Mark Gainey is one of the founders of Strava and in his podcast speech on Standford series he is talking about drivers of setting up company that is becoming main social community for sports people around the world.
Strava idea was already on Mark and Michael mind in 1995, but time was not ready for it (wearables, customer behaviour (sharing experience online)). Instead they realize that there is a need for customer e-mail management and they start Kana Communications company that become multi-milllion dolar company. Strava was officially launched in January 2009.
There main idea was how to connect MAMIL-s (middle age man in lycras) into virtual community. They decide to focus on one group – the passioned cyclist. Approach is called “inch wide, mile deep”. They wanted to get it right, before really moving forward. This approach to specialize in one really specific field is hard to stay with. Usually companies want to expand their reach and so disperse their risks. But Strava moved to running when they really become leaders in cycling field. When they started, they put enormous focus on what cyclist value, they realize that they memorize their achievements on local hill, they care for power and that in order to engage them, they should work on virtual teams – followers make us engage more.
Strava business model
The model is built on three stages:
They started with acquisition trying to catch every cyclist they think of, trying to offer free wearables and some other wrong ideas, but it was patience in build a community, that was the most beneficiary.
They make sure that engagement is there, especially their mission is to keep people moving. For every minute people is on Strava, they are working for 50 minutes. It took them 8 years for first billion activities in Strava, 18 months for second billion and 13 months for third. When they introduce leaderboards, things really started to move.
Monetization is about freemium model, that offers a lot for athletes to use the app and build a community, but you have payable upgrades and they are really making sure that with all the partnerships, they don’t jeopardize their focus on athletes.
Marks focus points:
- Don’t try everything, focus on niche. Inch wide, mile deep.
- Vision is important. Mark believes that you should not confuse vision with go-to-market models. Vision is there to drive you, your long-term dream, go-to-market models are strategy and can change, but vision is there as your core driver and should stay fixed.
- Real problems for real people.
- Going into business, it is really important that you know who your target customers are. Mark is talking about Starbucks experiment. Go into it and look around, who out of them would be your target customers.
- Try to go for number one, this will help you a lot. Don’t underestimate power of number one.
- Focus on great, rather then big. Big really quick, coming down really hard. If you are great, big will come.