From the Top: How Strava was built podcast transcript

Listen to the full podcast episode here.

Wade Wallace:

Maybe the best place to start from is back at the beginning of when you guys met. Maybe start with you Mark. Do you remember your first interaction with Michael when you first met him? And what that was like?

Mark Gainey:

It’s a long time ago. I’ve got to go back to, I’m guessing this would have been approximately fall of 1987. So last century. And I went in as a rookie, as a very much a novice in the Harvard Boathouse to the crew team. There’s some backstory there. I went to Harvard to be a runner and through a serendipitous event, I ended up in the boathouse and decided that I wanted to be a rower and Michael was two years ahead of me. So he was all the big man on campus. He was one of the guys that was one of the leaders in that, in that team. And so I was, that person was knowing that … The guy who was the captain of the team, maybe … Were you captain that year? Cause that was your senior year, right? Fall of ’87? Oh, junior year. See. Truly big man on campus. He was captain-

Michael Horvath:

I was captain my junior year.

Mark Gainey:

So that my first interaction.

Wade Wallace:

Well that was a big deal back then, wasn’t it?

Michael Horvath:

Well, yeah. It was something like that. I remember actually something like that, Mark, where the coach told me, “Hey, I got this new guy coming in. I’d like you to spend a little time with him. Just give him some pointers in the tanks.” Cause you don’t just jump in a boat and start rowing, you got to learn how to row if you don’t know how to do it. And so you, you row in these indoor simulators if you will, water’s rushing past you but you’re stationary on a platform with an oar in your hand. And so I remember doing that with you, Mark, for a bit. That’s sort of the earliest recollection. And then we developed that friendship over the course of … that was my senior year.

Michael Horvath:

And then I stuck around Cambridge for a couple of years and ended up coaching, helping to coach the freshmen team. So I was around the boathouse when Mark was finishing out his last two years and we got to know each other pretty well and became friends, though we never actually rowed in a boat together. It’s interesting. Like, we have very shared experience in crew and what we got out of it and exactly the same drive to want to connect back to a team and be part of a community of people who are active, that’s what Strava became. But that’s … The two of us were, in some ways we were already living way. We were not training together but wanted to stay connected.

Wade Wallace:

And did you guys go your separate ways after Harvard or what happened there?

Michael Horvath:

Yeah, so I graduated but stuck around for two years. So we, we left Cambridge around the same time. When Mark graduated, I went to grad school, I went to get a PhD in economics. And Mark, you moved back to Reno for a while and ended up moving to Palo Alto. So we were apart for what? That’s probably about three or four years.

Mark Gainey:

We ran the first half together.

Michael Horvath:

You came through Evanston, we ran [crosstalk 00:03:40] we ran the Chicago marathon together. You ran it fast. I ran it slow. We didn’t run it together. But again, yeah.

Mark Gainey:

Again.

Michael Horvath:

Yeah. That’s it. Yeah. Yeah. So we were in touch during those three or four years. Mark came to my wedding. Anna and I went to your wedding. You know, there’s like all these things. But yeah, ’94, I graduated with a PhD. My first job was teaching at Stanford back in Palo Alto, Stanford University. Mark’s living in Palo Alto, working at a venture capital firm. So we were re reunited in 1994. And yeah, it was a big, big reason I chose to take the Stanford offer instead of other offers I had, was Mark was like, “Ah, yeah. Come out here, it’s great. Life is good. You’ll do well out here.” And what a just a fork in the road in life, if you will. Had I not done that, lots of things would be very different in both our lives, I’m pretty sure. And so that was a pretty fateful decision as it turns out.

Wade Wallace:

Michael, will you pursuing a career in academia at this point or were you just kind of following the opportunities? You were?

Michael Horvath:

Well, I was, I was pursuing a career in academia unsuccessfully, as it turns out, because I land in Silicon Valley at the start of kind of the commercial internet and that’s what ends up undoing my career after five or six years. And I blame this guy, Mark, for completely distracting me because in the early days, 1994 and 95, we would get together. And he’d come to my office. And I joke it’s cause I had a fast internet connection being in academia and he still had dial up at his private equity firm. He couldn’t get enough of understanding what this internet thing was going to do for creating opportunity for entrepreneurs.

Michael Horvath:

And so he’d come to my office. We’d talk about different ideas about how the world could change with this new technology. And that’s in a way where we started to talk about the earliest ideas that ultimately now we know as Strava. But back then we were on the same theme of how do we create the world’s biggest team, if you will, a virtual team, that locker room feel to being active. So we can tell that story, but it’s like, that was part of … my journey was sort of starting that career in academia and I worked at Stanford for six years and then took a sabbatical for a couple of years and then came back into academia for a while as teaching entrepreneurship at a business school. But still, the satisfaction I get out of working on startup companies is so much greater than what I was getting out of being an economist, which was, that was my field. And so I decided to truly end the academic part of my life-

Mark Gainey:

[crosstalk 00:06:46] Say yes to both. I think that the job itself was [crosstalk 00:06:52].

Wade Wallace:

And Mark, you were working for a VC firm. Was that something that was satisfying to you or was going out our own always an ambition for you?

Mark Gainey:

And a lot of my peers had lost their jobs coming out of college and I just, I fell into it. The job, to be very clear. I was not a venture capitalist. I was what we call dialling for deals. I was a guy who was put on the phone to go look for investments. But it was great because when I got to talk to entrepreneurs all day long, so it was satisfying in the sense that, you know, first job out of school, chance to learn a business language, see kind of how that world worked and talk to entrepreneurs was just a really nice sort of exit from work and into the business life.

Mark Gainey:

Now my dad will tell you that I’ve been an entrepreneur going way back and there are some funny stories. I mean, my junior year in college I was injured. Actually Mike and I have some great stories together to traveling to even some races and things together because he was coaching and I couldn’t row at the time, but instead we launched a business, we launched a concessions business where we were selling hot dogs and Cokes at some of the, let’s say, less mainstream sporting events being professionally run. So before that I’d done some other stuff.

Mark Gainey:

So always in the blood, but I think at that role at the TA Associates, it introduced me to the world of entrepreneurship. And while I appreciated how important the venture guys were to the process, I absolutely wanted to be in the game. I used to joke that being in the bed was a little bit like being on the sidelines, cheering for the players on the field, and I wanted to be in the game. So that was a fateful decision. Late ’95 I quit TA Associates and that’s when I started visiting Michael’s office a lot. It’s like, there’s got to be something we can do.

Michael Horvath:

Yeah, yeah.

Wade Wallace:

And this virtual locker room idea, and the internet now starting to have commercial possibilities, how did that come about? What was the process that led you to actually starting a business around that?

Michael Horvath:

Well, this is where I remembered it at least is that I wouldn’t say that I had this nearly the same exposure to entrepreneurship that Mark did even by that point and so I remember Mark, you were kind of standing at my whiteboard in my office and you were like, “Well, let’s think about some problems we have because that’s usually the basis of like what makes for a great idea for a company if you’re solving somebody’s problem, it’s just as basic as that.” And so like we kind of quickly went to this like, well what do we want different about our lives? And I had just started this job at Stanford, pretty busy with work. I had first child, second child on the way and-

Mark Gainey:

1995 era for both of us

Michael Horvath:

I had no time to train. I was like, Oh Mark, I wish I was more active. That was one of the things we needed in our lives

Mark Gainey:

I don’t think it’s unique to our experience at the boathouse, but we just had all those things. And I always joke that the day we graduated was just poof. That experience disappeared. So I know I was seeking it from 1990 on. And the lesson that I got from TA Associates, from the venture firm, was, yeah, you know, you solve somebody’s problem as a startup. It doesn’t matter how small you are, people will listen. And so that was … The thesis was can we find a problem that’s in our passion space? Now the challenge is, yeah, as you say, we were a little early with that particular idea, but it did lead us on a path to another great business. So that’s also part of the entrepreneurial journey is just to be open minded.

Mark Gainey:

So Kana Sports was what was the original business plan to create what you know, which is now Strava.

Wade Wallace:

And how did this lead to your first company together?

Mark Gainey:

And profits were pursuing that in the mid nineties. So there’s a good news and bad news, and this is again where Michael will have a slightly different recollection, but the good news was twofold. One was the idea was good, it was just [crosstalk 00:11:40].

Wade Wallace:

So Kana Sports is the business that led you guys on the path to success? Correct?

Mark Gainey:

Getting data seamlessly into a virtual locker room, not so easy in 1995. And our business model was, let’s say less than ideal. Our hope was that we could get sponsors and advertisers to sort of help support this virtual locker room, the site that was going to be available. And we just, we were just early on multiple fronts, between the data and the business model and just the, frankly, the maturity of the internet. But what it did was it introduced us to a set of companies. We started talking to bicycle manufacturers and ski manufacturers and different companies that we were hoping would be our sponsors for Kana Sports.

Mark Gainey:

And they introduced us to a very different problem, which was, gosh guys, we love what you might be doing. But frankly, we’ve just launched our first website as a company and we’re getting all this customer email already that frankly we’ve never had to deal with before. We’re a business that sells to the retailer. We don’t deal directly with the consumer. So we’re not even sure we want to sponsor your website because we don’t need any more customers coming to our own sort of dot-com. And that introduced us to this customer email problem. And so KanaSports then morphed into KanaCommunications and I don’t know that we need to bore you with that whole story, but we ended up building an enterprise software company through the late 90s and early 2000s that was … it was a great ride. I mean, it was, it was …

Mark Gainey:

Yeah, yeah, we got to just over 1200 employees and we were generating hundreds of millions in revenue and took it public on NASDAQ. Yeah, it really was one of those … It was one of those journeys that you can only dream of having. And I’ll speak for myself. I mean it definitely hook, line and sinker. I really fell in love with that startup process.

Wade Wallace:

Well, it was a huge company. I mean like … what? 1200, 1500 people or something like that, wasn’t it? Wow. That’s amazing. And it just, if it hadn’t gone that direction, what would Kana Sports have looked like for you at that time? How would you have done the virtual locker room and the trash talk with the technology available? What was it going to look like?

Michael Horvath:

Yeah, I mean, really plainly put, it would probably have to be manually typing in your workouts, typing in what you had done because GPS was not widely available. It wasn’t very accurate, really. I mean if you remember, GPS technology has come a long way. There were no smartphones. You didn’t have smartwatches. You had really like very expensive ways of tracking if you wanted to get down to tracking location. The other thing was that, remember, back in ’95, that’s way before anybody is thinking about putting any personal information about themselves on the internet. This is not the Facebook era, this is you’re just starting to understand what it’s like to do a credit card transaction online to buy something from a website. So it was early from that perspective as well.

Michael Horvath:

And that was the message we got from when we started to talk from everybody from who could build it to some of the companies that we thought could be part of the business model, is just like, it doesn’t sound like this is something that actually is going to work. But yeah, it got us to the point of understanding a different problem that we could go and build a company around. And I think we learned a tremendous amount that we still apply every day at building Strava in that experience and definitely shaped the world of possibilities that we now have to build Strava.

Wade Wallace:

And when did you guys exit Kana Sports or Kana Communications? Did you, did you sell your shares and exit and concentrate on different things in your lives? What happened there?

Michael Horvath:

Yeah, so I stepped out right around the time it went public. I went back to academia even before then, so I wasn’t fully part of the ride is as long as Mark was and definitely had a favourable outcome in terms of the financial side, but pretty quickly realized I wanted to get back into starting another company. And that’s where when I landed with my family, now four kids, in Hanover, New Hampshire, I joined the university there, it’s called Dartmouth College. They have a business school called the Tuck School of Business. And I taught entrepreneurship for a couple of years, but pretty quickly joined up with a team of scientists who were starting a biotech platform company and I was their first business hire and helped them build that company for five years before we started Strava together.

Michael Horvath:

But just I kind of had the same experience that once you have that experience of starting a company and having it go the way that Kana did, it just teaches you something about the way you’re wired. And I wanted to continue to work in that area and build your teams around us.

Wade Wallace:

You guys make it sound like it’s not a big deal, but then you know, a company, that’s huge…. Most people just call it quits right there. Was there ever a feeling of ‘what’s next’? Or did you get complacent for a while and then begin to get the itch again?

Mark Gainey:

The idea, you get the idea and then you get this amazing executive team together and the chemistry and you ride the wave and you take it public and you know?

Michael Horvath:

So I think we were fortunate in that there were two trends that we just happened to be in the middle of. There was the obvious, which really the birth of the commercial internet, the fact that every major organization in the world was trying to figure out what their presence was going to look like there and they needed a base set of infrastructure. You needed to figure out how to put your site up and how to do commerce. [crosstalk 00:18:20]

Wade Wallace:

The tech bubble, I imagine, was just starting to really balloon. Was that  part of the success, or did you find that it was simply a great business idea?

Mark Gainey:

[crosstalk 00:18:32] management, just that attention to the customer, right? I think companies started to really appreciate, gosh, it’s [inaudible 00:18:38] to hold onto our existing customers than it is to acquire new ones. So we should be investing in that. And Strava sort of sat [inaudible 00:18:45] those two trends. Between CRM and the internet, what a great place. And again, we wanted to solve this very specific problem. Customer email response. We can tell you all kinds of stories around … I mean it was, we were myopic. There’s a phrase that I use at Strava, which is look, go an inch wide and a mile. And that’s what we would do. Just like, let’s get this customer email right. But in the process I think we built some really strong customer loyalty and just [inaudible 00:19:13] I just described and it turned out to be very good.

Wade Wallace:

Michael, what aspects to the team does Mark bring in terms of qualities that you don’t have?

Michael Horvath:

Well, so we’ve been working together for a long time and we’re really good friends, we’re best friends and we’ve been business partners for coming up on 25 years now. And that’s not that common. I have to point that out. I just, usually something can go awry one place or the other. And I think one of the things that is we … I feel we complement each other really well. And I don’t mean in terms of like raw, like I can program computers and he can do financial models. It’s not that. It’s more that the way we think about the world, maybe the way we approach any problem, is with different attributes, different mindsets.

Michael Horvath:

I know one thing that’s just helped us a tremendous amount is Mark, when faced with a problem, will say like who can I talk to who is an expert on this problem? I want to get as much input as I can from other people and I’m going to go a hundred percent analytical, which is how do I get as much an understanding of the problem through the facts around the problem? And so you combine those two together and I think you’ve got a powerful answer to the problem or to the challenge. So that’s definitely one thing that’s helped us.

Michael Horvath:

Maybe the other one is just like we’re really comfortable coming at something together where we don’t know the answer, where we don’t understand. And we just have confidence that together we’re going to find an answer faster, better, just we’re going to have more fun doing it if we’re doing it together. So it’s a real emphasis around that sense of like, over the course of 25 years you learn, yeah, this one, it’s time to take a break from whatever we’re doing. It’s not going the right way. Let’s take a break. Let’s come at it again tomorrow as opposed to, let’s go all in right now. Let’s go head to head on this issue.

Michael Horvath:

We’ve had a few moments where it’s … there’ve been obvious challenges in 25 years. It’s not all a bed of roses. But one of the things that I think I just …

Michael Horvath:

You can’t always lead with your friendship and you can’t always lead with your business.

Mark Gainey:

Let me put it this way. Mike was a PhD in economics and I graduated with an undergrad degree in General Studies!

Michael Horvath:

He’s the person who knows me the best in the world. [crosstalk 00:22:32] I’m not going to put words in his mouth, but when you have that level of [crosstalk 00:22:40].

Mark Gainey:

The other thing, Michael, that [crosstalk 00:22:40] ask the question but what happens after working together like this for 25, 30 years is we have a set of tools-

Wade Wallace:

Anything to add to that Mark?

Mark Gainey:

… that we kind of have in our tool belt that we can approach almost any problem with that kind of streamlines both the differences and the similarities. I’ll give you like a simple example. He and I approach almost every problem that we ever come across with what we call the bookends. We just sort of take, okay, what are the two extreme options? Well, we’re not going to end up at either of those, but by kind of identifying those two, it’s sort of an easy way to not get too personal about it, to not get … we sort of have a starting point where then when we start to work towards a solution in the middle, it’s not even about compromise. It’s just now we can apply each of our strengths to the problem. And that’s just one example, I could probably give you a half a dozen others. That’s what happens when you work with somebody this long.

Wade Wallace:

Right. Interesting. So by this point, we’re probably talking early 2000s. You guys, I imagine, started dusting off the plan for the virtual locker room. How did that start? Was there a conversation that led to, let’s do this? Or what was the turn of events that led to you guys actually reconnecting in that way and saying, let’s do Strava?

Michael Horvath:

Yeah, it’s interesting because now, remember, I’m on the East coast. I’m three time zones away, three hours time zone difference, 3,500 miles difference in terms of geography. So it’s not the ideal way to start a company. Right? And we didn’t just dust off the … That’s the other thing is like you’d think we had it all figured out and now the time is right. Why don’t we just go? We took a kind of a long road to getting to starting what you now know as Strava. It started this way, which is I was out of this biotech startup and Mark was was on board, different boards, and we both basically were free agents at this point.

Michael Horvath:

And we started talking about, well, if we’re going to start a company, we’d like to do it together. We feel we work really well together. Kind of let’s start exploring. What are we interested in doing? What are the problems out there in the world that we could try to tackle? And how would we go about figuring out what it is we would do together? And that was a series of phone calls. And back then you didn’t have really good video calling. And so it was really phone calls.

Wade Wallace:

Skype didn’t even work at that time.

Michael Horvath:

Barely. It was really hard, really early days for anything. And so that culminated in the summer of 2006. Now Strava starts in January of 09, so if you think about this, this is still two and a half years before we really [crosstalk 00:26:09].

Mark Gainey:

Yeah, to continue the story [crosstalk 00:26:10] … to Strava, and that that in both of cases [crosstalk 00:26:13]

Michael Horvath:

… and our cases and meet up in Vail, Colorado. So now we have the Denver office. There’s a real basis in which Colorado is part of our roots for Strava.

Mark Gainey:

… pretty intense. In Michael’s his wife Anna was diagnosed with cancer for the first time. So they were dealing with that, and in my case I had a bicycle accident that cost me 11 surgeries …

Michael Horvath:

I think, yeah, this is really the underpinning of why Strava is the way it is today is because of what happened in Vail over those three days.

Wade Wallace:

How did you guys start thinking about the feature list and functionality after you got the core customer you wanted to serve, and more or less the mission defined? What set of features did you guys start thinking about building on top of this?

Michael Horvath:

Yeah, I can take it this way, which is since we weren’t 100% sure what we were doing for this customer, we knew who they were, how they were wired, they were active, they wanted more adventure in their lives, they wanted to believe in the brands they use, the companies that were a meaningful part of their lives. So we knew what they were like, but we didn’t know what we were going to do for them. We decided to pursue a couple of different ideas and see which one won out, and one of them was what you know as Strava, and we had a couple of others and I’ll tell you a funny story which is we thought we had nailed all this and figured it all out in Vail, and we decided to take the last night we were there and go see a movie, and we were feeling really good about all the work that we had done, and we were going to come out of this trip really knowing what was going to come next for this company, this fledgling company, what it was going to go do. We picked the movie, and it was An Inconvenient Truth, about global warming and climate change, and we come out of that movie it’s like, “How could we do anything else except trying to focus on solving this big problem that’s going to affect everybody’s lives?

Michael Horvath:

And so we feel like we almost had to tear everything all up, and it gave us some real doubts about whether we were … given that we could work on almost anything at this point, why would we choose to work on anything but climate change in some way? And so we did pursue a couple of things. I can describe one [vay 00:02:42] one that we actually spent some time on, which was getting rid of the bottle, the plastic bottle, in bottled water. How could you do that? That was just the starting point.

Michael Horvath:

But one of the ideas was what you now know as Strava, which is how do we help people be more active and motivate them to stay active, connecting them to a community of like-minded individuals? And that’s where the earliest iterations around Strava involved an individual named Davis Kitchel, who happens to live in the region around Hanover, New Hampshire, he lives in Norwich, Vermont. I met him on my 40th birthday, December 20th of 2006 when I turned 40. And got introduced by a mutual friend, and he had already been tinkering around with different ideas having to do with … could you use GPS to try to tell you something about your training, could it be informative around how fast you’re going up your climbs when you’re cycling. He was also a rower, and could it help you with your training in rowing, and so we started to work with Davis and it really was instrumental in how we build things. Mark, you should tell the story of the earliest version of Strava, which wasn’t even orange. Shocker for all your listeners, but there was no orange in Strava when it first saw the light of day.

Wade Wallace:

What was this early version like?

Mark Gainey:

Yeah, early version. So, remember, no smart phones when we launched, Wade, no social network. We had picked a very specific audience. and that was that passionate road cyclist, and they needed a Garmin device on their handlebars. It was the early 305, or I’m not sure what it was … but whatever version that was back in 2007, 2008, and we started talking to that group and looking at the things that were important to them. And the simple example would be, something like they might go out on a five mile ride or a 50 mile ride, but boy that iconic climb, somewhere in the midst of that ride, that was what mattered.

Mark Gainey:

So Davis Kitchel and the rest of us started tinkering with, “Okay, interesting, how could we take this data that’s coming in and what would we want to do with it that’s different from what they’re getting from their Garmin upload or wherever else they might put their ride?” And that’s where, to your question, this green website, it had everything but the kitchen sink thrown in. We had the ability for you to compare and contrast your ride versus your buddy’s ride, in the same place. We quickly figured out that we should apply the UCI, the international standard for difficulty of a climb. So is it a Cat one or a Cat two or an HC categorization, because we were speaking to that audience. We were building calendaring systems in so that you could build your whole training program into that. I could go on.

Mark Gainey:

What came out of that, the perfect example … Segments. So anyone familiar with Strava will know Segments are this core, very unique experience, but it’s history is really … comes right back to something as simple as, because cyclists found climbs so important, and we were trying to be very focused and authentic for that audience, that idea again of going an inch wide and a mile deep, we started by saying, “Well, I’ll bet we can auto-identify somebody’s climb.” And once we started doing that for our members, for our athletes, they started saying, “Oh, this is really great, but can I see how my buddy on that same climb, even though he rode it three days ago?” So he’s, “Oh, sure, we can do it.” So from Segments came Segment leader boards, came that ability to compare and contrast, and what was just this natural evolution, blossomed into this thing that today, now, Michael probably knows better than I do, just how many millions and millions, if not hundreds of millions of Segments that are out there. But it came through a very fortuitous process of listening to our small set of customers, and then trying to recreate the ways which we could both visualize and provide insight, and frankly just keep it fun. It was always coming back to this idea of, “How do we make this entertaining, so that the cyclist wants to go and upload tomorrow?”

Wade Wallace:

Now, arguably, Segments is what gives Strava its heartbeat, its real life, that’s the way I think of it anyway. I have an embarrassing admission to make that I didn’t understand how this was going to work, because cycling doesn’t work like that, right? On climbs it does, but on a flat road with wind and bunches and all that, where did you guys get the insight? Because from my understanding, you guys weren’t cyclists at heart at the time, you were runners, is that correct?

Michael Horvath:

Yeah, you’re spot on there. A little know fact about Mark and me is that neither of us are that … at least at that time, we were not that comfortable on bikes. We were into triathlons, we switched out of rowing, found a real kindred community in the triathlon world and so you do ride bikes but not the way that you do when you’re a cyclist. So we came up to speed pretty quickly, I’d say that’s one thing, but often people ask us, “Why didn’t you just build Strava for runners if you were so much more runners than cyclists?” And it goes back to, at that time, if you think about the needs of a runner, most likely they were not using any technology. You don’t spend a ton of money on your sport when you’re a runner so you’re not buying all the latest gear, whereas cyclists were looking for advantages that came through things like GPS technology, and there were companies that were building those technologies for cyclists, that was Garmin and a handful of other companies.

Michael Horvath:

So it was a go to market strategy. It wasn’t a decision that we weren’t going to build for runners some day, it was a decision that in order for the company to be successful, we had to start with a customer who was most likely to be interested in what we were building, and that was the cycling community. And fortunately we were able to attract a bunch of really great cyclists to join the company very early on in Davis Kitchel and Mark Shaw, Chris Donahue, five of us plus one other individual, [Pela Sohonson 00:09:19], happens to be my nephew, lives in Sweden. The six of us were the founding team, and so we had a lot of cycling ethos and DNA baked in, and that kept us out of hot water … you didn’t want Mark and me speaking to the press about cycling, we weren’t going to be authentic back then. Not that we were talking to the press, the customer wasn’t interested.

Wade Wallace:

Back when I first moved to Australia, everyone was raving about this local website, it was called Cycle2max, and it was built by … I believe a former Olympian named Brett Aiken, here in Australia, that just basically used the honor system to … and with witnesses, to put your times in the popular climbs. And it was just always … when someone mentioned Strava to me it was like, “Well, that’s what this is missing.” Because the authenticity and trustworthy of that was questionable, I guess. So it was a profound insight that at the time was quite revolutionary.

Wade Wallace:

I remember, the first I ever heard of Strava was an email by a gentleman who I only knew through the blog, and I think he commented, and his name was Marcel Appleman, and I don’t know if that name rings a bell to you, Michael? He went by the nickname on his email and different online profiles as Hoofter, I think a Dutch guy that lived in the bay area. And his email said … and I looked it up before this, it says, “Do you have a Garmin unit? If you do, you must check out Strava.” And I think that’s how we finally got connected. And I looked up my member number, and I think if this is accurate, I think I’m member 4684, judging by my profile, so quite early on.

Wade Wallace:

But I’m really curious, when you had this band of six together, developing this, how did you guys determine that yes, there’s a business here, that there’s something we should pursue further, what was that process like?

Mark Gainey:

So, a pretty important moment time, and that the summer of 2008. So we had … at that time it was four of us. So Chris and Mark, who are really our key engineers, they hadn’t yet joined, but Davy, Michael, Pela and myself were focused on this. And during the Tour de France of 2008, we created a small competition on this green machine that I referred to. We got about a dozen cyclists on the west coast and a dozen cyclists on the east coast, and we literally gave away Garmins. For guys who didn’t have a Garmin, it’s like, “We’ll give you some Garmins to use here, but we would love if you would basically be active, during the Tour, and can you upload to this site and give us feedback?” And in fact we set up competitions between east coast and west coast to try to get them to up the number of rides that they would post and mileage they would do, and we might surprise them on one day and say, “Hey guys, free set of racing wheels to whoever posts the fastest five K.” And we wanted to just test certain behaviors. Chris and Mark, the two first engineers we ever hired, were actually part of that beta group, so they were cyclists but not on our team.

Mark Gainey:

And we came out of that and … honestly Wade, two things. One was, we were getting great feedback from this two dozen folks that, “Actually this was really insightful, this is fun, I am enjoying my cycling more, with Strava being part of it.” So that was good. The other thing we were seeing was just the behavior. We were watching funny things happen. If we’d put out an email about a potential challenge or competition, they would then go and recruit not just the 12 people on Strava, but 20 of their other favorite cycling buddies in their neighborhood because, “Hey, we got to go set a five K record on this stretch of road.” And the trash talking back and forth between the east coast and the west coast, and we just saw behaviors that were exciting. It was clear that we were touching a nerve, we were into something.

Mark Gainey:

So we came out of that with a lot of confidence that while we may not have the business model dialed in, “Can we charge for this? How do we generate data?” The concept that we had a product-market fit, that we had something that was compelling to this particular audience, that confidence grew 10X after that pivotal moment in the summer of 2008.

Wade Wallace:

Right, right. So next step in that was to hire some software developers? Was that the logical next step?

Michael Horvath:

Yeah, it was those two beta testers, Chris and Mark, they said, “Hey, if you guys are serious about starting a company around this, we’ll quit our jobs and come and join you.” They were two of our original engineers at Kana, back in the day, that’s how we knew them. And so they were early, early employees at Kana, we’d had a great run together there, we knew them very well. They now are further along in their career as well, and so it all started to come together around their experience using the early, early product, our knowledge of them, our relationship with them and our history with them. So it came together really nicely and we pulled the team together and got the company going early January of 2009, and …

Wade Wallace:

How were you funding it at this point?

Michael Horvath:

Yeah, so we had made the decision from a very early point to not raise any outside money, until we really figured out where we were going with this. We had been part of either on the investor side or advising other companies that had started that had … You lose a degree of freedom in terms of what direction you’re going to take something, once you take other people’s money, and we were funding it ourselves. Mark and I were putting the money in behind it, and we did that until the first round we raised at the very end of 2010, so really the first two full years of the company we were self-funded, and it allowed us to experiment with a lot of different directions we could take it. I think we got a lot of clarity that at the end of the day we were building a freemium business model, where there’s a free experience you can use for as long as you like, and there’s a better version … When we’re building for our athlete we really think about what’s going to give you reasons to stay long enough for you to discover what’s the value behind the pay wall, what are the best parts of Strava, and that’s the paid experience. So that’s what we figured out in those first couple of years.

Michael Horvath:

And I think that’s a really important part of what makes Strava different is that we didn’t take money too early, and when we raised it we knew what we were trying to put a lot of fuel behind, and hopefully we’ve made good choices along the way. We clearly haven’t made always made the right choices, but we have tried along the way to really reinforce that. Building for the athlete. If you build great athlete experiences it’s going to be great for the business as well so start with the things that athletes really care about.

Wade Wallace:

And when you guys decided to finally go to market and raise money to grow this, was there a particular institution you had already known that was a right fit for the investors to get behind this for what you guys wanted to do?

Michael Horvath:

Well, let Mark fill in here, but we weren’t going to go talk to the venture guys or venture firms, we didn’t think they’d be interested, honestly. So our initial inclination was to go raise an angel round, just circle a group of individuals who could raise a little bit of money, a pretty modest raise, that was the original intent.

Mark Gainey:

No. Yeah, the short answer is one of those individual investors, a good friend of ours, he’d been an entrepreneur, actually he had been a founder of company that we had acquired at Kana, so we’d gotten to know him that way. And then he had left Kana to become a partner at a venture capital firm, a firm called Sigma at the time, and had a great career there. By the time we were talking to him in 2010, he’d established himself as a very strong venture investor, and he’d been watching us closely and is a passionate cyclist as well. And so he all along had said, “If you guys ever raise capital can we please talk? And it doesn’t have to be from the firm, I’d love to do it individually.”

Mark Gainey:

And so we had a quick conversation with him saying, “Hey, we think we’re at a time where we’d like to do a raise, and it’s probably an angel raise and we’re bringing together some friends and family and would you be interested?” And his reaction was twofold, “Yes, I’m interested, and second, I just need to make sure that my firm … If I make an investment it can only be because it’s not a good fit for my firm. So would you and Michael be willing to just pitch the firm, so that then I’ll be able to make the private investment?” And a very long story short, Wade, we pitched the firm, and the firm came back with an offer, and it was a pretty good offer, it was one of those things where it’s like, “Well, yes, we’re raising venture and … ” The good news here, Michael and I had been on that path before, Kana had been venture backed and I’ll be the first to acknowledge that particularly here in Silicon Valley, they play a really important role in building companies. And Michael and I had some long conversations around the pros and cons of bringing an institution who’s just a bunch of individuals, and ultimately we chose that path, and so Sigma came in with Greg. The venture path, yeah. So Sigma led that round, and Greg became the partner involved.

Wade Wallace:

The venture path?

Michael Horvath:

Yeah. We did have a pretty tough conversation, honest conversation, with Greg, and then any other investors who came along later which is … we’re building Strava for the long run, this is not a … we joked about it, this is not the Silicon Valley Olympics, we’re not trying to win a gold medal in four years and if we don’t we’re going home, we’re building something that we hope will be here as a generational brand, something that you can join in your 20s and still be using when you’re in your 70s as an athlete, that’s what we believe is possible with Strava.

Michael Horvath:

It’s a way of life, that’s for our customer, so for our athlete this is the way they are wired. They wake up every day wondering how they want to be active today, it’s best part of their day. We believe that’s the basis of a long lasting company. So our criteria for investors where you got to be along for that long ride. You may sell your shares at some point, but Strava’s not going away, Strava’s going to be here, it’s going to stay an independent company, that’s our goal, is to build to last, going back to some of the things that we didn’t get done at Kana or other companies we’ve been involved in.

Michael Horvath:

So by and large I think it’s been a successful path, though it wasn’t what we had expected we were going to do, we’ve been able to find a group of investors who share that long term vision and are in it for the long run, Madrone Capital, Greg Gretsch through his fund, Sigma and JSV Capital, Sequoia Capital, Go4it, which is a Brazilian investment fund. Again, it’s just a great group of individuals and a really supportive cast who helped us along the way. Mark mentioned the benefits of having investors … there’s an accountability, there’s a network, and if you have built a relationship with them along the way, they can really help you solve the problems that you’re facing as a company, if you’ll let them. So that’s what we’ve been able to do so far.

Wade Wallace:

As you alluded to earlier, one of the foundations of the business model was a freemium/subscription based, which shapes the way the company looks and feels and how it interacts with the users. Were there other business models you explored or has it changed, or was that the exact business model you set out to build at the time?

Michael Horvath:

I can speak a little bit, and make sure Mark … Both of us have been CEO at different times, so we’re back leading the company now. But in the first seven years of the company’s existence, between the two of us we were the CEO and there was a two year period where we had another individual running the company, we were still on the board and involved. Over that timeframe, we definitely explored and experimented with other revenue streams, other ways of building value for the company, but subscription has always been at the foundation, at the core, and when we stepped back in to run the company in November of last year, we stepped in with a single purpose which was we were going to make that the sole focus, that is the number one thing is to choose what you want to be the world’s best at, and then you focus on it, and that’s what we did, and that is the subscription offering, the subscription service for athletes.

Michael Horvath:

Where we focus started with is just we want to build experiences that the athlete loves to use and tell their friends about and they’re so good that they’re willing to pay for them, that’s the extent of what we have to say to the team, we’ve got lots of great ideas inside the walls of Strava, a lot of ideas in the people who work at the company, we get a lot of suggestions from our community. It’s a really great opportunity to work on those things. And we definitely had gotten distracted on a few other of those other revenue ideas, other revenue models that we could pursue, that were just keeping us from building those things for athletes. So by getting back to that one thing you’re going to focus on, you can galvanize the team around that goal, that mission, and I think it’s really been amazing to see what we’ve done and we’ve shipped over 40 different features for athletes in the time since Mark and I stepped back in, and it’s just the team being free to go and build those things that they know would make a difference to athlete’s lives. How they use the product, how they experience they get from Strava.

Wade Wallace:

Correct me if I’m wrong, but another foundational aspect of Strava is that you have focused on the tip of the iceberg to start, and you’re, I guess, niche social media, even though you’re spoke about in the same breath as Facebook, Twitter, Instagram, for athletes. And it is also counterintuitive too where you need the network effect for this to be better for all users, but at the same time you want [crosstalk 00:24:35], can you talk about why that was a decision you led with early on, and why it was the right decision and why it initially took place?

Mark Gainey:

Sure. I think a couple of times this idea of inch wide mile deep, and just what it does [crosstalk 00:24:39], and this goes back a little bit what Michael and I experienced when we were at Kana. A funny story, when we were trying to raise money for Kana Communications, this customer email company, we got a lot of potential investors like, “That is not a company, that’s not even a feature. It’s not a product, how can you possibly just build something around that and …” We would hear that, and [inaudible 00:25:06] of our own thought process and logic, yet what we had were customers, with strong demand, and really asking for us to build this and that they were willing to pay us. And so we just learned this valuable lesson that by being extremely focused, at least early, it establishes credibility, it allows for a really strong customer relationship, and once you have credibility you begin to build confidence, with confidence you can begin to think about expansion.

Mark Gainey:

So if you fast forward to Strava, we were doing a couple of things. We were taking our prior experience and saying, “Picking this niche, picking the passionate cyclist, and seeing if we can really build for them.” We had a business plan that always said, “We want to support the world’s athletes, across many geographies and many different types of activities and sports.” Well let’s go deep with this audience, see if we can establish [inaudible 00:25:59] here and authenticity, because it’ll give us the confidence then to think about what expansion looks like, and the other place we always looked at was other sporting good companies. Frankly some of the companies we admire, the Nikes of the world and others … what was it, Nike was 30 years in to just doing running before they began to think about expansion into football and basketball and all these iconic sports that we now know Nike for, but their roots … And even to this day you’d argue their roots are still very much in providing innovation in the running shoe.

Mark Gainey:

So we were trying to take a page right out of other’s play books and apply it here at Strava and plenty of mistakes along the way, Wade. When we made the transition from supporting just cyclists, to cyclists and runners, we’ve got some really funny stories around what not to do in the process, or lessons learned, but no regret with going niche early, I think it just set up that foundation for our long term success.

Mark Gainey:

(Silence).

Wade Wallace:

Did cyclists push back at letting runners in? Was that the reaction you got at first?

Mark Gainey:

Definitely they felt-

Wade Wallace:

We’re a horrible bunch.

Michael Horvath:

Yeah. The cyclists definitely felt that we had built this for them and now we’re taking it away, somehow that we were just going to make it worse for them, we weren’t going to dedicate enough of our time and attention to them. But then they started realizing, “Hey, some of my friends are runners, and now they’re part of hold on Strava too.” And they realized it was benefit … that took a while.

Mark Gainey:

And in fact we launched with two separate paths. When we launched running, there was Strava cycling, and there was Strava running, never [crosstalk 00:27:37] the two, combine. There was a period of time in Strava’s history where we ran them independent of each other for the exact reason Michael’s describing which was, we didn’t want to in any way impose somebody else’s experience on those experience. But we learned over … then has already all kinds of interesting challenges because we began to cannibalize our ability to have network effect and things, so there was a period in … what was it Michael, about mid-2014 where we merged the apps and had to walk the community through what that merger would look like and that, “Don’t worry, your fee’s not going to change, and if you’re only following cyclists you’re still going to just see cyclists.” But yeah, we had to grow through that.

Michael Horvath:

Yeah, yeah.

Wade Wallace:

Yeah, right.

Wade Wallace:

Let’s just step back a couple of years, you just mentioned something quite significant in the word ‘app’. Michael, when we first were connected, it was around 2011 and mobile was just rising to prominence, can you talk about how mobile, or if it was a game changer for you guys in terms of growth and activity?

Michael Horvath:

Absolutely, game changer in a couple of ways. So, if you think about the requirements of using Strava before we built a mobile app, before you could use your phone to track your workout, you probably had to buy a GPS watch or cycle head unit for your bike. They’re hundreds of dollars, right? So right away, before you could even have an experience on Strava you’re a few hundred dollars in, compared to the … we’ve launched an app on your phone, you already have the device, you just need to download the app and the app happens to be free. So much lower barrier to entry for a new athlete trying to join Strava, that’s the first one.

Michael Horvath:

Second one is just the ease of … now though, we take it for granted, but back then you’re time on engaging with any online experience, whether it was tethered to your computer, you couldn’t be doing it while you were sitting on the bus or waiting for something to happen. The phone just gives you that ability to be in the moment, in the experience, and then out of the moment and doing something else, so just a lot more ability to interact with the world of Strava. So a game changer in that way. And it showed up in our growth rate. So it’s a great … I remember the summer of 2011 we launched the first app and we had been adding a few hundred new athletes a day, we all of a sudden were adding thousands a day, 10 thousands, and one month we had a whole 100,000, now we add about a million a month so it seems like just peanuts but back then it was so big compared to what we had been doing.

Wade Wallace:

I bet.

Michael Horvath:

Yeah, just really remarkable what that mobile capability meant for Strava. And again we launched our first mobile app, that we built, back in 1995, we were 20 years to early.

Wade Wallace:

Did mobile allow you guys to also include more activities into Strava as well?

Mark Gainey:

Ultimately yes. I’ll give you a funny story. One of the downsides, when we launched the first mobile app, it really was to provide an alternative and we had this assumption that if we now allowed for a mobile app, what they would do afterwards is would go and experience this amazing website that we’d built with all these wonderful features and these feedbacks and these insights and so forth. And what we missed was … the growth was phenomenal, but where we were off was … no one’s going to leave the app to now go to a website, to go and experience the second half of the experience, so the other thing that happened in that 2011, 2012 timeframe was, we had to retool the entire company.

Mark Gainey:

That was another key funding event where we raised additional capital to basically go from having been this very web centric, Garmin only company, to we need to lead with mobile, we need to get out in front. And to this day we still support multi-platform, we think it’s really important, the form factors are important, there’s just different things you can do on the web that you can do from a phone, but make no mistake, we now lead with iOS and Android and what that experience looks like. And you’re right, as we then thought about new sports, we lead with, “Okay, what’s that going to look like on the mobile experience?” Because that’s where the vast majority of our members interact with Strava, is on their phones.

Wade Wallace:

Yeah, yeah. So this time 2011, 2012, you guys are really riding a wave of huge growth and popularity, it was the thing everyone was talking about I remember, and then a huge tragedy happened. I remember you guys were sued because of … held responsible for the death of a gentleman … I don’t know if you called it King of the Descents or KOM at the time, but … What was it like for you guys then, and is this an event that you guys ever could have anticipated by affecting real-world events? What was that time like?

Michael Horvath:

Yeah, it was a real tough moment for the company, first of all just to … the gentleman passed away, believe it was the early summer of 2010, and so this lawsuit actually doesn’t kick off until years later. But at the moment, at the time, it had never crossed our mind that something we’re doing is potentially interacting with something that’s going on like this in the real world.

Michael Horvath:

So if you look at the lawsuit itself, what was alleged is we are partly responsible, liable for this death. It gets ruled that, no, when you go out and you’re exercising, you’re assuming the risk of what activity you’re doing and Strava’s not telling you to do anything, Strava’s not giving you instructions to go do those things and in that manner, so were found not responsible. But in terms of what it did inside the company in terms of the things we had to think about and think through, definitely we realized what we need to make sure is that we have to understand much more clearly, especially in the United States, what are the laws around things like liability as it relates to sports?

Michael Horvath:

So we came up to speed fairly quickly in that period and tried to understand it better. We have a really great team inside the company today that really tries to think through from when we’re building something, think through it from the legal perspectives. Everything from privacy now, which is as you know is a huge area that wasn’t there in the beginning, privacy regulations, to safety liability, but also that doesn’t stop there, it keeps going in terms of usability with regard to all sorts of different things that we think that our athletes are going to be concerned about. So it was a very challenging moment for the company and we learned a lot from that exercise from that experience that we still carry forward today.

Wade Wallace:

Michael, I was saddened to hear and very sorry about your wife Anna. In 2014 when you stepped back from the company to go to care for her, was that a difficult decision for you to make, at the time with possibly the gravity of the situation unknown, or was it … sorry there’s an error … not an error, 10 minute, add one hour, okay. Sorry about that. With Strava being such a huge part of your life, was it a difficult decision for you to step back at that time, or was it just the obvious, logical think to do?

Michael Horvath:

Nothing in life is obvious until you’re looking at it in the rear view mirror I think maybe, so this is a place where I can bring back what Mark and I are able to do as friends and business partners together. I really resisted when I first find out that my wife is terminally in September of 2013. My first reaction is, “How can I keep doing both? How do I be the partner for her that she needs and still be the leader of the company?” And it was Mark effectively saying, “You’re not going to be able to do this, you’re not going to be happy with the outcome. The company’s not going to be happy with the outcome. Your not going to be happy with what happens next.”

Michael Horvath:

So Mark wasn’t planning to do this, but he stepped in to run the company, and not just stepped in to take my place for a while, stepped in with the idea that now he’s running the company and I’m in a supporting role, I’m not out of the picture, but I’ve got the flexibility to devote my time and attention and care to somebody that needs it, and that’s my wife Anna, and she unfortunately passed away in February of 2017, but we had three and a half years where I didn’t have to try to do both things, and those were some of the big growth years for the company, I was still involved enough to feel like I was still a part of it, but I had that ability to focus on Anna and what the family needed. So, a really important lesson here, is that you need people in your life who are willing to tell it to you straight, when you can’t see it yourself, because you often do have the blinders on when you’re in the middle of it.

Wade Wallace:

Right. I remember in 2016, you alluded to this earlier, but it appeared that Strava was going really towards a … trying to monetize its news feed more so to possibly look more like Facebook, or getting publisher content. I remember having chats with someone named Kate Maxwell, who I believe maybe still works there, she comes from Tumblr and Gawker, so someone who’s familiar with the content world, [crosstalk 00:38:33] at the time, was that one of those times when you were standing away from focusing on a core subscriber base than in monetizing differently, or was that an experiment that you just decided to end up leaving behind? What was the thinking at that time?

Mark Gainey:

There have been many experiments throughout Strava’s history where … with your low member number, I’m guessing you’ve seen the vast majority of them. We can go back to the days of Strava delivering on custom jerseys, go finish a challenge and you can earn the right to have a custom Strava jersey sent to you, but of course you’ll have to pay for that jersey. So we had that business in play.

Mark Gainey:

If you fast forward to today, you’ll see … as Michael alluded to … absolutely vast percentage of our revenues and our focus as a company is on our subscription. We do have sponsored challenges, we do have this really great experience today on Strava where you can sign up for these monthly challenges, sometimes they’re weekly, it depends on the length of time. But the best ones honestly are the ones where sponsors are involved, where there are brands. And we love those because they’re additive to the athlete experience, they are improving the experience for our cyclists, our runners, our triathletes, for anybody who’s involved, but there’s brands that are engaged.

Mark Gainey:

And so what you’re alluding to is … you’re right, from ’16, ’17, ’18, there’s just a period of time there where we as a company were trying to really think through, is the business model one where we can incorporate the brand experience in a way that’s additive to the athlete experience, and how far can we take that, and are there opportunities for brands in the feed that would be additive to the athlete, would the athlete want to see that? And we ran a lot of experiments and … I think what Michael alluded to, when we stepped back in November, it wasn’t that we looked back and said, “Oh my gosh, how did we screw that up?” It was much more this notion that, “Boy, we’re 180 people, we’re a small company, where we’ve seen our success as two founders, is when we are very focused and disciplines, and willing to say no to a lot of things, and get back to our roots.

Mark Gainey:

And so I think what you’ve seen now going forward is that … I would imagine that brands and partners will absolutely continue to play a really interesting strategic role, inside Strava, but they are our partners, we don’t think of them as customers. Our customers are the tens of millions of athletes around the world, that we want to convince we’re creating something that is of value that they would want to pay us each month. That’s the mission. And if partners can help us do that and help us create really amazing athlete experiences, awesome, all the better, then let’s bring those partners in. But we’ve fine tuned that thesis from what you’re describing back in 2016, where I think we were trying to spread ourselves a little thin, and figure out different ways that we might be able to build different revenue streams.

Michael Horvath:

That’s exactly right, the genius of the and is something that … yeah, yeah.

Wade Wallace:

It’s never a this or that is it? Maybe it even comes from the built to last, the ‘tyranny of or’, it’s never one or the other.

Michael Horvath:

Yeah. And if you think about it, if you think about what the iconic brands in the world of sports mean to you as an athlete, you’re like, “Yeah, I want them in the experience too, they belong in the right way.” And that’s where we’re going to constantly focus on our primary objective is to build something that’s awesome for the athlete. And some brands are definitely going to be part of the picture, they have to be in the picture the right way. As Mark said, we’re going to experiment, when we learn those experiments aren’t working we’re going to change course, we’re going to do something else instead.

Wade Wallace:

One of the things that … it might be a backhanded compliment, I’m not sure, but it is often said about Strava, and you guys have probably heard this before, “They give me so much for free already, and what is there more to pay for?” And then a lot of people pay simply because they know it’s good for the community. But as well too, that’s a hard business model, isn’t it, right? Just to depend on people’s support. So then you launched Summit, and how much thinking did that take and feature enhancement and all that, to come to what’s now called Summit?

Michael Horvath:

Yeah, I think it’s still part of that world of experimenting, trying to figure out what is it that we haven’t unlocked yet around our subscription business, and many of those aspects that you talk about, that was the summer of 2018 where we launched the subscription offering became called Summit, and that was partly rebranding, what had previously called Premium, we now called it Summit, but also breaking it into smaller, we call them packs, you didn’t have to buy all the features you could buy three different modules or packs or combine them as two out of the three, you didn’t have to buy all three of the packs. The packs have gone away, because they were really confusing. It was very challenging for people to understand what was the difference between them and why would I buy one versus the other. I would say that experiment failed, right? So that’s another one where it took us maybe longer than we liked to have realized that that wasn’t working, and we are now simplifying buying a subscription from Strava as you buy all the paid features.

Michael Horvath:

But the important thing to recognize is whether you call it Premium or Summit or something else, it’s that building value that the athlete can really understand and be able to tell their friends why they pay, that’s something that had been eluding us. I think we’re getting a lot closer to that now. We just launched a paid feature called Routes. Routes from anywhere is the way we call it inside, but it’s our take on how we can help you discover the world. Even if that’s just the world around you because you’re now working out within 10 kilometers of home during this global pandemic. But Routes is a good example of how we take all the billions of activities, there are well over two billion activities uploaded to Strava so far, and we hone in on the set of activities that are really relevant to where you’re located when you’re using that feature, and we suggest routes to you, cycling and running routes, we’re soon adding hiking, and this is powered by all the data we’ve collected on how other people have navigated the geography around you and what bubbles to the top, what are the popular ways to go.

Michael Horvath:

So it’s got some real smarts to it, and that’s an example of something that’s really of value, you can’t get anywhere else, and where we can show that to the athlete and it’s a great example I think of what is possible when you really dedicate the team … it’s a small company, we have about 180 people, it’s a really small team, and think about it, if you spread that sized company across many different objectives, you won’t get Routes out of it. If you tell everyone we’re focused on the subscription experience, you’re going to get people focused on building something like that. So that’s something that’s come out in the last six months and we’re really excited about it, and excited to bring it to the world right now, especially where people need even more … I don’t know, even more sense of hope, they need some variety in their lives and Routes can give it to them.

Wade Wallace:

I think it speaks to the fact that everyone uses Strava differently, and people go through different stages of their journey. And to me, Routes was always that killer feature and I already pay for Strava, I have for years, but that was the one that I said, “That’s the one I would pay for if I hadn’t paid up until now.” But I thought about it as well too, because you have to cater to many different not only people and use cases, but use cases within that person who goes through different stages at the time.

Mark Gainey:

Wait, there’s a funny story when we launched Premium in the first days of Strava, it was used … basically you could use all of Strava for free, up to five rides per month, and then the sixth ride you had to pay. And that worked exceptionally well, the conversion rates and people’s willingness to subscribe, it turned out a lot of people were riding more than six times, or more than five times a month, and so it worked well.

Mark Gainey:

When we launched mobile, we found ourselves in a conundrum where that usage based model started to break, because we needed people to feel very comfortable using the Strava app to record all of their rides and their activities, and having those activities come into Strava was incredibly valuable, it’s currency. To Michael’s point, we couldn’t create Routes, that feature without having all these activities come in. So our free athletes, they’re absolutely welcome members of our community, we don’t look at them as freeloaders, we fully appreciate the value that they bring, but we had this shift where we had to shift to this feature based model, where now it was the feature was the pay wall, certain features. And to your point, you go back to when we made that move in … what was it Micheal, late 2011? We probably underestimated how much we left on the free side, versus the paid side, and to Michael’s point we’re just going to keep focusing on how we [eat 00:48:15] the value of the subscription side, it’s going to become a no-brainer, it’s just we’re going to let our athletes tell us when that’s happened.

Wade Wallace:

The investors you chose as well is something that allows that decision to be influenced with … is it short term gains or is it long term thinking that … and it’s a blessing that you guys found investors like you have.

Wade Wallace:

In 2018 you guys were criticized for revealing military locations and possibly activities within that, is that … again, another effect of Strava, real world effect that you guys could have never anticipated, how did that dawn on you, what was the reaction to that at the time and did it change the company in any way?

Michael Horvath:

Yeah. Just what you’re talking about is there’s this part of Strava’s website called The Global Heat Map, where we’re showing you basically-

Michael Horvath:

Yeah, a year’s worth of heat, if you will, of where are people active running and riding and so forth, and so someone had figured out that they found some really strange places in the world where people were being active, and why would people be active just right there where they didn’t seem … and they inferred that they must be military bases, perhaps they were secret military bases. And it turns out none of them were secret bases, this was all blown up out of proportion in the media, it wasn’t that they were secret.

Michael Horvath:

But there is this aspect of privacy that comes out of this, which is … anything you put on Strava, unless you mark it as private, it’s out on the internet. The information you post on the internet, turns out it’s public. And that’s what the heat map is showing you. So what it taught us, you’re right, we now need to think through, “How do we make sure we are being much more clear with out athlete when they’re joining Strava, that this is a global community of people who are being active? When you post your activity to Strava it’s publicly visible, your GPS points are out there.” We had already created a separate team in the company, this dates back to 2017, called The Trust and Safety Team, their primary charter of focus is on data privacy, how to make sure an athlete can trust Strava with this pretty sensitive data about them, where they’re located perhaps, or where they’re being active. And that trust team has done a great work in terms of improving how someone understands our privacy settings and onboards into Strava and are able to make sure that it dials in what it is you want to use Strava for.

Michael Horvath:

So we did a lot of outreach to the military, to the governments and got everyone to understand there are privacy settings inside Strava and you got to use them if you want to keep the GPS points out of the internet, because that’s where the information goes. So it’s definitely a learning moment for everybody, and I think we came out of that a lot stronger as a result.

Michael Horvath:

Yeah, the learning curve has been steep at times, unintended consequences. And I think the good news is, more often then not, it’s a place where we just realized we needed to do better education. But it is that we’ve totally fallen flat foot. What you just alluded to was when we were … the system was in place … you can be very private in Strava. You can treat it as your own personal training log, and never have anybody see any of that information, but you need to know how to do that, and there’s a lot of features inside Strava today, we will be the first to acknowledge, some of them are really hard to find, and so just how we elevate that ability to educate and be transparent and ensure that people get to use it the way they want, provide that choice … became really important.

Wade Wallace:

So at the end of last year, 2019, when it was announced that both of you were going to be returning to leading the company, what was the process like and how long were you guys talking about doing that and to it finally happening?

Michael Horvath:

So … can say it was a process of a few months. I think it’s really realizing that we had a real vision for what the company should be going forward and we were the best suited to lead it at that point, and so together with the board, we realized that was the best outcome for everybody involved. And our vision of creating Strava back in 2008, 2009 that we’ve talking a lot about, the early, early days, that’s still the same mission we have today, we haven’t changed to some other path, it’s not a pivot for the company, it’s really returning to the foundation of what we tried to build, which is an experience that athletes love and love to use and love to tell their friends about and they’re willing to pay for it, that’s going to be the basis or the foundation of our success.

Michael Horvath:

So we came in and between the time where either of us were the CEO, a lot of things had changed, we had grown quite a bit in terms of our community size, we were approaching 50 million registered athletes around the world. By that point we had a bigger team inside, we had a really full management team, which was something that neither of us had the opportunity to run the company with as good, as strong a group of people as we have today, so we felt really fortunate to be … everything was really poised I think at that point for what we’ve seen in the last six months, which is by focusing on that single objective of building athlete awesome experiences that will help drive our subscription business, we’ve been able to do some really great work, and the team I think is really energized around this and I think this is a great orientation for us. Yeah, Mark … what I recall also is the amount of how … we were viewed as the new guys. Even though we’re the founders, we come in and the team is a different team then we had when we were running the company, but we’re now new, how could that be?

Wade Wallace:

Have you guys ever stopped to think about what 50 million users look like? If you stand at the beginning of a marathon or a grand fondo or a sporting event and see 10, 20 thousand people, it’s mind-blowing how many people that is. Is there ever a point where it’s dawned on you what a success this has been?

Mark Gainey:

You know, Wade, for me it’s less the size of the community, it’s the frequency with which I hear the great stories. I don’t know if that makes sense, but I’ll give you one that happened as late as … just earlier today. So, I made what used to be, Michael knows, I treat my local grocery store more like my refrigerator. I would go to that store three times a day to pick up my meals and come over, I am not a cook. Unfortunately, given the current circumstances that we’re under, I’m visiting my grocery store far less frequently so I made my run today, I was not in the store more than … I happened to be wearing a Strava baseball cap, and one of the clerks in the store I see he’s a bagger, he’s a young kid, said, “Where did you get the hat?” And so I explained, “Oh, I’m involved with community.” He’s like, “You have no idea how addicted my father is to Strava.” And he spent the next 10 minutes talking to me. We were talking to each other through face masks, he could not stop talking about the impact it’s had on his father’s life.

Mark Gainey:

That to me, and I’m incredibly fortunate, Michael and I, I think both are, in that we get these stories on a very regular basis, that’s the impact I never anticipated. Just being able to hear … yeah, again, the way in which we’ve influenced somebody’s life in a really positive way, and so … yeah, the numbers are interesting, they start to blur, but when you get to just keep hearing these, “It changed my life.” Or, “Oh, my gosh, you have no idea what you’ve done for my dad and his buddies.” That’s really fun.

Michael Horvath:

I think of it also … we have a long way to go. There are a lot more people out there for whom Strava could be meaningful and we want to be able to meet them all, so it’s exciting thinking about where we’ve been and how big we’ve gotten today, but it’s also a bit more work to do. There’s more people to meet, and bring into the community.

Wade Wallace:

So you’ve never sat back and looked at each other and said, “We’ve done it. We’ve done what we set out to do.”

Mark Gainey:

That is the curse of an entrepreneur and I know you’re the same way, which is that you’re never looking back in the rear view mirror, you’re always looking forward at all the things that aren’t quite right, things that we know we can do better. I will say this, Michael’s heard me, the company’s heard me say this a number of times, I’d be satisfied if we never add another new athlete to the community. 50 million is beyond my expectation, and really what I want to do is build an amazing company for those 50 million athletes. I believe that if we didn’t add another single member tomorrow, this can be an amazing company for the next 50 years.

Mark Gainey:

Now do I think we’re going to keep growing? Yes. Do I want us to keep growing? Yes. As our communication folks will tell you there’s 700 million possible athletes out there that should belong on Strava. So I’d like to believe that we’ll get those 700 million over the next 10 years, but to me it doesn’t matter. We’ve found 50 million people who have found us, and I’m really excited about the ways we can serve them in new and creative ways over the next two, three, five, 10 years. If we do that, there’s a great business.

Wade Wallace:

What is the pie in the sky thinking tell you for the next 10 years? What do you want to do? What does Strava look like in 19 years?

Michael Horvath:

Ah, so this is the fun part about the last six months or so, is that we’ve reconnected to the original vision of what the company can do for the athlete, and today, we’ve talked a lot about what the experience is, it’s community. Today a lot of what we give you is connection to a community that motivates you. We don’t tell you what to do, we don’t send you a workout and tell you, “Get out there and do it.” It’s your friends on Strava who you know they’re going to give you kudos, they’re going to comment on your activity, you’re going to be able to show the photos. That’s what motivates you inside Strava, that’s largely what we do today.

Michael Horvath:

But there are other areas that we are excited to build for, and they are in the areas of, how do we help you really get dialed in on your goals? What do you want to get done? And goals are not always about getting faster, goals can also be about staying healthy, just being more consistent in my training, trying new things, and so let’s get really good at helping athletes with goals. It could be around gear. We have so much information about what gear people use and how successful they are when they use that different gear, whether it’s bikes or shoes, we should be a great resource for you when you’re deciding and trying to figure out, “I need a new pair of trail shoes, what are the right trail shoes for me, given a running idea.” Well we got a lot of other people who might be able to help you with that, and we got it in the data, we can show it to you, in a similar way that we’re doing with Routes, using the power of the community to help drive or fuel an experience for you as an individual athlete on Strava.

Michael Horvath:

There are only a handful of these areas that we’re really excited about building for in the future, and what that does is then it expands what we can offer the community. Mark talked about if we don’t add a single other person to the community, we want to do more and more for the people who are here who have made Strava a part of their athletic life. Yeah, we want to do more for those people in these areas, and then we’ll probably still have more ideas. We probably still won’t be done and want to sit back and rock and stuff, it’s too much fun.

Wade Wallace:

And it sounds like the biggest challenge is narrowing down what ideas you want to execute and all that.

Mark Gainey:

Yeah, I’ve often referred to it as the noise of opportunity, it’s deafening, there’s so many … and every time there’s another piece of feedback that comes in from a member in one of our forums, they’re very rarely bad ideas, very rare, they’re always really good and so we’re learning, we’re 10 years into this process, I think we’re learning how to prioritize, we’re learning how one thing can lead to another. As Michael just alluded to with community as our backbone, we’re getting really excited about the ways in which it can expand out from there, but you’re exactly right, it’s really hard to say no to stuff.

Wade Wallace:

Well, it’s awesome to see you guys just as enthusiastic as you’ve ever been probably, and not short of ideas. I can’t thank you guys enough for this, this has been awesome, I appreciate you sharing your story, and maybe this is where we close off.

Michael Horvath:

Yeah, well, Wade, just want to say a real big shout-out to all you’ve meant for Strava since the early days where we started working together and you really. CyclingTips just definitely put us on the map, not just in Australia, in a lot of other places too, because it was really so tied in to the community that we were trying to build for in the day, so it’s a long lasting relationship, we’re really glad that we kept up the contact and the friendship, and just really excited that we were able to be part of this … to tell the story here today on your podcast.

 

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