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

Head of fit­ness-based so­cial media net­work tells Ed­win Smith of his plans to start mon­etis­ing with­out users spend­ing more time on the app

The Sunday Telegraph - Money & Business - - Technology Intelligence -

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 36mil­lion 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 Eight­ies, 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, Steady pace: James Quar­les, above, chief ex­ec­u­tive of fit­ness app Strava, right, says the com­pany has no dead­lines for prof­itabil­ity 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 val­ued at $4.2bn (£3.3bn) in the sum­mer, as well as Zwift, the vir­tual bike rac­ing plat­form that raised $120m in De­cem­ber. 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

‘We want you to find a route, press start to record your ac­tiv­ity, then put your phone in your pocket and en­joy the scenery’

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 some 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 last year, 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.

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