Calm is another B2C that came from behind

Started 2 years after Headspace

With $1.5m seed round, Calm got to $40m and profitable

Overtook Headspace in revenue in '17 despite having a smaller team and now Calm is reportedly raising a $2b.

Same markets different outcomes. Why?

My guess

1/ Calm was leaner so had to focus on building a simple and well-designed meditation app that was high quality and not focus on corporations and B2B deals. I remember preferring Calm because of the "daily calm" over Headspace which I felt was unwieldy at times

2/ Maybe it goes back to "constraints foster creativity". Running low on cash, Calm "kept the team size under 10, worked long hours in a one-bedroom apartment in San Francisco and sharply questioned every outgoing dollar."

3/ With the focus, it may have helped Calm win the Apple App of the Year award which helped a ton with marketing in 2017 (note that's when according to Sensetower Calm overtook Headspace).

"“Since winning App of the Year, we seem to have a much higher growth rate than they do"

4/ Note that Calm continues to grow headcount whereas Headspace is still about the same where it started in late 2018. Perhaps raising too much too early hurt Headspace ability to focus.

5/ Interesting quote: “Calm has managed to overtake Headspace because they’ve been laser-focused without getting distracted by the types of vanity partnerships, like with sports teams, that look good in the press but don’t move the needle,” says Harley Miller a Calm investor.

@ncsh would know better than my wild guesses :P