By GREGORY ZELLER //
From the Going in Style File comes Sleep BioLogics Inc., a startup from two 70-something entrepreneurs who wouldn’t take retirement lying down.
Actually, Sleep BioLogics is a 2018 reinvention of a 2016 startup, RV Winkle LLC, which itself was a “bed in a box” enterprise several years in the making.
It all started because Irwin Pearl and Tom Williams, who’d both enjoyed long and successful business careers, weren’t ready to call it a night. Instead, they put their money under the mattress, first working to distribute Italian-made compressed-foam mattresses stateside, then resolving to do it on their own.
Now, they’re out to corner a market they basically invented themselves: physician-prescribed, chemical-free compressed mattresses.
Pearl, the Sleep BioLogics CEO, sports a history of innovative entrepreneurship. After launching (and later leaving) a successful retail advertising agency in circa-1970s Melville (it’s since evolved into Linx Communications of Smithtown), he took knowledge gleaned from that experience – many of the agency’s clients were supermarkets – and pivoted into the water-purification business.
In the 1980s, supermarkets were already facing stockroom issues related to the growing bottled-water business (pile the wooden pallets of bottled water too high, and the weight crushes the lower pallets). With Aquasciences, which was conceived on Long Island but actually launched in New Jersey, Pearl would take existing water-purification technology and create new refillable-bottle services for supermarket chains.
Aquascience went public and was eventually acquired, and by 2000, Pearl – while twice successful – again found himself with idle hands.
That is, until an old friend introduced him to Magniflex, an Italian mattress maker that had retained the friend to help bring the brand to the States. At the time, Florence-based Magniflex held a global patent on a process for compressing and packaging high-quality foam mattresses, and Pearl was intrigued.
“They were very innovative,” he noted. “Their beds were unique.”
The advantages of compressing a large, thick mattress into a manageable package are considerable – instead of requiring two workers and a delivery truck, a compressed mattress can be easily transported through a variety of commercial delivery options. Pearl and his associate spread the word domestically, but Magniflex’s global patent soon expired – and “that really opened the door,” the entrepreneur told Innovate LI.
“Had [Magniflex] been more sophisticated, they might have built some other patents around it, to protect it,” Pearl noted. “But they didn’t. And the rest is kind of history.”
Now Pearl and friends could compress their own mattresses – and true to form, his plan would involve both an existing technology and a modified way of presenting it.
The basic idea was to sell mattresses through doctors’ offices – primarily chiropractors, whom Pearl noted are often asked about the best mattresses for back support. A network of such providers would be “our brick-and-mortar,” Pearl said. “Being able to deliver a bed in a box truly changed the equation.”
Several other key factors, most stemming from Pearl’s impressive collection of business-world contacts, primed the unique vertical’s potential.
He knew plenty of chiropractors, who knew plenty of others, so establishing a network and collecting doctor recommendations wasn’t a problem. And in a truly Pearl-esque stroke of good fortune, the entrepreneur was personal friends with the maker of Celliant, a patented mineral-textile technology that harnesses and recycles body heat.
Celliant technology creates products – mattresses, for instance – that increase blood flow and oxygen delivery to muscle tissue, thereby promoting physical regeneration.
The FDA recently approved Celliant-tech products as medical devices. And the friend gave Pearl “exclusive rights in the healthcare sector,” meaning Pearl and partners are the only ones who can make mattresses from the stuff.
As if that wasn’t enough, another critical advantage plays into the entrepreneur’s ready hands: “Mattress off-gassing” is now a thing, with chemicals injected into “flame-retardant” mattresses earning heaps of bad press.
Sleep BioLogics’ on-demand manufacturing model can produce mattresses sans such chemicals, with nothing more than a doctor’s note.
“We’re not in the same ballpark as other mattress companies – we’re in our own ballpark,” Pearl said. “Out of 1,870 [mattress brands] out there, we’re the only ones with a doctor network. And we’re the only ones who can make and deliver on-demand mattresses without the chemicals.
“So, if you’re concerned about chemicals, one of our doctors will write you a letter of necessity, and I can custom make you a mattress without the flame-retardant chemicals, compressed and delivered in a box,” he added. “We’re in a fabulous position.”
Pearl credited the arrival of company director Jim McGrann, former CEO of multinational vision-care titan VSP Global, as another major advantage for the startup – and not only because McGrann brought a six-figure personal investment (though that was key to growing the doctor network, which now weighs in at more than 2,000 chiropractors, osteopaths, acupuncturists and other providers).
Each network member gets point-of-sale materials on BioPosture, Sleep BioLogics’ flagship product line, and plans are to continue growing that B2B model – Pearl anticipates 15,000 eventual members – even as Sleep BioLogics dives into B2C waters.
The newly formed C Corp is also looking to raise some serious coin: It’s setting an investment round with a $5 million ceiling and is already chatting with New York City-based investment bankers Goldmark Advisers and related NYC broker Young America Capital.
The Long Beach-based company – which was actually incorporated in Colorado, by a semi-retired securities lawyer and old friend of Pearl’s, naturally – is still formulating its new business model, and further tweaking is a given. Among other things, the partners may look to qualify for insurance coverage, based on the FDA medical-product designation.
But attracting new doctors is getting easier – “We’ve reached a critical mass where the doctors are coming to us,” Pearl noted – and while the average chiropractor is never going to sell hundreds of mattresses each year, he or she could generate upwards of $15,000 in annual sales.
Multiply that by a 10,000-member (or more) network of providers, and “it’s a numbers game,” according to Pearl – one Sleep BioLogics can win.
“We’re in a very good place,” the entrepreneur said. “Everyone tells you their mattress is comfortable, their mattress is supportive, but not everyone has the [compressed-mattress technology] and not everyone has the support of a network of doctors.”
Future capital investments will be spent on team-building, primarily on the marketing end, and Pearl does acknowledge that he and Williams can’t go on forever, establishing the need for “younger team members” in the C-suite.
But for now, the 70-somethings still have plenty in the tank, according to Pearl.
“We really didn’t want to retire yet,” he said. “I go to the gym every day, Tom walks for miles every day and his mother is 100 years old. And we don’t play golf.
“I love what I’m doing and I think we’re in a good place,” Pearl added. “There’s no question in my mind that with the financing, we can take this to over $70 million a year in under five years.
“I actually think we’ll get there sooner.”
Sleep BioLogics Inc.
What’s It? “Bed-in-a-box” foam mattress manufacturing and compressing – chemical-free, if you like – supported by a national physician network
Brought To You By: Golden-touch entrepreneur Irwin “Sandy” Pearl, the CEO; cofounder Tom Williams, the president; and gallons of age-defying chutzpah
All in: About $300,000, to establish a B2B business model
Status: Carving a unique niche, set to score big