The mood was whimsical at Casper’s New York headquarters— the online mattress startup had flipped its industry upside down. Celebrating Casper’s fifth anniversary, the celebration seemed more like a birthday party for a five-year-old, complete with face painting, piñatas, and a balloon artist who crafted everything from an intricate jet pack to a knockoff Chanel bag. “But the magician canceled at the last minute,” said Casper’s chief technology officer, “which kind of sucked.” About the only indication that this was gathering of adults was the copious supply of alcoholic beverages.

Which new product pricing strategy did Casper initially employ? Why did it work well?