Transcript of the interview with Alexandra Zatarain, Co-Founder and VP of Brand and Marketing of Eight Sleep for The Failure Factor Podcast.

Megan Bruneau: Alexandra, welcome to the show.

Alexandra Zatarain: Thank you for having me.

What is Eight Sleep?

Megan Bruneau: What is Eight Sleep for people who don’t know what it is?

Alexandra Zatarain: Yes, of course. So, Eight Sleep is what we define as the world’s first sleep fitness company. Essentially, we build technology to help you sleep better. We believe that technology is actually an ally in helping us optimize our sleep, and that it should be giving us the healthiest and happiest lives if we’re all sleeping better.

How Eight Sleep Optimizes Sleep

Megan Bruneau: Amazing. Okay, so what does that specifically look like? Especially for someone like me who is not a great sleeper, an insomniac all my life, I’ve tried every possible sleep aid there is out there. I rarely get to sleep through the night. So what kinds of things does it do to optimize sleep for people like me?

Alexandra Zatarain: Yeah. So the foundational part of it is that it seeks to understand who you are as a sleeper first. What we understood at Eight Sleep when we started building the company is that every sleeper is different. And every single night of sleep that you have, even as your own person, is different from each other.

So we’ve created a product that you can add on to any bed. And without any wearables, without having to touch any buttons or charge anything, it’s actually going to seamlessly track everything about your sleep and your key biometrics, including your heart rate at rest, your respiratory rate, your heart rate variability, your snoring, obviously, your sleep phases—deep sleep, REM sleep, light sleep, how long you sleep for, etc. With that information, it’s not only going to tell you how you’re sleeping, which is something wearables can do, but it’s taking that into account to optimize the environment you sleep in. So it manages the temperature of your side of the bed to your preferences as things change in your environment, and it changes with your sleep phases as well.

And we also manage the elevation of your bed. So if you’re snoring, it’ll mitigate that snoring through elevation. If you need a slightly different position to sleep better, it’ll just start everything happening in real time.

Megan Bruneau: Amazing. I love how different that is from some of the wearables I’ve tried where you get the sleep score, but then you just feel guilty. Like you’re just like, okay, cool. I don’t know what to do with this. I guess I don’t sleep as well as I thought I did, but it sounds like this actually, you know, there’s an actionable step afterwards where it’s like, “And we’re going to fix things for you with this suggestion.”

Alexandra Zatarain: Yeah, that’s ultimately our goal. We believe that to make a difference in health, we have to take action for you. Information is not enough. It is really important. You cannot improve what you don’t measure, but you have to go beyond that.

Megan Bruneau: Amazing. And you said, is it something like you put on top of your mattress, or is this a mattress itself?

Alexandra Zatarain: No. You can just add it to any mattress, any bed. So it’s like an accessory, like a mattress cover. We also have a base that does the elevation, but everything is designed to just fit with your existing set. Obviously, you don’t have to replace everything that you have.

Eight Sleep’s Product Evolution

Megan Bruneau: Cool. Was that kind of like your original hero product, or what was the first one that you came out with?

Alexandra Zatarain: It wasn’t that dissimilar from what we have today, in the sense that the platform itself was already doing the same thing. The very first product that we introduced back in 2015 — so we’ve been doing this for a long time — was tracking your sleep and your biometrics. That was the first step, like, how do we create all that platform so that we can bring sensors into the bed and we can basically replace what a wearable does at night?

Fast forward four years later, we introduced the Pod. So the Pod is the product that we sell today that we’re best known for, which does not only the tracking of your body, but then also the temperature regulation, both heating and cooling to your preferences, each side of the bed separately, doing it in real time. Now, more recent versions of it do snoring mitigation and elevation adjustment. So it’s the same platform that we’ve continued to build on and improve on.

The Journey to Founding Eight Sleep

Megan Bruneau: Amazing. Okay, well, let’s go back to 2015. Where were you at that time?

Alexandra Zatarain: So we started the company in 2014. I was a 24-year-old or something like that, very naive, who thought, “Well, this sounds like an amazing idea. And I like my co-founders. I think they’re smart. I think we’re all passionate. Let me just jump in. Let’s do this thing that’s called entrepreneurship.” Before that, I was working at a financial technology company in New York, so I was in a very different field.

But yeah, I fell in love with the idea of using technology to improve sleep. And here we are, ten years, almost 11 years later.

Megan Bruneau: Yeah. Amazing. What was your background before that? Like, you were in fintech, but did you get any kind of education related to that?

Alexandra Zatarain: Yeah. So my background is in marketing and communications. I went to school for communications. I always loved the more sort of strategic part of that, so everything from how do we build a brand, how do we tell the story in PR and content creation and marketing. Those had been a couple of my previous jobs after college, related in some respects to that.

But then when I met my co-founders, one of whom is my husband, they were looking for someone who would actually bring the product to market. And so they said, “Well, why don’t you do it? You should know how to do this.” I didn’t know how to do it in practice, but I’m sure that, textbook-wise I did, but I’ve never done it to this extent.

But yeah, I decided to give it a shot because it definitely aligned with my passions and my more formal education. But now, basically ten years later, what I know is basically what I have learned by doing.

Megan Bruneau: Of course, as is the case for so many of us. So, were you actually married to your husband when you decided to become co-founders?

Alexandra Zatarain: No. I mean, we were together. We were not married yet, but we got married right after we launched our first product.

Megan Bruneau: Oh, wow. Okay. How do you two meet?

Alexandra Zatarain: We met a long time ago. It’s going to be 15 years. At a club in Miami.

Megan Bruneau: What club? Can you tell?

Alexandra Zatarain: Nikki Beach. Yeah. I’m using that fact.

Megan Bruneau: What were you dressed up as?

Alexandra Zatarain: I had some pharmacy outfit, you know, like I just went to CVS, right? Like a pair of feathers. I was a student. We’ve all been there. There was no money to buy a costume, so yeah.

Megan Bruneau: And what about him?

Alexandra Zatarain: He also… He’s Italian, so they don’t celebrate Halloween. So he was wearing some just like, you know, fedora or something. Just like, “Let’s pretend you’re dressed up.” Yeah, yeah.

Megan Bruneau: Okay. So you meet at Nikki Beach, you start dating. This is… you said that was 2014 or… No, that was years before that.

Alexandra Zatarain: That was years before. That was 2010.

Megan Bruneau: Okay, amazing. So at what point then did you decide to take this leap? It sounds like you’re working in fintech. Tell us more about kind of how you… I mean, of course, we know how you met your husband, who’s now your co-founder was your co-founder and then your husband. But how did the other co-founders come about? What did that look like, especially as, for my understanding, you’re the only woman of four? So I’m curious about that dynamic and how that developed.

Alexandra Zatarain: Yeah, so what happened is that when Mateo, my husband, and I started living together in New York, he was an entrepreneur already. He was a lawyer, then an entrepreneur. And I think we both just share this sense of getting stuff done. It’s very much in our nature. So he had another company that he was building in New York in a very different space, and I had my regular job. And over the weekend, we would do things. We would start these mini hackathons. And I was dangerous enough with coding that I could build a website. And then he would come up with a business idea, and then I would design things. I was like a full-stack marketing slash web developer.

We would do these things over the weekend, and it was just a little bit of fun, but also environment-driven. We were in New York, and New York was having this moment, this resurgence of Silicon Valley. Everyone was talking about tech in New York, and there were a lot of meetups. And so after work, we would go to these things. We were just curious about what was happening in the space. And we would go. There would be people. We would listen to the pitch competitions and whatnot, and that would inspire us to, on the weekends, sort of build our own things. And so we built a couple of things that didn’t go anywhere far, but it taught us that you can share like that.

Learning the Startup Ropes: From Meal Kits to Jewelry

Alexandra Zatarain: You recall there was one really fun one that basically got inspired by seeing all of these companies that were creating the kind of meal delivery kits. And him being Italian, he said, “Well, why don’t we do this with Italian food? Why don’t we do it with more premium recipes and, you know, sort of teach people how to cook real Italian food and Italian American?” was his point. And so we just like taxed over a weekend, and it was fun. We would buy ingredients, design a little menu, we did the bobs, took some photos, and we probably sold like five boxes online. But the purpose of what we were doing was to learn, “What does it take to take a product from zero to one?” And maybe we got 2.5, but it didn’t matter. We were learning a lot, and most importantly, we were learning about working together. We get asked often, “How do you guys work together, and you’re married, and how do you make that happen?” And I think it’s because by the time that we got to Eight Sleep, we had iterated on like three or four ideas that maybe they would last for a couple of months of us working on it.

And that’s when we would go through the fights and the misunderstandings and figuring out what does this mean and integrating it with our personal life. And so we had that training, thankfully. And that’s how we met Max, who was our CTO, our other co-founder. So at some point, we started working on an idea that I had because 3D printing was taking off, and there was a company based in New York that was doing 3D printing almost as a service. You could go in on demand, print anything. And I thought, “Oh, this could be really fun to do with jewelry!” I think you could do, like, personalized name plates or any of these things that you see. And they were starting to offer this sort of service also with metals. So you could do like silver, name plates, and anything that you would want to do that would look more like jewelry, and you could do with plastic.

So I wanted to build this. This was something beyond just building a website, so I needed something more technical. And Max, our other co-founder, is also Italian. So Mateo and he knew each other just because they had been connected by a common friend. So I had been trying to convince Max to build this for us and say, “Come on, like, let’s make this. Let’s help me build a platform where people can go in and just personalize jewelry, and we’ll deliver it to their homes.” And he sort of helped out for a little bit, but he wasn’t very excited about it. It wasn’t an idea that really energized him. And then the idea for Eight Sleep came about. And so then we all just sort of shifted focus from there.

Megan Bruneau: Do you recall how that idea came about?

The Birth of Eight Sleep: A “Dumb Piece of Foam” Inspiration

Alexandra Zatarain: Yeah, it’s actually funny because Max just shared with us, with Mateo and I, a couple of days ago a sort of screenshot or a geotag that he made, which this was now 11 years ago on Facebook. He shared on Facebook that he was meeting Mateo that night. It was like, you know, when he used to be like, “Oh, I’m here with my friend.” So that was the evening that they talked about the idea, and that’s sort of the inception moment for Eight Sleep.

And essentially what happened is that Mateo, when he was growing up, he was always an athlete. He was a ski racer, a competitive tennis player. He would race cars. He sort of has that performance drive. And at some point, when he hit his 30s, sleep became a problem. He started realizing that his sleep was changing. He wanted to focus more on his health. And in that journey, he understood that there were no companies in the market that were actually building products to help you sleep better. He always has this phrase about, “Elon Musk is taking us to Mars, but we still spend a third of our lives sleeping on a dumb piece of foam.” And we expect that you go to just lie down on this dumb piece of foam, and suddenly you’re going to wake up fully rejuvenated and recovered. It makes no sense. Why are we not leveraging the latest technologies to actually boost people’s sleep?

And that’s how it happened. It was this insight that he had, and Max being the technical of the three of us, he said, “Well, here’s what we could do. We could put sensors, we could do this, we could do that.” And so he sort of came up with the architecture of what is the same foundational architecture we use today for the product. And they both were entrepreneurs. Max had had companies and sort of mirrored the world of big data, and he had just sold his company. So he was vesting at his new employer, and the stars aligned. And so then he’s like, “You know what? Let me just build something at home in San Francisco and see where it goes if we show it to a few people.”

The Pajama Party Prototype and Crowdfunding Success

Megan Bruneau: So Max was just like, “I’m just going to build this. I’m going to put this together.” And again, of course, I brought up Eight Sleep, and I understand there’s like heating and cooling, and it’s not just, you know, you just throw something on a mattress cover, right? So how did he build this in San Francisco?

Alexandra Zatarain: Yeah, so he took components that you call off-the-shelf, whatever you can find that is already available. It may not be perfect, and it may not look like the final product that you have, but really the idea is to test just the very basic prototype of if this product was to do X, what would people say? Would they like it? Would they not like it? So he put that together, and then a couple of months later, he and Mateo in San Francisco hosted a pajama party. And that’s another big milestone in our history because that was the first time that they showed this prototype. Some friends, me on the side. I wasn’t really fully involved yet, but, you know, being his girlfriend at the time, I was like, “Oh, can you help me put together some presentation with a cute logo or something to explain the product?” I did that, and then they had this pajama party. They showed it to some friends, and it was a really positive reaction. People were like, “Oh, this is really fascinating.” You could see in Max’s laptop when you would lie down your heart rate. You could see that they had connected it to the nightstand lights. It was just a very basic early version, and then there was a presentation explaining what it was.

Megan Bruneau: But fully functioning, it sounds like? Or functioning it was?

Alexandra Zatarain: Functioning. Yes. Exactly. And then that was a party where one of their friends, who was the person who had originally introduced the two of them, said, “I’ll give you guys a check. I’ll invest in this. If you make it a company, cash the check. If you decide not to pursue it, forget it.” And that was that lightbulb moment where they said, “Okay, maybe we should.”

Megan Bruneau: Right. Yes. I mean, I understand you guys really leaned on the crowdfunding model.

Alexandra Zatarain: Yes. We then asked, then that was almost nine months later that we launched on crowdfunding. So it took time from that moment to actually then say, “Okay, how do we go about building this?” Then I joined full-time, then, you know, “How do we launch crowdfunding?” And a lot of research and talking to a lot of people about their sleep, literally absorbing everything and understanding what are all the problems that we could solve, building a very small team, raising more money.

So all of those are the early days. And then we finally launched in early 2015.

Defining the Future of Sleep Technology

Megan Bruneau: What were some of the questions you were trying to answer during that time, like between getting that first check and doing the crowdfunding model?

Alexandra Zatarain: The main thing is, “What are the problems that we could solve?” Right. All of us sleep. And so there’s this very interesting area in which to operate because you can risk going too broad and trying to solve everyone’s problems at the same time. And so we spoke to a lot of people who were trying to find patterns and then trying to identify what are the things that technology can actually optimize for you without you having to do anything.

And so that was a lot of it is what problems can we solve and then how can we solve them? And then I think that there was this other layer around, “How do we bring this to market successfully when you’re inventing something that doesn’t exist socially, just as a category?” Like no one was going around searching for a mattress cover that tracks my sleep without me wearing anything, right? So we had to come up with everything from what’s this category name, how do we describe this, what do we see this is. And that was a lot of work. And so we would also put together a lot of different versions of what this could read like, what it could sound like, different images.

We would be testing. We would share it with friends who would spend hours and hours, and ourselves, just reviewing this and thinking through it. And that is part of the hard work of category creation. That took a long time for it to really, I think, for us to find the right fit and for it to pay off. But it was the right decision for us to say, “Let’s build something of our own in our own lane,” because our product really is, or at least the way we’re trying to solve this problem, really is unique.

Megan Bruneau: Totally. And for you spearheading the marketing, Alex, I’m curious. It’s interesting as you talk about all of the components of the sleep product, like it’s like, “Okay, well, there’s the it’ll elevate your head if you’re snoring, right? Or it’s the heating and cooling,” which I imagine, like the cooling especially, would be amazing for women who are in perimenopause or menopause. You know, there’s all of the tracking, the biometrics and whatnot for the biohacker who just wants to know how well they’re sleeping each night. So there are a lot of different directions it sounds like you could have gone with really targeting your customer. How did you make that decision as to what to really focus on first, or how did you navigate that? Obviously, as VP of marketing, being able to not be too broad, like you said, but also wanting to take advantage of all of these really incredible things that it can do for people.

Alexandra Zatarain: Yeah, I think that how I did it was basically through failure. I think that that has been the biggest learning for me and also what has ultimately built my most powerful skill set now when I look back. But I didn’t know what I was doing. It’s the short answer, and it’s not—I don’t subscribe to the “people are faking it to make it” idea. It’s not true. There are a lot of people who really do know what they’re doing. But when I joined to build Eight Sleep, I was 24. I was two years out of college. What experience could I have? This thing was much bigger than any experience I could have had before.

And so the first five years were really a struggle, in a different sense, meaning I really was out of my depth. And I think a lot of founders feel that way because everything is on you, and you have to cover a breadth of things by yourself. And so a lot of failure, a lot of initially, when we launched in crowdfunding, we knew our core audience was very clear. We’re trying to make this successful in crowdfunding so that we can prove that there is a market so we can raise our money. We can actually go and build this product and actually build a business. And so that was a little bit easier. It was a constraint we could go for. We started focusing on understanding them and the language that would perform for them.

And I quickly learned from reading about other companies, and there’s a lot of books about this, and talking to people in Silicon Valley, where we were based for the first year of the business, that the best way to figure it out was just to talk to people in your audience. So I did a lot of that. Talk to them, talk to them as much as possible, and then really be a student of the space and not assume that I knew anything. And that made the campaign successful. But then what happened after that?

Megan Bruneau: Let me jump in one moment. I want to hear all the series, but just for people who might not be as clear around like, okay, it’s very clear with crowdfunding, right? My understanding is like you have this selection effect, right? Where you’ve got all these people who are already interested in the product. So you were learning from them because they would be your potential consumers. Am I understanding that correctly, or is there anywhere in there you might?

Alexandra Zatarain: Yeah. Yeah. No, it’s actually crowdfunding has this community, this inherent community in there that supports these kinds of initiatives. They almost don’t always care about what the product is, but they’re just excited for people to be building things. They want to be the first ones to try it. They don’t know if these businesses are going to be really big eventually, so they want to be in the early days, right? So that’s the selection bias for sure.

Megan Bruneau: Got it. Okay. And then through that community, you were kind of learning from them, asking questions there, sort of your A/B testers or people that you can ask all the questions to.

Alexandra Zatarain: Exactly. Yeah. Before putting the campaign live. And that’s how we were basically doing this: by friends and friends just getting introduced to people, talking to people who had launched campaigns in the past and seeing how did you do it now? Can I get your feedback on mine? Right? So definitely what helps is just being that network and people being so open to share and provide feedback.

Then when we launched crowdfunding, that was very successful. We had a very, very successful campaign. We made over a million and a half dollars in pre-orders. And suddenly, we find ourselves with this new challenge of now we have to build this product that we don’t know how to do because none of us had built hardware products before. And that sort of got us into the second phase of the company.

Megan Bruneau: Right? So you’re like, “Okay, now we’ve got $1 million plus, like, what do we do now? Holy sh*t. This could actually work, but now we actually have to bring this product to market.”

Alexandra Zatarain: Yes.

Megan Bruneau: Okay. Let’s go into the series of failures because, you know, that’s all we talk about on this show.

Overcoming Challenges: Product Positioning and Learning from Feedback

Alexandra Zatarain: Yeah, I mean, I think that there’s this theme that we’re talking about of learning, you know, how do we know what features do we talk about, or who do we speak to? The biggest learning for me was at some point in 2018. We had raised our Series B, and our investor that came on board at that point to our board said, “Okay, now you guys have money. Now you’re supposed to build the next iteration of your product, which was the Pod, and you have this big problem, which is your positioning as a company sucks.” Like, everyone out there thinks that you’re just a mattress company. You know, this was the time of the beds-in-a-box and all that, and they’re like, “And you guys are evidently not that. And that’s not what we gave the money for. So you need to change this. Otherwise, you’re going to fail. No one’s going to give you money, and you’re not really going to scale.”

Megan Bruneau: Okay, I want to hear more about that. But let me just pause for a moment. So you said that you were 24 when this started. You were already dealing with, it doesn’t sound like it’s imposter syndrome because you’re owning it. You’re like, “No, I really didn’t know anything.” So about where were you in the timeline when you got that feedback that you guys’ positioning sucks? How would you… Yeah. Time?

Alexandra Zatarain: I think I’ve never felt imposter syndrome, thankfully. I definitely don’t subscribe to that. But I think that I had learned so much between 2015 and this moment at the end of 2017 that I was very humbled. I had been humbled by the journey, and I had understood that as much as I may have been the person within our founding team that knew the most about the topic, I wasn’t the person in the world that knew the most about it, right? And so that sort of positioning yourself relative to others had happened in those years in between, with a lot of difficult conversations, a lot of realizations. Why? Because things were not working. And so when the results weren’t coming, you couldn’t pretend, or I couldn’t pretend to myself and tell myself that I knew what I was doing if the results weren’t looking the way that we wanted them to.

Megan Bruneau: How did you know? Like in that moment? Because I think a lot of people might be like, “Oh, maybe it’s the product,” right? If things aren’t working, the question is, is it the product or is it the marketing? Right. And of course, there might be other things like the price or whatever, but like, okay, how did you decide, “All right, I think it’s because we haven’t marketed this properly, or the positioning isn’t right,” as opposed to one of those other questions?

Alexandra Zatarain: It can be both. And I always think there is a balance of both because it is much easier—and I always tell our team and our executive teams—”If you give me a great product, of course, my job is going to be easier,” right? But I also believe, particularly as a founder, it is a big part of my job to bring in the insights that will help develop the best product. So a lot of what happened in those first, say, four years, was these very hard conversations with Mateo, who was my boss and the CEO, but also my husband. And no victimization, no blaming. There’s no space for that. And so what are you doing as an individual in a team, and most importantly, as a founder in a team, to figure this out? If the problem is the product, then just go figure it out. If the problem is the marketing, go figure it out. And so that, I think, toughened me up a lot. And by the time that investor brought that up, it was another big humbling moment. But I think I was better prepared to handle it.

Megan Bruneau: Yeah. So how did you handle it?

Alexandra Zatarain: Well, first of all, he said the thing about your positioning is wrong. And I didn’t even know what positioning was. And so then you realize, “Okay, you may go to school to learn all these things and textbook, but there are many things you have yet to learn.” And it was this huge moment where I’m like, “Well, I don’t even know what he’s talking about, but I’m supposed to know what he’s talking about. So there’s something going on here.”

Megan Bruneau: If only he was around then, right? Go. Just like.

Alexandra Zatarain: Exactly. Yeah. Now what happened is that when I look back, I think I’ve in these moments, I’ve always become sort of the student. I flip it, and I think it’s become so much easier to handle those moments that you could take very personally, to say, “You know what? Let me take this as an opportunity to learn.”

Megan Bruneau: You know, there’s all of the tracking, the biometrics and whatnot for the biohacker who just wants to know how well they’re sleeping each night. So there are a lot of different directions it sounds like you could have gone with really targeting your customer. How did you make that decision as to what to really focus on first, or how did you navigate that? Obviously, as VP of marketing, being able to not be too broad, like you said, but also wanting to take advantage of all of these really incredible things that it can do for people.

Alexandra Zatarain: Yeah, I think that how I did it was basically through failure. I think that that has been the biggest learning for me and also what has ultimately built my most powerful skill set now when I look back. But I didn’t know what I was doing. It’s the short answer, and it’s not—I don’t subscribe to the “people are faking it to make it” idea. It’s not true. There are a lot of people who really do know what they’re doing. But when I joined to build Eight Sleep, I was 24. I was two years out of college. What experience could I have? This thing was much bigger than any experience I could have had before.

And so the first five years were really a struggle, in a different sense, meaning I really was out of my depth. And I think a lot of founders feel that way because everything is on you, and you have to cover a breadth of things by yourself. And so a lot of failure, a lot of initially, when we launched in crowdfunding, we knew our core audience was very clear. We’re trying to make this successful in crowdfunding so that we can prove that there is a market so we can raise our money. We can actually go and build this product and actually build a business. And so that was a little bit easier. It was a constraint we could go for. We started focusing on understanding them and the language that would perform for them.

And I quickly learned from reading about other companies, and there’s a lot of books about this, and talking to people in Silicon Valley, where we were based for the first year of the business, that the best way to figure it out was just to talk to people in your audience. So I did a lot of that. Talk to them, talk to them as much as possible, and then really be a student of the space and not assume that I knew anything. And that made the campaign successful. But then what happened after that?

Megan Bruneau: Let me jump in one moment. I want to hear all the series, but just for people who might not be as clear around like, okay, it’s very clear with crowdfunding, right? My understanding is like you have this selection effect, right? Where you’ve got all these people who are already interested in the product. So you were learning from them because they would be your potential consumers. Am I understanding that correctly, or is there anywhere in there you might?

Alexandra Zatarain: Yeah. Yeah. No, it’s actually crowdfunding has this community, this inherent community in there that supports these kinds of initiatives. They almost don’t always care about what the product is, but they’re just excited for people to be building things. They want to be the first ones to try it. They don’t know if these businesses are going to be really big eventually, so they want to be in the early days, right? So that’s the selection bias for sure.

Megan Bruneau: Got it. Okay. And then through that community, you were kind of learning from them, asking questions there, sort of your A/B testers or people that you can ask all the questions to.

Alexandra Zatarain: Exactly. Yeah. Before putting the campaign live. And that’s how we were basically doing this: by friends and friends just getting introduced to people, talking to people who had launched campaigns in the past and seeing how did you do it now? Can I get your feedback on mine? Right? So definitely what helps is just being that network and people being so open to share and provide feedback.

Then when we launched crowdfunding, that was very successful. We had a very, very successful campaign. We made over a million and a half dollars in pre-orders. And suddenly, we find ourselves with this new challenge of now we have to build this product that we don’t know how to do because none of us had built hardware products before. And that sort of got us into the second phase of the company.

Megan Bruneau: Right? So you’re like, “Okay, now we’ve got $1 million plus, like, what do we do now? Holy shit. This could actually work, but now we actually have to bring this product to market.”

Alexandra Zatarain: Yes.

Megan Bruneau: Okay. Let’s go into the series of failures because, you know, that’s all we talk about on this show.

Overcoming Challenges: Product Positioning and Learning from Feedback

Alexandra Zatarain: Yeah, I mean, I think that there’s this theme that we’re talking about of learning, you know, how do we know what features do we talk about, or who do we speak to? The biggest learning for me was at some point in 2018. We had raised our Series B, and our investor that came on board at that point to our board said, “Okay, now you guys have money. Now you’re supposed to build the next iteration of your product, which was the Pod, and you have this big problem, which is your positioning as a company sucks.” Like, everyone out there thinks that you’re just a mattress company. You know, this was the time of the beds-in-a-box and all that, and they’re like, “And you guys are evidently not that. And that’s not what we gave the money for. So you need to change this. Otherwise, you’re going to fail. No one’s going to give you money, and you’re not really going to scale.”

Megan Bruneau: Okay, I want to hear more about that. But let me just pause for a moment. So you said that you were 24 when this started. You were already dealing with, it doesn’t sound like it’s imposter syndrome because you’re owning it. You’re like, “No, I really didn’t know anything.” So about where were you in the timeline when you got that feedback that you guys’ positioning sucks? 

Alexandra Zatarain: I think I’ve never felt imposter syndrome, thankfully. I definitely don’t subscribe to that. But I think that I had learned so much between 2015 and this moment at the end of 2017 that I was very humbled. I had been humbled by the journey, and I had understood that as much as I may have been the person within our founding team that knew the most about the topic, I wasn’t the person in the world that knew the most about it, right? And so that sort of positioning yourself relative to others had happened in those years in between, with a lot of difficult conversations, a lot of realizations. Why? Because things were not working. And so when the results weren’t coming, you couldn’t pretend, or I couldn’t pretend to myself and tell myself that I knew what I was doing if the results weren’t looking the way that we wanted them to.

Megan Bruneau: How did you know? Like in that moment? Because I think a lot of people might be like, “Oh, maybe it’s the product,” right? If things aren’t working, the question is, is it the product or is it the marketing? Right. And of course, there might be other things like the price or whatever, but like, okay, how did you decide, “All right, I think it’s because we haven’t marketed this properly, or the positioning isn’t right,” as opposed to one of those other questions?

Alexandra Zatarain: It can be both. And I always think there is a balance of both because it is much easier—and I always tell our team and our executive teams—”If you give me a great product, of course, my job is going to be easier,” right? But I also believe, particularly as a founder, it is a big part of my job to bring in the insights that will help develop the best product. So a lot of what happened in those first, say, four years, was these very hard conversations with Mateo, who was my boss and the CEO, but also my husband. And no victimization, no blaming. There’s no space for that. And so what are you doing as an individual in a team, and most importantly, as a founder in a team, to figure this out? If the problem is the product, then just go figure it out. If the problem is the marketing, go figure it out. And so that, I think, toughened me up a lot. And by the time that investor brought that up, it was another big humbling moment. But I think I was better prepared to handle it.

Megan Bruneau: Yeah. So how did you handle it?

Alexandra Zatarain: Well, first of all, he said the thing about your positioning is wrong. And I didn’t even know what positioning was. And so then you realize, “Okay, you may go to school to learn all these things and textbook, but there are many things you have yet to learn.” And it was this huge moment where I’m like, “Well, I don’t even know what he’s talking about, but I’m supposed to know what he’s talking about. So there’s something going on here.”

Megan Bruneau: If only he was around then, right?

Alexandra Zatarain: Exactly. Yeah. Now what happened is that when I look back, I think I’ve in these moments, I’ve always become sort of the student. I flip it, and I think it’s become so much easier to handle those moments that you could take very personally, to say, “You know what? Let me take this as an opportunity to learn.”

Megan Bruneau: For you, Alex, do you recall like, oftentimes, that avoidance of conflict? You know, it’s made sense at one point, or it’s been productive, or maybe growing up, we didn’t witness conflict in our family, or maybe there was too much conflict or whatever it was. So do you know, for you, whether it’s culturally or what you grew up with, whatever you’re willing to share, how do you make sense of that fear of conflict for you?

Alexandra Zatarain: Yeah, I definitely think there’s part of it that’s cultural. I grew up in Mexico. I’m from Mexico. So I do think the dynamics of how women are raised, they’re a little bit different, and what a good woman is perceived to be. You’re motherly, and you’re pleasing, and you sacrifice for your family. And I definitely never fit that mold.

I’ve always been a bit more, maybe ambitious and career-oriented, and very driven and very clear in my objectives and hardworking, disciplined. And so maybe I had more of that yang when I was growing up. And so I felt like when I started managing people, that I had to balance that. I was very aware that when I was growing up, I was “bossy”—you know, the typical term that you hear, which is like, as a millennial, you grow up and if a woman was very strong, they were called bossy.

I was definitely called bossy. And I liked it when I was growing up. And then at some point when you’re older, you realize, “Oh, maybe that bossy is going to fire back.” And so let me tame it down. Let me be very nice. Let me be very accommodating. And that’s when my avoidance of conflict really started surfacing.

It was later on in life when I felt like, yeah, I was afraid to, at that point, sort of be perceived negatively. And it damages obviously your performance, especially as a manager. And like you said, it can hurt people if you’re just enabling them.

Megan Bruneau: Totally. And I would imagine also like even in the early stages, especially with three male co-founders, right? Did you have times where it felt like it was hard to have your voice heard or you didn’t want to necessarily speak up for fear of seeming aggressive?

Alexandra Zatarain: It’s so interesting because it doesn’t happen with my co-founders. And I think it’s because we really have such a good relationship. And actually, they would say—they call me the soldier. Yeah. Because they actually know I’m very strong. They know my strengths. And they want those strengths, right? That’s why they asked me to join them.

So even as the only woman on the team—and I definitely have a lot of the traits that us women have, which is like, we see people, we read people, we’re more empathetic, all of that—but I’m very strong, very decisive. And so with them, it’s like I’m in this different sort of comfortable environment where I just feel like I’m being accepted entirely by how I am and who I am, and so I can be myself.

But then I wasn’t doing that in environments where, you know, you’re building a team, there’s always someone new, and you feel like you have to tiptoe around and you have to just fit in. And, you know, you read all these things about what people think about their managers. And so you’re just adding all this weight instead of finding a way to become the best version you can be of a leader while, you know, improving yourself and everything, but you also need to be able to lean on who you are, being authentic to your own strengths.

And I actually think that that leads to much better team management than trying to be like the textbook version of it.

Alexandra’s Formula for Delivering Feedback

Megan Bruneau: Absolutely. So have you developed at all like a formula for yourself or how you navigate those times where it’s like, okay, this is clearly this person clearly isn’t performing, or there’s an area where I do need to hold them to a higher standard. There’s a part of you that naturally wants to just hide away and be soft and like, okay, we’ll just, you know, find all the reasons as to why we should allow them to do this a little bit longer.

But then there’s another part that’s like, no, no, we know this is not going to be helpful in the long run. So for people who are listening, do you have sort of again, like a formula or protocol that you follow in those situations?

Alexandra Zatarain: Yes. So there are a couple of things. First is that I instrumented moments that would force me to go through that exercise. And so when I identified that I was falling into that pattern, I said, “Okay, it’s difficult for me to just naturally blurt out these points of feedback. So let me just write it out. Let me see. Like, it’s like write a formula of how I would say it.” And what I realized is that—and I tell this to my team when they start managing their own teams—is that every one of us is different, and every one of us is going to feel comfortable delivering feedback in different ways.

The important thing is that you deliver it, and that you make sure that the person received it and understood it, but find your way. And so I iterated a lot on that. And what I found is that to me, what helps me take the right action is by just as much as I perceive feedback as a gift when I receive it.

To think of this as a gift that I’m giving to them. And to almost frame it in my brain as a gift. So if I want to make John Doe this gift of this moment of feedback for something that I saw that they didn’t do well, how would I give it to them if I was making them this gift?

What would I say? I would probably be much more detailed. I would probably make sure that they understood it. I would probably ask if they wanted to talk about it more in-depth. And you just—it goes through that same exercise of the questions like, “How would you do it if?” And that helped me a lot because it made me feel more comfortable.

I don’t feel it is a conflict anymore. I feel it as this gift I’m giving you. If I do it and I do it promptly, is that even a bigger gift? I can avoid those performance improvement plans and all of those things that no one wants to get to. And so that was important.

And then the other part I instrumented is the moments throughout the year when people get more formal feedback, when we go deeper, when we say, “Okay, at least once a year, there’s a written assessment process, how do we make sure that this is fair to everyone, they’re receiving it the same way, and documenting it?” And so I think that just helped me embrace those moments in a very different way.

Megan Bruneau: So helpful. Thank you. Alex, are there any rules you have for feedback such as like it’s always in person, it’s never over Slack or, you know, doing the sandwich method or anything that you would recommend?

Alexandra Zatarain: Which is really common. Okay. Yeah. Everyone knows it’s now. Yeah. Like, yeah, you don’t need to be like, “Here’s the good things about them.” No, no. Just tell them what happened. But what I do try to lean on is to also focus on the moments when people are doing things well. So, “Hey, someone wrote a great document. Someone did a great presentation.”

Just sending them that note, “I liked that,” or, “My email team created a great email campaign. I’ll just, when I received it in the morning, just like, ‘I loved this. And here’s why I loved it.'” Right? So feedback goes both ways. It’s not always negative. But it is immediacy. Take action immediately. Share it immediately.

We are distributed. Not everyone is in the office in person. And so sometimes, yeah, you’ve got to send them a Slack. Sometimes you don’t have time for a call, but you’ve got to understand the severity of it. And so that’s where a bit of that touch comes in, of saying, “Okay, is this something that might be best delivered by having a conversation, whether it’s in person or on a Zoom call?”

And just be mindful of that, because sometimes when it’s in written form, people may misinterpret. So if it’s like a quick fix, I’ll Slack. I’ll be like, “Hey, the copy doesn’t seem great. Why don’t you revise it? Here’s what I mean.” But if it’s something else, it’s much more important to be face-to-face.

Eight Sleep Growth Strategy

Megan Bruneau: Fantastic. Thank you so much, Alex. I think this is so helpful because I can’t tell you how many of my clients, one of the main reasons that they’re not advancing is because of that fear of conflict, in every area of their life. But oftentimes, it really is because they don’t want to fire somebody, or they don’t want to upset team members. Right? So, amazing. Well, we only have a few minutes left. So I do want to ask a couple more questions. And then we’ll make sure we wrap on time. You have been amazing today. I’m curious, first of all, just with your expertise in marketing, I’m so curious about how you decide to position the pricing, because I.

What is like the average cost of a mattress for most people?

Alexandra Zatarain: It depends because there are different layers, right? There are mattresses that are really, really cheap. You probably can find mattresses for $100. There are mattresses that cost $10,000. So it’s a very wide category.

Megan Bruneau: Okay. Cool. So how did you decide? Now, it sounds like you had the cover first, and then it’s the Pod. It’s the mattress as well? Or that just goes over top?

Alexandra Zatarain: It’s just the cover.

Megan Bruneau: Just the cover. Okay, cool. So like you said, you created a category. So you’re like, this is not—there are no comps or anything for this pricing. So how did you land on that? Because I think it’s about what is it, $2,500? Or what’s your pricing on it for $2,000? Okay. Cool. So that’s not cheap, right? Like it’s an investment for sure. But obviously, as evidenced by your guys’ growth and the demand, there is a huge market for it. So how did you land on that? And I would imagine, as VP of brand marketing, you probably played a big role in that.

Alexandra Zatarain: Yeah. The reality is that you start from the costs. So you start from how much it costs you to create the product. I think a lot, you know, we’re not a profitable business yet. So if we were to overcharge, we sure would be. So you really just start from the cost, and you have a full baked-in cost of everything.

You know, your cost of goods, all the materials, all the shipping, all the packaging, all the services. We have a software service connection to the Pod. There’s cost to that. There’s storage of information, there’s privacy, security measures. There are a lot of things. And then you say, “Okay, there’s a normal expected margin that a consumer goods product should have.”

And that’s how you come up. Pricing is much more straightforward. We definitely didn’t do that right the first time around back in 2015. So we learned our lesson, and then we did it well the year following.

Megan Bruneau: What did it look like just briefly when you didn’t do it right? Like what did you learn there?

Alexandra Zatarain: It was just random. We didn’t know the cost of goods at the time because we had a manufacturer for any product, so we totally underpriced it.

Megan Bruneau: Got it. Okay, cool. So I’d say if you had any advice for people that would be like, let’s really make sure you know the cost of goods before you decide to price it. Because I imagine it’s tough sometimes for people to go from a lower price to a higher price for something like 100%. Yeah. You’re saying, okay, great.

And, you know, in terms of where you guys are now, I mean, you’ve grown so much. It sounds like there’s just so much to be excited about. There are still many, many challenges. What’s like a current challenge that you guys are navigating right now that you’re open to share?

Alexandra Zatarain: Yeah, I think it’s how do you scale the business across multiple dimensions? We have opened up in a lot of different markets globally. We’re opening more this year. And so what does investment look like in those? Where do we lean in? How do we grow them? Same for audiences. How do we go from the audience that we speak to today to being a more mass market and globally iconic company?

You know, that’s another journey. And then introducing new products like we introduce new products every year. This year will be introducing several new products, both hardware and software. So another layer of complexity. And so it’s just sort of the business is growing more as a matrix. And that brings challenges that are different from where we’ve been until now, which is more one product, one big market.

Megan Bruneau: Totally. What if you were going to kind of name those challenges or a major challenge in one sentence? What would you make it?

Alexandra Zatarain: It’s complexity. It’s increasing significantly in complexity.

Megan Bruneau: And what’s that like for you? Where does that challenge you, or what are the sticky spots for you personally?

Alexandra Zatarain: Yeah, I would say it’s you need to think about the team that you have to build or grow your team to be ready, not for where you are today, but where you’ll be or need to be in two years. Right? So when you are earlier on as a startup, you are just trying to survive. And so you’re not thinking long term, right?

You don’t know if you’re going to be around a year from now. So there’s no time for long-term planning. You don’t think that way. You just say, “How are we going to make it to the end of the month, at the end of the quarter, at the end of the year?” At the stage that we’re in, you’re not thinking that way.

It’s your responsibility as an executive to think a little bit more long term while executing very much at a high pace in the short term. Right? So you don’t yet go all the way to the big 400 to 500 companies that are doing, you know, planning their Black Friday sale two years from now. You’re not there yet, but you still need to think around certain areas of the business long term enough so that you can be successful in two years from now and not just successful this quarter.

Because a lot of these things take longer time now as a bigger organization. And so now we talk about the product roadmap of what are we going to ship in 2026? And the work starts now. Maybe in other areas of the business you’re not that far ahead. And so you’re sort of—it just feels uncomfortable in that sense, because the way that you plan and you do strategy is different from the first ten years of the company.

And this probably started happening since like two years now. But I think this year we feel it very strongly.

Her Advice for Entrepreneurs

Megan Bruneau: Yes. And it sounds like those are new muscles for you. Like that’s not something you’ve historically done, correct? Yeah. Any again, there may not be too many listeners who are at that stage, but for anyone who is, what do you recommend or any advice or suggestions for navigating that stage of the business?

Alexandra Zatarain: You go back to the questions. I was just talking about this this weekend, and I was expressing to him, “You know why? What is the way in which you, as a CEO, need to spend your time in order for this to succeed? Which are the things that, you know, the initiatives that you should be involved in?”

And then he’ll ask me the same questions, right? But it’s just not being afraid to change the way in which you’ve done things in the past. Even if you’ve been successful, they’re not going to always be the ones that you need to do to get to the next stage of success.

Megan Bruneau: Yeah, that just sounds like such a theme for you, Alex, that I just admire so much. It really, I mean, I think I could encapsulate it in the word **humility**, right? Like not being afraid to change, not being afraid to be wrong. That feels like such a theme for our episode today. But before we go, I do want to offer that question back to you.

I mean, you have had such a journey as someone who started this company at 24. Sounds like you didn’t have a ton of experience. I mean, again, didn’t know what brand positioning was as you were the VP of brand or a co-founder and whatnot. You’ve learned so much along the way. For anyone who might be in that position right now and thinking like, “I don’t know enough, I’m not an expert, I have to learn all these things before I get started,” any advice you might have for entrepreneurs who are just in those earlier stages and maybe are lacking in that confidence or that knowledge or trust?

Alexandra Zatarain: Yeah, I think that if you are passionate about what you’re doing, don’t focus on what you don’t know. Just focus on how you can learn about that topic. And the world is so different now, even just from ten, eleven years ago, where there are podcasts about every topic, there are YouTube videos about every topic. There are books and audiobooks.

And, you know, so many people talking about how they went through this. And just go out there and learn about it. Don’t get paralyzed by the learning, because there’s also—you can get stuck in just reading and reading and listening and dreaming that one day you’re going to take the action. But you need to be smart about how you just absorb from the best minds out there as quickly as possible, and then apply it.

And second to that, I was just talking to a founder who’s in an earlier stage of building her business last week. And I was telling her, “Don’t be afraid to fail.” Ultimately, I think a lot of us are afraid to fail. And you’ve got to free yourself from that and go ahead, try it.

And it’s fine. If you fail, it is totally fine. You will be fine. You will survive.

Megan Bruneau: Yes. Oh, that’s the most epic advice for this podcast. One more question on that. How do you prevent yourself from being afraid of failure? Like what? Again, strategies, ways of relating to yourself, support systems, just anything that would say like, “Okay, in order the formula for not being afraid to fail or for at least doing things alongside that fear anyway, is what?”

Alexandra Zatarain: Yeah, I think that for me, what I have identified that is ultimately something I know, unfortunately, not everyone has, is **faith**. I grew up with that. I’ve strengthened it over the years. And second is a **loving family**. Again, not everyone has that. Maybe it’s a family you create for yourself, but I know that my parents, my siblings, my cousins, my best friends from childhood—they don’t care if Eight Sleep had failed or if it is where it is. And I think having that gives me this confidence to go out there in the world and give it my best. But I know that my value is not connected to my success in business, and I do think I’m extremely grateful for that.

Megan Bruneau: And that is—those are such wise words. Excuse me. I mean, so many entrepreneurs, they put all of their identity and all of their self-worth into whatever they’re creating. And then, of course, they’re terrified of failure. But if we diversify that self-worth, whatever that looks like, and then also have a community, whether it is a family or friends, a community that we build that loves us no matter what.

And it’s like, “Hey, we celebrate if you win, but also if you lose, we still love you. It doesn’t really matter to us,” right? Like then we’ve had that soft landing. Amazing. Alex, thank you so much for being on the show today. Are there any last words you want to share before we wrap?

Alexandra Zatarain: I don’t think so. Hopefully, I said a lot, but thank you so much for having me, for being able to share just a different side of what this means, and what being an entrepreneur is in the tech world.

Megan Bruneau: Oh my gosh, thank you so much, Alex. You were amazing. There’s so much goodness in this episode. So thank you.

Megan Bruneau, M.A. Psych is a therapist, executive coach, and the founder of Off The Field Executive & Personal Coaching. She hosts The Failure Factor podcast featuring conversations with entrepreneurs about the setbacks that led to their success.