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Career Life Stories: Michael Acton Smith, Co-Founder & Co-CEO, Calm

From Monsters to Meditation, Michael’s entrepreneurial journey has been a roller coaster ride, but he’s now in the midst of building Calm, his third startup, this time with a decidedly more mindful approach.

1. You started your first company shortly after graduation. Had your ambition always been to be an entrepreneur, and how did you get started?

I was one of those kids who was always coming up with hair-brained business ideas, driving all my neighbors around the bend. I think it was in my blood. However, just before I went to university, I watched Wall Street. My ambition changed to become an investment banker; I thought it sounded like the most glamorous and exciting job in the world. After graduating, I took a role working at an Investment Bank in their HR department. Quite quickly, I realized it wasn’t what I imagined, so a friend and I started throwing business ideas around, and that was how our first real company came about – Firebox – back in the late 90s.

2. Both your previous startups had great success, and so can you tell us more about your experience pre-Calm?

The first company, Firebox, was a creative e-commerce company selling toys, gadgets, and games. My business partner (Tom Boardman) and I didn’t really know much about running a business, so we had to figure it out as we went along.

My second company, Mind Candy, was born out of my passion for games. As the internet was developing around 2004, I thought it would be amazing to create a new type of gaming company that would allow you to play games online with millions of people. We raised a lot of money for a treasure hunt game called Perplex City which was very creative, but commercially unsuccessful. We were fast running out of money and urgently needed to pivot. I was intrigued about the idea of helping kids learn through play and so that become the seed of the idea that grew into the weird and wonderful world of Moshi Monsters.

Navigating the kid’s space was a very deep learning curve, but we ended up growing that business to tens of millions of users. As we grew, we came to understand the power of building an online and offline business to enhance a brand. Moshi, for example, had a digital heart but we also created physical products like books, toys, magazines, music albums, and even a movie with Universal Studios. The biggest learning there, though, was how fast the entertainment industry changes, particularly kid’s entertainment. You can be hot one minute and not the next. We rode a lot of ups and downs. As the market shifted, it was a painful, scary and humbling experience to go from over 200 employees to collapsing revenue and undergoing big layoffs.

That was quite a stressful time. The stress drove me to search for a little more balance and perspective which I found through the life-changing skill of meditation. I read a lot of books on the subject and what helped the light bulb go on for me was the neuroscience and extensive research showing how this ancient practice can rewire your brain for the better. This mindful transformation led my friend Alex Tew and I to develop Calm. The big difference with Calm is that it’s not a hit-driven business, meaning it’s not going to be here one day and gone the next. We are tapping into fundamental human needs, and we think it’s going to be a valuable in one year, in ten years, and in hundreds of years. Those are the kinds of businesses you can go deep with and bet the rest of your career on; that feels like what’s happening at Calm.

3. How have you personally evolved as a founder and leader since starting your first company? What role has mindfulness played in your evolution?

Like a lot of entrepreneurs, in my first two companies, I was very intense. Every spare second needed to be spent hammering out emails or working on the business. I’d go to bed firing off a few last emails at midnight before falling asleep with the phone glued to my face. I stressed over every aspect and metric of my business, but I often neglected my own wellness. It’s such a self-defeating lifestyle. If we’re not personally healthy and happy, we’re bound to cause problems for our teams and businesses.

I had a real wake-up call when I noticed how eating healthy foods, getting enough sleep, and doing enough exercise, enabled me to be a better leader and my business to become stronger. One of the great things about meditation and mindfulness is evolving into a calm leader. Your team doesn’t want to see you frantic and angry one minute and completely different the next. Learning to be calm in relationships, in leadership, and in every aspect of our lives is a powerful tool. Seeing things through a more mindful lens has helped me cope with the ups and downs of leading a fast-moving startup. I am much less reactive, and I can make better and more thoughtful decisions. Overall, I believe I’m a much stronger leader now that I was before.

4. Given your experience building companies in both London and San Francisco, how are the startup scenes similar and different?

London is an incredible city. I love the diversity of the different industries from fashion, to finance, to advertising to design. What stands out to me about talent in London is how creative the people are.

San Francisco, on the other hand, is much more tech-focused and that is obviously perfect when you’re building a very fast-growing startup. Where else can you find people who have built products or scaled growth across three of four different unicorns? You just don’t get that anywhere else in the world. The talent is unbelievable. The flipside is that you can sometimes get a bit of similar thinking in San Francisco, whereas, in London and other cities there is slightly broader thinking due to the different industries people come from and the diversity of experiences they have acquired.

I love the mix of the two cities and cultures. Alex and my experiences from Europe combined with the incredible folks that we’ve hired in San Francisco has created a valuable combination.

5. How have your hiring strategies needed to change from company to company?

We’ve taken a very deliberate hiring approach with Calm. We haven’t hired like crazy, which I might have done in previous roles. We’ve been slower, and we’ve set the hiring bar extremely high.

In terms of approach, we tackle hiring from all angles. We love referrals from folks on our internal team, we love tapping our own networks, we love meeting people at conferences, and we’ve found it hugely valuable to have external recruitment partners with market expertise.

We are getting a lot more inbound interest these days as Calm’s profile grows. People are reaching out constantly, whereas, in the early days and even just a few months ago, that wasn’t the case. Until recently, I think people just dismissed us as another meditation app and couldn’t see how we were differentiated. Winning Apple App of the Year has helped a lot, as has some of our other recent press. It’s exciting when a business goes from being somewhat of an unknown and a risk to a hot startup at which all of a udden everyone wants to work.

I’d say we’re still at a very early stage though. We have 25 million downloads, but that’s still less than 1% of smartphones in the world. We think a product like Calm is relevant universally, so there is a huge journey ahead of us. We’re still only 30 people, but we believe this can be a multi-billion-dollar business with thousands of employees around the world. So, still “Day 1”, as Jeff Bezos would say.

6. Calm was named Apple’s App of the Year for 2017 and is an incredible success story considering that you have only just taken a first round of venture funding and have done minimal marketing. What do you think makes Calm such a viral success?

We grew to about 7 million downloads before spending a dime on marketing. I wish I has a silver bullet answer but I think our viral success was the result of many factors such as:

  1. From the beginning we were hyper-focused on designing a simple and beautiful app that is accessible and intuitive. 
  2. We were nimble and moved very fast making multiple small bets and A/B testing. 
  3. Tamara, our Head of Mindfulness, is constantly creating fantastic content that people love. 
  4. We benefited from fortunate timing. Meditation went from being a bit weird and “woo-hoo” to being cool and getting a lot of mainstream attention.

I guess you could say it was little bit of luck and a lot of hard work.

When it comes to marketing, we actually love paid marketing, but we think there is a time and a place for it. Alex and I think that many companies start it too early. Our philosophy is that all your energy and effort in the early days needs to be spent obsessing over the product. Marketing is like the gasoline that you pour over the fire once it’s burning. If you don’t have a strong product foundation, then you’re constantly going to be wondering whether product or marketing needs tweaking. Once you know you have that organic and viral machine – a product people love and share – then you can add the marketing on top to create something that grows insanely quickly.

7. What is your favorite story related to how Calm has positively impacted a user’s life?

The commercial side of Calm is amazing; we’re growing quickly and profitably. All that is wonderful and we love it, but equally important is that Calm is a business that is genuinely changing people’s lives and improving the world.

Whenever we’re having a rough day or things have gone a little bit sideways, we just have a look at our reviews in the App Store. There are over two hundred thousand 5-star reviews. The reviews contain stories of everything from little kids using Calm to fall asleep at night or to cope with the stresses of exams at school, to people who have played it for their dying parents at nursing homes for comfort in their final moments. We heard about a couple on the brink of divorce that started to do the Daily Calm together every morning and could suddenly see each other’s perspective, had more empathy, and fell in love again. We know of others who have been depressed or suicidal that have greatly benefited from our content. The stories touch virtually the whole range of the human condition, and we feel it is an incredibly important and inspiring thing to work on.

8. What soundbite of advice regarding hiring do you have for other entrepreneurs?

I’ve hired hundreds and hundreds of people in my life, yet I’m constantly rethinking it. I find that processes and types of questions change as a business evolves. One consistent thing that I love to see is a cover letter. Resumes and LinkedIn profiles are great, but for me, I get electrified when I read a letter from someone who has obviously used the product and has taken the time to write something specifically about Calm. Letters tell me great deal about a person – how well they communicate, how passionate and excited they are about the business, and even a little bit about their personality. Sometimes I’ll read a cover letter and immediately want to meet that person, which very rarely happens when I just read a resume.

9. What is your favorite interview question?

I like asking someone what they do to stay sharp in their career. Some people just have a job that they do, and when they go home they keep work and life very distinct. For other people, they love their work and are constantly learning new skills, joining communities, going to relevant events, and listening to podcasts so they can stay at the cutting edge of their career.

I also like asking people what they were most proud of in their previous job. It’s great to see someone’s eyes light up as they talk about an amazing project they worked on.

Finally, I love ending interviews by asking people, with everything they now know about the company and the role, does it sound exciting? This one is great for gauging genuine interest or uncovering concerns.

10. As we wrap up, what resources (books, blogs, podcasts, events, etc) would you recommend to fellow entrepreneurs?

I recently read Stealing Fire by Jamie Wheal and Steven Kotler which I found relevant for entrepreneurs and would highly recommend. One of my favorite books is Influence by Robert Cialdini that I think about almost every day. Outside of books, I also love the Tim Ferris podcast – always very interesting guests on his show. For quickly staying up to speed on the market, I read the Hustle email in my inbox every morning. Finally, I love attending conferences and events – everything from the Web Summit in Lisbon to SXSW in Austin.

11. Finally, what is the best way for people to connect with you (Twitter, Medium, etc)?

I’m @acton on Twitter, and my LinkedIn is open, so anyone can connect me or message me.

If you’re looking for more balance in your life, help managing stress, or tactics for becoming a more level-headed leader, download the Calm app and give mindfulness a try. For further impressive stories from startup executive, check out our blog!

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