marketing channel.
Educate: Educate your target market about the problem and how your product solves it. Use TikTok, YouTube, Instagram, Blogs, Newsletters, etc
👍 Tips
Look at reviews for existing products in the market and see how you can improve upon them.
The sleep industry has a lot of competitors but it’s also a massive market. Make sure you have a strong USP and that your product effectively solves problems better than your competitors.
Some markets are more aware of sleep issues than others. If your market is too saturated look at launching into other markets with less problem awareness.
📚 Helpful resources
🚦 Signals
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