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Adjusting isn't changing strategy
The fixed destination
Mike Tyson's line, that everyone has a plan until they get punched in the face, describes how business goes. The destination at Eight Sleep stays fixed: a global iconic brand that helps millions of people improve their health and longevity through better sleep. The route to it moves with whatever happens.
A shock almost every year
Something shakes the business almost once a year. One year it was the collapse of SVB, when essentially all the company's money, tens of millions of dollars, sat in that bank. More recently it was an AWS outage, which made an offline mode that had been planned for two months suddenly urgent. The VP of software engineering went to sleep at 4 a.m. while the team shipped it in 24 hours.
Velocity wins
Younger team members sometimes feel the strategy keeps changing, but the priorities are shifting because new information arrived. Velocity is what separates a company like this from HP or IBM, and the same applies to product ideas, where assumptions get tested within months.
Why did Silicon Valley Bank collapse so fast?
The bank held large amounts of long-dated bonds that lost value as interest rates rose. In March 2023, depositors tried to withdraw about 42 billion dollars in a single day, according to the Federal Reserve's review. Most of its depositors were startups and venture-backed companies with balances far above the insured limit, so many withdrew at once. Regulators closed the bank on March 10, 2023, the largest US bank failure since 2008.
Why did one AWS outage disrupt so many apps?
Amazon Web Services rents out computing power that thousands of apps and websites run on. Many of them are hosted in its US-East-1 region in northern Virginia, the company's oldest and largest. A fault in a core service there can ripple through every app that depends on it. AWS launched in 2006 with storage and computing services.
Why build an offline mode for a connected bed?
A device that depends on the cloud for every decision stops working when the cloud does. An offline mode stores the schedule and settings on the device itself, so it can keep running without a connection. Engineers call this approach local-first design. Thermostats and smart locks commonly keep a fallback of this kind.
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