LBA 2 Assignment Report
Somnox - Group 11
LBA2
Assignment
Report
Somnox
Muhammad Arham Elahi (5213320)
Mohamad Mousa (5134269)
Martijn de Ridder (4857739)
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1
Opportunity Analysis Canvas Blocks
1.1 Entrepreneurial thinking
Using the opportunity analysis canvas block proposed by dr. James V. Green [1], the
entrepreneurial thinking is clear to see by looking at the characteristics of the innovation, as the
founder saw a problem in his close surroundings that he could potentially fix. The founders
started the company with a clear goal in mind: to improve people's quality of sleep and,
consequently, their overall health. This desire to achieve and make a significant impact in the
healthcare field has motivated the Somnox team to continually innovate and improve their
product. Also, Somnox's entrepreneurial mindset is marked by a focus on their customers. They
have invested significant resources into understanding their customers' needs and tailoring
their product to meet these needs. This customer-centric focus has been instrumental in their
success. Somnox's team also shows a high tolerance for ambiguity. As a startup in the dynamic
field of innovative health tech, Somnox operates in an environment characterized by uncertainty.
However, the team's ability to stay motivated has shown their tolerance for ambiguity.
Figure 1: Opportunity analysis canvas block, thinking. (James V. Green, 2013)
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1.2 Entrepreneurial seeing
Somnox operates in the sleep technology industry, which has experienced significant
macroeconomic changes in recent years. With smart watches becoming more mainstream they
allow people to track their sleeping patterns [2]. This causes people to better see any sleep
defects they might have. The growing awareness of the importance of sleep for overall health
and wellbeing has led to an increase in demand for sleep-related products and services. This
trend has fueled the growth of the sleep technology industry, making it a competitive market.
The sleep technology industry is experiencing significant growth and is expected to continue
expanding in the coming years. The Sleep Tech Devices market size surpassed $17.9 billion in
2022 and is projected to register a CAGR (compound annual growth rate) of 18.2% between
2023 and 2032 [3]. By 2030, the global sleep tech devices market is estimated to be valued at
$61.2 billion [4]. These numbers indicate the industry's potential for substantial growth and
highlight the demand for innovative sleep solutions.
This potential growth comes with industry competition. Some of the other competing
companies in the sleep technology industry include Sleep Number, Muse, Nyxoah, Dreem, Fitbit,
ResMed, Sleep Shepherd, Xiaomi, and Sleepace [5][6]. These companies offer various sleep tech
devices and solutions, such as wearable sleep trackers, smart mattresses, and sleep monitoring
apps. What Somnox does differently is the introduction of a sleeping robot, which acts as a
companion as well as a non-pharmaceutical alternative. It also uses breathing patterns to help
you fall asleep.
Figure 2: Opportunity analysis canvas block, seeing. (James V. Green, 2015)
1.3 Entrepreneurial acting
In terms of pull strategy, Somnox focuses on solving a pressing problem: poor sleep. The
company acknowledged that insomnia and other sleep disorders are significant issues for many
individuals. In terms of push strategy, Somnox leverages its unique solution to expand its scope
and create additional value. Somnox continually refines its sleep robot, adding features to
further push their sleep robot onto a broader audience [7].
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One of these push strategies is the release of the Somnox 2, a new version of their sleeping
robot. The Somnox 2 builds upon the basic functionality of its predecessor, offering features
such as breathing exercises, measuring and adjusting breathing patterns, and audio streaming
via Bluetooth.
Figure 3: Opportunity analysis canvas block, acting. (James V. Green, 2015)
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2
Key Customer Values
2.1 Minimal Viable Product
In this section, we'll dive deep into Somnox's value proposition, dissecting how the company
effectively addresses the fundamental needs, challenges, and benefits of its customers. To start
off, the Minimum Viable Product (MVP) of Somnox can be identified to be its first sleep robot,
Somnox 1. It weighed 2.3kg and had a 3300 mAh battery and was compatible with both iOS and
Android. It is made from soft fabrics and foam from Auping and contains a washable sleeve
made from cotton. Compared to the company’s flagship product, Somnox 2, it is slightly heavier
as the Somnox 2 weighs 1.8kg and also has half the battery capacity although their basic
function is very similar and they both do their job, the somnox 2 has enhanced sensors and
algorithms to provide an overall better experience. This is counteracted by its cheaper price
with Somnox 1 being €399 and Somnox 2 being €549.
The Value proposition canvas consists of 2 sides, the left side consists of a Value Map and the
right side consists of a target Customer Profile.
Figure 4: Value proposition canvas (own work)
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2.2 Client segment
To find out more about the customer profile, we will need to dive into the world of Somnox's
customers – those who seek better sleep and yearn for a solution to their sleep-related
challenges. We will uncover their needs, pains, and desires, and gain insight into the impact
Somnox's innovations may have on their lives. The Customer Profile consists of the following
elements:
●
Customer Jobs to be done:
In Somnox’s case this would be ‘jobs’ related to their sleep. So it would include
a. Getting to sleep faster
b. Staying in REM sleep longer
c. Reduce the amount of times you wake up after sleep
d. Increase total sleep quality
e. Reduce stress
●
Pains:
The lack of sleep has a variety of effects some of them include but are not limited to
(Medic. et al, 2017):
a. Slowed thinking
b. Reduced attention span
c. Worsened memory
d. Poor decision making
e. Lack of energy
f. Mood swings
In more serious cases with long term sleep deprivation the following effect may be seen:
g. Increased risk of cardiovascular diseases and diabetes
h. Obesity
i. Immunodeficiency
j. Hormonal abnormalities
k. Mental health disorders (particularly depression)
●
Gains: The better sleep someone may experience may make their day better in a variety
of ways including but not limited to [9]:
a. Better sleep quality
b. Improved physical health through proper rest
c. Enhanced mental health through reduced stress and anxiety
d. Increased daily productivity and energy
e. Overall better sense of happiness and well being
2.3 Value proposition
The Value Map unveils the cornerstone products and services Somnox provides to cater to the
intricate system which wakes you up gradually rather than an instant loud noise.
●
Pain Relievers:
The Sleep robot and its accompanying services would provide relief from sleep disorders
and prevent all of the aforementioned side effects of sleep deprivation, it also provides it
in a non-pharmaceutical and non-invasive fashion making it a more attractive option
than sleep inducing drugs which can introduce a variety of side effects.
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●
Gain Creators:
The sleep robot would provide improved sleep quality which would not only help them
potentially reduce the risk of life threatening diseases but also wake up feeling refreshed
and energetic. This would lead to better overall well being with less stress, fewer mood
swings and a more productive and relaxed day. needs of its customers within the sleep
wellness domain. It contains the following elements:
●
Products and Services:
The company’s core product is the Sleep Robot, a pillow shaped device that mimics
natural breathing patterns. This gives the illusion of sensation of another person
sleeping next to the customer who is breathing rhythmically, and therefore promotes
relaxation and sleep. In addition Somnox also offers an accompanying app which unlocks
a variety of features including settings for specific breathing patterns, sound for calming
music or podcasts and alarms.
Figure 5: The Value Proposition Statement (own work)
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3
Sustainable Business Model Canvas
The foundation of any successful enterprise lies in its business model, a blueprint that defines
how it creates, delivers, and captures value. In this section, we embark on a summarized
exploration of the business model that powers Somnox.
Figure 6: The Sustainable Business Model Canvas (own work)
It consists of 4 main components:
● Value Creation - Feasibility
● Value Proposition - Desirability
● Value Capture - Viability
● Value Delivery - Feasibility
3.1 Value Creation has 3 drivers: Key Activities, Key Stakeholders and Key Resources.
● The key activities for Somnox consists of continuous improvements to its product and
good customer support for existing customers. It also consists of marketing efforts so
more people with sleep issues are able to understand the value a Somnox sleep robot
could bring to their life.
● The key stakeholders and partnerships is their long term relationship with Auping who
would provide valuable insight into the sleep market and their recent partnership with
Drake and Farrell who will improve their supply chain and product longevity.
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●
The key resources are their tightly knit team of innovators as well as their research and
manufacturing facilities which enable them to keep on producing the highest quality
products. It also includes their patent for their disruptive technology as well as their
network of sleep experts which would be able to inform them of any new ground
breaking technology that may revolutionize their product.
3.2 Value Proposition was explained in greater detail in the previous section
● The main ‘profit’ provided to customers is the ability to get a non-pharmaceutical
product that improves sleep at a reasonable price.
● It will have a positive impact on people’s mental health in general, making them more
agreeable and making them function at a higher capacity, thus increasing the value they
provide to society.
● As for their dedication to the environment, they partnered with Drake and Farrell to
promote a circular life cycle for their product. They also ship and package in line with
environmentally friendly practices.
3.3 Value Capture has 2 constituent elements, Cost Structure and Revenue Streams.
● The cost structure consists of the initial as well as ongoing R&D costs, manufacturing
costs, marketing costs, distribution costs, cost of personnel as well as recurring
operational costs. The most important costs right now to invest in would be R&D and
marketing to improve the product and make sure it reaches as many ears as possible.
These costs are most likely the largest portions of the current distribution as well.
● The Revenue streams for Somnox contain 2 main avenues, one can either buy the sleep
robot directly or choose the ‘Sleep as a Service’ subscription model where for a monthly
fee you can use the sleep robot. This is particularly useful for skeptics who want to try
out the product long term before buying it.
3.4 Value Delivery contains 3 parts, the targeted customer segment, the relationship with the
customer and channels through which to provide value.
● Somnox primarily targets individuals who struggle with sleep-related issues, such as
insomnia, sleep apnea, anxiety-induced insomnia, or those who simply seek to enhance
their sleep quality. This can be from a wide range of ages and backgrounds who just
share a common need.
● The customer relationship is mainly through online customer support, somnox values
this highly and doesn’t push it off to a call center that might not know the product well. It
also offers multiple avenues of communication including email, contact form, whatsapp
messaging as well as voice calls. They are also very active on their kickstarter page
making sure all concerns are addressed for the initial customer base that they gathered.
● As for their channels, their main distribution method is online sales platform including
their own website as well as other big online retailers like bol.com. This is sufficient for
the relatively small scale they operate on right now.
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4
Market Segmentations
4.1 What are the possible market segmentations for the company?
Somnox, with its innovative sleep robot pillow, has the potential to serve various market
segments within the sleep technology and wellness industry. These segments include:
- Individuals with Sleep Disorders: Somnox can offer relief and improved sleep quality to
those suffering from conditions like insomnia, sleep apnea, and restless leg syndrome.
- Health and Wellness Enthusiasts: Somnox can target health-conscious consumers who
prioritize wellness and understand the significance of quality sleep for overall
well-being.
- Aging Population: The elderly often face sleep-related challenges, making Somnox sleep
robot a non-pharmaceutical solution to enhance their sleep quality and overall health.
- Hospital and Healthcare Facilities: Partnering with healthcare institutions allows
Somnox to offer sleep solutions to patients in various medical settings, especially those
recovering from surgery or managing sleep-related medical conditions.
- Hotel and Hospitality Industry: Hotels can enhance their services by incorporating
Somnox's sleep robots, offering guests a unique and relaxing sleep experience during
their stay.
Table 1: Market segment scoring
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4.2 The beachhead market and the characteristics of end users in first segment:
While the Somnox prototype is being tested in a hotel, the absence of any showcased results
from these tests raises doubts about the feasibility of selecting hotels as the beachhead market.
The beachhead market of Somnox consists of individuals struggling with sleep disorders,
particularly chronic insomnia. The characteristics of end users in this first segment might
include chronic sleep troubles. The end users in this segment often suffer from persistent sleep
problems such as insomnia, where they have difficulty falling asleep or staying asleep
throughout the night. Another characteristic of the end users could be Frustration and
Discontent , users in this segment are likely frustrated and dissatisfied with their current sleep
situation. They may have experienced the negative consequences of poor sleep in their daily
lives, including reduced energy levels and increased stress. The first segment or beachhead
market that Somnox likely started with individuals suffering from chronic insomnia.
We will create a persona through an empathy map to understand the characteristics and needs
of the end-users in this segment.
Figure 7: Empathy Map (own work)
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5
Market Size
5.1 TAM
An estimated 50 to 70 million people worldwide suffer from persistent sleep disorders, such as
insomnia, sleep apnea, and narcolepsy. Interestingly, many of those affected by these issues live
with someone who shares similar sleep-related challenges (76%), and for a significant portion
(42%), sleep problems have a familial connection [10].
This situation sets the stage for the Total Addressable Market (TAM) concept, a fundamental
aspect of market analysis. In Somnox's case, their TAM covers a broad global audience of
individuals dealing with sleep-related problems, including insomnia, sleep apnea,
stress-induced sleep difficulties, and those seeking innovative solutions to enhance their sleep
quality. Somnox's TAM reflects the extensive worldwide demand for effective solutions in the
realm of sleep-related issues.
5.2 SAM
In terms of the Serviceable Addressable Market (SAM), which is a subset of the Total
Addressable Market (TAM), Somnox can realistically target individuals in the Dutch market who
are seeking non-pharmaceutical sleep solutions and is open to incorporating technology into
their sleep routines.
An extensive study in the Netherlands, involving 20,000+ participants aged 12 and above,
unveiled concerning statistics regarding sleep disorders. It found a high prevalence rate of
27.3%, with 21.2% of males and 33.2% of females affected. These findings highlight the
widespread issue of sleep-related problems [11].
5.3 SOM
Somnox has already made a significant impact by enhancing the sleep quality of over 4,500
individuals in 2020. These 4,500 satisfied customers represent Somnox's Share of Market
(SOM).
When we dive into the concept of the Share of Market (SOM), we're exploring an even narrower
subset of the market. It reflects the portion that a company can effectively reach and capture,
considering factors like marketing strategies, distribution channels, and competitive positioning.
In the case of Somnox, the SOM encompasses those within the SAM who become actual
customers of Somnox's revolutionary sleep robot pillow.
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Figure 8: TAM, SAM & SOM (own work)
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5
References
[1] Green, J. V. (2015). The opportunity analysis canvas. Venture Artisans.
[2] Samsung. (2022). Samsung Newsroom. Retrieved October 7, 2023, from
https://news.samsung.com/us/understanding-sleep-habits-changed-over-pandemic/
[3] Swain, R. (2023). Sleep Tech Devices Market. GMI
https://www.gminsights.com/industry-analysis/sleep-tech-devices-market
[4] Skyquest. (2023). Global Sleep Tech devices market size and Forecast to 2030.
https://www.skyquestt.com/report/sleep-tech-devices-market
[5] Mordor Intelligence. (n.d.) Sleep Tech Devices Companies
https://www.mordorintelligence.com/industry-reports/sleep-tech-devices/companies
[6] Globesnewswire. (2023). Sleep Tech market is projected to grow at a CAGR of 22.6% by 2033:
Visiongain Reports Ltd.
https://www.globenewswire.com/news-release/2023/03/06/2620813/0/en/Sleep-Tech-mark
et-is-projected-to-grow-at-a-CAGR-of-22-6-by-2033-Visiongain-Reports-Ltd.html
[7] Somnox 2 Breathe & Sleep Robot: Breathe better, sleep better. Somnox Website. (2023,
February 22). https://somnox.com/
[8] Medic, G., Wille, M., & Hemels, M. E. (2017). Short-and long-term health consequences of
sleep disruption. Nature and science of sleep, 151-161.
[9] Get enough sleep. Get Enough Sleep - MyHealthfinder. (2023).
https://health.gov/myhealthfinder/healthy-living/mental-health-and-relationships/get-enough
-sleep
[10] Suni, E., & Suni, E. (2023). 100+ sleep statistics. Sleep Foundation.
https://www.sleepfoundation.org/how-sleep-works/sleep-facts-statistics#:~:text=According%
20to%20estimates%2C%2050%20million,Sleep%20disorders
[11] Chattu, V. K., Manzar, M. D., Kumary, S., Burman, D., Spence, D. W., & Pandi-Perumal, S. R.
(2018). The Global Problem of Insufficient Sleep and Its Serious Public Health Implications.
Healthcare (Basel, Switzerland), 7(1), 1.
https://doi-org.tudelft.idm.oclc.org/10.3390/healthcare7010001
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