Key Moments
Calm App Founder: From $0 To $2 Billion By Making The World Meditate: Michael Acton Smith | E117
The Diary Of A CEOKey Moments
Calm app founder Michael Acton Smith discusses building a $2B company, overcoming failures, and the importance of mindfulness and mental health.
Key Insights
Entrepreneurship involves significant failure, but resilience and learning from mistakes are crucial for eventual success.
Curiosity and creativity are vital entrepreneurial traits, enabling one to connect disparate ideas into successful ventures.
Storytelling and understanding the human angle are key to effective communication, marketing, and building connections.
Mindfulness and meditation are powerful tools for mental well-being, akin to a 'mental gym' that rewires the brain.
Prioritizing fundamental human needs—nutrition, exercise, sleep, and meaningful connections—forms a strong foundation for success and happiness.
The global mental health crisis is a first-order problem; addressing it through accessible tools like Calm can alleviate immense suffering.
EARLY CURIOSITY AND THE SPARK OF ENTREPRENEURSHIP
Michael Acton Smith's entrepreneurial journey began with a deep curiosity, fueled by a librarian father who brought home books on diverse subjects. Despite being mediocre academically, this curiosity fostered a creative mindset, allowing him to connect dots between various ideas. This trait, alongside a natural inclination for passionate selling—evidenced even in childhood car boot sales—laid the groundwork for his future ventures. He felt like a 'square peg' at school, introverted and not fitting in with the 'cool kids,' which led him to retreat into reading and a more internal world until university provided an opportunity to reinvent himself.
NAVIGATING BUSINESS FAILURES AND INNOVATION
Acton Smith's career is marked by significant entrepreneurial endeavors, starting with Firebox. He learned early on the importance of creating proprietary products rather than just reselling, a lesson that became central to his business philosophy. His venture into alternate reality games with Perplex City, while creatively brilliant and award-winning, proved to be a commercial disaster. This experience highlighted the critical need to validate the business model and unit economics alongside a compelling idea, a mistake that almost led to bankruptcy but provided invaluable lessons about not succumbing to hype and understanding monetization.
THE BIRTH AND GROWTH OF MOSHI MONSTERS
Emerging from the Perplex City near-failure, Acton Smith pivoted to creating Moshi Monsters, a kids' game focused on nurturing virtual creatures. Initially, the monetization strategy of selling physical phone charms was a flop due to friction. The breakthrough came when they shifted to a free-to-play model, removing barriers to entry. This led to explosive growth, attracting millions of children worldwide. However, the subsequent platform shift towards mobile devices and the rise of free-to-play games presented new challenges, leading to a period of struggle and eventual decline, underscoring the need for adaptability in the ever-changing tech landscape.
CALM: SCRATCHING YOUR OWN ITCH
Acton Smith's personal struggles with stress, burnout, and physical pain from his business ventures led him to discover the power of meditation and mindfulness, concepts initially met with skepticism. He realized that addressing one's own needs could form the basis of a successful business. The acquisition of the domain calm.com and a partnership with Alex Tew marked the beginning of the Calm app. Despite years of slow initial growth and difficulty securing funding, the app's value proposition—making advanced mental wellness practices accessible and relatable—gradually resonated with a society increasingly aware of mental health importance.
EXPANSION INTO SLEEP AND MENTAL HEALTH AWARENESS
Calm's success accelerated with the introduction of 'Sleep Stories,' born from observing user data showing people listening to meditations to fall asleep. This innovation tapped into a universal need, transforming evening routines for millions. The importance of sleep, once undervalued, became recognized as a pillar of overall health, mirroring the societal shift in understanding mindfulness. Acton Smith emphasizes that mental health is not a niche issue but a universal human experience, and Calm's mission to address this global crisis is driven by a profound belief in alleviating suffering and helping individuals master their minds.
THE IMPORTANCE OF FUNDAMENTALS AND RELATIONSHIPS
Acton Smith reflects on his toughest year, acknowledging burnout and physical pain from neglecting fundamental self-care—nutrition, exercise, sleep, and mental well-being. He now prioritizes these foundational elements to maintain stability and leadership. He also stresses the profound importance of meaningful human connections—romantic relationships, friendships, and family—as equally crucial as business success. Developing empathy, active listening, and vulnerability are key to nurturing these relationships, transforming him into a more balanced leader and individual. This focus on holistic well-being is integral to his life and his vision for Calm.
Mentioned in This Episode
●Products
●Software & Apps
●Companies
●Organizations
●Books
●Concepts
●People Referenced
Common Questions
Michael Acton Smith realized the profound impact of the global mental health crisis and his personal struggles with stress and burnout after his previous business, Mind Candy, failed. His friend Alex Tew had been meditating for years and encouraged him to try it, which eventually led to a personal breakthrough during a solo holiday. This experience, combined with research into mindfulness, convinced him that it could be a massive opportunity to help millions of people.
Topics
Mentioned in this video
A mindful meditation and sleep app founded by Michael Acton Smith, aiming to solve the global mental health crisis and help people thrive.
A virtual pet website mentioned as an example of successful online games that leverage children's desire to nurture, similar to Moshi Monsters.
An online multiplayer game for children, mentioned as a contemporary of Moshi Monsters that experienced decline during the shift to mobile platforms.
An online dress-up game, mentioned as another contemporary of Moshi Monsters affected by the shift from desktop web to mobile gaming.
Apple's digital distribution platform for mobile apps, which facilitated the rise of free games and contributed to the decline of subscription web-based games like Moshi Monsters.
A service used by Firebox in its early days to receive faxed credit card orders due to the lack of online payment systems.
The initial game developed by Mind Candy before its pivot to Moshi Monsters, conceptualized as a very complex and fascinating alternate reality game for kids.
A multimedia software platform used for creating animated content and games on the web during the era when Moshi Monsters was developed.
A technology magazine that featured Michael Acton Smith on its cover during Moshi Monsters' peak, contributing to his inflated ego at the time.
The domain name for the meditation app Calm, which Michael Acton Smith and Alex Tew acquired for significantly less than its initial asking price.
A successful online game where children adopted and cared for virtual monsters, which Michael Acton Smith pivoted to after Perplex City failed.
A video conferencing platform that became highly utilized during the pandemic, noted as an incredible opportunity for remote work.
A messaging platform used at Calm, which has a 'warm fuzzies channel' where positive user feedback is shared.
An early internet service provider mentioned as an example of the nascent stage of the internet when Firebox was founded.
A catalog that, along with Sharper Image, inspired the concept for Firebox's quirky product selection.
An American retailer of gadgets and gifts that, along with the Innovations catalog, inspired the product selection for Firebox.
An e-commerce platform mentioned as an example of modern tools that simplify online business, in contrast to the early days of Firebox.
Michael Acton Smith's ambition during Moshi Monsters' peak success was for the company to become as big as Disney.
An employee experience platform used by Calm to conduct biannual surveys and gather anonymous feedback on team well-being.
A social media platform mentioned as a source of early morning overstimulation, contributing to mental health challenges if accessed immediately upon waking.
An investment bank where Michael Acton Smith worked briefly in an HR-related role, hoping to transition into trading.
An online retailer of obscure gifts and gadgets co-founded by Michael Acton Smith and Tom, which gained significant traction after they started creating their own products.
Mentioned as a contrast to Firebox's early, inefficient delivery system, highlighting the lack of next-day delivery at the time.
A payment processing platform mentioned as an example of modern tools that simplify online payments, in contrast to the early days of Firebox.
A UK retailer where Michael Acton Smith bought magazines to find contact information for editors to send press releases for his product.
Michael Acton Smith's next venture after Firebox, which initially started with the alternate reality game Perplex City before pivoting to Moshi Monsters.
A company in San Francisco where Steven Bartlett worked, using social media for growth, and where he heard about Alex Tew's departure to start a meditation app.
Mentioned by investors as a source for free meditations, posing a challenge to Calm's early monetization strategy.
The publishing company that offered a book deal to Calm, which provided much-needed advance money to keep the startup afloat.
A nutritionally complete food product mentioned as a sponsor of the podcast, recommended for busy lifestyles to avoid junk food.
Steven Bartlett's first business, which he describes as failing despite receiving much public validation and press attention.
A social media platform mentioned as a source of early morning overstimulation, contributing to mental health challenges if accessed immediately upon waking.
A sponsor of the podcast, British renewable energy technology company, making products like the Eddi solar diverter to help with sustainable energy transitions.
A company invested in by both Steven Bartlett and Michael Acton Smith, focused on using psychedelics and non-psychedelic therapies to address the mental health crisis.
A mental health care company focused on psilocybin therapy, mentioned by Steven Bartlett as a company he researched when exploring psychedelics.
A popular virtual pet toy that inspired the concept for Moshi Monsters, demonstrating the appeal of nurturing virtual characters.
A novelty toy from the 1970s mentioned as a predecessor to Tamagotchi and Neopets, highlighting a human desire to nurture objects.
A UK solar powered diverter by My Energy, designed to divert excess solar energy back into the home to save power and money, controlled by an app.
Apple's tablet device, which represented the mobile revolution that caused a platform shift away from web-based games like Moshi Monsters.
Trading cards mentioned as an analogy for the physical puzzle cards sold as part of the Perplex City game.
Psychedelic mushrooms (Psilocybin) mentioned by Steven Bartlett as something he experimented with and became interested in for their potential therapeutic benefits.
A book mentioned by Michael Acton Smith that uses data to show how the world is improving in many ways, despite appearing to be in crisis.
A book by Matthew Walker that has been instrumental in raising awareness about the critical importance of sleep for overall health and well-being.
A book by Johann Hari, identified as a favorite by Michael Acton Smith and pivotal for Steven Bartlett, discussing humanity's disconnection from core needs and the importance of relationships.
A movie starring Michael Douglas that inspired Michael Acton Smith's concept for Perplex City, blurring the lines between game and reality.
A book by Will Storr that details the power of storytelling and its importance in connecting with audiences, for which Michael Acton Smith strongly recommends.
Author of 'Why We Sleep,' whose book played a significant role in changing societal perceptions about the importance of sleep.
A psychotherapist and author recommended for her work on relationships, communication, and nuance.
Billionaire founder of the Calm app, known for his diverse entrepreneurial journey, including Firebox and Mind Candy, and his personal struggles with burnout and mental health.
Author of 'The Science of Storytelling,' a book recommended for understanding the principles of effective communication in business.
Michael Acton Smith's co-founder for Calm, who initially suggested meditation and later found the calm.com domain.
The voice behind Calm's meditations, whose soothing tones were initially used by people to fall asleep, inspiring the creation of Sleep Stories.
Author of 'Lost Connections,' a book that had a profound impact on Steven Bartlett regarding the importance of human connection and purpose.
Actor starring in 'The Game,' a film that influenced the concept behind Perplex City.
A founder of atai Life Sciences described by Michael Acton Smith as a dynamic and inspiring individual.
A men's lifestyle magazine that featured Firebox's shot glass chess set, contributing to its early success through storytelling.
A men's lifestyle magazine that featured Firebox's shot glass chess set, contributing to its early success through storytelling.
A men's lifestyle magazine that featured Firebox's shot glass chess set, contributing to its early success through storytelling.
A UK tabloid newspaper that featured Firebox's product on page three, indicating significant media attention.
A fictional character whose quote, 'a spoonful of sugar helps the medicine go down,' is used to explain Calm's approach to making mindfulness accessible.
An ambitious alternate reality game created by Michael Acton Smith, involving a buried treasure, physical clues, and a large community, but suffered commercial disaster.
An early idea for a spin-off from Perplex City for children, focused on stealth education and learning through games, which later became Moshi Monsters.
A psychedelic compound being researched for its potential to help alleviate mental health issues when combined with therapy.
A dissociative anesthetic being researched for its therapeutic potential in mental health contexts.
A psychoactive drug being researched for its potential as a therapeutic aid, particularly in conjunction with psychotherapy for PTSD.
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