Startup Casper: Choose The Correct Business Model To Boost Your Startup


The way you carry on your business puts light on how you plan to run your company. Business models are essential to strategically chalk out your growth and expansion. How you invest your funds at each point of your business cycle can also be derived from a business model. While business models are essential for startups for a strategic growth plan, investors too take a keen interest to know the business model of startups. Often investors scrutinize business models and decide on the funding based on the business model that the startup would be using. We will look at the startup Casper for example.

The startup Casper from New York has gained immense popularity and success with their perfect business model. The startup that launched in 2014 has already become a $100 million company in less than two years into the market. Their business model and strategic planning along with the exclusivity of the product has been the contributing factors in pushing the startup to such heights.


Product exclusivity

Though the mattress industry has been in existence for a long time, the marketing technique is what the startup Casper tapped into. They were aware of the fast-talking salesmen of the stores who are sometimes quite intimidating. Also the various numbers of different products and their features often confused people. This often ended with customers buying the wrong product.

While doing their market research, founder Neil Parikh found that almost every customer who wish to buy a mattress looked for just one thing – Back Support. Taking this cue and after making various other researches, his team was able to create an exclusive product in the mattress industry.

The startup Casper studied the marketing loopholes in the mattress industry thus drawing out a business model that would help customers to get the right type of mattress delivered at their doorstep. Their business agenda was clear, simple and distinct – producing a good quality mattress that customers can afford and deliver them at their doorstep. Their sales figures in the first month of launch itself turned out to be around $1 million. This was evident enough that their business model was a success.

Free trial and doorstep delivery

The feature of free trial and doorstep delivery, was an entirely new feature in the mattress industry. The mattress industry has over hundreds of different companies selling the same thing under different brand names. The creation of a new kind of mattress was the first step in the success of startup Casper.

Once they were ready with their product, they launched the product offering free doorstep delivery as well as a trial period of 100 days. While free doorstep delivery was carried by many businesses, the concept of free 100 days trial was a new one. Customers took notice of this element which was a new thing in the mattress industry. This feature of their business model too was a success. They were able to deliver over $1 million of product in its first month.

Establishing a long term relationship

The mattress industry is a slow moving industry. Studies show that an average person tends to buy a new mattress after every 8 to 10 years. This was a challenge that startup Casper needed to overcome. Most stores focus on just making a successful sale of a mattress. Once the sales and purchase is over, customers turn strangers to them.

Business Ideas From Startup Casper

The startup Casper took this opportunity, and created a business model where they put emphasis on after-sales services. Apart from the free trial and free doorstep delivery, they took the opportunity to establish a relationship with the customer. Updating customers of various new features of the product and acquiring feedback. Customer queries form one of the main ingredients in establishing a long term relationship with the audience. Providing them with detailed information about the benefits of the product and responding to their queries within the shortest span of time gives customers the assurance that you genuinely care. This was one of the main interactive elements that startup Casper religiously followed.

Customer feedback too has helped the ecommerce company immensely. They regularly invite customers to test various prototypes and ask them to provide their feedback. This has been highly beneficial for the company to create a product that serves the best sleep to their customers.

Direct selling structure

The sales and selling structure too is a vital component in the business model of a company. Most manufacturers have a distinct distribution system. This generally involves transporting the product from the manufacturer to the wholesaler then to the distributor. The distributor then sends it to the retail stores from where customers are able to make their purchase. This elongated process involves more time and money making the mattresses more expensive.

The startup Casper being an ecommerce company has been able to cut down all this middlemen nuissance. Their business model involves direct selling to customers. Once a customer contacts them, they make sure the product is delivered directly to them at their doorstep by their very own delivery service. This cuts down the added cost involved with hiring of the various channels of distribution.

Casper has been using the direct selling approach and has been able to lower the cost of their product almost by 50% than its competitors. While an average mattress costs around $400 to $5000 depending on the size and brand which is over 100 in variety, the startup Casper has been selling just a single model that ranges from $500 to $950 based on the size. This has provided them an added boost in their business helping them reach the $100 million mark in less than 2 years of its launch.

Turning a startup into a $100 million company has not been a cakewalk for the startup Casper. The preceding years before launch, the team had undertaken various researches both on market pattern, as well as on mattresses. Creating a failsafe business model that has worked wonders has been the key element in the success of the startup turning it into a multi-million dollar brand in two years.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s