We just crossed 150,000 installs. We introduced revenue in April, and it's taking off (we optimized conversion rate to paid from .7% to over 5% (iOS) in less than six months). Our traction and milestones to date put us in the top 1.9% of all consumer apps, and we’re just getting started.
There are three segments of the mental health app space. One segment is “teletherapy” (think BetterHelp); these are apps that provide digital access to therapists. The second segment is “meditation and sleep” (think Calm); these are apps that provide instruction in meditation and tools for better sleep. These are both crowded segments with clear leaders already established.
Shmoody is part of an emerging third segment - “mental health toolkits” (aka self-guided apps). These are app-based digital tools that go beyond just meditation and sleep, for example, by helping users take mood-boosting actions, build healthy habits, and connect to community. This segment has no clear leader yet, and the players in the space are executing very poorly. Most of the apps are poorly designed, feel cold and clinical, and deliver a poor user experience. Shmoody is radically different. Shmoody is fun and welcoming and delivers a user experience that is warm, funny, and human. Shmoody provides science-backed tools, but in a way that is actually fun to use. So people actually pick up the tools and use them. And Shmoody connects users anonymously to other users dealing with the same issues, so they can support each other and hold each other accountable. And our users love us for this.
Pre-pandemic, there was already a global mental health crisis underway. The pandemic made the problem much worse, and it is being made worse still by the detrimental effects of social media on mental health. There are science-backed tools that are proven to help people, but most people don’t know about the tools, don’t use the tools, or don’t have the community support to make lasting change.
The younger generation (Gen Z) is the generation most impacted by the mental health crisis, with 58% of Gen Z reporting feeling symptoms of depression. On the positive side, Gen Z is helping to lead a broad societal shift toward reducing stigma around mental health issues. It is also the generation with the greatest demand for digital solutions, having grown up on TikTok. Gen Z has not yet reached the age when they have maximum purchasing power, but they soon will. In a decade, it will seem obvious in hindsight: there is a tremendous need for digital tools for mental health, especially delivered in a fun, easy-to-use way that doesn’t feel corporate or clinical.
Shmoody’s revenue model is known as the “freemium” model, which means the app is free, but users who wish to upgrade can pay for subscriptions for premium content. We strongly believe in always having a robust free offering of the app available to those who can’t afford a subscription. And as our data shows, a large free user base drives network effects. But many users can afford $14.99 a month or $59.99 a year, and we’ve now seen that 1.) there is real demand for premium features and content, and 2.) we are able to significantly optimize conversion rate to paid.
As a team, we've dramatically improved every key metric on which we've focused, and we’ve now applied laser focus to the conversion rate of free users to paid. We introduced the first version of the paywall for premium content in April. We first optimized conversion rate from 0.64% to 1.21%, and then restructured the paywall to more than double that number to 2.5%. It is worth noting our iOS conversions are now above 5%; this is important as we scale our user acquisition by targeting the highest converting segments. We’ve also created an attractive annual subscription offering, so the majority of the conversions are now for 10x the price of the initial paywall.
Nate and Mike, the co-founders of Shmoody, met in the world of addiction recovery (we both have long-term sobriety). We both have personal journeys in mental health including struggles with clinical depression and anxiety. We are subject matter experts in lived experience: having found tools that work for us, it is a personal mission of ours to bring these tools to others who are struggling. We have found that daily positive actions, connection to community, and being of service to others is a powerful pathway to real growth and real change. And we are passionate about building a company that will bring these tools to millions of people.
The Action Plans in Shmoody are based on the science of behavioral activation (BA). BA is a treatment used in cognitive behavioral therapy (CBT) and dialectical behavioral therapy (DBT), two of the most clinically well-established therapy modalities. Essentially, behavioral activation teaches us that our actions and behaviors change how we feel. In the recovery community, this principle is more simply stated as “move a muscle, change a thought.” By providing a framework to encourage mood-boosting actions, and build positive habits over time, behavioral activation can help people feel better in the short term and grow in the long term.
Shmoody also utilizes the well-established psychological benefits of peer support. When people connect to a community they feel less alone. They make real human connections that create a sense of belonging, and they get support and can be held accountable by others. And when people learn to support and be of service to others, they gain a powerful sense of meaning and self-esteem.
Shmoody users have taken 206,040 real-world positive actions using Shmoody. That's walks taken, family members called, therapy sessions booked, journal entries made, and thousands of other actions taken with Shmoody's help. Users who complete customized Action Plans self-report feeling an average 42% improvement in their mood. And we’re now seeing over 1,000 community posts a week as Shmoody users interact and support each other in the community section of the app. Every day we’re having an impact on the lives of our users, and the absolute most gratifying part of this journey is seeing this positive impact and hearing about it from our users.