Stanford Seminar - How Strava Found its Niche, Mark Gainey co-founder & executive chairman of Strava

thanks very much Robbie thank you it is it is an honor to be here this afternoon I'm gonna start by just setting expectations because it took me a while just to find this place and just you

understand I'm an art history major speaking in front of a bunch of engineering students in an engineering area so rather intimidating it's much easier for me to be in front of other audiences so we're gonna give this a

shot I was asked to come in and give you a little bit of background on myself a bit of the strobus story some more stories some lessons along the way and in particular as the title slide shows

here you know this idea of an inch wide mile deep I want to take sort of one lesson that we've learned actually both from the kana days as well as a Strava days see if I can go a little deeper on that a strategy that work really well for us as a go-to-market may not work

for everybody but in our case it's been pivotable twice through two different startups so well it's just growing and by the way my hope is 2025 minutes of me

talking and then we can get some Q&A some quick background so as I mentioned art history major actually grew up in Reno Nevada I was lucky enough to go out

to Harvard studied art history learn very quickly that it's really cold back there so I hooked it back as quick as I could to the west coast I graduate in 1990 the previous century I came out

here and I went to work for a venture firm a firm called ta associates in downtown Palo Alto a great job out of school this is pre-internet folks so my job was to basically sit on the phone all day long and talk to entrepreneurs

call startups try to find out whether there was an investment opportunity great for two reasons one I learned the business of you know the language of business but two I caught the bug to be

an entrepreneur and so in late 1995 I left that firm and with a good friend of mine actually someone who was a professor here at Stanford the Economics Department a guy named Michael Horvath

we found in what became Conner communications con a perfect example of going an inch wide and a mile deep alright and what I'm talking about there is picking a niche something that too

many people may look like too small an opportunity but going really deep into that opportunity trying to be authentic they're trying to develop leadership in that space with the hopes that then that opportunity leads to something bigger in

the case of Cano we did was we found this opportunity and customer email and this is 1995 companies are just beginning to go online beginning to build their internet presence and they have this problem

which is as soon as they go online they start getting customer email and there weren't systems to actually answer those messages so we developed a company and with some folks other than me who wrote the software we were able to come up with a

solution five years later we started two guys in a dog in 1995 by 2000 we were global company 53 offices around the world 1200 employees generating hundreds

of millions in revenue traded on NASDAQ sort of your classic we got very lucky right place right time but we picked that inch-wide mile-deep I can tell you when we were trying to raise capital we were accused of being a

feature not a product not even a I mean definitely not a company but what we proved was by going deep into that one space that customer email space it gave us that credibility that then allowed us to expand in our customer base and

ultimately offer a whole bunch of other things to our existing customers and then we get to strata so I left Cana in 2000 to start a family sit on some

boards do some things that probably I shouldn't have a horrible bicycle accidents and way too much time in Stanford Medical Center but ultimately caught the bug to be an entrepreneur

again and Michael and I came together in 2009 to launch Strava quick background on Strava so 2009 January of 2009 that's the

official start date to be clear its history goes all the way back again to the previous century as I mentioned Michael and I've been friends for a long time we met in The Boathouse right there that's Newell boathouse on the Cambridge

and the Charles River there in Cambridge at Harvard we met there on the crew team it was an amazing experience really hard to define for those of you who haven't ever been in a boat like that but the

camaraderie the esprit de corps frankly just the trash-talking and the competition everything that comes with being on that team was perfect it was sort of what defined my college

experience the only problem was that I graduated and when I graduated poof it disappeared this whole idea of sort of having my tribe my team that I could hang out with and that kept me inspired

was gone and so as early as 99 five Michael and I had actually developed a business plan it's called Cana sports at the time not Strava but we were fully intent on creating this virtual locker room we were going to use

this new thing called the Internet to create this place where we could get all of our buddies to bring their workouts together we were going to have this wonderful sort of virtual team

good-news-bad-news in 1995 right the bad news we were way too early were about 15 years too early in terms of the idea the technology was not there to capture the activities and frankly even the consumer

behavior wasn't there but the good news was by pursuing kind of sports that's what actually introduced us to the customer email problem so lesson number one that I would just share with you you know oftentimes I talked to

entrepreneurs and they'll say to me I just or I should say we wanna be on a burners they want to go start something but they just say to me I just don't know the right idea I just don't have the right idea I would just caution you

that pick an idea and just start rolling with it start having conversations and you'll be amazed at where it takes you if anybody had told me that a virtual locker room would lead to an enterprise software company worth 11 billion

dollars I would have laughed but that is what happened like the opportunity of pursuing the sports introduced us to this problem because of the sporting good companies and the things that they were experiencing online and because we were objective we were able to evolve

our business and become kana communications right the other piece of good news was we were 15 years too early but we were still very passionate about the idea and so come 2009 the world had

changed for one things like wearable devices the smartphone's you're able to capture activities in ways you couldn't do it 10 years earlier and the other thing that had changed was consumers themselves the athletes it was you're

much more comfortable sharing your information online that was not something we were doing in the late 1990s so 2009 we decide to start a business how do we go about doing it

right we had this vision Michael and I were really excited about creating a consumer brand it was not something we've done before we done enterprise software but when we thought about the companies that we admired they were much

more akin to that the virgin's and a Patagonia is in the north faces of the world these these iconic brands and so that's what we wanted to do with Strava and we thought how could we create something using the internet to inspire this global community of athletes so

that was the viz for the business from day one we still have that in the business plan but our go-to-market strategy was this niche it was basically taking a page right out of the Khanna playbook let's pick one

category one group of athletes go really deep be authentic with them and let's see where that lends us or sort of takes us down the road in this particular case we picked the passionate cyclist in fact

internally we refer to them as mammals these are middle-aged men in lycra all right that is our target audience all right and on the surface to us they look

really really good very fanatical about their sport right very intense and obsessed with their data and the technology associated with cycling they

tend to spend a lot on their sport and frankly there wasn't another solution out there in the market there were lots of things coming out for runners and so forth but there was nothing for the cycling audience so Michael and I looked

at that and said great this is perfect but again I will tell you when we talked to investors even family and friends we were accused time and again of cute little hobby but you're never going to be able to build a business there we

heard this over and over and over despite hearing it because of the effect that we had at Cana and frankly we were sort of middle-aged men in lycra and we needed this solution so we just started

building and we did four things that I want to share with you when it comes to being an inch wide and a mile deep first thing we did was we did grassroots recruiting right oftentimes in

entrepreneurs particularly here in a valley you're immediately trying to figure out how do you get your first thousand your first 10,000 your first hundred thousand customers online we did not think that way we were literally I

can remember the first five cyclists that we had on stralla right there's a gentleman I won't give you his name but his initials or DB he's our first customer he's still on Strava eleven

years later like we were begging and borrowing and stealing from cyclists anywhere we could we would go to local cycling clubs here we would raise e stories of going down to Costco and trying to figure out how to negotiate

with Costco to buy tens of thousands of dollars worth of Garmin cycling computers just so we could give those away to our friends so that they would participate on Strava because we could not get garment to sell us a device so

we had to negotiate with Costco we got fleeced by eBay sellers who promised us hundreds of Garmin's devices that would never show up after us sending them checks I mean we did everything wrong but we were worried doing is

really going grassroots trying to find those early customers early cyclists that we could do which was the second thing create a conversation with them right this was about sitting down and

really listening to what their needs were as a cyclist forging this relationship we didn't call them customers they were our partners in this project and what was happening was when

you had that conversation you start to hear these little nuances that become very very important for instance as a cyclist it doesn't matter whether you're going on a five mile ride a 20 mile ride a 50 mile ride or a hunter mile ride it

turns out that there's always this iconic moment there's this moment when you hit hill and you're gonna climb it as hard as you can and that's the thing that cyclists remember it's like what they memorialize on their rides is the

the climb that they do so for us that was important because if we could figure out how to capture memorialize that climb inside Strava that's the kind of unique opportunity that nobody else was offering we learned that they were

really fascinated with power or wattage you know sort of the the energy output that they were doing so how could we take advantage of that data that was coming through things like the watches and their bicycle and take advantage of

that information and do something unique online all right the third thing we did that was really critical at Strava was we focused on this notion of engagement

but again if you think about a consumer model you have acquisition of your customer you have engagement of your customer you have monetization that's kind of the three basics right there's churn and retention everything else but the three basics are acquire your

customer engaged them and then monetize that Strava it was all about engagement that's where we obsessed we spent our time trying to figure out once we'd found one of those cyclists grass roots

or otherwise how do we get them to just keep uploading time and again how do we make the experience as exciting as possible how do we create this long-term relationship with them all right their thought process was twofold one

was because we were talking about a vertical niche we knew that we had a finite number of customers out there so any one that we got we wanted to keep around but the other reason that that was so important was that we learned

very early our best source of growth was word of mouth so by focusing on engagement we actually saw that our growth actually accelerated so without focusing on it that was a great strategy

and then the fourth thing that I'll mention that was really part of this inch-wide mile-deep strategy was a simple notion of what we call single player mode all right there's this misconception with Strava that from day

one we were out to sort of build the community how do we sort of bring this party together in one big place and yes we were really excited about this idea of a virtual team like we believe that

people make other people active it's something we've seen we can actually show you the data it's really true as soon as you have followers on Strava really good things happen but in the early days of Strava it was all about

what we called single-player mode and what I mean by that is we had to assume we had one customer one cyclist who was uploading one ride on Strava how do we make that experience valuable so that

want to come back again right so it was all about high utility sort of just high value from that one experience it was that single player mode that was critical early on I talked to way too many entrepreneurs where they're like

it's going to be this amazing community based business but we're just we can't figure how to bring everybody together like you got to get product market fit for that one customer and once you do that a couple years in we got very excited about the community features but

we had to grow into that we had to mature into that opportunity so those were the four the last one I'll say that we did was what I would call patience

right expansion only happened after we really felt that we had nailed this niche this first group all right and what I meant by that was we needed to know that we were the definitive leaders

when it came to serving the cyclists online right we could see that both in the numbers we could see that an engagement we could see it by what was being written in the press but it wasn't until we felt that we had established that number one position in the

marketplace that we gained the confidence to really think about now an expansion strategy and we frankly we took a page I would argue more so out of some of the other sporting good companies than we did sort of tech

companies because the expansion for us was akin to what Nike did or others where we picked a new sport there was a new vertical and said okay now it's time and we went after running it was three

years later 2012 that we launched running we launched it first off as a separate app today it's all integrated into one but we actually had cycling Strava cycling Strava run they were

separate we learned a ton of difficult lessons we originally thought we could basically take the cycling experience reskin it is the old 80/20 rule 80% of it would work for runners no if we were

going to be authentic if we were going to get that same kind of high running engagement we really had to start internally with the DNA of the company and rebuild from the ground up a running

experience but it did work what we saw as I mentioned earlier word-of-mouth began to spread we saw a really fascinating viral effect we saw that many of our athletes are not cyclists or runners we find that they tend to be

multi-sport unless you're professional and you're making a living as a cyclist you're not riding every day you're riding and then you're running and you're skiing and the in the winter and you're swimming and you're playing around you're doing lots

of different things and so we found our existing athletes we're expanding with us and they were bringing more and more of their friends along see fast flow today as was already mentioned you know

we've had some fun here in the last few years we've just include 50 million athletes we had about a million athletes now every month we've truly gone global because it says it there you know we're

now over 195 countries there is not a country in the world where you can't find a Strava upload you can literally find guys doing fat bike rides to the South Pole on the Strava you can find folks that are going to the

gym climbing to the top of Everest the vast majority of our members are outside the United States 82% probably but it's more exciting than the just the geographic expansion is the the

diversity of our community as I mentioned you can find Alpine climbers you can find professional cyclist you can find Olympic gold medalist on Strava but you can also find people who are trying to do their very first 5k or

they're doing a first charity walk to raise money for breast cancer or whatever it is it's a really fascinating mix really what it's become is it's the home for their athletic life this is the place hopefully for those of you raise your hand they're using it we're really

hoping that you find that this is the place you can post your ride you can post your workouts and really share you know similar interests and and common goals with the rest of the community

that's out there the other point that I want to make here we continue to be obsessed with engagement it says up here we measure success by how many athletes sweat that's absolutely right now instead of just running and

cycling there's literally 34 different sports you can do on Strava you can do everything from hiking and walking on a Sunday afternoon to posting kite boarding and Nordic skiing you name it

it's available on Strava we see roughly 15 to 20 million activities per week funny stat it took us eight years to see our first billion activities on Strava it took us 18 months to see our second

billion took us 13 months to see our third billion and just again if you build patience into these models really interesting things start to happen but you have to have that authenticity in

place and the last stat here on Strava then I'll get into some of the more interesting challenges of the business this fifty to one ratio this probably one we're most proud of what this stands for is for every one minute that

somebody is inside the Strava app they're spending an average of 50 minutes working out and we're actually seeing that stat continue to increase so again our mission is to make sure that you're out there you're being active we

don't need your eyeballs in the app all the time we just want to know that we're a part of that experience and so that's that's been the mission force trama and as we go forward it's largely a lot of the same it's a freemium business model right you

can use the vast majority of Strava for free and then there's these upgrade paths where people can subscribe and that's that's been a business so I make

it sound like niche you focus on it you go global bada-bing bada-boom right it's all easy trust me I could spend the next three hours walking you through the vast majority of challenges

and heartaches that we've been through it's been a crazy time lots of ups and downs through Strava I pulled up four here that are related to this idea of just the challenges associated with

going an inch wide a mile deep but I could list another twenty the four that I've got here is this notion of abandoning the core right so great to go up to the niche but the minute you think

about expansion you've got a core group of audience that's saying hey wait a second what about me right as soon as we went after running we had this horrible sort of PR fiasco around the cyclist feeling like they'd been abandoned right

so how to sort of think about what that balance looks like what it is to continue to serve the core needs of you that audience that's got you to that successful point yet knowing that you're looking for expansion so we really sort

of muddled our way through that I call something up there the noise of opportunity it's just a simple challenge even within cycling you know if you think about where we started we started

what we call sort of post ride and what I mean by that is Strava was really great when somebody had gone out done a ride and then they put their information on a Strava and we showed them something interesting we hopefully sort of

surprised and delighted them but it turns out that there's all these great opportunities to help cyclists while they're riding or before they go ride how do we help them discover new activities it turns out that there's just so many different ways in which we

can expand our business and the services we offer that it becomes deafening the noise of opportunity and so we've really had to refine the art inside Strava around prioritization what are the things we're not going to do I often

referred to it as the no list just the things that are on the no list that despite a lot of people wanting us to do them we're not going to do that at least not right now third challenge that I would mention to you the business model

evolution right again here in this value here all the time you know things like multi-level revenue models and and so forth and these are referring to this idea that you get these consumer models so you often sort of see these multiple

ways in which you can generate revenue and trust me over 10 years Strava has experimented across the board we've got our subscription business we've done e-commerce with our athletes we've had marketing and advertising

associated with Strava we've had data insights we've we've been pulled into lots of different things imagine once you have 50 million athletes it's a pretty rich target audience for a lot of other brands and businesses but there's

some really interesting sort of strategic and ethical questions that come around that and so as much as we've evolved the business and tried different things I will tell you we always come back to our core in some ways business

model evolution for us follows that same strategy of inch-wide mile deep we're at our best when we know our customer is the athlete and that's the business we're going to be great at and that's

the subscription business and the last one I put up there Silicon Valley GBF trend so what I'm referring to there is they get big fast mentality that seems

to be pervasive in Silicon Valley if you're not getting big fast if you're not growing as fast you possibly can somehow you're failing all right we've felt that pressure internally this isn't just from investors you know the

employees themselves to know that we're sort of a succeeding at the rate we want to know that we're fulfilling our potential but I would just caution you that you know this notion of get big fast things that

tend to go up like this have a funny way of moving just as fast the other way and so Michael and I have sort of taken this philosophy that if we've got to kind of go up into the right this way we finally end up in a much healthier stronger

platform so we're willing to be patient and sort of build that into the model but we know that it comes with a lot of grief and a lot of interesting discussions at the boardroom and in other places so those are just some simple examples again I could go on

recruiting and retention inside Strava we could probably spend an hour in here around privacy and what it is to sort of hold people's geo locations inside Strava and if any of you have seen I

mean there have been fascinating stories published on Strava around the heatmap and we've had senate enquiries and we've had nato that's been in touch with us i mean you name it we've had sort of fascinating things that have happened

but fundamentally they come back to these really basic issues that you just need to be aware of all right then lastly here let me just give you five quick takeaways that again

relate to this idea of inch wide mile deep that I've learned along the way and we'll see if these resonate with you first one takeaway number one don't

confuse go-to-market with vision okay vision vision is the long term dream right it's the holy grail it's the brass ring it's that thing that as a company

you should be aspiring to get to but you never quite get there all right go in a market that's a strategy that's it that is a waypoint along the journey to get to the vision right at Strava from day

one we can show you the business plan our vision was this idea of what would it be like to bring this global community of athletes together because we believe that that's what inspires you to keep going is the people who keep

people active but I go to market was let's go deep with this niche in cycling all right I've seen way too many entrepreneurs they do one of two problems number one they immediately think that their vision has got to be

their go-to market they try to basically be everything to everybody or I see the opposite problem I often see entrepreneurs who take their initial product idea and they think that's the company remember as

entrepreneurs you're in the business of building a company not a product the product is a means to the end again don't confuse these two they're really important and you need them both you need them but you need them both for

the company you need them for investors you need them for employees this is what inspires everybody takeaway number two to quote Homer if you serve too many

masters you'll soon suffer okay we've seen this time and again it's drama this is one that's been painful now I'm not talking about sort of the expansion of the athletes you know yes we have a very

diverse population that's on Strava today with lots of different needs trust me trying to take care of the needs of a trail runner in Brazil is fundamentally different from that roadie

who lives in the Netherlands it's just they are different that's ok they're all athletes there's sort of Universal bonds that bring those together what I'm referring to here is what happens a little bit what I talked

about a second ago with this business model evolution right when you have customers that start to emerge that are not the athletes in our case like when brands started coming to us and really saying how can we participate in Strava

we'll pay you to be involved in Strava how can we advertise to your athletes things like that where we have other companies fascinating here's a great one we have a product called Strava Metro where we're actually working with city

planners and local governments around the world we have about 300 partners today where they're looking at the data that we're able to pull up for these cities to understand the way in which people move through the city cyclists

pedestrians runners and so forth so that they can make more informed decisions about the way in which they build their their bicycle paths infrastructure and their pedestrian infrastructure really good stuff I mean this is this is

fashioning stuff the problem is if these guys become your customers and you're trying to meet the needs of Transport for London or you know the state of Oregon while you're simultaneously trying to take care of the athletes

there's a lot of conflict that's built into that so it's drama we've had to take some hard hard look inside and basically make you know plant a stake in the ground our customer is the athlete

that is who we're there to take care of and anybody else that we work with they are our partners so as long as we know that together we're doing something for the athlete great but we know that the fundamental business the revenue

everything else needs to come from the athlete it's worked well for us take away 3 remember the Starbucks test okay so quick anecdote going back about

ten years ago start a Strava I was sitting in a local Starbucks here in Menlo Park with a good friend of mine it's a consultant she's written a number of books around subscriptions and membership economies and so forth and I was wanting to pick her brain on a lot

of things and she turned to me and she said mark tell me a little bit about your target audience tell me about sort of this addressable market just going after and I looked up and in the Starbucks in a far corner was frankly a group of mammals bunch of guys

sitting around and they're like oh they're called the cycling kit right and they were having their lattes after their ride and I pointed over to them to Robbie and I said right there if you look at those six guys that's our target

audience and Robbie's eyes lit up she's like oh my gosh you don't know how many entrepreneurs when I'm sitting here in Starbucks and I asked that question they tend to go like this they say well anybody anybody inside the Starbucks

they're a perfect target for sort of what we want to go do and she and I had this long conversation unaffected well that sounds great in theory that you've got a big enough opportunity that

everybody should be a customer when you're an early-stage startup it is really hard to get product market fit for that diverse group so again I'm kind of repeating over over but the Starbucks test is a good one for any of you to go

out to I will challenge you to login to the Starbucks it's a really diverse population that's sitting inside of Starbucks anytime day or night but try to figure out who that target audience is that you're you're initially going

after your go-to-market takeaway number four even being a niche number one gives you street cred right do not underestimate the power of being number

one even when it's a niche and there's really three reasons all right the first one is just credibility right even if it's just a niche if you're number one if you're the leader net space I'm telling you you develop thought

leadership you develop a voice in the market people will want to talk to you you will see that the partners start to emerge we've seen this now twice in both of our companies it works really well do

not underestimate that credibility the second thing it does is frankly it just develops confidence right you're winning if you're number one you're winning you're beating somebody out there and

with confidence comes as courage to now begin to think about expansion all right and the third and at least is this happened now twice for us do not honor estimate what happens with these niches

in the case of Kanna what was this little thing called customer email turned out to be a massive problem for every single company on the planet that wanted to go online so when initially we

were accused of going after a feature it turned into a beautiful high-value business and in Strava we had to laugh we never would have guessed that in the last 10 years we'd see the Renaissance

we've seen in cycling there's been this explosion in participation in cycling that we could never have projected but the reality is were still growing in that space even 10 years later it's

become like the golf of the 21st century so in both cases what were these little niches by going deep and frankly some luck that was involved but the knits themselves ended up proving to be more

valuable than we had initially anticipated the last takeaway please

please focus on great rather than big ok I can't say this strongly enough the too much time if we spend time think about how to get big it's again like I said

big really quick come down really fast focusing on this notion of being great focusing on this notion of being authentic focusing on being the best at

something that provides that platform from which expansion comes right it's it's not rocket science but I think we just lose sight of this in this in this sense of sort of how to move as fast as

we possibly can this the speed at which we need to move so again I just always come back to great versus big and the irony here is if your great big will

come it will come don't I'll finish here just the three confidence in the niche please yeah I know every single time you look at in the surface you will have a

naysayers have comments in it it has worked at least for us - for - I'm willing to bet on the third time second real problems for real people okay when you've got a niche you've identified

that that real customer again think about kana we found a real problem we found this customer emo we found the people who were dealing with it they were the people who were running customer service inside these companies

and they had real budget in a case of Strava because we focus on this we found that cycle so you found that person we understood their needs and we could build product that was a five so real people real problems just do

that it's amazing what happens when you find the real people real problem even if you're a one-person startup that person who has the problem or the opportunity they will listen to you they

will take the call and the third I just mentioned just commit to being great right it's it's just it's it's a it

being great it leads to wins rights wins leads to confidence and confidence really leads to that expansion opportunity alright enough of my talking

hopefully that makes sense great then thank you for letting me

share a couple notes and let's open it

up to questions anybody now you're

serving people and I imagine most of those people don't fall into your initial image that you designed for it so how did the design of your change

great question so question basically was as we expanded from this niche to this large global population what were the strategy that we deployed to really begin to not only grow aggressively but

meet the needs of this diverse audience I get that so I think there's a couple things that I would point to that happened some of the things that frankly were outside of our control but proved to be really valuable when we launched

we were a web only business the smartphones while they were out in the marketplace they were not capable of handling this sort of activity data and so forth the battery life was bad GPS

was bad so we were web-based which is part of where that slow growth came from and once we were able to go mobile in 2011 even just with our niche we saw expansion happen the app stores and

everything else just loud for a level expansion second thing that happened was we focused very much we realized that our community was driving us out internationally without we couldn't

control it there wasn't like we chose to go to the UK or to Brazil which are two of our largest countries after the u.s.

our athletes immediately took us there and so by focusing on how to become a really strong international company localization but also understanding the nuances that were taking place as I

joked earlier about like the trail runner in Brazil like we actually now have people in country in these places who really help us understand the nuances associated with the culture around sport Brazilians are fascinating

there's a combination of two things that are going on there's this love for sport down there but there's also this love for social media and so understanding the way in which they want to interact

with drama became really important and then I think the third thing was as I mentioned we had this single-player mode for really the first few years which allowed us to get that product market

fit but there came a time when we began to see that the the community features we could build in Ostrava were really really important and just simple little examples one would be very authentic

something as simple as a leaderboard so you can go onto Strava you can post your ride one of the things that you will see pop up is that you have ridden on a stretch of road or run on a trail where

other people have have been on and will show you how you rank on that on that trail now everybody says they're not competitive but everybody loves to look at that and we let you slice it and dice it lots of different ways so there's

sort of a community element or context to the experience that ended up being really good because now you're inviting your friends to join Strava which is a third thing that we did we realized that our best source of growth was word of mouth but we figured out

there are ways we can make that really easy so simple things like when you finish a ride hey add your friends to that ride that may not have been on stralla there were tricks like that that we started to build into the into the

experience yeah a long time let's travel user - but I am a preview sir and so my question is in terms of monetization

because it seems like I don't let people castrato I actually don't know anybody who pays for summat and so the question is what do you do about that and maybe maybe my sample size is too small and

you guys are doing a great job I'm just wondering it seems like and if some options would be you you know you can use raava's lead generation for other

companies or other products you can't try - you'd like tweak your marketing tactics to increase conversion rates before you can either remove features from the free version add features to

summit I'm just curious what your thoughts are yeah so so question coming from Strava member who's a currently free member is what are we doing about that business model how do we how do we

think about either either evolving our revenue sources or how do we continue to improve the subscription business it is a topic that is near and dear it's constant inside Strama

I will start by the following which is our free members are invaluable so if you think about sort of the Strava ecosystem and the way our system works the fact that you're just uploading your activity is a straw but we know is a

value because with every activity that comes in it's it's user-generated content and so that activity is something that we know becomes a value so we will remain freemium as long as

Strava exists and there will always be an aspect of Strava that's free that being said the second point I would make is that we've been told for 10 years our free is way too good our free is and it

is it's feature-rich it meets the needs of the vast majority of our athletes today we are aware of that and we constantly do look at the things that are on both sides of the paywall

if there are things that are commodity that are on the paid side why let's move them over to free on the other hand if there are unique aspects of Strava that we currently offer on free that you

can't find anywhere else we have to ask ourselves a question why are we doing that maybe that's something that should actually be something that you pay for because it's something you can only find inside straw so we're dedicated as I

mentioned earlier to the subscription business we really like just having that one-to-one relationship with you as an athlete and the onus is on I would expect you to remain free until

we reach a point where you're looking is saying it's a no-brainer I've got to actually pay and by the way we're talking about like five dollars a month so we're not asking you to pay a lot but it's up to us to ultimately prove to you

that the value is there on the other side of the pay wall in the back yeah so

you were first starting with the company like this that's very nice these users are the exact people you want to talk to

so how much did you let their feedback guide your vision versus what you originally thought you wanted to make yeah it's a it's a great question so the

question is based on this sort of initial grassroots efforts and really having this deep conversation with these these passionate cyclists how much of it was the cycle is telling us what they

wanted that we were building versus we were actually creating something that was new and my answer is probably I can be very satisfactory but I would say that there's this is the art and the magic of any kind of product effort and

I think we got somewhat lucky at Straub I'm going to give credit where it's due there's a gentleman named Davie Kitchell who's been with us from day one we call him the mad scientist and the art is our ability to listen hear what their needs

are but not actually build exactly what they're asking rather think of creative ways in which we can bring something that's that special inside stralla so the perfect example we were hearing

people talk about climbs and what they were saying was that they wanted to understand how they could measure their performance on a climb when they were out there it would have been easy for us

to just simply carve off that climb based on basically grade and distance and show them that data but when we took a look at it we thought okay there's some more fun things we can do here for

instance there's international standards around how you you measure the difficulty of a climb so let's let's apply that international standards so that somebody knows how hard that climb is and then when we got really excited

was we quickly realized hey I'll bet we can show how that person's doing against all their buddies on that same climb I mentioned the leaderboards a second ago that was something nobody was telling us about but once we added that it was game

over I mean all of a sudden we had all these cyclists trying to invite their friends on because they wanted to see how they compared so it was it's that art of absolutely listening and seeing what was important to them and then what was the magic we could

bring to that was something we hadn't necessarily heard does that make sense and in the case of the social media

aspect of strawberry I know a number of years ago had some bad press because people were using it a long way and

somebody got hurt portion other situations like that work it's kind of

like Facebook where you change the situation yeah so question from another strong member who's familiar with our

history and we've had we've had the particular situation this gentleman is bringing up is there was a time early in our history actually this goes back to I think our first two years there was a

Strava member who was descending a hill actually in the Berkeley foothills was going in at excessive speed way over the speed limit he crossed over the double yellow line was hit by an SUV and he

died and we unfortunately folks if you're involved at all in cycling you'll hear those stories weekly here even just in the Bay Area it's it's not a safe environment out there for cyclists yet

we're working on it but it's not great in this particular case we were sued by the family of the gentleman who died for wrongful death and I think to answer your question there were two things this

one we fought that variously it was thrown out of the courts we were accused of being a race director there were there's some interesting things about that case that we felt were patently

false and and we defended ourselves at the same time I think your other question was what have we done inside the app when situations like this or I alluded to some of the privacy things where our heat map

we were accused of at one point in the press of outing military bases throughout the world because you can look at our heat map and if you if you

basically zoom in on elements of our heat map is basically our global database of all activities visually presented via heat you know via sort of

lighting for all public activities inside Strava it's a really valuable resource that's out there and if you go in now you can see interesting parts of the world and so there are folks who are

going in and they were finding places in Afghanistan and others where there were soldiers who were basically doing their workouts on military bases and so we were accused of of outing these these

bases so now here the reality of the situation the military was very much aware that this stuff was there they weren't concerned with it when there have been concerns we've worked with governmental agencies to make sure that

we're not disclosing information that shouldn't but I think the answer question what we've done is we spent a lot of time I'll give you two examples in the case of the person who was going downhill we look hard at sort of the way

in which people were using Strava to think about being competitive so as an example we don't set up leaderboards on downhill segments it's just gone it's not something that you can do you can do

it on up hill you can do it on flat but we don't have those in the case of privacy we've spent an enormity of the thought leaders when it comes to sort of giving our athletes total control over

the privacy of their experience you can go completely dark on Strava you can be single-player mode totally private use it as your personal training log no one will ever see anything other

than you and then you need to decide sort of at what level you want to sort of open it up the funny thing is we get questions all the time we had one come in just a few weeks ago where the gentleman was like look it's really important for you to be private but I'm

not on the leaderboard how come I'm not showing up and saying we had to have the conversations like at some point it has to be one or the other you actually can't we can't give you both you can't be on leaderboards and be private so

it's a constant conversation with our community that I think has has served us well to figure out how to find that balance given the request you get from all your users that are what is the top

here No based on the most common request yes so

the question is based on sort of all the requests are coming in from from our users today what would be the top of the know list I'll give you a simple example that pops in mind just because no we were talking about it just last week

ironically even just with the 34 sports that we have today there's always both another sport that someone wants us to add and they want us to go deeper the irony at Strava is we went really deep with cycling and

running and swimming as good and so forth but there's what I call the longtail I had some I had a gentleman who's America's Cup sale or Olympic you

know silver medalist and so forth and he's been pinging me by email because he really wants us to make him proven so that the sailing experience on Strava is more authentic we cannot justify that right now I mean I love this guy to death

I want to make Strava as good a sailing app as we possibly can but there is no way that we can justify taking product resources and engineering to go deep in

a sport like that not right now so that would be an example yeah yeah yeah I don't know if this gentleman's earlier question I'm just curious

you talked a little bit about privacy and how that's changed the way users experience are you see more are you seeing a change in the way people engage

yeah so the question was just based on sort of all the stuff that's happening with privacy and so forth what is Java done if we built out as trust and safety team are we seeing sort of changes in the way that that our own members sort

of utilize their privacy more effectively so quick answer yes we have a full trust in privacy or trust and safety team that's out of our Denver office that's all they do it's all about

integrity trust privacy we've got a legal team that's on that as well that is there's one person who's dedicated and just constant communication with our athletes gdpr which is the european privacy you know

obviously we were on top of that we're trying to get ahead of it after you go look there's some great stuff that's in publicize recently on astrologists we high marks in terms of frankly simplifying privacy a lot of the privacy

stuff lot of companies have done great work it's just it's arcane it's very hard to to maneuver through as a user so we took a bunch of time just to simplify that process make it you know

point-and-click and and give our athletes options I think that the the theory for us is give them the option and make sure they understand where it's

available and then put it in their hands and that's work well for us yeah to hear

about how you approached defensibility

of your software in particular yeah interesting question one that I hadn't

even thought about but it's it's a huge part of Strava so the question is in terms of sort of defense ability of our position and and in particular the way in which Hardware plays a role and have we considered sort of hardware as part

of our solution or how we work with the hardware so the short answer is we've been very methodical and very direct in our strategy which is to be Switzerland what we realized early on from the very

earliest days you had you've use a Garmin device to even upload Ostrava and once we develop that partnership and it actually became one where we weren't getting what I call bloody knuckles knocking on the door trying to get them

to just even take a meeting the reality was it's been it's been great and so if you fast forward to today there is not a major hardware manufacturer in the fitness wearable space that doesn't integrate with Strava whether that's

Apple watch or Garmin or sinto or you name it and we found that that's been important we've been Switzerland we have taken the position we will not get into the hardware business our argument is

there's a reason they call it hardware it's really hard to do we like the software business and frankly we want to give again back to athlete's choice we find that athletes have different use cases they have different ways in which

they want to capture their sport we don't want to be sort of dictating how they should do it we just want to make sure we can work with whatever that is that they want to do so that's service really well and put us in a place where we're kind of a platform so we've done

that and the other thing that we've done is we hope our API number of years ago I think we're now at 40,000 API partners and so we're just in this position where it's rather than sort of look at this as

everybody's a foe we took the position of everybody's a friend how can we go and create these experiences together and that seems to have actually positioned us and sort of uniquely in

the marketplace how about we over here [Music] you stone me with the last question I think the wrong person so the question

was how many how many free users get supported by a single subscriber well let me answer in a in a funny way we're not yet profitable so you know ten years

in we're still dependent on what we're doing so I'm not sure that we've figured out that answer it's a mission that we're on right now as we move towards breakeven the business is good but

ironically we don't think it we don't we don't think about it that way so I'd actually have to go back and kind of run my math to actually even be able to give you a good answer it's what we do know

we benchmark against other freemium businesses there's lots of subscription businesses that are out there the Netflix of the world and the HBO's and so forth but there's actually not a lot of really great freemium businesses so

we tend to benchmark against the Spotify DH and others where there's a clear free and then there's a paid side and we just look at what is their percentage of

total mal or monthly active users that are subscribing and we've been very comfortable for the last eight years our subscriber rate as a percentage of total

monthly active user is right where it should have been now it's not high enough for us personally we believe that we can aggressively move that and that's something we're focused on in the coming year but that's that's the metric that

we've used is what is the percentage of total monthly actives that are currently subscribers you