Time to kick on for Strava as gym bunnies race to join up

Business

Time to kick on for Strava as gym bunnies race to join up

Fitness app plans to start monetising without users spending more time on the network - but it had better get a move on

Edwin Smith


As new year’s resolutions are made and festive calories begin to be worked off around the world, millions of amateur athletes in search of motivation will tap an orange icon on their smartphone’s home screen.
But even before Strava’s inevitable seasonal boost, the fitness and physical activity tracking app has been enjoying a healthy period of growth – just as some other Silicon Valley social networks are stalling, haemorrhaging value, or suffering from a tarnished public image.
It took Strava eight years to log a billion “activities” (mostly bike rides or runs recorded by its users) but a billion more have just been racked up in only 18 months. New users are signing up at a faster rate than ever – a million join every 30 days – and there are now 36 million in total.
The app has given rise to a popular saying among fitness fanatics: “If it isn’t on Strava, it didn’t happen” – a reference to the compulsion that some users feel to log all of their workouts and pore over the reams of resulting data as they attempt to set a personal record on a particular stretch of road, and perhaps top one of the in-app leader boards in the process.
When Strava was founded in 2009 by two dotcom veterans who had rowed together at Harvard in the 1980s, one of them, Mark Gainey, told a venture capital investor that he knew exactly who would use the app: “See those four guys sitting over there in Lycra with their bikes parked outside the window? That’s my customer.”
But James Quarles, the new chief executive who joined the business in May 2017 when Gainey took a step back, aims to accommodate a wider range of athletes than ever before. “Our ambition,” Quarles says, “is to be the next great sports brand of the 21st century. We’re on our way.”
What would it take for Strava to achieve that goal; to gain household name ranking alongside the likes of Nike, adidas, Sky Sports or ESPN? Quarles wants Strava to be recognised as “the home of your active life”, and goes on to describe a situation that would make the platform something like an operating system or home page for fitness and physical activity.
“Let’s imagine it’s the weekend. Strava should tell you, ‘here’s a race that’s coming up you should enter’, ‘here’s a trail run that you should try’ and, ‘your friend is signed up for this stretching class on Thursday morning; click here to join’. That’s what we’re really working towards.”
A recent point of focus has been “representing more of what [users] do in the world”. So rather than merely using a smartphone as a GPS tracker for cycling and running, the company is working to increase the number of activities that users can record and display on the app. It’s now possible to log hiking, skiing, swimming and surfing, as well as indoor workouts. Gym and yoga sessions can be recorded with the Fitbod and YogaGlo apps, respectively. Indoor cycling is covered by arrangements with Peloton, the exercise bike maker and virtual fitness class provider, as well as Zwift, the virtual bike racing platform.
The company has 30 such partnerships at last count and more on the way, according to chief product officer Stephanie Hannon, who previously led the technology operation for Hillary Clinton’s presidential campaign.
Strava operates a “freemium” model; a basic (and perfectly adequate) version of the app is free to download, but once users have developed a taste for the data and analysis on offer they are invited to upgrade by subscribing to various add-ons through a premium membership plan referred to as “Summit”. This is the company’s most significant source of revenue, but Strava also runs promotions with brands that grant discounts to users as a reward for covering a certain distance or achieving some other goal that is logged in the app. Rapha, the high-end cycling clothing maker, and Lululemon, the Canadian purveyor of luxury yoga gear, are among those to have taken part.
There are also plans to expand Strava Metro, an arm of the company that uses data from cycle commuters to help assess and plan infrastructure projects with Transport for London and about 130 other organisations and planning departments around the world.
However, nearly a decade after it was founded, Strava is yet to turn a profit.
According to Quarles, this is part of the plan. “We are intentionally not profitable,” he says, adding that the relatively modest amount of funding received by the company to date ($70m) and the fact that Strava is privately held allows a degree of freedom. “We could be profitable today, but in discussing with our investors, we want to continue to prioritise growth. As the community grows, this is a business that really scales well because every member that we gain is a potential subscriber or customer for us.”
According to Quarles there is no deadline for profitability, but he knows what it takes to monetise a social media company’s user base. From 2011 to 2014 he worked at Facebook, helping large advertising clients with strategy, before moving across to Instagram (which Facebook acquired for $1bn in 2012) to develop tools to enable businesses to advertise and sell products via the picture-sharing platform. Both roles were “great experiences”, but his time at Facebook and Instagram offered a salutary lesson about the dangers of engineering social media platforms to encourage people to spend as much time as possible using them.
“I don’t think that pure engagement is a thing that anybody should optimise for,” he says. “You can get into places where something’s ‘clickiness’ is indicative of its value in your system. It’s something that we have very explicitly steered away from in Strava.”
Ever since Sean Parker, Facebook’s first president, told an interviewer in November 2017 that the social network had been engineered to “consume as much of your time and conscious attention as possible” and that Facebook exploited a “vulnerability in human psychology” by giving users “a little dopamine hit” every time someone liked or commented on a post, a backlash has been reverberating through Silicon Valley.
However, Quarles says, Strava is different in some important respects.”We want [users] to find the utility in it and come back day after day, but we want you to find a route, press start to record your activity, then put your phone in your pocket and enjoy the scenery that’s around you. Breathe the air, sweat and be present. We are not trying to grow the time people spend on our app. It seems obvious now. I’ve been really focused on that since I left [Facebook].”
In contrast with the negativity associated with some other social networks, Quarles describes Strava’s feed as “a place to share positivity the same way you’d high-five or pat [someone] on the back”.
However, the company’s short history is not free from controversy.
At the end of 2017, Strava released a now infamous “heat map” that displayed where in the world its users went running and cycling most frequently. Inadvertently, this revealed the location of several previously secret military facilities and gave critics a reason to lump the company in with other Silicon Valley firms that have failed to handle customers’ data with sufficient care.
Quarles is keen to point out that his customers have several options that allow them to keep their data private. “We just want to keep educating them how to do so,” he says. “I think that was the big lesson.”
As things stand, Quarles, who ran his first marathon in 2018, doesn’t seem to be in any danger of running out of road. He may well be able to parlay Strava’s troves of data and legions of users into a sustainable business. But if he begins to drag his heels, he could discover that the patience of investors doesn’t always last forever – just like new year’s resolutions.
– © The Sunday Telegraph

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