The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:31:40 · Matteo Franceschetti
[00:31:40] S0: Well, let me step back for a second. One thing I'm learning as an entrepreneur is there is a time for things. Right, similar to what I was telling you about the out of home campaign. Nailing the timing of what you do, so when you do what, is actually really important for CEOs. Because it's not that it's binary that, I don't know, retail doesn't work, or out of home doesn't work. No, it works, but there are some second or lower level conditions that are required to make that project work. And so I think for Eight Sleep, that is happening now, and so you should imagine retail to become a meaningful part of our channels in the next month, years. But before, it would have been too early. Same for China, right? Launching in China, one thing I spoke to a lot of Chinese founders, and what they told me is sometimes when they start their consumer products, they actually start selling outside China first. And I say, Why? You have such a big market and you know the market. And they say, Because the Chinese market, they love to buy products that are already well recognized in the Western world. And so you want to build the product and the brand first in the rest of the world, and then you come back to China. Otherwise, in China, you would be one of many knockoffs, and it would just be a price war. And so I didn't know, we just decided to launch China, and so we were just doing it, but I didn't understand that for us it was the right time to get into China because now we're already selling in 35 countries, we are well recognized, we sponsor Charles Leclerc, now work with Ferrari through Charles. That is a very well recognized brand. Many athletes use us. Elon spoke about us. Mark Thackenber spoke about us. Elon is really big in China, right? And so you have a level of trust where you command a certain price. But if we were doing the same thing five years ago, we would be destroyed by a knockoff that is $500 cheaper.
00:33:27 · Harry Stebbings, Matteo Franceschetti
[00:33:27] S1: I had Hugo Barra on the show, who was a former exec from Xiaomi, and he taught me something very important in Harbaugh, and I'm intrigued if you agree with it. He said you need to be one of two things. You either need to be price king, which I'm the cheapest, or feature king, which is I'm the best. Yep. Do you agree with that? [00:33:42] S0: So I agree and disagree. I agree that you can be the best price, that's not what we wanna be, or I would call it the best product and brand. Not that it's so much about features, but the brand is really important. And so being a brand that is associated with, again, the Charles Leclerc, with Elon Musk, people they really respect, they want that. And the same happens in Europe, right? I grew up, and I remember when I bought my iPod. It was impossible, and I was buying a secondhand iPod on eBay back then, but because Americans were having this product and it was not being sold in Europe yet. There is that kind of former. I completely agree. [00:34:20] S1: I listened to A Thousand Songs in Your Pocket in a beautiful poster. Did Samsung and all the others did A Thousand Songs in Your Punky Device too? It was the same in was many [00:34:30] S0: 100% the same. And Steve Jobs has always been a genius because he was coming with a great product after everybody else, sometimes one, two, three years later, but he was nailing the branding, the packaging, and the peach, and everybody and also the look, and everybody wanted it. [00:34:46] S1: What do you think people don't consider about consumer brand enough?
00:34:46 · Harry Stebbings, Matteo Franceschetti
[00:34:46] S1: What do you think people don't consider about consumer brand enough? [00:34:49] S0: The brand, particularly, I think, in Silicon Valley. I think in Silicon Valley, we understand really well building the best product, but I think we underestimate the importance of brand. Then a great brand with a shitty product goes nowhere. So first is product, but then you need to be able to build a brand that is aspirational and can command a certain price. [00:35:09] S1: Charles Leclerc is a phenomenal talent, for those that don't know, in the racing world, one of the best. How does that come to be? You get a DM from Charles saying, I love Eight Sleep, do you wanna sponsor me? How does that come to be?
00:35:09 · Harry Stebbings, Matteo Franceschetti
[00:35:09] S1: Charles Leclerc is a phenomenal talent, for those that don't know, in the racing world, one of the best. How does that come to be? You get a DM from Charles saying, I love Eight Sleep, do you wanna sponsor me? How does that come to be? [00:35:21] S0: Yeah. Well, it's pretty incredible, the story. So we got connected. So Charles already had our product for two years before we met, and we didn't even know. And that is the best way, obviously, for us to start the relationship. Then I'm an F1 and motorsport obsessed fan. Like, obsessed. I know everything since when kids racing go karts. So I knew about Charles six, seven years before he got into F1. And three years before F1, he was racing two years before he was racing in F2. And at the time, I reach out to his team in F2, and I say, I'm a huge Charles fan. I think you will make it big. Is there any way where Eight Sleep can sponsor him? But at the time, Eight Sleep was very tiny, and so we couldn't find any real deal. But when I met Charles, I still had the email, where I was not going back and forth with his team, and I wanted to sponsor him before he even made it to F1, not to Ferrari, before F1. And then I shared with him our vision, our medical vision. He really cares about that, and he's actually really into AI. He's incredible. Super sharp guy, super into AI. And we had dinner together, I think it was the Wednesday of the GP in Miami. And before the end of the dinner, we said, We're work together. And the deal, since then, was done in a matter of days. [00:36:34] S1: Can I ask how much did it cost?
00:36:34 · Harry Stebbings, Matteo Franceschetti
[00:36:34] S1: Can I ask how much did it cost? [00:36:36] S0: No, I'll say I No, you can't. Can't What I can tell you is that Charles invested in Eight Sleep. I was honestly, first, really happy because he was one of my heroes, but second, I think that proves what I was telling you, smart he is also as an entrepreneur and a businessman. [00:36:54] S1: Can I ask you, I think a lot more celebrities and athletes are obviously trying to be investors and wanting to invest today than ever before? What would be your biggest advice to other founders on how to get them and how to get the most out of them as a founder of a company? [00:37:07] S0: Well, we made a lot of mistakes with that too. And now it's probably four or five years that we invest in sport, because obviously we have charts, but we were sponsoring the UAE team with Pogacar. Pogacar was installing our product every single night at each hotel of each stage of the Tour de France since last year, and we didn't even know. He won last year, and then he won this year. So they reach out after the first year and say, Look, Pogacchar did everything on his own. We bought the product, now everybody in the team wants it. Can we do something together? So we sponsor the UAE team this year. And then we are in padel with Arturo Coello and Federico Cingottos, who are number one and number three in the world. We are in tennis, where we sponsor a lot of coaches, including the coach of Sabalinka and many others. And there's a lot of top, top athletes that use our product. It's not public.
00:37:07 · Matteo Franceschetti, Harry Stebbings
[00:37:07] S0: Well, we made a lot of mistakes with that too. And now it's probably four or five years that we invest in sport, because obviously we have charts, but we were sponsoring the UAE team with Pogacar. Pogacar was installing our product every single night at each hotel of each stage of the Tour de France since last year, and we didn't even know. He won last year, and then he won this year. So they reach out after the first year and say, Look, Pogacchar did everything on his own. We bought the product, now everybody in the team wants it. Can we do something together? So we sponsor the UAE team this year. And then we are in padel with Arturo Coello and Federico Cingottos, who are number one and number three in the world. We are in tennis, where we sponsor a lot of coaches, including the coach of Sabalinka and many others. And there's a lot of top, top athletes that use our product. It's not public. [00:37:55] S1: But what would you advise founders on lessons from how to get great talent? And then it can be celebrity investors too, pop stars, DJs, you name it, and how to get the most out of them, or do they just not have value?