The exciting future of Hapbee
Jack: All right. Welcome, everybody, to Wall Street Reporter’s Next Super Stock livestream from March 31. We’re back with Hapbee. I’m wearing my Hapbee device. I have it on Focus mode. It’s on as you can see. Can you see it? It’s glowing. And Scott is wearing his. We’re going to talk about all the great stuff. I was talking to Scott earlier. We have a bunch of people who are members of our Discord channel who have ordered the Hapbees, and they’re actually getting real results. So this is not a paid endorsement. Real users are using it several hours a day, getting real results. One guy even had his on a cat. He’s got pictures of it on his cat and it’s working. The cat has mellowed out.
For anybody who’s just tuning in, Wall Street Reporter’s Next Super Stock livestream, our goal is to bring you those stocks which have a 10x to 100x upside potential, companies going after multi-billion dollar market opportunities with multiple catalysts in place at a key inflection point right now, really right at that threshold of explosive growth. We’ve had a bunch of winners in the last 18 months, stocks increasing between 10x to 50x. Recently we had CBDT at 5000% since November.
My question is why hasn’t Hapbee exploded yet? This is the thing I don’t understand. Scott, I’ve got to tell you. This really is one of the biggest concepts I’ve come across maybe in my career, at least a number of years. I can’t remember anything I’ve come across which is as big as a concept. Why? Because this is essentially the Holy Grail: feelings on demand, create new feelings at the touch of a button: focus, relaxation, sleep. Sleep is a big thing for people. We have guys on our Discord channel who put this under their pillow, and they’re getting more sleep, completely changed their life.
Scott: By the way, I have got on my app Sleepy 2.0.
Jack: Really? It’s a super sleep?
Scott: Yeah, we’re calling it Deep Sleep. You can actually see it. Do you see the initial 6? I have the newer version with the Lights Out 2.0 on it. It’s a sleep trigger versus a sleep regulator. The current Sleepy is a sleep regulator for the middle of the night. But the one that we’ve been working on in the labs for the last year is a sleep trigger. It actually gets you ready for bed. So you put it on before bed for a half hour, 25 minutes and your eyes get heavy. You start yawning. You’re ready to go. I’ve been testing it out for about three weeks with our whole team and about a dozen other folks. It’s awesome. This is coming out very soon to everybody, within weeks.
Jack: Basically you’re like the Tesla of feelings because Tesla can always reprogram the cars, basically download the latest thing. Not only do you have the existing signals, those 6 signals, but you’re constantly developing new ones. You’re improving them. Again, it’s like Tesla. Once you have the device, you can download new stuff, upgrades all the time.
Scott: What we really want to do is get people to understand that this is a platform technology. Now we’re just starting to gain that traction that you’re always talking about. It’s just now coming from a market sales perspective.
Jack: Reflection point.
Scott: Yes, because people are now starting to tell all their friends and family because this is so revolutionary. It’s starting with our customers and now they’re starting to tell everybody. Educating people is probably our number one obstacle because they’ve never known anything like this.
Jack: It’s revolutionary. Because up until now really, if you want to change your state, people would take a pill, alcohol, substances basically, anything to do that. And people would jump out of airplanes to get the adrenaline, whatever it is. It’s a multi-billion dollar opportunity. It’s an incredible thing. I think because it’s so revolutionary, people haven’t caught onto it.
And we know that there are actually lots of naysayers out there. You have people who actually put out smear campaigns on YouTube, etc. It’s such a revolutionary crazy thing. Once it gains traction, I think it’s going to be like a freight train or a rocket ship. Again, we have guys who are using it. They’re shareholders also. So it’s definitely the real deal.
Scott: I just got word that Dan Sullivan, who coaches all of the top CEOs around the world. He’s coached 3,000 of the top entrepreneurs. Strategic Coach is the name. He has been using this on average 15 hours a day. And he’s using it for his coaching groups with Alert and Focus. They just bought hundreds of them for their teams because it makes them so much more productive. I mean, this guy coaches everybody from Tony Robbins on down.
Jack: Oh, here’s the other thing. Again, you have a platform technology. So this is the original kind of form factor, this device. But you’re going to create different ways of getting the thing. This is the beta stage almost.
Scott: Yeah, think of it as the original iPod, the big clunky ugly iPod. A lot of people still wanted it and bought it. We’re still getting a lot of sales. But we know that this is more like intel. This technology can be put into yoga mats and ski helmets. The back of my chair would have a liner that puts these signals all across my body so I don’t have to wear something around my neck all day. I can just use it while I’m working.
Right now, we’re working on a sleep topper. We’re three months into the design phase. It’s going to be a very thin, comfortable fabric mattress topper with four times the coils – one for your head, your torso, your waist, and your legs – that can play these signals on receptor sites across your entire body to create a systemic effect. And I’ve actually tried the prototype. I tried the Relax signal, and it doubled it.
Jack: Really? Because there’s more of you to give it to.
Scott: Yeah. It’s localized. As long as this coil is creating a field across your body, more receptor sites are getting triggered. All we’re doing is just affecting your biology with these very precise magnetic fields that come from listening in on and analyzing these compounds like coffee, energy drinks, sleep aids, and muscle relaxants. Now we’re looking at memory supplements. The one we’re about to launch is from a stronger sleep aid. We’re looking at performance, blood flow, and digestion. We can put all of these different things into our app, and people can feel them at the click of a button.
Jack: This is incredible. I want to get an update on your new partnerships, what you do in terms of the technology side, all the new stuff. Here’s the thing which blows me away. I know the market has been a little rough for the last month. The microcaps are down 50% minimum. Your stock jumped out of the gate right after you first came out. And then February 26, everything was on sale.
I really was expecting this to go straight to like $3 or $5 in the first six weeks. I was expecting this to be a minimum of $3. I think it’s because investors couldn’t quite get their head arounds how big of an opportunity this is. What is the path for this to a billion-dollar business? I want you to articulate it and walk us through the path.
I really do see a path for this to be a billion-dollar valuation, which would make it a minimum 30x from where it is right now. You have a 30 million market cap right now Canadian. So it’s like 25 million US. In this space, wearables, Pelotons kind of in that technology/fitness/wellness space, the multiples are huge. I think we would need to get to about a 25 million run rate. If you can get to a 25 million run rate quickly, within the next 12 months, you would get 40x multiple. I have no question about that. So here’s the question: can you get to 25 million in the next 12 months’ run rate? And how do you get there?
Scott: It’s about 50,000 people doing it. We’ve got 3,500 right now people with almost no marketing. We can’t make enough right now. Our biggest issue is making the darn thing.
Jack: That’s the only constraint. Your only constraint is the supply right now.
Scott: Basically, yeah, because with Covid and now everyone ordering things from China and all over the world, our chips are 16-20 weeks out. So we just ordered 25,000 of them as fast as we could and they’re on their way. People are in the market. They’re just like, “What is this technology? What is going on here?” Well, when you get to the fundamentals, it’s pretty simple. We have our cost proposition, our affiliate partners, our referral rate, and our inventory being built. Once it’s built, we move it out to the customers who want it.
Yesterday, some random guy bought 16 of them for his entire insurance company because he saw how much it helped him in his job with better sleep, more productivity, more energy, less stress. He’s like, “All of my customer service people need one of these immediately.” Random people are buying up our inventory. It’s a struggle for me to hold enough inventory to get them to some of the bigger names.
I had a call with the LA Dodgers Head of Performance, Brandon McDaniel, two days ago. They use Levels Health for glucose monitoring, Whoop for recovery, Oura Ring for sleep, all these biotrackers. They heard about us through the grapevine because we’ve had some professional athletes love our product. And now they want to have all the Dodgers use them. We don’t even have the ability to get that inventory. Right now it’s all about getting as many as we can make.
Jack: Essentially, the only thing getting in the way right now is getting the inventory. Basically, 50,000 users will get you to 25 million in revenues. You’re getting recurring revenues from this. Each person is paying how much per month?
Scott: Right now, we have two price points. One’s about $300 and one’s about $800. If you pay $800, it’s a lifetime subscription. You never have to pay for a membership to all of the new signals that we launch and the current ones. It’s unlimited use. Over half of our revenue comes from that.
We have a lot of people paying for lifetime membership. They had a friend try it, they tried it once from their neighbor, their cousin, their mom…and they’re like, “Yeah, I’m buying this and I don’t have to ever pay any membership fees.” Other people are buying the $299 with the $19 a month fee, and they like that because it’s the price of two or three cups of coffee. It’s like Netflix really. They’re using Hapbee on average 5-6 hours a week, 20 hours a month. For them, that’s like $1 an hour. So this is a no-brainer for them to be able to use the technology.
If we can get a run rate of 50,000 people annually buying this thing—for us, it’s just about getting inventory in the door and setting off our affiliate networks. We’ve just kept them at bay till we get these things in the door. We’re trying to let the market catch up and learn about us as we get all this inventory in, move it out the door, and work on the new bed form factor.
Jack: I think there are basically two things. You have the early adopters right now who are buying this first device. It’s a little bit awkward. Once you develop something else which is not something you have to think about, like the bed thing you said, and then you get the adoption, I think it’s going to be upwards from there.
Scott: One thing you should hear about with this bed form factor is we have a lot of our team and investors already wanting as many as we can make for better sleep. But it’s not just more sleep at night. It’s deeper, healthier sleep. Calling it sleep performance is what we’re going to go after. It still connects to the app. You can play different signals in a playlist throughout the night as you sleep.
Jack, imagine playing the sleep trigger before you go to bed to get you in a state of being ready to pass out. Then you play the sleep regulator for 90 minutes for your first circadian rhythm. Then you can go into diet, digestion, blood flow, these kinds of signals that are good for cellular health in your body.
We have 18 signals in the labs right now that we’re working on. If a compound can do it non-covalently, so can we. We have an infinite potential of signals that we can bring into this. Then you have a healthy night’s sleep, great for digestion, and you wake up with Alert. We give you the effect of a cup of coffee five minutes before your alarm goes off so you’re not freaked out when it starts buzzing. That for $400 or $500 is a hell of a mattress topper. That’s an incredible sleep product.
Jack: The sleep thing is becoming a big topic of conversation in recent years. First of all, you have a lot of athletes who take it very seriously. Proper sleep is a huge part of health. I think the statistics say half of all adults don’t get proper sleep, especially as they get older. It’s a major problem. The blood flow improves your sex life. Is that what you’re saying?
Scott: Potentially, yes.
Jack: I’m making health claims here of course.
Scott: But blood flow is good for a lot of things. We are going for a vasodilator-type signal. I tried one recently. It’s not necessarily just for sexual health. Blood flow is good for a lot of things in your body. It’s good for circulation, digestion, mitochondria, recovery. This is why a lot of people do breathing exercises or cold therapy after they work out to be able to recover faster and move out the lactic acid. If we can do that at a click of a button, athletes are going to storm this. Seniors are going to love it.
Jack: It’s a big problem for seniors. Marcel, by the way, is the guy on our Discord channel who has been using the Hapbee and also has his cat using it. He’s talking about car seat covers for more alert drivers. The applications for the platform technology are endless.
I’m not blowing smoke, I really believe this might be the biggest concept story I’ve come across. I’m shocked that the stock is not like $20 right now. I think it has a path to get there, to being 30x from here. 30x is only what, $15? It’s like nothing. It’s crazy. All you need to do is get 50,000 people buying the product, subscribing, which is a very small number.
Let’s talk about some of the comps. They’re not direct comps really. Fitbit is somewhere in that space of performance. But it doesn’t give you performance; it measures.
Scott: Yeah, this is what everyone needs to understand. The wearable market is exploding, and the mental health market is exploding. We are the intersection of those. But there’s more. There are two types of wearables. One of them tells you data about you. This is like an Oura Ring, which by the way is a great comp for us. They sold their first 10,000 and then they sold 100,000 within the next six months.
Jack: And how much does the Oura Ring sell for?
Scott: Same price as us, around $300. The only difference is that we have a membership because we have unlimited signals that we give you, and we add more every month or two to add to the platform subscription. They got from 10,000 to 100,000, and we have the exact same marketing team and the exact same people that are advising and investing in us, so we just follow Oura Ring. But you’ve got to understand this. I love Oura Ring and Harpreet, the founder. They track your sleep. Your deep, REM, HRV, heart rate, and movement and give you a sleep score. That’s what half of these wearables are doing.
The other half are giving you an effect, the direct stimulation market, like what we’re doing there. They’re trying to give you a sensation or an effect or neuroplasticity with a shock like Halo Neuroscience or Muse for meditation or Apollo for your wrist or NeoRhythm. All of those people are just giving you one type of frequency. We’re giving you 24 million bits of information in a very precise frequency that comes from a compound. It’s analyzed from an actual thing that you ingest into your body, like a drug.
That’s what puts us ahead of the direct stim world, and our goal is to be the intersection of those two. We want to be biosensors and biostimulation. That’s what our sleep topper is going to do. This first one doesn’t because it’s like a clunky iPod that people still want because it helps them and feels great. But with our next iteration, we’re going to be able to track the same movement, blood flow, and heart rate. We can help people have a better night’s sleep based on seeing how they experienced sleep with our product.
Jack: Basically, you’re touching all the hottest markets, like the sleep market. You have all these companies which are direct-to-consumer like you. Basically, you’re following this billion-dollar template. You’ve got the same marketing as Oura Ring. It’s pretty much the same exact customer because anybody who’s crazy enough to pay $300 to measure their sleep is going to want to actually have an effect on their sleep
Scott: It is one of the fastest-growing markets. We’re getting into sleep more because we have 30% of our customers using Sleepy as their number one signal. We have thousands of people every day using our technology, and so we’re not tracking your stats but we can see overall usage numbers.
Sleepy is the top signal. People love this for sleep. They’re tracking their Oura Ring when they use Hapbee, and their deep REM increases throughout the night. Their sleep score goes up when they use this under their pillow. We didn’t build this to go into your pillow. People use it as kind of a hack right now. Our sleep form factor, which we’re working on for Q4 of this year to launch, is going to be a massive game-changer for our entire business. There are already so many people excited about this.
Did you hear that Google just got into the sleep market? They just put out a massive multi-billion dollar play to track sleep. They’re not even competing with us, but they want to help people sleep better and track their sleep more. Everyone cares about better sleep right now.
Jack: Everybody is has a product for tracking and tracking is such a big market already, but you’re the only one to actually do something about it. It’s like everybody’s selling roadmaps, but you’re the one that’s selling the Ferrari. The roadmap is great, but you want the car that’s going to actually get you there.
Scott: People don’t want to depend on drugs anymore. We have a common enemy. Drugs mess with you in a bad way. If you can get the effects of them without having anything negative in your body, nothing to metabolize or digest or any of the toxicological side effects of these things–you’re wearing Focus right now. Someone would have to smoke two cigarettes to get that same feeling potentially, but that comes with a bunch of carcinogens, tobacco, lung issues, and other problems. If we can help with nicotine receptors to make you feel more focused with a nice pleasant buzz and a little bit of a focused agent at the click of a button, you don’t have to go buy a pack of cigarettes.
Jack: I think the big takeaway really is that the road has been paved already for by Oura Ring and all these other companies. They’ve proven that there is a massive demand for your product right now. People are paying this amount of money for the roadmap and not the car. It’s crazy. If they have 100,000 people who have bought the product, easily you can get a quarter of that in the next year.
Scott: Yeah. We just partnered with Ben Greenfield, who has millions of listeners on his podcasts all across the world. He’s one of the top biohackers. Dave Asprey is one of our partners already. Ben Greenfield followed him. He is launching our podcast in a few days, and that is going to go out to a massive audience. He is one of our partners and promoters. He’s telling everybody about Hapbee. He uses it every day for the Sleepy signal and Relax and some Alert. And he is the top Oura Ring affiliate. That comes out in like four days, so I’m trying to figure out how to find the inventory for this.
People are slowly just hearing, and then they tell a larger audience, and then they tell more. And that’s how this thing’s going to grow. I’m not worried about that 50,000 people number. What I’m worried about is inventory, making sure all the customers are happy, having flawless onboarding. We’re redoing part of our app right now to make it more frictionless and make it easier to onboard. That’s all the things that our team is focused on. We know that flood is starting to come, but we want to make sure everybody has the easiest time opening the product, hooking it up, and logging in. That’s our main focus right now.
Jack: The product works, but you’re still probably a couple of months away from that point where you have the app and everything working smoothly. Maybe you won’t even need the app. Once it becomes seamless and easy like an Apple product, that’s going to be the tipping point when you have that massive adoption. Right now, the people who are buying this are biohackers, the people who are serious about it. $300 is $300.
Scott: Most of them are just being told by their friends.
Jack: It’s pretty much a word of mouth thing right now. This is not a mainstream thing.
Until I was told about this, I had never heard of Hapbee before. It’s this massive untapped market. The takeaway is you can get to 25 million revenues in the next 12 months with 50,000 users.
Scott: Yeah. Well, we’ve got to be careful about public disclosures. I look at it in terms of cost per acquisition for marketing, and we’re in the $1 to $200 range, which is right in line. So now it’s about turning on the faucet. And then I look at it in terms of referral rates. We ask everyone who buys how they heard about us. And we’re seeing how many people are just telling other people about it. Just those two numbers alone tell us what we can get to just by throwing some ad dollars into the pie. The more people tell people, the lower our cost per acquisition goes, the more we’re able to sell soon as the inventory is made.
Jack: And you have a virtual cycle going on, the flywheel. You can have all the cross-sell opportunities. At some point, this becomes a very attractive acquisition opportunity for Google or Amazon. They’re already listening to you in your house. Now they can give you feelings.
Scott: Yeah. Alexa, put me to sleep.
Jack: Wow, what a marriage made in heaven. There are so many paths for this to be that billion-dollar company. It’s incredible that. I don’t know why the stock is not like $10 as we speak right now. Usually, once these kinds of things get going, the stocks get ahead of themselves and the revenues have to catch up to that price. So right now the stock price is behind where your progress is.
I want to dive into some audience questions, and we’ll talk about the direct stimulation market. You mentioned a company called Apollo. What does Apollo do? Iis that your competition?
Scott: Apollo is almost an indirect competitor. It’s kind of the same industry, but very different technology. We’re friends with them, no qualms. In fact, the rising tide raises all the ships. We like that they’re selling well, and they have more inventory so they can sell a lot more. They basically give you a small buzz. And what it does is it triggers a parasympathetic response in your body. It can give you a little bit of a calming feeling or an alert feeling. Very simple, actually. When you click this device on and off or click play, it gives you a little bit of haptic feedback. That’s their technology. They use that same buzzing, just vibration, and they put on your wrist to trigger a parasympathetic calming response.
We don’t want to say anything bad about them, but it’s just a very different type of technology. It’s just basically one type of vibration, versus what we’re doing, which is giving you a very precise physiological change. Now, they’re limited in what they can do. We actually have a platform that can give you an unlimited amount of effects to your body, whether it’s digestion or diet or blood flow or focusing or sleeping. All of these other stim companies can only go so far.
Jack: Digestion is another big thing that’s become a huge market with all these probiotic foods. That’s the market you’re addressing.
Scott: No, we have a much larger market, a much larger group of people that are going to be able to benefit from our technology versus these other direct stem companies. Our chief scientist on the partner company team invented Cialis. He led a team of a dozen people to build this technology over the last 15 years. He says, “All these other companies in the direct stem world, we love them, but it’s like playing the C chord on a piano. Our technology is like playing the Bach sonata. You’re playing an entire symphony onto your body because that’s how precise you have to get it to be able to cause a biophysical response in the body to give these sensations. That’s the difference.
Jack: In terms of comps, what do they sell for? How many have they sold? That will give us a sense of how much interest is there in this type of product.
Scott: All of these companies are at 50 to 100s of 1000s of units sold. They’re about two or three years ahead. But again, we’re a completely different technology. It’s more potent and effective
Jack: It’s like comparing to like a bicycle to a Ferrari.
Scott: Yeah, those are your words.
Jack: Not a bicycle, something else that’s motorized, like an electric scooter versus a Ferrari. The main thing is you have other companies that have done various things and have sold 100s of 1000s of units already, so there’s a market. We’re still early. I haven’t heard of these companies. I’ve heard of Oura Ring because I see their ads, but I haven’t heard of the others. That means this is not even the tip of the iceberg. Let’s talk about the sleep factor thing. You’ve got this Purple Mattress and all these companies that have people paying billions of dollars to sleep better. You’re going to help them do that.
Scott: There’s a great company out there by my friend Todd Youngblood called ChiliSleep. And it’s a mattress topper where you can control the temperature. It’s great for sleep. They have been doubling their sales for nine years in a row. I think they just hit 40 million in sales and next year they’re going to 80 million in sales. They just closed $130 million deal because everybody cares about their sleep. It’s a very similar product to what we’re going to be launching. Ours is going to be about these ultra-low frequencies that are helping you in your body. We’re working with digestion and blood flow and actually triggering certain things in the body.
Jack: How much is your sleep factory going to sell for?
Scott: $400 or $500.
Jack: For comparison, how much is a Purple Mattress? $1000?
Scott: Well, ours is going to be a mattress topper; it’s not the mattress itself. It goes on top of the mattress. People pay $1,000 to $2,000 for everything included in their mattresses.
Jack: Look at the MyPillow guy. He’s a billionaire from people wanting to sleep better.
Scott: We have people who want us to connect with that guy. We’re going to build it first and then we can talk about partnerships down the road. One of our investors has the Casper mattress company. We have a lot of people who are very interested in this. I’ll just put it that way. We’ve got to be careful not just hooking up to one engine, but we’d like to be able to sell through a lot of them.
Jack: You’re saying one of your shareholders owns Casper?
Scott: He has a large share of Casper.
Jack: Wait, Casper is public now, right?
Scott: Yeah, they are.
Jack: Never before would a mattress company be considered a sexy story. It was never considered interesting. These DTC direct-to-consumer things, it’s a hot area. That’s why I’m saying this stock should be like a $20 stock on NASDAQ right now. I think the market probably wants to see a quarter or two quarters of numbers. When are we going to see the first quarter of that will get their attention?
Scott: We think that with the launch of the next signal. We have our seventh signal, which is the first new signal launched since we started the company. We started with these six signals that everyone has had for the last eight months. Signal #7 launches here in the next two weeks to everybody. That already has a huge buzz. There’s a lot of people excited. That’s going to teach everyone that this is a signal platform.
Then we have our form factor for the bed coming out in the fall. That’s going to teach everyone that this is a form factor platform with a dozen-plus form factors we can create that connect to our app. Those two pieces are going to help educate all of the customer base and the markets about what we’re actually doing.
Jack: So we have to wait for the fall until the sleep factor comes out? People want the stock to start moving now.
Scott: Well, two weeks until we launch these signals and get a bunch of people excited. It already is getting a bunch of people excited.
Jack: The new signal is the super sleeper signal basically.
Scott: That’s the next one. We also have a stronger Alert. It actually comes from some of the ingredients of chocolate, believe it or not, and it’s stronger than the current Alert. As we launch diet, performance, blood flow, etc., the goal is every month to two months we start getting more and more excitement for each of these signals. And before long, there’s a dozen-plus signals in here from anything you’re ever going to want. And that gets a lot of traction really quickly.
Jack: When do you think you could have your first $2 million dollar quarter?
Scott: That’s a good question. How many units is that sold? 3,000 or 4,000 a month probably? Our average ticket price is $400 to $500. So yeah, 3,000 to 4,000 sold in a month. We’ll get that inventory here in the next three months, and then we’ll be able to start making it and moving it out the door. We’re just now cresting the 500 to 1,000 mark and then moving up from there. But again, it’s about getting inventory in the door, so we’re sort of creating the demand. And then as these products are made over the next few months going into summer, we sell a bunch more.
Jack: The real constraint on growth is just inventory at this point. In other words, if you had a demand for 5,000, you couldn’t sell them because you don’t have them.
Scott: Right. We’ve probably got 500 or 1,000 units right now in inventory. But part of those are being reserved. The marketing is there, but I don’t want to turn up the faucet on marketing because we have our partners (who are the Oura Ring partners, by the way) who have the funnel set. They’re all optimizing. I don’t want to turn that up just because of cash flow, getting the units in, and having them available to sell. What we’re working on right now is adding more to that line. We should be able to make 3,000 or 4,000 more before June. You can’t just sell a million of these overnight.
Jack: Yeah, the company’s pretty new. In the next three months, you’re probably going to hit that point. Right now, it’s still kind of the early stage. You’re not at that point where the revenues are cranking. You’ve proven there’s a market. You’ve got the marketing figured out. At this point, it’s getting the inventory.
Jack: So let’s answer some questions. Is it direct-to-consumer right now?
Scott: Yeah. Well, right now it’s direct-to-consumer. You just buy it on the website, https://hapbee.com/ It ships out within a day and gets to you, depending on where you are, anywhere between three days a week and a half. We ship all over the world. We’ve shipped to 20-something countries already. And we are launching partnerships in distribution as we speak.
Now, the issue is again inventory. One of our advisors is Kevin Harrington, one of the original sharks. He connected with a major affiliate group, and right now we’re just trying to figure out how to start with the inventory we have and not go to the major 1,000 affiliates yet. We’re just trying to start simple to get some of the bigger names to start using this and enjoying this, along with their networks. Like I said, the faucet’s ready to go when we get the inventory in the door.
Jack: You’re using influencers and celebrities to get the word out on the product. Who all is endorsing the product?
Scott: Dave Asprey has been telling this to the world. He just sent out 50 units to all of his famous friends, Howard Stern, Tiffany Haddish, Jon Levy, the whole world. Ben Greenfield is another big name in the fitness space and JJ Virgin. Tony Robbins got our first XL version ever a few months back. He has a giant dome, so we had to give him a larger size. Peter Diamandis at Singularity University and XPRIZE.
We’ve got quarterbacks using this thing. The Seahawks have used it, the Dodgers are now getting into using this. We’re moving into more of the functional medicine space. A lot of counselors and psychologists are buying this for their teams and their clients. This is kind of the future of mental health we believe, and so a lot of people are loving this. Veterans are starting to use this too. They’re not big names like you asked about, but I think those guys are heroes too. People in the mental wellness space are using it too.
Jack: We haven’t talked about the mental wellness part yet. One of the big markets that you’re touching is the mental health market. You have the Calm signal. What else do you have?
Scott: Relax is great for the muscles. Calm is a microdose of a check out signal. We have a Sleep signal that everyone needs for mental health. And then some people need stimulants like Alert or Focus throughout the day. They struggle with things that keep them from working. Our Alert and Focus signals really help for that.
Jack: Okay. Here’s another question. There was confusion in the market regarding your announcement that you’re looking to bring in a new CEO to replace yourself. What are you going to do and what’s the new CEO going to do?
Scott: Not really replace myself. I want to move into only doing marketing, partnerships, and new products. I’ll do the public-facing part and tell the story. We’ve got a dozen form factors that this technology needs to go into. That is a full-time gig, and that’s where I’m good. Massage bed toppers, yoga mats, ski helmets, shirts, and bracelets, ways to make it more invisible and seamless throughout the day.
This is a five-year project just to build out all these other form factors, and that’s where my real unique ability is. So doing that and telling the story and marketing are the only things that I should be doing. Right now, we’re in the final stages of bringing in a world-class experienced CEO to take over a lot of the day-to-day from my plate. So meetings, audits, the bureaucracy.
Jack: Part of running a public company is there’s a lot of stuff which is very distracting.
Scott: Look at Elon Musk. Elon Musk is the CEO, but he’s not. He’s the chief engineer. He sleeps on the engineering floor at Tesla twice a week in one of the conference rooms. That’s where I need to be: on the front lines tweaking products, adding new products, building new form factors. This is where my mind works. Me doing an audit meeting is useless. We have a lot of smart people who can do that. I need to be focusing on what I can do to add value.
This isn’t just a billion-dollar home run. What you’re saying, Jack, because you’re one of the experts in the industry, is exactly what I’m seeing. This is a completely revolutionary platform. So I need to run full speed on building that platform. The more we build, the more signals, the more form factors, the more the world understands what we’ve been doing for years.
Jack: Okay. In terms of signals, what other signals are you going to have? Are you going to have any psychedelic-type stuff?
Scott: We have 18 signals in the labs right now, 6 in the public. We have to go through what’s called an evaluation protocol with our parent company, EMulate. They’re working on all of the FDA cancer trials and pain trials. They’re doing the medical side, and we’re the non-medical side, so there is a distinction between the two companies.
We have 18 signals in the labs right now for diet, blood flow, stronger sleep, stronger alert, other things that we’re looking at. And we have another several dozen signals being recorded. It goes from recording to animal testing to evaluation for beta users, and then to the public. So we’re looking at everything.
We have two memory signals that we’re excited about. One of our advisors is Jim Kwik, if people know him, the brain coach to Oprah, Will Smith, and a bunch of famous people. He is one of our main investors and advisors, and memory is what he saw as the main thing for this technology. We want to partner with him for a memory signal with kavinace and methysticin and those types of things.
Jack: With the diet thing, you’re touching these massive markets. People want to do something where they’re not going to have to take diet pills or whatever. I guess they could wear a bracelet or something that gives them that feeling of not being hungry.
Scott: Yeah, our technology basically imitates non-covalent bonds in the body. Any stimulants, suppressants, and hormones, we can emulate those effects using our precise fields from studying those compounds, those source molecules. There are thousands of stimulants, suppressants, and hormones or combos we can use to create these signals. Now, we don’t need thousands. We’re probably going to ultimately have 50 to 100 that people can use for any type of specific need throughout their lives, along with their whole family. You might want Focus. Your daughter or son might really enjoy the Happy signal or the Calm signal. Someone else might want something just for memory. These are family memberships, and we want each person to have a unique experience in the app.
Jack: Okay. So Dean is asking how many units you have sold up to date.
Scott: Over 3,500.
Jack: And when did you start selling? You started selling just recently, right?
Scott: A few months ago.
Jack: And again, you’re limited by inventory. That’s the big problem.
Scott: Selling is not the problem. Making is the problem. The chips that go inside of this are 16 weeks out. We’re halfway through that to get the next 25,000. Covid’s been affecting our orders. We are making the next several thousand, but we don’t want to ever have a gap in supply. So we are selling a couple thousand here and there, and then by summer, we should be getting all those in.
Jack: That’s been one of the issues now is the constraints on the chip market right now. Everything just went crazy with the Covid thing, so there are supply chain issues. We talked about marketing. We talked about the form factors. I think we’re wrapping up. Scott, what else in terms of news do you have in the next month? Any big events coming up?
Scott: Yeah, there’s a ton. We have a couple of huge events and expos. 10,000 functional medicine professionals are coming to an event that we’re the main sponsor and partner of. That’s with Sachin Patel with Perfect Practice. We’ve got the Ben Greenfield podcast coming out to millions of people here in the next week. So we’re trying to find the inventory for that, to be honest.
We have another big psychedelic conference this summer. People are loving this signal who do meditation and experiential work. There’s nothing in your body with our signals. I’m not saying we have a psychedelic signal yet, by any means. I’m not saying we can’t do it. I’m just saying we don’t have one right now.
I think two of the biggest movers are going to come right away. The first one is launching the new signals in the app. There’s a lot of buzz and excitement amongst our customers, partners, and investors about launching the new signals because it’s what shows people what we can do.
The second one is we just made a huge partnership in the podcasting world. We partner with Seth Green, not the actor Seth Green. They have a massive group of invite-only podcast hosts, and we just entered this small circle, and each of these hosts have hundreds of thousands of audience members and email lists. They brought us in because our story is so fun and unique that they want us on every single one of these podcasts. They’ve booked us 60 podcasts deep already over the next several months with these major groups.
One of the biggest ones, Dr. Paul Schiele, who has 250,000 knows about us, and it’s a fantastic partnership. So we’re going to be swapping podcasts and selling to all of their networks as well. I think that partnership with Seth Green’s group will be the best sales funnel.
I look at it as cost of acquisition. Yes, we could sell these in a million different ways, but cost per acquisition is going to be the easiest way. Very excited about that. We’ll be able to net a lot more per unit. I look at profit per unit sold. That’s the best bang for the buck I’ve seen. We signed that last week, and a press release came out today or yesterday
Jack: The takeaway from this interview would be that getting to 50,000 is a done deal. You have companies that are similar in that space who have already sold that many. You’re using your direct-to-consumer marketing channels and all these influencers who you have. And these are guys who sell $300 products in affiliate markets and all that. They do that all day long. They’ve moved billions of dollars of stuff. I think getting to 50,000 in the next 12 months is pretty much a done deal. The only issue is getting the chips, getting the inventory.
Scott: Yeah, getting the inventory. The goal is to sell at least 50,000 in the next 12 plus months of just the headband. We’re not even talking about the bed.
Jack: Okay, just the basic Apple product.
Scott: It is very possible that the bed could outsell it. I want to be clear on that. There’s the ability for a lot more to be purchased through channels in the bed form factor than there are for this one. There’s a lot of reasons we’re adding the bed on sooner rather than later. People buy those in bulk all the time, and there are way more distribution channels for the bed topper than there would be for this.
Jack: Really? Why is that?
Scott: All the sleep DTC companies out there: Tuft & Needle, Purple, Sleep America, Casper, all these people could add on our product tomorrow as an affiliate distributor and bring them on to all of their clients.
Jack: In the sleep market with all these companies, there’s already an established distribution. It’s a big thing already. Meanwhile, for this, you’re essentially a brand-new market.
Scott: A brand-new category.
Jack: But for sleep, you already have an existing distribution, so all you have to do is just stick it into that slot. When are you going to have this sleep factor?
Scott: I can’t promise exact dates, obviously, but we are already through the design and engineering phases of the product itself. So it’s like a six- to eight-month cycle. As summer draws to a close, we will be almost done with prototyping, moving into production. The goal is by Q4 to start to get these off the line and market them.
Jack: Really for Christmas basically. This is like a Christmas present. That’s going to be the game-changer. That’s a transformative thing for the company.
Scott: I think it will be the next step. Each month, we’re launching new pieces of our technology, more signals, more partnerships, that are making us successful. But things like that are going to be huge exponential growth pieces.
Jack: It’s like when Apple went from iTunes to the iPhone. Not everybody wants to listen to music, but everybody needs a phone. That really changed the company. So there’s actually a lot to look forward to here. Okay. Scott, I’m going to let you go. I’m going to let you get back to inventory and whatever else you’re doing here. Thank you. We’re looking forward to your next big news events. And thank you, everybody, for joining our livestream today.
Scott: Thanks, Jack, Thanks, everyone.