Nappr consists of a mobile/web application that provides access to an expansive network of short-term sleep locations in businesses, apartments and homes with hosts setting the prices, similar to Airbnb. This essentially allows people to take naps on-demand from wherever they are, whenever they want to and at the venues of their choice, and also give hosts the ability to generate extra income in their unfilled spaces with convenient hourly scheduling. Our revenues are generated as a 15% commission from each transaction, with 10% coming from the napper and 5% from the host (min $2 from each).
We have a fully functional prototype built for iOS, Android and web, and the latter is integrated on the back-end. We've received great customer feedback on the beta test of the app, which has undergone two separate rounds of beta testing. Improvements were made based on the feedback received.
We've also spoken to potential users on both sides of the marketplace and have generated some buzz there.
Our nappers will consist of workers who have jobs in high-stress, fast-paced environments or those with extended hours like finance, legal, insurance and health, a small to medium lack of health and wellness, and some disposable income. The hosting market will consist of existing AirBnB hosts who need to fill their unused capacity, co-working/event spaces that have extra room to fill, and any other services that already offer some type of nap.
According to the National Sleep Foundation (NSF), there are three main categories of "nappers" and we plan to cater to all of them. Office workers likely fall into one of the first two groups:
Habitual nappers take a nap at the same time each day (e.g. 12-1 if that's when their lunch break is).
Emergency nappers take a nap when they are suddenly very tired and are forced to rest in order to proceed with a particular activity. Naps for this group are arguably more important than habitual ones, as the name suggests.
Planned nappers (also called preparatory nappers) take a nap before they get sleepy. It is the leanest target for us and the demographic is unclear, but our model would still be attractive to anyone who participates in this daily routine.
Problem or Opportunity
Over a third of Americans don't get enough sleep on a regular basis, with that number rising to 40% in our HQ city of New York. As much as people would like to take a nap during the workday, they are either too busy to do so or too afraid to get caught doing it, or they view it as being weak. This leads to increased caffeine and energy drink consumption, with the average American drinking three 12-ounce caffeinated beverages per weekday. Not only is this an unhealthy, short-term workaround that can lead to burnout, but it can also lead to many long-term health issues as well.
Napping can potentially alleviate some of the problems caused by sleep deprivation, and studies show that even a quick 30-minute snooze can help people be more productive and healthy. And this is why people will care about our platform. Nappers will want to use it because it gives them a healthy and convenient way to get through the day (in an actual bed!), and hosts will want to use it as well because it allows them to make some extra income from their unused capacity, potentially from their Airbnb inventory.
Solution (product or service)
Nappr consists of a mobile/web application that will provide access to an expansive network of short-term sleep locations in businesses, apartments and homes with hosts setting the prices, similar to Airbnb. This will essentially allow people to take naps on-demand from wherever they are, whenever they want to and at the venues of their choice, and also give hosts the ability to generate extra income in their unfilled spaces with convenient hourly scheduling. Our revenues will be generated as a 15% commission from each transaction, with 10% coming from the napper and 5% from the host ($2 min from each). The apps will be free to download and the entire network will be available on a 24/7/365 basis.
HotelsByDay and DayUse.com both offer day-time rates at hotels in blocks of at least 4 hours, and while they do offer comfortable lodging they tend to be very pricey, especially in New York. A quick search for a Monday at 1pm shows DayUse is at least $70 and HBD is at least $60. Nappr will offer more flexible times and pricing, and also more locations to choose from since we also offer listings in apartments, homes and other businesses.
Globe Living has a similar business model as us but they are only in San Francisco and only feature residences on their platform. They have also diluted their business model quite a bit and napping is not a prominent feature of it, so we do not expect them to be a major competitor.
Spas offer the ability to relax at any time of the day and there are over 800 of them in the greater New York City area, so they could pose a potential threat. Some of them offer naps but few of them have actual beds, and their price points tend to be high as well.
AirBnb has a different multi-day lodging model, but they could potentially compete in this space at some point in the future. We reckon that many of their hosts would experiment with the napping model if given the choice to do so, and that is precisely why we plan to target them as hosts for the Nappr platform.
Advantages or differentiators
Since there aren’t any other companies doing this at this capacity, it will be a major advantage for us if we can establish the on-demand napping market and define the space. This will give us the opportunity to leverage our brand and build out our network of users before other companies compete with a similar business model.
Our current competitors (with different business models) have figured out that hotels have excess capacity in the daytime and/or that people need to relax during the day, but none of them evangelize napping and the science that backs how useful it is. Nappr is going to do both. We want to provide people with the spaces/customers they need and we also want to drive home why it's so important to get enough sleep on a daily basis, and that will differentiate us as both a productivity and a wellness company.
Another competitive advantage that we’ll have is our booking flexibility, which allows users and hosts to book or list something for as little as 30 minutes at a variety of spaces. This is something that DayUse and HotelsByDay do not offer at the moment since they require 4-hour blocks at hotels. We will have hotels on our platform as well, but also co-working spaces, spas and any other businesses that offer beds or nap pods (in addition to residences).
Lastly, our CTO is located in Pakistan and that will provide us with significant cost savings via lower purchasing power parity and higher exchange rates. It will also give us a leg up when we expand into the Asian market, which we plan to do in 2-3 years.
Our revenues will be generated as a 15% commission from each transaction, with 10% coming from the napper and 5% from the host ($2 min from each). This guarantees us at least $4 of revenue per transaction against $0.60 cents of Paypal or Stripe fees.
Our business model is very similar to Airbnb's - where you essentially have a two-sided marketplace with hosts renting out their spaces to nappers. Nappr does not own any of the spaces or assets and we simply provide the service while monitoring user behavior and providing safety guidelines. Our feedback system should help curate the market and help users make well-informed decisions.
Important metrics for us: Napper Revenue, Host Revenue, User growth per month/year, Avg. revenue per transaction, Avg. Length of Stay
Money will be spent on
This money would be put towards R&D and Technical costs (e.g. running our network on mobile and web, improvements to the software, labor costs, etc.), marketing for our product launch (advertising, promotions, referral program) and legal/administrative costs like insurance and outside consulting as we get this off the ground.
In general we are expecting the following percentage breakdown:
Research & Development/Technical Costs - 40% Marketing and Sales budget - 45% Administrative and legal expenditures - 15%
Offer for investor
We are pretty flexible here and would offer up to 30% equity in our venture.
The biggest risk for our business right now is the COVID-19 pandemic since our app relies on people feeling safe and secure in other homes and businesses (and sleeping in them of course). This affected Airbnb in a significant way in the past year, but now that vaccinations are prevalent we expect consumer confidence to rise in the near-term. To mitigate any risk we will be proactive about putting any necessary measures in place to ensure our users’ safety and security as that is one of our top priorities.
Another potential risk in the future is Airbnb jumping into this market and offering their listings for shorter-term durations, but I haven’t seen any indication of them heading this direction. If they did ever decide to do this it would add a new competitor in every country and it would also tap into our hosting market since we want Airbnb hosts on our platform, so we would need to strategically adjust our goals to combat this.
The other risk that we face is slow adoption and growth for this idea in the United States (or a significantly slower rate than we are hoping for). We are expecting many people and companies to not understand how helpful this can be at the beginning, and that's why our marketing materials will try to help fill this gap.