The Diary of a CEOCalm App Founder: From $0 To $2 Billion By Making The World Meditate: Michael Acton Smith | E117
CHAPTERS
- 2:00 – 9:00
Curiosity, Early Sales Hustle, and Feeling Like an Outsider
Smith reflects on a childhood marked by curiosity, voracious reading, and feeling like a “square peg in a round hole” at school. He discusses early experiments in selling at car boot sales, struggling with social status, and how university gave him a chance to reinvent his identity and lean into new experiences.
- •Curiosity, fuelled by his librarian father bringing home random books, was his defining childhood trait.
- •He loved connecting dots between disparate ideas, an early foundation for entrepreneurial thinking.
- •At school he wasn’t popular or particularly high‑achieving academically, felt on the periphery socially, and was introverted and shy.
- •University became a reset button where he consciously decided to be outgoing, join clubs, and build lasting friendships.
- •Early sales experiences (e.g., car boot sales) showed him that enthusiasm for what you’re selling is more important than formal ‘sales skills’.
- 9:00 – 25:00
From Corporate Detour to Firebox: Learning Storytelling and IP
After a brief attempt to break into investment banking via a leasing job tied to Goldman Sachs, Smith realized that world lacked creativity for him. He joined forces with university friend Tom to ride the early internet wave with Firebox, learning hard lessons about clunky early e‑commerce, skepticism about online payments, and the power of original products and PR storytelling.
- •Took a job servicing company car leases for investment banks hoping to pivot into trading, but found the environment soulless and uncreative.
- •In 1997–98, he and Tom recognized the internet’s potential, bought a £20 book on online business that became their ‘bible’, and launched a quirky gadget retailer.
- •Early e‑commerce was brutally manual: printed order forms, faxed credit card details, hand‑typed transactions on a PDQ machine.
- •Most people dismissed online retail as unsafe or only viable for porn, but they saw mail‑order catalog economics moving online.
- •Shift to making their own products (shot‑glass chess) dramatically improved margins and sparked the realization that owning IP is crucial.
- •DIY PR—focusing on the human story of two broke ex‑students—generated huge press coverage and orders, teaching him the centrality of narrative.
- 25:00 – 42:00
Exiting Firebox and Chasing an Ambitious Game Vision: Perplex City
Despite Firebox’s profitability, Smith left to pursue a bigger creative itch: massively multiplayer and alternate reality games. Perplex City combined collectible puzzle cards, buried treasure, and real‑world clues, earning acclaim but burning nearly all of a $10M raise. He recounts the growing dread as finances deteriorated despite external praise and the painful decision to shut the game down.
- •Left Firebox before being personally financially free because a new game idea obsessed him and ‘woke him at 4 a.m.’.
- •Perplex City aimed to blur lines between game and reality, inspired by the film ‘The Game’, with a £100k buried treasure and intricate puzzle narrative.
- •The business model—selling trading cards that fed into a sprawling ARG—generated some revenue but nowhere near enough to cover costs.
- •Externally, the project was hailed as brilliant; internally, bank balances and burn rate pointed to imminent collapse.
- •He suffered high stress: sleepless nights, physical symptoms, and isolation as a solo founder facing potential bankruptcy.
- •Ultimately gathered 25 staff, trembling, to announce they were killing the game mid‑season; staff were shocked, and many left.
- •Core lesson: don’t mistake press, awards, or creativity for a viable business; understand unit economics and monetization pathways early.
- 42:00 – 55:00
Pivot to Moshi Monsters: Explosive Growth and the Mobile Cliff
With little cash left, Smith pivoted Mind Candy from Perplex City to a children’s property—Moshi Monsters—built around virtual pet adoption and stealth education. After a false start selling physical phone charms as access keys, making the online world free unlocked exponential adoption. However, a later platform shift from desktop to mobile blindsided the business, leading to a painful decline.
- •Repurposed ‘Puzzle Monsters’ from Perplex City lore into a children’s IP focused on adoption, nurturing, and learning; renamed it Moshi Monsters.
- •Initial monetization via physical phone charms with access codes created too much friction and flopped.
- •Removing the physical gate and making signup free ignited viral growth: from single‑digit daily signups to hundreds, then 100k+ per day.
- •At its peak, Moshi had offers in the hundreds of millions; Smith declined, believing it could be “the next Disney.”
- •Summer 2012 marked an inflection: user engagement stalled as kids shifted from desktop browser games to iPads and mobile apps.
- •Adapting a web subscription world into the free‑to‑play app ecosystem proved extremely hard; revenues declined, and five rounds of layoffs followed.
- •The experience crushed his ego and self‑image—media adulation flipped to criticism—and underscored the importance of anticipating platform shifts.
- 55:00 – 1:09:00
Burnout, Escapism, and Discovering Meditation as a Lifeline
As Moshi faltered, Smith experienced chronic stress, physical pain, and emotional burnout. He coped poorly—distance from the office, daily painkillers, and abandonment of healthy habits—while struggling with an identity built on entrepreneurial success. A solo trip to the Alps and tentative meditation practice transformed his perspective and planted the seed for Calm.
- •Describes waking every morning feeling ‘hit by a truck,’ relying on painkillers and caffeine, and avoiding the office.
- •His self‑worth was fused to business success, so Moshi’s downturn felt like personal worthlessness.
- •Locking into vicious cycles: poor sleep, bad diet, no exercise, isolation—all compounding stress and burnout.
- •Friend and future Calm co‑founder Alex Tew had long suggested meditation; Smith initially dismissed it as impractical or ‘hippie’.
- •Took an unprecedented solo trip to the Austrian Alps: played tennis, read, journaled, and tentatively tried meditating.
- •Distance and stillness cleared mental ‘fog,’ allowing him to see his situation more objectively and encounter scientific research on mindfulness.
- •Realized mindfulness was essentially a way to rewire the brain; saw a huge opportunity to make it simple and accessible for the masses.
- 1:09:00 – 1:26:00
Naming and Building Calm: From Skepticism to Product-Market Fit
Smith and Tew acquired the calm.com domain by diverting house‑deposit savings, despite friends and family thinking they’d lost their minds. Investors were deeply skeptical that anyone would pay for meditation. Calm survived a long ‘frozen paddling’ period through frugality, a book deal, and price experimentation before finally hitting a growth wave and scaling subscriptions.
- •Initially quoted ~£1M for calm.com; later negotiated a much lower price and Smith used personal savings intended for a house deposit.
- •Early 2010s, meditation was viewed as niche and ‘hippie’; investors questioned charging for something available free on YouTube.
- •Calm endured years of underfunded grinding: only 6–7 staff, difficulty raising beyond seed, and pressure to be profitable.
- •A serendipitous talk led to a Calm book deal with Penguin; the advance literally kept the company alive.
- •Raising the annual subscription price from $10 to $40 without a drop in signups validated perceived value and dramatically improved unit economics.
- •Once product‑market fit was clear, they hired a strong user acquisition lead and began scaling paid marketing (especially on Facebook).
- •Smith cautions founders: don’t “pour gasoline on the fire” (marketing spend) until the product is already burning strongly on its own.
- 1:26:00 – 1:33:00
Expanding Into Sleep: Sleep Stories and a Massive Universal Need
Analyzing usage data, Calm noticed nightly spikes around 11 p.m. as users played meditations to fall asleep. Instead of resisting this, they embraced it and invented ‘sleep stories’—adult bedtime stories crafted to transition listeners from engagement into drowsiness—turning sleep into Calm’s second major growth pillar.
- •Usage data showed a global spike at ~11 p.m.; people were misusing meditations as sleep aids.
- •They designed sleep stories: soothing narration with soundscapes and music that start engaging then gently become more soporific.
- •Introduced a ‘story slope’ structure (rather than three‑act drama) to lead listeners into a liminal half‑awake state and then sleep.
- •Hundreds of millions of listens, celebrity narrators, and extensive press made sleep stories a breakout feature.
- •Highlights the universality and scale of the problem: every human must go to sleep nightly, and many struggle to do it well.
- •Situates sleep’s re‑evaluation alongside mindfulness: once dismissed or flexed about (“I only need four hours”), now recognized as a performance pillar.
- 1:33:00 – 1:47:00
Mental Health, Neuroscience, and Our Hijacked Attention
Smith explains why he views mental health as a ‘first order’ global problem and meditation as a brain‑training method akin to OS upgrades. He outlines a simple neuroscience frame for how mindfulness reduces amygdala‑driven reactivity, enhances prefrontal control, and fortifies attention in an era of constant digital stimulation.
- •Reframes mental health: it’s not ‘1 in 4’ but ‘1 in 1’—everyone with a mind has mental health that fluctuates.
- •Argues that solving mental health unlocks better responses to complex societal issues like climate change, inequality, and racism.
- •The brain’s most ancient systems (amygdala) default to fear and reactivity; meditation strengthens prefrontal cortex involvement, enabling perspective and planning.
- •Key everyday shift: moving from reacting automatically to responding thoughtfully, inserting milliseconds of awareness between event and action.
- •Compares mindfulness to lifting weights: repeated focus and refocus trains attentional control and emotional regulation.
- •Notes we are ‘assailed’ by unprecedented noise—from social media to billboards—and the ability to direct our attention is becoming a core 21st‑century skill.
- •Remains overall optimistic about humanity’s trajectory, citing data‑driven work like ‘Factfulness’ and growing cultural acceptance of vulnerability and mental health days.
- 1:47:00 – 1:59:00
Pandemic Burnout, Company-Wide Mental Health Weeks, and Founder Self-Care
Smith describes how the prolonged pandemic and remote work led to physical injury (herniated disc), chronic pain, and cognitive fog from painkillers—even as he shouldered leadership of a 300‑person company. Internal survey data showed unprecedented burnout at Calm itself, prompting bold interventions like a full‑company mental health week.
- •Initially, 2020 felt novel and manageable; 2021’s prolonged screen time and isolation created a ‘perfect storm’ for his mental and physical health.
- •Hunched Zoom posture contributed to a herniated disc, nerve pain, sleeplessness, and reliance on painkillers that dulled his thinking.
- •Culture Amp surveys at Calm revealed a massive spike in references to stress and burnout in anonymous comments.
- •Noted a Harvard study: average workdays extended by nearly an hour when working from home; boundaries between work and life eroded.
- •Calm had to move beyond ‘unlimited vacation’ (which people rarely use) to structural solutions; they instituted mental health days and a full mental health week.
- •He was initially skeptical about giving the entire company a week off in a competitive market, but calls it one of their smartest decisions—the business survived, and people returned recharged.
- •Personal behavior changes: no more email in bed or phone first thing in the morning; stronger boundaries around tech and rest.
- 1:59:00 – 2:10:00
Foundations of Wellbeing: Sleep, Nutrition, Movement, Mind—and Relationships
Smith distills his current philosophy of health into four fundamentals—nutrition, exercise, mind care, and sleep—while acknowledging a fifth, often neglected pillar: meaningful relationships. He admits past failures as a partner due to obsessive focus on work and shares how meditation has increased his empathy, communication skills, and presence in relationships.
- •Four core pillars: what you eat (nutrition), how you move (exercise), how you care for your mind (meditation/mental practices), and how you sleep.
- •He argues our culture overcomplicates solutions so they can be sold, but many cures are simple: water, real food, sleep, movement, and conversation.
- •Cites Johann Hari’s ‘Lost Connections’: modern life has disconnected us from what our brains evolved for—contributing to depression and anxiety.
- •Openly acknowledges having been a poor partner, overly consumed by work and assuming others’ brains worked like his.
- •Meditation has increased his empathy and ability to “see the world through other people’s eyes,” instead of immediately problem‑solving or projecting his preferences.
- •He’s now more intentional about calling his mother, being present with his daughter, and showing up for friends and partners.
- •States plainly that nothing matters more than the quality of our relationships over a lifetime.
- 2:10:00 – 2:21:00
Communication, Vulnerability, and Leading Calm Without Being ‘Perfectly Calm’
The discussion turns to practical communication skills in both relationships and leadership: listening more than speaking, repeating back others’ viewpoints, and de‑escalating conflicts. Smith dispels the myth that Calm’s founders live in constant serenity and explains why blending authenticity with accessibility—rather than spiritual extremism—has been core to Calm’s brand.
- •Childhood advice from his grandmother—“two ears, one mouth”—now shapes his emphasis on listening more than talking.
- •Highlights a simple but powerful conflict tool: reflect back your partner’s perspective so they feel understood before offering your own.
- •Notes that many arguments are really about being understood, not about the surface issue; echoing builds connection and diffuses combativeness.
- •References Esther Perel’s work as excellent guidance for navigating relationship nuance.
- •Rejects the stereotype of Calm’s founders as mountain‑top mystics; they are imperfect, stressed humans applying tools they help popularize.
- •Calm’s brand intentionally avoids heavy spiritual jargon, adapting ancient practices into fun, relatable, modern formats (e.g., with celebrity voices).
- •Sees vulnerability from leaders—sharing struggles with burnout or pain—as compatible with, and even necessary for, effective leadership.
- 2:21:00
Psychedelics, Mental Health Innovation, and Embracing Pain as a Signal
In closing, Smith connects Calm’s mission with his investments in psychedelic therapeutics via Atai Life Sciences. He expresses strong belief in their potential, when combined with therapy, to alleviate severe mental illness. Answering a question about “the pain you enjoy,” he reframes pain—physical or emotional—as essential information that forces him to confront problems he’s been avoiding.
- •He and Bartlett are both investors in Atai Life Sciences, exploring psychedelics and non‑psychedelic compounds (psilocybin, ketamine, ibogaine, MDMA) for treatment‑resistant mental health conditions.
- •Smith views psychedelics, in proper clinical settings, as a ‘golden key’ that could help hundreds of millions of people and dovetails with Calm’s broader mission.
- •Recalls meeting Atai co‑founder Christian Angermayer, whose energy convinced him quickly to invest.
- •On ‘pain you enjoy having,’ he clarifies that pain isn’t pleasant but is valuable: it’s a sensor telling you something’s wrong.
- •He cites sleepless 4 a.m. anxiety as a kind of mental pain that signals unresolved issues his conscious mind is dodging, pushing him to take action.
- •Emphasizes that masking pain (with substances, distractions, or avoidance) delays growth; leaning into it can prompt necessary change.
- •Ends on mutual appreciation: recognizing the reach of Calm in easing global suffering and acknowledging the role of long‑form conversations in shifting culture around mental health.
