CRM report Headspace need it may 1st 10 am Pacific time

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company had launched the third generation of the application, expanded from 50 to 200+ employees, and had seen downloads of the app grow exponentially, due to an expensive but effective marketing push.

But Vieira knew they could do even better. He was particularly interested in the company’s user retention numbers. Currently, Headspace’s entire active user base essentially turned over every few quarters. And while its retention rate was in line with other mobile subscription apps, improving this number would mean unlocking not only a crucial competitive advantage, but also a key growth opportunity. Vieira was encouraged by the fact that users were leaving the app with a positive view of their experience. Surveys showed that people loved the app, but just didn’t see a need to continue using it after learning the basics of meditation. If Vieira and his team could figure out how to convince users that Headspace was more than just an introduction to meditation, then they could unlock the next chapter in Headspace’s growth.

This was easier said than done. Vieira knew from experience that he and his team would have to look at every aspect of the product, its relationship with its customers, and the entire funnel: from discovery of the app, to onboarding, to conversion, to ongoing engagement and value delivery within the application. The company would have to rethink the entire way the company approached the product.

BACKGROUND

Meditation and Arriving at the Idea for Headspace

Andy Puddicombe and Richard Pierson founded Headspace in May of 2010. Puddicombe, who in his twenties trained as a Tibetan Buddhist monk, was looking for a way to bring the 2,500- year-old practice of meditation to the masses. The benefits were numerous. Recent studies showed that meditation and mindfulness reduced stress, anxiety, depression, and a number of other ailments. In fact, a Headspace-sponsored study showed that 10 minutes of meditation, three times a week, reduced stress by 30 percent when compared to the control group.4

In 2004, after a decade of studying meditation, Puddicombe moved to London, where he began working in a medical clinic. He used meditation techniques to treat patients with insomnia, anxiety, and high blood pressure. Puddicombe began adapting the practice of meditation for his clients, many of whom were corporate clients looking for ways to deal with the stress of the 2008 financial crisis. He added frameworks to his teachings, translated Tibetan and Sanskrit concepts into English, and reduced the time spent meditating per session. Whereas Puddicombe’s retreats in Tibet could involve multiple four-hour meditations per day, combined with days of silence, he knew such a practice would not work for his clients. He reduced meditation times to 20 minutes or less and began curating the segments into fully guided sessions. As Puddicombe developed his methods, his client list began to grow. In the age of overstimulation and digital burnout— coupled with the 2008 financial disaster—the need for mindfulness and meditation was at an all- time high.5

4 Interview with Paddy Hannon, CTO at Headspace, August 14, 2018. Subsequent quotations are from the authors’ interviews unless otherwise noted. 5 Lizzie Widdicombe, “The Higher Life,” The New Yorker, July 6, 2017, https://www.newyorker.com/magazine/2015/07/06/the-higher-life (October 15, 2018).

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Richard Pierson, the other half of the founding team, was one of Puddicombe’s students. Pierson was a corporate ad executive who marketed Axe deodorant by day. He also suffered from anxiety so badly that, as a feature in Forbes reported, “He struggled to go out in public.”6 Upon meeting with Puddicombe, Pierson found meditation to be a quick and effective cure. Pierson and Puddicombe bonded, and Pierson’s marketing tips for Puddicombe’s practice soon turned out to be the foundations of a new business.

Launching Headspace

In the spring of 2010, Pierson quit his job, borrowed $50,000 from his father, and joined ranks with Puddicombe to launch Headspace as an events company. They held ten-week courses guided by Puddicombe. They described Headspace as “The gym for your mind”—creating the comparison that just as someone needs consistency and structure by going to the gym to keep one’s body healthy, people also need consistency and structure in a meditation practice to keep one’s mind performing in top shape.

Puddicombe was the voice of Headspace, and the developer of its material and programs, while Pierson was the marketing and branding expert. The courses they developed were incredibly popular, and in 2011 Puddicombe released many of his techniques in a book, titled Get Some Headspace.7 But in order to reach a wider audience, they knew their approach would have to go beyond written materials or in-person courses. As they looked for ways to expand the reach and content of the company, they concluded that the logical progression was to build an app for smartphones.

Their first app launched in 2012 as a freemium subscription model. Users could set up an account and get what the company referred to as “the basics”—an introduction to meditation— for free. Paying subscribers received access to the full library on meditation content. The brand took off quickly, inspiring an incredible level of trust and an enviable amount of brand loyalty. By January of 2017, Forbes put Headspace revenue at “north of $50 million and a valuation of $250 million with the app having been downloaded 11 million times and 400,000 paying subscribers.”8 By July 2018, app downloads tripled and there were over 1 million paying subscribers. The company had offices in both Santa Monica and San Francisco, with over 200 employees between the two locations.

As of July 2018, the application had over 1,000 hours of content the YouTube content had 80 million total views, with approximately 800,000 people meditating on the app on a given day. The company held core to its mission that every decision should seek “To improve the health and happiness of the world.”

6 Ibid. 7 Alex Williams, “A Ten Minute Mind Clearing,” The New York Times, June 22, 2011, https://www.nytimes.com/2011/06/23/fashion/andy-puddicombes-meditation-for-the-rushed.html (October 15, 2018). 8 Ibid.

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Randhir Vieira

After completing his MBA at Emory in 2001, Vieira took his first product manager role at Yahoo! He was there for almost seven years before working at start-ups Eye-Fi and then Mindflash. Working for these companies gave him the full range of experiences—from a small start-up, to a growth-stage company, to a large technology firm. “Six of my seven years at Yahoo were amazing,” he quipped.

Vieira had done his first Vipassanā meditation9 retreat while pursuing his masters in human resources at the Tata Institute in India. This experience proved to be a significant moment, inspiring a lifelong meditation practice. The free retreat involved ten days of silence and limited human interaction, with meditation sessions from dawn until dusk. “Since then, meditation has become a core part of my life, “Vieira said. “I have done retreats in centers all over the world. It was always a very personal thing, outside of work.”

People noticed his renewed state following a retreat, and he found himself recommending Headspace as one way to learn how to meditate:

Every time I’d come back from a meditation retreat, it was visible in my whole person. People would say “Oh my gosh—what have you done?” And I’d say, “You can do this too, it’s free.” Though, ten days is not free. People said, “No, I’m not doing that. Any other suggestions?” “Yeah, Headspace.”

In September of 2017, he merged his personal practice with his professional interests, becoming a product lead for the “Headspace at Work” product.

I found Chandra Janakiraman’s [the chief product officer at the time] email address and sent him a note saying, “You don’t know me, but you need to, and here’s why I’m the right person for the job.”

After that, things just clicked. I joined Headspace for B2B SaaS and to build out the hub. When I started [in the San Francisco office] there were very few people in the division and no one in engineering. I had to figure out what we should do and in what order.

CUSTOMER RETENTION

Vieira became head of product at Headspace in March 2018, assuming the responsibilities related to the development of the product. At the time, Headspace was rolling out an aggressive advertising strategy, with millions of dollars dedicated to ads in the app stores, display ads, and some search advertising. User numbers were rising exponentially just as competitors, such as

9 Vipassanā meditation is one of the oldest meditation techniques, often taught/practiced in 10-day courses of silence with multiple meditations per day. Students check in all possessions, including writing materials, upon arrival at the retreat. Human interaction and contact is limited throughout the experience, even with the teachers. A quick online search shows most people describing such retreats as both immensely challenging and wholly life- changing.

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Calm and Buddhify, were gaining ground. The campaigns were profitable and, as such, were celebrated in the office and with the executive team. Viera elaborated:

We are growing very aggressively. [In 2017] we grew 75 percent. But when we look at the underlying metrics, we are buying our growth. We’re building up this bigger and bigger snowball that could potentially be very hard to control.

Viera explained that the company was built on a freemium subscription model, and therefore there were only two options that mattered when it came to creating a sustainable and growing revenue stream. The company could (1) increase the price per customer, or it could (2) increase each customer’s tenure within the app. Advertising could only get them so far. Figuring out how to keep people in the app would unlock the next wave of growth for Headspace.

He began exploring the various avenues and strategies for improving retention. There were the immediate, tried-and-true initiatives: adding in programs such as personalized email notifications that brought people back into the app periodically, adding steps during sign-up to encourage users to enable notifications from the app on their phone, and beginning to structuring the content of the app in a way that encouraged a dialogue with the company along with a stream of recurring communication between the company and the user. But the biggest and first step was to determine the key reason (or reasons) that users were leaving the app. “It’s Not You, It’s Me.”

Vieira and his team began surveying users and talking to customers who left the app. They found that customers were happy with the application and with the experience. Even though they were leaving the application, they still had positive feelings towards Headspace. In fact, Headspace’s Net Promoter Score (NPS)—a metric that measured customer experience and the strength of a brand ranging from zero to ten—was over 70, a very strong score. Vieira continued:

So, our users were pretty happy with the product. You’d think someone who is unhappy would churn. So what was going on? Why are they leaving? Why would someone be so happy and leave?”

Vieira and his team looked deeper, finding that 40 percent of users were completing only “the basics” on the site before churning out. As the term “basics” implied, these lessons gave the user their first, introductory lessons and walked them through the initial principles of meditation. After completing this package, users could proceed on to the 1,000+ other hours of content on the app. Vieira continued:

So, our next questions were: “Why don’t [users] engage with these additional lessons? Why don’t they go on? Do they not know? Or do they not care?” Well, our research showed pretty clearly: A good percentage of users do not know to go on.…

Essentially, people were buying into the value proposition of meditation, but once they learned the essential ingredients of the practice, they were saying, “We love you guys. We learned to meditate. Thank you very much, I’m going.”

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FINDING AND INTERPRETING KEY METRICS

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Senior Product Manager Gary Jense was on the hunt for a “North Star Metric.” Jense defined a North Star Metric as the way to most directly capture the value delivered by the product, with the idea being that if one optimized for that metric, then one can optimize for customer growth and retention. Jense provided an example:

Facebook, for instance, found a “golden rule” as it began its growth initiatives. In their case, the goal was for people to have 10 friends. If Facebook could get you to add 10 friends, then you crossed a threshold that meant you would begin coming back to the site every day.10

So, what was Headspace’s equivalent to “10 friends,” he wondered? What key step or steps would users have to complete early on in their Headspace experience in order to increase the likelihood that they would convert to become a paying member? Jense turned to user data to better understand what this might be. He scanned the data for clues to inform his hypotheses and help construct the most useful experiments to validate any potential North Star Metric. This was particularly important, because time and cost were both critical factors in the equation. Jense explained:

Headspace has every new meditation product on the market out trying to eat its lunch, so each one of our tests must push the company towards growth through retention. Experimentation has a cost, so you have to make decisions on what experiments to run. A given experiment might take a few weeks to set up, two weeks to run, and then additional time to evaluate. That, plus the engineering and development costs to construct a given test.... We can only run a few experiments per quarter. We can’t afford a year to throw stuff at the wall and see what sticks. Speed and capturing the market are what matters.

Using various statistical analyses, the team broke down Headspace users into select cohorts. From that, Jense looked at conversion rates between various cohorts by changing one variable in the data at a time. Jense elaborated:

It certainly wasn’t the cleanest way to analyze the data. But we could quickly find certain spikes in conversions, and as a result, attribute those spikes to certain activities. In no means was this an actual experiment within a control environment—we were just using these experiments to eliminate early misdirection.

The team found that if a user meditated at least once in the first week, and at least once in their second week, they were five times more likely to convert to the paid subscription within the next 90 days. What’s more, if the user skipped week one entirely (meaning they installed the app, created an account, but then chose not to do a meditation in week one), but they came back in week two, the user was still two times more likely to become a paid member.

10 Interview with Gary Jense, senior product manager at Headspace, August 21, 2018. Subsequent quotations are from the authors’ interviews unless otherwise noted.

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With this information at hand, they decided week two retention was their North Star Metric. So, in Jense’s words, “We then needed to dissect that further. What were the sort of things that needed to happen in week one that would stack the deck or increase the probability that someone meditates again in week two?” Again, data was key. Jense explained:

We found that users who meditated twice in week one were significantly more likely to return in week two [than users who had completed only one meditation in week one]. We also found that each additional meditation beyond the second meditation improved the odds of a week two mediation, but only slightly. As a result, we decided to focus our efforts on getting new users to complete two meditations in week one.

Armed with this knowledge, the team began formulating a hypothesis for their first experiment that sought to find the optimal set of steps to maximize conversions. The key parts of the experiment were as follows:

Upon registration, the app asked the user to enable notifications. This allowed Headspace to nudge users periodically, encouraging them to come back onto the app to complete meditations within the ideal week one and week two windows.

Headspace knew they had a user’s attention on the day they registered—after all, the customer had downloaded the app and created an account. So now Headspace would encourage new users to complete their first meditation on their first day as part of the onboarding process.

The company used notifications and email reminders to encourage week one meditations so that week two retention (and therefore likelihood of conversions) could be maximized.

Though the experiment followed their logic from the data, the results did not come back positively. Jense and his team tried another test, following a new logic: Maybe the company had too many steps in its onboarding process? What if they eliminated some of the upfront friction? Users could complete their first meditation while the app was downloading. They ran the experiment with this adjustment, and while it increased week one meditations, it did not positively affect the end conversion rate. Jense expressed a key learning from this experiment:

Just because we identified a leading metric or a leading indicator of some other metric that we were trying to optimize for, simply improving that leading metric—unless we did so in a way that addressed the fundamental relationship for why it’s a leading indicator—would not drive the metric we wanted.

After four experiments, the team had yet to find any significant change in conversion rates. They then switched their approach and turned to qualitative research. They set up a diary study with users. Over the course of two weeks, 19 users mediated and used the app, documenting their progress. The team began pulling themes from their reflections, leading to a key finding: Users were arriving at Headspace with a specific goal in mind. They weren’t downloading the app to learn meditation, per se. They wanted to improve sleep, reduce stress, reduce anxiety, and so on. And while there was content that addressed those things, users were not finding it.

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In order to address these customer goals, which Headspace began referring to as “need states,” the company needed to reconsider the onboarding process. Headspace would have to know why a customer was downloading the app before they offered any content. By finding out exactly why a user was coming to the app, the app could in turn demonstrate specific value towards addressing a user’s particular need state. But asking a series of discovery questions (see Exhibit 2) at the top of an already bulky onboarding process could be problematic. Jense elaborated:

People [at Headspace] were worried about our onboarding flow because we made it approximately four times longer that what it was before. People were concerned that users weren’t going to have the patience to get through it. The mentality was “Let’s just get them into a meditation as fast as possible; take out all the friction.”

But subsequent experiments showed that people didn’t mind the longer onboarding process. They were discovering the usefulness of meditation and were learning through the new onboarding process how Headspace could help them meet their goals. Jense explained:

The solution in our case was counterintuitive. We had to add more friction [to the onboarding process] because without it people didn’t understand why they were meditating or how they should view meditation in relationship with the need state that brought them to Headspace. People were willing to go through [these additional steps] because they were finding value in it.

EVOLVING THE PRODUCT

Reframing around Need States

As the Jense’s research showed, users were not necessarily interested in developing a meditation practice, but they were interested in addressing a core issue, or need state. Every aspect of the customer journey—from discovery to conversion—would have to be rethought. Vieira elaborated:

We went back to the mission statement: to increase the health and happiness of the world. It’s a lofty mission. But it never says “teach the world to meditate.” So, we began from that premise.

Vieira employed the “jobs to be done”11 framework to the problem. Essentially, instead of offering a broad meditation offering to the customer, Headspace would approach from the idea of finding out what specific jobs meditation can accomplish. What need states could it address? Vieira gave an example:

11 The framework, championed by HBS Professor Clayton Christenson in his 2006 Harvard Business Review article, What Customers Want From Your Products, focuses on looking at a product development from the point of view of “what is a customer is trying to accomplish by purchasing (or using) a given product.” By isolating this factor, Christenson pointed out that a company could precisely target and develop a product to suit the job at hand, therefore improving the likelihood of providing value to a given customer. Often, analyzing how a customer is using or adapting a given product points towards the most valuable way to innovate and refine that product.

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We now have a partnership with Nike, for instance, where we have our content in their Nike running club app centered on running meditations. Now why would it make sense to do a running meditation in a Nike running club app? The app services all beginner to intermediate enthusiasts who want to learn how to do, for example, a 5K. That’s exactly an example of jobs to be done. The job to be done is “I want to complete a marathon, which is going to be really hard.” And there’s the physical endurance part of it, which Nike does well. But there’s also the mental part, which is huge. So, we need to change people’s way of thinking relative to tasks. This isn’t about meditation itself. It’s about meditation helping you achieve something else.”

Fortunately, much of the requisite content to help users with sleep, anxiety, and a variety of other issues already existed within the app. Thus, the company began tailoring its content into “courses” that focused on topics like relationships, performance, sports, sleep, anxiety, and others. It also developed smaller offerings for specific, one-off uses such as “rough day,” “anxious moments,” “sleep sounds,” and so on. There were also things like animations to describe key meditation concepts and an entire kids’ section with such topics as “appreciation,” “calm,” and “wake up.” It also highlighted short 1- to 2-minute “mini programs” that could help the user “unwind, focus, or “breathe,” in those moments when someone needed the quickest of meditations.

Vieira summarized that new approach expanded the market for the product, while also increasing retention at every level. But as the market expanded, so did the competition. Vieira elaborated:

If the job to be done is “I need help falling asleep,” who is the competition? It’s not just other apps. It’s prescription and over the counter drugs, music, alcohol, TV…. Suddenly there’s a whole new spectrum of competition in that one need state. And we have so many jobs [in our jobs to be done framework].

A New Approach to Onboarding and User Engagement

As Jense’s experiments showed, finding out why the customer was downloading the app would enable the company to serve its users with the right content from the beginning. But the app,

being a freemium model that offered basic meditation guidance for free and more advanced,

specific content for paid subscribers, was not necessarily set up to address this issue. Vieira

elaborated:

We are a freemium product, and we will always be a freemium product. That’s one of the things our founders will always want and it’s part of their mission. We always want to help people to learn how to meditate for free.

My challenge with this, in coming in with the Jobs to Be Done Framework, is that the basics might not necessarily be the right fit for different need states that people come in with. If you tell me, as a student, you have anxiety around exams and I’m like “Here you go, here are the basics.” I’m failing the promise to product test. I should be delivering that student content that will immediately address his or her anxiety state, not content that launches into the foundations of a

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meditation practice. So, we needed to figure out a different model or a different model of freemium.

Rather than offering the basics and nothing else for free, Headspace began to give users access to

the entire collection of content for a period of time. This allowed the onboarding process to

target the right content to the right user from the onset, though releasing the full catalog was not

an ideal solution. Vieira continued:

We tested the free trial where all content would be unlocked for a certain period of time. This allowed me to match the user with the most valuable and compelling content as determined by his or her need state. Essentially, I could make that promise to product link much more aligned to a user’s need. We began running tests employing this new approach—we’re doing 7-day, 14-day, and 30- day tests right now. In general, with everything I’ve seen: When we ask the right questions to a user up front, we’re able to make a connection and display value much faster.

Vieira was also concerned with the fact that a user had to create an account before ever getting

access to meditation content. A percentage of users who downloaded the app did not give an

email address and walked away from the product before ever gaining access to content. This

was a loss right at the outset. Vieira elaborated on the issue:

We don’t have the right to ask for anything until we demonstrate value. Asking is time, info, or money. Today, no one gets access to anything in Headspace unless you create an account. To me, that breaks the “give then get” principle. Because if we haven’t given you anything, but we are asking for you to give us information, we are going to lose people at the top of the funnel.

But giving value without collecting data was a challenge for Headspace. In order to track user

data and determine what content bests serve them, the company needed a new user to go through

the onboarding process. As Vieira pointed out, Headspace was relying on the strength of its

brand and reputation to get people through the initial registration rather than demonstrating

actual value with the product.

Vieira also implemented a number of “Evergreening” processes into the application in order to help support members along their journey, knowing this would further expand retention. He explained:

We needed to create a lifecycle to support members. We asked people to set a goal—and when they would fall off their goal, we would send them supporting messages: “Hey, you said you were going to do this; it’s ok, come back, we’re ready when you are.” We’ve seen a 14 percent improvement in engagement just from these kinds of messages. If a customer answers the question “Why are you here?” we know what their goals are, and we can then build in mechanisms to be supportive of their objectives.

Though these steps showed progress, finding the ideal onboarding system would be an iterative process. Jense elaborated:

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We are constantly looking for ways to optimize these flows and funnels and really think through what’s the best sequencing of these different activities and maybe trying to invert the funnel a little bit from what it used to be—maybe into something with a little bit more innovation, more outside the box, something that challenges how we’ve traditionally thought about how the users are introduced to the product and how to get to their first meditation.

Voice and Wearables As the team continued to refine and develop Headspace’s offerings, they began looking at future technologies. Voice technology such as Google Home or Amazon’s Alexa and wearables such as the Apple Watch not only provided more contact points for the brand to reach out to the customer, but they also provided some key solutions in cases where a mobile app might not be the ideal way to connect with a user. As with previous insights, these discoveries were the result of experiments and qualitative research. Product Management Director Ashok Bania explained:

One of our key things is that people like to use Headspace to do meditations before sleep. A key research point was that users don’t feel like looking at a screen when they’re trying to sleep. So, delivering this product, this experience through voice was a key solution—similar to the start of Headspace, moving the meditations onto an app as opposed to doing in-person classes was a way to expand the product for the customer that also stayed in line with the mission.12

There were use cases where a customer might not want to wake up with something stressful— email, for example. Voice could be used to wake them up with a positive, energizing meditation. A wearable device could, for example, show or say a daily inspirational message or be a quick access point to a short meditation exercise. These newer technologies also provided access points to users in cases where a mobile app might not be the ideal way to reach them. Other examples included opportunities for when a user was cooking, cleaning, or potentially even driving (in which case a Headspace podcast might be a better solution than doing a meditation). What’s more, these new technologies gave users a quick access point to Headspace as opposed to the multi-step process inherent to mobile phones. In Bania’s words: “Users are taking out the device, sliding it, entering a several-digit pin, finding the Headspace app, clicking on it, and then finding the content. That’s a lot of steps.”

Wearables, in particular, enabled people the opportunity to be mindful throughout the day. Bania and his team began looking at various “customer journeys” that showed those moments when a user might want to be mindful, but did not having the ability to do a meditation. He explained:

There are a lot of moments in our lives when we cannot have the app come up, but we have the headphones in our ears, the watch on our arm. So how might we connect these dots for the day from one meditation session to another session?

12 Interview with Ashok Bania, director of product management at Headspace, August 6, 2018. Subsequent quotations are from the authors’ interviews unless otherwise noted.

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That was the genesis of an Apple Watch project that we are working on right now. We found that a lot of times users were saying things like “I’m in a meeting, I feel like doing a breathing exercise, but without opening up my app and putting my headphones in.” Apple Watch could be there to solve that… there are breathing exercises, mindful moments or quotes, or a few visual exercises we can send the user, where, without them being conspicuous, they can sit on a train—or anywhere, really—and go through a few exercises very quickly.… These could be ten-second exercises!

There were additional communication capabilities with wearables as well. Not only could Headspace send notifications through a Watch device, but they could also ask the user questions. Bania continued:

We might be able to ask—“How are you feeling?” And get a response on how [a user] is doing from a one to a ten. We could do these quick check-ins with the product, all leveraged through the Apple Watch.… It could become a part of the product’s communications strategy.

Voice technologies presented a unique set of challenges as well—most notably, user awareness. There was no “voice store” in the same way that users could scroll through the app store. Users with Google Home or Alexa devices had to connect their accounts manually to Headspace. On average, hundreds of users connected their Headspace accounts to voice devices per day. But after a test email campaign that informed users they could connect their devices, Headspace saw a spike—thousands of users connected their accounts that day, and in the following days, that number trickled back down to the original rate. Despite the issues with adoption, the numbers for “users who were using voice devices” were encouraging. Bania explained:

Voice led to an increase in engagement by 30 percent for the users who ended up using it. But out of all the meditations that occur in a day, only a small percent were voice meditations. This second figure could mean one of potentially two things. Either not many people have a voice device (the number of phones is much higher than devices) or that people may not remember the product because voice is nothing but a speaker—it doesn’t have a screen and it doesn’t have notifications.

Community The team also believed that improving the social aspects of the platform was a key way to drive retention. Just by looking at the range of successful wellness movements and organizations— Weight Watchers, Alcoholics Anonymous, CrossFit, to name a few—it was clear that it was not just the materials and knowledge that drove the recurring success of these solutions, but rather the ability to develop strong supportive communities outside of one’s own preexisting social circle. Vieira elaborated:

Community is incredibly important. If you asked me how we were doing on Community, I’d grade us very low. There are very few parallels to what we are doing. Meditation has been free for 2,500 years. What makes an organization [such as Weight Watchers, etc.] thrive are the elements of community support,

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inspiration, and accountability. And while apps have the wonderful benefits of being on demand, accessible, and so on—they don’t have that accountability and support.

The community initiatives on the platform involved first, a numeric indicator that showed a user the number of people who used the app in the previous 24-hour period. While Headspace did not want to provide key user statistics to its users (or competitors), displaying this number of people who completed recent meditations provided a way to give a user a slight “push” of social encouragement. The app also had a “Buddies” option, in which a user could invite up to five friends onto the platform. These “buddies” could share stats, see how much time they spent on meditation, share their total number of sessions, and view each others’ run streak (how many days they had meditated in a row without skipping a day). Buddies could also nudge each other through the app if a user was inactive.

Jeremy Fourteau, director of product, explained that ideally Headspace would create a “robust community experience,” but that the company needed to make sure it did not betray the sentiment of trust that users had with the brand. In his words:

People love the application. People have become ambassadors for the brand. We have this strong connection to our users, which we hold as sacrosanct and we try to nurture as much possible. [As we build out our community initiatives on the app] it’s important for us to infuse to the user that they’re not on this journey alone. We want to create meaningful relationships and a place for meaningful interactions amongst individuals in their peer groups—their direct family and friends. We also want to keep all features opt-in. We know a lot of things related to meditation can be highly personal—so with these features and mechanics, we want to make sure we don’t jeopardize the trust we have established with users.

…Once we have the groups, creating goals or challenges within these groups is one potential route. Or forums and communication for sharing ideas is also possible. And our last phase would be allowing users to expand beyond your immediate social network. [We realize many users might not] have friends or family on the platform, but may yearn for that connection with others using Headspace. How do we facilitate those conversations—but in a way, again, that does not jeopardize the brand equity, the trust. That’s the challenge.13

A WELLNESS PLATFORM

As Headspace looked to the future, more and more it was positioning itself as a technology company that provided wellness solutions to its users. In order to scale, what was once a well- marketed meditation content library would have to become a fully integrated, personalized tool that addressed a wide range of user goals. CTO Paddy Hannon explained:

What we are realizing is that meditation is only one tool in our arsenal. And with the vision of the company being to improve the health and happiness of the world,

13 Interview with Jeremy Fourteau, director of product at Headspace, August 14, 2018. Subsequent quotations are from the authors’ interviews unless otherwise noted.

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we see that there are many other tools that can get you there. What healthy habits can we help a user adopt? That includes thinking about the way you eat, getting up and stretching, providing inspirational support. Our big question is, given that we know people have these sets of problems, “What curriculums and content can we produce—grounded in authentic expertise—to deliver against those areas?”

Though the team didn’t know what the final iteration of the product would look like, they outlined a series of steps that would guide them as they took this path:

Step 1 – Gather need states and topics. Step 2 – Service those need states. Promote them on the home screen and allow the

content team to add in the appropriate materials, whether it takes the form of videos, podcasts, meditations, quotes, and so on.

Step 3 – Cultivate guided curriculums that take a user through a journey towards solving or addressing his or her need state. Include check-ins along the way that allow Headspace to monitor progress or suggest a shift in programming.

The idea was that, over time, a learning engine would gather user data and suggest optimal journeys and use cases based off of previous Headspace users’ success rates. Check-ins would provide chances to alter a user’s journey at key inflection points, using the history of outcomes from past users to inform the optimal “next step” at any point in the curriculum. Paddy explained:

We can start mutating the curriculums, running experiments against them, and watching the outcomes. Then start tailoring the curriculums uniquely based on the outcomes you’re having. Eventually, we build enough data to build item-item similarity, essentially saying, “Okay, people that have your history and have had this outcome have had success with this next step, as opposed to this next step.

“It’s a big project,” he added.

Towards the goal of growth and retention, Headspace believed that there was a huge appetite for this kind of engagement with the app. Fourteau explained:

With check-ins, Headspace is having a conversation with you as an individual. When we launched the first version of this, it was one of our most successful feature launches to date—we saw huge bumps in traction, adoption, and repeat engagement. Experiential learning will drive a tremendous amount of value.

But what form would such a massive and open-ended project take? There were so many possible need states, types of content, and variations within the curriculums. When one factored in the need to have a clean, unified platform that supported connectivity to various new technologies, many of which—such as voice and Virtual Reality—were still in the earlier stages of development, the sheer scope of the project was daunting. On top of this, as of July 2018, Headspace had only a small team of engineers—roughly 30—to build out these projects. Fourteau elaborated:

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Over the past two years, what we’ve really taken on is competitive differentiation. We’re taking the brand icons and the content and evolving that into a technology company. This involves setting up the right leadership, product management expertise, org structure, and resources. And developing a mantra of “How do we now create this environment where we’re constantly iterating towards bigger bets? How do we take a tech-first approach and product-first approach as a way to complement the content and branding efforts that we’re already doing?”

WHERE TO FROM HERE?

As he sat in the company’s San Francisco office, Vieira knew that Headspace was in the midst of a massive transition. What was once merely a well-branded meditation content library was now in the process of becoming something much grander. The challenges were immense, but the new trajectory would not only unlock a new chapter of growth for the company—it could also set up Headspace to more fully meet its mission of increasing the health and happiness of the world.

Prioritization of resources and keeping customers engaged with the product would continue to be the primary challenges as the company pursued these new opportunities. Vieira was confident, however, expressing that as long as every decision the company made helped retention efforts, strategy would be aligned for the future. He commented:

The core strategy of any growth business should be retention. Everything we are doing today is driving towards that goal… and while the product manager doesn’t have the authority a CEO has, you have to understand all parts of the machine to be successful. At Headspace, we understand this, and in the end, that will make all of the difference in our success or failure.

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Exhibit 1 The Look and Feel of Headspace

Source: Headspace.

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Exhibit 2 Need State Discovery Questions

Source: Headspace (Gary Jense, “Data, Intuition, and Design: A Growth Perspective” talk).

This document is authorized for use only by Rohil Shah in Managing Customer Experiences - MKT-436 - SFO1 at Hult International Business School, 2019.