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How Calm’s co-founder went from video games to meditation

July 30, 2020


In the “My Worst Crisis” series, entrepreneurs from all over the world tell us about their greatest test on their entrepreneurial path and what they have learned from it.

A summer morning in 2014 Michael Acton Smith was sitting on a balcony overlooking a lush green valley in the Austrian Alps.

How Calm’s co-founder went from video games to meditationHow Calm’s co-founder went from video games to meditation

He had only booked the vacation to escape the stress of his online gaming company, which was in serious trouble. The landscape of lush grass and distant mountains looked almost like a postcard or a desktop wallpaper. Wow, even a poster background with motivational words.

But Acton Smith didn’t look at the landscape. Her eyes were closed and her thoughts were clear. Would have meditated For 10 minutes to calm down from stress, and what you got was inspiration from Calm, the world’s most popular meditation app.

Being (and finally the co – founder in Quiet), Alex Tew, had asked him to try the practice, but Acton Smith had ignored his advice for years. I found it too hippie, with incense and special costumes. After a mountain of stress at his video game company pushed him to the limit, Tew’s continued advice prompted Acton Smith to really test it meditation.

Acton Smith Moshi Monsters playing with their niece / Image: Anna Acton

Acton Smith moved to Tew two years later to develop quietly all day. It was worth it. In 2015, the meditation app barely sold $ 2 million. Sales increased tenfold by 2017 and the company was named Apple App of the Year.

Acton Smith was sitting on this balcony in 2014 and was aware of his breathing. For the first time, he opened his eyes. He believes that this was the first time that the “light bulb was turned on”.

Everything around him seemed brighter.

The detour

Acton Smith’s childhood it was full of pets, Tamagotchis and video games, so it was natural that a children’s entertainment company was founded around the age of 30.

Mind Candy focused on online video games, and shortly after its launch in 2003, Acton Smith raised $ 10 million in venture capital funds. The idea that brought you money? Perplex City, a long-term alternative reality game that resembles a scavenger hunt in offline life. Users from all over the world should search for a stolen artifact in a fictional metropolis (Perplex City) using clues, puzzles and ciphers. The winner will receive a real £ 100,000 reward.

The search began in April 2005. The clues were decrypted, business cards bought, and communities formed. The game ended after a man found the artifact and won the reward in February 2007. But the game, at least financially. It didn’t quite work in real life. It was a “commercial disaster,” says Acton Smith. With less than a million dollars in the company’s account, the entrepreneur knew he needed to do something quickly to change the course of things.

He spent months thinking about London coffee shops with nothing to show but fruitless doodles. But one day the doodles on Acton Smith’s napkin gave way to a series of little monsters and he knew he had found something. These doodles would become Moshi monsters, an Internet “pet” that would storm the United Kingdom from October 2007.

The world of the Moshi monsters was similar to that of the Neopets or Tamagotchi: children could log in and feed, hug or walk with their monsters, and the personality of the pets evolved according to the way they would have been treated. for the kids. There were online games, puzzles, shops, and even a messaging system that kids could use to chat with their friends. And these little users were the best ambassadors for the Moshi monsters and spread the game like a forest fire among classmates, family members and friends in various schools.

“It took me a few years to fly, but when it did, Moshi monsters grew like nothing I’d ever seen before,” Acton Smith recalled. At the time of the game’s greatest popularity in 2012, half of all British children between the ages of 6 and 12 had adopted a Moshi monster.

Quiet team in 2018 / Image: Quiet

This growth led to a large number of partnerships. A music album with Sony. With Universal Studios, a film released across the country. With SkyJack Publishing, a magazine that became the UK’s best-selling children’s magazine six months after its launch. Dozens of millions of physical toys were marketed, prizes won, and the team grew to 200 employees.

“We thought we would be the next Disney,” said Acton Smith.

But in the fall of 2012, Moshi monsters started falling apart. To the entrepreneur’s surprise, the virality that made Moshi Monsters the “coolest thing on the playground” was also the main factor behind his disappearance.

Moshi Monsters’ subscription model had generated revenue in the first two years as parents paid for their children’s use of the website and there was not much competition at that time. But in 2012, children started using smartphones and tablets. The brand failed when trying to switch from desktop to cell phone. The revenue model had to move from subscriptions to in-app purchases, the company’s marketing technology had to be redesigned, and there was simply too much competition with thousands of other apps available to children.

In a minute, Acton Smith felt like the tech entrepreneur, with millions of dollars at his disposal. A few weeks later, he was unable to sleep through the night because he feared he would be unable to keep his company afloat. This constant stress would take years.

“I thought the world was going to go under,” said Acton Smith. He felt that his self-esteem and success were related to the business. When it started to fail, he felt completely responsible. This caused insomnia attacks, exhaustion, headaches and when it got worse over the next three years, he had to fire 200 people.

Acton Smith and their Moshi monsters / Image: Mind Candy

Acton Smith learned a valuable lesson about the often moody world of entertainment, especially children’s entertainment. “Just because you do well today doesn’t mean you will do well forever,” he says.

The jump

In 2006 Acton Smith met Alex Tew for the first time on a ship. The previous year, he’d seen an avalanche of notes about Tew, a teenage boy who, in order to raise money for college, created a website and sold each of his millions of pixels for a dollar each, giving him the status of a millionaire for four months . The two became quick friends, then roommates. Tew was the first person to talk to Acton Smith about meditation, and they often sat on their sofas and discussed philosophy, neuroscience, and business ideas.

In 2012, both bought Calm.com with the vague idea of ​​developing products that help people relax. Even though they had badly drawn ideas like relaxing videos and sound effects, they weren’t sure which direction to go. The following year, Tew moved to San Francisco to take another job and the two entrepreneurs made transatlantic calls to discuss the future of their company. The following year, he, Tew, and a group of friends traveled to the Italian countryside for Acton Smith’s birthday. They had in-depth talks about mindfulness meditation and where to go.

Cover by Acton Smith on Wired in 2012 Wired / Image: Wired

The same year that Moshi Monsters’ income began to decline, Acton Smith did something he had never thought of: take a step back, go to a new place alone, and think about his thoughts. He decided to take a solo trip through the Austrian Alps and took books on meditation. One of them, 10% happiertouched a fiber in the entrepreneur. The author Dan Harris wrote this text after experiencing a panic attack on the show. Good morning America and find a realistic meditation program that worked for him.

Something clicked for Acton Smith when he discovered that meditation was less about incense or religion than neuroscience. “I realized that it was an old but valuable skill that could be relevant to everyone,” he said. He tried it on his hotel balcony on vacation and felt less stressed afterwards and more aware of his breathing. The colors even seemed to be more vivid.

A blacksmith -Year old sales stones / Image: Charles Smith

Although Tew Calm’s focus had been on meditation for some time, his partner only agreed to this business model after Acton Smith’s experience on the balcony. Later that day, Acton Smith took out his notebook and wrote ideas for the company. He had experienced firsthand how stressful life and business was in Western society, and he felt that the future was even more stressful for most people. Remember to have thought: What if we could create a brand that surpasses itself and could be here for centuries instead of being in the entertainment industry? Wouldn’t that be an amazing thing to dedicate the rest of our careers to?

Over the next two years, Tew and Acton Smith talked on the phone, found developers, and started building Calm the way it is now: guided meditation and programs for all types of users, both beginners and advanced. In January 2016, Acton Smith finally felt ready to move away from Mind Candy, his video game company. He found a new CEO to take on (though he will continue to serve as President to this day) and moved to San Francisco to devote himself to calm. He and Tew, who were already working full-time in Calm, agreed to be co-CEOs and split the company equally, but at that point, earnings were scarce.

The predetermined breaking point

In the first half of 2016Acton Smith suffered from the thought that Calm would not be able to “turn the lights on”. At the end of the business, only a few thousand dollars remained in the bank.

It didn’t help that potential investors ignored them.

Acton Smith and Tew attended dozens of pitching meetings just to get a clear “no”. “If that happens a few times, you can handle it,” Acton Smith said. “But if it happens dozens of times, you wonder if you’re on the right track and if investors know more than you do.”

In addition, Acton Smith heard the gossip that an investor called Calm “an idea full of nonsense that would never work.” Another capitalist described it as an “impractical meditation app”. All venture capitalists seemed to think that consumers elsewhere could access the same services for free and would not pay for what Calm offered.

The change

After about six monthsActon Smith and Tew decided that they had no choice but to make the business profitable. The team size stayed under 10 people, they worked long hours in a one-bedroom apartment in San Francisco and took care of every dollar spent. Acton Smith paid for many of Calm’s original editions from his personal portfolio.

At the beginning of 2016, Calm finally managed to make a profit and to draw with what was invested. Acton Smith, who believes Calm can be a place where users can save their lives, predicted sales of around $ 80 million in 2018. In June, Calm raised $ 27 million in Series A financing, which the company valued at $ 250 million.

Acton Smith and his co-founder in Calm, Alex Tew / picture: Calm

“The mind doesn’t come with an instruction manual,” says Acton Smith. “But meditation is the next thing I’ve found.”

So far, 35 million people have downloaded Calm, but according to Acton Smith, this hardly means a presence in less than 2% of all smartphones in the world. The goal of this entrepreneur is that everyone learns to meditate.

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