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Don’t Snooze on It: Why the Sleep Industry Could Be the Next Mindfulness Revolution

We identify dozens of opportunities across 7 major categories (education, communities, aids, products, perks, support, and meds) for serving a sleep-deprived world.

  • Sleep matters and people are starting to take note, with the CDC calling sleep disorders a public health epidemic. 
  • There’s opportunity to educate the sleepy through online courses, quizzes, and communities, targeting the millions searching for sleep-related terms each month.
  • There is double the search volume for “sleep app” vs. “meditation app” but no clear winner in the category.
  • Businesses have produced a range of products that help people get better sleep, including weighted blankets, sleep trackers, and premium PJs.
  • Companies are beginning to understand the restorative nature of sleep, with some even paying their employees to get a better night’s rest.
  • Sleep science borders the nootropics industry, where OTC supplements are taking off and a popular insomnia drug’s patent just expired.
10 Minute Read
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Waking Up to Opportunities

It’s widely known that sleep is important, yet somehow this essential restoration period is often de-prioritized. Whether it’s because people struggle to snooze, would rather get a little less sleep to do a little more of X, or they’re just not educated on how destructive a lack of sleep can be… 35% of adults don’t get enough sleep.

And it’s not just a matter of feeling more tired. Researchers have found that an individual sleeping 6 hours or less has a 13% higher mortality rate, and lack of sleep costs the United States $411B each year. For those and other reasons, the CDC has identified  sleep disorders as a public health epidemic.

How We Sleep, a 2017 New York Times bestseller, has helped fuel an important conversation about the science of sleep, including how a lack of sleep can contribute to serious short- and long-term impairments, such as diabetes and Alzheimer’s. 

The book, which has ~40k ratings on GoodReads, has become a cultural touchstone. Bill Gates raves about it. And renowned physician Peter Attia loved it so much, he interviewed author Matthew Walker several times.

The ‘Next Meditation’

The last decade was the decade of meditation. Headspace, founded in 2010, led the pack, with Calm following in 2012. Last year, Calm became the world’s first mental health unicorn. Just as it took many years for meditation to become mainstream, some think sleep is next up, as people continue to look for ways to “look good, feel better, and not die” (a quote from our teammate Meg). And despite 27.1k people searching for “sleep app” (more than double “meditation app”) there’s still no clear winner.

According to a 2017 McKinsey report, the sleep industry and its adjacent products represent a $30-40B industry. More recently, others have pegged it at $70B. Analysts expect that sleep aids will grow to a $101.9B market by 2023

There are some 1.7k companies in the sleep industry according to Crunchbase. The business is diverse, with companies investing in everything from innovations in sleepwear to softer screen colors to ease the strain on your eyes at night. In this report, we’ll break down opportunities in the industry through 7 mini-signals, touching on major facets of the sleep industry:

  • Sleep education: websites, courses, videos
  • Sleep communities: forums and subreddits
  • Sleep aids: digital apps, plugins, and trackers
  • Sleep products: mattresses, premium PJs, weighted blankets
  • Sleep perks: the next wave of enterprise perks
  • Sleep support: sleep docs, labs, medical devices
  • Sleep meds: supplements, tablets, drug patents

7 Opportunities Worth Waking Up To

1 – Sleep Education

What you need to know: If you’re newly convinced that sleep matters, you’re part of a growing group. But not everyone knows how to act on that new revelation. How many hours of sleep do you really need? And does it matter how and when you get your zzz’s? Is quantity all that matters, and how do you measure sleep quality? What should you do if you can’t sleep?

These are among the sleep-related questions people ask online every day. The good news for entrepreneurs and investors: there are still lots of opportunities to be the “source of truth” for scores of sleep-related questions.

But the competition is digging in. Since its launch 3 years ago, Sleep Advisor has amassed an impressive $1.3m worth of organic search traffic, while its referring domains have skyrocketed. SimilarWeb estimates that Sleep Advisor gets over a million pageviews every month.

How? They’ve traded on common commerce-centric terms like:

  • “best mattress 2019” – 45k searches/month
  • “best memory foam mattress” – 20k searches/month
  • “best mattress topper” – 20k searches/month
  • “best pillow for neck pain” – 17k searches/month
  • “best mattress for back pain” – 13k searches/month
  • “best mattress in a box” – 10k searches/month

But they’ve also found and targeted informational queries like:

  • “how to lucid dream” – 23k searches/month
  • “hypnic jerk” – 17k searches/month
  • “king vs california king” – 15k searches/month
  • “do fish sleep” – 13k searches/month
  • “feng shui bedroom” – 12k searches/month
  • “how long can you go without sleep” – 10k searches/month (don’t try this one at home… in fact, the Guiness Book of World Records has stopped certifying attempts to beat to “no sleep” record)

For a full download of the organic terms that Sleep Advisor ranks on, access them here

The opportunity: As you can likely tell from Sleep Advisor’s keyword targeting, the world of Circadian health and commerce is broad, and more people are looking for advice (ex: “best pillow for neck pain” continues to rise). 

There’s still room for more educational sites, but also courses, books, quizzes, and videos.

Quizzes: More people are looking to understand sleep disorders or to understand what may be disrupting their sleep. Simple quizzes or educational material can help people get baseline information before having to see a sleep specialist. Some people (590, in fact), search for “sleep disorder quiz” every month.

Here are some other search phrases related to sleep education…

  • “Sleep apnea test” – 27.1k searches/month
  • “Insomnia test” – 8.1k searches/month
  • “Chronotype quiz” – 2.9k searches/month
  • “Do i have sleep apnea” – 2.4k searches/month
  • “Insomnia quiz” – 1.6k searches/month
  • “Sleep apnea quiz” – 1k searches/month
  • “Do i have a sleep disorder” – 720 searches/month
  • “What is my chronotype” – 480 searches/month
  • Other sleep disorders include: DSPS, sleep breathing disorders, hypersomnia, parasomnia, circadian rhythm disorders, sleep movement disorders, and restless leg syndrome.

Content and Video: There are opportunities for entrepreneurs to create educational content around various sleep postures (ex: “sleep position pregnancy” has 410 searches per month).

Courses: Entire courses could bring someone from 0 to 1, teaching them the theory behind good sleep, providing practical information that teaches “students” how to get a better night’s rest, and elaborating on subjects like lucid dreaming.

Books: Children’s books oriented around teaching children about sleep are taking off. They include The Rabbit Who Wants to Fall Asleep, written by a Swedish psychologist, and this not-so-educational but hilarious tome, Go the F**k to Sleep

Coaching: Sleep coaching and consultants have been around for some time, but have traditionally tailored their services toward infants. But as more people begin taking their sleep seriously, this occupation could expand to serve more adults. One early mover: Equinox added sleep coaching to their app and as a service to members. 

2 – Sleep Communities

What you need to know: Online sleep communities are taking off. Take sleep subreddits, for example: r/sleep and r/sleepparalysis both have displayed exponential growth, with a particular jump in 2019.

Source: Subreddit stats

Other subreddits like r/luciddreaming have even more subscribers, nearing 300k.Source: Subreddit stats

The opportunity: Outside of Reddit, there are some sleep communities, but many are relatively old and outdated. Take The Sleep Forum, which ranks first for “sleep forum” but has a domain ranking of 15. Despite 96% of its traffic coming from search (according to SimilarWeb), it only has $86 worth of organic traffic and is not available in several countries. In other words, someone can do much better. 

Other more targeted forums like Apnea Board (DR: 39) and MyApnea (DR: 38) do better, but still leave a lot of room for improvement.

3 – Apps, Plugins, and Trackers

What you need to know: Despite more people searching for “sleep app” (27.1k searches/month) versus meditation app (12k searches/month), there is still no clear winner in the sleep app space, akin to a Headspace or Calm. But what’s even more compelling is: not everyone meditates, but everyone sleeps

In fact, 4 out of 5 of the top sleep apps, which also are the only ones with 500k downloads or more, are focused around meditation (aka Headspace and Calm).

A few interesting sleep apps that have received attention:

  • Sleep Cycle: Most downloaded sleep app, outside of Headspace and Calm.
  • Flux: Laptop software that adapts to time of day, eliminating blue light late at night (which suppresses melatonin).
  • Pzizz: A “sleep and power nap system” endorsed by the likes of JK Rowling, the Duke of York, and retired NBA star Roy Hibbert.
  • Sonic Sleep: Offers personalized sleep coaching through their AI-driven app, in addition to 1:1 coaching consultations.

The opportunity: Even Apple is investing heavily in the sleep tech space. They acquired hardware company Beddit in 2017 and have since filed sleep-related patents, like this one that helps you track your sleep habits through multiple devices.

In recent years, a number of companies have developed devices that track sleep:

  • The Oura ring
  • The Beddit sleep monitor, which fits under your sheets
  • Dreem, which raised $57m for its sleep-sensing headband
  • Beddr, a medical-grade “sleep tuner” that sticks to your forehead
  • Sleep aiding headphones: Kokoon and Bose Sleepbuds
  • The Somnox sleep robot that soothes you to sleep with “thousands of years of Buddhist breathing techniques” for only €539.

It’s hard to say exactly how the sleep tech will advance, but it’s clear that new solutions are on the up and will likely continue to be as the market expands.

4 – Mattresses, Premium PJs, and a 20 lb. blanket?

What you need to know: In addition to trackers, entrepreneurs have developed a wave of sleep products aimed at improving your physical sleeping environment. The mattress industry alone was $27B in 2017 and is growing at a 6.5% CAGR, driven by popular DTC brands like Casper, Purple, Helix, and Eight. Some of these mattresses offer smart features which claim to help you sleep better. But the premium sleep product market isn’t only limited to mattresses. 

Weighted blankets: Weighted blankets (i.e., heavy blankets weighing ~10% of your body weight) have existed since 1999 for acute mental health support, but have taken off in the consumer realm since the Gravity Blanket was founded in 2017. The weight placed by these blankets produces an “anti-anxiety” effect, similar to the sensation of hugging. Gravity Blankets started as a Kickstarter, raising nearly $5m. Since launching, numerous other weighted blankets have emerged, including weightless variants like HugSleep’s Sleep Pod, which claims it was designed around Deep Touch Pressure Therapy.

PS: We did an interview with Gravity Blanket co-founder John Fiorentino about how he’s raised millions through Kickstarter multiple times. For his second product, the Moon Pod, a $400 bean bag, he raised $1.3m on Kickstarter. The company that makes the Moon Pod is doing $15m in sales.

Pillows: In the sea of pillows out there, some companies have managed to sell millions (MyPillow has sold over 41m pillows) while other new sleep orientations have emerged, like…

Premium PJs: Some companies have focused on premium sleepwear, from stylish garments like Lunya ($25m+ ARR) to high-tech PJs (a la Tom Brady) made of bioceramic material which supposedly “absorbs natural heat and reflects infrared back to the skin,” resulting in a more rested body that recovers more quickly.

The opportunity: Most of the aforementioned brands have penetrated the DTC model relatively well. But when’s the last time you stayed in a hotel that had a memory foam pillow, a weighted blanket, and some thermal regulation? Exactly…never. 

High-end hotels or even premium sleep-focused hotels may be where the opportunity lies. These hotel rooms can include not just a really nice bed, but also other technology such as light therapy lamps, white noise machines, or other temperature regulation technology like…

  • chiliPAD: Hydro-powered thermal regulating mattress pad
  • Embr Wave: A thermal regulation bracelet that helps you heat or cool down your body temperature 
  • Buffy: A temperature regulating duvet made of eucalyptus, which is “highly breathable”

Some hotels already have their eyes on the prize…

With many travelers already looking to biohack jetlag or catch up on sleep at the airport, this may be the next frontier for those that prioritize sleep while on the road.

5 – The Next Wave of Enterprise Perks: Sleep Bonuses

What you need to know: If you don’t work for Google or Facebook, you likely won’t have access to a nap pod in your office. That’s why some companies have emerged, offering naps as a service (NaaS). They include Nap York which has people paying up to $250/month for 5 nap sessions. Casper has similarly created the Dreamery, which they deem as a “magical place” that offers nap sessions for $25/month. 

The opportunity: Workers needing midday naps isn’t just a problem in New York. In fact, numerous people in Japan book rental cars in part to take midday naps.

While companies like Nap York are available directly to consumers, the big opp here is to partner directly with companies. Better sleep equals more rested and more productive/happy employees. Sleep perks may be the next wave on the horizon.

Aetna, for example, literally is giving sleep bonuses to workers that sleep 20 seven-hour nights consecutively (at $25 per night). Businesses are always looking for ways to incentivize employees to join their team, and sleep might just be the next arm of that. In this case of sleep, it’s a win-win, because the reward comes back full circle, with the model potentially mimicking health insurance company Vitality, which is getting traction in the UK for rewarding employees for healthy habits.

6 – What’s a Polysomnogram? Sleep Docs, Labs, and Medical Devices

An estimated 70m Americans suffer from insomnia, while obstructive sleep apnea (OSA) impacts 43m. As the world starts paying more attention to the importance of sleep, they are naturally starting to search online for help. Just as the number of searches for therapists has shot up (as people pay attention to mental health), the same has been true for sleep specialists.

KeywordSearch Volume
sleep specialist6.6k
sleep specialist near me260
somnologist1.6k
somnologist near me110
sleep clinic14.8k
sleep clinic near me390
sleep apnea doctor3.6k
sleep apnea doctor near me2.9k
sleep center12.1k
sleep center near me4.4k
sleep lab3.6k
sleep lab near me1.6k

What you need to know: Similar to dentistry or optometry, sleep doctors may not be included in standard health plans and can be expensive. For that very reason, each patient can be worth hundreds or thousands to a sleep doctor. It’s estimated that there are 4.7k US sleep centers/labs in the United States, which help to diagnose sleep disorders for millions. Each lab brings in $920k annually for a bed count of 7-8, resulting in a $4.3B industry.

The opportunity: In recent years, some sleep practices have struggled to attract customers due to portable testing options which have been approved by Medicare. Similar to dental marketing, sleep specialists will move to digital to find their customers, generating an entire field of marketing for sleep specialists, targeting terms like “do I have sleep apnea?” (2.4k monthly searches). There’s also opportunity for new companies since Medicare has approved coverage for at-home sleep studies

There already exists a particularly big community that focuses on sleep apnea, with the CPAP (Continuous Positive Airway Pressure) subreddit alone growing to over 7k subscribers. The CPAP industry is a $4.3B market, with a CAGR of 7.2%. What’s even more compelling? Marketdata estimates that the market has only been penetrated by 12%, as many people have yet to be diagnosed.

7 – Supplements, Tablets, and Drug Patents

What you need to know: Sleep science is closely linked with other wellness trends. If you take a look at the r/sleep subreddit, for example, you’ll notice that its related subreddits give us insight into what sleep advocates also care about. Looking closely, you’ll notice that the space lies adjacent to the nootropics industry.

Source: Anvaka.github.io/sayit

Melatonin, the chemical that helps regulate your Circadian rhythm, is sold over the counter in United States and is searched for thousands of times each month:

  • Melatonin: 1m searches per month
  • Melatonin supplements: 22.2k searches per month
  • Melatonin tablets: 27.1k searches per month

According to Market Research, the insonia pharma market is dominated by 3 major players:

  • Belsomra® (suvorexant)
  • Ambien®, Ambien® CR (zolpidem tartrate) — even has its own subreddit with more than 88k subscribers, including 20k added in 2020.
  • Lunesta® (eszopiclone)

Other commonly used insomnia drugs include: 

  • Amitriptyline
  • Dalmane
  • Halcion
  • Prosom
  • Restoril
  • Rozerem
  • Silenor
  • Sonata
  • Desyrel
  • OTC sleeping pills (including melatonin)

The opportunity: Many insomnia drugs have been declining in value due to the expiration of patents. The patent for Silenor, a relatively popular insomnia drug, expired this week; other insomnia patents are expected to expire over the next decade. To continue monitoring pharma patent expirations, you can do so here.

Market Research suggests that the OTC segment of the sleeping pills market is growing faster (currently $576m) as well. Another area to watch includes beauty supplements tailored toward sleep (another potential set of products to put in premium sleep hotels). For example:

As more solutions enter the market, it will inevitably be difficult to differentiate between legitimate products and the more questionable — especially for serious sleep conditions. The market is waiting for a third-party review site to provide clarity as the market takes off. It also wouldn’t surprise us to see the emergence of  sleep bloggers and vloggers, akin to the thousands of beauty bloggers out there.

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