Neurosonic CEO Juha Suoniemi on building a global brand that sells relaxation

0:03Hello, everyone, and welcome to the Modern Retail Podcast.

0:30Things like sleep pods and headphones. I'm sure Juha will explain it a lot more in depth, but they're a really fascinating company. And I'm really excited because they're based out of Finland. And as those of you who have been listening the last few weeks, I've been featuring companies throughout all around Europe. We've had Denmark, we've had Sweden, we've had Austria. And I'm in Finland, and I'm really excited to be featuring a Finnish company here. But Juha, how are you doing? Thanks for joining. I am excellent. Thanks for having me, Kale. So first, I feel like I probably did not do neurosonic justice with my description.

1:00So can you give a quick explanation of what it is and how it works? Absolutely. So we are doing a well-being technology. It's a low-frequency vibration that we have integrated in, like you said, in mattresses, in chaise longs, in reclining chairs. uh it's uh it's a technology uh developed by a psychotherapist marco kerkainen and and it helps helps people to to relax it it kind of impacts the autonomic nervous system which impacts in stress release and and and improving the sleep quality so that's in in short got it got it and so did the technology come first and then the company or did they happen in tandem well the The development, Marco had the idea already in 2008 and started developing the first prototype.

1:52And then in 2010, the company was founded. So 2011, in the beginning of the year, the first product came out. So since we've been working with this technology, it's been, you know, much because of Marco's background, really much in the therapy field, in nursing homes, kind of helping people with their topics. And therefore, we've then expanded with product lines, with different target segments for our products. And for example, currently we have 300 service providers in Finland offering Neurosonic as a service. When you say service providers, does that mean like, you mentioned nursing homes, therapist office, that kind of thing?

2:40Exactly. So it can be psychotherapist, it can be physiotherapist, so athletes benefit from the treatment, gyms, spas, well-being centers of all kinds. So these type of service providers. Got it, got it. So let's start with who you are. So how did you get involved with Neurosonic? and what were you doing before you began working with sonic technology to help with relaxation and sleep? Sure. I've been fortunate to work with great Finnish brands throughout my career. So I started with Nokia in 2000, which was a great place to build a foundation as coming out of university and having the world-class processes and ways and also kind of development programs, leadership and so forth.

3:33I was with Nokia for 11 years and then I moved to another Finnish technology company called Suunto, which manufactures sports watches and dive computers. And that was kind of really where I could kind of combine the two passions of mine, technology and sports and well-being and kind of were able to work with a very innovative company. I had a chance on leading the business in China for a couple of years and also then leading the dive business for Suutoitota. Then I did a kind of a jump towards the chemical industry, Kielto, which is a household brand name for kind of laundry and cleaning, but also the leading kind of professional hygiene provider in the Nordics.

4:30And I was there for a few years, you know, lots of great experience in M &A, maybe kind of good. I started there just before the corona came, very interesting times. We bought a company leading kind of hand disinfectant provider in Nordics. So you can imagine that it was a pretty busy time. So opposite for other companies. So trying to get the disinfectants out. Wow. So you were there when the coronavirus started? You were doing that? Yeah, sure. That must have been quite stressful. It was a big effort to get enough supply to all of the healthcare and whoever needed the product. Got it. So when did you join Neurosonic?

5:22I joined Neurosonic almost exactly one year ago. Oh, well, happy anniversary. Thank you. Yeah, Neurosonic, of course, first getting introduced to Neurosonic, It was a kind of a lots of thought process coming from a bigger brand to a smaller startup like environment. But I was very intrigued by the value proposition of Neurasonic. So kind of restoring the body and mind, seeing and hearing the stories of people getting help for their stress, for the kind of sleep issues. And kind of coming from also the tech companies. Nowadays, there are a huge amount of tech companies in the well-being area, which are somehow measuring the situation.

6:14But with Neurasonic, we can offer actual solution to the problem, not just measuring it. And that was something that really got me hooked. And of course, then when I first tried the product myself, I was blown away kind of how it impacted me. how I got to this relaxed state so easily. And of course, then later on, seeing in my older data, how the kind of the HIV and my sleep quality got improved over time. So what would you say has been your mandate as CEO for the last year? Is the idea that, you know, given your background at such big, large companies with international business, it was to expand that?

6:51Or was it just keeping with the current growth plan as it was before you joined? I think the clear target for me is to make Neurasonic more international. That's what we are working at the moment for sure. We started with kind of a new strategy last fall already, kind of building it. And this year, really the kind of the team, I would say, for the whole company has been focused. So really focusing on the where to play choices that we've made, kind of our value proposition, the target segments that we've selected, and just making sure that our kind of scarce resources are focused on the right things.

7:40Got it. And of course, then on the product. So we launched a new Generation 2 product line beginning of this year. We were kind of launching it in the CES in Las Vegas in January, and now we've been kind of pushing that quite a bit. Cool, cool. So I wanted to go back a little bit because one of the things I find really fascinating specifically about Neurosynic is that you have very different and all very difficult sales channels. And so it seems like you're in workspaces where you can provide, you know, you can put a nap pod in a workspace where people can take a nap or a break. You have the professional side you mentioned, which is like therapist's office, other physician's office.

8:21You have the retail side. When it started, when the first product launched in 2011, what was the vision with the company? Was it that it would be more consumer-facing, more B2B, a mix of all? What was the idea behind that? Well, I think kind of the thing at that point of time was that there was lots of promise. And basically, you know, people of all kind can get help from the technology, from the treatments. So there was lots of focus on the therapy side in the beginning, but then also towards consumers. And I think over the years, there's been lots of opportunities. And being a small company, there's been a kind of a push to kind of grab all of them.

9:10And I think that's something now that we are kind of making more conscious choice of being kind of international and expanding. So we also need to make tough choices and focusing in a narrower kind of a target group, whether it's the customers or geographical segments or whichever. So that we make sure that our efforts are fully committed to the plan that we have at hand. What are the areas of growth that you think are most promising with this focus on international? So like the most recent product, correct me if I'm wrong, is the new pod, right? Yeah. So that's actually a good kind of answer.

9:47The pod, the neuron activation pod, it's a product of our partner, Luke Industries. Okay. So we sell our own products, Neurosonic branded products, but we also sell the technology kits for kind of part of the product. Like Tempur has a bed in Finland that you can buy a Tempur bed with Neurosonic technology already integrated into it. Look Industries is a great Finnish company doing great design for interior design for offices. And they have kind of a built neuron activation pod, which actually, together with their partner, Thinkspace in the U.S., just won the Innovation Award at the Neocon Fair.

10:26Oh, congrats. That's awesome. Yeah, in Chicago, one of the biggest industry happenings in the world. So there's lots of good promise with that Look Industries Neurodactivation Board product and the Neurasonic technology in it now also in the US. So that's a great kind of testament on how the technology works. For our own branded product, we have been focusing this year on Europe. So we have been in Finland, Sweden, Benelux and UK where our effort has been kind of mostly. But we have also had a good reception now in some of the other markets in Europe, in Germany and Spain. So kind of building really the foundation now.

11:11So the big change that we are doing now is kind of we have been very direct with our business, direct to consumer through our kind of a website. And that will continue. But then also being very, very direct B2B kind of approach. approach. And what we are changing now is that we want to be more channel driven model. We want to build a channel driven model. And that's a huge change for the organization that we are doing at the moment. So also at the same time, kind of finding new partners, new distributors, new resellers, but at the same time, then kind of building our own processes and how do we work with the existing ones and the new ones and making sure that we get kind of the successful corporations running.

11:57Let's talk about any of the countries that you're focusing on right now. How traditionally have you approached selling in those? Was it that you would run ads or reach distributors specifically there so that they would sell your product? What was the way so that you would gain mindshare in those countries so that people would know you? And what would you say has shifted now in this new strategy? Yeah, so I believe many of the past existing international contacts have come from trade shows or exhibitions or things where we have been present or have met other companies. And I think that's still a valid source to get to know right companies.

12:45So it's still in our back. But what we've tried to do now purposefully is build a go-to-market strategy that then works, that we can replicate and do. And that's what we've done during this spring, kind of mapping our target customers, the personas, the needs and wants for them. And then we have done a lot of kind of growth hacking efforts. So whether it's been buying contacts and having an email campaigns or social media campaigns or we've started to have webinars where we invite our kind of target customers and continuously kind of improving there. The other thing that we want to do better and have been also kind of focusing a lot is then our kind of ambassadors and having the testimonials.

13:47We have lots of kind of great experiences from athletes, from other parts of the world kind of that we want to spread more. And then also then having more of kind of independent reviews done for the product, which we actually are in just a few weeks' time, along with a review is being released now that I'm quite excited about. That's exciting. One of the things that I imagine is difficult specifically for a company like Neurosonic is that it has a higher price point, and that's because it uses a technology that has benefits with it, but that people aren't aware of the technology. So can you talk about how you approach that kind of educational process of it, so that just doesn't seem like a random marketing buzzword, but you can explain, no, these are the benefits, this is why you should pay this much, etc.

14:43How have you approached that? I think that's a really, really good question. You know, just kind of starting from our kind of customer feedback. So we have an excellent feedback from our users and kind of testing or trials have been kind of one of the key kind of sources for new customers. So we have showrooms in Finland, and when we get people testing the product, the conversion rate is really high. But as you know, that is not a very scalable model to build showrooms everywhere. So there are two kind of focus areas going forward, really. There's a credibility, and there's awareness that we are starting to build.

15:36And credibility starts from, of course, the scientific research. So we have had already kind of scientific research done, of course. For example, one of the world-leading sleep scientists, Markku Partinen, did a study on the product, on insomnia and anxieties, which was a great, great result together with a bunch of other. And we currently have also studies ongoing with University of Oulu, University of Jyväskylä and University of Rotterdam as well to kind of continuously build the scientific basis as the vibration technology is still rather kind of less examined in the scientific world. So that's one thing.

16:29Also, other thing that is very powerful then is kind of measurement. So the product itself doesn't measure anything. And we certainly will not start building any kind of other. People are having auras and wearables, you know, of all kind in there, you know, already measuring themselves. So kind of combining that information together with the Neurasonic usage is something that we will do in the future. So you can see it in the HRV clearly when you take the Neurosonic session immediately, and you can see it clearly in the kind of long-term data as well. So kind of bringing that information, then together with the awareness, which then, like I mentioned, really kind of having this growth hacking approach, what we want to do together with kind of a closer cooperation with the ambassadors is one of the key things that we will do.

17:25We are also in the process of renewing our kind of communication strategy, so kind of building a great foundation of that as well then going forward. Can you talk about the ambassadors a little more? I've seen a few on the website, like you have an ice hockey star who I believe, is he Finnish? I might be incorrect. Yes. So how are you approaching it? Is it professionals who can then talk about how, you know, the health benefits they've gotten from their neurozonic products? and what is the overall intent and deployment of it? Yes. So athletes is a great source because of people of athletes. So we will soon release a testimonial from, for example, Yoni Hakampa, which is one of the defensemen in Dallas Stars playing NHL.

18:19We have other kind of NHL players been using. we have a cooperation with UFC the Human Performance Center in Las Vegas kind of using it there so athletes and the sports world is kind of easy because they are always trying to find the edge and willing to try new things and when they see that hey this works you know we get good results out of it and there's lots of kind of recommendations going so this is something that we can utilize but I think for me it's also important that we don't kind of just communicate that this is just for athletes, for example, because this is for all of us, everybody who is kind of a little bit weary of life and kind of need a relaxation, need a break in the day, whether it's then kind of a busy businessman or parent at home kind of having a, so that's something that we are now then more purposefully trying to find the influencers that have kind of from these contexts.

19:22So whether it's kind of a well-being at work or even at the home kind of setting. Would you say with this new go-to-market strategy for these new countries, is it focused mostly on the DTC consumer side and the reseller side? Or are there any other channels that either you're focusing on or you're focusing less on now a year in? Well, I think we are now clearly focusing more on the B2B channels. Okay, got it. And kind of having the service providers, I think it's very beneficial also. I talked about the credibility. So with the service providers, the physiotherapist, the psychotherapist, that is also kind of having those selling or giving the service, it is also kind of building the credibility in those markets.

20:16So we want to build kind of the database for the service providers and also then kind of address the well-being at work market. And then we believe that the people who kind of get the help from the encounter with their kind of a personal trainer or a physiotherapist or at office, they also want to buy the product for themselves at home. So that's where we are focusing now, really, on the B2B side. But we will keep, obviously, the D2C kind of our web shop, and that will be open all the time. And we want to enable everybody to buy the product, of course. That's kind of the key. Absolutely. Can you talk about how you approach B2B in different countries?

20:59So do you have someone in each country who has knowledge of what would be the best partners, what would be the best place to gain mindshare? How are you approaching each strategically because each country has its own nuances and different ways that they operate? Yeah. So there is a kind of a lot – I talk about the well-being at work and then the service providers. But there is some kind of routes that are converging there as well. So many of the kind of the service providers, whether if you are a physiotherapist, for example, they are offering kind of services for recovery, for stress, also for companies.

21:42So they are different avenues and we are basically having two. There's the kind of the pre-sellers and distributors who can offer the services, but also sell them and build kind of these recovery centers. but then also kind of the interior side of the business where we're going more traditionally through the interior kind of design, furniture companies, distributors towards then the offices. And it does vary between markets a little bit. So where does the companies, for example, buy the kind of this type of well-being products as well as where does the service partners then do that? Got it, got it.

22:30I wanted to talk about the partnerships and collaborations that you mentioned earlier, such as Look Technologies. So do you have a target for how many of those you want to do? Do those just come up when a business comes to you and says, hey, we want to include your technology in one of our products? Just talk about that overall strategy and how core is it to Neurosonic's business now compared to maybe a few years ago? It is one of the three cornerstones that we have as target segments. I think there, when we talk about the technology integrators, the quality is much more important than the quantity.

23:07So we are not trying to find kind of as many as possible, but we are trying to find the right ones. And who can put the technology in front, kind of one of the central pieces of their offering, so that we can be sure that they are actually then selling and promoting the product, but also then having the right kind of background and so forth. But there are a huge amount of opportunities. We are currently in discussion with multiple potential technology integrators from different fields, and it is really interesting. And it seems that kind of this type of well-being as offering is kind of more interesting to also many different industries.

23:55So there are lots of players who are looking how to make their product or their offering more well-being in a sense. Well, I mean, I feel like well-being is a hot topic. So you're in a good spot right now for a company that's trying to integrate it. But I kind of want to ask, because the two areas that I see the most obvious are furniture and like mattresses. And I guess, you know, there are a few others that I could come up with, but like, are those the areas you see the most inbound or what are some other areas where you see people who are saying we would like to include your technology in our products?

24:31Well, they are, they are. Those are clear, you know, but it can be, and, you know, it can be also kind of a transportation, automotive, you know, all kinds of solutions can be built with the technology. And we are also kind of, of course, developing the technologies itself all the time and making it, for example, smaller. So the integration will become more and more easy then for various form factors and various use cases. So that's also important. Got it, got it. And I realize I should have asked that at the beginning, but how does the neurosonic technology manifest? fast. So if I'm laying on a mattress with it, A, what do I experience?

25:16B, is it just with my body on it, I feel these vibrations? How does that work? Yeah, it's a full body vibration. So if you lie on a mattress or a recliner chair or whichever, there are four different zones that we have the vibration ongoing. So calves, thighs, lower back, upper back. And the actual technology for for creating the vibrations, that's not the thing. The key thing that we have developed is the programs, the recipes within the programs. So the different frequencies and amplitudes in them that we can impact the autonomic nervous system separately. So So what you feel is kind of a vibration, like waves coming in.

26:12And somebody referred that it's like lying on a purring cat, a giant purring cat. I like that. But the point is that it feels really nice. And what it does, it takes you into this meditative state really easily. So if you are kind of stressed out, you know, doing mindfulness or, you know, meditation might be very difficult if you haven't practiced that earlier. So with this, it's very kind of easy. You just lie down and you get the impact. And with that vibration, which is the same frequencies as the tissue resonates with, so it penetrates the whole body and we can impact the autonomic nervous system.

26:54So when we activate the parasympathetic side of the nervous system, it's like the rest and digest. So it's the brake pedal. When you are stressed out, your sympathetic side is kind of predominant and it's kind of taking you there where you are. And when parasympathetic kicks in, the balance is created, which lowers the stress and also kind of then improves the sleep quality. We like to use the analogy, Robert Sapolsky wrote a book back in the day that why zebras don't get ulcers. And the key story in the book is that in the natural world, you know, there are very stressful situations. So lion is chasing a zebra and they don't get ulcers.

27:39We get ulcers sitting in front of a computer. and the key is that what animals do they shake after a kind of a stressful event and with that shaking like your dog or whichever they initiate the natural process in the body that kind of activates the vagal, the parasympathetic side of the nervous system and that is something that the vibration does as well. Wow, zebras don't get ulcers I love that. I will keep that one in my head. We're just about running out of time, but I have a couple more questions I wanted to ask you. So first, you mentioned this earlier, but I'd love to get just a little bit more color about it.

28:19But industry conferences are a really big cornerstone of sort of how you're getting the word out, and especially with international expansion. Can you just talk about, A, what type you are focusing on, and B, how you choose which ones to attend? They're expensive. They require a lot of international travel. What is the cost-benefit analysis you have in your head to make sure that you're actually making a dent going to these shows showing off your product? Yeah, I think that is exactly so. So the cost benefit is something that we kind of talk and discuss all the time. So it's not just that you go to every event.

29:02We are trying to carefully select the events that we want to know, whether it's then kind of a well-being side or biohacking or then more on the interior design side of things. So those are the key ones. But there also you need to select that which seems the right. And why maybe even for us, it's better than for many other players is I mentioned the testing that we have a very high kind of conversion rate for people who test the product. So this is the possibility of, you know, having our products out there. Industry partners coming in, testing it. we were in Las Vegas in January kind of launching also the Generation 2 products and we had a constant line towards our beds there.

29:55The people wanted to test. So during the three, four days, we kind of roughly 500 people came and tested the product, a 10-minute kind of a power nap program. And I would say that of those 500, at least the Vedi80 fell asleep in the middle of the kind of very busy Las Vegas convention hall with bright lights and lots of noise. So that's kind of also telling that you can relax with the vibration in a very kind of even difficult situation. So those are good situations, good ways to promote the product for us. But of course, we need to select those events are not cheap and the general investment needs to be looked at.

30:44Well, we're just about running out of time. My last question is what I try to ask everyone is just, what are you thinking about for the rest of the year, for the next, say, 12 to 24 months? You mentioned a few things. You mentioned the new go-to-market strategy, international expansion. You also said that there's going to be a marketing regroup, I think, coming out pretty soon. So what are you thinking about, and what are the major, say, three things you're hoping to accomplish in the near term? I think, well, the two is clear. It's, you know, I mentioned the awareness and the credibility. So we will focus on our communication strategy.