Zeo, Maker of Personal Sleep Tracker, Hunting for More Regis Philbin Magic

5/19/10

When celebrity Regis Philbin talked up the benefits of Zeo’s sleep tracking device on his TV show last June, the Newton, MA-based startup sold more than 1,000 units within three days, says Dave Dickinson, the firm’s CEO.

Zeo, founded as Axon Labs in 2003 by three Brown University students, is nearly a year into marketing a system for consumers that detects brain waves to record the length and quality of their sleep. Sleep-deprived journalists like The New York Times‘ David Pogue gobbled up the story last year, sending early adopters to what was the only place to buy Zeo’s Personal Sleep Coach, the Internet. Yet the firm faces the same hurdles that have tripped other consumer tech makers trying to navigate between an initial publicity bump and commercial success.

This month Zeo’s first infomercials aired, providing the startup a new means of enticing the masses to buy. In June, the firm plans to release its first iPhone app, which gives users of the system a new way to view their sleep data. (Users are already able to upload their sleep information to their personal accounts on the firm’s website.) The jury is still out, however, about whether the product is destined for lasting stardom. Dickinson says that so far the company has sold thousands of its products, but he and other executives refused to provide exact sales figures.

Colin Angle, co-founder and CEO of iRobot, has been advising the team at Zeo since 2005 and is a director of the startup. Angle came to the aid of Zeo in 2005 after his Burlington, MA-based robotics firm had made millions of dollars with the Roomba, a robotic vacuum cleaner for the consumer market. He says that the adoption of Zeo’s product hasn’t been as rapid as that of the Roomba, which helped his firm generate $13 million in sales in the first year after its 2002 release.

“Their challenge is one of getting people to believe the story of how this thing works and to try it,” Angle says. “They’ve earned their way to the point where they can get to the early adopters, but they need to scale their market in order to break through and have a sustainable company going forward.”

There should be plenty of takers for Zeo’s system. One in five U.S. adults get less than six hours of sleep per night, way short of the recommended range of seven to nine hours, according to the National Sleep Foundation, a non-profit group headquartered in Washington, DC. And Americans spend more than $20 billon a year on everything from sleeping pills and herbal remedies to specialty pillows and mattresses designed to help them snooze. Zeo is not targeting people with medically diagnosed sleep disorders, but the firm’s product could help the millions of people in this country who don’t get ample Zs due to many other factors such as diet, stress, and bedroom noise.

Think of Zeo’s system as an extremely evolved alarm clock. Users wear an adjustable headband equipped with fabric sensors, which pick up electrical signals in their brains and muscle movements that indicate whether they are awake, in light sleep, REM (rapid eye movement) sleep, or deep sleep. The headband sends the data from the sensors to a bedside unit, which at first glance looks like a sleek alarm clock but under more careful examination displays a graph of a person’s sleep pattern. The unit also crunches the sleep data and shows the user a numerical score (called a ZQ, of course) for how well she slept. It also does have an alarm clock that can wake a user up at a preset time or at what the system determines is an optimal moment to roust her from bed, based on her sleep patterns.

On a personal note, I’ve been testing the Zeo for the past two nights. My disclaimers: I’ve had a nasty head cold that’s been ruining my sleep and, presumably, my ZQ scores. Also, I’m a novice technology reviewer; on Sunday night I forgot to charge the battery on the headband and I didn’t get it on my head until 3:30 AM on Monday, and then Monday night I didn’t fasten the headband snugly enough before I conked out and the thing fell off my bucket for a couple of hours, during which the system obviously couldn’t record my sleep patterns. Pathetic, I know. My human errors and illness aside, the Zeo has performed without a hitch, opening my eyes to what’s going on when they are closed. It tells me I’m a light sleeper who is easily and frequently woken.

In addition to taking corrective measures, I’m going to upload my sleep data from the bedside unit to a personal Zeo webpage. The system comes with a memory card and thumb drive to transfer data from the bedside device to a computer with a Web connection. The personalized Zeo webpage charts a user’s sleep patterns and provides access to a coaching program designed to help people overcome what the firm calls “sleep stealers,” like late-night snacking, worrying, and allowing restless pets to sleep on the bed.

Clearly I haven’t given Zeo’s system enough of a test drive to really gauge its utility, but the firm’s star-studded list of advisors certainly lends it some credibility. They include big names in sleep research like Charles Czeisler, director of sleep medicine at Harvard Medical School; John Winkelman, medical director of the sleep health center at Brigham and Women’s Hospital in Boston; and Kenneth Wright, director of the sleep and chronobiology lab at the University of Colorado,

In one sense, Zeo is also fortunate that it doesn’t have a lot of competition. The most comparable competing product on the market is the aXbo Sleep Phase alarm clock, which comes with a wristband that detects only body movements to capture a user’s sleep patterns. On the other hand, the dearth of competing products means that the concept of a home alarm clock that detects biological signals is completely foreign to most people. That makes it difficult to plop a Zeo on a shelf at, say, a CVS or Target store and expect a average shopper to take to time to learn why it’s worth paying the $250 retail price to own.

Yet I wouldn’t bet against the ambitious team at Zeo. I met the firm’s three founders—Jason Donahue, Ben Rubin, and Eric Shashoua, all of whom remain executives at Zeo—when they were still operating the startup out of a small office down the street from Brown in 2006. (Here is a 2005 story from the Providence Journal about the early days of the company.) While they were standouts in Providence’s tech scene, one the city’s influential venture capitalists told me he declined to risk significant capital on them because he didn’t like their business plan. But the company, which moved to the Boston area in 2007, has managed to raise a total of $14 million from backers such as iD Ventures America and Trident Capital.

If Zeo can find a wider audience to buy its system, the startup could become a standout on a national level. The next test will be whether the company’s new infomercials will drive meaningful sales, if not the kind of buying frenzy Regis ignited last year.

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  • http://www.dailygrommet.com Jules Pieri

    Sleep is such a HUGE issue…the addressable market for this product is consequently very meaningful. It’s a mix of steady evangelizing by the company, press, random celebrity endorsement and social media buzz that will win the day here (assuming the product works flawlessly). An infomercial is a good idea for a quick revenue hit if the ROI pans out. I am watching this story with interest.

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