People’s sleep struggles generate successful UCT spinout company, Sleep Science

When asked what the market size of people who struggle with sleep was, without hesitation, Niall Naidoo said 7 billion humans. Everyone closes their eyes at night, the New Venture Manager: Research commercialisation & Innovation, Technology Transfer Office at the University of Cape Town told his audience.

He’d been asked to showcase his university’s recent commercialisation successes at the 6th annual Entrepreneurship Development in Higher Education (EDHE) Lekgotla 2022 in Gqeberha, recently.

Speaking as part of a panel tasked with sharing best practice at entrepreneurial universities, Mr Niall Naidoo (above) had the audience eating from the palm of his hand as he described how they supported a spinout company called Sleep Science.

The story, he said, began with Principal Investigator, Professor Dale Rae who gave a 45-minute presentation at a conference, on the behavioural interventions around sleep deficiency – dealing with people who struggled to sleep.

“Then something fascinating happened at the conference: for three hours people bombarded Dale with questions, sharing personal stories on their sleeping struggles. The most incredible thing was that they were willing to pay to help implement remedial interventions.

“I approached Dale and asked if she’d be interested in starting a spinout company. She looked at me and she said: I’m a scientist, I wouldn’t even begin to know where to start. I said, Dale I want you to imagine a world where you don’t have to write a grant proposal. We take your research, package it into products and services, take it to market, sell it and, with the profits, we will support your research, your research group, and allow you the academic creative freedom to research what you want.

“Her eyes opened wide, and she said WOW, let’s begin. We started the spin out journey,” Mr Naidoo said.

First, his team had to understand sleep insufficiency and its drivers. They looked at the players in the industry where money was flowing into. “One of the key questions our Tech Transfer Officer (TTO) asked was: what is the business case? Is there really a need?” Mr Naidoo said he later found the Rand study which detailed the cost of sleep insufficiency.

“That put a monetary cost to sleep insufficiency. We called multinational companies and presented the findings on the cost of sleep insufficiencies. Human Resources people in charge of wellness said they thought they had to work employees to the bone, when they just had to let them sleep to increase productivity,” he joked.

An investigation with European, North American and Asian counterparts came back with the same results as those in the Rand study – sleep insufficiency was real.

“If we were going to commercialise this, we needed to know who the customer was. We started to segment and create what we call a target market – creating a character on the perfect candidate who’d use the sleep product.”

This, he said, was a very important catalyst in the journey. They looked at what sleep products were available in the market, called the bio-medical engineering department who told them about a medical device aligned to the sleep industry, the C-Pap machine.

“We began to see the investment thesis to what we were creating – a sleep vehicle that was going to go into industry. We began to unpack Dale’s research portfolio. We went through the frontier work, that is purely scientific, and what is more applied, focused on the applied section and started to build these products and services.”

When they conceptualised the vehicle called Sleep Science, they looked at two markets – for individuals who struggle with sleep insufficiency and for corporations promoting employee wellness.

But, the UCT TTO needed convincing.

“The assumption is that we deal in patents and so we were asked what the IP was. We said the IP is know-how and the TTO said they’d never before commercialised know-how but agreed to go ahead.”

The team then started a new product development, from scratch, working with the sleep scientists to understand their needs and investigating how sleep insufficiency is measured.

“Once we had a clear understanding on what they needed, it was clear that the product was going to be a software product, so we specced it out.”

Throughout the journey, Mr Naidoo said, the key role of the TTO was to maintain the business case and economic units offer.  At this stage, when they knew what the product was and what they were building, the talk turned to the business.

Said Mr Naidoo: “How do you communicate your product benefits to the consumer, or an employer in the wellness area?

“This is when the story becomes worth telling. Industry wanted to charge us millions to develop the software and so we went internally.” In the computer science department, they found two software developers: Carlton Ndhlovu and Sabelo Mtetwa – 2^nd and 3^rd year computer science and computer engineering students. They also brought in a graphic designer from industry who was responsible for the marketing and design of the product.

“We brought them together and the role of the TTO – my role – was to create an environment that would enable them to do their best work. We told Amazon web services we were building the software and asked for infrastructure help. They not only provided the tools but, also showed how to make the software more cost and performance efficient.”

At the time of the conference, the product was ready for launching. “The software, built internally, is incredible complex and very sophisticated. We will be able to tell you your sleep score based on your questionaire.”

“From day one, we focused on communicating the benefits of this product. We had complex scientific information that we packaged simply and put out to the public and on social media. We gained about 600 followers a month on different platforms.

1. You need time, an open mind and top management support. My colleagues provided sounding board information when we ran into roadblocks and helped remove them.
2. Be enthusiastic and use available resources. The university has an incredible talent density – there are many smart and intelligent people and there are a lot of resources. If you want to build a software product, go to your computer science department; if you want to build a hardware product, go to your engineering department.
3. Focus on the customer, your partners and most importantly, on the regulator. When you’re doing frontier technology, you have to know the rules of the game.
4. If you do good work it’s easier to find funders. Work at building long-term, trust-based relationships.
5. Thousands of opportunities sit in the university. Smile and have the energy to go and find them.

Audience question: How do you create a character for your product? How did you communicate your product benefit to your customers?

Mr Naidoo: If you segment and target the wrong people, the cost to acquire the customer you’re targeting is too high. Understand who the consumer is and look at key demographic and behavioural elements. Once you have all the data, the evidence, you need to generate an opinion. Once you’ve visualised your customer, it is time to communicate to the engineers.