Strava strives to stay ahead of race
Creator of popular fitness tracking app dreams of ‘generational brand’
BRISTOL, ENGLAND In 2009 Michael Horvath was tinkering with a fitness tracking app in the snow-capped New England town of Hanover. Flanked by the White Mountains of New Hampshire on one side and the green hills of Vermont on the other, Hanover is an attractive but unremarkable place. With a population of 5,000 people, it is best known as the home of the prestigious Dartmouth College.
“It’s not a tech centre, and you really can’t imagine Strava coming out of that environment,” Horvath chuckles, recalling the early days of what was to become the world’s most popular fitness app.
The 53-year-old has just returned to the helm of the company he co-founded with Mark Gainey in 2009. The pair, who previously floated an email management company in the nineties, have tapped into a generation of fitness fanatics with more than 50 million users now on the platform. Many of them have grown addicted to the Strava app, which gamifies sports activity and allows cyclists, runners and swimmers to compete against each other every day — often on their daily commute to work or school.
“Hanover was a good grounding for us,” Horvath says at the company’s U.K. offices in Bristol. “We’re trying to fit into people’s everyday lives — not all of our users are in Silicon Valley. The majority of our community are outside of the U.S. and we have to remember that many of them live in places that are small towns and Strava, for them, is really important.”
The U.K. has proven to be a fertile territory for Strava with six million registered on the app. It’s behind only the U.S. and Brazil in terms of market penetration. Picking the right sport to get the app up and running was vital.
“We started with cycling knowing we could spread to other sports over time,” says Horvath. “With cyclists we thought if it could work there it had a great shot at working everywhere — they were the first to embrace technologies to improve their experience in the sport.
“It was a social sport to begin with and they thought it could spread easily by word of mouth. If one person liked it they’d tell their friends.”
Cycling has proved to be a smart bet. The company swears that word of mouth is one of its most effective forms of advertising. Strava’s technology has also been opened up to many other sports, ranging from hiking and canoeing to ice skating and kitesurfing.
Strava deliberately chose not to start producing hardware devices but to focus on apps. “We specifically stayed out of the hardware space because we never really believed we could make the perfect watch.”
Nevertheless, hardware, it turns out, was something Strava had given significant thought to. “We explored that early on and we realized that we were a software company and we’re going to stay there. Software is hard enough; hardware is really hard.”
Horvath says that any form of activity should eventually be on Strava, even team sports like soccer and rugby.
Horvath is dressed casually in a round-neck jumper and jeans and comes across more as an active fitness enthusiast than a tech bro.
In November, it was announced that he and his co-founder Mark Gainey would return to run the company they started. Horvath replaced James Quarles as CEO after Quarles spent two and half years in the role. He says Quarles led the company through a “really important growth phase” and thanked him for his contributions.
However, Strava has shifted strategy since his departure. “The near-term opportunity we have right in front of us is to be the world’s leading subscription business for athletes. It made good sense. We all agreed for the co-founders to step back in.
“What Mark and I had been doing over the past three months is shaping the team to allow that focus, taking parts of the company that were spread across a number of different objectives and bringing them back into the fold around the subscription business.”
Strava has always had a paid offering, but it is now more in-depth. It has an à-la-carte subscription model that offers people a range of enhanced features including overtraining alerts and heart rate trends.
Horvath explains that before he returned to the business, less than 20 per cent of its resources was focused on converting free users to subscriptions. Now, he says, almost all of the company is focused on subscriptions.
Strava is a private company and keeps much of its financial details to itself. However, Horvath says that conversions to the paid offering has remained consistent as it has grown to 50 million users and that the subscriber base has continued to grow at the same rate as the overall community.
The business has raised US$70 million since its inception and looks to be closing in on profitability. “We won’t give specific numbers but we anticipate running the business profitably, sustainably, going forward,” he says.
Horvath says he wants the business to be there for the “very long run” and that he wants it to be a “generational brand.” In 1999, Horvath and Gainey successfully floated an email management business called Kana Software. They may now look to repeat the trick with Strava in the years to come. “I think so, that will be in our future at some point,” he says of an initial public offering.
The company has endured some faux pas. It was revealed in 2018 that a secretive special air service base had been inadvertently revealed by the fitness app after it created a heatmap of running routes around the country.
An SAS base in Hereford, in southwest England, along with a nuclear deterrent naval base and the government’s spy agency GCHQ had been placed on a heatmap of Strava’s customers, including the profiles of several people who regularly run to and from the highly sensitive buildings.
At the time Strava said it took the safety of its community seriously and that it was working with military and government officials to address sensitive areas that might appear.
Over the last number of years data privacy has become a much more integral part of international conversations, underlined by the introduction of the EU’S General Data Protection Regulation. Horvath says the company has invested a lot in privacy settings to give users more control over what’s made publicly available.
The company has also had to face down allegations of burnout by users. A study by the National University of Ireland suggested the “gamification” of fitness apps has led to high levels of burnout. The co-founder says that the app has since introduced a fitness dashboard to control people’s “impulse to be active all the time”.
When Horvath, who was born to a Swedish mother, and Gainey first started talking about a fitness social network in 1994, they were “laughed at.” And his Swedish links were what determined the name of the app. Strava translates as “to strive” in Swedish.
Now the company is leading the chase in a highly competitive field that includes some of the biggest names in tech. It has partnered with Apple, but the Cupertino, Calif., giant has its own alternative. Similarly Under Armour and Nike have also made strides in the fitness tracking space.
Horvath enjoys all kinds of activities from cycling and running to hiking. When asked, he reveals that he can run five kilometres in under 20 minutes, an impressive time. He will need to be able to apply that stamina in his bid to fend off some sizable rivals and develop the “generational” brand he craves. The Daily Telegraph