Lessons on building hardware from the founders of Eight Sleep

Eight Sleep</a> — part of YC’s summer 2015 class — set out to solve a problem that resonates with just about everybody: they wanted better sleep. Not just more sleep. Better sleep. That real, deep, wake-up-happy sleep that most people only get when the stars align just right. A huge part of that equation, as anyone who has woken up at 2 a.m. to throw the blanket off could tell you, is temperature.So Eight Sleep’s founders built the Pod, an intelligent mattress cover loaded with tech that learns the temps that you sleep best at and heats/cools itself accordingly throughout the night. <a href=https://www.ycombinator.com/"https://www.eightsleep.com/wall-of-love//">People love it</a>. “Hardware is hard” is a saying for a reason, but Eight Sleep has gotten incredibly good at it over the last ten years. With the team launching an entirely new version of the Pod this week — the Pod 4, <a href=https://www.ycombinator.com/"https://twitter.com/eightsleep/status/1788157138256171010/">read more about that here</a> — I asked co-founders Alexandra Zatarain, Massimo Andreasi Bassi, and Matteo Franceschetti to share some learnings that might help the future hardware founders of the world.Here’s what they shared with me:<ul><li>Do not wait for scale to solve your unit economics. If the unit economics don’t work because you are small it’s because you don’t have a business, not because you don’t have scale. Be ruthless on immediate paybacks & [customer acquisition cost], cash conversion, and net margin. These things will not solve themselves over time; take the pain now. </li><li>Because the development cycles for building hardware are longer, many assume that velocity is less important when building a hardware company. The exact opposite is true. Because of the physical limitations in developing hardware, fewer things are in your immediate control. This means that there needs to be even greater urgency and velocity when the team attacks the things that are in their control. A hardware company needs to move insanely fast and be willing to travel to the other side of the globe in a minute’s notice. </li><li>Without a deep technological moat, someone else will copy your hardware and make it cheaper and faster than you can. Focus on defining the truly unique aspect of your product that will be impossible to replicate. This needs to be something more significant than a beautiful UI, it needs to be something intrinsic to the product story and that solves a real problem more effectively than anyone else. </li><li>Make sure software and hardware development teams are closely aligned as you build your product. Any delays on either side can hold up the entire project. </li><li>Customer support should be considered an integral part of the product experience. Products that combine hardware and software are complex and with all the moving parts it's inevitable that some things will not work perfectly. While Customer support should not make up for gaps in the product experience, it should help identify feedback or issues quickly and be an advocate for the customer. </li><li>Invest in tools that help you diagnose customer issues faster. There are a lot of external factors that can affect hardware performance, the right tooling will allow you to root cause issues as fast as possible. </li><li>Backwards compatibility is absolutely critical. You have to maintain your product in the field for many years and it's the only way to continue iterating quickly without a huge team.</li></ul>","comment_id":"663baea3eba13d0001fb3381","feature_image":"/blog/content/images/2024/05/eight-sleep.png","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2024-05-08T09:56:03.000-07:00","updated_at":"2024-05-08T11:00:25.000-07:00","published_at":"2024-05-08T11:00:25.000-07:00","custom_excerpt":"The co-founders of Eight Sleep share some things they've learned about building hardware over the last 10 years","codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"645000ebb09be6000165fbad","name":"Greg Kumparak","slug":"greg","profile_image":"/blog/content/images/2023/05/greg.jpeg","cover_image":null,"bio":"Greg oversees editorial content at Y Combinator. He was previously an editor at TechCrunch for nearly 15 years.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/greg/"}],"tags":[{"id":"663bbdb9eba13d0001fb33c5","name":"#964","slug":"hash-964","description":null,"feature_image":null,"visibility":"internal","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/404/"},{"id":"61fe29efc7139e0001a71157","name":"hardware","slug":"hardware","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/hardware/"}],"primary_author":{"id":"645000ebb09be6000165fbad","name":"Greg Kumparak","slug":"greg","profile_image":"https://ghost.prod.ycinside.com/content/images/2023/05/greg.jpeg","cover_image":null,"bio":"Greg oversees editorial content at Y Combinator. He was previously an editor at TechCrunch for nearly 15 years.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/greg/"},"primary_tag":null,"url":"https://ghost.prod.ycinside.com/lessons-on-building-hardware-from-the-founders-of-eight-sleep/","excerpt":"The co-founders of Eight Sleep share some things they've learned about building hardware over the last 10 years","reading_time":2,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":"A photo of Eight Sleep co-founders Massimo Andreasi Bassi, Matteo Franceschetti, and Alexandra Zatarain","feature_image_caption":null},"mentions":[{"id":964,"slug":"eight-sleep","name":"Eight Sleep","batch_name":"S15","small_logo_url":"https://bookface-images.s3.amazonaws.com/small_logos/b649c0ed7300661389c61da3478d9e510a6ef517.png","one_liner":"The sleep fitness company.","website":"http://eightsleep.com","long_description":"Eight Sleep is the world's first sleep fitness brand with a mission to fuel human potential through optimal sleep. Founded in New York City in 2014, Eight Sleep leverages thermoregulation, data, and technology to design products to restore individuals to their peak energy every morning. Eight Sleep was named one of Fast Company's “Most Innovative Companies of 2018 and 2022”, and recognized by TIME's Best Inventions of 2018 and 2019.","tags":["Hardware","Health Tech"],"ycdc_status":"Active","logo_url":"https://bookface-images.s3.us-west-2.amazonaws.com/logos/255ad9d87fe5d5b188b1e1940ffefd844674fbb7.png?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAQC4NIECAPQJ45IQW%2F20250528%2Fus-west-2%2Fs3%2Faws4_request&X-Amz-Date=20250528T124337Z&X-Amz-Expires=3600&X-Amz-Security-Token=IQoJb3JpZ2luX2VjEKv%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaCXVzLXdlc3QtMiJGMEQCICx6mOJeQwzPD5W1N4%2BQX9GjhuDjnhemsZ9tVE84IhwVAiBPv5Ty3DPI3hCI%2BLmvAFFrMzDCeRm2g75kocWzKnYGNyrlAwh0EAAaDDAwNjIwMTgxMTA3MiIMq75lOR9%2FuJn2OrhaKsIDNw9nnDIt0DuaiEkPGfP6ANlYnCslJOqsMEv%2FAjnoVRkxSfAIIY1B2KJg2mZ0rJoorSJ%2B3L4sxH2ds9nKlXDlDVKxwH2hGXRMzxV%2BSDTWQd00v7hewJSEu5%2BD7%2F6rGyAw7ta1lt6HWD%2BqhB%2BB7OryKwG3YXN9bWtoX6Vph3g5hRTWDHHadDSun%2FEYRYTu6Gg5Nkv4mjWtZfNglyNPg%2BPe%2FG%2BPWl6YwuHbdDB0JTy8QWeTXf75yRXPDwP3CtJ8X2X%2BRciYFR2hvTf0diui7ycv%2BgNzpfREITL4BoTKHrG1gvZu8IoJmypWTS0RU4Qz7ndfAJnQizuc%2FXGr%2BxuSuA37Rck80O9%2BdwMBP1qBr1%2BDOanfxqr8lc4YT4jguIcxbPI2%2FvvtES%2B%2F9vT8V6F7A25dLIWe%2FQUvYaUC9KzBc6ejGVscf27Y%2FSM4vGzf3V0pNgiDFe51LQlSxvAzR2PrnGPg7%2FR0GGyczPrn2tvuw4l7kjtvtAkAYELvhyxL6B7UYfSvjFXoTy8HNto3VYwf%2FLn1GXhQYS%2BTSeA0WEi1xWGqkuvZtiZ7F60I2AeXM02Q8z0F%2FK6k8kZxIzYp5qcYw9fhbvo7MJnM28EGOqYBsAcJQGLb15sqj%2FwjqPXQuKgI3RSiMNhau%2FeVGcGvpcMgc1cD9zLsCuD4HXwprNZPo820H%2Bv4I9mX5Vukkg3KczxJHvFo1hpGpjrCyMRyPMA6YsubLV3TkRtq3NX2zRbKoETkXKCzo2xxCqfx3hOdB0EK4KAge6UU%2BDhD2Df0zvPUDyE1TB0BMqXBD%2Fclycru%2BquDCfFWv%2BcjkO9UsLZq3umY2tfwTQ%3D%3D&X-Amz-SignedHeaders=host&X-Amz-Signature=5398fe64944ebde7db866db0d868b50b5afd9cca360872dbaacc20f1bd5c1551","year_founded":2014,"team_size":100,"location":"New York","linkedin_url":"","twitter_url":"https://twitter.com/eightsleep","fb_url":"https://facebook.com/eightsleep","cb_url":"https://www.crunchbase.com/organization/morphy","is_hiring":true,"active_job_count":13}],"related_posts":[{"id":"61fe29f1c7139e0001a7180a","uuid":"569cde80-2815-4314-a88d-91c90348bcd8","title":"Hardware, Less Hard","slug":"hardware-less-hard","html":"How can hardware startups compete in the software-centric startup world?\nWith iteration time measured in days rather than seconds, the burden of marginal costs, and often unexpected hurdles such as the <a href=https://www.ycombinator.com/"www.ewmfg.com/chinese-new-year//">impact of Chinese New Year, hardware companies face unique battles.\nBut during the Y Combinator program we expect our entrepreneurs creating physical things to move just as quickly as their digital-only friends. In fact, here is the (admittedly bold) hypothesis I shared with the Winter 2016 startups at our kickoff meeting: In the earliest stages, nothing involving hardware product creation should take more than 3 days longer than software.\nWe have more than 30 hardware startups in the current YC batch, breaking the <a href=https://www.ycombinator.com/"http://techcrunch.com/2015/08/19/hardware-at-the-speed-of-software//">record we set last batch by 50%. To help give them advice in meeting our expectations, 14 of my smartest friends provided support at YC’s first Hardware Mega Event. We began with an alumni panel of founders who successfully made and shipped things people want (and pay real money for.) Later, we had panels focused on specific topics such as industrial design.\nHere I’d like to share some of my favorite pieces of advice they shared:\nConsult Users, Not Consultants\n<a href=https://www.ycombinator.com/"http://www.pebble.com/">Pebble founder Eric Migicovsky holds the current Kickstarter crowdfunding <a href=https://www.ycombinator.com/"https://www.kickstarter.com/projects/597507018/pebble-time-awesome-smartwatch-no-compromises/rewards/">record, having sold $20,338,986 worth of Pebble Times in 30 days. We learned that he launched his first record-setting Kickstarter campaign without the help of any agencies: The original Pebble watch raised nearly <a href=https://www.ycombinator.com/"https://www.kickstarter.com/projects/597507018/pebble-e-paper-watch-for-iphone-and-android?ref=users\%22>$10.3 million</a>, with not a crowdfunding consultant to be found.\nEric said that selling small runs of units to early adopters and listening to their feedback taught him far more about what users actually wanted from their smartwatch than any consultant could. There’s no replacement for talking to your customers.\nGet The Word Out\nFounders nervous about the size of their mailing lists at launch should consider <a href=https://www.ycombinator.com/"http://www.bluesmart.com/">Bluesmart co-founder Diego Saez Gil’s hack. Bluesmart’s founders emailed everyone they had ever corresponded with, explaining that the project they’d poured blood sweat and tears into was launching soon. They asked friends to please check it out. Diego’s from Argentina, so he created Spanish and English versions of the message, to reach as many people as possible.\nThe $2,244,721 of connected carry-ons sold in their Indiegogo <a href=https://www.ycombinator.com/"https://www.indiegogo.com/projects/bluesmart-world-s-first-smart-connected-carry-on/">campaign should outweigh any slight breach of etiquette.\nBeauty Is Core\n<a href=https://www.ycombinator.com/"http://www.bellabeat.com/">Bellabeat co-founder Sandro Mur made mouths drop open with his suggestion to ship beta versions of connected products without electronics. Bellabeat garnered feedback by sending test users smart jewelry without the smarts — they were basically just beautiful shells. This focus on aesthetics has paid off: Bellabeat’s growing rapidly in the highly-competitive wearables market.\nGet Your Hands Dirty\n<a href=https://www.ycombinator.com/"http://www.doublerobotics.com/">Double Robotics’</a> David Cann provided B2B perspective and an interesting alternative path to finding a contract manufacturer overseas. His company satisfies the tight quality controls and sophisticated manufacturing techniques necessary to create their intricate telepresence robots by manufacturing all of their telepresence machines in Burlingame, CA.\nIt’s worked out well: Profitable and having just launched a majorly-improved version, they’ve never had to bother to raise a series A. Manufacturing locally may cost more upfront, but consider your product and your company’s needs: It could end up being worth it.\nDesign Isn’t An Afterthought\nDesigner <a href=https://www.ycombinator.com/"https://www.linkedin.com/in/dominika-blackappl-08796/">Dominika Blackappl</a> has worked on everything from iPods to Mars rovers, and she stressed that even at the industrial level, design isn’t just something you can bolt on as an afterthought. Impactful design isn’t just about how something looks, she said. It considers all the constraints upon a product, from manufacturing processes to user habits.\nSimilarly, industrial designer <a href=https://www.ycombinator.com/"http://www.josephmorin79.com//">Joe Morin</a> added perspective from working as a consulting designer after years at a big design firm. He cautioned against startups thinking a designer can produce work without guidance: Asking a designer to “just make it look good” is unlikely to produce useful results.\nPartners As Accelerants\nGreg Kress urged startups to use partners like his firm <a href=https://www.ycombinator.com/"http://radicand.com//">Radicand to make the most of their time during the crucial, high-impact early days of engineering a hardware product. Getting third-party help can speed up the building of prototypes and supplement core engineering staff, he said.\n<a href=https://www.ycombinator.com/"http://tempoautomation.com//">Tempo Automation</a> co-founder Jeff McAlvay pushed entrepreneurs to ditch their Arduinos and make the move to custom boards sooner rather than later. Tempo creates custom printed circuit boards (PCBs), taking designs from the form of an email attachment to a delivered unit within a week for a few hundred dollars.\nFactories Can Be Friends\n<a href=https://www.ycombinator.com/"https://www.dragoninnovation.com//">Dragon Innovation</a> founder Scott Miller is speeding up the process of scaling, getting startups into production at factories that have been vetted by his firm with visits and production runs. Dragon’s standard bill of materials and other tools help ensure you are speaking the same language as your production partners. In manufacturing (and life), communication is key.\nHardware-focused investor <a href=https://www.ycombinator.com/"http://www.yunqi.vc//">Yi Pin Ng</a> showed the incredible value a partner in-country (and often in-factory) can add. With quality assurance staff on the ground in China, Yi Pin’s helped several of our startups rapidly scale up to tens of thousands of units per month. By helping with finding factories, navigating incorporation, and hiring in-country staff, Yi and other local partners keep startups from reinventing the wheel every time they start to grow production.\nKeep Users Informed\nKickstarter’s <a href=https://www.ycombinator.com/"https://www.linkedin.com/in/julioterra/">Julio Terra</a> explained what Kickstarter backers look for from a campaign, stressing that regular updates to create a sense of involvement are of utmost importance. <a href=https://www.ycombinator.com/"https://www.linkedin.com/in/derekdukes/">Derek Dukes</a> of Amazon said that you should also encourage your early adopters to share with the wider world. Early customer reviews are key as a product transitions from niche pre-sale to mass-market retail, he said.\nLearn From Presales\n<a href=https://www.ycombinator.com/"http://www.tilt.com/">Tilt co-founder James Beshara talked about the burdens and benefits of a white-label Tilt campaign. James stressed the importance of launching with a pop; that the first 4 hours are typically the most important, and that the more PR budget going into those 4 hours the better on a critical day like launch day. With software, you can launch multiple times, but that’s not the case with a crowdfunding or pre-order launch.\n<a href=https://www.ycombinator.com/"http://www.indiegogo.com/">Indiegogo’s</a> Evan Cohen introduced pricing strategies for maximizing your crowdfunding campaign’s performance, stressing that your campaign should be a learning opportunity for finding an answer to one key question: What will users actually pay for your product?\nLuke Iseman specializes in hardware at Y Combinator. You can learn more about hardware at Y Combinator <a href=https://www.ycombinator.com/"http://www.ycombinator.com/hardware//">here. Ready to solder things people want? Apply <a href=https://www.ycombinator.com/"http://www.ycombinator.com/apply//">here.

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The sleep fitness company.

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Greg Kumparak