Dr. Wei-Shin Lai
On Creating A Drug-Free Sleep Solution
AcousticSheep
from Erie, PA
started June 2007
2
Founders
20
Employees
1.35M
alexa rank
2.66K
followers
2.86K
followers
1.47K
subs
market size
$81.2B
avg revenue (monthly)
$357K
starting costs
$42.1K
gross margin
49%
time to build
11 months
average product price
$700
growth channels
Advertising on social media
business model
E-Commerce
best tools
Instagram, Twitter, Verifigator
time investment
Full time
pros & cons
32 Pros & Cons
tips
7 Tips
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Start A Sleep Products Business

Hello! My name is Dr. Wei-Shin Lai and my husband’s name is Jason Wolfe. Together we are co-founders of AcousticSheep, LLC. We started this company 14 years ago as a drug-free solution to common sleeping difficulties.

Our flagship product is called SleepPhones®. They are the world’s first and most comfortable headphones designed specifically for sleeping. Based in Erie, Pennsylvania, we manufacture and ship seven different versions of SleepPhones® to customers across the globe in search of a safe, drug-free solution to common sleeping challenges. In addition to the hardware products we also have two software applications (The Beginning by SleepPhones® and Sleep Sounds by AcousticSheep®) designed to deliver soothing, sleep-inducing bedtime soundtracks, complimenting our SleepPhones® perfectly.

We have sold well over one million pairs of SleepPhones® headphones globally since incorporation and on all seven continents (yes, even Antarctica!).

on-creating-a-drug-free-sleep-solutions

What's your backstory and how did you come up with the idea?

Before I was the CEO of AcousticSheep LLC, I was a family doctor. I would regularly receive patient phone calls in the middle of the night and found myself struggling to get back to sleep. Listening to relaxing or meditative music helped, but traditional over-the-ear headphones were way too bulky to wear in bed and earbuds were extremely uncomfortable. I began searching for solutions and found that there weren’t any headphones on the market specifically designed to be used in bed, so we decided to make our own.

We began working on different designs at our kitchen table in the evenings after we got home from our day jobs. My husband, a video game designer at the time, would solder the speakers while I sewed different styles of headbands. My “aha” moment came the first night we had a working prototype. I fell into a deep sleep quickly and woke up feeling incredibly refreshed. It was then that I knew we were on to something and decided to test them by selling them online.

Initial feedback was incredible. One lady was able to come off of sleeping pills after taking them for 10 years. Another saved her marriage because she could finally sleep in the same bed as her snoring husband. We knew we were on to something after hearing these success stories, so we decided to keep going.

Take us through the process of designing, prototyping, and manufacturing your first product.

We sewed and soldered the first 500 SleepPhones® headphones at our kitchen table. My husband would solder the speakers while I sewed the headbands. When we realized that we had a product that we could potentially build a business around, we knew the next steps would be to patent the design and establish a manufacturing process.

At first, we found some sewing and soldering contractors on Craig’s List. This worked for two years when we outgrew the ability to manage a whole bunch of contractors. Then we found a local contract manufacturing factory to help with the sewing. It was actually really difficult to find because there aren’t many sewing factories left in the USA. We hired neighbors part-time for customer service, packing, and shipping, working out of our garage and basement. We funded these initial patent efforts with our savings, and we’ve been profitable from the start because we only bought what we needed.

Here’s a photo of SleepPhones version 1 headphones!

on-creating-a-drug-free-sleep-solutions

A few years later, we released our first software product - a mobile app called ‘The Beginning’. This product bundled four of our favorite (at the time) full-length sleep tracks into one place for convenient listening. We designed the app to be very simple from a UI and UX perspective, providing only a few options for user interaction.

We took a step back from software product development for several years to focus on new additions to our SleepPhones® product family. In the summer of 2019, we came back to the digital space with our newest offering - Sleep Sounds by AcousticSheep®. My husband’s background in video game design inspired him to create artificial intelligence that uses listener input to both create and recommend specially crafted soundscapes designed to put listeners to sleep. This product is significantly more complex than our first mobile app, and we faced several challenges when it came to developing a UI and UX that was not cumbersome to the user. Since its initial release in the Summer of 2019, Sleep Sounds by AcousticSheep has become increasingly streamlined and user-friendly, incorporating an in-app sleep timer, personal and community stats page, and main home page that displays the specifics of the soundscape a listener is hearing.

Describe the process of launching the business.

We started the business very organically. We went to Jo-Ann Fabrics to buy their on-sale fleece. We ordered speakers from Mouser.com. My husband bought a Singer sewing machine for me for my birthday, and I bought him a Weller soldering iron for his. Getting off the ground was relatively inexpensive. The first major investment was filing for a patent. We used our savings to pay for that. We’ve been profitable since the beginning because we just bought what we needed.

We set up a website, and even before we were done putting it together, someone stumbled upon it and emailed me. I asked him how he even found the page - there was no shopping cart, and we didn’t even advertise it. He said that it was because the name just seemed to fit. He typed in SleepPhones.com on a whim! That was all the validation we needed for our product name. When we made him one, he loved it. Then the orders started coming in from all corners of the world. Since we were hand-making each one individually, we were busy just fulfilling orders along with working in our day jobs.

We’ve crowdfunded two products through the Kickstarter platform - SleepPhones Effortless™ and SleepPhones® ASMR Edition. Our Effortless™ product was launched in 2015 and features wireless Bluetooth® audio and charging capabilities. Our customers were extremely excited about this product, helping us reach our Kickstarter goal of $10,000 in under 2 hours. SleepPhones®: ASMR Edition was released in 2019 and features 8 hours of exclusive audio content from 16 of YouTube’s top ASMRtists. This product has been wildly popular among ASMR enthusiasts and was completely funded in two weeks.

One of the things we’ve learned is to follow our gut rather than fully trusting “experts.” Many people speak very confidently and want to sell you their services. If they didn’t really listen to you when you were telling them your needs, they probably can’t really help you.

Over time, our success has attracted people who want to either ride our coattails or push us down. Knockoffs are a problem, but we can also choose to view it as flattery. Ultimately what motivates us is simply that we are really helping people throughout the world get better sleep.

Since launch, what has worked to attract and retain customers?

The steps we’ve taken to increase website traffic and sales have been very organic in that we’ve established a strong affiliate network, investing in PR for earned media, and our marketing team does a fantastic job at keeping our customers updated on the latest sales and special offerings via our email and social media channels.

We’ve found that the most effective way to bring existing customers back is to deliver quality, life-changing products. After that, offer world-class customer service. The results truly speak for themselves when it comes to the products we produce and sell, and the fact that we have a global customer base and have sold over millions of SleepPhones® headphones all across the globe speaks volumes for the value we deliver to our customers.

How are you doing today and what does the future look like?

Distribution: We distribute our products through a global network of distributors and resellers.

Operations: We run all of our operations out of our Erie, Pennsylvania headquarters. Because of the pandemic most of our employees currently work from home, but our warehouse and customer service departments come in every day to ensure that orders are being fulfilled and customers' needs are being met.

Whatever you can do on a small scale to prove the concept and make the first sales will critically guide your product development.

Plans: We are transitioning from our focus as a hardware company to incorporating more software-based products. Our development team created an artificial intelligence called Sleep Sounds by AcousticSheep® designed to help the world figure out what types of music and sound technologies help people achieve the best sleep possible.

Short term/long term goals: In the short term, we’re focused on building a committed following behind our newly released digital product, Sleep Sounds by AcousticSheep®.

Our long-term goals have remained the same since we became an official company back in 2007 - we want to create a world of happy, healthy, well-rested people with our comfortable headphones, allowing for easy sleep and enjoyable exercise.

Through starting the business, have you learned anything particularly helpful or advantageous?

I mentioned this earlier, but I will again because I truly think it’s worth repeating. One of the most important things we’ve learned is to follow our gut rather than fully trusting “experts.” Many people speak very confidently and want to sell you their services. If they didn’t really listen to you when you were telling them your needs, they probably can’t really help you. We’d paid good money and spent time on “expert” advice that didn’t help.

Not having a background in business and just bootstrapping the company has helped us stay focused on what’s most important: serving our customers, not any external shareholders’ interests. I also believe that both my background as a family doctor and my husband’s background in video game design allowed us to approach this business idea uniquely. It’s hard to tell how we would have approached things had there been competition in the market already, but when we first started making SleepPhones® nobody else was doing anything remotely like what we were. Competition in the marketplace is always a good thing, but being the first to create a product like this really helped us keep our customers at the center of every decision.

What platform/tools do you use for your business?

We use multiple Google products, Gmail, Google Drive, etc., for external communications. For internal communications, we use a custom internal CRM, chat, and wiki.

Productivity is managed through a program we developed in-house. Online orders are handled through Shopify, and we use Outreach for sales prospecting and pitching. PR efforts are handled through services provided by Cision.

What have been the most influential books, podcasts, or other resources?

I’m constantly looking for new perspectives and sources of inspiration that I can apply to our business model. Some personal favorites are Hooked by Nir Eyal, How to win friends and influence people by Dale Carnegie, Crucial Conversations by Kerry Patterson, and Good to Great by Jim Collins.

Advice for other entrepreneurs who want to get started or are just starting?

I always advise people to start small and keep their day job. You don’t really know how big your market will be, and you can’t be sure that you have the perfect product for the need. Whatever you can do on a small scale to prove the concept and make the first sales will critically guide your product development. Check your ego and really listen to constructive feedback to understand customer needs.

Are you looking to hire for certain positions right now?

We are looking for a science geek who can write.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Dr. Wei-Shin Lai,   Founder of AcousticSheep
Pat Walls,  Founder of Starter Story

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