How Headspace grows

After a consultant's qualitative price research (summer 2017), ran multi-variant price tests roughly every six months across iOS and Android and many markets (US, UK, Canada, Australia, Europe, Asia). The first test needed over a month to gather data; later ones ran faster as volume grew. Annual tested at $49, $59, $69, $79, $89, $99; $69.99 won on conversion and first renewal and sat near competitors. Monthly raised to $12.99 to make annual look better; the lifetime plan was dropped. Would narrow to top markets if doing it again.

In summer 2019, moved from direct purchase (web, App Store, Play Store) to free trials, testing 7, 14 and 30 days. Settled on a 7-day trial for monthly and 14-day for annual, using the gap to make annual more attractive.

In 2019, from a model with ~80% of content locked, tested 90%, 95% and 99% locked variants on new users first (who had no expectations of what was free). Kept one or two of the most popular items free in each category (meditation, sleep, fitness). Existing long-time free users were moved over only after 6-8 months of internal deliberation, with an incentive.

On an annual-focused paywall, tested stating the dollar value of the savings versus a simple 'best value' label.

Onboarding asks why people came (sleep better, anxiety, stress, feel calmer). Changed it from single-select to multi-select and tested adding more onboarding questions. Answers feed content and personalization. A similar test in an earlier era did not work.

Revamped the referral program: more visibility, embedded in several places in the product, and triggered lifecycle campaigns announcing it. Research found people refer to help a friend and fear looking self-serving with sensitive topics, so it avoids DoorDash-style give $10/get $10. The recipient gets a 30-day free trial vs the standard 14-day annual trial.

Find the average time from download to upgrade (e.g. 7 days). For users who haven't upgraded by then, send an email with a small discount (e.g. 10%), then increase the discount in later emails (2 days, 5 days, a week later) if they still haven't upgraded. Headspace ran this ~2-3 years before the episode.

Headspace tested a commitment campaign: collect the reasons a user joined ('Here are the reasons why you joined Headspace'), then resurface them later ('Remember, you wanted to reduce stress...') to reinforce the habit.

Because some free users kept replaying one favorite piece and never saw upsells, tested locking 100% of the library for both new and existing users (only 'How to Use Headspace'-type educational content stays free). Tenured free users got a very generous transition offer. For the mission, popular content was published free on YouTube and via partnerships like Netflix instead of in the app.

Recently launched content sharing: any user, free or subscribed, can send a friend a 30-60 second clip of any piece of content in the library, as a 'Costco sample' taste before a trial start.

Upsell page highlighted that annual was the better price, broke it down into a monthly cost, and added a banner with an animated character ('Conversion Connie') pointing at the annual option.

Hypothesis: a cheaper monthly plan would attract later-adopter, lower-intent users who won't commit to annual. Tested eight lower monthly price points.

Tested a paygate focused on the annual subscription and its benefits; the best variant still offered monthly as an option. Final state: monthly and annual shown with equal prominence.

Introduced a student plan (Keya's era), partly for mission and access, betting students would stay on as professionals and parents. Tested whether the volume was additive to revenue. Later, when international student-plan requests became a top support ticket driver, launched it in the top 7-10 requesting countries (Shreya's era).

Over two years moved onboarding 'like an accordion': from 10-15 screens down to 3-4, back out, landing in the middle. Long versions were judged on week-one engagement (sessions completed in the first week); the shortest dropped users into the app and immediately showed a free-trial upsell.

At sign-up/conversion, told users they'd get a prize at the end of their first month (a free month of Headspace or a referral code for a friend). Lifecycle ran the test: 'are you on track?' notifications and a first-month email sequence leading to the prize. Enabled by running lifecycle inside the product team.

Marketing ran a referral challenge where the top 5 (or 10) referrers won a one-on-one meditation session with their favorite Headspace teacher. Exploring similar rewards such as early content access or special events. In an earlier era, lifecycle tried a thank-you note from co-founder Andy for referrers, which users found more meaningful than money.

Headspace emailed the host, a lapsed subscriber: 'Come back, 40% off, 7 days only if you re-subscribe'. Guest's caution: discounts work but cap margin and can attract low-intent subscribers; consider holding discounts until a user passes the average number of renewals.

Research showed readers felt overwhelmed by the news, so The Washington Post bundled with Headspace to offer a moment of calm. Guest's advice: decide up front who is the big fish; equal-size partners fight over whose stack and customer relationship it is.

Headspace asks what you are struggling with; choosing anxiety and stress shows very different in-app content than choosing sleep.

Launched a family plan on the hypothesis that shared use (family, roommates) creates accountability that makes people less likely to cancel. Surveyed and matched accounts to see whether buyers were new to Headspace.

Once someone knows how to meditate, a timer is Headspace's competition. Headspace added mindfulness for exercise and sleep, new use cases that keep adding value and avoid boredom with the core proposition.