Matteo Franceschetti (Co-founder & CEO of Eight Sleep)

Matteo Franceschetti on the future of sleep technology, YC, value-add investors, picking a co-founder, working at a startup, stopping alcohol consumption, and more. 🚀

Aug 31, 2020

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Guest Profile:

Interview Guest: Matteo Franceschetti (Twitter: @m_franceschetti)

Role: Co-founder & CEO at Eight Sleep

What is Eight Sleep?: Eight is a sleep fitness company that uses innovation, technology, and personal biometrics to help individuals improve their sleep and boost energy levels. Eight Sleep participated in YC’s S15 batch and has received over $70m in funding to date from notable investors including Khosla Ventures and Founders Fund.

Quick Note: This interview was recorded via a phone call between Matteo and Michael (that’s me) in August.

(Huge thanks to Delian Asparouhov and Alex Horowitz for helping make this one possible 😁)

Michael’s favorite quotes from the interview:

On the idea for Eight: “I started wondering why there was no technology taking care of one-third of my life: Sleep. Why is Elon Musk taking me to Mars, but I still spend a third of my life on a piece of dumb foam?”
On the vision for Eight: “Phrased differently, what if we can improve your sleep performance by 25%?… What if your bed becomes a medical-grade device that can let you know if there is anything wrong with your health, particularly your heart rate, respiration, and sleep?”
On stopping alcohol consumption: “And so, we stopped and we started feeling immediately better. My sleep quality was much better. As a consequence, my training during the day was better and harder. I just started feeling so much stronger and more energetic, so I decided to never go back.”
On the importance of sleep: “But, the real foundation of health is sleep.”
On joining a startup: “The important thing to understand is that a startup is basically a compressed career.”
On picking a co-founder: “When you pick a co-founder, it's really like a marriage. When you start a company, you should think that it will probably take 10 years to have an exit or an IPO. And so, you need to be very selective in picking your co-founders.”

Michael: To start, it'd be great to get a brief background on how you came to found Eight Sleep and what exactly Eight is?

Matteo: I have always been an athlete. As a teenager, I played tennis and also raced cars. I have always been into performance. I later became an entrepreneur.
I had two companies before Eight Sleep, and I was the typical entrepreneur working really hard. I started wondering why there was no technology taking care of one-third of my life: Sleep. Why is Elon Musk taking me to Mars, but I still spend a third of my life on a piece of dumb foam? I thought, how can technology help me recover faster while I'm asleep while also helping to monitor my health every night? That is how I came up with the idea for Eight Sleep with my co-founders.

Michael: How do you think being obsessed with competition and high performance as an athlete has transitioned to your success as an entrepreneur?

Matteo: I think being an entrepreneur, in particular in a tech startup, is probably the closest thing to being a professional athlete. The reason is that you always have to prove yourself. You need to have a growth mentality. You will face a lot of challenges, sometimes they will be brutal, like an injury or defeat, and you need to recover and keep going because you know your end goal.

Michael: Let's go a little deeper on Eight. How does The Pod mattress differentiate from a more traditional mattress? What are some of the core technologies in The Pod?

Matteo: It's a drastic improvement from a classic mattress. Think of Tesla compared to a car from the 90s. We did it in a couple of different ways. First, through algorithmic technology. When you are sleeping on The Pod, you are really sleeping on a computer. There is a thermal engine that can regulate the temperature. There is a sensor package with dozens of sensors that can track things like bedroom temperature, light, humidity, and also your biometrics such as heart rate, respiration, and obviously sleep. So, there is the algorithmic component. It's really the most advanced and most sophisticated hardware you can think of.
And then there is the software part, which is still very similar to Tesla because it's like if your mattress has a growth mentality, where there are software updates and it is able to keep growing and improving. And so, we leverage artificial intelligence and machine learning to do a couple of different things. The first one is to track all your biometrics with medical-grade accuracy: think of heart rate, respiration, snoring, and sleep. Then, based on your biometrics, we keep changing the temperature of The Pod during the night in order to help you fall asleep faster and get more deep sleep.

Michael: Where do you see Eight in 5 or 10 years?

Matteo: Our vision is based on two pieces. The first one is, what if you could sleep only six hours and get more rest than when you were sleeping eight hours? Phrased differently, what if we can improve your sleep performance by 25%?
The second is, what if going to bed becomes better than going to your doctor for a checkup? What if your bed becomes a medical-grade device that can let you know if there is anything wrong with your health, particularly your heart rate, respiration, and sleep? That is what we want to achieve in the next 5-10 years.

Michael: I really enjoyed your conversion on The 20 Minute VC about stopping your consumption of alcohol. How has stopping alcohol consumption helped you from a productivity and health perspective?

Matteo: I came back from a short vacation with my wife, and we had a bottle of wine almost every night. It was not a lot, but we came back and just felt bad and had low energy. We said, let's just try to skip it. And so, we stopped and we started feeling immediately better. My sleep quality was much better.
As a consequence, my training during the day was better and harder. I just started feeling so much stronger and more energetic, so I decided to never go back. It was May 2019 when I stopped drinking. Now, it's almost a year and a half since I had my last drink. I'm lucky that I don't crave it. When friends drink, I don't even feel the need anymore.

Michael: How big of an issue is sleep across the board?

Matteo: Almost one out of two adults have problems related to sleep, ranging from sleep apnea to snoring to being sleep deprived. What we don't understand is that sleeping and making sure you have time to properly sleep is as important as your training and as important as your nutrition. Actually, if we really want to be very specific, health is based on three pillars: sleep, nutrition, and fitness.
But, the real foundation of health is sleep. The reason is, if you sleep two hours per night, first, you will start craving a lot of bad food, a lot of sugar. Second, you will not have the energy to train and do any sort of fitness. And third, you will enhance the development of different types of illnesses. Sleep is really the foundation of your health.
In my case specifically, since COVID hit around March, I started sleeping nine hours a day, every day. All of my biometrics have improved. My HRV went up, which means I'm healthier and more rested and I recover faster. My heart rate at rest went down, which means I'm a healthier person. In general, I feel much stronger and more energetic. And, the only thing I changed was sleeping one hour more per day. If you think about sleeping one extra hour per day, it means seven hours per week. It's like saying I'm sleeping one additional night per week compared to what I used to do.

Michael: Do you have any advice for how students can best prepare themselves to enter a job market that may not be as strong as it was for the past decade or so?

Matteo: It depends on what you like. The important thing to understand is that a startup is basically a compressed career. We try to achieve in three to five years what is normally achieved in ten to fifteen years. This comes with pros and cons.
The pros are that you will learn a lot, you will learn really fast, and if you do well and the company does well, you will have opportunities that would have taken a much longer time in a corporate job. The cons are that you need to be scrappy, you need to be able to get shit done quickly, you will work really hard (particularly if you want to be an over-performer), and in a startup, everything is broken. You need to have the ability to pick the fires that you want to put out and let all the other things burn because you don't have the resources and you don't have the time to solve everything. If you have this attitude, you move fast, you're a problem solver, and you have a growth mentality, startups will love you.

Michael: Do you have any advice for a student or young professional who may be interested in starting a business or may have an idea that they're working on but are not entirely comfortable making the leap and actually running a business full-time?

Matteo: There is a lot of material from Y Combinator and Paul Graham about this (Check out Paul Graham’s How to Start a Startup essay, here). I’ll talk about a couple of core principles. First, if you don't try it full-time, it will never happen. Someone else will build it, and you will not succeed. So, if you believe in something, you need to take the risk. Look for early signs. Don't build something for a year and then discover that no one cares about what you are building. Think in terms of MVP (minimum viable product): what is the minimum thing that you can build this week and start validating with customers and getting external feedback? Don't be worried that someone else will steal your idea because the idea is worth nothing without execution.
The second big principle is, it's usually highly recommended to have a co-founder. When you pick a co-founder, it's really like a marriage. When you start a company, you should think that it will probably take 10 years to have an exit or an IPO. And so, you need to be very selective in picking your co-founders. Don't just rush it because if you do, you will pay the consequences later.

Michael: You touched on the importance of picking great co-founders. You obviously also have a number of really great investors on board at Eight. What exactly has the process of finding the best investors, who can add the most value, for Eight been like?

Matteo: Good investors are really game-changing. They push you to think in the proper way. They push you to use the right frameworks for decisions. They also have a lot of experience and can give you proxies from other companies, which can be valuable for you on different occasions.
Great investors also drive other investors, so it becomes easier to raise more money and attract talent. In our case, we were really lucky first with Y Combinator, then with Khosla Ventures, and then with Founders Fund. We have many more great investors, but these are the ones who were most impactful in terms of leading rounds.

Michael: Can you talk about your experience with Y Combinator? How beneficial was YC in the early days of Eight?

Matteo: I highly recommend YC. It has definitely been an inflection point for us. They really shape the way you think. They push you to move fast, to talk to your customers, and to show progress. Being admitted is also something that means a lot in Silicon Valley and unlocks a lot of opportunities, including fundraising and access to investors. More than anything, all of the Partners at YC are awesome people that really push you to do what matters and focus on progress and not motion.

Michael: How has having strong networks in Italy, San Francisco, New York, etc. helped Eight in terms of connecting with customers, finding the right investors, hiring talent, and so forth?

Matteo: Like everything, it comes with pros and cons. I think the number one pro is that it gives you a lot of mental plasticity. You're flexible. You learn how to adapt to different environments. You learn a lot of things. I come from Europe, I’m Italian, and I have lived in a lot of different European cities, having worked for a UK company. I've also lived in New York, San Francisco, and China.
Being exposed to these different places really shapes you and gives you flexibility, and you learn a lot. The obvious potential downside when I moved to the US was that I already had a company in Italy and already had a network there. I had to rebuild my network from scratch in the US. And so, you just need to have the energy and the passion for what you do so you can start again. Now, I have my original network in Europe, and I have my network in the US. And, since we have Chinese investors, I also have a network in Asia.

Michael: What's a book recommendation you would give to our subscribers? Why?

Matteo: One book that I really like is Lifespan by David Sinclair. It's a book about longevity and how aging is an illness and how you can defeat it. It's super interesting if you are into health and longevity.
A second book I really like is Shoe Dog, which was written by the founder and former CEO of Nike. It's the story of Nike, and I think it is really representative of what life in a startup is like. You see what Nike went through before becoming who they are today: how many times they were almost dead and had to figure out how to solve problems and make it work. If you want to get into startups, I would highly recommend reading Shoe Dog. If you are into health, Lifespan is a great read.

Michael: Thanks so much, Matteo!

Matteo: No problem. Thanks for having me!

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