What’s up, everybody? This is Courtland Allen from IndieHackers.com and you’re listening to the Indie Hackers Podcast. On this show I talk to the founders of profitable internet companies and I try to get a sense of how they got to where they are today, how do they make decisions, both in their personal lives and at their businesses, and what exactly makes their businesses tick.
Today I’m talking to Vicky Hsu. She’s the founder of a company called Habitica. Vicky, thanks so much for coming on the show, and it’s good to have you here.
Thanks for having me, Courtland. I’m excited to be here.
And I’m excited to have you. I think Habitica is right at the intersection of a lot of topics that I am personally interested in. It’s a business, and I obviously love businesses. It’s a game, and I have a long history of spending countless hours playing games. It’s also very focused around the topic of human psychology and how we form habits, so it’s a lot of stuff that I like.
But before we jump into all that, let’s talk about you. I love your Twitter bio. It says, “Vicky Hsu, attorney, writer, former trucker, CEO of Habitica.” So why don’t you tell listeners a little bit more about who you are?
All right. I am Vicky Hsu, and I will commend you, Courtland, for pronouncing my name correctly, even though every person with the last name H-s-u seems to pronounce it differently.
So, definitely an attorney, writer. I had gone to law school, graduated from law school in the middle of the recession, so 2008. People were getting their job offers revoked, because in law school generally you interview for a firm, and then have that set up and basically coast your last semester. That did not happen. Firms were going out of business. When I went out for interviews, it was like, me, little brand-new minted law school graduate; and the guy from Columbia Law who’d been on Wall Street for 10 years and had just been let go, and trying to compete with me for this little one-lawyer firm. So it was a rough time as an attorney.
Then I got connected with a trucking company who was having some legal issues, needed somebody to kind of just monitor the back office operations. I was looking at that opportunity compared to some of the offers I was getting. People were like, “Oh, you know, there’s a lot of competition. We’d like to try you out for free for three months and then, maybe after that we’ll start you at ten dollars an hour.” And I’m like, “This trucking company actually makes money. It’s an interesting opportunity. It’s a nice intersection of environmental and constitutional law and employment issues. And I would get to see the back side of a working company that made four to five million a year. Not a bad gig.”
So that’s where the trucker part of my Twitter bio comes into play, as I worked for a little family-owned trucking company out in Long Beach for a couple of years. Really learned the ins and outs of managing a cash flow positive business, and a host of other skill sets as well.
Did you ever get to drive one of the trucks?
I did not. You actually need a special license for that, and I did consider actually going out for a commercial license. The timing didn’t work out. But I have absolutely climbed in and out of the cab to check the mileage, lifted up the hood to check out what exactly has been done to it, and walked around and did the safety inspections with the CHP officers.
My coworkers would always joke that the CHP were really happy to work with me whenever they came in, probably because I was a young woman in a space where there really are not a lot of young women.
I have a confession to make. I downloaded Habitica and started using it a few months back. Then I purposely stopped using it and deleted it from my phone, because I realized that if I got too into it, then all I would want to do is talk to you about the features and the details of the game. And nobody listening would have any idea what we’re talking about.
So I stopped and now I’m in the same position as many audience members, although I’m sure among people listening, there are also many Habitica players. So let me ask you, what is Habitica exactly? How does it work, and why do people use it?
Habitica is a gamified productivity app. What that means is we basically take your list of habits you want to work on, your list of daily commitments, and your to-do list, and make it all into a checklist that earns you experience points and gold coins that you can use to level up an avatar, and fight bosses with your friends.
In a sense it is an advanced version of a sticker chart that we all probably experienced as kids, in that you’re just checking things off and moving towards a particular goal. But we really took the time to try and model it on World of Warcraft and MMORPG mechanics at a really basic level. And Courtland, I’m happy to talk to you at any time about the features if you want to get into the really nitty-gritty.
Basically the line we were trying to walk is to be as engaging as possible for somebody with just a really rudimentary understanding of games, and also not to be so engaging that all your time would get sucked down into this rabbit hole of optimizing your little video game character.
Right. So who’s using this? Is it primarily gamers, or is it business people trying to get more work done, or people doing chores at their homes?
You know what? It runs the entire spectrum. Our user base is probably 60% 18-44, but of course that is actually a really big range. 30% of those are in the 18-24 range, so college or just after college. Then young adults 24-44 are sort of getting into jobs, learning to ‘adult’ is the phrase I use, and just trying to figure themselves out. Definitely work and school is a large use case, because our user numbers drop on the weekends. Really kind of drastically. It’s kind of funny.
We also have everyone from hard-core accountants, lawyers, medical students, people trying to work on physical habits, people trying to achieve goals like writing novels. I think we had one letter from a family that was using it with their grandmother. They had three generations of people on Habitica, all working together and fighting monsters.
That was pretty cool.
I don’t know what I would have had to do to get my grandmother on Habitica. She was born in, I think, 1912. [Laughter.] That would have been a stretch.
Just for some context, can you explain a little bit about what the business model is behind Habitica? How it makes money, and then maybe something about how many customers you have, and what kind of revenue you generate?
Habitica had actually had a kind of evolving business model. When we started out it was very basic, micro-transactions, in-app purchases. A couple of bucks would give you some in-game currency that you could spend. Then we realized very quickly that to make this sustainable, and grow it to a business that could support full-time employees, we would have to try moving to a subscription model, basically. That was sort of the kicker. That’s what pushed us into being able to bring on three people full-time at a very, very low salary. I mean, they call it Ramen profitable for a reason, because you really can’t afford much more than Ramen.
That expanded what was available to us very quickly. Currently we are still on the subscription model. That brings in probably mid to high figures annually. It’s comfortably sustaining a handful or maybe two handfuls of employees and contractors. Our cash flow: positive, generally. In part because we’re very conservative about how we spend money. We are a remote company, so we definitely take advantage of not having to pay for things like office space, and figuring out other ways to deploy capital in a way that can really leverage our particular interesting skill sets.
I mentioned a few of my favorite things about Habitica. I like that’s a business, a game, and a psychology application. What’s your favorite part of Habitica, and what do you like most about being the CEO?
You’ve got to choose. No cop-outs.
[Laughter.] The really amazing thing about Habitica, and working on Habitica, has been the people involved. Everyone who works on Habitica right now, that gets paid to work on Habitica, has come out of the community. So they were volunteering their efforts for a really long time before we even had the money to dedicate some hours to what we needed to get done as a business. That means that the people who work on Habitica are – I’m beholden to them. I consider myself a servant CEO, in that my job is to make sure that they can continue doing this work for as long as possible. In a way, that makes sense for both them and the larger Habitica community. Really, one of the joys also of having Habitica be a consumer-facing product is that we get exposed to cool people like yourself. The big surprise of a couple years ago was that we have a lot of science fiction and fantasy writers. Like, award-winning published authors, on our platform, who are using it to make work count, and submit their projects on time.
We can look at the Nebula Awards, or the Hugo Awards, and be like, “Oh, yeah, three people on this list who won are Habitica users, or are known to be Habitica users.” So that’s been really impressive and amazing.
Well, we’ve got a ton of stuff to cover. I want to ask you a lot of questions about Habitica, and about the community behind it. But first let’s talk about you for a bit, so we can learn about what the path is like to go from Vicky Hsu, attorney-in-training, to Vicky Hsu, CEO of Habitica. Was the first time that you ever got interested in entrepreneurship, and perhaps being a founder, when you worked at this trucking company? Or were you interested in it before that?
I think I’d always been aware of that as a path. When I mentioned earlier that -- I’d never thought I would be heading up a tech startup. I’d always sort of had this in the back of my head, “I wonder if it’s possible to generate an actual business selling stuff on Etsy, or doing a stylist service.” For a while I had been doing a little bit of work doing production design on independent films. Just sort of feeling out what was out there in terms of what people could make a living doing.
One of the reasons I went to law school is because I come from a conservative Asian family, which I’m sure is a good chunk of your listeners, and it was the ultimatum of, “You can do medicine or law or engineering.” Was really the three options. I had decided law was probably the easiest and best match for my skill set. And I liked the idea that you could potentially build a business, which is what a law firm is, essentially. So I thought I would try that out. But it was all sort of like this general awareness of the business world, the corporate world. Intellectual property was a strong interest. It had gotten, I think, clear enough that something to do with business was probably going to be the best place for me. Even in corporate law, my professor had flagged that as, “You are very money oriented.” He meant that kindly, and not in a bad way.
But it was like, “Is this one of those things where, like, that was driving me a lot more than, for example, environmental law was driving me?’
I think being money oriented makes a lot of sense. One of the big things behind Indie Hackers itself is, I like to talk to people about how much money they’re making. It’s become kind of this unspeakable thing. You can’t talk about wanting to make money. But money is essentially fungible. You can exchange money for anything. You could make a bunch of money and donate it all to charity. So it’s not an inherently bad thing to want to make money.
I’m curious: where did your obsession with business come about? Was it primarily that you wanted to make a lot of money? Were there certain role models that you had, things that you wanted to do, or was it innate in you that you saw the world and thought, “Business is for me and I’m going to be a lawyer, because at least I can start my own law firm.”?
You know what, I don’t know that it was necessarily like, “I want to make a lot of money,” but what I always come back to is the idea that, you know, money will not make you happy, but lack of money will definitely make you unhappy. Right? My family particularly grew up very poor. For example, I was surprisingly old before I realized that my mother had probably grown up without potable water. She had this anxiety reaction if we pulled dishes out of the dish rack and they weren’t completely dry yet. It’s this really overblown reaction, and I must have been 27 before I finally figured that out, that that was not a normal thing.
So I think that was probably a really big influence, looking back on it, in that you always have to figure out how you’re going to eat. You have to be able to take care of yourself before you can even start considering taking care of your family and everyone around you. That is something that’s coming up a lot now in a lot of the self-care discussions that are going on online. You have to be able to take care of yourself emotionally and physically. I think money is a critical part of that. And just understanding even just personal finances is a really big part of that.
You mentioned that you thought being a lawyer, in addition to letting you start your own law firm, also matched up with your personal skills. When I was a kid, I actually had a stint doing mock trial in high school. I thought I would be a great lawyer. I’m curious, what skills did you have that really made law intriguing to you? What kind of person makes a good lawyer?
The funny thing is, I was never a particularly great debater. I mean, I could if pushed to it, but you really have to push me. I am, and have always been, a more solid writer as a communicator, than a speaker. There are plenty more charismatic CEOs out there who can do podcasts and YouTube videos, and really garner a following. But I really do best when behind a screen, articulating my thoughts and being able to clean it up as I go.
One of the things that I think people don’t realize about lawyers, if they’re watching “Law and Order” or any other kind of legal drama, is that lawyers are by and large introverts. They get an office that they can shut the door and just do their work. There are very few people who are courtroom dramatists and really like the pontificating and the exposition, the speech-making part of it. Even the litigators who are the people who handle lawsuits when people are being sued or are suing others, frequently they are very quiet people. They just really like being able to organize their arguments, because a courtroom is a very controlled environment. Because the rules are so strict and procedures are very defined, it can be a very comfortable place if you don’t like to be ruffled too often.
That’s fascinating. I went into law for the exact opposite reason. I was like, “I love debating. I should be a lawyer.” But I got out of it pretty quickly, before high school ended.
Let me ask about this trucking business. You eventually stopped being an attorney and decided that the trucking world was for you. One of the things you mentioned earlier was that you learned about the ins and outs of managing a cash flow positive business. How big was this trucking business, and what are the ins and outs that you learned?
The trucking business was roughly four to five million. When I joined it was the recession, so it had dipped quite a bit during that time. There were probably 12 staff and another 50 to 70 independent contractors who were the drivers. That was one of the big legal challenges facing the industry at the time, is basically the Clean Air Act mandated that a lot of the really old, kind of junky trucks had to be taken off the road because they were not meeting Clean Air emission standards. That forced the industry to start buying new trucks, which all cost $100,000, $200,000 apiece.
So what used to be a really easy, almost the equivalent of driving for Uber, kind of a business, like, spend $10,000, pick up an old truck, and then be able to make a living, turned into, “I cannot afford the equipment I need to do my own business.”
So one of the challenges for a long time in that space was, you were retaining drivers who were technically independent, but needed the business to supply the trucks. So the business would buy the trucks, rent them out to the drivers, and the argument there was, “Are drivers then employees?” because they’re dependent on somebody else to provide the equipment they need to do their jobs.
That was one of the things that drew me to the business, but because the drivers were iffy on becoming employees, they were like, “Well, we kind of like our lifestyle. We like being able to start and stop.” And on the business side we were like, “Well, we just shelled out a lot of money to provide equipment that’s now just sitting empty,” because the driver isn’t coming in because he had some other personal reasons. I think a couple of years there was the Super Bowl. Or not the Super Bowl, the World Cup was going on and nobody wanted to drive during the World Cup until their country had lost, their country of origin had lost.
Because everybody was watching the game, and we were like, “Well, these jobs are coming in.” They have to be moved. But nobody’s around to move them. That’s one of those things where, “Maybe I should go get a license,” so I could jump in the truck and go help out. But it was dealing with those personalities. And of course there was the aspect of being female in a largely male business, communicating with contractors whose first language was not English. And then also coming into a legacy business of people who had been there 10, 15, 20 years, and had maybe gotten really complacent about stuff. There was a woman who sat behind me who would sleep half the day.
And just get away with it?
Yeah. That was the point where, when she got a raise and I didn’t get a raise, that was the point where, “Maybe this isn’t my life.”
You just need to take more naps, Vicky.
Clearly. And one of the reasons she was there and could get away with it was, apparently, when the business had first started out 20 years ago, she was super helpful. She came and pinch-hit, and the owners were grateful. So they were willing to overlook that.
How did you transition from this trucking business into whatever came next?
The funny thing about that is, this surprised me but doesn’t surprise anybody else, is that I got bored.
When you have a family-run lifestyle-y business, there’s not a lot of room for improvement, in part because you’re fighting a lot of inertia, organizationally. It’s things like not being able to fire the person who’s sleeping at her desk. Or it’s fighting the shareholder who really wants more control but doesn’t have the capital to take control, and also doesn’t have the knowledge to strategize properly in the industry because he doesn’t have the relationships.
There’s just a lot of things where I could make changes but the changes would not be in my favor in the long term, because it was just going against so much that was set. As a note for the people who are building lifestyle businesses, there’s absolutely nothing wrong with that. The trucking company owners had basically built a business across 20 years and for the last ten years, all they had to do was come in for three to four hours every Friday, review the books, and take somebody out to lunch. That’s all they had to do, because the company ran itself.
This kind of reminds me of the movie. I don’t know if you’ve seen it. I think it’s called The Founder, and it’s about Ray Kroc, how he kind of stumbled upon the McDonald brothers, who were running their hamburger joint, and his ambition was just so much higher than theirs. His vision – he was just driven to turn it into this gigantic national phenomenon. And they just wanted to keep their small store. The movie’s largely about the tensions between the two parties, and kind of the history of McDonald’s. I recommend anyone listening to watch it if you haven’t. It’s fascinating.
It sounds like you were Ray Kroc, and you were tired of the slow, family, unambitious, business lifestyle.
I think it wasn’t so much that I was tired of the lifestyle, as that I knew I could make a difference, and that was not the location to make a difference in.
Let’s talk about Habitica, because clearly you are making a difference with this company. How did you first hear about Habitica, and how did you initially get involved?
One of the things that happened when I was bored at the trucking company is that I was starting to rebuild or start feeling out the possibility of just launching my own firm, just as a solo attorney. Of course I was based in Los Angeles. I had always had an interest in the entertainment, the film business side. I was starting to network a lot and participate in the local bar associations.
One of the things that happened is that a friend at the Beverly Hills Bar Association was speaking at Comic-Con, and mentioned that he had a couple of free passes if people wanted to go, and he’d sort of run out of people to give them to. Because ordinarily he’d set his speakers up with them. And I basically raised my hand and said, “Yeah, I’ll go. I’ll go attend your session and also just network at Comic-Con.” I went to Comic-Con, wandered around chatting with people, and one of the things the badge was, was a professional badge because he was speaking as a professional, as an attorney.
I met a couple of people who were interested, talked a little bit about some of the legal challenges they were facing, and then of course the people I had interesting conversations with, I tried to keep in touch. You know, LinkedIn or Twitter. I think it was Spike Trotman who runs Iron Circus Comics, and a couple other things, who mentioned on Twitter that she was really into this thing called – it was HabitRPG back then. So I was like, “Well, I enjoy productivity tools. There’s always this shiny promise that comes along when you try out a new tool. I’ve got nothing to lose. Let’s give it a shot.” I tried it out, really enjoyed it.
HabitRPG back then was entirely volunteer-driven. It had done a small Kickstarter campaign but was largely open-source, volunteer developers, volunteer community moderators, volunteer pixel artists and everything. Just poking around on the website, there was a call for “I need some legal advice. Please get in touch if you are a lawyer.”
So I got in touch and talked to Tyler Renelle, who was the sole developer and founder at the time, and hit it off pretty well, and stayed in touch. It was really little things like pointing out areas where things didn’t quite add up.
For a long time we had a copyright notice at the bottom of your task page in the browser version, which made no sense, because we weren’t going to claim copyright on how you worded your tasks, right? So that didn’t need to be there. And flagging really little things like that, and also starting to point out areas where stuff could be improved, was I think really what got me on people’s radars and really entrenched in the community.
At the same time I was running around with a couple of my college buddies who had an idea to do a video game. We put together a small team of people who had the experience and other skill sets that were useful, and were trying to do a top-down third person naval shooter for Xbox. We’d gotten as far as naming it Strawberry Armada, and got a prototype working, and then it just fizzled out. One of the things I learned from that, is that sometimes bridging the intent and the actual execution – there’s a big gap, there, right? It’s tough to be like, “I want to do a new thing,” but also go through the actions required to make that new thing a reality.
What do you think are some of the biggest challenges of actually getting over that hurdle? Because I think a lot of entrepreneurs are in that situation, where they want to do something but there’s not enough time, or there’s not enough money, or they’re not sure what the next steps are, or they get bogged down and it takes longer to code than they thought it would, et cetera.
That is a tough problem that everyone’s trying to crack. In this particular case, it was a lack of energy availability as well as just a lack of familiarity with the amount of steps involved in getting a product to market. You can have the idea in your head that you want to put out a video game, but until you draw it out and map out what the interactions look like, what the screens look like, what the characters look like, so on and so forth, your developer can’t make that up for you. And half the time, your developer won’t even want to do your job for you, because that’s a completely fair thing to decide.
In this particular case, it was just – I think one team member stopped pulling their weight, then everyone else sort of started to, like, “Well, hold on. I can’t move forward but I also don’t want to make any decisions for the rest of the team.” So everyone ended up in a holding pattern, and eventually it just died a natural death.
You somehow found yourself in this position where you’ve gone from trucking to being legal counsel for a productivity-based video game, and also working with a group of friends to build a video game. What’s up with you and games? Are you just a big gamer, or was this complete coincidence?
The funny thing is, I was not a big gamer, but that was not by choice. We had grown up with a very old, bootleg Nintendo console back in the day, and were restricted from playing too much, spending too much time on it. When I say ‘we,’ it’s me and my sister. My sister is now a neuroscientist who works in sleep and circadian rhythms, so actually, surprisingly, still sort of related to what we do at Habitica.
I was not allowed to play video games as a child, but was always aware that this was a thing that other people did. I do have that addictive personality. If you sit me down in front of a game, there’s a very good chance that I’ll end up getting sucked into it. In college I found a really small browser-based MMORPG called Kingdom of Loathing. Kingdom of Loathing is so small that I think Habitica is larger than it is, now, or Habitica now is larger than Kingdom of Loathing was even at its peak. But it was my first real MMORPG experience.
The reason I had opted to play this game was that they limited you to 40 turns, 40 click through turns. It was a really amusing way to pass, probably, 20 minutes, half an hour. The original intent was for Kingdom of Loathing to be a game that you could play on your coffee breaks. I clicked through it, really enjoyed it. It had a bunch of goofy puns, and stick figure artwork, but it also had a community of gamers, and I really enjoyed the social aspect. And I still keep up with a couple of people from that space.
That was smart of you to pick a game that couldn’t take over your life, because I picked World of Warcraft.
I would not have graduated college if I hadn’t found some way to pull myself away from that game.
That was the thing, I knew if I had started getting into it, I probably would not have gotten out. [Laughter.] There were absolutely people on my floor who, if they weren’t playing World of Warcraft, it was DOTA, and then afterwards League of Legends for a while. So I definitely saw it taking time away from other people. I think if e-sports had been a larger thing back then, it would have been less disturbing to me. But back then, when I was in college, it was like, “E-sports is a thing, but for crazy Counter-Strike people in South Korea.” So it didn’t seem like a viable way to spend a whole lot of your time.
Let’s talk about how you eventually became the CEO of Habitica. How do you go from being one of the contributing community members to being the person at the top who’s running the company and handling all the business tasks?
Nobody else wanted the job.
[Laughter.] To be perfectly clear, I think one of the things people don’t realize, as CEO you are largely responsible for everybody. You’re responsible for making the decisions and taking the fall for decisions that are poorly decided. I mentioned earlier, I approach my job as a servant CEO: “What can I do to enable everybody else to do their jobs well?” I think at some point, my cofounders had realized that they did not want to be in that position. They did not have the skill sets to be in that position, or did not have the personality. I think because I had years, at this point, of thinking about business and thinking about strategy, and thinking about our community, that I was the natural fit to step into that spot.
Did they reach out to you, or did you ask? Or did it just come together?
It sort of came together. I think there was a time when people realized that they didn’t want to do the job, and that I was still around and spending time and starting to take over a lot of that responsibility anyway. So the shift was more for general optics than it was for any actual responsibility change.
I guess I will say, the main responsibility change is that I became the main person responsible for determining whether or not we were going to raise funds through the traditional VC startup round, or try and figure out something else.
How did that go down?
It went down really interestingly. Because we have such a unique product and such a strong community, we’re very protective of it. So we didn’t just want to go straight-up, “Hey, we’re going to take VC money for whatever. Give us money and we’ll bring you on board.” It was, “Is this person the right fit? Are these people the people to help us develop Habitica in a way that makes sense for everybody?” Definitely, we turned down a couple of offers.
Our two investors right now are people who are, first and foremost, really good people. I would want to invite these people to a backyard barbecue and hang with them. Instead of – it’s not just because I took their money. They have operational experience, or they have a skill set that I don’t have, and PR relationships that I don’t have. We’re been very fortunate in terms of being able to work with Marker (ph) Capital and Backstage Capital as our two main investors.
Without mentioning any names, we did have a surprising interaction with a couple of really top-tier people who dismissed us because they didn’t expect our company to be making a product that wasn’t just for girls. Basically, they were surprised when it turned out that Habitica’s gender breakdown is roughly 50/50. At worst, it’s been 60% male, 40% female. That was one of the interviews where we came out going, “We make a video game.”
“Why did they look at this and decide that it was for girls?”
That didn’t make sense.
That’s a pretty bad sign of their general competence level around that area anyway.
Right. And this was absolutely a firm that had spent a lot of time trying to talk about their strength and female founders and getting female founders together and developing a community. And that was just not the experience that we had going into this interview.
And then there was of course another firm, also very well regarded, who tried to lowball us on valuation. Not just lowball us, but drastically lowball us. I was starting to do research on the side, talking to their existing portfolio companies, and the existing portfolio companies were surprised at what the valuation they offered was. Not even in the same ballpark.
So once you start getting experiences like that, you sort of start thinking that maybe VC money isn’t quite the right way to go. We also always knew that there was stuff that we could be doing on our end to make the position stronger. The valuable thing for us has been that, because we’ve been cash flow positive, there has been a lot of freedom not to take VC money in order to survive. That’s, I think, something that distinguishes us from a lot of other companies.
It’s funny to hear about this VC firm that talked about being great with female founders, and then it turned out that they just assumed that anything you were making had to only be for girls. It actually reminds me of this thing I read a while ago about marketing, and how a lot of companies will handle their marketing by just picking what they’re really bad at, and then saying the exact opposite. So an airline commercial will show people super comfortable and relaxed and stretching out in their seats, when reality is everybody hates airline seats and there’s no room to stretch. Maybe that’s what this VC firm is doing by telling you that they were good with female founders.
Maybe they just knew they were horrible. Anyway, let’s talk a little bit more about the history of HabitRPG, as it was called at the time, and how that led to the point where you’re now the CEO and you’re making decisions about fundraising. How did it get started? How did HabitRPG get its very first users, and how did it grow?
HabitRPG originally started as, I think, Tyler’s personal project. It was put on GitHub just because he was a big proponent, and I’m sure he still is a big proponent of open-source software. What happened was, I think Reddit found it. Between Reddit found it and a Lifehacker feature, the costs of maintaining it rapidly ballooned past what he could support on his own. And the suggestion back then in, I think, late 2012, early 2013, was, “Gosh, put it on Kickstarter,” which was a brand-new thing. So he put it on Kickstarter. It raised, I think, more than $40,000 very quickly, with a lot of fanfare and a lot of early support. That was really what kicked it off.
I found HabitRPG a couple months after that, and then several months after that, we had managed the conversion from in-app purchases to a subscriber-based model, which enabled us to start working on it full time.
Currently where we’re at is, we had sort of grown out the subscription basis and switched a couple years ago to realizing that a lot of people really wanted a mobile experience of Habitica. We had known that going in, starting even from the Kickstarter campaign, that that was going to be a thing that we would have to offer eventually. But the big surprise is, once we spent some time working on the experience on mobile side, developing a mated app for it and developing a cohesive design for it, that that side of the user base really just grew. Suddenly, two thirds of our user base is on mobile. And I think that’s still the case today. At least 20, 30% of our users just moved over to mobile. That’s the way that they fit Habitica into their lives. We generally get at least 2,000 new users a day on mobile alone.
Oh, wow. That’s a ton.
Absolutely. A lot of it is word of mouth. A lot of it is people searching for being able to turn their lives into a game. We actually do very, very little marketing.
Let’s talk about some of the strategic and tactical things that you’ve done to grow Habitica and your company. I think one of the most unique things you’ve got going on is your community, because so many people in the community are doing different things. You’ve got people who, at least early on, were contributing artwork creations to the game, who were writing documentation, who were writing guides. You yourself were part of the community, you were helping with legal aspects of the business. I’m curious how you think about the community part of Habitica, and how does that even work? Most businesses do not have anything that’s even remotely resembling that. It seems to be such a super power for Habitica, because it means that you can get a lot more done with just the employees that you have.
The thing about community is that it is very relationship based. I knew, as a non-technical founder, what I did have to offer was the ability to listen to users and to be able to reach out and say “Hello” and have that kind of personal contact. That has really driven, I think, a large part of our relationships, in that our hard-core users know that there are people and faces behind the app.
We know a lot of our early users by name. We know pretty much all of our trolls by name. Usually when there’s somebody new who’s added to the team, there’s this little induction where eventually they hear about somebody that they haven’t heard about before, and we’ll be able to explain to them exactly why this troll is no longer around, and the trials and tribulations that were involved in getting them off of Habitica.
And on the flip side, there are users who we get excited about, on the contributor side or even just on the cheerleader side. We know exactly who our top supporters are, even if they’re not giant social media followings. It’s just the people who happily will share every little update, every pet they’ve hatched, every time they level up. We’re aware of all those interactions. I think that’s been the strongest piece of our community, that we interface so much. We don’t wall ourselves off behind a corporate face.
I think people kind of assume that businesses and communities are run by robots who don’t actually care what’s going on, aren’t aware of it, because so many seem to be.
Oh, absolutely. And we definitely get that interaction, too. People come in, basically swinging their arms and swearing, and then once we respond back with a very human response they’re like, “Oh, sorry. I didn’t realize.”
I get the same thing on the Indie Hackers forum.
To be honest, there are people behind the screens at larger companies, too, but we do try to infuse our communications with a little bit more personality to try and prevent that.
How exactly does a community work from a technical perspective? How does a user become part of the Habitica community? Because I’m sure most people who start playing aren’t playing for the game itself. They’re playing to be more productive, they’re playing to form useful habits. How do they go from doing that to being a contributor?
Yeah. Well, the contributors are really just such a small slice of the user population, but they are your most dedicated users. They’re your cheerleaders. They will tell you when they think you’ve screwed up and sometimes be absolutely correct.
Usually, we actually have a page on the wiki that tells you what we’re looking for, how you can help that we tend to direct people to. Obviously, developers are always appreciated, but community moderators are a surprisingly difficult skillset to locate. It is super rare to find somebody who has a ability to de-escalate conflicts or redirect or calm people down or even just tell somebody that they’re out of line without having that person be insulted.
How do you identify these people? I’m curious about the things that you’ve learned, because like you said, it’s pretty hard to actually find the right people, it’s hard to manage all this stuff, it’s hard just to do things like give developers a chunk of code that they can work on and review it in a way that’s friendly to them.
So what are some of the things that you’ve learned in setting up this framework and finding the right people and sort of managing them as they contribute to your community?
You know what? I rely a lot on my team. At this point, I don’t have all that much interaction on the day-to-day interactions with the people who are wanting to help out. By the time I hear about somebody, it’s like, “Hey, this particular individual has been doing a lot of high-quality commits (ph). We should keep an eye on them the next time we’re able to bring on an additional contractor,” or “This particular user has been super helpful in answering newbie questions in the various public spaces. Let’s level them up.”
And I should talk a little bit about our contributor leveling system, because one of the things that we did early on was rank your contribution levels so that people who were sort of helping out would get this little colored tag in the public spaces, and that would confer on them an extra level of social status.
And that was surprisingly motivating. We pegged a very, very small reward to each additional level. Basically, if you spent that time and did any other job, you would probably make enough to purchase those rewards off the bat (inaudible) really people who want to give back to the community in some way and then they get recognition and then they become more invested. And that also just opens up the pool for us to hire from our community.
And I do take the time to try and get to know the top-level contributors and be aware of everybody else who’s coming up through the ranks in part because that’s really a nice pool of potential candidates for when we need to hire somebody is to reach out and be like, “Hey, I know you have this skillset. We’re looking for somebody to do exactly this. Do you want to come on board?”
So it’s a combination of this almost programmatic incentive system and getting to know people personally, because there’s really no substitute for doing that if you want people to help you with their company even if they are community-based volunteers and not full-time employees.
Absolutely. It’s all about sort of balancing both the quantitative and the qualitative, the left brain and right brain stuff.
Yeah. I wonder how much other companies can sort of build up a community among their users or their audience and get people helping them actually working on their business.
I know one of my friends runs a podcast. His name is Jeff. He runs Software Engineering Daily. And his listeners have kind of chipped in to help him build a mobile app and some other stuff on GitHub. And it’s interesting to think about how that comes to pass. Maybe having a big platform or a big audience really helps you build a community.
And I’m curious to hear what your thoughts are and how people can sort of best position themselves to get a community of people helping them to build their companies.
I don’t even think that you need a big audience. It’s that you have to have a willingness to ask for help. And if you are providing value, people will inevitably want to figure out a way that they can give back, whether it’s putting a couple dollars into a PayPal tip jar or designing something specifically for you.
It’s funny that you mentioned Software Engineering Daily, because definitely one of our developers, Keith Holliday, has been helping them out. And I believe that’s one of his favorite podcasts as well.
Cool, it’s a great podcast.
So you mentioned earlier that you guys haven’t done very much marketing. And I think that’s fascinating to have a company that sort of grows by word of mouth. I’m curious: What marketing have you guys done? What things have you tried, and what’s worked and what hasn’t?
Yeah. The biggest portion of our current marketing strategy is really the social media side. And when I say, “We haven’t done much marketing,” it’s we haven’t done a lot of paid advertising and the user-acquisition strategies.
And that is totally a valid strategy that, I understand, if you get the economics right, you can definitely just keep cranking that engine. But we’ve just never really had the resources to even try and spend the time to figure out how that would work for Habitica. It’s definitely on our to-do list, but so far we have been redeploying any resources we have into building out the app and trying to keep up with a user base.
So one of the things I want to mention about our social media strategy is Beth, who’s Beffymaroo on Habitica, she’s been manning the Twitter, Facebook, Tumblr accounts and recently just launched our Instagram account, so look for that. That’ll be coming up. We’re excited to have another avenue to sort of get some interaction time with our user base.
And how do you guys think about this stuff when you decide to launch on Instagram or hit another channel? Do you have specific goals that you’re aiming for or metrics that you want to hit, or is it more that you just want to have a presence there because your fans are there?
At the current stage, we should have metrics. It is one of our weaknesses that we are really working on shifting over this year into a company that does a little bit more data-driven decisions.
Mostly what we’ve been trying to do is look at it from a human angle: What do you expect, what do you enjoy about your favorite Twitter accounts or Facebook accounts? Definitely respond to any help request that comes through, even if it’s just to redirect them to emailing a particular account.
And I think what people don’t realize is that even if we’re not interacting with a piece of feedback in any obvious way, we’ve definitely seen it. We’ve looked at it, we’ve considered it, and maybe we’ve decided not to respond or maybe we just don’t have the capacity to respond at the moment. But we do see everything that comes in and read everything that comes in.
How do you think about growing Habitica’s revenue as opposed to just your user base, and what are your goals in that area?
Yeah, that is actually an excellent question. One of the things that we wanted to try and figure out is that we get a lot of inbound requests from people who want to use Habitica in groups. So not just parties and quests that you can battle monsters with your friends, but they want to be – it’s like people who are managing a small team network who want to be like, “I need you to turn in this report on time at least once a week or submit your proposal by x date.”
And they want to be able to gamify these processes because those interactions really aren’t a lot of fun. And the hope there is that by adding a little bit of game flavor, we can at least soften the blow a little bit.
Similarly, teachers want to use it with their students. There are plenty of households running a sort of chore system through our dailies. And what we realize is that there are a lot of things that we can be doing in that space to really make Habitica useful for that kind of thing.
If your living environment is not being kept up, then that will at its very worst have an impact on your physical health. So what we are looking at is that groups are going to be the next big area of focus for us, and hopefully, that will open a new revenue stream for our users as they sort of graduate from school and start moving into jobs and new living situations.
The other thing that we’ve been sort of taking a lot of time to look at, especially in the last several months, is that we know we have a large segment of users who are burned out on Habitica because they’ve gotten bored with it or they’ve done everything that there is to do in the game and the novelty has worn off.
So we’re working on a couple things that we’re hoping will bring some of the magic back for those particular people.
Both of the things that you mentioned actually – number one, the group dynamics and number two the novelty, are interesting to me because they both play a lot into human psychology.
I’d love to talk more about some of this psychology behind Habitica and how it works. What goes into somebody forming a habit, and what’s the science behind how you guys have designed your app?
So kind of the references that we usually talk about is Charles Duhigg’s book, The Power of Habit, is definitely something that we talk about. B.J. Fogg does a habit-building kind of mini course out of Stanford that gets mentioned a lot. But basically, you sort of want to trigger a routine and then make sure that you are rewarded for that kind of behavior change.
And one of the things that I think Habitica does particularly well is that, yes, there are triggers and then that triggers the action and then you do the action. But most gamification strategies are really rudimentary, like leveling system or you earn a badge; whereas what we’ve done is we’ve gone back to look at what makes games interesting.
And it was like, well, it’s not just leveling but it’s leveling up so you get access to a particular skill that you really want, or you want to crank through your chores today because then you can get that sweet helmet that just got released. Adding a little bit more juice and flavor to those interactions is really what sets Habitica apart.
Do you guys find that people are motivated by sort of individual, unique things, or is it more or less universal what motivates people and what motivates your users?
Honestly, our users start to look more like the gamer dynamic in that there are people who are motivated by the social aspect, like they’re fighting a boss, they want their friends to be injured by the fact that they didn’t manage to complete their research paper on time. There are users who just really want to level up quickly and cycle through and do it fast and basically do the equivalent of a Habitica speed run, and so they’re micromanaging everything through Habitica.
One of the surprises when we looked into the analytics is that I think our top 1% of users spends four to seven hours a day in the app.
They just keep it open and just keep poking at it. And our only conclusion is that they’re either very active on the social side or they’re just micromanaging every single interaction they have in their lives through this framework. These are not one-off users. They’re people who have been around for several months.
And then you have your people who are motivated by dressing up nicely. There’s a little bit of a paper-dolls effect of people want to set up a nice background and pick the right color pet and put on the right robe that goes with the background and the pet so that they look cool and then put it out on social media. There was a small population of those as well.
So it’s been interesting to see the different styles. And even on the team, there’s a multitude of different play strategies. There’s at least one person who’s working on a Beast Master achievement, which is just you’ve collected all the pets and released them. And then there’s also people who are just really using Habitica to check to make sure that they’re maintaining progress towards their goals, and they just take a look at their dailies, check them off, and then move onto the next thing.
So there’s a full range of styles and motivations. And probably what we’re going to do over time is really start digging into: How do we determine the best way to motivate individual users given what we know about them?
Yeah. I was going to say you’ve got such a huge variety of things that people use Habitica for and even the ways that they use the app. I think that’s analogous to a lot of people who have started companies that have created products that are just very generally applicable. They don’t appeal to a very particular niche or single-use case.
And I think it’s difficult when you’re in that situation to find out, “Okay, who’s the most valuable user, who’s the most likely to succeed using our app, and how do we zoom in on what they’re doing?”
So I’m glad you mentioned that toward the end. How do you decide who to focus on and what kinds of people to motivate? And how much of it is just hands off and you let people use the app however they want and go forward with that strategy?
At the very least, we internally are developing it for ourselves. Because the team has all come out of the community, we all use the app, we’re all very familiar with it, and we all know exactly where the faults are and the areas where we’d like to fix are. So frequently, there is a lot of discussion about, “Well, this no longer works for me. Why not? How can we solve that problem?”
One of the things that we’ve been trying to do is just tracking more data – not tracking more data, but looking at the data when we’re making decisions. Because what we realized is that while we’re very good at listening to the qualitative data, like the users who are complaining about problems and things, we were ignoring al whole 80% to 90% of basically silent-majority people who may not be vocal or articulate about what they like to dislike, but they have very specific ways that they use the product that don’t necessarily intersect with how we as the team use it or how the community that we interface with regularly uses it.
So for example, one of the things that came up last year that we were completely unaware of is that – or not completely unaware of, but we were not accounting for when we were planning our product strategy is that I think a good 80% to 90% of our users actually never enter the public spaces. So whereas beforehand our user flow would be to try and gently push them towards, “Here are the guilds that might interest you,” “Oh, I see you’re into writing. Check out these three options,” that was actually not a natural flow for a lot of people.
What people really wanted was a space where they can battle monsters and bring their friends onto the platform. They really didn’t want to interact with strangers in a new social network.
That’s fascinating. It’s tough to get people to interact with strangers. That’s a big thing that I’m trying to do on the Indie Hackers forum. There’s a bunch of founders and I’m like, “Hey, talk to other founders and tell them what your problems are and see if they have any interesting, creative insights that you wouldn’t have by yourself,” and there’s a lot of resistance to doing that because other people are scary and you don’t know what they’re going to say and how they’re going to interact. And your friends are a known quantity, so it’s a little bit safer to be around them.
Yes. And I think it’s that there’s not a lot of that kind of interaction in your normal life, where you just walk into a room full of strangers. As entrepreneurs, especially I think on the tech side, I think there are a lot of people who are introverts. For example, in my case it took me several months to get used to the idea of walking into a networking event and not knowing anybody and being able to have a genuine conversation and make a genuine connection.
We had been thinking that in games, that’s actually a fairly natural interaction in that sometimes you join a game, you don’t know anybody, your friends haven’t started playing in the game, so you just walk in and go, “I’m looking for a group. Where can I join a group?” And while there is still a large population of users on Habitica who are very familiar with that lingo and that sort of usage pattern, there’s a much larger group of people who maybe don’t want to engage with a stranger if they have any other option, so they’re trying to find a pathway to get their friends on the platform, which can also be a growth strategy, and we’re hoping to be able to employ that a little bit more effectively.
So zooming out here a little bit, you’ve been working on Habitica for how many years now?
I joined them in, I think, full time in late 2013.
So four and a half years or so?
I’m sure you’ve made a ton of decisions in that time about the game, about how it’s laid out. Can you give me one example of a decision that you guys made that worked out really well, and then perhaps one example of a decision that you guys made that backfired?
So we actually haven’t made too many changes to the core game. But also (inaudible) something interesting about one of the changes that we made that was surprisingly controversial, is currently Habitica allows you to play, after a certain time, one of four different classes. You can be a warrior, a mage, a healer, or a rogue. Each of those classes comes with different skillsets which ties nicely into exactly how you motivate yourself.
For example, if you are motivated by acquiring lots of gear for your character, then rogue is going to be your class of choice. If you’re motivated by doing damage to the boss and landing these 100-point, 200-point hits against the monster that your party’s engaged in, then a warrior or a mage is going to be your pick. And then if you’re somebody who checks in fairly regularly and likes to be helpful, or in my case, if you’re cleaning up after yourself because you haven’t managed to hit all your dailies, healer is your class of choice.
So that is a fairly standard class-system distribution. It is a regular feature on a lot of different MMORPGs. But when we first introduced it, it was apparently super controversial because people didn’t want that extra level of complication. They thought it was too gamified. And of course, now people really can’t imagine Habitica without it unless they’re very, very (inaudible) the platform.
How do you handle people complaining about a change that you’ve introduced that you feel confident about that they think is not good at all? Because I think this happens to a lot of apps.
This happens to a lot of apps. We have been trying out for the last few releases that we know are going to be difficult – we know our users are going to be change-averse in a lot of ways. We’ve put a lot of work into making sure that Habitica is a safe space, but when you are prone to anxiety or you’re trying to manage everything, when stuff moves around on you, it is stressful. But sometimes those changes are really necessary.
So what we’ve been doing the last few releases is instituting a two-week moratorium on any feedback. And they’re free to go shout on social media or whatever, but we don’t really start taking and logging complaints until the two-week period has passed just to let everybody get used to the change and see if it worked for them or if it really doesn’t work for them.
That also helps a lot of people simmer down. There are some individuals for whom that two-week period is really just a time to stew, but it’s surprisingly not a large portion. Usually, by the end of two weeks, people have already sort of gotten used to it, moved on, or they’re going to take the time and send us a nice message about the things that we have changed. So that has been super helpful to us.
One of the things that we think might also continue to improve on the process is a little bit more regimen to (inaudible) testing process with a lot of maybe our more dedicated users or users for whom we’re trying to solve a particular problem, is getting more systematic about inviting people to test a new feature and tracking the data on that before we make any long-term decisions about overall product changes.
It’s interesting to hear about your decision to introduce a class system to Habitica. Class systems are pretty well known as a stable of RPG games, and RPG games are themselves pretty well to be habit-forming. And so if you copy what an RPG is doing, then you’re very likely to bring along some of the habit-forming attributes of RPGs as well.
How much of what you guys are doing with Habitica is sort of inadvertently introducing habit-forming properties? And how much of what you’re doing is very deliberately constructed from the ground up to allow your users to form and set new habits?
Yeah. I think remembering to reward users somehow is a really big thing that people sort of instinctively grasp but they don’t look for opportunities to do.
For example, one of the changes that we made that was more impactful than we realized it would be at the time is that we allowed sound effects. When you checked off a task, Habitica would give you a little sound. And of course, we had some contributors who worked on some sounds for checking off a daily versus checking off a positive habit, 8-bit themes, different style video game themes, and all of that.
When we released the new mobile apps, that was one of the things people missed. And every once in a while, it would fall off or stop working on the mobile app and people would be like, “Where’s my sound, where’s my nice reward for checking things off?”
And I feel like that’s one of those things where they’re so intrinsic to games that we don’t think about them, but that’s absolutely something that you can incorporate into other apps, is rewarding a user’s interaction in some way. That’s not super expensive of a process, but on the experience side, it’s nice.
So we are approaching the end of our time. I’ve got one question from a user on the Indie Hackers forum. The question comes from an Indie Hackers user named Alchemist. He asks, “What is the most amazing way that Habitica has improved somebody’s life?”
Oh, man. There are so many. There’s actually a guild in Habitica that we set up for people to sort of announce their testimonials. And occasionally, we’ll pull a few of those onto the webpage, the front page, to talk about it.
Actually, let me talk about Mary. So Mary Robinette Kowal is one of our more well-known users. She is a writer and a puppeteer. And we reached out to her when we found out she was going to be in San Diego for a Comic-Con. And what she told us was basically that Habitica helped her pull herself out of a depressive funk. And between Habitica and another app called Fabulous, she was able to moderate her depression where she could drastically reduce the amount of medication she had to take, which was a thing that was important to her. She definitely expressed her gratitude and thanks and credited our platform with helping her do that.
So that’s one of my favorite stories. We’ve also had at least one couple get together on Habitica, so that was fun.
Very cool, Habitica the dating app.
Yeah. I don’t think it’s meant for that kind of interaction. And every once in a while, we’ll get some probably school-aged individual who really wants sexy times and doesn’t quite know how to get there, and we have to rapidly tell them to knock it off. (Laughter.) It’s just one of those things where I remind myself and remind the team regularly that sort of our app as it is is designed for people who are non-neurotypical in some way. We’re all playing games. We need that extra oomph to accomplish particular tasks. So we’re going to get a lot of whacky people up in the mix.
Of course. So why don’t we wrap things up by taking a look at your entire journey. You went from studying law, to working at this trucking business, to working on your own projects, to working on Habitica sort of part time, and then eventually moving to full-time CEO where you’ve been for years.
What are some lessons that you’ve learned from all of this that you think other entrepreneurs would benefit from hearing as well?
Oh, man. I’ve got a lot of soft-skill-type recommendations. Definitely, definitely take care of yourself. For me the toughest thing was realizing that I do need to sleep. I can’t just work hard and have everything fall into place. Because what happens when you get enough sleep and do things like meditate, which is actually a really critical part of my routines these days, is you are better able to make high-quality decisions.
The thing in startups is there’s a culture of generally making a decision and moving on, but you can save a whole lot of time and energy if you can make the right decision the first time around. So working harder is one thing, and I think (inaudible) superpower is that I am capable of working like a dog compared to everybody around me. But the flipside of that is sometimes I work like a dog on exactly the wrong thing that’s not going to be the biggest valued-add to my business.
So being able to sort of take the time to step back, think about it, rest enough so that you’ve got a clear head in order to be able to make that decision is super important, and that was a hard lesson learned.
Also sort of related to that was being able to hear, to parse through a lot of different advice from a lot of different places, and figure out what worked for Habitica and what worked for me. I approach things from a very different perspective, I think, as somebody who is non-technical, as somebody who is not based in the Bay Area. And as also just because Habitica grew out of a community and grew out of an open-source project, I have different responsibilities than a lot of the other startups I talk to, and which means that I make decisions sometimes differently than a company that is maybe not cash-flow positive or has had cofounders working with them temporarily or even long term.
Yeah, being able to filter out the advice and figure out what works for you
Both of those are lessons that I think everybody really needs to hear. To your first point, a huge part of building a business is making the right decision at any point in time. And there is an infinite universe of decisions, but only a few of them are the right decision. So getting enough sleep and being in the right head space so that you can make the best decisions is really a huge part of the job.
And then to your second point, every business is unique and everyone is different. And that doesn’t mean that you shouldn’t learn from people, but it certainly means that you should be critical of the advice you receive and see if it really applies to you.
So I think it’s awesome that you’ve really taken both of those lessons to heart. And I hope people listening will do the same.
Anyway, thanks so much for coming on the show, Vicky. Can you tell listeners where they can go to find out more about what you’re up to personally and also where they can go to learn what’s going on with Habitica?
All right. Well, thanks for listening to me ramble on. Definitely, I am probably the most easily available on Twitter. I am @caffeinatedvee. And Habitica also is on Twitter, now Facebook and Instagram. We also have a fairly active Tumblr account if Tumblr is your jam, or you can just swing by, say hello in the Tavern, and we’re always happy to see people there.
All right. Thanks a ton, Vicky.
Thank you, Courtland.
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