Michael Acton Smith constructed an empire on the again of a stressed-out society.

Okay, that sentence sounded higher in my head, and upon it in print, it‘s fairly imposing — not precisely in step with the spirit of Acton Smith’s meditation and mindfulness app, Calm.
Nonetheless, it‘s true (even when it’s not completely on-brand).
Since its inception in 2012, Calm has gone on to amass over 4.5M paid subscribers, tally over 100M downloads, and be valued at over $2B in its newest funding spherical. However how did Acton Smith get there? And what classes are you able to pull from his story?
Properly, valued reader, you will get the solutions to these questions and extra under.
How Calm’s CEO Created a Multimillion-Greenback Model
1. Discovering Inspiration in His Background
Calm wasn‘t Acton Smith’s first enterprise. His foray into entrepreneurship began with a toy and gadget firm within the late Nineteen Nineties, known as HotBox. In accordance with him, he and colleagues “noticed this factor known as the web effervescent up, and [thought] there was gonna be a possibility to revolutionize commerce.”
HotBox offered what he describes as “quirky devices, toys, and video games” on-line — and that got here with a bunch of challenges. Predating ecommerce staples like Shopify and Stripe, Acton Smith and his staff needed to “hack all the things collectively [themselves].”
He additionally hit a hitch over the corporate title. Sadly, Hotbox.com was one of many world‘s largest porn websites on the time, prompting him to alter the title to Firebox. He didn’t like how his mother would inform her pals to take a look at his firm’s web site and have them land … elsewhere.
Over twenty years later, Firebox continues to be operational. At its peak, the corporate was at $70 million in income — however as he discovered, the world of children’ leisure strikes quick.
In accordance with him, “You’ll be able to actually be tremendous scorching one minute and never the following … It is a hits-driven enterprise and in order that was difficult. We needed to let lots of people go; we needed to restructure the enterprise, and revenues dropped dramatically. That was a interval the place I used to be tremendous harassed and wasn’t sleeping effectively. And I had fixed complications.”
Troubling as that stretch was for him, it was in the end productive. That is when “the sunshine bulb went on round Calm and meditation.”
2. Pinning Down the “Why” Behind His Enterprise and Studying to Articulate It
In 2012, Acton Smith based Calm with co-founder Alex Tew — marking a welcome transition from a hits-driven, entertainment-oriented enterprise to 1 rooted in “a basic human want to cut back stress, be calmer, and perceive our personal minds.”
As he places it, “The world will not be getting any much less nerve-racking. I feel folks will all the time have to sleep. I feel it is a big, big space to lean into. And I feel these are all the time essentially the most thrilling companies.”
Regardless of its needs-driven foundation, the primary 12 months at Calm was robust for Acton Smith. Elevating cash was tough as a result of “folks did not actually perceive what [it] was” — so he needed to self-finance the enterprise initially.
Because the enterprise bought its legs, Tew was what Acton Smith describes as “the primary particular person on the bottom, constructing the enterprise,” whereas each chatted to traders. However they bumped into bother with meditation’s fame on the time.
3. Pondering “Like Nike”
In accordance with Acton Smith, “Folks did not actually perceive what meditation and mindfulness have been. It comes with a lot baggage. From folks pondering it is spiritual, or woo woo, or a bit bizarre.” Traders have been skeptical, pondering the idea is likely to be too area of interest or fad-y.
However meditation finally grew to become en vogue, and demand caught up with Calm. Acton Smith likens its rise to Nike‘s 5 a long time in the past. In accordance with him, ’Bodily health wasn’t actually a factor [back then]. Going operating was bizarre.“ Meditation had the same trajectory, and he hit the purpose he describes as being ”so thrilling for an entrepreneur.”
He says, “What I feel the most effective entrepreneurs do is that they spot these inflection factors in society the place public opinion shifts. And when it shifts, it usually would not occur steadily. It occurs actually shortly. And if you happen to’re browsing that wave when that shift is occurring.”
Acton Smith says, “It took years and years earlier than [Calm] hit a tipping level.” In 2014, the corporate made about $340k. By 2015, three years in, it made $2.3m. Issues actually took off in 2016, when the corporate did $7 million in income — and in 2018 it did $80 million.
4. Leaning Into Phrase of Mouth
Calm didn‘t owe a lot of its preliminary success to paid advertising and marketing. It didn’t want to speculate an excessive amount of on that entrance because the enterprise discovered its footing — the corporate reached 8M downloads virtually strictly on phrase of mouth.
As Acton Smith places it, “The sooner docs have been moving into meditation and mindfulness, earlier than it form of tipped in society. So folks, after they uncover mediation, they turn out to be very evangelical about it. And that was fueling our development. And then we began testing into Fb and paid advertising and marketing — and it took a short while, however we bought that working very effectively.”
Acton Smith, Tew, and Calm’s advertising and marketing crew led a profitable, extra novel marketing campaign to generate fast curiosity.
He recollects, “[Alex Tew] created an internet site that was mainly just a few waves lapping on the seaside, and it was known as donothingfortwominutes.com [where] you actually needed to simply stare at these waves for 2 minutes and never transfer your mouse or faucet on the keyboard, and never many individuals may do it. It was surprisingly difficult, however if you happen to bought to the top of it, it could ask on your electronic mail deal with. And we collected about 100k electronic mail addresses in two weeks.”
5. Cultivating a Distinct Model Id
Succeeding in any business is, largely, a operate of how effectively you possibly can distinguish your self. So naturally, Calm’s branding technique was decidedly completely different from its competitors.
Whereas meditation apps weren’t essentially a crowded house, Calm did (and nonetheless does) share it with Headspace — a distinguished outlet that promoted itself through bigger branding campaigns and tried to disrupt the picture of “lotus leaves and hippies” that meditation had historically been related to.
As Acton Smith places it, “We took a barely completely different method [than Headspace]. I like this concept that Calm is predicated extra round nature and the pure world. And I feel that offers us a bit extra accessibility. And even the title Calm can work on a series of resorts, or clothes, or an entire host of different services.”
6. Staying Nimble
Calm additionally distinguished itself from Headspace with what Motion describes as his firm’s “startup DNA” and emphasis on organizational effectivity.
He says, “I feel the explanation why Calm has a unique form of profile to Headspace, is Alex and I’ve run many companies earlier than. And I feel we now have startup DNA. And the entire thought of being extremely environment friendly with capital.” He noticed a whole lot of worth in cultivating a “very nimble, very test-driven tradition.”
In accordance with him, “I made some errors within the earlier companies the place I employed too many individuals, bought too bloated … It‘s virtually like a badge of honor a whole lot of entrepreneurs speak about, how many individuals in your online business. And to me, now, it’s a badge of honor how few folks we‘ve bought. As a result of whenever you rent a small variety of folks, who’re all like 10x stage — oh my God, it’s insane what you are able to do. And yeah, I like that.
“[Revenue-per-employee] is a good metric. And whenever you rent these varieties of individuals, when you do not bloat, everybody wears a number of hats, everyone seems to be pushing actually exhausting. It simply creates an incredible tradition.”
7. Leveraging Fundraising as a Model Consciousness Builder
Calm additionally needed to generate model consciousness on an organizational stage — trying to develop a fame that might assist the enterprise appeal to prime expertise. Acton Smith says he was in a position to get there, partly, through fundraising.
In 2018, Calm raised $27M in its sequence A spherical, however Acton Smith says the corporate didn‘t truly contact most of it for some time. That wasn’t why he sought traders. In accordance with him, “Bringing in nice new traders is efficacious however one of many main causes we did our sequence A spherical final 12 months was to boost consciousness of the enterprise.”
Calm needed to hold discovering angles to ascertain its foothold available in the market, and that included bolstering its profile as a enterprise — not only a product.
He continues, “[Before the series A] it was nonetheless fairly difficult to rent folks, and we simply needed to make a giant noise available in the market. And immediately folks have been like, ‘Wow. This enterprise is price $250m, there’s one thing occurring right here.’“
Know your self.
If there‘s one underlying theme to Acton-Smith’s journey, it‘s that there’s super worth in understanding your self and your online business. That is the place his potential to determine an rising market, create a compelling worth proposition, and in the end stand out stemmed from.
Corny because it sounds, you need to know what makes you you.
Do not underestimate the enterprise worth of studying from life expertise. Know the ins and outs of your business and what makes you uniquely positioned to serve it, and in the end, have a pulse on why folks can purchase your providing.