THE BLACK SHEEP

At 25, James Proud has a quarter-billion riding on reinventing how you sleep. And this original Thiel Fellow is determined to do it his way—or fail trying.

At 25, James Proud has a quarter-billion riding on reinventing how you sleep. And this original Thiel Fellow is determined to do it his way— or fail trying.

It’s only six blocks from James Proud’s ofce, a brickwalled converted bakery in San Francisco’s Mission District, to Central Kitchen, a hip restaurant owned by fellow FORBES 30 Under 30 alum Thomas Mcnaughton, but that’s plenty of time for the 25-year-old to take on more or less all of Silicon Valley. People who complain about finding good talent just don’t know how to recruit. Traditional venture capital firms? Unnecessary. By the time we reach the host stand, he’s deriding the entire tech community for their “airy-fairy bullsh-t about changing the world.”

This absolutism feels all the more jarring given that his short, bulldog frame and pudgy baby face make him look like the high school computer-lab nerd he once was, a persona buttressed by his wardrobe (a sweatshirt and sweatpants almost all the time, a black T-shirt if he’s feeling dressy) and diet (no vegetables, no fish). The latest in the 21st-century cavalcade of cocky prodigies in the mold of Sean Parker, Mark Zuckerberg and Evan Spiegel, Proud was born thumbing his nose at other people. “No one can make me do what I don’t want to do,” he says. He’s been professionally bred this way, too.

James Proud was in the first class of Thiel Fellows, the upstarts—122 and counting—who for the past seven years have taken $100,000 each from billionaire contrarian Peter Thiel on the condition they skip college. And he’s also the most successful. Over the past four years he’s raised roughly $40 million for his startup, Hello, mostly at a $250 million valuation. He’s recently been raising bridge financing, at an even higher valuation, including a direct $2 million ante from the godfather himself, Thiel. It’s his first personal investment in one of his fellows. “James stood out from the start as extremely tenacious and determined,” Thiel says.

And now he’s rich, too. Proud still owns about half of Hello, pushing him well into centimillionaire territory.

Proud’s chosen market is right up there with death and taxes in terms of universality: sleep, which has suddenly become a bit more sexy and a bit less sleepy than it has been for the past few millennia. “You’re starting to see a shift in conversation around sleep that happened in the ’80s around exercise and in the ’90s and 2000s with organic and healthy eating,” Proud says. Arianna Hufngton has raised $7 million for Thrive Global, which offers a suite of products and services driven by the idea that more sleep translates to a better life, and Casper, the mattress-will-change-your-life startup, has raised $70 million.

Proud’s focus is on hardware, specifically an orb the size of a tennis ball that sits on your bedside table and uses a variety of hidden sensors to

track your movements and the surrounding nighttime atmosphere. The $149 gadget, called Sense, grades your sleep on a scale from 0 to 100—and tries to help you improve that score over time. Proud claims that the Sense holiday rollout at Target is the biggest the retailer has ever done for a new electronics product (Target says that’s incorrect).

Big orders won’t guarantee big success, at least not immediately. A source close to the company says the internal sales projection for 2017 is 250,000 Sense units, implying net revenues in the ballpark of $20 million. Tiny compared even to a flagging competitor like Fitbit, which likely finished 2016 with sales of more than $2.3 billion—and even at that size, it’s barely profitable. Meanwhile, a triad of monoliths—amazon, Apple and Google—stand determined to put connected devices on every conceivable surface of your body and in every space in your home.

What does Proud think of his trillion- dollar competitors? Looking up from his lamb ribs and roast pork, he lifts both hands in a double-middle-finger salute.

It’s the kind of brashness that a Peter Thiel could love. That tack surely worked for Zuckerberg and Spiegel. But youthful hubris goes back to Icarus, and that tale didn’t end with an IPO. Given his complicated market, dotted with pitfalls and entrenched enemies, Proud will ultimately demonstrate whether unswerving self-confidence is a necessary entrepreneurial attribute or a potentially fatal flaw. At the FORBES Under 30 Summit in Boston last October, Proud was asked backstage whether he’d ever met Richard Branson, whom he would soon join on a panel. “The real question,” Proud responded, “is whether Branson has ever met me.”

PROUD GREW UP

less than an hour away from Branson’s childhood home south of London. His father worked for the British civil service, and his mother was a secretary who later stocked grocery-store shelves at night. Proud preferred haunting the computer lab to making friends on the playground. His first Internet payday came at the age of 12, when he built a website for a scammer he had met through an online forum (he spent the money on a Sony Ericsson mobile phone and Creative Labs MP3 player). As a hired hand for Web projects, he began making hundreds of dollars per job. At one point his Paypal account was frozen because he was underage, so cash arrived in the mail, prompting questions from his parents.

At 17 Proud started Giglocator, a website that aggregated concertticket information, and persuaded his parents to let him take a gap year to work on it. He fed himself by faking hole punches on loyalty cards from a British chicken chain, Nando’s, or else schmoozing venture capitalists and other European techies