How Lensa AI Generated $50M+ with AI Avatars By Riding The AI Wave

Lensa AI launched in 2018 as a photo and video editing app.

Their "Magic Avatars" feature, released in November 2022, used artificial intelligence to transform users' selfies into artistic portraits across various styles within minutes.

This feature quickly became a viral sensation, generating approximately $50 million in revenue with peak earnings reaching $8 million per day.

Perfect Timing Beats First-Mover Advantage

Lensa didn't pioneer AI avatars but executed with perfect timing. Launching alongside ChatGPT during peak AI interest (November 2022), they capitalized on newly available stable diffusion technology faster than competitors.

Serial entrepreneurs Pieter Levels (Avatar AI) and Danny Postmaa (Headshot Pro) had already launched a similar product 35 days earlier. However, they focused on web platforms while Lensa targeted mobile users.

For B2C products, the golden rule is to prioritize mobile, not web.

By leveraging Prisma Labs' existing distribution channels and reputation from their previous viral sensation Prisma (2016), they proved that superior execution can outperform being first to market.

Google Trends data shows how the "avatar AI" trend began gaining momentum in November 2022, peaked in December 2022, and then stabilized-following the classic trend curve of slow start, explosive growth, peak, and eventual stabilization.

The Product Itself Became the Marketing Engine

Lensa engineered a product specifically designed for viral spread:

• Created flattering, artistic avatars that generated genuine "wow moments"

• Offered multiple artistic styles encouraging sharing several images

• Simplified complex AI technology (Stable Diffusion) with a mobile-first approach

Each satisfied user became a marketing channel, showcasing their personalized avatars across social media and driving organic growth through authentic word-of-mouth.

Strategic Influencer Seeding Created Explosive Growth

Their growth strategy centered on targeted influencer seeding. When tech influencer Marques Brownlee shared his avatars on November 26, 2022, it triggered a 631% spike in worldwide downloads within days.

This happened because Lensa AI strategically tagged influential tech personalities like Marques Brownlee, Casey Neistat, and Lex Fridman in their social media posts.

The #lensa hashtag accumulated 434.2 million views on TikTok, creating a self-sustaining promotional cycle across Instagram, Twitter, and other platforms.

Rather than paying for traditional advertising, Lensa generated avatars for people with large followings, effectively turning them into unpaid promoters.

Immediate Monetization Captured Peak Value

Unlike many viral apps that prioritize growth over revenue, Lensa monetized immediately:

• Charged $7.99 for 50 avatars (or $3.99 for existing subscribers)

• Set price points perfect for impulse purchases while capturing significant value

• Achieved peak revenues of approximately $8 million daily during viral period

This approach allowed them to capture maximum value during peak virality, eventually normalizing to around $206,000 per day-still substantial recurring revenue.

Most B2C apps offer their product for free, but Lensa couldn't afford this model as renting GPUs for AI processing requires significant investment for each generation.

Psychological Triggers Drove User Behavior

Lensa's success stemmed from understanding core psychological drivers. The avatars served as digital status symbols that users proudly shared, while seeing friends' results created urgency and FOMO.

Each user's unique results generated excitement that prompted multiple shares, tapping into fundamental desires for idealized self-representation.

By creating content that made users look and feel special, Lensa motivated sharing behavior that fueled the viral cycle.

Building Long-Term Value Beyond the Viral Spike

Lensa didn't just capture a momentary trend but built lasting business value:

• Used the viral avatar feature as a gateway to their subscription photo editing app

• Converted one-time purchasers to long-term subscribers ($29.99/year)

• Established brand reputation as leaders in consumer AI applications

This strategy transformed what could have been a fleeting viral moment into a sustainable business with ongoing revenue streams.

Although the initial peak will never be replicated, Lensa continues to generate substantial revenue. According to App Magic, it has made over $50 million in total revenue. Some estimate it around $75 million in net revenue.

Lensa's success demonstrates that even in crowded markets, companies that execute exceptionally well on product quality, distribution strategy, and monetization timing can achieve extraordinary results regardless of whether they were first to market, especially if they ride a wave.

Top Tweets of the day

1/

Gold AI tip for generating better titles.

Rather than telling WHAT TO DO, tell it WHAT NOT TO DO.

Some humans work like that too.

2/

So much of being satisified falls down to setting expectations and matching expectations.

99% of people quit entrepreneurship because they don't set the right expectations.

Most failed entrepreneurs don't even have 100 actual failures that they really went out 100% for. The human brain is smart enough to figure stuff out within a few failures. Most failed entrepreneurs would succeed within 40-50 failures if they went all out on every attempt.

The company Rovio was on the verge of bankruptcy. They had made 51 games and none of them took off. And then they made Angry Birds and the rest is history.

3/

Save yourself 5-10 years and a whole lot of trouble by just copying stuff that's already working.

As Chamath Palihapitiya said, "Get the money first."

Then you can try to create something novel.

VCs shame copying ideas because they want billion-dollar exits and its easy to do when the ideas are novel but success rate is <0.1%. Its in their incentive, not yours.

One of my favorite questions to know what the other person wants, "What's their incentive in this?"

Rabbit Holes

1. Why I'll NEVER Play Video Games Again After Learning This by Alex Becker

2. Cameo's Second Act | SBI Growth by SBI

3. The SaaS Freemium Model: Great for Acquisition, Not for Revenue by Paddle

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