In 2008, 27-year-old Londoner Richard Pierson was burned out from his career marketing Axe deodorant at a major agency. He switched to freelance, but felt so much anxiety he struggled to go out in public.
A FRIEND KNEW JUST THE CURE: AN ENERGETIC, AMIABLE
A friend knew just the cure: an energetic, amiable “Jeeves” for taking care of your brain. It wasn’t a drug or a doctor. It was Andy Puddicombe, a Buddhist monk with 10 years of Tibetan monastic training across Asia. Tan, bald and athletic with a soothing Bristol accent, Puddicombe seemed like an unlikely messenger for the roughly 2,500-year-old practice.
But Pierson quickly bonded with the assured, zen guide, who dropped out of college at 22 to “find peace of mind” as a monk after losing two friends and a stepsister in sudden accidents. Pierson offered Puddicombe marketing tips for his nascent meditation business in exchange for one-on-one mindfulness training. It quelled Pierson’s anxiety, and he became just as eager as his teacher to spread the practice.
HOW MUCH OF YOUR LIFE DO YOU SPEND IN THE PRESENT MOMENT?
“Andy’s first question was, ‘How much of your life do you spend in the present moment?’” Pierson said, who hasn’t missed a day of meditation since. “I didn’t know that was a thing. It fired something up in me.”
What the duo started as a meditation event business in London in 2010 has evolved into a meditation and wellness app, Headspace, with annual revenue north of $50 million and a valuation estimated by Forbes of about $250 million. Headspace, which has been downloaded more than 11 million times, has more than 400,000 paying subscribers and hip Santa Monica, Calif. headquarters complete with meditation pods, an indoor magnolia tree and swings. Headcount is expected to grow significantly from 158 to 250 next year, when the company will open its first San Francisco office and expands headquarters.
Increased happiness, compassion and better health and relationships are some of the core benefits of meditation, according to the founders and a growing body of research that supports their claim. Headspace ranked as the highest quality “mindfulness-based” iPhone app in a study in the peer-reviewed Journal of Medical Internet Research, in part because only a handful of other apps also offer training programs, such as Smiling Mind, iMindfulness and Mindfulness Daily. As the wellness market grows — mental health costs are predicted to hit $6 trillion by 2030, greater than the cost of diabetes, respiratory disorders, cardiovascular disease or cancer, according to the World Economic Forum – these digitally savvy meditators-turned-entrepreneurs are betting that people and organizations will continue shelling out a monthly subscription fee (ranging from a two-year deal for $6.24 per month to as much as $12.95 per month) as a life staple.
THE COMPANY HAS BEEN FLESHING OUT A LIBRARY OF TAILORED
Since 2014, the company has been fleshing out a library of tailored “packs” on topics like relationships (patience, kindness, generosity), performance (creativity, balance, focus), cancer, chronic pain, stress, sleep, anxiety and sports, which the company spent years developing with British Olympic psychologists and athletes. The app also offers tracks for experienced meditators with less guidance and a suite for kids (Puddicombe, 44, says age three is the ideal time to start), building a user base with an even split of males and females, a nearly even breakdown across ages from 18 to 65 and subscribers in more than 200 countries, despite only being available in English. According to Headspace’s chief executive, 41-year-old Sean Brecker, revenue growth has accelerated between 2015 and 2016 and is expected to again in 2017 (Brecker, a former banker and longtime friend of Pierson, joined Headspace in 2014 after the app helped him jump from sleeping less than four hours a night to seven hours after a stressful overseas move with his family.)
“It’s an incredible commercial opportunity because it’s digital content we create ourselves,” Brecker said. “There are no licensing fees. It’s immensely scalable.”
It also doesn’t hurt that the app has the backing of a host of flashy investors. The startup’s $30 million Series A, which closed in July 2015, led by entertainment-focused Chernin Group, featured Breyer Capital, Jessica Alba, Jared Leto, Ryan Seacrest and LinkedIn LNKD +% chief executive Jeff Weiner. And celebrities like Gwyneth Paltrow, Richard Branson and Lebron James are vocal fans. Other buoys have been Puddicombe’s speaking tours and rising profile as a wellness guru and partnerships. Seven airlines offer Headspace on flights, and the app became Spotify’s first bundling partner in late 2016 (users of the music service in most of Scandinavia can subscribe to both apps in a bundled deal). And Headspace’s secular, simple style and cute animations help make meditation approachable.
HEADSPACE’S MOST IMPORTANT STRENGT OVER TIME LIES IN DATA
But perhaps Headspace’s most important strength over time lies in data, which it has been using to understand what makes new users become regulars, when people zone out of tracks and how the app can become personalized to predict users’ needs. In the future, for instance, Headspace could be suggest its fear of flying pack to an anxious traveler when the app detects the user is at LAX. Jim Breyer, a longtime user and investor in Headspace, said data gives the company a key edge.
“The most magical companies I invest in combine deep passion for a product area with a deep, positive view of how data and technology can enhance an experience,” Breyer said. “The meditation app and packages are developed with a close examination of data, which informs the product but also long-term thinking around which adjacent wellness areas are important.”
According to Kathleen Chaykowski, It wasn’t always clear that Headspace would be a tech company. When Puddicombe was leading live mediation groups six years ago, he was resistant to digitization. He wasn’t sure the techniques would be received well by Westerners en masse, and was skeptical of apps as a vessel. He had after all, spent a decade device-free. But, the live meditations were largely subsidized by book deals, and Pierson was adamant that an app could be their ticket to reaching millions. Puddicombe came around, and in 2012, the founders used the $50,000 they had in the bank from friends and family to launch the first version of Headspace, a set of 365 sessions.
Puddicombe acknowledges the irony that users consume Headspace on a device tied to countless addictions, but he now sees technology as an obvious tool, and embraces it. After all, it took a few thousand years for meditation to reach 6 million people outside of Tibet. For Headspace, it only took a few years.
“The phone is plastic, it’s metal, it’s not good or bad,” said Puddicombe, who records all of the app’s audio with a clear, pacifying voice that Headspace regulars love. “With anything in life, you have to meet people where they are.”
While the company doesn’t currently have plans to tweak its steady subscription model, the journey hasn’t been without its bumps. Two weeks after the founders relocated to Los Angeles in March 2013, drawn to the California’s lifestyle and startup culture, Puddicombe was diagnosed with testicular cancer. While Puddicombe has recovered, the event made the company reexamine its dependency on its founder. The company has also struggled at times to hire quickly enough, and in a few cases, carefully enough, in the process of more than doubling in headcount over 2016.
Although the founders live and breathe meditation, it isn’t the end goal. Their ultimate aspiration is to become what Pierson calls “the most comprehensive guide to health and happiness in the world,” a broad, but expert wellness platform with hundreds of millions of users. But like today, the founders emphasize it won’t only be for those who can pay. Anyone can download Headspace’s “take 10” meditation series for free, and for every paid subscription, Headspace donates one to someone in need.
Next on the company’s agenda is using 2017 to double down on corporate wellness offerings (corporate subscribers like Google GOOGL +1.52% and LinkedIn represent a small total of revenue now), and boost user growth by translating the app into major languages and expanding content. It appears well-armed, with a $30 million war chest that hasn’t been touched, and growing interest from for- and non-profit partners, like Arianna Huffington’s Thrive Global, which made Headspace its sole meditation partner.
“I love that it’s science-based,” said Huffington, who started meditating when she was 13. “It’s great if you wake up in the night to be able to listen to one of the meditations. It also creates a more-centered way to approach my whole day.”
But the app’s great unknown is whether its playful cartoons and doses of peace will win over users’ time in the long-haul.
“Short-term, Headspace has an aspirin on effect on people,” Brecker said, calmly in a conference-room swing. ”We’re really trying to turn it into a vitamin kind of movement, where people are using it every day, building a skill they can apply to life no matter what.”