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Building Bearaby: How Kathrin Turned Weighted Blankets into a Multi-Million Dollar Business

Thursday, November 16th, 2023

Dr. Kathrin Hamm was destined for a career in helping people. She earned her Ph.D. in Economics, was a visiting scholar at Harvard, and obtained her Masters from Columbia University. She then worked for the World Bank, a job requiring lots of travel and leading to poor sleep quality. While searching for a solution, she discovered weighted blankets and her life took a new direction. She cashed in her retirement account to make blankets in her house. Her family and friends didn’t get it. (It reminds me of Elle Wood’s mom [from the movie Legally Blonde] saying “Honey, you were First Runner-Up at the ‘Miss Hawaiian Tropics’ contest. Why are you going to throw that all away?”) Like Elle, Kathrin persevered. She’s helped thousands sleep better. Read our case study to see How Kathrin Started.

Our favorite quote

"When I left my job my mom would say “Let's not talk about my daughter because she’s selling heavy blankets on the Internet. Let’s talk about my other kid.”

"Female founders, we sometimes hesitate to trust our own intuition, but if I hadn't trusted mine, I know I would look back on that decision with regret."

Financials

Initial cost: 120k (retirement)
Funding: Bootstrapped
Revenue 2020- $21M

Case study

How She Started: Where did the name come from? I love it.

Kathrin Hamm: Bearaby is a combination of Bear Hug and Lullaby. That’s how I want people to feel when they're under our weighted blankets.



HSS: When was the moment that you knew you needed to start Bearaby?

KH: I knew I needed to be a founder because I truly believed in the product. Some people might have ideas and think it’s great initially, but then forget about it a week later. With this idea, I could not stop thinking about weighted blankets. This went on for months. I took up all of my free time thinking about the designs for the blankets, and it was evident that this was something that I wanted to pursue.

In terms of de-risking, I was fortunate that I could always come back to the World Bank. I spoke to my boss about taking a year off and if it didn’t work out she suggested we make a case study out of the endeavor and highlight female entrepreneurship.

After I left, I set some goals for myself and if I didn’t achieve the milestones that I wanted, then I would look at it as an experience. I didn't want to look back and say “Well I didn't even try.” I felt if I didn’t try entrepreneurship, I would have regretted it more than I would have regretted failure.

In terms of becoming a founder, it was a big transition. When you work at the World Bank, you’ve followed a lengthy path of education. There is so much time and money dedicated to that track. In my case, I completed a PhD in economics. Once you’ve invested all that time it feels like you have more to lose.

  • Insight: If an idea is stuck in your head find a way to explore it.
  • Insight: If you have the luxury, find ways to de-risk the business. In Kathrin’s case she had a supportive manager who expressed that she could return to her job.
  • Insight: If you don’t try you’ll never know the outcome.
  • Insight: Don’t let the sunk cost fallacy keep you from testing out an idea.


HSS: What were some early challenges you faced?

KM: It was definitely something that a lot of my friends said “Are you crazy? You have a great job!” What was even more challenging to navigate was my family. My parents loved to say “My daughter’s working for the World Bank.” When I left my mom would say “Let's not talk about my daughter because she’s selling heavy blankets on the Internet. Let’s talk about my other kid.”

It’s also tough when you’re bootstrapping. Early on you don’t have anything to show for it. For my business in the first 12 or 18 months, I had a product idea, but I didn’t have a website or any credentials. When I was working at the World Bank and people asked “What do you do?” it’s an easy question to answer. It’s much harder when you say you’re a founder and CEO, but you’re building your business out of your living room.

  • Insight: Have conviction in your idea even if the people around you might not understand.


HSS: Thank you so much for sharing that. You're one of the first founders who's been so vulnerable with the “reputation” aspect of entrepreneurship. That’s something I see a lot of people struggle with and I imagine it’s a large barrier to entry. Once you were able to get that social proof I imagine it was much easier. How did you get your initial clients and what did customer discovery look like?

SD: I previously founded and ran a digital marketing agency, so I have a very strong background in digital marketing. With Ellect we tried everything. We did social media, newsletters, ads and found that LinkedIn was the platform for it. Our growth strategy revolves around impactful campaigns on LinkedIn, complemented by our email newsletters.



HSS: What are your lessons learned as you look back on the business so far?

KH: I decided to do a Kickstarter (tooltip: Kickstarter is a crowdfunding campaign where people pre-buy a product to help fund the business) because I felt that having honest feedback from strangers would give me a great opportunity to explore the market. From the campaign I saw potential and that people were really excited about it.

We then launched the full brand and there was immediate traction. In our first production run, we sold out within two weeks! I had journalists reach out from outlets like Fast Company, demonstrating that people were genuinely excited about the project. Even retailers reached out. Within four months of launch, we had West Elm contact us. Their buyer told us “We were looking into weighted blankets but couldn’t find anything we liked in the market. Yours is the first one that is sustainable and has the home design aesthetic.” That's when I knew we had something special.

  • Insight: Crowdfunding can give you great insight into the desirability of your solution.
  • Insight: Journalists can help amplify your message.


HSS: How do you retain your customers?

KH: A great way to retain customers is to listen to feedback. Initially in the DTC (direct-to-consumer) space people were giving valuable feedback, and we could adjust based on that feedback. Additionally, if you have a really good product that addresses a core need, retailers will keep you in-store, and people will come back to buy more. Getting adequate sleep has such a big impact on your life and you need to sleep every day. Our target customers are people who struggle with sleep. We found that when customers bought a napper weighted blanket, they typically had a great experience and it became a core product in their life.

We also strive to create an authentic brand voice. We have a very passionate community and cater to them on the website and social media. People like that we're very responsive and our social channels allow people to connect with us as a brand.

We are also iterating constantly. We think “How we can innovate?” One innovation we had was a pop-up in New York for the holidays we had different activations. We partnered with various wellness studios where we could incorporate Bearaby.

Having different moments of surprise and delight, where they can interact with us is a big part of our retention strategy. We seek out ways to build relationships with our community instead of it being a transactional relationship.

  • Insight: Find a way to make you solution a core part of someone’s life. In Kathrin’s case her solution can be used everyday for sleeping.
  • Insight: Be authentic with your brand. People like to support products that align with their values, and finding authentic ways to connect with your consumer base will lead to higher brand equity.

HSS: How did you handle the competition and how were you able to scale?

KH: We entered the market at a time when weighted blankets were mainly found in pharmacies. They were treated solely as a medical product. However, because so many people struggle with sleep, I knew that I could educate customers on the benefits of weighted blankets. Once they understood the benefits then we would be able to convince them that it was the best product on the market to help them with their sleeping issues.

We sought out medical research around it. We educated people about topics like hormone levels and the plethora of other benefits of weighted blankets.

We then focused on our points of differentiation. For us that was relatively easy because you can visually see that we have chunky knit blankets in beautiful colors. We lean into aesthetics and sustainability because most of our competitors were filled with plastic beads.

We also emphasized the functionality. Our top two functional benefits are that our blankets don’t shift around and its breathable because the air can flow through the knit over time we built trust with our consumers and they could feel confident in their purchase.

  • Insight: Educating consumers can go a long way in building a loyal consumer base.
  • Insight: Emphasize your points of differentiation to stand out in the market. In Kathrin’s case she emphasized functionality, sustainability, and aesthetics.

HSS: How did you handle the competition and how were you able to scale?

KH: During the COVID-19 pandemic, we experienced rapid growth because many people were anxious and confined to their homes, seeking comfort products.

When you're bootstrapped, you anticipate slow, organic growth, and having 80,000 people on the waitlist all of a sudden was a significant shift. People were also inquiring about children’s products and different weight categories, which we didn't offer at the time. We needed to hire rapidly and ramp up production to meet the increased demand.

As an entrepreneur, I learned at a much faster pace and more rapidly than I had originally planned. It was like entering fast-track mode. We expanded our production capacity and our customer service team, and we focused on strengthening our logistics processes.

  • Insight: Have a plan to map out what explosive growth looks like in case there is a market opportunity.

HSS: What's your growth strategy now?

KH: What we are known for is our knitted weighted blanket, and we still work to educate more people about the benefits of sleeping under weight. Additionally, we are constantly building our retail partnerships. West Elm was our first one and now we’ve added Nordstrom, Sacks Fifth Avenue, and Bloomingdales. We’re also diversifying our product offerings by introducing blankets made of different materials.

Sustainability was always something that was really important to me. I drew from my experience at the World Bank where I saw massive landfills in Bangladesh and India. Seeing the environmental impact of manufacturing has driven us to not only introduce new products that integrate sustainability. To give you an example, our body and sensory pillows are made from rubber extracted from natural tree sap instead of polyester, making them completely biodegradable.

  • Insight: Find ways to diversify your offering while staying true to your vision and mission.

HSS: What are your lessons learned as you look back on the business and do you have any additional advice for female founders?

KH: I would say become very comfortable with stepping out of your comfort zone. Transitioning from being an employee in a structured environment to a role with many unknowns, where you must make decisions with conviction, is a significant shift. Sometimes you might listen to your gut and make a mistake but you need to move on from it. For female founders, we sometimes hesitate to trust our own intuition, but if I hadn't trusted mine, I know I would look back on that decision with regret.

  • Insight: When making decisions as an entrepreneur you need to make them with conviction.

 

Insights

  • If an idea is stuck in your head, find a way to explore it.
  • If you have the luxury, find ways to de-risk the business. In Kathrin’s case, she had a supportive manager who expressed that she could return to her job.
  • If you don't try, you'll never know the outcome.
  • Don't let the sunk cost fallacy keep you from testing out an idea.
  • Have conviction in your idea even if the people around you might not understand.
  • Crowdfunding can give you great insight into the desirability of your solution.
  • Journalists can help amplify your message.
  • Find a way to make your solution a core part of someone’s life. In Kathrin’s case, her solution can be used every day for sleeping.
  • Be authentic with your brand. People like to support products that align with their values, and finding authentic ways to connect with your consumer base will lead to higher brand equity.
  • Educating consumers can go a long way in building a loyal consumer base.
  • Emphasize your points of differentiation to stand out in the market. In Kathrin’s case, she emphasized functionality, sustainability, and aesthetics.
  • Have a plan to map out what explosive growth looks like in case there is a market opportunity.
  • Find ways to diversify your offering while staying true to your vision and mission.
  • When making decisions as an entrepreneur, you need to make them with conviction.


How We Met: A partnership with JBC

After my interview with Laura Bucks Tedesco from The Honeypot Co. I formed a partnership with their media relations agency JBC. JBC offers "a creative, multidimensional approach to consumer awareness defining what's next.”