17 August 2018 Courier Weekly

Surprise: mattresses aren’t big business

PLUS: Selling to teens – Health tech – Sustainable businesses – Chinese tech

Trouble for mattress companies.

Cracks are showing in the battle to own bedtime. This week, UK mattress company Simba announced it’s brought in a business turnaround specialist (this follows announced losses of £3.3m in 2016).

Allan Leighton has previously helped revive Royal Mail and supermarket Asda. Now he’s joining Simba as its chairman and has invested £1m in the company.

Simba’s competitor Eve Sleep, meanwhile, has also been struggling since it listed on the AIM stock exchange in May 2017 at a valuation of £140m. Its share price has dipped by 80%, bringing its market cap to £23m.

As a number of slick mattress companies have launched in recent years, many have questioned how much mileage this sector has. Challenges include customer acquisition costs – the companies generally have comprehensive (expensive) TV, outdoor and digital ad campaigns – and gaining repeat custom. Their marketing tactics have fascinated reporters.

Over in the US, mattress brand Casper hopes to get new customers more cheaply by opening retail locations – this month it announced it would open 200 stores over three years.

Appealing to today’s teenagers

Highsnobiety, the sneaker blog turned media platform, has unveiled a new brand identity.

Highsnobiety has become a defining publication for the fascinating ‘Gen Z’ cohort – today’s teenagers – who are spending their disposable income on beauty, trainers, streetwear and gaming. This group is also generating more cash for themselves than previous generations, with companies like Depop making it easy to buy and sell products via their smartphones. Brands are keen to cash in on this.

Stephanie Capuano, founder of 31st State, a cosmetic brand aimed at teenage boys, told Courier that teens want products that will resonate with their wider lifestyle and perspective on the world – particularly as these purchases will likely feature in their Instagram feeds. ‘They see themselves as brands,’ Capuano adds. ‘They’re constantly crafting their images around that.’

Babylon Health’s ambitions scuppered by the NHS

Babylon Health has had a difficult week. The NHS is continuin the expansion of Babylon’s ‘GP at Hand’ service in Birmingham, citing patient safety concerns. While artificial intelligence – which the GP at Hand service uses – appears to be the answer to more efficient healthcare, a lack of evidence and recent critical errors have stalled its implementation.

Babylon’s founder Ali Parsa is profiled in the latest issue of Courier. The company is a manifestation of his socialist, capitalist and academic values for a better society.

Parsa is not just targeting the NHS, though. The company has struck deals with the Rwandan Ministry of Health, Chinese internet company Tencent, UK life insurance firm Prudential and more.

Understanding China’s startup ecosystem

This week, feted startup accelerator Y Combinator announced it would be launching in China while MyDreamPlus, a WeWork rival based in Beijing, raised £94m in funding.

China is a powerhouse when it comes to digital businesses. JD.com’s impact on rural Chinese life, the growth of e-commerce rival Pinduoduo, and the battle between Alibaba and Tencent are good starting points for those wanting to get to grips with the Chinese tech landscape. Indeed, many reckon the next generation of tech giants will come from China.

Building a sustainable business

Our latest event with coffee roaster Allpress took place on Wednesday, exploring sustainability within small businesses, from supply chain to staffing. Our panel included Chris Baker from Keep Cup, Laura Boyes from ‘zero waste’ store Hetu and Katy Saide from Manchester-based cafe Trove.

Three key takeaways from the night:

  • Think hard about the impact of corporate collaborations. Keep Cup worked with McDonald’s to prevent millions of disposable cups and lids from being handed out, but other collaborations can devalue the brand, such as when companies give away Keep Cups at conferences.
  • Hire staff with shared values so training and retention take care of themselves. If potential hires already live and breathe a product, they’re better equipped to answer customer questions and are likely to stick around for a long time.
  • As sustainable products become cheaper and more in demand, the industry risks becoming part of the problem. The myriad reusable plastic carrier bags in most British homes are evidence of this. Boyes points to Australia’s ‘boomerang bag’ initiative as a smarter scheme.

Five things
On our radar this week: