The First Few: Calm

The story behind the first users of Calm

Hey, Justin here, and welcome to Just Go Grind, a newsletter sharing the lessons, tactics, and stories of world-class founders! Premium subscribers get full access to this newsletter, exclusive events, event discounts, and more.

The Just Go Grind Podcast is back!

Our first guest for the show’s relaunch is Shawn Sheikh, Founder & Managing Partner of Adly. Adly is a private equity firm that has done 13 acquisitions and $300M+ in deal volume since 2021, focusing on acquiring and growing small and medium sized internet businesses.

Prior to Adly, Shawn co-founded and sold the Y Combinator startup Solve as well as his growth agency, PivotCMO.

Shawn is a serial entrepreneur and shared lots of insights for both founders and investors in this episode.

Listen to Shawn’s interview on:

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I’m in the middle of the craziness that is podcast relaunch week. Very excited for the show to be back. Less excited for the rain I’m seeing out my window this morning in LA. As is life.

I’ve got some amazing guests lined up for the next few weeks that I can’t wait to share with you:

  • A startup founder who raised $100M+ in venture capital

  • The co-founder of a very well known coffee company that does tens of millions a year in revenue

  • A media founder doing $1M+ in revenue per employee with a team of 20

Candidly, I’m still figuring out the whole podcast process again after a 2+ year hiatus, especially adding video into the mix, but I’m energized by the new challenge!

I’m also planning on recording an episode or two in SF at the end of the month - if you know a great podcast studio in the city I can use, let me know!

Today we’ve got the next edition in our series, The First Few, which shares how companies acquired their first customers.

So far, we’ve featured:

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Let’s dive in.

We’re less than a week away from Just Go Grind: Poker Night ♣️ 🃏 in Santa Monica and I still have a few spots open.

So far, attendees include an innovative alternative investor, an editor at a well known technology publication, a couple of VC-backed founders raising their next round, and about a dozen other interesting people.

I’m also co-hosting a podcast relaunch mixer with Rho to celebrate the show being back.

Food, drinks, and good people at one of my favorite spots in LA… what could be better?

Have you ever had to deal with anxiety issues or had trouble sleeping? Then you probably know Calm.

Founded in 2012 by Michael Acton Smith and Alex Tew, Calm has always had one clear mission: to solve the global mental health crisis. 

If we can end all this unnecessary suffering, if people can become masters of their mind instead of controlled by their minds, everything starts to change. You know, we can start to tackle the climate change and inequality and racism and homelessness and all these other problems that stem from people having healthy minds, with greater resilience and empathy and compassion and gratitude. […] We think it’s a very important mission we’re working on.

Michael Acton Smith, The Diary of a CEO, 2022

A wellness platform may not sound groundbreaking today, after the global mental health and wellness market reached $5.2 billion in valuation in 2022. But Calm was actually the first of its kind.

In the midst of a global increase of depression cases and other mental health conditions, both Michael and Alex could feel the world starting to shift towards a more wellness-orientated society, and they decided to bet on that change.

And what better than to give people access to it from the comfort of their own phones?

At first some people thought it would be just a ‘little meditation app’. By 2017, however, it was named ‘Apple’s App of the Year’. By 2019, it became the world’s first mental health unicorn. And as of today, the company is valued at over 2 billion dollars.

But how did it start? How exactly did they do it?

Let’s dive in.

TIMELINE 

  • 2012: Founded in San Francisco.

  • 2015: Made $2 million in revenue.

  • 2016: 5 million downloads and $7 million in revenue.

  • 2017: 14 million downloads and $37 million in revenue.

  • 2018: 33 million downloads and $80 million in revenue.

  • 2019: 57 million downloads and $150 million in revenue.

  • 2020: 89 million downloads and reached $200 million in revenue.

  • 2021: 110 million downloads and $330 million in revenue.

  • 2022: Calm’s best year achieved 124 million downloads and made $355 million in revenue.

  • 2023: 133 million downloads but a drop in revenue to $300 million.

HOW CALM ACQUIRED THE FIRST FEW USERS

  • DoNothingFor2Minutes.com was a website that invited you to—you guessed it—do nothing for two minutes. The premise was to challenge the user on their patience by letting a countdown run without moving the mouse or touching the keyboard, otherwise the clock would just reset. Alex Tew and former CTO of Calm, Ben Dowling came up with the idea and seeded it on Twitter as a sort of experiment. It went from zero to a million visitors in a week. Half of the people who hit the page weren’t able to sit still for those two minutes and ended up clicking out. But as a reward, the other half could enter their email to be notified about similar tools later on. That’s how they got the first hundred thousand email addresses for the launch of Calm.com. That was the perfect way to target future users, people who had sat through and potentially enjoyed the experience of winding down for two whole minutes.

  • CheckyApp.com. Along the lines of the previous website, Checky was an app that was built and launched in a day with the sole purpose of counting how many times a day you checked your phone. This idea would later be replicated by mobile developers, but at the time it was original and funny enough for Stephen Colbert to make it into a 3-minute segment on his Late Show. This made half a million people download the app, and it certainly drove a lot of traffic to Calm.

  • Sleep Stories. If there’s one thing Calm knows how to do is put you to sleep—and we mean that in the best way. By using data they discovered that a lot of people were using the Calm app right before going to bed. Meditations and nature sounds were apparently helping people sleep. So they came up with Sleep Stories, a reinvention of children’s bedtime stories but made for all ages. These were specifically designed to be interesting enough to draw you in, but not too engaging that they end up keeping you awake.

They’ve been super effective. I mean, sleep has been a huge part of our growth story in the last couple years and there’s lot more we wanna do around sleep.

  • Underpriced For The First Year. Calm was only $10/year at the beginning. That was definitely not ideal in terms of revenue, but it certainly did help to build the user base in the early days. When they inevitably raised the price to 40 dollars the following year, even though the revenue rocketed, less people joined overall.

  • Good Advertising. You’ve probably bumped into one of Calm’s ads. Just like with DoNothingFor2Minutes, they make you stop what you’re doing to wind down a little, if only just for the fifteen seconds the ad lasts. But the contrast between going on Instagram to see random stories and abruptly having to stare at a countdown get to zero has shown to be incredibly effective to catch people’s attention.

That’s been so successful as an ad. Like, it’s insane. Because people don’t see it as an ad, they see it as a piece of content, they see it as an invitation to stop mindlessly scrolling, which is what we’re doing everyday. That’s been a major part of our user acquisition story.

KEY TAKEAWAYS

  • Broad Audience: Calm targets everyone. Just by having a brain you could benefit from using Calm. Smith and Tew managed to create a product that can be attractive for quite literally any living human being on Earth. That just inevitably skyrockets your chances at getting people to try it out.

There’s an often quoted stat that one in four people will suffer from mental health issues in their life. It’s not one in four, it’s one in one. Anyone who has a mind has mental health. And somedays it’s great and somedays it’s not. […] We have to respect and learn about our minds, because there’s nothing more important.

Michael Acton Smith, The Diary of a CEO, 2022
  • Gamification. Both Checky and DoNothingFor2Minutes were fun, goofy ways for people to get a little bit more into what Calm had to offer. Did Checky say you checked your phone too much today? Maybe you need to be more mindful and present. You found yourself enjoying the 2 minutes doing nothing? Then maybe you’ll also enjoy meditations.

It’s fun to step out of the day to day occasionally and just come up with these random, silly ideas that might help the sort of main company.

  • Accessibility. By 2013, anxiety disorders were the sixth leading cause of disability, in terms of YLD’s (Years Lived with Disability), in both high-income and low- and middle-income countries. This was a mental health problem that transcended borders and class barriers. So Calm was right to think that if they truly wanted to make a difference and reach the whole world, the solution would have to be easily available for as many people as possible.

[Make people be] more calm, less stressed, less anxious, happier, healthier, all of those things. And we can do that by teaching these skills, and we can do it where people are at, which is on their phones. You know, people are looking at their phones, so why don’t we use that platform to create something that actually can be very beneficial.

Learn more about Calm:

In the past two years, we’ve published dozens of deep dives on world-class founders, sharing how they built their companies. These typically take 20-30 hours to research and write. The most recent ones are below:

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Best,
Justin

Founder of Just Go Grind

P.S. Hiring? Check out the team at Athyna

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