The Build Cycle Podcast #022 – Strava co-founder Mark Gainey

Believe it or not, Strava started out with the idea of being a virtual locker room. And when it launched, it was only a desktop app. That’s a far cry from the ubiquitous mobile app it is today, and their story of becoming a device-agnostic service that unites every runner’s and every cyclist’s data into a public scoreboard has valuable lessons for anyone wanting to create a global platform. How big of a platform? Strava is now a verb…as in, “Did you Strava that ride?”

DISCUSSION TIMELINE

  • 01:45 – Where did the idea come from?
  • 04:20 – Why launch with a focus on cyclists?
  • 08:15 – The original launch product was very different than the current app.
  • 13:00 – Becoming universal has opened them up to the widest possible audience.
  • 15:10 – How they rolled it out.
  • 19:55 – How do they manage such a massive software system?
  • 24:25 – Working with industry partners to ensure devices work with their service, and vice versa.
  • 29:25 – Data is a big part of their business.
  • 38:25 – What’s the feature set? What makes people pay for a Premium subscription?
  • 41:30 – What are some of their other features? New products?
  • 49:05 – How will they use deeper social interactions to improve the business model?
  • 52:55 – Dealing with adversity and challenges.
  • 59:05 – One of their more unique promotions, and what they learned from it.
  • 1:01:10 – How giving users control and listening to their feedback shapes the product.
  • 1:07:40 – Does the service differ for running versus cycling? What are future opportunities?
  • 1:12:00 – One of the key challenges they had shaped the company around the way people were using it.
  • 1:14:30 – Where did Strava get their startup capital?
Interview with Strava co-founder Mark Gainey about how Strava started and their business model
Gainey finishes the Leadville 100 mile mountain bike race.

 

POST GAME ANALYSIS

What’s most impressive about Strava is that they created a global platform upon which to build more services. They could have picked any one single service or option and built a business around it. But to truly scale and reach the most people, you need to create the platform that people use on a daily basis. Think WordPress. Or Facebook. They’re platforms that then sell services, and that’s where Strava is, too. All of these are free to use, with paid options available. With Strava, they are also collecting massive amounts of data that is incredibly valuable.

Another similarity to Facebook? It’s better the more people that use it. Think about how you can build that intrinsic vitality into your product or service. Can you design it so your “customers” spread the word for you because they benefit by doing so?

The data set that Strava pulls is incredible, showing where millions of people are cycling and running. This lets them package and sell that data to municipalities, which helps inform transportation infrastructure. There’s also the obvious marketing side of that, which could let them provide usage data to brands, or offer special deals from brands to their users. In fact, they do offer discounts and additional services from various other brands and service providers to their premium members.

It’s a “freemium” model, where users can sign up and get plenty of features for free, and then they entice users to upgrade to Premium. Those members pay annual subscription fee to get additional benefits, so Strava has to develop more services and features to justify that subscription fee…which is the largest portion of their revenue.

Mark says they chose cycling because there was an established culture of using technology to enhance their activity, and the audience size was big. That, and there wasn’t a good product out there to serve them. That’s a great combination, so when you’re looking at potential audiences that fit your products (or trying to design a product for a certain audience), look for one with big numbers and a tendency to use that type of product or service already. No need to push a boulder uphill trying to convince a new audience to try something they’re not used to. As famed designer Raymond Loewy said, “to sell something surprising, make it familiar; and to sell something familiar, make it surprising.”

The brand learned quickly that their app was, in consumers’ minds, was all Strava was. The real product was online, though, so they had to quickly figure out how to send all of a user’s data to the app. It required a complete rethink of the business model, adding people, and raising money, but it gave them the product that we all know and love today.

They went after outside capital so they could grow as quickly as interest dictated they should. The company launched with personal funds from Mark and Michael, but they quickly realized they would need a lot more if they were going to grow as fast as people were signing up for the service. As Mark says about their first startup and the decision to take on outside capital, “Speed over greed”. That let them grow something bigger and faster than they ever could have done on their own. Would you want a big piece of a small pie? Or a small piece of an enormous pie?

Strava founders interview podcast
Strava founders, from left to right: Mark Gainey (co-founder), James Quarles (CEO), and Michael Horvath (cofounder).

 

LINKS & RESOURCES

  • Strava.com
  • Find them on Facebook for running and cycling, Twitter, and YouTube
  • Kana is the enterprise knowledge software they launched prior to Strava, which gave them their startup capital (and freedom to focus on Strava full time).
Strava dashboard screenshot
A screenshot of Tyler’s Strava profile for one ride.

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