Mark Coombs, co-founder of Sleepout, is helping North Americans get better sleep
From a Kickstarter campaign that saw 2,000 customers in just over a month to Dragons’ Den and Good Morning America, the last two years have been an absolute rollercoaster ride for entrepreneur Mark Coombs (JD ’15). Coombs is a co-founder of Sleepout—a portable blackout curtain that installs anywhere in just seconds.
The product came out of necessity—or more so, frustration. Mark, a (former) sufferer of insomnia, spent years searching for a quality blackout curtain to improve his sleep. Finding nothing that could guarantee a fully darkened room, he decided to take the ultimate leap of faith in 2021, quitting his job to develop and patent a prototype of his own. Battling through a pandemic (and, of course, the usual challenges faced by any entrepreneur), Mark and co-founder Hannah Brennen have taken their idea to market, helping over 20,000 customers get a better night’s sleep.
Mark’s path to Sleepout
Like many entrepreneurs before him, Mark’s journey is one of resilience—motivated by a dream of creating a better life for himself.
“I was born in Newfoundland and moved to British Columbia with my mother when I was five. Mom was sick pretty often and we didn't have very much. It was certainly a hard road for the two of us. I faced a lot of barriers in terms of people thinking that I wouldn’t be able to go to university because of our economic situation.”
Mark graduated from Memorial University in 2012, studying political science and philosophy. He fell in love with Atlantic Canada and decided to stay after graduation. He received a full scholarship to attend UNB Law.
“The scholarship was massive for me. As somebody who came from a disadvantaged background, I don't know if I would have been able to actually afford law school without it.”
Mark made the dean’s list in each of his three years at UNB Law, graduating with his JD (with distinction) in 2015. From there, he articled with Moodie Mair Walker LLP in Toronto. While he enjoyed the courtroom experience and the litigation side of things, he was not fond of the billable hour structure of law. Still longing to explore a world of entrepreneurship and business, Mark joined Blue J Legal, a Toronto-based start-up exploring AI prediction for legal technology.
This would be a highly formative experience for Mark. In his time with Blue J, Mark built and managed the full revenue team. He created the framework that grew the company from $0 to $1.8M in revenue. He managed channel partnerships with Fortune 500 company distributors for multiple products, and grew total revenues by 382% over 12 months as head of sales.
“I jumped in immediately to start working on product development, but then I just kept taking on more and more responsibilities. One of the best ways to accelerate learning is just to get involved in a very early-stage company. You get to help to build everything.”
One of Blue J’s key Partners was Thompson Reuters, a leader in legal technology.
“Going to those boardrooms and talking to the VPs, learning about market strategy, going to law firms—on the other side—I was a lawyer that was walking into law firms trying to get them to adopt new technology and fighting all the battles with senior partners. Traveling to Ottawa and meeting the DOJ and the CRA. It was an incredible experience.”
Mark’s next move took him to another tech start-up, Kira Systems, a market leader in artificial intelligence technology for contract/document analysis. Mark led Kira's financial services initiatives, negotiating significant business transactions.
The aha moment
While Mark’s time with both Blue J and Kira further fueled his desire to start his own business, it wasn’t until the onset of the COVID-19 pandemic that it became clear how this would happen.
“I was suffering from light sensitivity and insomnia that got worse because I was stuck inside all day. I was in a condo in downtown Toronto, where I wasn’t allowed to install my own blackout curtains. Hannah and I were using shower curtain rods with garbage bags. We tried several items from Amazon, but nothing seemed to be effective.”
Mark pulled the back-end sales data from several Amazon products designed to blackout windows. He saw that these items were selling really well, but that the reviews showed customers were not happy with the products—a sentiment he and Hannah shared. That is where they saw their opportunity. They began calling entrepreneurs who had appeared on Dragons’ Den and Shark Tank—anyone whose product was a window covering or that had suction cup technology.
“It was great to speak with these people to gain an understanding of the market and the manufacturing process. Curtis Kennedy helped us a lot in the early days. He is the founder of Vertiball and also a UNB grad and Dragons’ Den alum.”
Mark bootstrapped the operation to be as capital efficient as possible. He knew a pre-order model would be required as the plastic injection molds for the suction cup technology would be a massive expense. In July of 2021, Mark and his team found a manufacturer to mass produce their first product, Sleepout Portable. He launched a Kickstarter campaign and in just 35 days received orders from over 2,000 customers totaling nearly $300,000. Sleepout was officially born and picking up incredible steam.
Investment from an industry leader and pandemic challenges
Following the huge success of the crowdfunding campaign, Mark began talks with Sleep Country, Canada's leading specialty sleep retailer. The brand agreed to a 25% stake in Sleepout, providing logistical assistance with warehousing, supply chain and helping build business relationships for rapid growth.
“The investment from Sleep Country was huge for us. This was their first minority investment deal. Before us, they'd only done acquisitions, like Endy and Hush Blankets, massive acquisitions.”
Sleepout’s first big challenge came in late 2021. They faced inventory shortages due to the worldwide supply chain crisis. Originally scheduled for delivery in October, their crowdfunded Sleepout’s would only arrive in January. Mark and his co-founder Hannah Brennen fought hard to manage customer expectations and keep the business flowing during a time of limited sales/pre-orders.
“We started Sleepout at one of the worst times for an e-commerce business. Container costs went from $2500 to $18,000, and getting goods landed was almost impossible. It's those macro events that you just can't foresee or control. You just have to get scrappy and pick up the phone. We called every freight forwarder, we called in every favor, and Sleep Country helped us to figure out a way to get our container faster because it could have been March had we not done all of that work.”
Thanks to a never-say-quit attitude, Sleepout delivered the 2,000 pre-orders of their flagship product by January and, thanks to some innovative marketing initiatives, went on to close out the year with $2.7M in revenue.
Pitching to the Dragons
Following in the footsteps of nearly all of their mentors, Mark and Hannah applied to appear on the Dragons’ Den.
“We had spoken to so many people who had been on Dragons’ Den. It’s the show you need to be on if you want to be a big Canadian e-commerce brand. It can really legitimize you and your product. We knew we had to apply.”
While hiking in the Grand Canyon, Mark and Hannah got the call that they would be appearing on season 17 of the hit CBC show to pitch Sleepout to venture capitalists (and Dragons), Arlene Dickinson, Vincenzo Guzzo, Wes Hall, Robert Herjavec, Manjit Minhas, and Michelle Romanow. The pair practiced their pitch feverishly for the three weeks leading up to their May 2022 taping. For Mark, their preparation felt like a throwback to the hours of practice benches before his first-year moot.
“I actually used the exact same technique to prepare for our Dragons’ Den pitch as I did my first moot—the skills I learned at law school. We gathered some of the top people we knew and pitched four or five times in front of them. By the time we got up for Dragons’ Den, just like for the first-year moot, we knew every question they were going to ask. I memorized our income statement and knew every number.”
For their pitch, Mark and Hannah brought two giant windows to the studio and facilitated a curtain hanging competition between Dragons. One would use popular household DIY solutions, the other would use Sleepout.
“We did our pitch 30 minutes before the taping for the entire production team. They told us it had to change; that it was too long. We had to think fast to cut it down. Then they told us that Hannah couldn’t hang the Sleepout curtain; it would have to be Michele Romanow. We agreed that Hannah would be all over her—to teach her how to hang it because that moment wasn't going to be controlled by us anymore, and we couldn’t afford to have Sleepout installed incorrectly. If it fell, it would have been a huge disaster; we would have been skewered.”
The pair breathed a huge sigh of relief as Michelle nailed the install and won the competition. Next came a solid grilling from the Dragons (over an hour of off-screen time) on the product’s background and history, the design, use cases, and funding and financials. All five Dragons were incredibly impressed by the pair’s knowledge of their numbers, the company’s gross margins and their annual sales totalling over $1M in just their first ten months. Mark and Hannah received three offers, accepting exactly what they asked for from Arlene, $225,000 for 10% of their company.
“Being on the show was an incredible experience. The exposure from being on the Dragons’ Den has been great for sales and growth, and working with Arlene has been an amazing opportunity.”
What’s next for Sleepout?
“We have seen so much positive feedback from our customers—people who travel regularly, shift workers, and first responders. We have seen overwhelming support from parents, who want to ensure their children are getting healthy sleep in a pitch-black room. We have become the number one most recommended product by sleep specialists in North America for children.”
Growth and innovation remain the primary focus for Mark. Sleepout recently launched their latest product, Sleepout Home, a blackout curtain system designed for installation in the home.
“Business has really gone mad ever since we launched our newest invention, Sleepout Home. We worked really hard last year to reinvent the curtain rod. We have designed—and are working to patent—a rod that tilts 45 degrees upward, towards the wall, to eliminate light bleed and ensure a fully blacked out sleep.”
Mark is currently in talks with Good Morning America, which is hoping to bring Sleepout in for its second appearance on the show this summer, promising even more national exposure. He was recently informed by Shopify that Sleepout has reached their top five percent globally for sales, and is receiving regular calls from Amazon to stock the product. Mark is currently working hard to grow the team and expand infrastructure to address the unprecedented consumer demand, and support budding partnerships with leading US retailers in the nursery/baby sector, as well as major UK sleep brands.
“The kind of response we have seen is really the dream for any business. We are looking at massive growth to scale operations. What's next is taking Sleepout fully International, to the US and UK. We're getting messages from all over the world, Europe, Australia, and beyond. The journey is very much ongoing—our story is not finished yet.”
