0:00 spk_0
All right. Welcome to a new episode of Opening Bid Unfiltered. I’m Yahoo Finance executive editor Brian Sazi, and like I always say, this podcast, it will make you a smarter investor. And I, I find it somewhat funny. I’m about to talk to my next guest please. I don’t get a lot of sleep, and that is really by design. I don’t have trouble sleeping. I just don’t get a lot of sleep. I’m just always up watching the stock market, waiting for breaking news, but I’m excited to talk to our next person, uh, our next featured guest here.That’s 8 Sleep co-founder, uh, and CEO Matteo Franceschetti. Matteo, good to see you. Uh, I appreciate you coming on. It feels like I’m always seeing your ads for your sleek, elegant 8 Sleep pod and system on my Instagram feed. So I’m glad we’re finally able to do this. I appreciate it.
0:43 spk_1
Well, thank you for having me. I’m super excited to be here.
0:46 spk_0
All right, so full disclosure, I have not, I have not tried the pod, but I know a lot of CEOs, uh, that I talked to, they are using this, um,What, what did you realize sleep was broken and it needed to be fixed in some capacity?
1:03 spk_1
Well, the, the first thing I started thinking is why Elon Musk is taking me to Mars and I still spend a third of my life on a piece of dumb foam. That is how everything started, right? At the end of the day, if you’re gonna live 100 years, you’re gonna spend 30 years of sleep, and we just pretend to go to bed, lie down on a piece of foam, and wake up 8 hours later fully refreshed. That didn’t make sense to me.
1:28 spk_0
What did you misunderstand? So you’re building this company, and it’s not like you created this overnight. Uh, you founded it, what, uh, 2014. Is that, is that 2015?
1:36 spk_1
Yeah, we launched in 2015, so 10 years
1:38 spk_0
ago. So 10 years ago, what did you, you know, as you’ve been developing eight sleep, what did you, what was misunderstood about sleep that you’ve been figuring out?
1:48 spk_1
The importance of temperature, and in, in two dimensions, first is what customers really want, so 80% of couples, they fight around temperature, so you have a partner and the partner wants it warm or cold, and you want exactly the opposite, and so every night you kind of fight about that, and that is the consumer facing part. And then there is plenty of medical evidence that temperature is the biggest factor impacting your sleep quality, uh, for normal people outside sleep medical disorders.
2:17 spk_0
Do you get a lot of sleep?
2:20 spk_1
A lot. I, I slept 8 hours and 33 minutes last night. Oh
2:24 spk_0
jealous. I don’t know what that feels like. I mean, what do you, but do you, and we’re gonna get into the business. I mean, I can’t help myself, because I’m, I’m very fascinated by the, the, the sleep fitness industry that you are, are pioneering. Um, yeah, do you plan sleep as you plan your workday? Do you know when you’re going to bed? I mean, how to take me through your sleep process.
2:45 spk_1
Yeah, I’m obsessed, and by the way, I just came back from China, where I was for work, and I have zero jet lag. So everything is designed around my sleep and my life. But um, yeah, last night we went to sleep very early because we were still a bit jet lagged. We went to sleep at 8:30 p.m. very, very early.And then, uh, we woke up around 6 6:30 a.m. this morning, but I could have kept sleeping. I just pushed myself to wake up, uh, because I had to start the day, but I could have slept 9 hours.
3:18 spk_0
This is a fascinating time to do what you do. Uh, you mentioned you’re focused on temperature, but I look at my, my friends over at the AG1, for example, they just came out with a sleep supplement, and they’re not alone. IIs there sleep overload? Like, do we need all of this stuff, or is, is more of the merrier? Should I be taking the AG1 sleep supplement and sleeping on your, your, your 8 sleep uh pad or, or mattress?
3:45 spk_1
Yeah, I mean, one thing I like to say is every night you take the equivalent of a trip from New York to Milan.8 hours is what it takes more or less from New York to Milan, right, so it’s a pretty big deal. And so spending, I don’t know, 30 minutes to prepare that journey, that trip every single night, is fairly important. Then in our case you have to do nothing, you just go to bed and we do the work for you, call, call us the, the sleep buckler.And then there are other products that maybe you might want to take or not to help you fall asleep or to stay asleep, but I think investing 30 minutes or a few bucks every single day to maximize 8 hours of your day is a pretty big deal.
4:30 spk_0
The, the industry is so, I mean, the, the sleep industry, it’s huge. You mentioned these foam mattresses, and there’s other companies uh that compete with you, and there’s supplements. Has it been easy to raise money?
4:43 spk_1
Well, it really depends, meaning in different phases of the company, it was very easy in the early days, then it became extremely difficult because a few investors wanted to invest in uh consumer tech. And then in the last year it has been easier because the company got to a point where we have so many metrics about our margin, our growth that it’s just clearly a business judgment.
5:07 spk_0
Do you view yourself as uh more of a hardware player software? Cause there’s a whole software component to what you do as well.
5:14 spk_1
Yeah, at the end of the day, it’s all about AI and data. That’s what we do. We are becoming one of the largest sleep databases in the world and based on the data we collect, we optimize the sleep of millions of people.
5:25 spk_0
How, how will AI change, you know, the, the product roadmap for, for AI sleep over the next few years?
5:33 spk_1
Well, it’s really incredible what we start seeing, some of our models are literally becoming smarter than us because they’re able to triangulate data um across multiple dimensions, but on one side, AI is making us better at optimizing your sleep, so we change your temperature 30 to 100 times per night.Based on different variables, and so we are becoming much better than that. But more than anything now there are hundreds of Matteo on the cloud, we call them a digital twin, and these digital twins are simulating my life for the next 10 to 20 years and coming back every day to me with a recommendation about what I can change to live longer.
6:11 spk_0
Where do you think the next big breakthrough is for 8 sleep? Is it the, is it the, the software on the app, or is there a new hardware component? I, I, for example, now you recently put like a button on, on the, on the cover for the mattress, and that’s, I was reading reviews. I’m like that was like a big deal. You don’t have to pick up your phone, cause we were picking up our phone, and I guess that defeats the purpose of trying to get some sleep, but now you put a bed, uh, a button on it, and that was a big deal. Like what’s next that on that frontier?
6:38 spk_1
Well, it’s both ardor and software, where you will see the biggest breakthroughs is definitely software with AI. I think we will start saving more lives, we already saved a bunch of lives, um, but we’ll save more. We will extend the life of people, um, just imagine that you will have a 24/7 PhD level doctor reviewing your data in real time and providing this advice to live longer.But also on the hardware side, we are working on different types of products that will help you to um again improve your sleep and save your life.
7:13 spk_0
I, a lot of my friends, they knew you were coming on, so they hit me with some questions. I’m just gonna fire them at you. It’s really more on, they’re just interested, I mean, they’re really getting into sleep. Um, number one, you know, you’re getting a lot of data. What, what’s the one insight that contradicts popular sleep advice?
7:30 spk_1
Well, the biggest one is that uh there is this um we just discovered and we published a study where the phone is not a problem for you, using the phone before going to bed. It’s not the phone itself the problem, it’s the content you consume. So if you’re on your phone talking to your best friend about an amazing memory, it’s completely fine, it’s not gonna disrupt your sleep, or instead if you’re on your phone fighting with your boss and risking to be fired.Then probably you will not sleep very well.
7:58 spk_0
Well, speaking of bosses, that’s my, that’s my next one. What do, what are these CEOs and athletes, what are they getting brought about sleep? I can’t tell you, Matteo, how many CEOs that I talked to, uh, they’re still not sleeping. They remain, they are that power CEO where they’re not like you. They’re not getting 8 hours and 30 minutes of sleep. I mean, they’re getting 3 hours, they’re sending emails at midnight, and they’re winging it the next day.
8:20 spk_1
Yeah. Well, so I, I, I like to say sleep deprivation is the new smoking. I think that, that is where we are. Then if you go back to the 90s and the early 2000s, there was this macho concept where, no, I, I’ll sleep when I’m dead.I think now that things are really changing and CEOs, they are taking care of their health because they understand that to really have cognitive performance during the day, they need to take care of their nutrition, their fitness, and their sleep. So now we have and this is public customers like Mark.Zuckenberg, Elon Musk, all of them sleeping on our product. But you should assume that probably 80 to 90% of CEOs in Silicon Valley use our product every single night to maximize their sleep performance. So it’s a trend that is changing, and there is this big tailwind that is pushing our growth.
9:08 spk_0
What was it like when you heard that Elon Musk and Mark Zuckerberg were using yourproduct?
9:12 spk_1
And, that was pretty cool. I have to admit it. I’m a big fan, uh, we are big fans of Elon and everything he has done, and so him disclosing publicly that he likes the product, uh, was pretty exciting.
9:24 spk_0
Youhave a, and you have a lot of data. I mean, how do you think about protecting so much of this, I, really important data, I mean, you really know.I mean, how we’re spending essentially more than 8 hours of our lives lives every day.
9:39 spk_1
Yeah, I mean, if you keep sleeping on our product for a very long time, we will be able to see directionally all your trends, and so our technology will be able to predict strokes, we’ll be able to see if you’re developing sleep apnea, we will be able to see if you have arrhythmia. So the end goal.Here is to transform your bed with our technology in a health machine and really unlock the future of preventative health. And so again, our goal is to compress your sleep. So what if you could sleep only 6 hours and get more rest than when you were sleeping 7 or 8? And second is how can we unlock the future of preventative health and help you live a longer, healthier life.
10:16 spk_0
Is thatthe next frontier for industries like yours, and I, I.You know, I look at what’s happening, for example, over at whoop, you know, I’m a, I wear the bootstrap, and now I can have it linked up to my medical records. Is that the next frontier where products like yours are linked up with my doctor’s office, and they, to your point, can offer preventative things, like if they see me sleeping differently, they can offer maybe medicine and get out in front of any potential problem.
10:42 spk_1
Yeah, absolutely, and they will see two things. First, OK, they can see you sleeping differently and so they can provide recommendations.About what to change, but the other thing is they also will also see trends about your cardiovascular system and your breathing, um, rate, and there is where they can help you um with recommendations and insights. The other thing we, we did, uh, and this is public, we filed for FDA approval, so we are entering into the sleep apnea space.Our device is able to track and tell you immediately if you have sleep apnea, and then we develop certain technologies to also mitigate sleep apnea. As you know, there are 80 million people with sleep apnea diseases, um, and that is a fairly dangerous disease.
11:28 spk_0
No, really, I mean, when do you, when do you find out about approval? How does, how does that work?
11:32 spk_1
So we started the process, so now we have to go through that with the FDA and uh we’re running er additional clinical studies, we already run a bunch and um we then, we should be able to get an approval fairly fast.
11:46 spk_0
That’s cool.Uh alright, hang with us, Matteo, we’re gonna go off for a very short break. We’ll be right back on opening bid unfiltered.All right. Welcome back to Opening bid Unfiltered, talking all things 8 sleep. Uh, Matteo, uh, your, your product is cool. I definitely, I definitely need to try it cause that is one of my focus points this year in 2026. I need to start getting to bed at a reasonable time and staying asleep. Um, I find your business, you actually, you co-founded this with your wife.
12:17 spk_1
Yeah.
12:18 spk_0
How does that, how does that, how does that work? How do you, how do you separate these two things?
12:24 spk_1
Yeah, we have now our, our own tools. So for example, everything business is on Slack, but everything personal is on WhatsApp.Um, and then we have rules like, um, so I think about work all the time, and so sort of and in her case, sometimes I don’t know, 9:30, 100 p.m., she doesn’t want to think about work anymore. And so she said, look, you wouldn’t be talking about work with, uh, with, um, one of the other executives, right? It’s not that you call them at 10:00 p.m. unless there is something very, very urgent. And I said, yeah, that’s true, but I can.Still slack them. And so sometimes we’re on the couch watching TV and I’m slacking her from my phone and I can hear her phone vibrating, but I cannot talk about the topic because I need to be respectful. So we have all these kind of things, or sometimes I might be on Slack pushing to get something done faster and in the meanwhile I’m, I’m WhatsApp asking what we are going to have for dinner. So.You really come, no, we have two compartments. Uh, one is business and one is personal life.
13:22 spk_0
Is that, what is the benefit of, of working with your significant other? I mean, in a company, uh, you, you’ve built this company from scratch. Do you view it as your secret weapon versus other competitors who may not have this dynamic and, and a dynamic that doesn’t work as well?
13:39 spk_1
Absolutely, and I’ll tell you why, you have two co-founders that after 10 years, they’re still living in, in the same house and they, that’s a good thing, the same place, and uh they’re thinking about that 24/7, right? By now, normally co-founders have reached a point where they, you know, they have different lives, they live in different places. Here is like literally like day one. We’re still here pushing every single day.
14:02 spk_0
Why are you so passionate about the sleep industry? I mean, is this something you studied in in school? Did you see yourself getting into it?
14:09 spk_1
No, I actually used to be a lawyer. I was in finance as a lawyer working for uh two very large law firms, but I used to be an athlete when I was a teenager. I have always been in performance and recovery, and now I’m really into doing everything I can for my health and longevity.And if you zoom out, health is really based on three pillars. There is sleep, there is fitness, and there is nutrition. By at the end of the day, sleep is the foundation because if you are sleep deprived, you will crave junk food and you will not have the energy to exercise.And so sleep is key for me and my view of longevity andhealth.
14:46 spk_0
You mentioned that you, uh, you visited China, and this has been an interesting, uh, 1218 months, and you know, China tariffs, you name it, a lot of uncertainty. I mean, how is it like dealing with suppliers on the ground nowadays, Especially at a company at a, at a young age like yours.
15:01 spk_1
Yeah, it’s much more normal than probably what many people think here in the US, meaning, um, uh, no, the, the, the working relationship, we have a team there. I lived in China 10 years ago when we had to start the team, uh, and some of those people are still with us. So for us, uh, the, the relationship has been very successful. Obviously there were changes in the tariffs, but we were able to respond to that and the business is stronger than ever. Can
15:26 spk_0
you makeWhat you sell in the US, I mean, I see a product like yours. I mean, it’s a premium product, it’s got a killer app. I mean, could you just make everything here? Does that manufacturing capacity exist?
15:38 spk_1
No, and, and the reason is the supply chain, uh, meaning, can, yeah, can you have a factory here and build the, the, the same. You could, but the, the whole supply chains and all the components, they will still come from China. Um, and so there is where it’s very tricky to move, um.Part of our production here, and then over time we will be, we will do it and we will be even more American
16:03 spk_0
based. How do you see this all at the end of the day shaking out? Uh, do you see consolidation in this industry? Like I, well, I’m, I’m on the outside looking in, but I see something like you, why not join forces with uh, a supplements company? I mean, you just full on dominate every area of the sleep industry. Is that where this is all headed?
16:22 spk_1
Well, you will see some companies doing really well, uh, like us, potentially going IPO on their own. Then you will see others consolidating and and merging together, so, uh, I think it will be a mix of both.Uh, but I think there is room for probably 2 to 3 companies to be really big and, and be public companies.
16:40 spk_0
Would you be, I mean, just think, does an IPO, and I’ve been getting a lot of different answers from, from startups. I mean, uh, startup founders, um, on the IPO question. I mean, do you want an IPO? Does that still have an appeal to you?
16:53 spk_1
It does, I think for a consumer business it still makes a lot of sense because you are perceived as a brand that people can really trust, uh, and it also brings discipline to a company, um, just by following the, the, the, the typical public company standards, so I.I think it’s a good thing to do. Um, you just need to be ready and it needs to be the right time. We, we don’t need to rush it. At a certain point, I think it will be part of our goals.
17:18 spk_0
The key to it, I mean, you now have, I mean, you have annual recurring revenue via the app. I mean, that’s a, that’s a huge selling point, right?
17:26 spk_1
Yeah, yeah, yeah, we have the hardware component and then we have the recording.Uh, software component, and so the business is pretty well diversified.
17:34 spk_0
I, I have, I have, uh, at the end of the podcast, I always leave a little bit of a, around the horn session. I got a bunch of fun questions for you. I gotta ask. I’m, like I said, I’m, I’m obsessed with the sleep fitness industry. Um, one, Matteo, what’s one prediction about sleep or health that sounds absolutely crazy today, but you think will absolutely happen?
17:53 spk_1
Well, as the companies like Neuralink will start implanting chips in our brains, a part of our job will be to develop software for sleep for those chips.
18:03 spk_0
Hold on a second, I didn’t, I didn’t expect that one. So you’re, you think Elon is going to really, I mean, he has implanted chips. I mean, he’s driven some amazing stories initially with this. I, that’s where we’re headed.
18:16 spk_1
I think so. I, I think you should expect that in 20 years from now, millions of people will have chips implanted, and uh AISleep will be developing software for sleep enhancement that can just be uh downloaded in those chips. OK,
18:31 spk_0
hold on, so let’s say we’re 15 years from now, I have one of these neuralink chimps in my head, by then I’m like, I don’t know, I’m probably over 60, let’s just say. Uh, you will be able to send me a pulse to my brain, saying, Brian, get your ass to sleep. Is that, that’s, that’s what you’re telling me.
18:46 spk_1
Yeah, I, I think you will be able to get the maximum sleep recovery in 4 hours through a sleep optimization software that is installed on your chip.
18:56 spk_0
The future cannot get here quick enough. Uh, another one for you, uh, for me, I just can’t, like, it’s gonna speed up time like we need this stuff. I need this stuff. Um, what advice would you give to founders who are building in categories that people underestimate? I was reading the backstory on you and, and 8 Sleep and what you’ve been building, and people told you know a lot. You know, they think they, they thought you were selling a mattress, uh, they didn’t really get the product initially.
19:20 spk_1
Yeah. Well, you need to be contrarian and right. When we started working on sleep, sleep was not a topic at all, right? It’s very similar to what you were saying, people were saying, oh, I’ll sleep when I’m dead, I, I can work, now, I can function with only 4 hours of sleep. And so you need to be contrarian and see things that people, other people don’t see, and they believe they are actually crazy, but then you also need to be right, and so they need to manifest as you expected over time.
19:47 spk_0
What country is getting the best sleep and why do you think that’s the case?
19:52 spk_1
Uh, Is Australia a specific area in Australia? I think it’s called the Golden.The golden something, and um and there is where we, we see the highest uh sleep uh quality score, sleep fitness score.
20:09 spk_0
Whatdoes a perfect night of sleep even look like?
20:12 spk_1
Well, it’s somewhere between 7 to 9 hours, honestly 8 to 9 hours if it’s perfect. You get 15 to 20% of bedtime in deep sleep, and 20 to 25 in REM, and very little interruptions.
20:26 spk_0
Uh, lastly, Matteo, if, if we’re having this conversation 12 months from now, what else will have 8 sleep developed, whether it’s on the app or the hardware fronts. You have the covering that goes off the mattress, you have that cool looking pillow. Uh, I’m gonna call it a pillow topper. I apologize, it’s not the exact right term. You’ve got all these new functions, uh, in the app. What else is coming?Yeah,
20:49 spk_1
there will be new outdoor products that keep enhancing your sleep and health. There will be new software and AI driven features that can really help you live a longer life, so this concept of digital twin, and uh we will be an FDA approved device for detection and mitigation of sleep apnea.
21:07 spk_0
Well, good luck on the road ahead. Uh, again, this is an industry I am fascinated with, Matteo. Uh, I look forward to staying in touch, and I appreciate you taking the time, and I don’t get to sleep, and I gotta get to sleep too. I mean, for a change. I, I appreciate it.
21:19 spk_1
Get some sleep tonight.
21:20 spk_0
Yes, I will. I will, Matteo. Thank you so much. And that is it for the latest episode of Opening Bid Unfiltered. As always, I thank you for tuning in. Continue to hit me with all those likes on YouTube and all the feedback on social media and the podcast platforms. I love the feedback. It makes me better at doing these interviews. We’ll talk to you soon.