When Eli Lazar was an Aerospace undergraduate at the University of Illinois Urbana-Champaign, sleep sometimes eluded him, so he started snoozing with a traditional electric fan facing the wall, allowing him to hear the soothing white noise from the appliance without feeling the blowing air, particularly during a Midwestern winter. Lazar says he became addicted to the fan noise and realized he wasn’t alone.

Serendipitously, he met his future business partner at a wedding. Matt Snyder, then a marketer for Zappos, and Lazar, an engineer at Caterpillar, sat together at the reception. With the idea of a special fan for sleeping percolating in Lazar’s head, the conversation with Snyder sparked a business venture.

Today, Lazar and Snyder, now brothers-in-law (their wives are sisters), are co-founders of SNOOZ, a company that manufactures white noise machines. Originally funded through Kickstarter and launched to the wider market in 2017, SNOOZ has sold 300,000 units of their original product, and has 11 employees. Lazar says SNOOZ is in a growth stage — with two new products on the horizon.

The company website describes the differentiating factors of SNOOZ machines — it uses a real fan, not a speaker; no sound loops; scheduling via a free companion app; no blowing air; and a proprietary impeller and acoustic chamber that creates their signature fan drone.

 

Q: How a Chicagoland native fascinated with astronomy landed at the University of Illinois as an undergraduate studying aerospace engineering is a story that begins with parental influence.

My dad took us up in single-engine planes growing up. So, I had a lot of time in airplanes, not like bigger planes, but the little kind of rickety, loud ones that scare people. I wanted to go into astronomy, and my mom told me the safer bet is to go into engineering. She said I could keep astronomy as a hobby. Looking back, it was a good idea.

 

Q: Tell me about your student experience.

It’s one of those things you don't appreciate as much until it's over. Because learning doesn't come as easy post-graduation. [At the university] you have all these people who are absolute experts in their area, and they're presenting this content to you in a way that's been time tested and delivering it in a way that's orderly and easy to digest. I love the campus. It’s like this little technological [hub] right in the middle of cornfields so it's easy to stay focused. The engineering program was exceptional. I liked all the professors and thought they all did a really great job.

 

Q: For graduate school, you moved from aerospace to mechanical engineering at Illinois.

My advisor [Greg Elliott] got me involved in helping on some of his research projects as an undergrad. And I think I spent the last summer working with him. And then just carried right on. I jumped over to mechanical engineering for graduate school. I've always liked mechanical stuff a lot, and I just felt if I was going to stay here [at Illinois], for grad school, I should go to a different program. I think probably the most valuable thing was I learned how to be safe with dangerous stuff and being methodical, how to attack a problem. So, I think those general skills were really, really helpful.

 

Q: Did you participate in student design competitions?

Yeah, and they all failed miserably. Like all the way through undergrad and grad, I just kept going. And every single one of them failed. Not one of them got off the ground. And a lot of it, I think, looking back, [my team] was only engineers. And I think we were not as effective. This is also a good lesson I learned — some ideas are just too big to get off the ground from the start. It's crazy how intensive capital-intensive hardware projects are.

Walter Herbst is a famous design professor from Northwestern, and I met him, right when we were starting the company SNOOZ. He's kind of fiery. He asked, “Why are people going to buy your product?” And I said, “Well it uses less energy.” And he said, “You're wrong. People don't buy products for those reasons. They buy it because of emotional connection with how it makes them feel when they look at a product.” And he was so right. All the entrepreneurial stuff we did in the early stages I didn't understand at all.

 

Q: Was there a moment when you thought, “I’m not an engineer who is going to work for a corporation, I’m an entrepreneur?”

I always had ideas — some good, some bad — and maybe a little bit of a rebellious streak that I think makes it harder for me to fit into a typical corporate setting. Sometimes you want to do things differently, which can get you in trouble, especially in a big company. Looking back, I guess I always did want to do this. But in the moment, I would have never used the word entrepreneur. I would say, “I'm just doing things I find interesting.” It was probably when I started working for a big company that I realized that I don’t think I want to work for a big company. Some people love it, and some people don't, and I was on that “don't” side.

 

Q: Tell me about the early years of SNOOZ.

A sound machine — it's kind of an oddball thing. So, we just started playing around with stuff. And we iterated a lot. We finally got something people liked. The problem with hardware is it takes a lot of money; even the molds for a unit like SNOOZ cost $70,000. Just the plastic molds. And you can't just manufacture one unit, you’ve got to manufacture several thousand at a minimum. And you’ve got to have a deposit for all that stuff. It’s very capital-intensive. We went to Kickstarter, and that was our goal. Let's just do a Kickstarter. And it could have flopped. But it did good — about half a million in 49 days. Pretty good.

 

Q: After Kickstarter, and continuing to work their full-time jobs, Matt and Lazar needed to start manufacturing the original SNOOZ units, a process that took them to Malaysia.

US manufacturing is interesting. A lot of people really want it, and it's tricky. We certainly would have preferred that as opposed to flying halfway around the world, but a lot of factories in the US won't work with you, especially if you're a small company.  A lot of them, I think, have accepted the idea that manufacturing consumer electronics in the US is not really achievable. So, we both took off work. We flew to Malaysia, and we found a factory there. It took us a whole year to figure out the manufacturing.

The first production run we did 10,000 units, 7,000 of them going to Kickstarter. When the production run was ready, we had them shipped to our in-laws’ house in the Kankakee area. Each unit weighs about two pounds, so you're talking 20,000 pounds. Since we have a brother-in-law who’s familiar with truck driving, we picked them up in one of those huge industrial trucks. And then for three days, we just fulfilled our kickstart orders.

 

Q: Tell me about the pitfalls.

The key to manufacturing is to design your product such that it can’t be assembled incorrectly by someone who is completely unfamiliar with it. For example, if two pieces of plastic are not fully snapped together, or a screw not fully tightened, then the entire unit won’t turn on or it won’t fit in the packaging box. What’s important is that it is visually obvious to the factory worker they made a mistake, and mistakes will happen. If you repeat something 10,000 times, a percentage will be perfect, another percentage will be acceptable, and some percentage will be not acceptable.

In the beginning, we were just so inexperienced it took a lot of effort to get production in the right spot. We would produce thousands of units, find there was a mistake, and then have to run the production line in reverse for a few days to fix the issue. In the worst case we once found an issue after 10,000 units had arrived at our warehouse (our garage at the time), and had to spend weeks manually fixing the issue ourselves. At this point, things are perfected; but in the beginning it was an absolutely terrible experience. With software, if you make a mistake, you can at least put out an update. With hardware, if you make a mistake, it’s very costly and manually intensive. I have personally fixed well over 5,000 units myself. This means unboxing units, dissembling them, reassembling, and then repackaging them.

 

Q: When did you leave your full-time jobs to focus full time on SNOOZ?

It was kind of a crazy run until 2019. We decided when we had enough traction that we were going to quit our jobs, and we did.

As you grow a little more, you become less nervous about money — not personal money, company money. We asked ourselves, do we have enough to pay employees and attract the right people and pay them the right money? We're just coming up to a stage where I'm not as worried about those things, which is a little bit dangerous because it's better if I'm worried. I mean that 100%.

I would never want to lay off employees. I never want to tell somebody, “I'm really sorry, we can't, we don't have enough money for you anymore.” That will really drive me to push harder — to make sure that we never get in that situation. Sometimes being comfortable is not so good. I don't want to say we're comfortable yet. I just say that we're more comfortable.

 

Q: During the same time frame as committing full-time to SNOOZ, April 2019, you auditioned for Shark Tank and almost appeared on the show.

Everything went so fast, and lo and behold that June, we’re in California shooting for Shark Tank. It was like rapid fire. In the midst of all this, the trade war started and overnight our cost of goods increased 25%. It basically evaporated our profit.

When we auditioned, we actually pitched our product, which was a real surreal experience, because on the show it looks so real. But on the stage, it feels fake with all the cameras and people. I think I can best describe the experience as it’s just a bunch of people screaming at you for like an hour. That's how I felt.

We came in with two and a half million dollars in sales and products in a bunch of hotel rooms around the country. We felt like this was pretty good, and we had offers from three sharks. We accepted an offer, but unfortunately, the deal didn’t close after the show. However, when the Season 11 trailer for Shark Tank came out, they publicly aired a clip of our product in front of Mark Cuban so we became very confident we would be on the show. We had purchased 25,000 units in preparation for airing, which was well over $1 million, so we were pretty financially extended. We found out in January or February of 2020, right before COVID started, that we weren’t going to air.

It was devastating. I was entirely beside myself for a few weeks. But I tend to think that even though it was hard, it was a good thing. Eventually disappointment turns into anger, and you want to be able to prove people wrong. And every year, we’ve managed to grow both in revenue and number of employees.

 

Q: You’ve been reluctant to label SNOOZ successful – what is your threshold of success?

I would say having 20 employees, because it gives you enough resources to start doing bigger things. When you first start out, you have really “broad shoulders,” working literally in every aspect of the business (engineering, customer service, accounting, marketing, logistics, etc.). However, eventually you have to transition from working in the business to working on the business, or you will never grow. Of course it takes people to make transition happen, and that of course takes money. Your first employee is the most expensive employee; but then if you add a second one it's cheaper and becomes increasingly less expensive to keep adding employees. If you want to do a product and you need some serious capital behind that, you either must keep raising money, or you've got to have enough income coming in that you could fund a project like that internally.

 

Q: You have added to the SNOOZ product line since the original SNOOZ machine debuted. How do you decide what to create and why?

We create products we want to use ourselves. If the product can’t live in the bedroom, we won’t make it. We have a lot of heated discussions about what we should do next. We have a lot of internal discussions about if we should stop. We just talk about it for several months. Should you be focusing on just selling what you have and trying to expand the market? Or should you be trying to add more products? And can we afford it? You don’t really know how people will respond to a new product until it’s in the wild. There’s more risk.

I think we're only going to try to do bigger products. I think we're going to pause on anything smaller. We came out with the SNOOZ original, which was our first product. And then we came out with Go, which was this little travel machine. And then we came out with the fan. And then we did this Pro, and we've got a new product coming out this year that's a little more focused on babies. Beyond that, an air purifier is really where I've got my heart set next.

 

Q: What advice do you have for students at The Grainger College of Engineering

I think some of those other courses outside engineering are more valuable than most people think. It could be anything — philosophy or religion classes — that gets you away from things and a little closer to people.

My advice would be to try to remember the soft skills a little bit more. If I could redo everything, I would take additional courses outside of engineering, even if they didn't count. I just think it allows you to interact with the world better. Even knowing the history of different countries is important, because as you're interacting with people you have to be mindful of that.

 

Q: Tim Hoerr from Serra Ventures is a mentor of yours. What advice has he given you?

Tim has been just the best mentor ever. He is an absolutely extraordinary person, and I am so grateful to have met him. He has had an instrumental role in everything our company has achieved, and I still meet with him at least once a quarter. He told me a lot of really good things over the years, things that he had learned. Two that come to mind are: everything costs more than you think, and he warned me not to step over nickels to pick up pennies. I understand that because you can get so distracted.

 

Q: As the person who brings restful slumber to the others, how well do you sleep at night?

(Laughs) Yeah, that’s the irony. I have no problem falling asleep, though it’s always a challenge not to lose sleep when you run any business. And I do use a SNOOZ every night.