CAPITAL FRIDAY

View Original

Loop Earplugs - Selling $50 million in earplugs a year

Loop instantly caught my eye as the margins must be unreal. They sell earplugs designed to partially block noise for $35. There’s now a bunch of versions with different goals but that was the initial product.

It started in 2016 when Maarten Bodewes and Dimitri O were trying earplugs as they enjoyed the nightlife, but suffered from tinnitus, a ringing in their ears. They didn’t like any of the earplugs they tried so they made their own. It helped both were engineers.

Initially, the Loop Earplugs were marketed to concert and festival goers and The New York Times covered them as “the best earplugs for concerts”. Still ranked as their top choice! After covid sent everyone inside they changed gears and focused on the benefits to sleep, focus, etc.

Fast forward and last year, in 2022, they sold over 2 million pairs and reported revenue of €42 million (approximately $52 million USD).

They took a problem - concerts are too loud and existing earplugs were ugly and blocked all the noise. They made something that wouldn’t embarrass people to wear and let some of the sound through so they could enjoy the concert. Brilliant.

In fact Ryan Bartlett, Co-founder and CEO of True Classic ($150 million in revenue selling t-shits), mentioned in a recent tweet (or xeet?) that you don’t need to overcomplicate things, just improve on something!

But I think the smartest part of Loop is their price point. They didn’t look at their cost and apply a markup. They charged what they thought it was worth. I wish the company was public so I could see the margins.

But as an estimate what could a pair of silicone earplugs cost to manufacture? I mean I’m not entirely sure because there is a mesh and membrane filter but maybe we could find something close if we spent a lot of time…

What type of business could you start related to hearing?

You could try and compete for the Loop earplug for kids. For homework, focus, movies, etc. There may be an opportunity to compete and capture that market. Just show a kid with the giant noise cancelling earphones and then the ear plugs and how easy they can be packed away. But as a parent myself, it is easier to just throw a pair of noise cancelling over ear headphones on the kids.

But if you’re looking for something bigger… Well the hearing industry is of interest to me as my family suffers from genetic hearing loss. In 2017 Congress passed bipartisan legislation requiring the FDA to create a category for over the counter hearing aids, but it wasn’t implemented until mid-2022. So you’ll start to see more and more brands getting into direct to consumer hearing aids as the current ones (even sold through Costco hearing centers) are super expensive.

I also think it’s telling to see what Loop is doing. According to their press releases they are looking into the “smart hearables” segment.

So if you’re interested in this space then direct to consumer hearing aids may be an interesting play. But be ready for competition. Its already started.  

Other Interesting Business Success Stories

See this form in the original post