Lensa AI – how to make $8M the first week by entering the AI avatars market the smart way (11 min read)

Lensa AI by Prisma Labs is one of the many AI-based applications that allows its users to generate AI-crafted images. Although the app wasn’t the first one of its kind, it stormed the market, scoring a whopping 4M users within the very first week and earning more than $8M. It has been there since 2018, but only after the release of the Magic Avatars feature in November 2022, its popularity skyrocketed.

?Strategy & Tools

Lensa AI History Timeline

  • December 2016 – FaceApp launched.

  • 2018 – Prisma Labs released Lensa AI, an AI image generator app for App Store and Google Play.

  • 2018-2021 – Lensa’s growth was slow throughout its first 3 years of functioning.

  • January 2021 – Lensa AI managed to reach about 1.6 M downloads.

  • October 28, 2022 – AvatarAI.me launched.

  • November 3, 2022 – Profile Picture AI launched.

  • November 2022 – Lensa AI got the Magic Avatars function and quickly became a viral trend on TikTok, which put the app in the Top 1 of the App Store apps for photos.

  • By the end of November 2022 – the app was installed over 1.6 million times only in that month. It was a 631% boost over October.

  • December 12, 2022 – Lensa AI had over 13.5 M downloads worldwide.

  • By the end of 2022 – Lensa AI’s revenue doubled from 2021, totaling more than $16M. The sum that Prisma Labs earned from Lensa AI in December 2022 alone ($9.25M, according to Statista) already exceeded what they had earned throughout the previous year.

  • By February 2023 – the total number of downloads worldwide for Lensa AI was around 22 million.

How Lensa AI works?

Lensa AI is an AI-based photo editor app that enables you to picture yourself as a fantasy character, an astronaut, a secret agent, a superhero, or basically any other kind of person you would like to see yourself as.

All you need to do is upload 10-20 of your selfies and let the magic happen. Lensa AI has been built upon the Stable Diffusion engine, which is a text-to-image artificial intelligence model that transforms strings of text into images.

The entire process is complex and requires a lot of computational power, but after a while, the users get a package of avatars with their faces on them. Lensa AI is available on App Store and Google Play.

Magic Avatars launch

Lensa AI was launched in 2018, but it didn’t allow its users to create their fictional avatars right from the start.

Initially, it was an AI-supported photo editor to enhance, smoothen, or modify the pics that the user would provide. For example, it could remove the background from your photo or help you get rid of some unwanted objects that could accidentally get in your way while you were taking a pic.

It wasn’t too popular then. In 2021, Lensa AI had less than 0,5 M users worldwide. It was not until late November 2022 that Prisma Labs decided to introduce Magic Avatars, which totally skyrocketed the app.

The older features were still there, but it was the Magic Avatars option that gave Lensa such a great boost over the course of 12 days since the feature’s release. During that time, the app saw a drastic increase in the number of downloads, which reached 13.5 M in December 2022. The release of Magic Avatars by the end of November gave it a rapid 631% increase in the number of downloads over October (200K vs 1.6 M).

Lensa AI being Top 1 of Photo & Video apps for iPhone (Dec 2022) [source]

The pricing

As for the Lensa AI business model, the app itself is freeware, but if you want to use the Magic Avatars feature, you need to be a subscriber or buy one of the available avatars packages. Those are as follows (as of the writing of this text):

  • $3.99 for the smallest package of 50 avatars,
  • $11.99 for the medium package of 100 avatars,
  • $15.99 for the large package of 200 avatars.

Lensa AI business model is subscription-focused since those prices get discounted by around 51% if you buy a 1-year subscription for $35.99. Of course, you can choose to continue it after that time, but that’s the fixed price for one year.

Lensa AI business model let its founders earn nearly 0,6 M within a single day, like they did on December 2, 2022.

Lensa AI app and its competitors

Lensa AI is not the only AI art-generation app out there. What's more, it wasn't even the first one of its kind. Although it's based on the Stable Diffusion system, the idea behind it is quite similar to so much popular FaceApp, a 2016 AI picture-generating app that made people look older or even changed their gender at will.

Later, but still before the Magic Avatars features came up for Lensa, here came such projects as AvatarAI.me and Profile Picture AI – respectively in October and November 2022. They both offered the same thing as Lensa's Magic Avatars.

This feature was released in late November 2022, so you could say that Prisma Labs simply stole the concept to boost their own project, but then they made it much more efficient in terms of business and marketing.

Lensa really outplayed other AI art apps comparing their revenues. When AvatarAI.me's founder earned ~$250K in 6 weeks, Lensa AI's 13,5 M in one month seemed hilarious. While Prisma was earning about 0,6 M a day, AvatarAI.me barely scored $11,000/week. A similar situation was in the case of Profile Picture AI. How come Prisma managed to leave its competitors so far away behind?

Why is Lensa AI so popular – how did Prisma Labs beat the competition?

There are several reasons why Lensa AI has won the race, but one of the most important is that they run on their own GPUs, simultaneously taking advantage of the power of the Amazon Web Services to run their biz and store the processed photos.

What's more, the Prisma Labs may be just a small team, but they're all more or less skilled in tech. They all come from the so-called Russian “big tech.” They launched Prisma in 2016 in the group of nine people, including names from such Russian giants as Mail.ru or Yandex (Russian counterpart of Google).

Meantime, both AvatarAI.me and Profile Picture AI's were created by solo founders. They worked on APIs, which meant paying $20 for the machine learning process (while the actual cost of such a thing is around $0,5). As they didn't have a group of techy friends, they couldn't constantly keep an eye on their own servers like the guys from Prisma did.

Prisma was also ahead of its competition thanks to the fact that they had already had a working mobile app, which was a photo editor.

Magic Avatars was just a feature. They didn't have to build from scratch. They also leveraged iOS which was crucial in the Lensa AI growth because the app was especially well-received by the iPhone users.

Lensa AI influencer marketing

Prisma has also had enough funds to leverage social media like TikTok, Instagram and Facebook. They also reached out to the influencers.

Sometimes they paid them to post their Lensa AI selfies, and sometimes they tagged them only after they used their photos without their actual consent, like it was in November 2022, in the case of Marques Brownlee, one of the biggest tech influencers on YT. Luckily for Prisma, Marques replied to their tweet, which greatly boosted the entire thread. A lot of other celebrities and influencers got on the trend of uploading their selfies to Lensa AI, including Chance the Rapper, or Britney Spears' husband, Sam Asghari.

Now Prisma has plans to contact Marvel or Disney to allow Lensa's users to “transform” themselves into characters from those universes.

Lensa AI is friction-free

The rapid success of Lensa AI has also been caused by the fact that the app is friction-free. That's another thing that makes it stand out of the rest of the AI art apps.

When something is friction-free, it means that it's simple to use and fast to work. Lensa AI app is fast and simple. You download the app, pay, give your photos, and get the results.

You don't need to download any software for your computer. No need for registering on some website and/or waiting for the activation link in your inbox. It's both psychological and strategic. If it's easy and quick, many would probably give it a try, boosting its downloads count and contributing to its revenue increase.


The Law of Diffusion of Innovation & First-Mover Advantage

Market you sell to is the most important factor of your business. Even more important than your product. A fast-growing market is a great market on steroids.

AvatarAI and Profile Picture AI already showed there was a demand for their services. Lensa AI was just fast and smart enough with their tech implementation and marketing strategy, that they have established a First-Mover Advantage in the AI Avatar market.

Social proof

The more people do something, the greater the possibility that it's worth testing. Seeing others getting involved in stuff makes us willing to try it, too.

When Lensa AI hit the Top 1 of the App Store's “Photo & video apps” chart, iOS users could see that it's a new hit. That made them wanna try it out themselves.

Exploring different versions of ourselves

Humans tend to be curious “what if” they were born in different time or they would have become somebody else.

Just like in the case of FaceApp, Lensa AI made it possible to experiment with our photos to discover various “versions” of ourselves.

The curiosity gap

When we are curious about something, and we get a gist of it, we usually want to see it all.

People were intrigued by the Magic Avatars feature. They saw other people's AI avatars and were curious what it would be like in their case. That led them to buy avatars packages from Lensa AI.

Bandwagon effect

The greater the crowd, the greater the fun. When we see others participating in something, we want to join as well.

As the Lensa AI user count grew, and there were even some influencers and stars involved, a lot of regular people wanted to test the app, too.

Familiarity bias

People prefer things they already know or heard about. We tend to trust more if we see something that lets us stay in our comfort zone.

There have been a bunch of various AI art generators out there recently. However, Lensa AI was launched in 2018 as an AI-supported photo editor. Magic Avatars was just one of its features, so Lensa's users preferred that over using a completely different app.

? Window of Opportunity

Lensa AI success story is all about outsmarting the competition. Prisma Labs had a techy team of people coming from the Russian big five, which made it easier for them to develop their app.

If you want to be successful like them, keep an eye on the trends that are worth exploiting, like the AI art generators market. Prisma Labs took the path that had been paved by FaceApp, and then was quick enough to “steal” the other developers' idea for the Magic Avatars.

When making a mobile app, it's also crucial to mind the App Store and the iPhone owners. Mastering iOS is a great booster to any tech business.

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