Dr. Kathrin Hamm, founder and CEO of sleep wellness company Bearaby, never wanted to be an entrepreneur. After receiving his Ph.D. in economics, you started as an economist at the World Bank. Her work has taken her all over the world and given her valuable insights into the small, medium and women-founded businesses she has tried to convince banks to lend to, but she “learned firsthand how difficult it is, especially in developing countries, for women to gain access to finance and start and grow their own businesses.”
During his time in India and especially Bangladesh, Hamm faced long and “exhausting” travel days. She had “never slept well”, she also woke up easily as a child, and she had developed a chronic case of insomnia. She began “at a more moderate level,” with difficulty falling and staying asleep, before her waking periods became increasingly longer, motivating her to seek different solutions.
Image credit: Courtesy of Bearaby. Kathrin Hamm.
He started by looking at various mattress options, but when he dug deeper, he found an article that talked about weighted blankets. The article focused on helping children with sensory issues, Hamm recalls, but also mentioned that evenly distributed weight on an adult body could promote better sleep. Hamm was immediately intrigued as a potential customer.
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“Let me buy a product, sleep better and then move on with my career.”
“I come from a consumer perspective,” says Hamm, “and knowing how difficult it is for women to start a business, I [was] Pleases, Yes, I’m fine here. I don’t want to start a business or even think about becoming an entrepreneur. Let me buy a product, sleep better, and then move on with my career.”
However, the purchasing process proved difficult. Unable to find options online, Hamm had to travel to a pharmacy in Germany, where she’s from, to place an order. Six weeks later a “big bag of beans” arrived. It was orange and blue and “very loud,” Hamm says. At first she was reluctant to even try and wondered if she had made a mistake.
“But then I wore it during the day on a weekend and passed out after 10 minutes,” Hamm says. “And I woke up more than two hours later, [after] a nice nap, completely passed out, and I thought: Wow, this is magic. This thing works for me.“
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So Hamm continued to use the blanket at night, but there was a problem: Because the blanket was filled with plastic beads to add weight, it often got too hot. The underlying functionality works; the weight on my body works, Hamm remembers thinking, but the way it’s done doesn’t work. After some research, Hamm discovered that the technology, which largely consisted of bead-filled chambers between layers of blanket, had been around for 30 years: “Nobody had innovated anything on this product.”
“Why can’t you just use cotton strips?”
Hamm decided to experiment with alternative designs. He drew inspiration from his time spent in India, “where there is a culture of carpet making, knitting and crocheting”, but the turning point came from a conversation with his mother. Hamm was thinking about changing the material or adding holes for airflow when his mother said, “Why can’t you just use cotton strips?” They would create a thick yarn that could be stitched together for natural airflow, eliminating the need for heavy man-made materials that shift and reduce comfort. That idea led to the development of Bearaby’s first little blanket, made from a cut-up t-shirt.
Confident she was on to something, Hamm decided to take a year off from work to focus on business. “I didn’t want to take too many risks, again, knowing that it can get really difficult,” she admits. “[But] My boss was very helpful and said, ‘Look, if it doesn’t work, let’s make it a case study.'”
Hamm withdrew $120,000 from his retirement fund and raised just over $250,000 from a crowdfunding campaign to fund prototypes of the first batch of blankets. She also looked at patents, but they were expensive, so she did the drawing herself, then asked a lawyer to prepare a provisional patent application, which gives filers 18 months before having to pay more. This occurred just a couple of days before the launch in December 2018; the blanket sold out in two weeks and remained the only product of its kind on the market for a couple of years, Hamm says.
Image credit: Courtesy of Bearaby
Related: How to Take Advantage of the “First-to-File” Patent System.
Despite the initial success, the more than 50 factories Hamm contacted were unwilling to accept the product. They had never seen anything like it: it wasn’t clothing and it wasn’t bedding. So, for that first year and a half, Hamm rented a small garage equipped with knitting and knitting machines to churn out the first products. The strong sales helped the company continue to finance production, which was also good, because people weren’t that interested in investing in the first-of-its-kind product yet.
“In hindsight, we had to learn how to be profitable.”
Hamm leaned into the “bootstrap” mentality, which was a blessing in disguise. “In hindsight, we had to learn to be profitable,” he explains, “to get in tune with our production and marketing processes, to be efficient, which was sometimes not seen at the time in direct-to -consumer”. space. Everyone said, “I raised a lot of money and I’m investing that million in marketing expenses.” So we never had that, but now, in an environment where the money doesn’t flow [as] freely, we never had that money, so we feel pretty good right now.”
Bearaby saw another big benefit in brand loyalty. Hamm notes that people seeking wellness and sleep tend to form an “emotional connection with the blanket” and that it’s easy to fall in love with a brand that helps you sleep better. Substantial interest has also translated into an early retail presence Just five months later, Bearaby was in West Elm, thanks to customers who came in and wanted to try the blanket, which also happened with Nordstrom.
Related: Customer Loyalty Is Your Holy Grail for Success. Here’s how to grow it.
When considering expansion, Bearaby focused on functional products that maintained its commitment to quality and sustainability (the company is certified by third-party organizations, including The Global Organic Textile Standard, The Forest Stewardship Council and The Global Recycled Standard). Since anxiety often goes hand in hand with insomnia, the company has landed on the line of food warmers; Boasting a neckband, bottle, and heated, weighted pad, it “brings the nervous system down to zero,” says Hamm.
Image credit: Courtesy of Bearaby
Naturally, Bearaby products have become an integral part of Hamm’s sleep routine, and as she’s gotten older, she’s become even more aware of how much sleep she actually needs. “Now I sleep for a minimum of eight hours,” she says. “I’m training myself to get nine to 10 hours of sleep, obviously not every night, but definitely every weekend. Also, [it helps] whenever I get a chance to take a nap, like a 20 minute nap to reset. [I make sure that I have] these conscious ruptures, if [it’s] take a nap or breathe deeply because running a business is a marathon and if we don’t take care of our body, we won’t be able to do it for a long time.”
“Just have tunnel vision for a year and then reevaluate it after those 365 days.”
Hamm’s five-year marathon with Bearaby led to more than $20 million in sales and more than 10 patents, but it all started with a single, somewhat reluctant leap of faith. And according to the founder, this is precisely what is needed to be successful.
“Once you believe in a product, take a chance and give it a year,” Hamm says. “It’s much more manageable if you [have] a considerable period of time where it’s as if Okay, in that year I’m giving everything I have, 100%. Because sometimes we second-guess ourselves. After [a few] months or six weeks, we don’t see success, [and] we start to doubt ourselves. You say [I have] a year and I’m not asking if it works. Just have tunnel vision for a year and then reevaluate after those 365 days.”