Can you just tell me a little bit about yourself, starting as a young entrepreneur and your history and background?
Sure. I'm the CEO and co-founder at Fitocracy and I started it with my cofounder, Dick Talens, about four years ago, and prior to that I had spent a couple of years working in consulting as you do after graduating from college. I went to U Penn undergrad for Econ, which is where I met my co-founder, Dick, originally.
My start as an entrepreneur was interesting. After graduating from college, I didn't really imagine that I was going to get into it. It was an abstract concept at the time. I figured I would get several years of experience working a normal job, developing some knowledge and experience, and figure out what I want to do on the entrepreneurial side when I'm late 20s or 30 or something like that. I figured I'd have more savings and know how to execute and a funny a thing happened.
In 2009, actually, I lost my job. This was around the winter/spring after Lehman Brothers collapsed, so shit was hitting the fan, and the particular consulting firm that I was at, and the division I was in, was not performing well. All it took was one bad project, or one mediocre project on my end as an inexperienced college grad to lose that job nine months in. That was pretty rough, but I was met at that point with a decision I had to make, which was, hey, maybe I can think about doing something entrepreneurial or just find a new job.
At that point I think the seed was starting to get planted, but I didn't really take it that seriously. I decided to go and get a new job, so at that point, I moved up to Connecticut where I started working for a different company up there. I knew pretty quickly that this wasn't for me. I didn't like the industry, I didn't like the work, I didn't like living in Connecticut, no offense, and I remember at that point I really started getting interested in the startup world, especially because in New York, it was starting to heat up.
It was around late 2009 and I started buying the books, reading the blogs, hanging out on Hacker News. I remember, Spencer, I saw you as one of the early guys in the community in New York tech that I thought was really interesting, and I think I tried to reach out at some point early on, but I was still up in Connecticut up at that time.
I was just trying to get my feet wet a little bit. I started going to some of the events and trying to drive down from Connecticut when I could in the evenings to attend some of these things and really get a lay of the land, so I was very, very green. It was going into 2010 when I really started getting serious about this mentally and I started talking about this with Dick.
Did you guys have an idea at this point?
We were bouncing ideas. Let me think about this. This was late 2009, early 2010 when Dick and I would start going through this daily ritual of bouncing ideas back and forth over chat. One of the primary things we had started working on was conceptually all about this social gifting website that was meant to solve the problem of, you need to get someone a gift for their birthday or special event and you have no idea what to give them, and I remember this was during the height of recommendation systems.
People started getting really interested in that. Hunch was a thing, and social was the thing you naturally plug in there as well. We called it Gifty.
It's funny thinking about it now because a couple years later a whole bunch of stuff in that space started popping up, with names that were very similar as well. But, ultimately we actually canned that idea because at a certain point we decided that we weren't really that interested in it, and then I remember Amazon and Facebook had announced a partnership during that period that spooked us. I don't think anything became of that, but it spooked us enough for us to start looking for other ideas.
So this was mid 2010. We had already mentally committed to the idea of quitting our jobs and starting something, we just needed to find the right idea first. So it was in the summer of 2010 when I was hanging out with Dick in D.C. where he was living at the time, and we started really, seriously considering a fitness space. The reason we weren't naturally jumping to that was because we thought it was a very competitive area that we didn't really know how to successfully differentiate in that space.
We had already mentally committed to the idea of quitting our jobs and starting something, we just needed to find the right idea first.
What made you guys interested in fitness in general?
Right. So for some back story, that's how Dick and I became friends in school. Going into college, we were both in the middle of diving into the whole health and fitness world, we were spending lots of time on body building forums, we were working out four days a week, we were eating really strictly, we were head first in that world. If you've met anyone, probably the most relevant example these days is anyone you know doing CrossFit. It was a similar level of fervor or passion and it really defined our lifestyles.
Body building and strength training was becoming a really big part of our lives during that period from 2004 to 2008, and so by 2010, it was very much a part of our identities. We had a lot of experience in that space and we figured this was an area where we could add a lot of value.
So going back to that period in 2010, we were conceptualizing something in the fitness space, but we thought there were a lot of companies out there that seem like the market leaders, they're incumbents, how do we make any dent in that when we have no idea what we're doing? Little did we know that it would get probably 10 times as competitive a few years later. Even then we thought "Oh man, there would be a ton of companies that were going to be battling against."
So anyways, we decided the best approach was to play in an area where we had a lot of knowledge and passion for. We figured trying to solve a problem that was interesting from a utility standpoint, but not necessarily from a personal interest standpoint wasn't going to be a winning strategy.
So we decided to go into the fitness route. We created the name Fitocracy and we started throwing ideas together on how this would actually work. We knew that workout tracking was going to be a component there, we knew that some sort of challenge mechanisms, some sort of social challenge mechanism was going to be in there, and then ultimately, Dick was the one who came up with the idea of what if we just really turned fitness into a role playing game.
I understood that idea intuitively and right off the bat I thought it was great. We could draw upon our years and years and years of playing RPGs and combine that with our passion for fitness into something that could be really compelling, and no one was really doing that, so at the time it was an opportunity for us to just geek out like crazy.
Did we have a business model for it? Did we know how this was going to get users or any of that? No. We just simply had concepts and we figured we're going to put it out, we're going to start building this and we're going to start trying to get users for it and then see where it goes.
Did all those features make up the initial prototype? How did you guys build the first version?
Yeah, I still have screenshots of the old stuff and it's really fun to look back on it and horrifying. The basic approach was that Dick knew how to program. He was a self-taught programmer. He didn't go to school for it, but he had learned enough as a teenager to do a bunch of side consulting and put together some basic stuff. So he was in charge of all the technical implementation, although he did have to learn a lot of knew concepts and ideas around web development, because that was relatively new to him. So he was picking up books on Django and just diving into that.
On my part, we knew we needed a front-end design lead and someone who could handle the HTML and CSS because there was always enough work to be done on the backend. So I took it upon myself to learn as much as I could around web design, HTML, CSS, and started throwing that together. So I was in charge of mocking up all the features.
We would come up with the features together, but I would mockup the layout and how it would work, the functionality and the experience, and then I would start throwing together static pages on HTML and CSS. He would start making the dynamic and we would start working back and forth on that until we got something that was actually interactive.
It's so funny because we were just doing it all the wrong way. There was no version control, we weren't using any sophisticated tools, it was just about let's run it on our local server and see if it works. The initial version was terrible. It was so God awful, but the basic mechanic that we started with still is what Fitocracy does today, which is you go to the interface and start tracking an exercise or a series of exercises, and those exercises come with a certain amount of data attached to it like the name, the type of exercise and that type of exercise defines whether or not you're tracking weight versus reps versus distance versus speed and so on.
Then based on those parameters that the user's inputting — it was very input heavy and in fact in a lot of ways still is today, you would spit out points. We basically scored your exercises, and the idea was that that was the basic building block, where like any good game as you're earning points you level up. It becomes harder and harder every time to earn more experience, "to level up." That was the basic mechanic.
We started thinking about other functionality as well like the concept of quests and the concept of achievement badges, even boss battles. That was an idea we threw out because it started to get way too complex. We had a whole bunch of these concepts that we want to employ and even had some mockups of how it would work, but the basic idea was this whole point system, which was the very first thing that we really started to get working.
Then from there, it started just evolving where the moment you did an exercise and started getting points that would get you connected to an activity feed and then it started to come natural from that point where we started introducing social features where you could follow other people, see what they were doing, and then start interacting with those objects socially as well from a comment perspective and things like that.
The initial version was terrible. It was so God awful, but the basic mechanic that we started with still is what Fitocracy does today.
So now that you guys had a prototype, how did you guys get it out to the world? How did people start hearing about Fitocracy?
I would say there was an alpha phase and then a beta phase. At the end of 2010 after about a month of development or so we had this rough alpha, and that was that classic friends and family, kick the tires for the moment, where we were spamming everyone that we knew and saying, hey, we would really love it if you tried this out. We had maybe a few dozen people try it out, but no one would stick around to do it, they were just being nice. But there was at least enough feedback to start to get a sense of what was confusing, what worked, what didn't. So even in the alpha phase, this is still 2010, I made a post to Reddit, and this requires a little bit of explanation.
This was in the late fall and Dick and I were on our way out the door to go to the New York Tech Meetup. I think it was the very first one, maybe the second one. On a whim I decided, well, we don't really have too many users on this thing yet, but I spend a lot of time on Reddit and I spend a lot of times on the fitness section of Reddit, otherwise known as Fittit, why don't I just write a long missive of what it is that we're building here and throw it up there.
By that point, we had a beta invite gating system already, so you needed an invite code to get access. We had that all set up, so I wrote this long multi-paragraph post on Fittit where I explained, here's what it is, here's the concept and the long-term vision, and we'd really love for you to try it out, and guess what? I've got invite codes to pass out if you're interested, let me know. I posted it there. I think it had 10 uses or 100 uses on it and I posted that once, didn't give it a second thought, we headed out the door, and we're sitting there at New York Tech Meetup about 30 minutes later and all of a sudden we're just getting a bunch of emails on our phone.
These were auto generated system emails letting us know that people were joining Fitocracy. We were, like, what the hell, where is this coming from? And then, of course, hey, we just made that post on Reddit an hour ago and people were leaving comments, they were upvoting it, they were asking questions and requesting more invites because the invite code had run out of uses, and we just rushed back home. We were, like, holy crap, we've got to pay attention to this.
So you guys left the New York Tech Meetup because you were getting so many users.
Yeah, and I think in retrospect, it was no more than 100 or 150, but at the time that was pretty significant for us. So we rushed back home, we loaded up more invites to be used in that invite code and we started spreading that around. Then I spent the next 12 hours pretty much just answering every single question or comment that had been posted on that thread, which helps the visibility and helps the activity on that overall thread.
At that point I think we had just a couple hundred users, but it was enough to get the ball rolling. People were starting to use it, they were actually interacting socially, they were spending time in the forum, spending time in the activity feeds, and they were real users. This was late fall and I remember from that period, this is like December and January, so over Christmas break and the months before and after, we went very heads down on this beta release. We had enough feedback from the users to understand what we needed to add and what things we needed to change.
So I went through this intense period where I was completely redesigning the site. I was pulling a bunch of different web design elements from the sites that I liked. It was very Frankenstein-like, but it was starting to come together.
We got everything together and we started translating that over to HTML and CSS and rebuilding everything, and then in February we launched the site as this beta version. It was faster, it was more functional, and it looked better. It was an improvement in every way possible. That's when I made another post to Reddit. It was around that time, it might not have been the launch date, but this is all about part two. It's, like, hey, we're building a fitness RPG and we'd love to show you more about it, here's all the added features. There was like a whole long list of new things there and that drove up even more excitement, and I think on launch day we got maybe 700 new users on Reddit. That was still very, very exciting for us. It was better than the first time.
So going into 2011, it was this private beta mode where you had to use an invite code. You had to obtain and use an invite code to get access to Fitocracy and create an account. So we used this to our advantage because every person that had an invite code could spread that around, but each invite code is only good for 10 uses. So what would end up happening is that every time we posted on Reddit with invite codes those invite codes would run out very quickly, and so in the comment thread people would post it around and share it, and then people would go back and forth and say, "hey, thanks for that usage, I really appreciate that", and then someone inevitably says, "oh man, that code no longer works." Then someone else pops in and is like, "hey, you can use my code."
So there was this virility that was happening in these common threads on Reddit.
We had enough feedback from the users to understand what we needed to add and what things we needed to change.
How did you guys come up with the invite code system? How did you guys imagine that working?
The reason we employed it was two fold. One was that it simply seemed like the thing to do. I think this was just a period where there were a lot of different products launching out there where private beta, get an invite code was just a common tactic. So we just copied it, straight up. The other side of it was that we just weren't ready to handle a publicly available platform. We were embarrassed by a lot of the warts on the site, and infrastructure-wise, I don't think we were even able to handle very much usage.
I think there was a very long period where if we had more than 100 people using the site at a time, it would slow to a crawl. Like, nothing would work properly. We were not set up for that, so there were two reasons why we had that. It was this home grown invite system, every unique users gets their own unique invite code and we just tallied up the uses that were tied to registrations and that was that.
It turns out, in 2011, Reddit was really one of our biggest user acquisition channels, because I was highly engaged. I would be coming in there fairly regularly, maybe once every couple weeks and saying here's a new update, or here's some new invite codes that you guys can go and use. This would always trigger a new wave of users because of this viral invite exchange phenomenon.
Then going deeper into 2011, Reddit started becoming less important, but it was still quite important. We started getting some press, we started getting some outside interest and so on, but Reddit in our earliest days was our number one user acquisition channel.
I think what was really important was that I was spending a lot of time engaging with those users. I was explaining the vision, I was responding to feature requests and bug reports. I was very visible and I think that created a lot of good will in that community and made it very, very easy for them to hop on over and spend time with us early on, and that very much helped to seed the community of Fitocracy early on.
What led to Reddit being less enthusiastic with Fitocracy over time? You guys were such a darling of Reddit.
I think we still maintained that status even going into 2012. I think that it started changing, I want to say in mid-2012 or so, for a few different reasons.
One is, I think there was a certain amount of frustration among the community when, let's say, certain feature requests that had long been made weren't being fulfilled. You've built products before and you understand that roadmaps exist for a reason. You have to deploy your resources in a certain way and you have to be deliberate about it, and the tough part is that most of these people are never going to see that roadmap and they're never going to know why you made certain decisions in a lot of cases.
So they would have these long-standing bug reports or feature requests that we simply weren't answering and it felt like we were ignoring them. So I think that was a big part of it. The other side of it was that we started moving the product in a more social network oriented direction, and I think in some sense that felt like betrayal to the original vision that we had set out on Reddit. We talked about this fitness RPG, so that instantly conjured up notions of character classes and stat sheets and epic loot and stuff like that and it never came about.
I think the really tough thing as well, and in retrospect this was a mistake, is that I entertained a lot of those concepts and said, yes, we definitely want to do that, yes, this is our timeline. I was this big believer in the idea of transparency. I didn't call it building in public at the time, that's essentially what we were doing, but we were green and we didn't know how long it would take to actually implement a feature. We had never done this before, so timelines would always get missed, roadmaps would always get adjusted, so I think it had just gotten away from us in terms of the original concept that we had laid out on Reddit.
So I think that was a big part of it. They could see that these guys aren't interested in building a real RPG for fitness, so that was less interesting to them. The other side is that as the social network was growing, they started seeing a lot of behaviors there that I think a lot of Redditors just didn't take a liking to. So, people posting photos of themselves, right? This is before selfie had a name, but people were doing a ton of that, and people were just chit-chatting on the network, and this was just kind of behavior that the Redditor on r/Fitness just wasn't that big a fan of.
The other side of it was that the typical user of r/Fitness tends to be more serious, more serious about fitness, and I think part of that also tends to be associated with a little bit more of an elitist attitude as well.
So as Fitocracy started growing and getting more of an audience among newbies and more mainstream casual users, that started becoming tough because there was this culture clash where Redditors started saying, oh wow, all these newbies who are asking these dumb questions are coming about. What do they call it? Eternal September notion.
I think the really tough thing as well, and in retrospect this was a mistake, is that I entertained a lot of those concepts and said, yes, we definitely want to do that, yes, this is our timeline.
So when you're building a product like Fitocracy, how do you balance those hardcore users from those casual, newbie, mainstream users?
Yeah, that question has been something we've had to wrestle with for a while now. I think ever since 2012 when we publicly launched and had an iPhone app, it changed everything, and all of a sudden we were stuck with this challenge of, who are we building for and how do we determine our roadmap? Are we building for the hardcore users or are we building for the mainstream users? I can't say that we've always done a good job of balancing that. It's been a mix of both.
I think ultimately we did make the decision to go more towards the casual, mainstream user for two reasons. One was a very selfish reason. It was, if we wanted to grow this large and attract private investment, it was going to have to be more of a mainstream product. The moment you're talking to an investor, whether you're describing the demographic and the core use case, if they're demoing it and they're trying it for themselves and chances are they're not a hardcore fitness enthusiast, their eyes are going to glaze over and they're, like, "I can't see this being a big business."
So for selfish reasons we decided to go down that route. But the other reason, which I think is more important, is that if you go back to why you're doing what you're doing and what problem you're really solving, the enthusiast doesn't really need much of a problem to be solved. Like, yeah, they're interested in an efficient workout tracker and analytics and seeing how they're training over time and so on, but aside from the fact that that's a small minority of the population, these guys are already self motivated.
They're not part of the obesity crisis, they're not part of the population that needs a lot of help for this sort of thing. So we didn't want to be this niche product that was helping the folks who were spending all their time on bodybuilding.com. These guys are going to do it either way.
But the real problem that you're ultimately solving for society is the hundreds of millions or billions of people who aren't motivated enough, who don't know what they're doing, who really do want to improve their health and fitness but have no idea how to do that, and that we decided was the bigger problem to be solved, and also happened to be the bigger opportunity.
So having moved into focusing more on the mainstream, you guys launched mobile apps for Android and the iPhone, but you also still had your website. How did you guys balance having those three products and keeping everything synced and up-to-date?
Yeah, so, it wasn't easy. In 2012 this the first time where we really started to get a notion of a coherent API or backend to start powering client apps, essentially. Everything on the website wasn't architected in a way to support that efficiently. There wasn't a REST API or anything like that, I think it was all being done through these manual brute force queries and database queries and so on, and it was just ugly.
So we had to hack together some consumable backend for the iPhone in 2012. We decided that the iPhone was the place to start. That was the conventional wisdom. We could find contractors more easily there, it was a more mature platform, plus Jared, our Chief of Product decided that we would start with our mobile design on that platform first. So it made sense.
We decided on iPhone first. That's where the users were as well, and after several months of design and code and testing we launched it in March of 2012. It was a great launch. But now, all of a sudden, you have to deal with two platforms. You have to deal with the web and iOS. So backend changes were multiple and necessary as the iPhone app would get updated for new features, bug fixes and so on and so forth, but is was maintainable. It was manageable.
However, going towards the end of 2012 we decided, look, we've got a lot of users from iPhone, and we also happen to have a lot of user who are using Android devices. We know that from our Google Analytics traffic data. They came in because they were already Android users when we first launched on the web, we also have a mobile website that Android users were using quite often, so we decided, let's start building something for them. Plus, we believed that there was going to be a large amount of growth that came from being on Android natively.
At the time we had an engineer on the team who had a background in Android, so he started focusing on that. He started spending a several month period working his butt off on Android and by January we had something that provided a pretty solid mobile experience for workout tracking, and the social elements as well, the core elements around which Fitocracy was based.
So we launched that in January of 2013. I think it was a pretty solid launch. We got a nice spike in downloads and users and so on, but now all of a sudden we had a new problem. Now we had three client apps and we have to maintain all three of them. That started becoming really tough because, if you zoom out a little bit, this notion of finding product market fit for any sort of startup, any sort of new product is a challenge when you're faced with limited time and limited resources, which most startups are dealing with.
So at the time I think it felt easy to say, yeah, we were at a level of product market fit because we were growing fast, we had a lot of usage, a lot of passionate users, so it felt like the thing to do. But I think that going into 2013, it became apparent that we really hadn't solved the core problem that we were really trying to solve. We didn't have the retention rates that we were really trying to go for, so whenever we were thinking about the roadmap and new features to implement, now we had to worry about deploying across three different platforms.
So what ended up happening is that development slowed and the likelihood of bugs started growing significantly. QA periods were of course now necessarily longer. Launch periods and launch cycles would be hindered as well. We were still chugging along going into middle 2013, but it started becoming a real big problem when our Android developer left in the middle of 2013. Now we had three platforms that we had to maintain where we didn't have someone to maintain one of those client apps. That started to become a huge challenge.
Then we started having to deal with contractors and contractors are never great because they're not a full-time member, they don't have the institutional knowledge that you really need to work efficiently, and they're not going to iterate on your product at the speed that you're normally used to.
So any time we made a backend change to support a new feature on iPhone, or anything at all, we had to make sure that it was going to degrade gracefully, or fail gracefully or whatnot on Android, or it could be handled silently. Now you have to start working with hacks and things like that.
It's hard to say, but in retrospect, I think there's a good argument that we shouldn't have gone to Android in 2012, or at the end of 2012, because it started becoming very costly later on, and if you're dealing with limited resources and limited time it's probably smarter to focus really, really hard on one particular channel or platform and nail it, and then once you've really, really nailed it, we're talking millions of users and growing fast and so on, it's a model that's working, then it starts to make more sense to go to other platforms.
I think there's been a lot of recent talk and writing about that very notion. That never ends, people always talk about it, but I think in recent memory, there's been a lot of talk about that as well. I think Semil Shaw had an article about that recently driving home that point. People think about, is there any new startup that's going to be Android first? It's really hard to identify Android first startups that have worked. I can't even think of any, really.
So I think the conventional wisdom was around iPhone first, and then I think the Semil Shaw's phrase was "iPhone first, Android much, much later." It's not even an immediate second, just much, much later. I think that has a lot of merit to it. So yeah, it's tough when you're having to handle multiple platforms on a limited budget and resources.
But I think that going into 2013, it became apparent that we really hadn't solved the core problem that we were really trying to solve.
Do you guys think that you were maybe a bit too user acquisition crazy and not thinking enough about getting product market fit first?
Yeah. Thinking about 2012, 2013, and even today, there have been a lot of shifts. I think in 2012 we were hyper focused on user growth, but we were aware that retention was a really important metric as well. But the other side of it that started to creep in as we were starting to raise investor money, now all of a sudden you're starting to get these people to provide input that you also have to let color the roadmap.
These questions are starting to arise where it's, like, how does this turn into a 50 million dollar business, a 100 million dollar business, a billion dollar business, and so you start thinking, is it going to be growth oriented for us? Is it going to be monetization oriented? Is it going to be pure retention? In 2012, it continued to be growth. We were saying there are going to be 10 million users on this platform and so on and so forth.
Going into 2013 I think, thankfully, we started taking a step back. In 2013, we were still continuing to grow really fast and that's when we reached the 1 million user mark, but we took a step back and we realized that growth isn't going to be the only thing here. Especially if you're worried about retention, you have to make sure that you're fixing your leaky bucket problem, that you're fixing your funnel. So we went back to square one and we thought, okay, what is this problem that we're really solving? How are we solving it and what can we be doing better?
So we started conceptualizing this idea of the version 2.0 of Fitocracy in 2013, and the notion was that we needed to start setting up a way for this app to be more instructive, to provide more content and to tell the user what to do. We realized that if we're ever going to be able to break through to the mainstream market and beyond the enthusiasts, we have to give them guidance and give them some content.
The hardcore people, they're going to look up this stuff by themselves, there's no problem, but if you're talking about someone who's never worked out a day in their life, they need some guidance there.
So that's what the entire 2.0 version started revolving around, and we put that into motion. Now, it took us the better part of the year to get to that point, to get ready for launch, so by the time it was the fall of 2013 we were getting ready to launch that. Unfortunately, it wasn't the version that we really wanted. It wasn't the version that included workout programs from coaches and things that would take you through these eight-week sets of workouts and take you step-by-step.
We had the vision for it, but we ended up with, and a part of this was also driven by the fact that Android development was super slow as well, we were fighting this battle to get rid of a lot of technical debt and build out the foundation to get to that ideal, to get to that point where we've got this library of workout programs that take people through it step-by-step.
But what we got instead in the fall was just a stepping-stone. It was basically this refreshed version of the app where workout tracking was completely redone. It had new features that supported certain things like exercise circuits and super sets and things that were important for the workout programs that we wanted to introduce down the line. We also introduced photos and video in the workout tracker so you could see how to do those things, so that was a nice step as well, but it wasn't the full package.
It really wasn't until sometime this year that it really started to come out, where now workout programs are starting to make their way into Fitocracy. So we started with that idea of guidance and content and how-to in 2013, but it wasn't really until 2014 where that started to actually come about inside the app.
So workout programs are now your biggest revenue generator, and that was something that you probably thought about for a few years now. How did you guys go about building that product set? What were you thinking would make it great and get people to sign up?
Yeah. Great question. To start off, I want to differentiate between a workout program, which is just like pure content, and coaching, which is this notion of hiring a coach. They're quite different.
The 2.0 Fitocracy was based around the idea of these content-based programs. That was what our entire roadmap was predicated on, but as early as 2010 or 2011 we had always been fascinated by the idea of working with a real life human being online. There's a lot of value in that. That coach, that expert, can tell you what to do, but also track your progress over time, keep you accountable, adjust things, support you and be a sounding board, and there's a lot of value to that.
However, we figured that one-on-one coaching online isn't really scalable and it doesn't really make much sense for the coach because unless you're charging a person a few hundred dollars a month to work with them online, it's not worth the coach's time, and at that point the consumer wasn't going to shell out $300 a month for that sort of thing.
We were aware that there were coaches out there that were doing this, but it felt very niche. It took time for them to build a client base. We were interested in scale, we were interested in something that could go out to a much wider audience. We never really knew how to do it. It was, like, how are we going to scale this thing?
So we never really visited it until 2012. We started raising experiments to do that, but the data was so inconclusive that we weren't really sure whether or not we should move forward. This was the end of 2012. So going into 2013, we focused solely on this whole 2.0 version of the programs and whatnot.
We revisited the idea in the summer of 2013 of, okay, here's what we have to scale coaching. We can scale coaching by offering it in a particular format, and that format was in a group where the coach is working on a one-to-many basis as opposed to one-to-one, so all of a sudden I could get away with working with 30 people or 40 people that are paying me $70 a month and I'm still netting a good amount of money.
It's also going to be based on a program, so it's not completely individualized at all. It's really about, I've built out a set of content ahead of time, maybe it's a 12-week program, and I'm going to get all these people on it. And yes, the coaching value is in accountability, in adjusting the program based on your needs, giving you advice, helping you fit this program into your life, but it's not going to be a perfect match and a perfectly customized program for you, but that's not what you're paying for, right?
So we started experimenting with that in the summer of 2013. We saw some really exciting results with the pilot and we decided, okay, let's start seeing if we can introduce this to more and more people. So we got together with some of the coaches that we had built relationships with and starting saying, we'd love for you to be on this platform and start offering these services, let's see what happens.
So we threw together a landing page on WordPress. It was very hacked together, but we said, here are these four coaches, here's the pricing, here's what you get, you click on the coach and you see more information about what's available, and let's have you sign up.
You clicked on a button, that button would then bring you to a Gumroad checkout page that would charge you, starting today, $70 a mouth. We would have to then look for those notifications from Gumroad so that we could immediately send an email to that user about the next steps, and we had to organize them all in spreadsheets, and we had to make sure that the payments were aligning with the actual content that was being delivered by the coach, we had to make sure that the coach was getting in front of that user very quickly. It's hilarious because it was just all this manual work in the background to handle the logistics, but it was starting to work.
We had someone working with us remotely to organize all that stuff, and we were starting to put these processes in place, and so by the late fall of 2013, not too long ago, we started to work on making this a true new platform. So we were starting to introduce more and more coaches. We were working with the same format, which was a content-based program, 8-12 weeks, get multiple people in there, it's affordable for the end user and these coaches are guiding these people through the program with 24/7 access to the coach.
So in the spring of 2014, we finally had an actual workable platform where it was starting to get easier and easier for a coach to come on board and create their content. We handled all the billing through Stripe, we actually built out our own marketplace payment system where we could pay out the coaches at the end of every month, you can audit that system now, and we started automatically putting those users through the right flow as they signed up.
So it was actually a coherent experience now. We realized that as the revenue was growing month over month with this system, that this was ultimately what our business model was going to be, and it had the nice feature of, hey, this actually happens to line up with what we set out to do in the first place, which was to provide a way for people to improve their fitness by getting the right how-to and the right guidance and the right accountability, and it's a business model that can scale.
So that has actually been, for the last 12 months, the main focus for the company because we started seeing something that was working, something that was scaling, and it was matching up with what we were setting up to do.
We saw some really exciting results with the pilot and we decided, okay, let's start seeing if we can introduce this to more and more people.
So you guys have been around for four years. Is there any advice you'd give to a young entrepreneur about building a business for the longterm? Any product advice around ups and downs?
Yeah. There's a lot that can be said about it and I'm trying to think of the most important bits to remember.
Or any takeaways that stand out from Fitocracy.
Yeah, I would say, and a lot of what I'm going to say has been well-trotted ground from others, but one of the most important things, and this is obvious, but it's just to build something that people want. But it's not just to build something that people want, you want to be able to build something that people are going to use on a regular basis.
The level of frequency is going to vary based on the use case, right? A messaging application you want to be used every day versus e-commerce where you might be selling to somebody three times a year. The point is that repeat usage is something that's going to be really, really important.
So when you're trying to think of a product, and I assume most new entrepreneurs are still in the ideation phase, when you're thinking of something to build, you really have to be brutally honest with yourself and ask yourself, is someone going to use this multiple times in a given period? Can you envision this being a regular part of their life? If you can't envision that, if it's something that they're just going to once or twice, maybe, and never use it again, then don't bother doing it because that's not going to be a sustainable product or a sustainable business.
Speaking of business, I think most companies or startups are really better off thinking about revenue early. I think that's something that we should have done earlier on as a business because it's very rare for anything to launch and start experiencing the viral growth and the fast trajectory of growth of free users that most people seek when they're thinking about these sexy consumer products. It's very, very rare.
When you're trying to launch a free-to-use consumer product you are competing against a whole slew of other things, not only directly competitive with you, but stuff that's in completely unrelated industries that are still taking up your user's time, right? Netflix and Hulu and chat apps and Facebook. People have a limited attention span, so becoming another app on the phone that you're going to start using regularly as a free consumer is tough. It's very, very rare that you're going to find success there.
So thinking about revenue early, thinking about something that has a clear utility I think are important things to think about. The nice benefit of having pay product is that you can actually pay for users at that point, you can make the economics work, otherwise you're stuck with just pure word of mouth, press, a lot of stuff that it's hard to scale. Content and SEO and other things like that take time.
I think some companies that are really, really interesting that are doing just that these days, Buffer is a really fascinating example. They've grown tremendously in the past 12 months. They've gone from like a 1.5 to a 4 million annual run rate now. It's crazy watching those guys, and they charge pretty much what they want.
Another example is a company called Baremetrics, which is a Stripe analytics SaaS company, and they've been building "in public" from day one, and it's been really, really awesome to watch them charting from the very first day and getting paying customers from the very first day. These guys I'm sure are profitable already and they're probably already at a 1 million annual run rate or close to it. They actually display all of their metrics publicly so you can see how they're doing.
But the point is that they wrote their own ticket. They were not dependent on investor money. They were companies that decided to build real value, charge for it, get customers, and have the freedom to do that.
So I think thinking about a business model early is important. There are a lot of people out there, especially in the valley, who don't think a business model is important in the beginning. I'm on the other side of the fence there.
Other than that, the journey of entrepreneurship, ups and downs is an obvious statement, but you just have to be ready to get beat up a lot. Thinking back on the last four years, there's been lots of great successes and those are what sustain you and what keep you going, but there are also plenty of times where you face a lot of challenges and moments where you really are wondering why the hell am I doing it. You've got to be ready for pain, man. You've got to be ready for moments where you're just, like, this is fucking terrible. Moments where you're stressed out all the time, your heart's pounding, you're afraid of your inbox.
I went through a long period where I was just terrified of my inbox. I didn't want to look at it because I knew that I was going to get some bad news because maybe something wasn't performing the way I wanted it to, or maybe I was in the middle of fundraising and I was getting a ton of investor rejections.
But, you start getting to this point of conditioning where it's like the Skinner box, but the opposite where you're getting shocked every time you hit that inbox and you don't want to open it anymore. So I was going through that for a long stretch of time, so you've got to be ready for that. You've got to be ready for this to consume you. You've got to be ready for you to ultimately build something that doesn't work out.
So it's tough, man. You've got to be ready to take a lot of beatings and oftentimes nothing really helps a startup win except for luck. That's the other thing. Oftentimes startups don't find success until they've been around long enough for the success to find them, and for luck to find them, and by that I mean that it can take a long time for anything to seem like it's working out and some lucky break could be right around the corner, or some flash of insight that turns around the business could be right around the corner, but if you don't last long enough for you to get there, then it's all for not.
So it's this notion of the luck surface area. You've got to maximize your luck surface area and a lot of it means surviving long enough and putting yourself out there enough to get those opportunities in front of you. I think that's what a large part of this really is. It's putting yourself out there and letting those opportunities come to your doorstep.
So if you're an entrepreneur and you are going through those rough periods you have to remember what you're fighting for, which is continuing to get that lucky break. I can point to lots of examples where that definitely occurred for Fitocracy and I think plenty of other businesses out there have experienced the same thing.
I think most companies or startups are really better off thinking about revenue early.
Well, thank you very much.