Thinking Small to Get Big: Sleepyhead

In the movie "Fight Club" Edward Norton's character asked his doctor to treat his insomnia. Instead of prescribing medication, his doctor said, "You need healthy, natural sleep. Chew valerian root and get more exercise."

A couple of Chicago entrepreneurs are following the good doctor's advice and have created Sleepyhead, a drink designed to help rid consumers of those pesky sleepless nights - complete with valerian root.

But Chuck Hamman and Eli Galayda are not just aiming for the stars without a plan for their anti-energy/caffeine drink movement. The two have carefully picked through all the details including launching in Chicago, utilizing local companies, marketing in all the right places and continuously researching the growing need to calm down a city once dubbed the "Most Caffeinated City in America." 

Sleepyhead was born one evening over a beer when Hamman and Galayda were discussing how they hated wasting time, especially while trying to fall asleep.

"It was Eli who said, 'Hey, they should come out with something that helps you sleep at night," Hamman said.

It didn't take but a moment later for Hamman and Galayda to decide to be the "they" making it happen. 

For the next two and a half years, the pair researched the sleepless nights of family, friends and random survey takers to find out if the idea had legs to stand on. Next, they brought out the big guns doing a full market research survey across the country.

The results came back in their favor:  64 percent of the people who took the survey said they'd experienced a symptom of insomnia once per week. 

Hamman and Galayda took a look at what was on the market and decided to design a drink inspired by big city life.

The pair's main focus was making their product season-flexible in the retail market.

"Seasonal changes are huge in the retail industry," Hamman said.  "In the winter months the foot traffic can sometimes decrease 60 percent."

By creating a drink that can be served hot or cold, the pair covered the market year round.     

The two were also very careful in their choice of icons for the product. Instead of paying a large company for packaging design, they saved money and utilized the smaller artists found on

From there, the iconic emblem of Sleepyhead -- a sheep in a moon and stars sleep mask -- became an intricate part of their packaging.

"We wanted something that was gender neutral, fun, not something that came across as a bottle of medicine you would be taking," said Hamman.  

The two hit the ground running in June 2010 pushing hard to be the first on the market and make themselves seen. 

"Here in Chicago, if you searched you might find one or two [competitors], but by and large Sleepyhead is making the initial push here," Galayda said.

Taking a grass roots approach, Hamman sold the product himself before getting a distributor in May 2011.

"And literally it was me driving around in an old beat up van hocking the stuff, going into independent places and franchisees and knocking on doors, giving out free samples," Hamman said.

From all this - and a few helpful words of advice from another beverage company - Hamman and Galayda have learned not to try and grow too quickly too fast.  Covering a small geographic area and doing it well has helped them during the hard times of a start-up company. 

"Instead of increasing sales by increasing number of stores, we wanted to increase our sales by increasing our rate of what we were selling at any one particular store. We did this by marketing," Hamman said. 

The two are sticking to this model for their future.  They've vowed only to expand into new markets when they feel they have adequately covered the Chicago sleep-drink market.

They have also continued their grass-roots approach by getting people as they exit public events or even just going home on public transportation.

However, their creativity doesn't end there. They can see all aspects of the sleeplessness market including marketing to airlines and hotels.

"We think the business traveler who has a hard time sleeping at hotels or the traveler who can't sleep in strange surroundings. And when you're out on work, you're already stressed and over-caffeinated," Galayda said. 

Hamman and Galayda also understand they are entirely a consumer driven product, but this doesn't scare them.

"It's completely all about people who love our product and that's been instrumental for us," said Hamman.

Sleepyhead is a company that focuses on the small to get to the big. Making use of smaller, local companies and a grass roots approach has kept them moving forward one step at a time into cornering the sleep-drink niche market.

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