20VC Maximising Engagement and Retention on Mobile & Why There Should Always Be Availability To A Free Product with Sean Brecker, CEO @ Headspace

In this episode of "20 Minutes VC," host Harry Stebbings interviews Headspace CEO Sean Brecker, discussing the growth of LA's tech ecosystem and the success of Headspace, a meditation app with 8 million downloads and significant investments from figures like Jim Breyer, Jeff Weiner, and celebrities such as Jared Leto and Jessica Alba. Brecker shares his transition from banking to the startup world, emphasizing the importance of Headspace's mission to improve global health and happiness through meditation, and how the app fosters user engagement and habit formation. The episode also touches on the broader health and wellness app market, Headspace's content creation process, and strategies to convert users from free to paid services. Additionally, the show highlights We Are LA Tech as a valuable resource for the LA startup community.

• The podcast is part of a special feature on LA's tech ecosystem.
• Headspace CEO Sean Brecker is the guest, highlighting his role in the company's financial and commercial expansion.
• Headspace has seen significant success with 8 million downloads and notable investors.
• Christian from Whitestar facilitated the introduction between the host Harry Stebings and Sean Brecker.

"Now today I'm thrilled to bring you part two of our special double on LA's tech ecosystem this week. And as it's founders Friday, I had my pick of LA founders to choose, but there was one I was particularly drawn to for longterm listeners of the show."

"Sean is essentially the driving force behind all financial and commercial matters at Headspace as it continues to expand the product, which has been downloaded a whopping 8 million times."

The quotes emphasize the focus on Los Angeles' tech scene and the significance of Headspace within that context, as well as the CEO's role in the company's growth and development.

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• An exclusive offer is available for 20 minutes VC listeners to explore LA tech and Silicon Beach.

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The quote describes the benefits of the Eve Mattress, emphasizing its quality and the assurance provided to customers through the trial period.

• Sean Brecker moved from a career in banking to becoming the CEO of Headspace.
• His transition was driven by a personal move back to the United States and a chance meeting with a co-founder of Headspace.
• Brecker's analytical and commercial skills were seen as valuable to the growing company.

"Well, it's a question I get asked a lot by my former colleagues in banking, and I wish that I had a very sophisticated answer for you, but the truth is it was primarily dumb luck."

The quote provides insight into Sean Brecker's unexpected career shift from banking to the tech industry, emphasizing the role of chance in this change.

• Sean Brecker acknowledges the skepticism around meditation and how Headspace addresses it.
• The onboarding process for new customers includes education and a simple start with the product.
• Brecker's own experience with improved sleep after using Headspace serves as a testament to its effectiveness.

"Yeah, it's a great question. And I was one of those people that viewed it as a sort of hippie like thing."

This quote reflects the challenge Headspace faces in changing perceptions about meditation and how the company approaches new user onboarding with an educational focus.

• Meditation offers a wide range of benefits including better sleep, reduced stress, and anxiety.
• It also has implications for chronic pain management, focus, and performance enhancement.
• Over 2000 peer-reviewed studies support the robust science behind the benefits of meditation.
• Communicating the science, user stories, and testimonials helps in making people believers in meditation.
• Branding is crucial in positioning meditation in a modern, secular way to reach a broader audience.

"And the great thing is, the science is very robust on this. There have been, to date, over 2000 studies by researchers, and these are very serious studies, peer reviewed on the benefits of meditation."

This quote emphasizes the scientific backing of meditation's benefits, highlighting the extensive research that supports its efficacy.

• Engagement is a key focus, as it is highly correlated with retention.
• The vision is to encourage proactive mind health similarly to how people approach physical health.
• The goal is to produce high-quality content that keeps users returning, whether it's guided meditation or other types of content.
• Removing barriers to practice, enhancing content, and embedding engagement tools are strategies to maintain user interest.

"What we want to do is really affect a sort of cultural movement in which people think about proactive mind health in the same way that they think about proactive physical health."

This quote illustrates the broader mission to normalize proactive mental health care, similar to how physical health is prioritized, which is central to the company's user engagement strategy.

• The content creation process is a blend of art and science without a fixed formula for success.
• The guided meditation content is created by a former monk who plans the pack progression and delivers unscripted sessions.
• The organic feel of the product, akin to a one-on-one session, contributes to its success.
• A strong content team including creative designers, editors, and writers work on all other content through a health and happiness lens.

"With regards to the guided meditation content, there is only one former monk who really is a genuine expert."

This quote provides insight into the unique expertise behind the guided meditation content, highlighting the authentic experience provided to users.

• The Take Ten approach offers ten free days of Headspace to lay a solid foundation in meditation.
• The duration allows users to start seeing benefits, addressing the social mission and efficacy of the product.
• Frequent meditation is more effective for mental health change than longer, less frequent sessions.
• The approach is designed to give users a free, effective foundation without feeling burdensome.

"So 100 minutes, ten days times ten minutes, 100 minutes of free content really is a very solid meditation foundation."

This quote explains the rationale behind the Take Ten approach, emphasizing its structure to provide a substantial introduction to meditation practice.

• Providing a good product experience in the free version is essential for conversion to paid users.
• Offering more free content allows for a broader foundational experience.
• Collaborations, like with Apple Watch for short form meditations, align with the social mission and increase accessibility.
• Making content available beyond the paywall supports the conversion by demonstrating value.

"People are not going to convert paying users if we have not given them a good product experience in the free part of the app."

This quote underlines the importance of a positive user experience with the free content as a prerequisite for converting users to the paid version of the app.

• Headspace provides a wealth of free content as a solid foundation for users.
• The challenge is to engage users with free content and then show the value of paid content.
• Experimentation is key to finding the right balance between free and paid offerings.

Yeah, we're always sort of experimenting with this, right? I think we will always, whatever is free will always be a solid foundation. I think that's sort of the guiding principle in terms of how do we get people to convert to paid.

This quote explains that Headspace continuously experiments with the balance between free and paid content, with free content serving as a fundamental part of their strategy to encourage paid conversions.

• Headspace is considering whether the ten-minute meditation format continues to be the best approach for all users.
• Most Headspace users are new to meditation, which leads to more opportunities for experimentation.
• There are plans for future developments to improve the user experience.

I don't think people are tiring of it, but we always ask ourselves the question, is that the best experience for everyone as they come into the product.

Sean Brecker suggests that while the current format is not yet tiring for users, Headspace is always evaluating if it's the most effective way to introduce new users to the product.

• Headspace categorizes users as "vitamin users" and "aspirin users."
• There is a positive trend of users transitioning from using Headspace for stress relief to incorporating it into their daily routine.
• Headspace aims to encourage proactive health and happiness habits among its users.

We talk about vitamin users and aspirin users. The vitamin users are the ones that are in a routine that are doing this as a sort of preventative measure to keep themselves healthy and happy.

Sean Brecker describes the two main types of Headspace users, highlighting the company's understanding of consumer behavior and their goal of promoting routine use of the app for mental well-being.

• Headspace views time, not other meditation apps, as its main competition.
• The focus is on encouraging people to invest time in their mental health rather than in less productive activities.
• The mental health market is significant, with projected costs of mental health issues reaching $6 trillion by 2030.

At the end of the day, what we are doing is we're trying to compete for people's time.

Sean Brecker clarifies that Headspace's real competition is for users' time and attention, aiming to shift it from less beneficial activities to mental health investment.

• Headspace's fundraising process involved meeting with numerous investors and selecting those who provided the most value beyond capital.
• The Churnin Group was chosen for their media expertise and alignment with Headspace's mission.
• Strategic investors, including celebrities, add value to the company's mission and commercial potential.

For us. The reason that we did that was we felt like they were incredibly savvy around how to build media products, and we do view ourselves as a media company, but they also really understand the blocking and tackling, sort of nuts and bolts hygiene of growing businesses and organizational design and strategy.

Sean Brecker explains the rationale behind selecting the Churnin Group as their lead investor, emphasizing their media expertise and strategic business acumen.

• Investors in the cap table are not only financially invested but also personally impacted by the product.
• Jim Breyer, Jeff Weiner, and Michael Linton are among the investors who are profound fans of the product.
• These investors approached the company as fans wanting to add value and be involved.

"across our cap table, our investors are big fans of the product and have, there's been a sort of profound impact on their lives that has occurred because of their use of the product."

This quote highlights the personal connection and positive impact the product has had on the lives of its investors, which goes beyond their financial stake.

• Business: "The Hard Thing About Hard Things" by Ben Horowitz is favored for its practical advice.
• Non-Business: "A Man in Full" by Tom Wolf is admired for its lessons in humility.
• Sean Brecker regularly refers back to the detailed notes he took from Ben Horowitz's book.

"So business is, Ben Horowitz is the hard thing about hard things... Non business, I would say a man in full by Tom Wolf..."

The quote lists Sean Brecker's favorite business and non-business books, providing insight into the kind of literature that influences him both professionally and personally.

• Sean Brecker emphasizes attaching meditation to a routine, like brushing teeth.
• He meditates in the morning using Headspace, before his children wake up.
• Meditation is encouraged at his company, with optional team sessions at 10:00 a.m. and 03:00 p.m.
• The advice is to find a routine that works and recognize meditation doesn't require a lot of time.

"Well, I think it's really around trying to attach it to a routine... For me, I try and do it in the mornings... We have a very sort of encouraging of doing meditation... Team meets at 10:00 a.m.. And 03:00 p.m. Every day."

The quote provides personal insights into how Sean Brecker incorporates meditation into his daily routine and encourages it within his company culture.

• Sean Brecker reads "The Information" and "Recode" daily.
• He also enjoys content from Satya Nadella, Hunter Walk, and Bill Gurley.
• These sources are part of his regular reading for industry insights and updates.

"Oh, so many. But I'd say the ones that I read every day are the information and recode... I love reading. Whenever they put stuff out, Bill Gurley obviously just puts something read, you know, whatever he puts out, whenever he puts it out."

This quote identifies the blogs and newsletters Sean Brecker prioritizes in his daily reading, which helps him stay informed about the industry.

• Sean Brecker finds it gratifying to see the app's impact on users' lives.
• Users send unsolicited emails sharing positive effects ranging from serious issues to improved personal relationships.
• Working with incredible people and making a difference is fulfilling.

"Yeah, I mean, I think the most gratifying thing is just the impact that we're having on people's lives... And I also get to work with incredible people, and it's been a great experience."

The quote reflects the satisfaction Sean Brecker gets from the positive feedback from users and the rewarding experience of working with his team.

• Time management is a significant challenge for CEOs, according to Sean Brecker.
• Hiring is also a constant issue due to the fast pace of the company and industry.

"Time management. You'll probably hear this from many ceos... Hiring is a given... But time management is very difficult and is perhaps more specific to sort of people in my role."

The quote highlights the particular difficulties faced by CEOs in managing their time effectively, amidst the ongoing challenge of recruiting talent.

• Headspace aims to evolve beyond a meditation app into a comprehensive guide to health and happiness.
• Meditation remains at the core, but the vision extends to a lifetime's work.
• Sean Brecker hopes to continue working on this mission for at least the next five years.

"Yeah, well, I think people view us fairly as a meditation app, but we think that to really focus on health and happiness, it's about more than meditation... And I hope that I'm still here in five years."

The quote outlines the long-term vision for Headspace, indicating a commitment to expanding its scope and Sean Brecker's personal desire to remain involved in this journey.

• Harry Stebings expresses his continued use and endorsement of Headspace.
• Sean Brecker is thanked for his participation in the show.
• The podcast "We Are LA Tech" is recommended as a resource for the LA startup community.
• The Eve mattress is advertised as an ideal complement to a meditative lifestyle.

"A huge hand to Sean for giving up the time today to be on the show and so amazing to hear his journey with headspace... Wow, what an amazing LA feature week it has been... Remember Eve, make that one perfect mattress."

This quote concludes the podcast episode, showing appreciation for the guest's contribution and promoting other recommended products and resources.