Sleep is an incredibly powerful driver of well-being and health. Bad sleep can lead to everything from high blood pressure to depression, in addition to making it difficult to focus on tasks or make good decisions. Sleep therapy can improve the quality and duration of sleep but is often inaccessible due to cost or limited access to providers. And sleep medications like Ambien may make it easier to fall asleep but aren’t necessarily addressing the root problem – and can lead to frightening problems of their own.
Percy CEO and founder Conner Herman’s personal journey with sleep deprivation made her realize there was a gap in the market between expensive, hard-to-access sleep therapy and practicable, scalable solutions – and she set out to fill it.
Sleepless Nights Inspire a Solution
Conner Herman was serving in the U.S. military when her first child was born. Like roughly 15% of women who give birth, Conner experienced postpartum depression – a serious medical condition following pregnancy characterized by symptoms like persistent sadness, low energy, and a loss of interest in activities. In Conner’s case, she was barely sleeping. She left the military and began a desperate search for answers to her ongoing sleeplessness. “I was just incredibly sleep deprived and had depression,” she explained. “And no one was there to tell me how sick I was or what to do about it.”
She found a sleep consultant after writing to numerous authors on the subject, and the experience was transformative. It led to her and her partner creating the first overnight sleep consultancy in Manhattan. Rather than have patients come to a sterile sleep study office, instead, they sent experts to observe them in their actual nightly routine.
“We were sending people to spend the night on people’s floors. It was intense, we were exhausted. It basically proved the concept that if you can change someone’s environment and teach them the right behaviors at night, you can change their sleep dramatically – almost instantaneously,” she explained. “People would go months, years of suffering and not know that they had the capacity to change these things because they just didn’t know what to do.”
Considering that 35% of U.S. children and 40% of adults don’t get enough sleep according to the CDC, there is a huge market for sleep assistance.
Although the sleep consultancy proved to be an in-demand service, there was an obvious scaling issue. Paying someone to watch you sleep all night is expensive and doesn’t mirror a patient’s normal sleep experience, and expanding the service to other cities would require a huge investment of infrastructure. Plus, Conner realized that getting actual behavioral sleep therapists into the mix would enhance the consumer’s outcomes. That meant they needed to find a solution that would be easier to scale.
More Data is the Key to Better Sleep
Pharmaceuticals may offer short-term relief, but they don’t address the root causes of chronic sleep issues, which are often behavioral or environmental. Behavioral sleep therapy is effective, but it relies on consistent, detailed self-reporting – which is difficult to obtain and sustain over time (and can be prohibitively expensive).
That’s why Conner developed Percy: a contactless, non-video behavioral measurement system that scales sleep therapy and delivers key data to providers.
For example, picture two children, Wendy and Linda, sleeping in the same room. Wendy relies on a routine of having her parents in the room to fall asleep, while Linda listens to music and falls asleep by herself. Both children experience interrupted sleep when Wendy wakes up at 2am and goes to find her parents to begin the routine again, while Linda is woken up by Wendy’s movements. The solution for getting more sleep for each child should look quite different, as diverging behaviors are responsible. However, without adequate reporting and data, Linda and Wendy’s parent might bring them to the doctor, report that they’ve been experiencing sleeplessness, and the doctor may recommend melatonin as a solution for them both (80% of children with sleep problems are recommended medication).
That’s why Percy’s real-time reporting system that continuously shares sleep data with the patient’s doctor enables more accurate and adaptive treatment.
“We’re trying to extend this care to people who can’t get to a sleep lab, who don’t have access to a therapist who can work continuously by self-report because that’s very expensive,” explains Conner.
Once Percy is fully developed, it will be sold directly to providers. Percy has a special interest in working with the autistic community because 80% of autistic individuals have clinically significant sleep issues. Conner notes that individuals with autism might receive 15, 30, or even 40 hours of therapy during the week – but no therapeutic oversight while they’re sleeping. Gathering that data on how individuals sleep can help doctors and therapists make better, targeted plans for care.
Conner Herman listening to a Science Center-organized investor panel at HLTH 2023
Percy Crosses Paths with The Science Center
Conner and the Science Center team first crossed paths at HLTH 2023. The Science Center team encouraged her to apply to the Capital Readiness Program where she could learn the essentials of preparing Percy for capitalization and transitioning from a task-oriented founder to a visionary CEO. Conner applied and was accepted into Cohort 4 in March 2024.
Conner says that the connections she formed during that week have become an essential resource for her as a founder.
“It is an extension of my company, this team. It is the most profound gift to be a part of the program and get to learn and see all of the problems we’re going to eventually face. The relationships, the opportunities [the Science Center] continue to provide for us are unmatched.”
She notes that working with the Science Center post-CRP has opened doors that would have otherwise been closed. Notably, her return to HLTH 2024, this time with the Science Center.
“We are a pre-revenue company watching every single penny, and we would never have been able to have a booth at HLTH. Because [the Science Center] offered that and we were able to, at a discount, get a spot that had so much visibility, we made so many partnerships and relationships from that experience,” she explains. “It was really our first time showcasing what Percy was going to be. We had the Science Center team sending valuable connections our way. It was a tremendous experience. And its exposure that not many pre-revenue startups are able to have.”
Learning to Scale
“You start out and you think, $30,000. If I could just get a check for $30,000, that would mean so much. I could do so much with that. That would be enough,” says Conner, recalling the early days of the business with a smile. “And now I’m like, oh… we need so much more so we can really grow.”
Reflecting back on the process of scaling her startup, Conner wishes she had invested in building before chasing investors.
“Don’t look for somebody else’s validation first – build what you know they need,” she recommends to founders starting out. “I spent a ton of time talking to the wrong people. The best momentum that I got was in communicating with the people I was building the product for and building it so that they could see that I could do it. And once I did that, all of a sudden I had partners and traction and a market and a technology. And then I became interesting. I would be a year ahead if I had just built it instead of waiting,” she notes.
Percy isn’t Sleeping on Moving Forward
As with most startups, it’s a bumpy ride, with no naps in sight. But good sleep has never looked so promising: Percy has received the support of the Alliance for Pediatric Device Innovation, a consortium between Children’s National, NIH, and the FDA and partnership in an upcoming clinical trial.
They are planning grant submissions for studies with Easterseals, and other behavioral partners, and now that the device is registered with the FDA and is FCC Compliant, Percy has a commercially viable product that can pass IRBs (Institutional Review Boards) to do official pilot studies and most importantly, go to market with an MVP and start helping people get the rest they need.
Percy is officially launching at the American Academy of Sleep Medicine’s annual sleep conference in June. Conner says this extra work to derisk the company has changed the conversation with qualified investors.
“We’ve been able to mitigate significant risk now that we’ve achieved our compliance milestones and as a result, investors are paying more attention to our product,” Conner reflects. “The conversation has shifted from an infinite list of concerns to a discussion of who should be our first market. Every investor I speak with has different ideas about who needs our product more, because sleeplessness is a universal challenge. I think this is an exciting shift because it really highlights the magnitude of the opportunity. The conversations are more about really understanding how we designed our tech for scaling, how we would partner, and goals, which signals that we are ready to launch.”
Consequently, and equipped with support from the Capital Readiness Program, Conner raised $800,000. But according to Conner, that’s not the real growth worth paying attention to. She says the real measure is what she did with that money. Conner reports that she met all her KPIs for this round, has built a commercially viable MVP, knows where she is going next, and has the traction and readiness to raise the next round.
