Strava: Mark Gainey and Michael Horvath

GPS device. That was the only device that would work with Strabat in th those early days, so You had to have one of those devices that would track your work out and you would Plug it into your computer. And the data would flow

Up. into Garmin and from Garmin into Strava. Yeah. And you know, one of the points of friction was Yeah.

How many people have Garmin devices and so I mean there was a whole period of time where Michael and I were negotiating with the likes of Costco and others, just literally trying to buy Garmin's so that we could either sell them or give them away to friends so that we could get people onto the platform. Basically we tried to make Participation Strava as hard as possible. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.

Guy Raz, and on the show today, how two friends who missed the competition and camaraderie of the locker room. Decided to capture that feeling with an app. screw it into Strava. a platform used by a hundred million athletes around the world.

Subcultures often have the power to build brands. We've seen it on this show countless times. Crossfitters help to make R X energy bars a hit. Bloggers turned WordPress into the biggest website builder in the world. And gamers help turn Discord into a massive social network.

Now often it's a deliberate strategy on the part of the founders. Make a product that is good enough for the hardcore fans. Tested on them. Make it better. and then figure out how to turn it into something with widespread appeal.

And some of the best guinea pigs out there happen to be athletes. Because you can gather a lot of data around their activities. There runs or bike rides or swims. can help you understand how they use the product. But more importantly.

At least in the case of today's story, Strava. People who run, or cycle, or swim, or hike. Can be a little what's a competitive. They like to compare personal bests and distances or heart rates.

And they also like to talk about the things that make their runs or bike rides better. Good shoes or socks or sunglasses or technology. So back in two thousand eight, when Michael Horvath and Mark Gainey set out to build a platform where people could share their workout data? They decided at first

to target dedicated cyclists. Michael and Mark figured if they could make something that worked for committed athletes, The kind of people who were already spending thousands of dollars on their cycling? The word would then spread to more casual athletes.

and Strava could then expand to other sports. Like running. Today, Strava calls itself the largest sports community in the world. With about a hundred million athletes using the app.

I first interviewed Michael and Mark for our resilience series back in the middle of the pandemic, and we talked mainly about the trends they were seeing around fitness at the time. We didn't get the time to get into the story of their founding, so we asked them to come back for a longer conversation. And one of the things that's really interesting about their story is They actually tried to launch Strava or something. Very similar to it.

back in 1995. But they were just too early. couldn't convince investors or even software builders that What they were trying to do. Could it actually be done?

So they pivoted. into an entirely different kind of company. and eventually sold that company. And then the two of them went off in totally different directions and to totally different parts of the country. Only to come together again.

Ten years later. Mark and Michael first met in nineteen eighty seven as students at Harvard. And in the first of many serendipitous moments in their story, They met in a group that neither of them had ever expected to join. the university crew team.

Before arriving at college, Mark had hoped to compete in track and field. And when he got to Harvard. Michael had first wanted to go out. for the sailing team. I more or less kind of showed up at the first

uh meeting that the the sailing team had and said, Hey, I'd like I think I'd like to join the team and uh It was not a a great first encounter. I think it w there were six or seven people at the meeting. They seem pretty serious. it didn't seem like it'd be a lot of fun. So I was like, Huh, do I really want to do this? It wasn't I didn't come here to do this. It was just something I thought would be fun to do.

And the next day I was in line trying to register for classes. And uh bunch of other organizations were out. along the line of students trying to recruit people and one of those was the lightweight crew team.

And so I went to their own. meeting that evening and That was a totally different story. It was room full of people, maybe sixty or seventy or so and They seem to be having a lot of fun and I thought this might be something worth trying. So I went went to the practice the next day and

The rest is a big part of the history and for Mark and me. So you join the crew team. Yes. And as for you, Mark, I know Uh you're like a few years. behind my goal in school. So you you got to c Harvard a couple years after he did.

And you've been like the champion level Cross country runner in high school, I think. Correct. And so w were you planning to run in college too? I mean like ha How did you end up with Michael on the crew team? So when I arrive my freshman fall

I was challenged and that I had some injuries. I'd I'd been suffering from some stress fractures basically in my leg and my my foot. And you know, that in combination with having Been running. competitively and and hard for, you know, at least four or five, six years. I will fully admit I was somewhat burned out.

Right. And then a a very long story short. I was introduced to the crew program, uh just sort of serendipitous. Part of drawing me to crew was this romantic notion that well, you're out on the water and won't it be beautiful, but

Turns out that's not the case when you're in a When you're in a cruise shell, you're you're staring at somebody's back. And thankfully, uh That class in particular, Michael's class, were Kind enough to take me under their wing and

And frankly start coaching me. Because I had a steep learning curve. You know, the there's just Perception that crews like this, um

sport of privileged men and women and that it's like, you know, very preppy and I'm not saying that's entirely untrue, but th the the the part of it that I don't think a lot of people understand is that It's really hard, especially if you are in Cambridge, Massachusetts, because you have to wake up at like five in the morning or four in the morning on freezing cold days and get out into freezing uh the freezing cold river. And it's like

You're practicing For a race that's like six minutes long. Yeah, no, you're you're right on so many levels. The uh The elements that you battle when you're rowing, uh whether it's out on the water early mornings and You know, waiting for the ice to thaw, uh or in the winter when you can't go on the river but you're still forced outside to do stadiums, things like that.

And then you're right, I I think at one point some I'm sure one of the mathematics majors You know, did the math around how many hours of practice we do for six minutes of racing and you know You you didn't want to know that math. Yeah. Alright, here's a question for both of you. It's the mid eighties.

You are in Massachusetts. And then you're getting in a freezing cold boat in a freezing cold river. Mm. Tell me what was attractive about that to you. You know, guy, I I often refer back to the time spent on the water in the boathouse. I mean, that was my education.

At our without question, the life lessons there. And I remember being out on a on a long row. So this was supposed to be just a called Forty Five Minutes Along the Water where we're all supposed to be pulling at a relatively easy Cadence and working on our endurance. And the boat was just rocking back and forth. We had no rhythm whatsoever. It just was miserable. And

This was at a time where we were just starting to experiment with heart rate monitors. So early days, uh again, late eighties. And so we're all wearing them, and the coach actually stops the boat. 'Cause he can tell. We're just we're miserable. And uh He asks each of the rowers. Call out your heart rate.

number right now. Tell me tell me what your monitor is saying on your wrist. And we kinda go down the the boat and one of our top rowers, it was not Michael, by the way, it was uh somebody else, but uh Forty beats higher than everybody else. He clearly was working way harder. And You know, he was trying

to pull hard. He was trying to do what he thought was right. But just the fact that he was actually working harder than everybody else completely threw off. our entire system and uh sort of the the rhythm that we had, and as soon as we got him to just actually relax and calm down That boat

Took off. Like a rocket. And To me that's just This is the element of teamwork. This is

Sometimes, you know, go slow to go fast. I mean, there's all these phrases that we've now used for years and decades later. They were learning right out there on the water. Hm. So

While the while the two of you were were at college together Did you d I mean did you the two of you particularly become close or or did that happen later? Did did did the two of you kinda forge a close friendship already? Why you were students? What I recall was it was the summer

A year after I graduated. Mark is still on the team. And uh There was the Harvard Yale Princeton race down at Princeton. And we

Both realized we wanted to go on this trip. to go see the race and so I I offered to drive, I had a car, I had a really very Old and not very

dependable Jeep CJ five. So we hop in this car It's a very cold day. And the car has very little heat.

But this trip is burned in my memory as the moment where Mark and I Went from being Classmates to being friends. And it we did it a down and back in the same day. We weren't You know, you didn't trip. Didn't have a lot of options uh at that time. We didn't have money.

to pay for hotels, but this is where we the friendship Really. started and and from there it was The rest is is you know, he's been part of my life ever since. Yeah.

Um So after graduation, the two of you go off in in different directions. Michael, you go to uh I think you w you go to Northwestern University outside of Chicago to uh to do a PhD. And economics. Yeah.

And Mark, I guess you you went to Palo Alto to work there at a place called TA Associates, which W it's like a like a private equity firm, something like that, is that right? Correct. And from what I understand, y I I guess your job was to call up companies and say, Hey, uh I'm with TA associates and can I talk to the CEO or the owner like

You you literally do that? Yes, that's exact with one extra line in there, which is I promise I'm not selling something. We actually have capital that we're interested in investing. in the business. You know, we've invested in some really fascinating companies. We're in the same place as you were We take minority positions, we're not trying to buy you, but the mission was to get on a phone with someone.

And get them talking. Okay. But essentially you were learning about I mean, if you got a comp a founder or an owner on the phone and and they were interested Presumably it was like a ticket to

learn everything about that company and how it how it ran. I mean this was It's like an education. Right? For you. That's exactly right. I love to joke, but I mean this with some sincerity. I I got paid to go to business school because every day was another case study.

The good businesses had a set of principles that were almost identical. It was really fascinating. But the bad businesses, there were a million reasons why they were in trouble. And so to be able to learn those different things and to understand the pitfalls and When I talk to recent college grads today, I'm always quick to point to you know, any kind of call calling sales opportunities where you can get on a phone And

Yes, it's scary. My first six months were We're pretty miserable. I I mean I had a lot of people hanging up on the phone on me and I couldn't understand why they would do that. And then I realized it wasn't them. It was it was me. I had to I had to learn the language. I had to, you know, teach them how to trust me on the phone and that I was I was offering something of value and And uh what started as a kind of a tough job turned into Just an amazing education.

Hm. Alright, so you've got this job at the private equity firm, but but at some point I guess you started to think. You know I wanna start my own.

Thing. Is that do that experience get the wheels in your head? Turning. It did. Uh the wheels had even turned earlier than that. I I With a good friend, we'd started a small business even when we were at Harvard, so I mean there's a business

Oh we had this we had a concessions business, so we figured out that at all the non mainstream sports uh, you know, swimming, uh indoor track and field, all these sports that frankly were not of interest to the you know, professional concessions guys, uh, there were still Spectators that were there. So myself and a friend of mine, Chris. We'd go down to local grocery store, we'd buy a bunch of hot dogs and buns and coke, six packs of Coke, and we figured out that, you know, for nine cents, which was the cost of a bun and a hot dog, we could turn around and sell that for two dollars at these local sporting events and That was great. I mean, that's how I paid for all my meals, uh and spending while I was at Harvard, so

Yeah, that was that was the first inkling. And then you're right, talking to all these entrepreneurs in my first job I absolutely just Had an interest To start something. And so I

I left. I left the firm and September of nineteen ninety five. Yeah. I mean you left to pursue something that you weren't quite sure what you were going to do. But you initially took a job at

Uh at a running store, right? Right. I left, but then I had to still put Food on the table and pay the rent. So I I went from a very nice cushy, you know, investment job to getting I think uh I got eight dollars an hour. Working at Metro Sports.

But it was great because I could work at the running store for You know, maybe four hours a day. Punch a clock. And then have the rest of my time totally free to focus on whatever business opportunity I wanted to go do.

Meantime Your old pal from college. Michaelath m moves to to Palo Alto to uh to start teaching at Stanford. And presumably you're

Like you guys reconnect. Oh in fact I I take credit here. Yeah, I think I convinced him to come to s to California. I'd been at his wedding in Chicago. He and I had uh we'd even done a race out in Chicago. We'd done the marathon together and things, but No, I I was a big sale it was one of my best sales jobs was selling him on the uh the merits of coming to Northern California. Yeah, so I as Mark mentioned, uh

I'd gotten married grad school. I Mm. Oh no. And six months later we were married. So as I'm I'm fielding offers about different places I can go.

Mm-hmm. Some options in the Midwest, the East Coast, but These options on the West Coast were really Interesting. And Anna, same thing. She had

thought of moving to San Francisco after after she graduated. So we said, let's let's do it,'cause Mark's there. So yeah, Mark was a big reason. Why we chose Stanford over the other choices. Basically made that move at a at a good time because meanwhile you were thinking about starting a business and

And this is e even before you had an idea. And I guess you were starting to look for a co founder, right? Yeah. Entrepreneurship is lonely. I felt it was important. I wanted a partner and I wanted a teammate.

Right. all the experiences that I had in my life that were positive were where I had teammates where I we were training hard together, so I'd had gone out to a number of my friends And Michael was somebody obviously uh you know, spent a lot of personal time with and

Mm. I love to joke that, you know, he had the office at Stanford, which was one of the few places on the country that had really good internet speed. Yeah. So we could do that with there was some truth to that, but It was also just

He was somebody that I could trust and was really smart helping me think through these. These ideas. So Michael, help me understand this. You are a a newly arrived at Stanford. Uh were you on tenure track there when you got there? Yes, tenure track, assistant professor.

And Mark comes in and says Hey I wanna start a business, I want you to be my business partner, but like you've gotta you've gotta do your tenure track stuff, you've gotta write research papers. What what what convinced you to say, sure, yeah, I'll do this? In the beginning I there was not didn't cross my mind that this would turn into me joining Mark.

to start a company. I think I was just really excited to be thinking about starting a company, what does it take? Right. Um but no idea what the company was. Just No, we were exactly we were exploring a lot of different paths. Big range, so I you know two examples. We were looking at things like

headlamps for mountain bikes and you know, night running and things like that. Didn't go very far for a variety of reasons. But another idea that we were looking at was this simple notion of You know, my friends and I who had all been competitive in in college and in high school

And when we graduated there was this void in our life. There was this um This whole thing that we felt. Um I remember I remember when TA first hired me, my firm mate they said, Oh, you know, one of the things you're gonna love being here is you're gonna get that same competitive thrill that you got while you were competing and rowing and running. Yeah. And you know, they sold me on a lot of stuff. That was one that was uh total bag of beans that they saw makes that was not the same. Uh great job not fulfilling in terms of my competitive drive. So we started exploring this notion of could we create a virtual locker room on this new thing called the internet? A virtual locker room.

Yeah, we we we had this concept of could we use the internet to bring our all of our old buddies back together who now, you know Spread across the globe and all their jobs. And basically share their workouts. Yeah. When people ask when was Strava started?

You know, the honest answer is the first business plan was written in late nineteen ninety five. It just wasn't called Strava. It was called Cana Sports. It was named after my dog, Connor, and we had this concept of we're gonna go create this virtual locker room. I just wanna I wanna just Explore this idea for a moment.'Cause it's a It's amazing, this is a social media idea.

Right, really ten years before social media would start to become a thing. That's right. Fifteen years, really. Um, and and it was like, hey can we recreate that feeling we had in the locker room where we were talking about our times and our achievements and in a in a supportive way, but also competitive way.

You wanted to kinda recreate that. Virtually. That's right. The internet would get the allow us to bring the community together and it would be around being active. So very much like what Strava is today, but it you know Like you said, nineteen ninety five, long before

what we think of as today is uh social media companies, the ones that we all know, love and hate. I mean, if if my memory serves me well, the internet in nineteen ninety five was still like Mainly static pages. It was just like text, some pictures. On static.

Pages, right? W websites were very, very it looks like cave art. compared like like if we look at it now, right? So this was a complex idea that you had. Was it possible to do that? In nineteen ninety five?

Turns out it wasn't. That's what what we found out when we went out to talk to Some people who actually knew how to build things on the internet or build things out of software. There was actually a website development firm that was very focused specifically on the sporting goods industry. That's right. And so

They said, you know, the things you want to do with this virtual locker room can't be done. They, you know, and by the way, they think it's a terrible idea. No one's gonna share Personal information. On the internet with complete strangers, well, who would do that? Who would do that? Yeah. So uh you know, we we got talked out of the idea. By the people who we went to to see if we could get some help.

They also put us though in touch with a number of their other clients because from a business model perspective The way we thought that this virtual locker room would make money was in a sense through sponsorship that you'd have these sporting good companies that would want to interact with all of our you know, all of the athletes who were involved on the in the locker room. And they too were very sceptical. They were like

You know, we just spent a million dollars on this this new website of ours, and we're not really sure we want to Get any customers. frankly faced with this bigger problem, which is we're getting all these emails. from customers now, directly from consumers. With the advent of the internet, it was much easier to go to

you know, dub dub dub dot nike dot com or trekbikes dot com than it was to try to find a retailer online. So they were they were like, look we we don't want to sponsor you because we don't even know what to do with this website and consumer that we have and That was when I would say that's the good news, because what happened to us as entrepreneurs was while we were disappointed that our idea didn't have merit. We were listening and what they were telling us was, Hey, there's this other problem out there. Which is we're getting a lot of customer email that we don't know what to do with. And Michael and I just looked at that and said Well that's crazy. Of course you want to answer the customer email. I mean that that's gold. How how do we help you solve that problem? Wait, so let me let me try to understand it. So so

In nineteen ninety five, I'm assuming if Nike or K two or Trek Bikes had a had a website, it was not an e commerce website, it was not to sell products at the time. It was just a website and maybe there'd be some pictures of What they sell and athletes using the equipment. But there would there would be a button on the website that would say, Hey, contact us.

people would contact them because they'd say, Hey my My shoes coming apart or my ski the binding on the skis loose or something, and they'd email it and nobody would respond. Correct. What was what it was was it not even a button. There would just simply be an info at. Oh it's a good thing. Support at you know, name your company. And what was amazing was Consumers are really smart. If they're on the internet

And I can click on that button and send a question saying, Hey, where do I find a size eleven in the color blue? That's way easier to do than picking up the phone and calling an eight hundred number. Right. But nobody was responding. They were just going into like a a a black box. That's right.

Yeah, so you can think of this as Mark and I are So we wanna start something, we think we have a good idea, we're told it's not a good idea, but then someone hands us a problem saying Can you solve this? Uh it felt like Here's the challenge we're we're up for. And uh we

Managed to get Something like ten thousand. Real email messages printed out. On paper. from a handful of these companies that the web development company was working with.

And we use this to Sketch out. What would a Email customer response. software system have to do? What would it have to be capable of doing to be able to handle this flow of emails and the types of questions that were coming in and how you'd have to think about standardizing responses. We so we did all this really with just

Without any experience uh in the industry of customer service, we had no No real concept of how we would build this, but The most important lesson up for me f out of that was just how you don't have to figure out all the answers to how you're gonna build something. You have to start with something that gets you to the next challenge to solve. And this was the first one, which was we had to design something really worth building. Yeah. So it again

When we heard about customer email We assumed that that problem had been solved in other industries. It was just that the sporting goods companies didn't yet have the solution. So Michael and I then started making calls. We I started I remember I started calling around to basically Silicon Valley, you know, to the the big companies of the day, the Intels and the Cisco's and the Oracles.

Because I just assume they must be handling all of their customer email really well. And we'll take that solution. Yeah. and we'll bring it to the sporting goods industry. So we were still hopeful that we were gonna stay kind of in this industry that we were passionate about, but we were we were evolving sort of the solution set. Here's the irony when we made those calls out to these other companies. Nobody had a solution. Nobody was they all had a huge problem. You figure there was an off the shelf solution that you could maybe sell.

Correct. These other companies. Yeah. Okay. Yeah. And then we could stay in sports and we can stay connected and we'd figure out how to how to bring that to life, but When we learned that nobody was solving for customer email That was the moment in time where like Wait a second. This is This is crazy. This is I mean, this is gonna be the future. This is how consumers are gonna

This is how they're gonna interact online. Um Maybe we ought to spend a little more time here. Why don't we come back in just a moment. Now Mark and Michael wind up spending a lot more time on customer email.

But how more than ten years later? they come back to their original idea. Stay with us. I'm Guy Raz and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz.

So it's 1995 and Michael and Mark put their initial idea of a sports startup on hold, and they pivot to something entirely different. software to handle customer emails. Michael's parents lend them about$75,000 to get started, even though To be frank. They don't. really know what they're doing.

Like why did you guys think you were like at what point did you say, Yep, we're g we're the guys and then you raise your hand and you were like, Yep. We can do this. I think it's m maybe we're surprised I'll speak for myself. I I think looking back on it now Mm. I'm surprised that we

what made it not seem like such a leap was that This was happening all around us. You had people with with no domain expertise starting things on the Internet because it was such a new technology, new medium, new place to do things.

And so we we kind of fit that model at least, uh which was that we were willing to try something w that hadn't been proven yet. And once going and started developing this, we pretty quickly Seen as well, you you know more about this than anyone else.

How did you learn about it? What did you'cause this is like you couldn't just go onto Wikipedia. There was no Wikipedia. How did you even learn what to do next? First off, Guy, I think you're you're hitting an important nail on the head here. And so in my case and Michael, what we did I'll never forget, we did track down a little company, it was called Catapult Entertainment. This was uh coming again, mid nineties that was Basically allowing

Two Nintendo gamers. that live in different cities to play and communicate with each other. And they had a part time sixteen year old kid who was answering customer email for them. And my old roommate was In that company and he said, Hey, you should talk to the sixteen year old kid. I think he's actually got a pretty good solution.

And so I remember sitting down with him at a local subway restaurant And he took a placemat, turned it over, and been sketching sort of what the screen needs to look like and the screenshots and how the email should move and how you interact with the inbound and the outbound message. And you know, that one fateful meeting, we turned him into a consultant to us. This sixteen year old, I think became perhaps the first consultant we had at Kana. And you know, we became those experts that you described. It was you know, you you learn pretty quickly. It it comes in these funny little chunks.

Key thing we learned from were actual live customers of our technology before we even had Something we could sell. We we realized that it would take a long time if we were gonna build our own system, so we

We took an off the shelf software. called FileMaker Pro found a A c someone who knew how to Create customer Templates for it.

And ask them to to basically build what Mark just described, that that uh placemat sketch from the t sixteen year old file maker pro version of what we would eventually try to bring to market as an enterprise software. And we went out and got a handful of

customers they actually started using this system in house and were giving us real feedback and So we we had we had somebody to work with. The venture world was very different in the late nineties, but also This was the beginning of the the dot com boom era what would eventually become a bust, but I mean there was there was money pouring into companies. Was it easy for you to raise money at the time?

Yeah, we I'd say we were uh early on the wave of the big investments in internet, but we were also different. We were not a dot com where are your e commerce, for example. We were trying weren't trying to disrupt something that was already happening in the real world per se. We were really trying to build tools to enable those companies to be successful. So I think we had a hard time raising capital relative to had we tried to do this

Two or three years later, we had a hard time because I think a lot of venture firms looked at what we were trying to offer and saying, Well, Why is that gonna be a standalone company? Why won't that just be handled by Microsoft Outlook or the other email software companies out there that just they didn't understand the translation between Personal email and customer service via email. So Um that started to change as you s you the the problem got written about more. There was a f for us at least a very formative uh moment was where

I can't remember if it was the Wall Street Journal started to write about how Amazon was solving this problem. with building their own solution for customer service email because they didn't couldn't find anything, and that was really validating for what we were trying to do. But we did find eventually success with raising capital are Series A, uh led by Draper, Fisher Jervison, D F J We closed that round in I believe it was nineteen ninety six. And

Seven hundred thousand dollars. So I mean when you of course when you look back on what you were developing back in nineteen ninety five, ninety six, it looks Like Right, like primitive stuff, right, with FileMaker Pro but then But back then this was like kind of innovative, I I guess, right, because it was a solution. Yeah. It's

I go back to my days, uh even working at the venture firm, one of the key things that the partners used to tell me is If you can solve a real problem where there's significant pain, it doesn't matter how small a company you are, they'll listen to you. And I took that to heart and it was proven true. The pain was significant enough and and was growing fast enough. I mean when we started to talk to Some of the larger Internet companies, you know. We had clients that were now receiving tens of thousands of customer emails on a daily basis.

And y you do start to realize, no, this is a critical piece of their business going forward. So and I'm the first to always admit, I mean So much of good entrepreneurship is timing. And We got very lucky. We this was nineteen ninety five, nineteen ninety six, right as all of that infrastructure was just beginning to be developed in a meaningful way.

And yeah, I w within a year we were just doing million dollar contracts. You were getting big customers. You were gonna like I mean I mean, I guess it wasn't so big then, but now he eBay, right? Like um airlines. Like m major companies. Right.

Part of our strategy was let's own the dot coms. Now we used to joke, if we see that someone gets a venture Yeah, venture around and raises capital, we should be one of the first checks that they write. Because if they're If they're starting an e commerce business There's three or four pieces of infrastructure that that they have to have. And one of those pieces is is communication.

Um How did you Go about dealing with the same. the scale of this because it it I mean, people wanted this software, companies wanted the software

How how did you manage just like bringing on staff and and meeting the demand. Yeah, it was it was a A crazy time. I'm be the first to admit. I mean it went from two guys and a dog hanging out in an office to I know when I left in the summer of two thousand

We had just over twelve hundred employees. So'cause you went public in ninety nine, right? We did. We went public in uh early fall of nineteen ninety nine. I mean you went from from the two of you in ninety five to a public company in ninety nine. I mean, you went from zero to a What what was the market cap? w uh at its height when it was a public company.

Uh I believe it was just Under eleven billion was the market cap's peak. It was insane. That's the right word for it. But

What explain I mean, you go public in ninety-nine. And I think you Uh Michael, you left actually, right? Uh just just before you went pu you the company went public. You you decided to

That's right. Why did you decide to To leave it at that point. Yeah, so

It was the summer of nineteen ninety eight. Uh so about a year before we Uh going to take the company public, I went to Mark and I said, I I think this is where

I really do have to make a choice. It's either Jump all into Kana because that's what Connor needs. or jump all into academia. I can't be have a foot in each any longer and um and and do well for either one. And so I We did work out a an advisory relationship with Kana, so I

I stayed connected, but in a very different capacity. And I wanna be clear here, is like it's almost like you're You you do have a you have a better quality and the company has a better quality of existence. If you really separate. as much as possible at some level when you don't have a role to play anymore. I think in two thousand you you eventually moved to New Hampshire to take a job at the at the business school at Dartmouth. That's right.

the decision to go back to m to move to New Hampshire, everything from you know we have four children, where's our place in the world and and New Hampshire seemed like a great place to raise a family. this will be a great way to spend the rest of your life careers teaching teaching entrepreneurship now. I can take the the skills or the experiences I had Starting Khan up with Mark. It all seemed like it made sense. The puzzle pieces were fitting together. If that had been the story, the rest of the story

Everyone would have said, Yeah, that makes total sense. Yeah. Totally. Um, w what about you, Mark? I mean around the time the company went public you also left some I mean, what did What did you do? I mean you could have

You could know gotten a sailing boat and gone around the world. Like what did you do at that time? Did you already think I'm gonna do something else or did you decide to take time? To just Kind of Enjoy The fruits of that.

Bad experience. Yeah, it was a focus on my personal life and specifically so my wife at the time, her name's Lisa, uh we've been divorced now for many, many years, but still one of my closest friends and If I'm not mistaken, she became pregnant in August of two thousand, uh with twin boys.

So my life over the next uh year or two. I would say filled with joy when it comes to sort of Jake and Charlie, who are the the twins who uh were born in March of two thousand one. You get to be a full time dad. Full time to add. Uh

But You know, there was Honestly, guy, there was kind of a dark cloud that then for whatever reason kind of rested over the the Ganey family for a bit. And you know, the the boys were born prematurely, so we had health issues and Lisa unfortunately had pretty significant health issues that carried on for a while and And then it was uh early two thousand two I was out I was actually

training. I was actually trying to get some of my athletic life back. Unfortunately, ten days before uh an Ironman event that I was training for, I I had a bike accident. Uh this was uh Memorial Day of two thousand two. And was airlifted to Stanford and emergency surgeries and That that period of time for me after Kana was

was again Uh wouldn't give it up. in terms of uh particularly the two boys in my life and and the friendships I have, but Uh, I also learned that just because you're set financially doesn't mean you shouldn't keep working. When I don't work, I tend to have problems arise in my life. So I I like to stay busy professionally as well as personally. You started to get

Anxious, probably. that um because so there's a lot'cause you know, you've got the camaraderie of the people around you and a sense of purpose. You're going to an office, you're You have meetings, there's there's tension, creative tension, but you know, you're all working towards this goal and then all of a sudden like, no, your phone's not ringing. You're not.

That's right. I I uh There was a period there professionally I what I did was I spent a lot of time on boards and I thought that perhaps that was the next chapter. In the same way Michael described his his academic opportunities as sort of the next chapter. I I saw myself as okay, well perhaps now I can take my experience and

apply it across a a spectrum of of board opportunities and so forth. But what I learned was Those I I love to equate being on boards to eating junk food and and I'll be the first to attest. I like junk food. Like I will occasionally have it. And so uh in the moment being on a board

can feel really good. Uh you're you're contributing, you're having interesting intellectual conversations, you're you're thinking through strategy. The only problem is you leave the board meeting. That's like junk food. It's just not that satisfying. At the end of the day, you're not on that team who's going and now executing all these ideas that you discussed. And It served its purpose for those four or five years that we were basically trying to stabilize our family. And get everybody back and healthy and

This is this is the time. I I ended up Lisa and I divorced in two thousand five, so we had to go through that period and that chapter in our life as well. So between the health issues and the Just the family dynamics. Board service was a great way for me to keep my finger on the pulse of what was going on. Yeah. But it wasn't something that was gonna satisfy me long term. And meanwhile, Michael, you're now living in in Hanover, New Hampshire. teaching at Dartmouth at the business school there. And I guess while you're there, you actually uh like get asked by some colleagues to help with

Their startup? Which is like a health startup, is that right? Yeah, so there's this uh Group of scientists at the engineering school who have started a biotech platform company. Um, and looks like they need some help. They keep you know, they ask me to to give them some advice. We start meeting more regularly and

By virtue of being exposed to their idea and where I see I could be helpful, I s realize I could have a role to play in this nascent company, and so I join as the CFO and VP of operations at this company called Glycopy. And we go through the process of raising capital, we go through building a team, building a laboratory.

And I stay with that company till t two thousand five. And It's sold in two thousand six to to Merck. really good outcome for everybody involved.

But what do I do next? And so I I don't go back to teaching. Do you decide not to stay in academia? That's right. It was teaching the second year and then the third year. Where like I'm telling the same stories. I I have no way to

And update them and bring in new things. And I think eventually I I'm just looking at this and say, I'm gonna become Obsolete here. And

Teaching is a bit like board work. The Mark mentioned. It's You can't go much further than just maybe uh giving people a few insights and uh telling some motivating stories. And then they have to go and go and experience it themselves and I wasn't ready

to be done experiencing myself. I want it to continue to grow and continue to to learn. And meanwhile, Mark, you'd mention that. You kind of were focused on Yeah, your personal life and and there was health and dealing with your kids and and health issues with w with your wife at the time and

Your own. challenges with your accident, your bike accident. Um During your let's say interregnum'cause it lasted for like Five. Plus years, I think.

At what point did you start to Think I gotta start something new. I gotta I gotta launch something new. Yeah.

I I think it was as stuff stabilized in my life as my again health and family situation is as those things stabilized in that two thousand five time frame. Michael was just coming out of Glycophy at that time. So I remember Okay, here's here's our chance. Uh He's coming out of that and I'm stable, knock on wood.

We're too young not to You know. Think that there isn't something else to go do here. Alright, so now we're in Sort of l like kind of phase two for

For you, Michael, which is A new old idea. Right. Because You had an idea in nineteen ninety five to create a social network around

Athletes. People sharing their achievements, it was not technically possible to do it then. But it sounds like that idea did not die in your head. Yeah, that's right. In that process of two thousand five to two thousand six.

We looked at consumer. What's missing in our own lives. And we spent some time Thinking about companies that we really admired, uh, we made a list of if we had been founders of XYZ Company, what would it have been? And it was telling because

It wasn't a bunch of Silicon Valley companies. I don't think there was I mean maybe maybe we put Apple on there, I can't remember, but Otherwise it was all these iconic consumer brands. It was the Patagonia's um There was a virgin uh from the UK. It was these These brands that had withstood the test of time had been around for decades, but they just had a unique relationship with their consumer.

And if you think about our history now, we're we're these two enterprise software guys and We both sort of took this leap of faith that it's like We don't we don't want to do that again. It would be easy to pull out the playbook and And replicate another enterprise software company and We could bring the band back together and hire a bunch of folks we knew before, but

There was an intellectual curiosity and I think this is again I Give credit to Michael where it's like, Yeah, let's let's Let's go do something we've never done before. we were almost going back to what we felt like when we were twenty five and we didn't know how to do anything. I think because of that the idea that had surfaced back in nineteen ninety five around the virtual locker room.

made sense to revisit. The problem was still there. You know, we were now in our early forties, but We knew that sports and participating in games and things were meaningful to us, yet it's really hard to do. Life gets in the way. And so could we think about software as a platform and the internet as as a way to perhaps help both inspire and and motivate Folks like ourselves to stay active.

Alright, so the idea was let's I mean this is now. Right, two thousand six. It's sort of sort of pre app. But you've got

uh websites now that uh I remember using like Map My Run and things like that that that were out there. But it's still pre pre mobile devices, right? It's still like a couple of years before the iPhone's gonna come out. And So w what were you initially thinking? That you would do a website that would

be this community where you could track and and compare your you know, your I don't know, running times? Was that the the idea that you landed on? Yeah. Th we gotta introduce a very important

Person. to the story. And that's Davy Kitchell. Katie. And his family live in Norwich, Vermont, across the river from Hanover.

And It's my fortieth day of my fortieth birthday. We sit down for coffee that morning. And Davy has been experimenting with

If he uses a Garmin cycling head unit, Garmin was making uh G P S G P with GPS in it. Uh it was a uh this is in n in two thousand six, this is pretty bulky, pretty expensive. But he wanted to see if he can use this to try to collect some data that could help him Train better.

So There was something interesting there. that we said we oughta keep talking because you seem to be working on the actual could be important and and and f fit into our world as well.

And so We asked Davy to to keep working on stuff. And see what he comes up with. And what he comes up with. by the summer of two thousand eight, spring of two thousand eight. is what we now know as the Strava segment leaderboard.

The idea that you can Have people in this case riding their bicycles at different points in time, but they can see their their times on a climb. Or any stretch of road. Compared to each other.

So this prototype that he is working on comes out of that phase of two thousand seven, two thousand eight. And uh we We uh decide in the summer of two thousand eight, Mark and I are now pretty sure this is gonna be it. It's it's the virtual locker room idea among all the the few other possibilities we were experimenting with or thinking about this is the thing. So and and the name Strava is str Strive, right? But uh yeah, we ch we chose a name that hopefully can go around the world.

And the idea was you would run run this kind of in a distributed way. You wouldn't have an office like Mark you would be on the West Coast. Michael, you'd be in Hanover, New Hampshire, and you would just kind of Do it all virtually. Well, we were committed to the

Distributed model. Uh But as soon as we began the process of hiring folks, we also believed in the power of face to face and being in person. So So we we opened a small office in Palo Alto. And so for Michael, did that did that for for you do that mean Commuting. Okay. Country. Yeah, getting on a plane more and more regularly.

All right, so you have this so you're all kind of working towards this. concept and it's gonna be I keep saying a social network and maybe maybe that's not accurate, but It sounds like that's sort of where it was headed, but I guess something happens in two thousand eight that There's a breakthrough, right? That kind of changes the way you think about it. What

What was it? What happened? Yeah. Summer of two thousand eight. We had a group of individuals, I think maybe no more than half a dozen cyclists On the east coast. out in Hanover and another half dozen cyclists that we recruited on the West Coast.

And Davy had built a uh Very basic website. We used to call it the green machine. It was this lovely Shade of green that everybody would log into. And we made sure that everybody had Garmin cycling devices.

And we asked them through the time of the tour de France. So over a three week period in July of two thousand eight. Would you be willing to upload to this website. And in exchange we're gonna we're gonna create some competitions, we're gonna

We're gonna put East Coast against West Coast. We just love to get your feedback and your reactions to this experience of not just going out for a ride, but then sharing that information on the Strava website. And For me the takeaway was twofold. One was

It was clear very quickly that the cyclists who were using it Yeah. infatuated by the information they were seeing. Like there was a high level of engagement with this data and the the storytelling. Davy just did this amazing job of taking what was pretty raw GPS information. And creating a story for somebody afterwards.

Takeaway two was Just the level of interaction. between these cyclists now. I mean the level of trash talking and gamesmanship and camaraderie and the competition back and forth between East and West. It was fervent. It was just this really funny experience to watch them and they they couldn't get enough of it.

And so that experience over three weeks in the summer of two thousand eight. was really the final catalyst that we need to say Okay, we may not have the business model nailed down here. We we've there's a lot of specifics. But it was enough of an energy there and and enough excitement after that quick three weeks that we said We've got something.

When we come back in just a moment. How Mark and Michael got Strava out of its awkward adolescent days. And how, because of life circumstances, they each had to learn how to run the company. Stay with us, I'm Guy Raz, and you're listening to How I Built This.

Hey, welcome back to how I built this. I'm Guy Raz. So it's around two thousand eight. And Michael and Mark are hard at work on Strava. A platform for cyclists to clock and compare their rides. And by the way, that emphasis on cyclists and only cyclists. is totally intentional.

Arcana experience had taught us something really valuable, which was by just picking one subcategory. of an audience or a prospective customer. And back in Econa days it was email response. Which I can tell you many investors said that's not even a company, that that's not even a product. That's a feature. Yeah. Yeah.

solving that problem for that one audience opened up so many opportunities for us going forward. And so we in many ways applied the same thing here. We went after a a passionate cyclist, not because we thought that that was going to be the sole market, but But By creating that opportunity and that relationship with them, the way in which you can build an experience it becomes really rich and really authentic for that group and

There is a leap of faith and It's I always remind people, don't get confused between vision and go to market. In the case of Strava, our go to market strategy was cycling. And lastly, the reason was There were lots of running apps that were out there and running solutions. There actually weren't very many solutions that were addressing the needs of cyclists. And so we kind of did an end around. Um instead of going into the crowded market, we we

had just as um A fanatic, a base but without the noise of other competitors. I mean it's like any triad, right? It's like CrossFitters. Like cyclists, presumably. If if one cyclist starts using this and loves it, then you know that they're gonna talk about it to it just and and then there's there's a virality to it.

Yeah. We knew we'd get to the other sports, we knew it's a little bit of a it but it we didn't know when. We didn't know how long it would take for us, how long would we stay with cycling. And some of the biggest chan you know, say the the discussions we had was when do we start expanding into other sports and it we didn't really do it in earnest until two thousand twelve. How did how did how did a consumer interact with with Strava in in on august eighteenth, two thousand nine, when you launched it.

You had to have a Garmin. GPS device. That was the only device that would work with Strava in the those early days. So You had to have one of those devices that would track your work out and you would Plug it into your computer. And the data would flow.

Up. into Garmin and from Garmin into Strava. So compared to today, it required a lot of work, if you will. And so as you might imagine grew slowly. Uh it you you'd have to do all those steps that today you'd say a lot of people just

Take for granted that happens through their mobile apps. He would wear it. You would you know, cycle. You come home, you plug it into your computer

And then that data would be uploaded to a website where you could You had a profile, basically. Basically we tried to make participation Strava as hard as possible. Uh slowly but surely. But no, you're you just as you were describing that, I was reminded of

You know, one of the points of friction was Well How many people have Garmin devices? And so I mean, there was a whole period of time where Michael and I were negotiating with the likes of Costco and others, just literally trying to buy Garmin's so that we could either sell them or give them away to friends so that we could get people onto the platform. Uh we have sometimes a phrase we say which is do things that don't scale. Yeah. I would say we probably did this, uh, perhaps to an extreme level in the early days of Strava when we look back at it.

when you I mean this is still again, I mean I think the iPhone in two thousand seven and smartphones kind of are beginning to emerge. But immediately before you launch,'cause you launched it in two thousand nine, the summer of two thousand nine, Did you think that it was gonna be an app first uh product? No. Uh we should have moved off of web onto mobile sooner. Uh but we that's not the team we had. That's not the that's not Mark and I. We were not

big app users. We we so w going back to this sort of uh w did we have the set of experiences that would ultimately make Strava the most successful, I'd say is an example where we didn't. We launched Strava into a pretty crowded space already and we were on a on a technology on on a platform, the web, that was not going to become the dominant platform. And um it wasn't until the 2012 until we we really had a a viable mobile app. into the market. We launched something in 2011 that would that didn't work, but um it w it took us a while to shift off of that. D did you even have an uh an idea of how this could be sustainable, or did you say did you just kind of figure, let's just build it, let's get people on, and then we'll figure out how we're gonna how how this can become sustainable? Yeah we We actually had um always had the intent to have it be that the business model was a subscription. That you we would there's a free version you start with, but to get the best of what we are building you that's something you subscribe to. Yeah. I I imagine as you were thinking, you know, sort of five, ten years out at the time, you were thinking, okay, we can have a subscription option, a a freemium model, where you know there are better features if you have a subscription. Were you also thinking, and maybe you know we'll have some ads? And maybe because we're gonna have all this data, we can also be a data broker.

Actually, guy, just point of clarification, we launched the subscription uh Within that first year. I gotcha. Okay. To answer your question, you're right. We We did

And have, if you look over Strav's thirteen year history, explored various modernization models. Um And We've always come back. to that fundamental premise, which is

When we're building something for our customer, for our members. And it's something that is of value enough that they'll pay us, that that's a good thing. I like to Mm state the simple idea that we're going to do. We want Strava to be as important as a runner's running shoes, as important as a cyclist bike. And if we can get to that place the rest sort of sorts itself out.

I do remember. The earliest Business plans. had the concept of sponsorship, but we said no advertising. We're not Wha why is that? Why did you why did you take that position?

We already found that advertising on the websites and the digital experiences that we were using That It it wasn't s it was a distraction. Um it was It may work economically for the advertiser. It may work great for the for the platform that presents the ads, but

It didn't feel like it was in the best interest of the actual experience or the cons of the customer. And so we believed we we at least wanted to start with a thesis that we could build something Better than that. Um Advertising per se so that you could basically turn your customer into the product so that you you're selling their attention. That did not make sense to us from the very early days.

And w I mean, you also had this incredible access to amazing metadata around human health. you know, a trove of of valuable information. D I mean What is your what what has been your position on data? I mean, how do you How do you Handle. I mean, obviously people make it available f you know, if you've got a friend on Stravel like right now. I know that Mark took a uh an eight mile ride this morning.

at five thirty AM and uh Your average speed was eight point two miles an hour. And I can pr pr probably tell where you live from this, but I'm just w but you know, we're friends on Stravisop, right? You you you you gave me access to it. But how do you how do you think about privacy? How did you did you and did you start to think about it from the beginning when you launched it? Yeah, you're exactly right that privacy and trust of our or athlete in Strava for

Ensuring that their data is safe, that they can control how they show up on S that's critically important. And if we're going to use data for any purpose, it's gotta be anonymized and aggregated and not we never sell anyone's private information. We never give away anyone's the the product. Yeah. And so when did you first launch? The app on the app store.

We had a version in two thousand eleven in the app store IOS only. It was bare bones and ultimately wasn't successful. We rebuilt the app in the course of the no next six months after launch. But it showed us the power of building a mobile apps. You can it's just such an amazing way to Get access. Two

the experience to millions of people. So the phone is really a great entry point for getting more people into the community. One of the things that that I I think is so interesting about the the way you launched it was you didn't actually target you know, sort of Casual.

athletes or people who just took a you know run once or twice a week, you actually were trying to go for like the best athletes, like t like professional athletes even. Well, I it it these are shades of grey. It's not necessarily how good they were, but how passionate they were. So you're right, we were targeting they didn't necessarily have to be good at it.

Um yeah, yeah. But they were probably spending thousands of dollars on it. They were probably talking about it with their friends when they weren't writing. And we used to have a phrase, l you know, let's make sure we build it for the the best in the world. and meet their needs because if we do, they're the ones who inspire so many others to then join the platform. Here's here's a question.

Who is the person, like when you were describing Strava to people? Who is the person you imagine would come to it? Because You know, you are sharing your runs and sometimes your runs might suck. Yeah. So When you describe the kind of person who would go on it what were the reasons why you thought they would go on it? W was it was it to

Or was it to m motivate themselves? Who who was that person? Uh it's it's People keep people active and they will find the joy in the the activities that they do, they will find more joy in them by sharing them on Strava. Yeah.

But I've s had this insight that as people have joined Strava historically They often don't join because they're trying to join the community. They join because they're looking for a way To track their own personal activities. And I often refer to it as single player mode versus multiplayer mode. If you go back to our earliest days, we actually had to build. An experience where if you were the only person on Strava

You would get value. Yeah. the tens of millions of people who are there, you can actually onboard Destrava and have a very Private rich experience.

where you can see your trends, you can you know you have this this digital log that's available to you, but the magic happens when you begin following just a few people. Yeah. Yeah, you referred to my ride this morning. It's nothing to write home about. It was only eight miles. But

What was fun about it. was I got up there before the sunrise and if you look at the activity, it's not my distance or how fast I was But There was some spectacular color out there this morning that I was able to

To enjoy and then to be able to share that with some friends and And family. I get way more kudos today. for something like that than I do, you know, a fast mile time or Yeah.

So one of the the the first kind of one of the first things you you you decide to introduce once the cycling community is kind of solidified is the running And this was a separate. So separate, completely separate. site right. Um Strava Run. And from what I understand like the

Cyclists like went crazy. They they just so felt so betrayed and angry that you had this running app. Yeah. Two. They uh that's true. They were jealous that we were spending any time devoted to a sport that they didn't love. And uh I think what changed was the minute they understood that hey, these are their friends who run and they can

celebrate them and build community with them and in the Strava feed, which is the place where you see other people's activities, you get to decide who's in your feed, you follow them. They can follow you back. But that that first reaction of um You know.

Why are you ruining Strava? It was perfect before. Why are you adding these things that we don't care about? Uh we definitely heard a lot of flack for that. So so the business is is expanding and and you're doing well. I mean I think you guys were able to to raise a Fair amount of money around this time too. Like four million dollars.

But meantime around Uh two thousand ten or so I think. There are some major personal challenges in in both of your lives which will affect who's gonna lead the company. Um Mark, kinda w walk me through

What happened? Well When we launched I was running the business in In the Bay Area. And then in two thousand nine, literally

that spring that we're doing it my ex wife started to have some pretty serious health problems again and I'm now single parent, full time dad. And so by early two thousand ten

It was, Hey Michael, I I really need you to You needed him to become CEO. Exactly. So here I was CEO for all of you know, a year and change and At that point, even though he was in Hanover, I was like I and coming out

you know, on a frequent basis, but not out here running things. Uh we just He I owe him because he stepped in in a moment in time when I needed to devote my energy to my family. So you become

CEO. In two thousand ten. Yes. Michael. And In December two thousand thirteen, you announced that you were stepping down.

And You Switched. positions again. I think Mark you come back as CEO um

Michael, without I don't m wanna pry into your personal life, but are are you willing to talk About that that time in your life. Yeah, uh Glad to share. It's it's part of my story and um

Yeah, there's a there's a sadness to it, but there's also a um continuing on and forging ahead and discovering some great things that come on the other side of that sadness. And so you know, the the roles we've played in the c over the course of of Strava have changed, but one thing hasn't changed, which is we're doing this together. We're co founders together in this. So he steps in in December because in September of that year, uh, a few months prior, my wife Anna had been diagnosed with metastatic breast cancer. She had been first diagnosed in two thousand four.

had uh gone through treatment at that time. It recurred again in two thousand six and had gone through treatment again. And so It was uh A real surprise we'd been seven years had had not had had this had it sort of receded more to the background. And so In September

She's diagnosed, um, it's a shock, it's a huge shock, and the prognosis is not great. It's um it's metastasized into her And so Recognizing that and understanding what that meant for the two of us and what it meant for my capacity to run the company, that took a while and I credit Mark for being able to come to me and say

You you've gotta you've gotta see this differently. You've got you can't Do both the company's gonna suffer, your family's gonna suffer, you're gonna suffer. And we can find a better way. We can find a different way. So We did.

Right, because I think at this point Mark stepped back in as CEO. Correct. But Michael, you didn't you didn't leave entirely, you stayed on with the company, right? Yeah. I took the role of president.

I could take on As much work as my schedule would allow to prioritize taking care of my family, taking care of Anna. uh during the last few years of her life. Mm. Um

During your time. Yeah. When you stepped away. Um Did you stay in Hanover and New Hampshire?

Yeah, that's where we we'd kept our our home there uh during my my increasingly long visits to San Francisco. I had an apartment in San Francisco which I gave up. So I'm in Hanover. We have an office there. We have a a growing team there actually. And Mark is is CEO running the company in in San Francisco.

Uh. during that phase, um I was his commute partner. He would Whenever his ride into the s into San Francisco, it would be when he and I would talk every morning forty five minutes or so of of touching bass. And again just roll switched here. I'm now the sounding board. I'm

Uh whatever he needed. needs me to do, I'm doing, uh whatever he however I could be helpful. Um, I'm trying to do what I can from from him. So you Parker back as CEO now. And

Tell me a little bit about I mean how how the the the product is being adopted. I mean is is it Almost entirely just word of mouth. I mean is it that tribe of cyclists and runners who are telling other cyclists and runners about this and

You know wanting their friends to be on it so they can share their experiences. It is. As simple as it sounds, our our greatest source of growth

are our members. Um It's been like that from day one and d frankly, despite our efforts to come up with other ways. to grow and so forth. And that's not to say we don't have a fantastic marketing team and there aren't things that we continue to do, but if you look at sort of the core best source of our growth. It's it's happy members. It's people who are engaged in Strava and are telling their friends. And yes, that was happening in twenty thirteen and

Yeah, in a typical sort of network like effect and particularly a freemium business like ours, um, if you're patient and you have the resources to be patient, The flywheels does start to spin faster and faster and faster, and you could see that in our growth. Uh just Michael can tell you how long it took us to get our first million members and Yeah, now we add two million every month, but

Uh I think it took us what, Michael, eight years to see our first million members, something. Maybe not quite that long, but it was like three or f Oh, what was it, Michael? So I believe we hit a million Daily actives in twenty fifteen. With that.

shows you though is like word of mouth is slow until it's fast, right? Yeah, like uh we We were patient, I guess, we built patience into who we brought on as investors, we built patients into our team. So that we said. It might take us a while, but we're gonna get to a place that's gonna be really great, and it's gonna be very resilient when we get there, and I think that's where we've arrived to at this point.

I know you came back to to as a CEO in twenty nineteen. Yeah. And November of twenty nineteen. That's right. And You know, the the business model's clear. It's a subscription model, right? And so that was where your revenue But the

Free product you are offering. I think, from what I've read, People were you know it was You had subscribers, but there were plenty of people who were happy just

using the free product. So At a certain point did you did you have to have internal discussions where you were like, you know We gotta We gotta make the free product a little bit less. attractive because we need subscribers.

That period in November twenty nineteen, uh, Mark and I Teamed up. to come back to run the company, him as executive chair and me as CEO, it was uh A challenging time, realizing that We are now at that point.

uh ten years in on a journey the company needed to become sustainable, profitable. Um, and so your question about the free and paid balance between free and paid, it was We didn't start with saying the free is too good. We started by saying we have to We have to create more value in the subscription.

Would we build more features? Yes. Would we rebalance the equation between the free and the paid? by moving some things from the free side to the paid side. Yes, we would do that f in the name of Building Strava to be sustainable, building it so that we can be here for the next hundred years. Yeah, guy there Just to give you context,'cause I think there's a There's an important chapter in here that where there was a

An important lesson that we're going to do. Hopefully any of your other entrepreneurs. Because from mid twenty seventeen, twenty nineteen, we had brought in a An external CEO.

And And no regrets. However, during that period from seventeen to nineteen We were experimenting across a lot of monetization models. We were we were looking at frankly, we were looking at ads in the feed for the first time in Strav's history. We were looking at data insights. So when Michael refers to coming back and and facing some challenges, but also just trying to simplify

That was what late twenty nineteen was for us as as two founders, let's come back Remind everybody we really only have one customer. at Strava and that is the active person who just loves being out and being active every day. And we want to build something that's great enough that they wanna pay us for it. And if they want to use it for free, that's great because our free members are not just a marketing channel. Our free members are contributing their activities to Strava every day, which enhances the experience.

For everybody else. So Companies go through these ebbs and flows, and we went through this period where we in some ways I'd argue we just bit off more than we could chew. We were spread really, really thin as a company and Twenty seventeen, twenty eighteen, twenty nineteen and We learn the value of focus. We just brought it back to its basics.

You know. one of the things that happened unexpectedly, I think, for every b business, especially for yours, was that two two thousand twenty And then twenty one then tw just prove to be huge growth years, right? Because the p the pandemic people were shut out of gym and stuck at home and so

People wanted to exercise, they want to get out. I mean you had one and a half or one point one billion uploads in twenty twenty and then a thirty eight percent increase in twenty twenty one. And then you're still increasing in twenty twenty two. How many how many employees does Strava have now, by the way?

We're close to three hundred and fifty. Uh we entered the pandemic with about a hundred and eighty. So we've we've almost doubled uh since then. Um and again, this is how we invest um We've reached profitability at this point. Um so we're reinvesting the the benefits back into by hiring more people, being able to do more so that we can continue to serve our community. You know, I I I kinda wanna understand what draws the two of you together. I mean like

Like fifteen or six sixteen years ago, you guys were on different sides. Of the country and and pursuing very different paths. When uh when Mark you you reached out to Michael and to to kind of get back together and build what would become Strava.

Why did you reach back out to him? I mean w what is it about Michael that Uh that made you want to work With him again. This concept of trust is a word that often gets overused, but

not understood. And it there's just He and I had such a long history together. And being able to trust someone Yeah. A very intimate level.

That's hard to d Define, but it's there. Second is we compliment each other very well. I like to joke that all you have to do is look at our degrees, you know, art history and economics and There's just a yin and a yang to the way in which we think. And the third reason I'll tell you guys that

Because he's got he's got the golden touch. Michael's uh You know, there's some truth to the simple fact that um As long as I've known himself. He wins. Michael's uh Michael's a very quiet winner. Whether it was Kana or Glycopy, good outcomes and

I just give him a lot of credit. Well it's okay, so I'm you can't see but I'm I'm over here blushing. So if it's okay, let me t tell it from my perspective as well, which is The person I've learned the most from in life is Mark. I've evolved and changed and and understood. Many, many things about

leadership and how to really think about the process of creating something of value. And Mark is incredibly aware. And uh like the need even just the need to be able to communicate effectively. But we we have the the the joke is if I write the first draft

It's three pages and it should be one. If Mark writes the first draft, it might be a half a page and it should be one, but He he boils things down, he reduces things to what actually will people be able to understand and and that's that's leadership, is that you you can't throw everything at them and and expect them to do to make the most of the information you're passing along and So when when we look for compliment uh the complimentary styles another way, uh thing uh you know, the thing I see in Mark I boil it down to

I internalize problems. I look at them and I say, How would I solve this? What what skills do I have? What what can I bring to s to the solution? Mark externalizes. He says, Who can I talk to who has perspectives that will help make a great decision here? You put those two together, the the analytical internal approach and the external Collecting the The right solutions from others.

And that's a powerful combination. It it just strikes me as kinda remarkable that It it sounds like you never fight. that you never had conflict. Is that true? Is that right? Uh

Our challenge what I've and I'll speak for myself here, our challenge as two co founders and partners is When we don't communicate. That's when Challenge occurs. As long as we're able to stay

synced. Uh it doesn't even have to be synchronized a hundred percent of the time, but as long as we have communication going, then it's pretty rare that you see fights. Um But but we've had our we've had our moments. We've had to figure out when we have our friend hat on versus when we have our business hat on. Right. That's that's the art.

Mark, you um I mean You know, you you you injured yourself and You didn't end up on the cross country team. And ended up stumbling into

The crew team. And Michael, you didn't like decided not to do sailing'cause he just didn't like the vibe there. And You happen to see the

Crew table. when you're registering for classes. Uh, and that eventually brought the two of you together. And and your lives m would have may have been equally interesting and great had you had that not happened. But

That steer you in a different in a different direction and then led you eventually to founding a business together and then a second business together and here you are today. How much of your journey do you do you think has to do with um With with luck, like things like that. And how much do you think has to do with just how hard you worked and

Grind it away. Um First T mark. There's a huge percentage of my life is associated with sort of luck and circumstance. Because I keep pushing, because I keep grinding. So I think that there is an element of creating luck. And my thought is that

I was uh just reading a book recently, I think it's called How Champions Win or s or something to that effect, and it just talks about Optimism. being a learned trait rather than something you're born with. And That is what I think I I do have in me is is optimism. And with that then

Yeah, the luck comes and goes. If I look back on my life, I've had plenty of bad luck. I've I've had bicycle accidents and ski accidents and I've had heart problems and I've had a divorce. Yeah, y I can go back and look at bad luck and good luck, but If you bring optimism to things, it's amazing how the luck Keep servicing in a good way. Michael?

I think Mark and I are wired very similarly. We are at our heart we're optimists. We approach uh challenges as well they represent the opportunities. I will say one thing, guys, as we have talked through our meeting on the crew team and

Just the path dependency of What would have happened if Mark had not gotten injured and had stayed on the cross country team, what would have happened in my life if that sailing meeting had been a little bit more fun. I do think about that as I have confidence that Mark and I would have found each other somehow. Hm.

I I just can't imagine my life without him. That's Michael Horbath, founder and CEO of Strava. and Mark Ganey, founder and executive chairman. And by the way, one of the off-label uses of Strava is that users can chart their run or bike ride along a specific path so that it actually draws a picture. And sometimes

A pretty elaborate one. Right now I'm looking at an Instagram account called Strav.art. And some of these images are amazing. There's dragons and bunny rabbits and tigers, even Frank Sinatra and Freddie Mercury, there's Queen Elizabeth and R2 D2

And also images from actual art like the girl with the pearl earring and yes even the baby on the Nirvana album cover. Hey, thanks so much for listening to the show this week. Please do follow us on your podcast app so you always have the latest episode downloaded. If you want to follow us on Twitter, our account is at how I built this, and mine is at guy. And on Instagram, I'm at guy.Roz. If you want to contact the team, our email address is hibt at id.wondery.com. This episode was produced by JC Howard with music composed by Ramteen Arabui.

Was edited by Neva Grant with research help from Vera Safari. Our production staff also includes Liz Metzger, Carrie Thompson, John Isabella, Chris Messini, Carla Estevez, Catherine Cypher, Margaret Sereno, Alex Chung, Sam Paulson, Josh Lash, and Elaine Coates. I'm Guy Roz, and you've been listening. how I built this.

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