By: Carol Vercellino, CEO & Co-Founder
Headspace is a digital health platform that teaches users how to meditate in only a few minutes a day. As of 2020, it has a post-money valuation in the range of $500M to $1B and 2 million paying subscribers.
As you know, creating a successful app doesn’t happen overnight – or on a small budget – but there are valuable lessons and takeaways startups like you can glean from Headspace to apply to your own app development project.
Carol: Hi, my name is Carol, and I’m the co-founder and CEO of Oak City Labs Software Development Agency, located right outside of Raleigh, NC. I also have with me Jay, our co-founder and CTO.
Today, we’re going to talk about the app, Headspace. What it’s all about, how it works, and why it’s one of the most popular apps in the health tech market today. And maybe what it costs to build an app like Headspace.
So, let’s dive in.
First, what is Headspace?
Headspace is one of the top meditation, sleep, and focus apps in the app store. We’re going to walk through how it works (to some extent).
So, when you download Headspace – and this is an important feature for most apps – you need to log in. And one of the features that I like that Headspace has is that it includes using your Apple ID to log in.
Jay, why might that be a good feature?
Jay: The sign-in with Apple ID is something Apple introduced fairly recently. It’s tied to your iCloud account, and you can use that to log in to an app. It’s a privacy-focused login, so the people on the other end get an email address they can contact you with, but it’s a smudged email that’s private that you can turn off later. It’s one of the ways you can centralize your login to make it easier to access your apps, but it also keeps your information private.
Carol: I like that better than signing in with a social network, like Facebook.
Okay, so as you walk through Headspace, we’re in what we call the onboarding screen. The onboarding section is the first two screens you see in an app that tells you what the app is and how it works.
Now, Jay, I know there are different opinions about onboarding screens. Some people think you should have them, and some people think you shouldn’t. What do you think?
Jay: It sort of depends on your app and what industry you’re in. Onboarding screens serve as a really good introduction for a user. It tells them what your app is all about.
If it’s a really niche utility app, maybe people who come to your app already know what it is. But, an app like this, where they eventually want to sell you services, they really want to make you feel like you’re welcomed. It will provide some value for you, and they can focus on the benefits that you, the new user, are going to get out of that.
So, on this screen in Headspace, they’re already talking to you about what you’re trying to get out of the app and how you can personalize it, and do some recommendations and stuff later based on your responses.
Carol: That’s on the tech side – where we talk about recommendations. It’s kinda like in Amazon where they say, ‘Other people like you may like things like this’.
Okay, let’s choose some options.
What’s kind of cool here is that the screens change, so you get different colors, which is nice. Let’s go with ‘staying focused’.
It tells you what you might expect from the app as well. Now, this is an important screen, particularly if you’re going to sell a subscription, which many people will do because sometimes, with the apps, you can’t make as much revenue as you’d like.
Now, Jay, with the subscriptions, what’s an important thing for somebody to think about, especially since this is through the app store?
Jay: So, with the app store, they’ve got a pretty tight set of rules about what needs to be on the screen. When you’re making the screen, you can go to the app store for examples and iterate on those examples and put your branding in.
You’re required to describe what the features are and your subscription options. You’ve also got to have the link to ‘Terms and Conditions’, and a link to restoring purchases if the user has a new phone or something like that. These features are what the app store will look at in the review process to make sure it ticks all those boxes with its guidelines and regulations.
Carol: One of the features I like here in Headspace – in the upper right-hand corner – is you can exit out of this section. I think that’s important because users don’t want to feel trapped. They want to feel like they have options. That’s my theory and personal preference. If I can’t exit out of something, I’m done. I don’t want to subscribe.
Jay: That’s what I would be looking for on these open screens too.
Carol: So, I’m going to exit out of this because I’m not ready to subscribe just yet. Okay, so now see the option to set up notifications. This is where you can control it. Why is this screen important, Jay?
Jay: Because the way iOS works, when an app asks for notifications, it’s going to pop up that system dialogue we’ve all seen a billion times. You, as a developer, get to put two lines of text in there, and that’s it.
It’s considered best practice to have a screen like this where you step people through notifications and the benefit of allowing notifications. Explain why it’s beneficial to the user to click the ‘Allow’ button. As a developer, you only get to ask this once. If the user says no, to enable it later, they have to go into settings and dig through a couple of layers of menus. The chances they’ll do that go way, way down.
Carol: So, we’re still in onboarding mode, which for me, even with an app like this, might be a little long, but we can explore now. And, we can still exit out of here.
Okay, so if I go to ‘begin’, now it wants to walk me through an exercise. What I like about Headspace are the animations. I’m sure that’s super easy on the development side, Jay?
Jay: Yeah, as long as you have a big team and a lot of time, and budget, you can have animations.
Carol: Let’s talk about the use of haptics as you’re breathing in and breathing out. I can feel it on my phone, which is nice. Is that something developers have to think about?
Jay: Absolutely, you’re integrating that in with animations and graphics. It’s a next-level type of integration.
Carol: So, I exited from there, and on this screen, they want to know how I’m feeling. I’m going to say ‘relaxed’. And we’re still in this beginning stage. I’m going to say ‘maybe later’ because I’m ready to get to the app. The first thing that I notice on the app is that this looks like a native app. Would that be right, Jay?
Jay: As far as I can tell, it looks like a native app. The interface feels native, but it’s also heavily customized and branded. This is a tier 1 app for sure.
Carol: There’s heavy use of graphics and animations. So, when you think about video and animations, there’s probably a lot of costs behind that as well. Wouldn’t you say?
Jay: I would think so. Not only are you looking at development efforts to do the fancy animation and integrate all the video, but you’ve got to have somebody – like a graphic artist or animator – to do the actual graphical elements you’re integrating. And also, there’s a lot of really professional videos in this app, so there are probably teams doing that.
Carol: That’s a good point. A developer can build the app all day long, but if you’ve got a constant heavy app like Headspace, there will be a lot of marketing, and there’s going to be a ton of content creation. And then you have to think about how does that content makes it into the app? So, your developer is not necessarily going to sit down and create content and put the content in there. They may create an interface for other people to put that content in there. So, the administration portion is sometimes a component of development that some people don’t think about.
On this screen, we’ve got a play button with a lock on it. So, if I tap on the button, it will tell me I need to start a trial. If I start a trial, do I have to put in a credit card? How do payments work for this?
Jay: With all iOS apps, Apple has you go through the app store, so this will use the credit card that’s on file with the app store. I don’t think you could have downloaded the app to start with without that already on file. With the free trial, again, that’s through the app store with the normal subscription process. You can manage that on your iOS device. What’s the free trial for this one? A week? Yeah.
The developer can pick that. A lot of trials are one week long. Once you sign up, it’s going to start automatically. It’s on you as the user to unsubscribe after the trial. If you can get folks to agree to the trial, it’s a good chance they’re going to at least do the first month or first year, and you can convert that to an actual sale.
Carol: If you are thinking about building an app, one thing to consider is the subscription fee. Headspace is $70 annually. How much of that subscription fee do you get to take home, Jay?
Jay: In general, Apple takes a 30% cut. There are programs for small businesses where if you have revenue through the app store of less than one million a year, you can cut that down to 15 percent. For obviously a big tier-one app, they’re going to be paying 30 percent.
Carol: Is there anything else you want to point out with Headspace? For example, when I went to my profile, there’s a ‘share with a buddy’ link. If you can get other people on board, that’s more users for your app, and you can get a network effect.
Jay: Yeah, a little bit of a viral spread of your app.
Carol: So, Jay, how much do you think it costs to develop an app like Headspace?
Jay: Carol, I’m going to say a lot! Like we talked about, this is a complex app with a lot of machinery behind it in terms of graphics, animations, and video teams. Just given that, you’re talking millions of dollars.
Carol: And we googled before we did this video that Headspace has over 400 employees, so you think about the costs of the employees and the marketing of the content behind it. This is not a small app. This is certainly something to keep in mind if you want to create an app like Headspace. There’s a whole company behind Headspace that allows you to do all these animations and personalizations for the end-user.
So, we talked about onboarding screens, revenue models, and how that all works behind the app with the administration and recommendation engines.
Jay: I think you hit on everything. For an app like this, it’s also all the other things that go along with it, the development cost is one thing, but there’s the marketing and content creation. With an end-user app like this, there’s so much marketing and advertising that goes into it.
Carol: Exactly. Thanks for watching if you made it this far. If you liked this video, don’t forget to subscribe to our channel to not miss out on any other videos. And please feel free to leave us some comments and give us some feedback.
**The above interview has been transcribed for clarity and brevity.**
Want to learn more about streamlining your users’ experience? Check out this post to learn how to make a great first impression in your app.