The Headspace Strategy Story

Headspace is a mindfulness and meditation company founded by meditation guru Andy Puddicombe and business partner Richard Pierson that has grown into a world leader in the mindfulness and meditation space with its mobile application and growing library of online and streaming content. 

With the mission to “improve the health and happiness of the world”, Headspace believes “that mindfulness should encompass every aspect of life, not just when you’re sitting to meditate.” 

Through its unique library of mindfulness and meditation tools and resources, Headspace strives to “offer inspiration, guidance, and support to living a mindful life in the pursuit of improving the health and happiness of the world.”

Headspace is the brainchild of the rather unlikely duo made up of former advertising executive Richard Pierson, and college dropout turned Tibetan Buddhist monk Andy Puddicombe. 

Despite building a successful career in the marketing and advertising world, at the age of 27, Richard Pierson was feeling burned out. To combat this, Richard began exploring the world of meditation, where he met mindfulness and meditation guru Andy Puddicombe.

Andy has an interesting story of his own. After a series of personal tragedies in his early 20s, Andy dropped out of college at the age of 22 to travel to Asia to study meditation. After a 10-year journey that took him around the world, Andy returned home to London to open a meditation clinic.

It was here that Andy and Richard crossed paths, and they quickly hit it off. Shortly after Andy and Richard met, the two came up with the original idea for Headspace, with the goal of “Improving Health and Happiness in the World.” 

In May of 2010, the pair launched Headspace as a meditation events company, and quickly garnered attention and success. Around the same time, Andy Puddicombe’s profile began to rise as a meditation and speaking guru, publishing the first of three books, Get Some Headspace: 10 Minutes Can Make All the Difference, in January 2011.

However, participants at Headspace’s meditation events wanted more. In response, Puddicombe and Pierson began developing a simple mobile application so that attendees could take the lessons with them, practice them in between, and share them with people they know.

The first version of the Headspace app launched in 2012, and Version 2 followed in 2014. Since then, Headspace has added products and services, launched Headspace for Work and Headspace Health, and acquired or merged with several companies to be the $3 billion mental health giant that it is today.

As a meditation company that may be slowly transforming into a mental health company, Headspace’s products and services revolve around creating content that satisfies its mission of improving health and happiness in the world.

Headspace currently has three core product and service offerings:

• Headspace Subscriptions
• Headspace for Work
• Headspace Health

Headspace’s primary product/service is its mobile application and website. Although the Headspace app itself is free, in order to access the majority of content on both the Headspace application and online, users have to pay to subscribe to Headspace’s premium membership category.

With over 2 million subscribers worldwide, subscription-based D2C revenue accounted for 60% of the company’s revenue last year. 

Headspace’s second core revenue stream are its B2B offerings, known as Headspace for Work. Headspace for Work is a corporate health and wellness program that provides a company’s employees with access to the Headspace app, specifically designed workplace programs, resources, and much more designed to reduce stress, increase focus, and decrease burnout.

The company has also partnered with several companies to provide its application and programs for their employees. 

Headspace’s third core revenue stream was meant to be Headspace Health. Originally organized as a division of Headspace that aimed to get FDA approval for Headspace products, Headspace Health has pivoted from that mission and become the umbrella under which the company operates Headspace, Headspace for Work, and recently acquired Ginger.

Headspace Health has fueled Headspace’s growth with an aggressive mergers and acquisitions strategy acquiring on-demand mental health provider Ginger, AI powered mental health and wellness company Sayana, and selfcare app Shine in 2021 and 2022.

• May 2010: Headspace incorporated in London as a meditation events company.
• January 2012: First version of the Headspace mobile app launched in response to demand from event attendees.
• March 2013: Headspace relocates head office to Santa Monica, California.
• September 2015: Headspace raised $34.3 million in Series A funding.
• November 2016: Headspace joins up with Spotify to bundle mindfulness and music subscriptions.
• June 2018: Headspace launches Headspace Health, a subsidiary with the goal of creating FDA-approved mindfulness and meditation tools.
• September 2018: Headspace Health acquires voice-based AI company Alpine.AI.
• July 2020: Headspace partners with Snapchat to create meditation mini-apps.
• October 2020: Headspace teams up with Hinge to create guided meditations.
• December 2020: Headspace signs a deal with Netflix for a three-series partnership.
• October 2021: Headspace Health merges with on-demand mental health provider Ginger to create a $3 billion mental health juggernaut.
• January 2022: Headspace Health acquires AI-powered mental health and wellness company Sayana.
• September 2022: Headspace Health acquires Shine, a self-care app and community for people with anxiety and depression.

What started as a meditation event business has blossomed into one of the largest online meditation companies in the world. But how does Headspace make money?

Headspace’s business model most closely resembles a subscription business model. Subscription business models are based on the idea of building a product or service that produces recurring revenue from your customers. In fact, subscription-based direct-to-consumer (D2C) revenue makes up the majority of Headspace’s revenue. 

However, Headspace really has three primary revenue streams: subscription-based D2C revenue through its application and online content offerings and two business-to-business (B2B) revenue streams. The company’s B2B verticals include:

1. B2B revenue from employers who pay for programs to teach mindfulness and meditation to their employees
2. Headspace Heath’s direct deals with health plans.

Currently, about 60% of Headspace’s revenue comes from its D2C subscription channels, and the other 40% is generated from its B2B products and services. However, the company expects that its B2B business will soon surpass its D2C revenues. According to Headspace CEO Russ Glass, “Given that [the B2B] growth rate is so significant right now, it will probably overtake [the D2C business] at some point in the not too distant future.”

Headspace has grown to be the global leader it is today by successfully employing a number of marketing and growth strategies to carry out its mission of improving health and happiness in the world.

Here are some of the key strategies that we believe helped make Headspace into one of the most popular mindfulness and medication companies today:

• Content Marketing
• Partnerships
• Mergers and Acquisitions

Headspace’s entire business model revolves around the content they produce. So it should come as no surprise that it has a killer content marketing strategy. To sum it up simply, they produce content meant to create value in their target audiences that supports their goal of improving health and happiness in the world. 

That’s it. Headspace produces content that its audience finds valuable. Within their content, Headspace’s call-to-action is the same. Download the App. Start Your Trial for Free.

And to reach a massive audience, Headspace delivers its content through a multi-platform approach. You can find Headspace content on their website, YouTube, Facebook, Instagram, Twitter, and Snapchat, in search engine advertising, social media advertising, radio, and TV, helping to grow Headspace a huge audience and user base.

In addition to creating effective content that its users find valuable, Headspace has been extremely successful in expanding its content’s reach and user base by partnering with some of the world’s top brands.

Headspace began partnering with airlines way back in 2011, teaming up with Virgin Atlantic to create an in-flight Headspace channel to help passengers learn about meditation, relax, and get some sleep. Since then, Headspace has collaborated with 12 different airlines, reaching an audience of over 800 million passengers per year.

And on your next trip, your flight might not be the only place that you find unique Headspace content. Headspace has also partnered with hotels around the world, including Hyatt Hotels, Casper’s The Dreamery luxury napping hotel in the heart of New York City, and KEYPR, the leader in guest experience and hospitality management technology and enterprise resources, to create unique and original content for their guests and employees.

In addition, Headspace has partnered with numerous companies to create unique curated content for their employees, products, and target audiences, including Amazon, the Australian Football League, the NBA, Nike, Pinterest, Snapchat, SXSW, Vitality, and WellnessWins.

Headspace also successfully uses partnerships to expand its user base. Headspace partnered with Netflix in 2020 to create several series of mindfulness and meditation videos, including “Headspace Guide to Meditation” and “Headspace: Unwind Your Mind,” a mindfulness training and story series for kids.

Another strategy that Headspace has successfully deployed in its strategic plan is the use of mergers and acquisitions to fuel growth. 

According to Russ Glass, the CEO of Headspace Health, “Our plan is to grow both organically and inorganically through M&A over time,” Glass said at the time. “So I think it’s highly likely that one day we acquire a company — or two or three — that fit into the strategic matrix for us so that people can get the support they need in as scalable and cost-effective way as possible.”

In the few years since then, Headspace Health has done just that. Under CEO Glass, Headspace Health has pursued an aggressive merger and acquisition strategy, acquiring Ginger, Sayana, and Shine.

“Headspace Health, the overall company, the brand we’re building, we hope will be an umbrella for a lot of different products, and opportunities for those in their mental health journey,” says Glass.

Headspace isn’t showing any signs of slowing its growth, continuing to build strategic partnerships and making important acquisitions to grow its audience and subscriber base. 

Headspace is expected to continue investing in growing each of its three core business units, Headspace, Headspace for Work, and Headspace Health’s deals with health plans and insurers. In fact, the company expects its B2B offerings to soon outpace its direct-to-consumer channel. 

Although Headspace has captured a large share of the existing direct-to-consumer market,

Headspace continues to find new audiences. The company’s partnerships with Netflix, Hinge, and Snapchat in the summer and fall of 2020 greatly expanded the company’s reach to new audiences across a multitude of platforms.

Expect Headspace to continue to grow its direct-to-consumer products, expanding into new audiences and markets through additional partnerships and the creation of content and content libraries for new audiences, such as their children’s content found on Netflix, Headspace Breathers created in collaboration with Google, and Monster Meditation created in collaboration with Sesame Street. 

Headspace’s acquisition of Ginger also suggests that the company is focusing on growing its presence in the mental health space outside of mindfulness and meditation to focus on the entirety of one’s mental health. While it is difficult to predict Headspace’s next move, you can be assured that it will aim to “improve health and happiness in the world.”

Headspace can teach us many things when it comes to building a successful startup. From their ultra-successful content marketing to their private offerings and partnerships that expand their audience, there are a lot of things that Headspace seems to do right. Here are some key takeaways you can get started incorporating in your company today:

Headspace is well known for its super effective content marketing strategy, and they do this by focusing on creating content that is valuable to its target audience. While you don’t need to start with such ambitious goals as Headspace, content marketing is easy to get started, cost-effective, and economical, and it provides an opportunity for turning prospects into paying customers and growing your business. 

In order to create effective content marketing, you need to start with a plan. You will need to determine your content marketing mission and goals, understand your target audience, choose your content types, and choose your marketing channels. With a plan in place, it’s time to start creating content.

For more on content creation, check out our Guide to Content Marketing for Startups.

When it comes to content marketing, it’s all about video. Although video is only one of many, many types of content that you can create in your content marketing, it is not something you should even think of skipping or skimping on. 

Headspace has learned to effectively use video to provide education, resources, and tools to its target audience. While Headspace creates videos for its own app and website, they have also created hundreds of short-form content videos published on social media, YouTube, and across the web. For Headspace, this has translated into nearly 600,000 YouTube subscribers and hundreds of millions of views.

Video increases interest and engagement, educates your audience in a way they prefer, brings more people to your website, gets them to stay there longer, generates more leads, and turns more of them into sales.

In fact, video is the number one channel for content marketing today, surpassing blogs and infographics as the top media used in content marketing. In fact, more than 60% of marketers now use video for content marketing, and the majority of content marketers believe that video is their most effective format of content (76%), producing more leads (79%) and directly increasing sales (81%). 

So, when you are developing your content marketing strategy, don’t forget about the importance of video.

For companies new and old alike, partnerships can be a great way to grow your brand and your business. Partnerships allow you to reach new audiences, deliver value for your target audience, build brand awareness, build trust, increase credibility, and access new customers. 

Headspace has partnered with brands around the world, including airlines, hotels (Hyatt, KEYPR), social media companies (Pinterest, Snapchat), wellness companies (Nike, Vitality, WW), and even Amazon, Google, and Netflix. 

Notice, however, in each of their partnerships how Headspace was able to grow its brand reach while advancing both its mission of improving health and happiness around the world as well as the mission of its partners.

This is what you should look for in a partnership for your business. Seek out opportunities to partner with companies where your products or services align with your partner’s mission and that benefit you, your partner, and most importantly, provide value for your target audience. Effective collaborations can open the door to mutually beneficial outcomes that completely change the game.