Dr. Kathrin Hamm, founder and CEO of Sleep-wellness Bear, I never desired to be an entrepreneur. After graduating with a Ph.D. in economics, she began as an economist at the World Bank. Her work took her around the world and provided invaluable insight into the small, medium-sized and women-owned businesses she tried to persuade banks to lend to, but “learned first-hand how difficult it is for women, especially in developing countries, to gain access to finances and starting and developing your business.”
Especially during his stay in India and Bangladesh, Hamm faced a long, “exhausting” journey. She “never slept well”, even as a child, she woke up easily and suffered from chronic insomnia. It started “at a more moderate level” with difficulty falling and staying asleep, before her periods of wakefulness became longer and longer, which motivated her to hunt different solutions.
Photo credit: courtesy of Bearaba. Katarzyna Hamm.
She began by researching different mattress options, but when she dug deeper, she found an article discussing weighted blankets. Hamm mentioned that the article focused on helping children with sensory issues, but also mentioned that evenly distributed weight across an adult’s body can result in better sleep. Hamm was immediately intrigued – as a potential customer.
“Let me buy the product, sleep better, and then continue my career“
“I come from a consumer perspective,” Hamm says, “and knowing how difficult it is for women to start a business, I [was] as, Yes, I feel good here. I don’t want to start a company or even think about becoming an entrepreneur. Let me buy the product, sleep better, and then continue my career“
However, the purchasing process proved difficult. Unable to find options online, Hamm had to go to a pharmacy in Germany, where she’s from, to place her order. Six weeks later, the “big bag of beans” arrived. It was orange and blue and “very loud,” Hamm says. At first she didn’t even want to try it and wondered if she had made a mistake.
“But then I put it on during the day on the weekend and I just passed out after 10 minutes,” Hamm says. “And I woke up over two hours later, [after] a solid nap, I completely passed out and I think: Wow, this is magic. This works for me.“
So Hamm continued to make use of the blanket at night, but there was a problem: because the blanket was stuffed with plastic beads for extra weight, she was often too hot. Basic functionality works; the weight on my body is working, Hamm remembers considering but the way it’s done doesn’t work. After doing some research, Hamm found that the technology, consisting primarily of bead-filled chambers sandwiched between layers of blankets, had been around for 30 years — “No one had ever innovated on this product.”
“Why can’t you just use cotton strips?”
Hamm decided to experiment with alternative designs. She drew inspiration from time spent in India, “where there is a culture of making rugs, knitting and crocheting,” but the final breakthrough got here after a conversation with her mother. Hamm was considering changing the material or adding holes for airflow when her mother asked, “Why can’t you just use strips of cotton?” They would create a thick yarn that could possibly be stitched together to permit natural airflow, eliminating the need for heavy artificial materials that shift and reduce comfort. This idea led to the development of the first small Bearaby blanket, made from a cut-up T-shirt.
Confident that she had found something, Hamm decided to take a yr off to focus on the business. “Again, I didn’t want to take too many risks, knowing it could be really hard,” she admits. “[But] my boss was very supportive and said, “Listen, if this doesn’t work out, we’ll make it a case study.”
Hamm withdrew $120,000 from her retirement fund and raised just over $250,000 in a crowdfunding campaign to finance prototypes of the first batch of blankets. She also considered patents, but they were expensive, so she drew up the drawing herself and then had a lawyer draw up a provisional patent application, which entitles the applicant to 18 months before having to pay more money. This took place just a few days before the December 2018 release; the blanket sold out within two weeks and for several years was the only product of its kind on the market, Hamm says.
Photo credit: courtesy of Bearaba
Despite early success, the greater than 50 factories Hamm approached weren’t willing to adopt the product. They had never seen anything prefer it: it wasn’t clothing or bedding. So, for the first yr and a half, Hamm rented a small garage equipped with knitting machines and knitting machines, where he produced his first products. Strong sales helped the company proceed to finance production, which was good too – because people still weren’t that interested in investing in a first-of-its-kind product.
“In hindsight, we had to learn how to make a profit.”
Hamm leaned into the “bootstrap” mentality, which was a blessing in disguise. “In hindsight, we had to learn to ensure profitability,” he explains, “to adapt to our production and marketing processes and to operate efficiently, which was sometimes not visible in direct space sales at that point. Everyone said, “I raised so much money and I’m putting so many millions into marketing expenses.” We never had that, but now, in an environment where money is not flowing [as] freely, we never had that cash in the first place, so now we feel pretty good.
Bearaby saw one other vital advantage in brand loyalty. Hamm notes that individuals searching for wellness and sleep are inclined to form an “emotional bond with a blanket” and that it is easy to fall in love with a brand that helps you sleep better. The great interest also resulted in an early presence in retail trade. Just five months later, Bearaby was at West Elm due to customers who got here in and desired to check out the blanket. The same thing happened with Nordstrom.
When considering Bearaby’s expansion, it focused on functional products that may uphold its commitment to quality and sustainability (the company is certified by third-party organizations including the Global Organic Textile Standard, The Forest Stewardship Council and the Global Recycled Standard). Because anxiety so often goes hand in hand with insomnia, the company decided on a line of heated products; equipped with a weighted and heated neck band, bottle and lap pad, “reduces the nervous system to zero,” Hamm says.
Photo credit: courtesy of Bearaba
Naturally, Bearaby products became an integral part of Hamm’s sleep routine, and as she got older, she realized much more how much sleep she really needed. “Now I sleep at least eight hours,” he says. “I train myself to sleep 9 to 10 hours, not every night of course, but definitely every weekend. Apart from that [it helps] whenever I have a chance to take a nap, like a 20-minute nap to reset. [I make sure that I have] these conscious breaks, or [it’s] naps or deep breathing, because running a business is a marathon, and if we don’t take care of our body, we won’t be able to do it for a very long time.”
“Just have tunnel vision for a year and then re-evaluate after those 365 days.”
Hamm’s five-year marathon with Bearaba led to over eight-figure sales and over 10 patents – but it began with one, somewhat reluctant leap of faith. According to the founder, this is what it takes to achieve success.
“Once you believe in the product, just take a chance and give it a year,” Hamm says. “It’s a lot easier to master if you [have] a significant period of time in which it’s like, OK, this yr I’ll give my all, 100%. Because sometimes we second guess ourselves. After [a few] months or six weeks, we do not see success, [and] we begin to doubt ourselves. You say [I have] a yr and I do not ask if it really works. Just have tunnel vision for a yr and then re-evaluate after those one year.
This WOMEN ENTREPRENEURS® this text is part of our ongoing series highlighting the stories, challenges and triumphs of running a business as a woman.