Despite years of rejection for their "terrible" startup idea, two friends have now achieved an "extraordinary success" worth $2 billion.

Despite running multiple businesses for many years, Michael Acton Smith felt exhausted and his mental health deteriorated. However, he dismissed mindfulness and meditation as mere "woo woo" terminology.

Alex Tew recommended meditation to Acton Smith, and it was only after giving it a chance that Acton Smith realized its true impact.

Acton Smith, the CEO of Calm, explains to CNBC Make It that mindfulness is rooted in neuroscience and involves rewiring the human brain through reading books and research papers.

Tew and his companion came to the conclusion that mindfulness is a combination of "simple yet highly effective techniques" that can have a significant impact. They were determined to share its importance with others and found that there were limited resources available to teach it to a broader audience.

In the past, mobile devices were becoming increasingly popular, so Acton Smith and Tew decided it was the ideal moment to make mental health resources like guided meditations, sleep stories, and mindful movement exercises available directly on people's phones. As a result, they founded Calm, an app that provides these resources.

Today, the app has a valuation of $2 billion.

The cost of Calm subscriptions ranges from $14.99 per month to $69.99 per year or a one-time payment of $399.99 for unlimited access to premium features. Additionally, there is a free version with limited content available.

The Calm app, founded by Action Smith and Tew, who are also Co-Executive Chairmen of Calm, faced challenges in making mindfulness mainstream. Despite their previous successful business ventures, investors were not interested in a product centered around mental health, making it difficult to sell the Calm app.

Acton Smith asserts that when establishing a business, one is likely to experience more failures than successes.

Calm, the meditation app that has been downloaded more than 150 million times, was made into the go-to app by the friends and business partners who developed it.

'The Nike of the mind'

During their usual hangouts in Soho, London, Action Smith and Tew developed the idea for Calm while playing video games and discussing business possibilities.

Tew says, "I had been dreaming of a meditation app like Calm for a little while, and I was quite into it personally."

"Could we simplify, make more accessible, and relate this to people? Acton Smith asks. Could we use smartphones as a distribution platform and change the world? Could we create the Nike of the mind?"

Acton Smith and Tew aimed to create a brand that emphasized "mental fitness," similar to Nike's focus on physical fitness.

To market their company, the pair believed that Calm would be more well-received in California, so they relocated to Silicon Valley. However, investors in the tech hub were not convinced.

"A decade ago, discussing mental health was uncommon, and meditation and mindfulness were considered unusual," says Acton Smith.

"At parties, people would either steer clear of us or presume we were establishing a nonprofit if we discussed it."

Initially, they faced challenges in securing funding for their mobile meditation app because it was perceived as a "terrible idea" by some.

It took nearly six months and involved meeting with over 100 people before Calm secured its first angel investors. Despite this, "we didn't raise a ton of money," Tew admits. They raised $1.5 million between 2012 and 2014.

"We secured substantial funding later in our journey after achieving considerable growth."

Calm struggled to convince people to pay for their subscription service when there were numerous free relaxation apps available. To distinguish themselves from competitors such as Headspace, Calm emphasized a more playful and less serious approach to mindfulness.

We kept costs low and relied on word-of-mouth promotion, achieving eight million downloads before investing in marketing, says Acton Smith.

The goal of Calm's website design was to create a relaxing atmosphere, generate maximum publicity, and make the app enjoyable, in the hopes that satisfied users would spread the word.

'To build successful companies, you have to do things differently'

The app's popularity was significantly increased due to the addition of a new feature called "Daily Calm." Acton Smith explains that they collaborated with meditation teacher Tamara Levitt to create a unique 10-minute meditation each day, which included a new quote at the end. People eagerly anticipated this feature.

"Sleep Stories," a bedtime story app for adults, was a fast follow-up to the popular Daily Calm and featured playfulness, great sound design, and celebrity storytellers.

According to Acton Smith, building successful companies requires going to the edges, doing things differently, and thinking differently.

"If you consistently strive to conform and fit in, you're unlikely to achieve a groundbreaking product or company and experience remarkable success."

In 2018, Matthew McConaughey became an investor and narrator for Calm's Sleep Stories. This successful partnership led to other celebrity endorsements.

In the same year, both LeBron James and Harry Styles used the Calm app's "rain on leaves" soundscape to fall asleep at night. They also invested in the app and shared their own Sleep Stories, which helped broaden Calm's reach to new demographics.

Acton Smith claims that Harry Styles' Sleep Story caused the app to break. The company raised $27 million in a series A funding in 2018.

In 2019, Calm expanded its reach by offering the premium version of its app as a workplace wellness perk for employees at other organizations.

"Tew explains that Calm's mission is to make the world happier and healthier. The company began by teaching meditation and then expanded to help people with sleep. Now, Calm is evolving into a healthcare company, with a focus on mental healthcare."

Thirteen years on, Calm's objective stays unchanged, according to Acton Smith.

"Calm is a superpower that enhances our sleep, relationships, leadership, and parenthood. We are deeply passionate about the transformative power of Calm."

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