How a Monk and an Ad Executive Are Turning Meditation Into a Fast-Growth Business
Headspace founders Andy Puddicome and Rich Pierson are spreading the practice of meditation through a mobile app.
PHOTO CREDIT: Getty Images
Startups are known for missions that are lofty, audacious, and sometimes even a bit wacky-sounding. But when it comes to ambition, perhaps none are a match for Headspace. "We want to improve the health and happiness of the world," explains Rich Pierson, the company's co-founder.
That's a tall order for any company, never mind one that makes a seemingly simple meditation app. But the Los Angeles-based startup claims 12 million active users, and says that 80 percent of its growth comes from word of mouth. Headspace, which guides users through hundreds of meditation sessions of various lengths, has a five-star rating in the Apple app store, and more than four stars pretty much everywhere else.
While Pierson jokes that we've hit "peak mindfulness," he believes that there's still lots of opportunity to get more people to meditate. By making the practice both approachable and simple---not too clinical, and not delving into "super-weird, hippie granola crystal healing madness," says Pierson--Headspace aims to make it appealing to those who might not have considered it before.
There's also a burgeoning market in large companies that are becoming more aware of the role that mental health could and should play in their corporate wellness programs. That opens up opportunities for companies such as Headspace and meQuilibrium, which offers online stress management. "I think companies are growing in the way they view wellness," says Rob Goetzel, a senior scientist at the Johns Hopkins Bloomberg School of Public Health. "I think these types of activities--meditation is one technique--ought to be part of the tool kit employers use to support workers."
Most of the time, that has meant a company would hire a trainer and set up a time for employees to learn meditation or other strategies to build their resilience and deal with stress. "Some people like to be in a room with other people," says Goetzel. "But it's very hard to get people in a room for an hour." Delivering meditation via an app allows employees to practice whenever they choose. That may increase adoption, and, Goetzel suspects, could be cheaper than the in-person option.
An unlikely pairing
It's not like Headspace is the only meditation app out there. Dozens of entrepreneurs, it seems, see little irony in using the most distracting device we own--the smartphone--and trying to turn it into a tool for improved awareness. Headspace, at $7.99 to $12.95 a month (depending on the length of your subscription), also is not the cheapest.
What is does have is an unusual co-founder duo: Andy Puddicombe, a Buddhist monk who does the narration for all of Headspace's sessions, and Pierson, who'd formerly been marketing Axe deodorant for BBH, a large agency. Each of them came to meditation through a personal crisis: Puddicombe somehow endured a year during which two of his friends were killed by a drunk driver, his stepsister was killed cycling, and his ex-girlfriend died during heart surgery. His response, after some initial boozing, was to leave his native England for 10 years, study Buddhism, and be ordained as a monk.
Pierson's catalyst was perhaps less dramatic, but it affected him deeply. "I had a bit of a breakdown," says Pierson. "I couldn't go out on public transport, I couldn't speak in front of people. And my job up till then had been in a very public role." A friend introduced him to Puddicombe, who was teaching meditation at a clinic while also running intensive one-day meditation events for a few hundred people at a time. "We did a skills swap," says Pierson. "He would teach me meditation, and I would help him get more people to his events."
Even with Pierson's help, there were still plenty of people who wanted to attend Puddicombe's events but couldn't. They asked if they could buy the handouts that attendees received, so Pierson and Puddicombe started selling that content on their website. In 2011, after an event in New York City, they met someone who asked if they had considered selling the content as a subscription. "We were like, no, we definitely hadn't thought of that," says Pierson, still sounding a bit amused by the oversight. "The events business is a terrible business model, so we went with the subscription idea."
The following year, they developed some exclusive content for The Guardian. "That was the turning point," says Pierson. In a month, the paper took in £32,000 in subscription sales--more than it made the entire year before. Pierson and Puddicombe also built an app, but, says Pierson, "we didn't have any money. We had different developers working on it all over the world. It was kind of built on quicksand."
By 2013, the founders realized they were building a content company, and moved to Los Angeles (yes, they're both surfers). They relaunched the app in July 2014, coming up with something similar to its current product. Meditations are bundled into packs designed to help with relationships, health, and other topics.
Attracting clients and investors
In September 2015, the company raised $34 million, a round led by the Chernin group that included Los Angeles luminaries Jessica Alba and Jared Leto. Among other things, the money will help Headspace expand internationally and increase the number of animations on its app. Headspace also will be paying more attention to the corporate market this year. Its clients include Uber, LinkedIn, and Google, says Pierson. These companies get discounts for their employees, and HR managers can tell, in aggregate, how much time employees spend with the app (no personally identifiable metrics are available). The 165-person company offers its content as part of the in-flight entertainment network on seven airlines as well.
Headspace also runs about 40 different studies on the uses and effects of its app. Some address chronic pain, fatigue, and sleep patterns. Another is examining compassion fatigue in nurses. "To me, it's really interesting if Headspace can work with medical professionals," says Pierson.
That would no doubt lend the app some credibility among doubters. While Headspace's user reviews are full of nifty quotes like "This changed my life," Headspace can't promise that subscribers will see any particular gains as a result of the practice. "We are taught that if we do X, we will get Y," says Pierson. "Meditation is the complete opposite of that. If someone is just starting out, my biggest advice is to expect nothing."
If Pierson thinks it's odd that he and Puddicombe are attempting to build a billion-dollar business based on the practices of a religion that argues strenuously against all forms of materialism, well, he's not letting on. He points out that he and Puddicombe still own a large share of the company, having bootstrapped it for five years, and, he says, "making money before we did the A round. It's a proper business." (The company declined to give financial figures.) In the end, Pierson says, "we're mission-first. We want to make sure we can build the project we envision building. If you've got a big enough vision, you need help and financing to get there."