Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses for an audience of entrepreneurs. Many of us have wanted to be business people. Since we were kids, we started selling candy. We started doing all kinds of stuff.
Today’s guests didn’t feel that way. He says that he never was a business oriented person, but he did care about. Health, he did specifically care about mental health. And he came out with this app that just made a lot of sense. It’s a mindfulness app, which encompasses a lot of things. It’s meditation, it’s calm, it’s music to help you fall asleep at stories to help you fall asleep.
And then the guy in his brother with a little bit of money, just got it to a million dollars in sales, simple business made a ton of sense and it works. And for some reason, he decided to take funding. He got a good amount of funding and then everything changed. And I’ve added him here to talk about what changed and also about what’s working really well with this platform.
His name is Steve Lee. He is the founder of aura health. And what they do is they, they’re basically a part of this creator economy because they allow multiple people to create, uh, these mindfulness programs. So if you guys like my voice and Steve likes my attitude here, he might say, you know, Why don’t you create a, maybe not asleep properly, don’t have the voice for sleep meditation, but maybe it’s like a mindfulness exercise for how to start your day by thinking about the right things.
Anyway. So I could do that. I get a share of the revenue that they make because they are subscription-based business and life is good. And for you, if you sign up, you would get, um, You would get to listen to me and a bunch of other people. So if you don’t like my voice, you can switch to others. All right.
That’s the model. I invited him here to talk about how he did it. I love how it works and we can do it. Thanks to two phenomenal sponsors. The first, you know, if you have an idea, you need a website, you should go to hostgator.com/mixergy. The second Steve has list of creators. I’m going to tell him why he and you, who who’s listening to me should be using SEMrush to understand traffic and understand what’s going on on other people’s sites.
Steve Goodman.
Steve: Thanks for having me, Andrew
Andrew: What’s your revenue
Steve: jumping straight into I it’s between one and 10 million, but headed towards 10 million currently.
Andrew: closer to 10 million. Then you were back when you were just you and your brother. And how much of that do you share with the creators who are on your platform?
Steve: Yeah, we can share that number exactly. But there are paid based on listens. So a lot of our top creators, Amit thousands per month with a pretty little effort, and it’s really become a life-changing sum for
Andrew: But the idea, the idea is that there’s some fixed percent that you share with your creators based on the percent of listenership that they get on the platform. Is that right?
Steve: It’s actually not a fixed number. We have a fixed payout per listen and it
Andrew: Oh, really?
Steve: Yeah. So that incentivizes coaches and therapists to create better content.
Andrew: So then, is there a situation where if you get a lot of listens that you could end up losing money?
Steve: Uh, for very certain, um, core users, let’s say who have listened to a hundred times, uh, per month, uh, that is a possible scenario. Um, but that is the beauty of subscription businesses. It’s not on it doesn’t really matter.
Andrew: You mean because there are going to be some people who listen, very little other people who listen a lot. Got it. But what it does do for creators is it gives them a fixed thing to count on. If they get to listen, they know how much you’re going to make. It’s a all right. It’s an interesting model. It’s, it’s much closer to Spotify than it is to something like, I think Skillshare still will take a percentage of their revenue and then split it with creators based on.
Based on listenership. So they have a fixed expense. Wow. We, and so can I go on there? Can I say, I need to make more money. I want to tap into my audience before they fall asleep. I can go into a low, quiet voice and help them fall asleep. Can I do that? Can I just go onto the platform on my own?
Steve: Uh, no, actually, uh, we have an application process. We do get hundreds of applications from therapists, coaches have the therapist storytellers. Um, so if you do apply, I’ll make sure to put it on, get work for you. Um, but it is not an open book.
Andrew: What do you think I should? Do you know what? This is actually really interesting for creators, right. And I don’t think I could do the bedtime voice. I I’d love to. I listened to bedtime stories all the time. It helps me fall asleep, but what do you think I could do if I wanted to be on the platform as a creator, what would be a good entry point for it?
Steve: That’s an interesting question. Um, most of our creators are, are actually really health professionals. So medication coaches, life coaches, therapists. Psychiatrist. I’ll bet. We do have some, let’s say voice talents, creating stories. We’ll be moving into new categories like poems, and we’re constantly launching new, um, ways to help people with their mental health and, and blocks.
Uh, so we’ll love to continue talking about it?
with you.
Andrew: Interesting. I’m not a mental health professional. Would that be an issue?
Steve: Uh, no. Yeah, exactly. Uh, what I was saying is some of our creators are not mental health professional.
Andrew: So here’s what I would do, Steve. I don’t, I don’t, I’m not really applying right now. I’ve got, I’ve got enough going on right now, but imagine if I wanted to, here’s what I would do. I would say I’m going to give you stories. Successful people that are designed to calm you down, but they will impregnate in your head, had thoughts of productivity, of engagement, of hard work.
You’re just going to go to sleep with this and, and confidence more than anything else so that when you go to sleep, your mind will focus on the confidence, focus on dreams that are, that have been helpful. And when you wake up, you’ll have, and those in your mind, and they’ll allow you to be more productive the next day.
Right? That seems like, that seems like a thing for me.
Steve: Absolutely. I, and this is why we, we love to work with different creators. Like you.
Andrew: I love your model. All right. You’re not though an entrepreneur. You’re somebody who cares about this more. So it seems to me from a mental health point of view, I wonder if you could go a little bit vulnerable with me and talk to me about what happened in your family. Growing up before we get into how you built up this business.
Steve: Yeah, absolutely. Uh, so going all the way back, uh, my passion for health started, I literally, because I was a sick kid. Um, I was born too, not very healthy mother. Uh, I went to the hospital and doctors all the time. Uh, and then I got healthier over time. Um, starting, let’s say middle school, which is when I happened to move from Korea to America.
Andrew: What was going on with your health growing up?
Steve: Uh, I always, uh, I just let’s say, um, was constantly getting infected with different, um, things. I was constantly at the doctors on, on IB. Let’s say I was just a weaker than average.
Andrew: Did you feel disconnected from your friends because of it?
Steve: Uh, I would say maybe a little bit. I was, let’s say smaller. Um, I was, um, much more introverted at the time. Uh, and this was back in Korea when I moved to us, everything changed because I started taking health very seriously. Like my diet, uh, started playing football, soccer track, uh, and, um, really transforming myself.
I, and that led me to want to become a doctor where I can help others become healthier as well. Um, So in, in college I studied biology, um, every sorts of science and computer science as well.
Andrew: I’m going to pause you for a moment there. I want to get into the vulnerable. You don’t know me well enough and we haven’t built enough of a relationship here, but maybe you can just still trust me and say what, what happened with your mom growing up?
Steve: Yeah. So one thing I was, uh, about to mention, uh, right when I moved from Korea to America, that also really created a lot of stress between my parents and they actually ended up?
getting divorced in a very, very nasty. 10 lawyer on each side, kind of a divorce. I, it really destroyed our mother. Uh, and since then we also grew up with a single mother and we, we saw her kind of struggle, But get better.
She’s actually also a physician doc in Korea, but even as a doctor, she, uh, you know, they didn’t really know what to do, and it was hard for her to, um, To deal with that situation. She did an incredible job of protecting me and my younger brother from the situation, but it was just so obvious to us, how much shame
Andrew: what was going on with our stress yelling disappearing out of depression, into the bedroom? What can you say?
Steve: much more on the depression side. And, um, yeah, seeing her let’s say cry on loser energy.
Andrew: Do you know what that’s one of the scary things for me. I told you before we got started, we’re going to Austin, not as big a move as your family made. Right. But that moves. Have a big impact on family life, on who you are. I wonder a lot of times, will there be something that happens, a move or an incident, an illness that happens to me that completely changes my relationship with my wife, my relationship with who I think I am.
And as a result, I lose a sense of self and go into depression. And then you look at your mom. She must’ve been. She must’ve been a hard worker. She became a doctor right in South Korea. She had things going well, my am I right. I’m trying to read your face on that.
Steve: Yeah,
Andrew: Yeah, right. So I took my name from Andrew Carnegie.
I was born Shuki. I said, I got to get an American name. No, one’s really gonna understand what Shuki is. And the reason I picked Andrew Carnegie’s because he’s a guy who came to America, really built himself up and became the richest man in the country. And the libraries that we had in Queens were because of him, because Andrew Carnegie decided that us needed to have free library.
But there was also this, a story about how his dad came to the U S from Scotland, where they didn’t have much money where they weren’t doing well, came to the U S Andrew Carnegie found opportunity. His dad just couldn’t find his way in this world and basically became a failure. And I thought. Look at this, this, this dad who brought his whole family or who had the strength of mind to pick the U S and to make his way over here and to find the money to do it fell down so hard.
If that could happen to him. Could that happen to me? Do you worry about that stuff or is this in my head?
Steve: I personally, let’s say don’t worry about it, but I. It is always good to have that perspective also that you’re constantly working on not just your work, but also on your family and your personal
Andrew: I do find that, that helps me. Do you say, do you find that that helps you to that knowing how that that could happen redo? And so did that you were starting to talk to me about going to school. Tell me a little bit about how that impacted your school and what you were studying.
Steve: Absolutely. Um, so I studied biology, uh, at, at UC Berkeley. Um, but always in the back of our mind. I didn’t want to limit myself to patient care. I wanted to create a bigger change in the society. Um, took a lot of policy classes, really understanding how the healthcare system works. Worked at hospitals, worked in research, uh, in overtime.
Uh, I started to realize that mental health was an even bigger problem. Uh, one, I, it is really previously underserved, especially from healthcare perspective. Also from consumer perspective, there’s lots and lots of stigma and barriers. Um, and one day. Uh, I was at a family vacation, um, with my younger brother.
And that really became the turning moment because he happened to be thinking about the same thing. He was also studying biology and trying to become a doctor, but also had this mental health in the back of his mind. I, and we were just talking about like how the culture needs to change, how can technology be leveraged to, to lead this movement?
Um, At the time, uh, our mobile phones were getting so powerful and the power of internet, software, everything, but they were really being used to get us addicted to our phones for entertainment, for, you know, comparing ourselves with others.
Andrew: about, I’m going to say Facebook I’ve saw articles that you were mentioned in back, uh, back in the day that you’re referring to right now, I guess you were in college at the time, and you said we’re getting sucked into these social networks. They making us feel bad about ourselves.
They’re sucking us even more so than we feel even worse about ourselves. And you wanted to come up with a solution to it. And one of the solutions that you came up to, it was Wayfair, Wayfair, mobile. Am I right? Or Wayfair?
Steve: Yeah.
Andrew: What was happening?
Steve: Yeah, so the thesis behind wafer, uh, and that was co-founded, uh, between me and my younger brother as well, um, was that we wanted you to create more memorable experiences, what your close friends and family. Uh, so it was, um, kind of an anti-social network where you share with others, what you wanted to do.
And it was designed to get you off the platform, spend more quality time.
Andrew: That was another part of it. You said social networks about now, but mostly about the past and the more you look at the past to the, the more you’re you’re taking your eye off the future, and you said we’re going to focus on the future. What do you want to do? What are you aspiring to do? Where do you want to go this year?
What do you want to achieve in the next month? That’s the thought process, right?
Steve: Exactly.
Andrew: Okay. All right. So I went to the internet archive to get a sense of how it worked. I don’t see much here. How, how did it work? And then what happened?
Steve: Yeah. Uh, it was called Wayfair. Wayfair means a traveler and you get to Shay, what’s called a ways, a ways are a post where you share kind of what you were about to do or wanting to do in the future. You get to invite other people out, do people get to join it on and you get to create these experiences.
Andrew: Something like, um, uh, here’s one BBQ and chill. There’s another one. Let’s go biking. Let’s go, uh, ice skating. Right. So I can say let’s do it. People can give me a thumbs up. They could join in. They could just cheer me on.
Steve: Exactly.
Andrew: Okay. All right. I like the simplicity of it. Who designed it? I’m guessing that was you.
Steve: Yeah. Actually my brother designed the whole thing himself. Yeah.
Andrew: It looks good. All right. And so then what happened to the site? What happened to the app?
Steve: Yeah. Ultimately we, as let’s say, non-funded entrepreneurs, uh, one, we weren’t, uh, there was no clear monetization strategy, uh, and two that also meant it had to grow really virally and organically. I and that was something that was really hard to achieve, uh, to get people, to use, to stop using their phone.
Uh, so we ended up turning that the company in about, uh, 10 months, uh, and then start to experiment with different ideas, uh, about what our next product could be. Any company could be.
Andrew: I love the experimental phase that you went through. How many ideas, what was the process? Walk me through it because you ended up with a hit product with aura health. Walk me through what, what you did to get there.
Steve: Yeah. One was lots of user research. Both on the market side of what’s actually going on, what are people interested in? But the current products are, are not meeting the need for a as well as kind of what our passion and mission, uh, is. Uh, and, and so therefore we decided to stay with mental health. How do we make people healthier, their make their lives simpler.
Um, and, uh, we of course looked at many other products in the market as well. Uh, getting inspiration from there. Um,
Andrew: Okay, give me, give me a couple of ideas. What did you pursue?
Steve: Yeah. So one idea we were. Uh, working on was how do we make our mornings, uh, more satisfying, more, a transformative experience. Every day mornings are very special for, especially for people who, who work.
Uh, and we want you to create a better experience there. Um, so we created one, uh, app that had a bunch of stuff in it. Uh, and we started to kind of like see What people were using and find the most helpful, getting their feedback.
Andrew: What are some of the features in the app?
Steve: It was like a to-do list, setting your intention, a better calendar management.
Um, so more productivity as well as we added like mindfulness spending time in silence. Um, and really the mindfulness aspect really starts to resonate with people. Um, and at the same time, um, mindfulness was getting so much support from the scientific community that, ah, I’ve been, um, let’s say, uh, keeping an eye out.
Uh, so we thought, Okay.
there are meditation apps out there. Uh, and they’ve done an incredible job of introducing meditation. What can we do differently and, and solve a different problem that, uh, let’s say the modern consumers weren’t being met. Um, at the time we thought he was actually making it shorter, uh, in leveraging machine learning AI to create a much more precise and, um, effective experience.
So we got rid of a concept of a course is a very simple product where you come every morning. Ill Hobbit. One, three minute meditation chosen for you. You share feedback and it will learn what works for you over time.
Andrew: And this was one feature of the otherwise broader app.
Steve: Exactly. We actually ended up getting whatever, everything called this aura and
Andrew: did you know that this was the feature to focus on? What was it that told you? This could be. Okay,
Steve: Oh, um, I think most important what’s qualitative feedback, uh, of, um, people just loving the silence feature that we had, uh, and also this kind of looking at the market and, and different products. I, and seeing that it was very early, um, there was room for, or other products to create, uh, different slash better experiences.
Andrew: because the worst, some apps that were coming out, I think at the time that you launched was what? 2015.
Steve: Yeah, that’s correct.
Andrew: even later than that, when did you launch, uh, 2017, maybe.
Steve: 2017.
Andrew: right. So 2017 new launched by then, uh, Headspace, which was, I think still the leader at the time it launched a 2010. That was calm. That’s now the leader in this space. And so you saw them and he said, look, there is an appetite for this type of guided meditation. We see that our people like it. And the difference that we’re going to add is what were you imagining?
The difference was going to be.
Steve: Uh, so, uh, one, uh, we thought people were very busy and people didn’t like choice. I, and therefore we really had to focus on the data science aspect to figure out what works for you. Uh, so we created many different. Very short three to seven minute meditations. You had two options, three or seven minutes.
Uh, we also started with just like one coach and moved to three coaches so that we can give you some variety and really use data to, uh, make that few moments, the most amazing and effective, uh, moment for you in your daily
Andrew: Uh, because with the other apps, it was a lot of picking. Tell me, tell me, tell me, pick from this big menu and they today have an even bigger, uh, library and you said, forget the library. We pick it. They give us feedback, we improve it. They give us feedback, we keep improving it and we pick the right one for them.
That’s the idea.
Steve: He’s likely. And if you look at other upstairs really course space, so you do seven days on, let’s say stress, you’re stuck with that one coach. And also if let’s say the first content that doesn’t resonate with you, you just have to keep going or you’re going to turn. So we wanted to solve that experience.
I, and also didn’t make it, want to make it feel like work where you have to like do things in order. We wanted you to come be yourself, uh, and just have a, um, a moment for yourself.
Andrew: I thought the reason that they were doing it is that. The course-based is that they wanted to develop a habit that if you’re on a 30 day meditation course, where you’re supposed to start every day with their app for 30 days, you’re going to develop a habit with it. That will last beyond the 30 days. So I thought, yeah.
Was that of getting people to stick with an app that was new for them and it was helpful, but you didn’t think so. You thought it’s just too much of a commitment. There’s a market of people who don’t want that, uh, obligation. We’re going to go after them.
Steve: Exactly. I would say the obligation part is maybe secondary to more kind of personalizing the experience every single day and learning from you.
Andrew: Okay. All right. How long did it take you to create that version of.
Steve: Yeah. So it literally took maybe about two to three weeks by the time. Uh, I was. Very comfortable, uh, coding and making on the engineering side, making products really fast. My brother got really fast at designing, uh, and creating beautiful products. Um, so once we had the idea, we were extremely fast to execute.
Uh, we even started by just looking for free meditations online. I am putting that into our application as well. We, we eventually, uh, took them off. Uh, but, and then we found one coach and created this MVP, right.
Andrew: Okay. So one coach does guided meditation just records it. I’m imagining into a microphone, kind of like I’m recording this podcast, right? All right. That’s beautifully simple. I heard it took about three weeks to get the whole thing up and running the first version. Right. Okay. Then you got into both tech crunch and product hunt to get your audience, which one happened first?
Steve: Uh, tech crunch happened first. It also kind of happened, uh, accidentally. There was an amazing writer named Megan who happened to have, uh, reviewed other meditation apps and written about them, but weren’t quite satisfied. So we reached out to her. It was literally the end of the year. So it was like, uh, I think right before, uh, like new year’s, like the day before, uh, we just happened to reach out and, and tell her about the app.
Uh, she. Got an, a phone, uh, use our product right away and then just literally wrote about us, um, and basically kind of accidentally launched us. So that, that became the beginning of our journey went Nora. And that’s when we knew also there was a lot, lots of demand for what we had at
Andrew: I like the headlines you put on it, or a health launches meditation app for people who can’t sit still for long.
Steve: Okay.
Andrew: Um, and then she also talks about how much funding the. People who are in the space had raised. So it says Henry Headspace reached, uh, $30 million in funding comm 1.5 million at the time. And here you were walking into this space with how much zero.
All right. Any imagining no customers came from that, right? Tech crunch is not a place where people are looking for product recommendations. It’s just a credibility boost. Am I right?
Steve: That’s great, but we, we still presently got, uh, if I remember correctly, maybe a few hundred to like, even up to like a thousand users, just from that one, one article,
Andrew: Okay. And it was free users with a potential upgrade for what? Like 7 99 or 12? Nine? Uh, yeah, 7 92 or 1299 a month.
Steve: I think that’s correct.
Andrew: That’s what was in the article. Okay. And then product hunt, you went on there. How did that do for you?
Steve: Uh, also very well, we ended up getting top five, um, And then kind of got syndicated after not, uh, so, uh, yeah, very grateful that we were able to get on there.
Andrew: it was all about app store. Right. Did you, were you an Android also in the Android store or just the iPhone store?
Steve: We focused. I initially, I, and even today I still focus just on, I’m mostly on iOS. Uh, and yeah, the big turning moment was when we, Uh, in the old app store, there was a slot called new apps. We love I, and we got the number one slot and ended up really changing the trajectory of our company.
Andrew: Good. All right. That’s phenomenal. So tech crunch gets you. Credibility gets you, some customers product on your listing there. I think you ended up, uh, number four for the day, right? You end up with more users, more credibility, more attention. App store gives you some more recognition. Boom. You get even more users.
The combination of the three got you to roughly how much in monthly revenue.
Steve: I don’t remember.
Andrew: But we’re talking about in a 5,000 enough to live on
Steve: Yeah, by the time we, let’s say that definitely sounds about right.
Andrew: just enough to live on comfortably you and your brother.
Steve: Yeah. Yeah.
Andrew: All right. Then you start to improve the product, improve the business. Let’s take a moment. Talk about my sponsor and then come back in. Steve, my sponsors HostGator. I want to run an idea by you. One thing that I noticed is anytime something becomes really big on its own.
There’s an opportunity for somebody to create a marketplace of other entrance. So for example, WordPress themes became really big. ThemeForest and Invado in general, created a marketplace where you can buy w a WordPress themes from people who aren’t like Brian Gardner, who were the brand names who are selling WordPress themes.
Everyone else has this marketplace and they generate attention. They send customers to them. You did something similar for a meditation. There were these individual apps with Headspace, you get N D talking to gently, right? And you said, what if there could be a marketplace and you created it? A place where you could get more creators.
A lot of people created courses on their own sites. Skillshare comes in and creates a marketplace. I feel like this is a pattern that I’m picking up in my interviews. I’m wondering what you think of it as an entrepreneur, should people who listening, maybe say, you know what, Andrew is telling me, I should go build a website.
I don’t know what to do, create a website about why don’t I look and see what’s hot right now. And I’ll create a marketplace of people like it. Especially if there’s one person who is especially, especially big in this space, I’ll create the marketplace for the people who aren’t as well known. What do you think.
All right. So now we need to think about what is it that there’s a special category of, right? Who is this? The bigger players in it. And I actually don’t have one in mind right now. Do you, is there something that you’re keeping an eye on? Okay. All right, then I’m going to pick one right now, what I’m finding.
Yeah. That psychedelic medicine and, uh, alternative, um, things that used to be illegal and, and look down is now becoming big. So I’m looking at something like mind bloom, huge, uh, idea. They’ll do psychedelic medicine directly delivered to your door. The founder is a phenomenal entrepreneur. He’s going to get a ton of attention, but they’re going to be more options for psychedelic and other alternatives.
Medicine that used to be illegal. Imagine if you create the marketplace for that, we will help match you up with the right person to, to, to do that for you. So it could be that it could be, um, Iowasca where you travel outside the country to get it. It could be something else we’re creating in the marketplace.
That’s a little bit out there, but when you think of that, Steve, looking at your face. You don’t love it.
Steve: Oh, no. For me, marketplace is really democratization and really exposing anyone to what is out there. Um, there can be incredible, you know, power within that. Uh, there could be also downside to that. Uh, so with any marketplace, even for, for us, we, uh, everyone needs to be conscious of that and have a really strong kind of moral compass thesis and practices to ensure the quality and safety.
Andrew: Yeah. You know what? I see what you’re saying. You’re saying, look, the idea of marketplace is anyone can go and post their theme on theme forest by. That’s not the way that you look at it, you would like to see a much more curated marketplace, even calling it a marketplace sounds too much like a bizarre, right.
Steve: Yeah, I think it depends on the industry. Um, and yeah.
Andrew: Okay. All right. But we’re seeing that, that when there’s something that is, uh, either out of reach until recently, like with voiceover artists, that became a thing, right. Where suddenly podcasters and advertises and others needed. Voices.com. And what is it? A bunny, uh, voice bunny started creating a marketplace for that or something that’s brand new.
Like I think psychedelics say, I don’t know that I love the psychedelic idea. Let’s be honest, but wherever it is, if there’s a huge market now coming up and there’s a huge entrant already getting attention there’s room for somebody to create a marketplace where the others who aren’t getting attention can actually start to come together and the marketplace can get them attention because it, when they’re all together, they’re they’re draw.
All right. People listen, whether it’s that idea. Well, maybe you think that’s a stupid idea and you’ve got your own idea. You’re going to need a website and you better go to hostgator.com/mixergy to get it. Cause they’re going to give you a low price, give you reliable service and they’ll grow with you.
Yeah. When you go to that URL, you’re going to see that they have really inexpensive pricing. That’s just to get you started. I have scaled up with them because they will me hostgator.com/mixergy. All right. Today, it’s no longer one person and some free content you found online. Talk to me about the evolution of, of the content before we get into how else you got.
COVID.
Steve: Absolutely. So I would say the biggest change. Our, our product and our thesis just really came from. Learning what our power users wanted and why they were using RF or compared to other products. And initially we thought it was the very short experience, no choice. Uh, but we actually learned over time that day loved the variety of coaches, the variety of sessions and topics that we’re getting exposed to.
Uh, and so we went from there. Three coaches, two, five coaches and then 10 and then 30. And every time when we Did that, we also were thinking other than medication, are there any other ways of helping people sleep better, reduce stress? So we were one of the first to create this, um, Format of stories and using that to help people relax.
We went through life coaching. We went to music and sounds, and then today we have even more than the like hypnotherapy, AMR, uh, breath work. Um,
Andrew: Did you know that that was at what? Talk to me about the feedback. How did you get feedback from people that told you that that was, that they weren’t looking for that one head, they were looking for a broader collection. They were open to stories. Talk to me about that discovery.
Steve: Yeah, actually, our, one of our head of the data science, he’s a, he has a PhD in anthropology used to. Um, be a professor in anthropology as well. Uh, so he really helped, uh, really understand who our power users were. Uh, we did a lot of service interview them in search of see a pattern, um, about what three key attributes of, or at work.
Uh, one is variety. Two is simplicity and personalization, and three is kind of quality of content. Uh, and so we decided to double down on all three attributes. Um, and that kind of became what aura is today and what our thesis is today, which is enabling the creator economy among their peers and coaches.
Um, right now they were really seeing people one-on-one, uh, but especially due to COVID, many of them want to move digital, really want to scale their impact in society, but they don’t know how they go on social media, but it’s just way too much work to compete with other let’s say creators and influencers.
Um, so they were actually coming through aura because we make that so much more. Easier. They have to just,
Andrew: Uh, huh,
Steve: sorry. He just popped up. Uh, they just have to use their phone to record their voice. We help them with audio engineering to make it sound perfect.
Andrew: wait, they’re recording it on their phones.
Steve: many of them do. Yeah. Barrier to creating content.
Got so much lower because of that.
Andrew: Did we send you a microphone to do this interview?
Steve: Well, I have my own
Andrew: You have your own. Yeah. Why don’t you send people? Microphone’s only 50.
Steve: Oh, yeah, it’s actually because, uh, then you have to connect it to computer and then the process gets more complex.
Andrew: Oh, you want to make it so easy that they don’t even have a computer.
Steve: Exactly, exactly.
Andrew: Okay.
Steve: So many of the new content creators are mostly using their phones right. now.
Andrew: Wow, by the way, you can still connect the microphone to a phone. I carry a cable like that so that I can do that at times, but I get it. I get the, the simplicity of it. You still though, I said 50, you’re now at a hundred creators.
You still have a smaller group of people. Um, and, uh, uh, So I still think you can buy them a microphone connected, but I get your point. You want to make it simple. It seems to me like your vision is how do we make it so that anyone who’s ordinarily going to think about going on Instagram or WaterAid has an email list, but doesn’t, but doesn’t have this kind of engagement with their audience.
If they want to create content, how do we make it so easy? They could do that. Got it. All right. The story thing is kind of interesting to me. I like stories before falling asleep. I don’t know what it is. I always listen with a, with an air pod in my ear to something, and I thought that I could replace the apps with YouTube, but it’s really hard to find the right stories on YouTube to organize it well.
Right. And then of course, in the middle they’ll interrupt and say, This, uh, whatever is sponsored by curiosity stream. It’s like, ah, no, you’re ruining my, I almost was out don’t don’t wake me up with it. How did you find your first creators once you went past that first person who you told me about, what was your process for finding creators?
Steve: Let’s see down and inbound. Uh, we naturally started getting like people hearing about aura and reached out to us. We also were finding people on other popups, like YouTube and seeing who had a ton for content and work.
Andrew: Do you have any process for getting them to also promote or is it just good quality? We’ll put it on the platform. We’ll do the promotion for them.
Steve: Oh yeah. Right now we focus on good quality content. They get analytics on what’s working. We give them insights on, on what users are looking for. So really creating that loop in helping everyone succeed. That way, we focus a lot less on promotion at the moment, but as we grow our, our number of coaches even more, there’ll be a much bigger part of our company.
Andrew: you eventually raised 350,000 from angel investors. Right?
Steve: Yeah.
Andrew: What was that money for?
Steve: Yeah. Uh, what it was mostly for marketing and growth. We wanted to, we were growing, growing a hundred percent organically. We didn’t have any money to spend. So how can we create a more repeatable and predictable way to grow our company? Um, so that was really transformative because we weren’t able to find a few channels and that really led to us raising on a bigger VC round.
Andrew: So who were the angels?
Steve: Uh, so, um, Uh, we were just networking in finding angels that mostly in SF, uh, as well as let’s say, founders in the audio space who were really passionate about, um, mental health, uh, our biggest check was, uh, an a VC called 1517. They invested, uh, in. College dropouts and usually young founders, what very different perspectives.
So my, I didn’t drop out actually about my younger brother. They had dropped out of college to work with me. So we happened to buy their thesis.
Andrew: but were there any angels that we would know who invested?
Steve: Um, Anthony pump piano.
Andrew: Oh,
Steve: trying to remember who he was. I think our, uh, we met through a mutual connection, uh, and yeah, he was just, we just had an instant connection.
Andrew: You know, what I like about him is that he is a good promoter too. Is he someone who helped you guys get the word out?
Steve: Yeah, absolutely. Uh, he knew a lot about, uh, growth in general and, uh, we didn’t. So we, we learned a lot from, from him as well.
Andrew: Can you give me an idea of what he did? Is there something you can remember?
Steve: Uh, I’ll say he took a lot of meetings with us, uh, to really dig in and think of creative ideas and repeatable ideas to grow the business. So maybe less on, let’s say promoting directly, but more so kind of transferring his, his growth knowledge, which became the foundation initially for how he thought about growing our business.
Andrew: Who else? There’s also a Shiva Raja, Raja, rum, Ramin, fro a former Spotify person,
Steve: Yeah. Yeah. She vibed with us, uh, on our C ground. He was the VP of product there. Um, he led, he was a CTO at, we work in is now at Facebook, uh, leading their marketplace development.
Andrew: Okay. All right. So then you said to a producer, you started to go after, um, marketing channels. And one of the things that worked for you was Facebook. Another was Instagram. Was it you doing the ads at the time?
Steve: Yeah, we actually didn’t run any ads. Initially we were mostly working with influencers and figuring out how that worked, that worked great, uh, greatly initially. Um, we actually ended up kind of shutting it off over time and move more towards advertising. Um, Uh, initially it was such an amazing channel for us to leverage
Andrew: who are the Instagram influencers and how did they do it?
Steve: natural voice, uh, and, uh, really emphasizing our, our key value prop at the moment, uh, which was sleep. Um, So, yeah.
Andrew: So, what they would do is they would do what, uh, they would do a story about how they used aura to go to sleep and then told people that they should go and get it.
Steve: Oh, yeah, back then. There were, there were no stories, so it was a post, but yeah, similar.
Andrew: Okay. So post it out how they’re using aura to help them fall asleep.
Steve: Yeah, exactly.
Andrew: All right. And Facebook influencers too, is that right?
Steve: Oh, no, we didn’t use Facebook,
Andrew: Facebook, not at all. Anything else that worked for you in the beginning? This is, I want to go before you raise money and understand what work then.
Steve: Uh, it was really a mix of creating as much organic, uh, traffic as possible. And we mostly did that by just really focusing on a product. We were releasing a new update every day, every other day. Uh, and so when we did influencer, that would just amplify the organic growth as well. Um,
Andrew: Okay.
Steve: Yeah, those words are really, that’s two things.
We did product and influencers initially.
Andrew: Okay. All right. Let me talk about my second sponsor. And then I want to know why you decided to raise more money and then some of the issues that came up with it, the second sponsor is SEMrush. Do you guys do any content marketing in order to promote.
Steve: Uh, no,
Andrew: You don’t all right. Imagine if you decided this is a thing that you want to do, what you would look for is the first thing I would do is I would say who’s, who’s doing this really well. And then go look and see what articles are they writing that are not so good that you could improve. Who’s linking to them.
I would also start to see it for you because you’re looking for creators. I would start to put in the websites of creators that you admire and get a sense of like how much traffic they’ve got, what kind of, um, um, what kind of loyalty they have summer, she’ll do all that. They’ll help you see where other people rank they’ll help you find keywords that will help you rank better.
They’ll help you see where your traffic’s coming from, but you know that already, but more importantly to let you see where your, where your competitors traffic is coming from. That’s the tool that will help you grow. If anyone out there is doing marketing, whether it’s social media marketing, paid advertising, like pay-per-click, or even just content marketing.
SEMrush is a tool to use. You’ve heard me talk about it. You’ve heard other guests talk about it. If you want to go try them for free. For a limited time, they’re making it available@semrush.com slash Mixergy semrush.com/mixergy back. Let me take a look and see where you’re getting most. Well. It was of the traffic is still coming in, direct a teeny bit from Google, right?
Um, a little bit from Google you’re you’re definitely not getting that much traffic to your site. It seems to me, Steve, what you’re doing is mostly doing ad, uh, app store stuff, right?
Steve: That’s great. We do run paid advertising by most of our, majority of our traffic is organic. So.
Andrew: Wow. And let me see how much is, so let me see if I could figure it out. All right. 70,000 visits to your site in June of 2021, we’re still kind of closing up on July. All right. You could do so much more here. You should really go to semrush.com/mixergy and sign up, start to see your traffic. And then you know what you do think about the people you admire, who you don’t want to tell me right now.
Cause I’m going to ask you who they are. You’re not going to want to give them air. You’re not going to want to say that you’re thinking about them at all, but when you’re by yourself, you think about them, put them in here and see what they do. Put these, put these people in and start to study them and study yourself and see what you could do to improve.
You’re going to love it, everyone out there, including you. Go to SEM, rush.com/mixer, G S C M R U S h.com/mixergy. All right, what made you decide to go raise money? I’m guessing it’s advertising was working and you wanted to, to grow it, but you told me.
Steve: Yeah. Uh, and we knew that this is not a decision that should be taken lightly. I think for us, it, ultimately it came down to our vision for the ecosystem that we wanted to create a, how many coaches And therapists we wanted to, uh, how big of a need there was from consumers. Um, and, but what was really also important to us is that we wanted to create a mission driven company on not, let’s say.
Just a company. So it was important to us that we find the right investors, um, especially for this round where we were getting bigger VCs involved. Um, so yeah, it was not a light decision, but a decision we decide to make.
Andrew: And what was the money going to be used for?
Steve: Uh, so yeah, at the time we, it was just us two, maybe I think we had a contract engineer at the time, also growing the team, doubling down in marketing, I, and growing our, our supply of coaches.
Andrew: Okay. I saw you raised from cowboy ventures.
Steve: That’s correct.
Andrew: Really? How’d you connect with them?
Steve: Yeah. Actually the story goes that I reach Capitol and cowboy co-lead the investment, uh, reached capital initially found us because there were, uh, Uh, interviewing students are they’re, they’re a education focused fund. So they were interviewing students about what they do for their mental wellness, or I started to come out on.
So they reached out to us. We happened to be raising. So they invested in, uh, introduce us to cowboy that worked out well. Um, so.
Andrew: Wait, Steve. So they decided that they wanted to invest in mental health. They started interviewing students to understand what students were using. They came up with you and they said, all right, if they’re using this app already, let’s go find the founders and see if we can invest.
Steve: That’s correct. Yeah. And of course we went through a long diligence. Yeah.
Andrew: Wow. All right. That’s impressive. I, you told our producer, I don’t think I’m revealing anything here, but you said, look, we’re in San Francisco. It’s a culture of growth at all costs. And that was part of our motivation, the sense that everyone else is growing. Am I right?
Steve: Yeah. So that’s where I think being first slash second time founders, um, We S uh, straight to stray away from building a mission driven company, we start to kind of ruthlessly focus on growth. We even got through like top five in the app store at one point we’re growing like crazy, but at the same time, um, we weren’t as focused on the user.
Uh, and we also were burning a lot of money. Um, I wasn’t sure where I was going with that, but Yeah.
Andrew: Putting a lot of money on
Steve: that we
Andrew: Where did the money
Steve: on marketing. What’s
Andrew: Uh, marketing. You’re just saying let’s keep buying ads, bring people in. We get higher, we feel better. You also told a producer, look, I’m Korean. We don’t feel comfortable. Bragging. We are an environment where people are good at bragging. Right? You still live in San Francisco.
You do, right? So there’s this, like, there’s some, the bragging that happens here is not so in your face, it’s more like, yeah, by the way, here’s how much we raised you, by the way, here’s how our company is doing. Right. And it could even be about benefits. Yeah. We get six months offer for child leave and I’m going to go to Hawaiian and hang out.
Um, I don’t know that that’s exactly a thing. Do you, when you were spending money, what was most effective since you got to spend a lot of money on advertising, what worked
Steve: At the time, uh, I would say we started moving more towards Facebook and an Instagram advertising. I was very predictable for us, uh, and scale wall.
Andrew: and still effective to this day?
Steve: Yeah, we do have many other channels today, but, uh, it is very effective. Yeah. Hmm.
Andrew: What was the worst when you look back and go, I can’t believe we spent money on that.
Steve: Well, there were a lot of, let’s say gaming focused mobile, Uh networks. Uh, it wasn’t as, uh, it didn’t get us the right type of users.
Andrew: Uh okay. But they’re effective because people accept ads in games, even if they’re disruptive. Is that
Steve: That’s correct. Yeah.
Andrew: Okay. You don’t feel like you’re an entrepreneurial person. How does that, how does that come out? Like what, or do you feel it day to day? Do you feel like as you’re going through this, that you’re this isn’t for you to sit here and do a Mixergy interview and talk about growth and answer Andrew’s questions about revenue.
Steve: Yeah, actually. It’s an interesting relationship for me. Uh,
I do think of myself as entrepreneurial when I was in college. I literally co-founded three different nonprofits and one on campus, one with neighboring hospitals, one globally, and, uh, in Africa. Uh, and that’s. The first time when I realized I actually have a desire to create change through organization and team, I didn’t necessarily think of myself as a business person.
So pitching making money. That’s just not how I identify myself as, uh, and so when I was pitching investors, it was very. Um, I didn’t show who I truly was. It was a bit forceful. Um, I didn’t know how to communicate my vision. Uh, so we had a really, a hard time, uh, and that probably, um, just brought myself a lot of, let’s say anxiety and, um, And struggles, uh, which I, uh, was able to use, or I had to overcome and become a much stronger.
And now I have a much healthier perspective about what it means to become a non-smoker, uh, why fundraising is necessary, how to go about it the right way.
Andrew: What, what about hiring and managing? Do you ever feel comfortable there?
Steve: Yeah, I actually love working with the team. Uh, I’m I a very extroverted person. I, uh, also am passionate about being a good leader in helping others succeed. So yeah, I really enjoy that aspect.
Andrew: And the process of hiring, how is it for you? Is it largely networking? Because you’re so extroverted.
Steve: It’s been mostly, uh, organic actually, we, we post on LinkedIn and we get like hundreds of applications. Um, we’ve also used kind of like platforms, like, uh, alias and a hired.com since some of those heightened popups as well,
Andrew: All right, looking forward. Where do you see aura going? What do we, what are we taking this to?
Steve: really going back to?
this concept of an ecosystem, um,
Andrew: Yeah.
Steve: One, uh, as a consumer, there’s just so much barrier to even seeing a therapist in finding the right person, being able to afford them. So aura drastically reduces the barrier to start to take care of yourself. And then the user journey goes, Oh, you might meet the right coach.
What if you want to see them? Um, and so we want to have a full stock, a very integrated experience where you can get access to the world’s best content and world’s best coaching and services. All in one place. And also even from coaches in therapist side, we want to become there all in one place where they can make money from sharing content.
They can also find their own clients as well, and really shift their whole business online. Hi, I’ll say that’s our vision
Andrew: so you’re not thinking what other content can we add in? Or you are thinking that, but that’s not the future of just great content. It’s how do we do great coaching, great mental health, this app. And so if there’s something, one whose voice, I like to fall asleep too, but I want to hire them as a coach.
I should be able to hire them and work through my issue with them. And maybe I can imagine as they get big enough, maybe they bring other people on who teach them methodology. Also bring them into. And so this is the place that when I want to think about mental health, when I want to think about mental strength, confidence, ability to sleep, everything that goes along with that, the app is all in one solution.
Ooh, I like
Steve: one place.
Andrew: I like that. All right. Here’s what I’m learning from this number one. I like how I’m trying to understand what I could take away from your story. I like how you just kept experimenting and exploring in the beginning, there were a bunch of different, uh, ideas that you went through. And then when there was a German of an idea that worked and you saw that it was proven in other, in the marketplace and that your audience liked it.
You jumped on it. In this case, you saw people like these meditation apps, they were accepting the idea that they could sit down with an app and, and meditate. I love how you went to kind of a marketplace approach that was highly curated. I love how you’ve got your costs, uh, directly connected to your, uh, To your revenue though.
I would be a little concerned there, but I imagine that the price per listen is, is reasonable for you. I also think the distribution from the app store was huge. If you would have done all this on a web on the web, even if it would have worked on mobile devices, you would not have had everything that comes from being in the app store.
Like the promotion that comes with it, the paid, uh, uh, the paid model. I think as soon as I signed up for aura, there was an opera. I think, you know, there isn’t even a free version. Is there still a free version?
Steve: There is a limited free version. Yeah.
Andrew: It’s not even a seven day trial. There’s BR there’s a multi-day longer than seven day trial
Steve: Yeah. It’s a very, very limited product quite yet.
Andrew: I see it was. So when I went through the, the onboarding, I remember I was asked to give some information about what I was looking to do with aura, what my focus was. Do I like stories, et cetera. And then, um, I was told that I could sign up for a subscription and I have seven days to cancel. And if I don’t cancel, uh, and get charged and I think even do a nice thing of saying we’ll alert you before, just bang.
The Mike will alert you before you get paid. Don’t worry. Right? So those mechanics are built in from the app store. I like how you have all these different, uh, potential voices because of the marketplace. I wonder if, um, you would have benefited from the Skillshare approach where I see people who are, who are, um, Who are well-known on YouTube for getting I’m just thinking about what is the name?
Ali Abdul. Who’s really good at productivity app, uh, productivity, productivity, videos on YouTube. I see that he then promotes a Skillshare course, which then gets me to sign up to Skillshare and take his courses. And he gets, he promotes them as much as they promote him. I wonder if you’re thinking about that too.
Steve: Yeah, absolutely.
Andrew: All right. All right. I love this idea. I love his business. Congratulations. Steve feels good, huh?
Steve: you. It feels like we’re, we’re just getting started in way and not we’re learning a lot and making a lot of mistakes.
Andrew: All right. It’s aura health in the app store. And I want to thank to sponsors who made this interview happen the first, if you liked this idea and you want to come up with a model similar to it, or keep the model and come up with the business that you could apply it to go to hostgator.com/mixergy.
They’ll get you a great price, great service, and those skeletons. Hostgator.com/mixergy for the lowest price they have. And second, if you want to get an understanding of how to do content marketing and other marketing, right, there is no tool that’s been mentioned here, more favorably, more often than Sam rush.
You can go look at the transcripts. You can listen to future interviews and you can hear their name, come up over and over again. And I could let you try them for free right now at SEM rush.com/mixergy. And I’m grateful to them for sponsoring and to use you for doing this interview. Thank you.
Steve: Same here. Thanks for having me.
Andrew: You bet.
Bye bye everyone.