Crowdfunding
Kickstarter

James Proud ... Founder Hello Inc

Burgess COMMENTARY

Peter Burgess

https://www.kickstarter.com/projects/hello/sense-know-more-sleep-better

The last time Forbes caught up with James Proud, he was 20 and had just sold his first company. A member of the inaugural class of Thiel Fellows, a group of 20 teenagers paid by billionaire investor Peter Thiel to skip college, the overachiever had parted ways with a music business started out of his bedroom for a six-figure sum and was looking for his next big project.

Now 22, Proud is well into his second company, Hello Inc., whose first product promises to track sleep habits better than any current wearable or phone application. Launched Wednesday on Kickstarter, Hello’s Sense is part-Nest thermostat, part-Fitbit, a device that its founder will help people better monitor an activity that they spend a third of their lives doing.

“Sleep is the one time that you’re not conscious for and you don’t know what happened,” says Proud. “Sleep is something you do every day and it’s important in determining how the rest of your day goes.”

Indeed, that’s the realization that a number of applications and devices have already had, most notably wearable companies like Fitbit and Jawbone. Proud, who initially considered building a wearable when founding his company 18 months ago, moved on from the idea after considering his own sleeping experiences and interaction with technology. Current devices that track sleep do so only as a side function, he says, and the wearables involved can often be a distraction.

“The valuable of wearables becomes more interesting when you don’t have to do something, when you don’t have to charge something or press buttons,” he says. “Sleep is when you want to be distracted the least.”

Hello’s product, which will be available later this winter contingent on a successful Kickstarter campaign, aims for minimal distraction and features a pillow clip-on–dubbed the “Sleep Pill”–and a central bedside Sense device that was modeled after the Bird’s Nest stadium in Beijing. The pill tracks and sends movement information to the Sense, which also takes in light, sound, temperature and allergen particle information with built-in sensors. With WiFi and Bluetooth capabilities, the product communicates with mobile devices and the Web giving reports and a zero to 100 sleep score that judges how well a user slept during the night.

IMAGE Hello Inc. founder James Proud (Photo courtesy of Hello Inc,)

Dr. David Volpi, an advisor to the company, says the device in its current form would not replace FDA-approved sleep test kits used by patients with medical sleep conditions. However, he says, something like Sense can provide valuable feedback for those who can’t pay thousands of dollars for those kinds of treatments, or patients who don’t necessarily have a diagnosable ailment but still have sleep issues.

“I anticipate using it to follow up on patients,” he says. “A lot of patients that come to see me and don’t have a medical issue, but still need to have their sleep monitored.”

Among the monitoring capabilities of the device include the ability to discern when and how loud a user is snoring as well movement sensitivity that can take into account when someone is tossing and turning and how that’s associated with the room environment. Sense can also track a person’s sleep cycle, and with its smart alarm, wake up a person near a target time when are they not in deep sleep.

For now though, the Sense remains an unmanufactured product subject to the whims of backers on Kickstarter. Proud is hoping to raise at least $100,000 on the crowdfunding platform, or 1,010 pre-orders at a price of $99, acknowledging that it gives his company, which is unveiling itself on the same day of its initial device, more of a marketing presence.

“The real magic of Kickstarter is that it has an engaged community ready to back or communicate with companies about their projects,” he says. “Trying to replicate that on your own site–which has just launched–is next to impossible.”

Proud, who seeded the company with earnings from selling his first startup, also makes it clear that he’s going with Kickstarter not necessarily for the money. Hello, unlike crowdfunding projects started out of bedrooms (or seldom-used kitchens), has 16 employees, an office in San Francisco’s Potrero Hill neighborhood and a host of elite Silicon advisors from former PayPal head David Marcus to former Apple iPhone senior engineer Andy Grignon.

Documents filed with the SEC also show that the company raised $10.5 million in funding in January after allotting about $18.2 million in shares to be sold. Proud did not discuss Hello’s previous fundraising and was only willing to talk about Kickstarter, which he says wasn’t the most efficient way to raise money, but is “the best way to reach people.”

And it’s those people who will give the thumbs-up, or thumbs-down, to Sense. Proud, who is confident is in his product, still understands the democratic judgment that can be passed on projects by Kickstarter users.

“If we go out there and it doesn’t do well then obviously we’re building something people don’t want,” he says. “It’s the same thing if we went and put up a pre-order page and there were no pre-orders.”

“But I do think we’re making something people do want,” he adds.

Indeed, if he’s wrong, there could be many sleepless nights ahead for the young founder.

Update July 23, 2014 at 1:08 pm PDT: Forbes uncovered documents that Hello Inc. raised funds prior to launching its Kickstarter campaign. Details on that fundraising round have been included in the above story.