Strava

For Mark Gainey, founding companies was nothing new by the time he created Strava with his co-founder and best friend, Michael Horvath. Strava was founded as a platform for cyclists to track and share their activities. Today, it is one of the largest in its category, covering thirty-one activities, from running to cycling to surfing. However, it wasn’t all smooth sailing that got them to their current position.

Mark grew up in Reno, Nevada, and used his location to his advantage. His location allowed him to bike, run, and ski as a kid, sparking his lifelong passion for sports. After high school, he earned a place at Harvard, where he rowed on the crew team. Mark said that even though he didn’t pick a business or technology major (he ended up majoring in art history), his time at Harvard was a crucial moment of his business life. Through the crew team there, he met his business partner of the last thirty years, Michael Horvath, who also shared the same competitive and intense spirit of the sport. It was an experience that they had always imagined rebuilding and recreating.

After graduating, they took different paths. Mark spent four years at a venture capital firm in Silicon Valley, where he would call up entrepreneurs and learn more about their businesses and to determine if there was any opportunity that the firm could invest in. From there, he began to think about becoming an entrepreneur himself. On the other hand, his future partner Michael got his PhD in economics, and was teaching macroeconomics at Stanford when they got back together in 1996.

They decided to start their own company, Kana, which became a large and successful software company that focused on managing customer emails. Kana took off quickly, earning hundreds of millions in revenue each year and employing twelve hundred people after only about five years. Although he learned how to start a successful business, he also experienced the downsides of scaling too fast after the dot-com bubble burst in 2000. Mark decided to take a break after his twin sons were born in 2001 and a cycling accident that cost him 11 surgeries and many hospital visits.

Eventually, he and Mike “got the band back together” and started Strava in 2009. Mark said that after serving on the boards of other companies for about seven years, he felt entrepreneurship calling his name once again. He had missed the feeling of “rolling up his sleeves” and building something.

When they first started, there was an obvious problem. You may have already noticed that both co-founders had no background in tech. An economics major and an art history major creating not one, but two tech companies? Mark even admitted that he wouldn’t trust himself to touch any code. They pulled it off because they were located in the right place at the right time. Their past connections and their location in the center of Silicon Valley meant that they had easy access to top engineering and software talent. In fact, the first two engineers that signed on to Strava were the same people that helped get Kana up and running almost fifteen years prior.

In addition, when Mark and Mike founded the company ten years ago, there wasn’t much of a precedent to follow. They had both spent much of their lives in the world of sport and wanted to make athletics easier and more enjoyable. They wanted to create an authentic experience that would cater to and provide specific features for each activity. The two co-founders initially only wanted to track cycling, and then go one by one so they could get each one right. When they decided to launch running, they saw that their cycling features didn’t always translate well to running. They were then forced to hire new people that actually were runners to ensure that their product could fit them well.

Mark also realized that to stand out, the company needed to create features that were new and unique. His first priority was to make features that professional athletes would use. His logic was essentially: “If it has the features that the pros want, then it should be able to service everyone else”. Some people criticized their approach for being almost “elitist” and focusing on the top level of the pyramid, but it worked. They built a strong brand and credibility among pro athletes that helped them to break into other skill levels.

However, to become a well-known brand, they first needed to get the word out there. Mark attributed much of Strava’s success to the intrinsically social nature of the sport of cycling. They did sponsorships and advertising, but realized that the best way to promote the product was simply through word of mouth. They believed that if they could show that other people were using Strava, more people would begin to sign up. They then realized that they needed to focus on ways to invite their friends to do well. To solve this problem, they tried to make it effortless for users to invite their friends. They allowed people to add their friends to their tracked rides, and even gave their early members “ride cards”, which were essentially waterproof business cards that they could use to convince their friends to join the service. Unlike other startups that often spend huge sums on expensive ad campaigns, Mark believed that the best approach was to be patient. He and Mike saw how scaling too fast could be dangerous through their prior experience with Kana, so they focused on a growth pattern that could successfully sustain the community that he was trying to build.

One of their most important tasks for them was to get the hardware to support the software. They first turned to existing sports hardware manufacturers: companies like Garmin, Suunto and Polar. However, some of these companies began to treat them more as foes rather than friends. Strava wanted to be resellers of Garmin devices and integrate their services into the hardware. Even though they promised to maintain their neutrality between device manufacturers and to stay as a software business, they still faced an uphill battle. Many saw Strava as a competitor for a while, before turning around. They later realized that Strava provided features that helped improve the marketability of their products. However, if they really wanted to become a mainstream brand, they had to break out from the niche market of expensive standalone devices.

When the company launched in 2009, the now ubiquitous smartphone was still a new invention, and was only used by a very small percent of the population. They also did not have the complex sensors that were necessary to track exercise. However, by 2011, their battery life and capabilities had improved enough to be expanded on. After this, the company began to take off with the average consumer.

Even after the company had took off, they still had times that tested the stability of the company. In early 2012, when the company was in the middle of fast growth, a wrongful death lawsuit rocked their world. Strava fought back, and won the lawsuit, but it did create some negative publicity for the young company. Mark said that their mission was always to promote an active lifestyle, and it was hard to be accused of the opposite. More recently, there was a period of public scrutiny of the service’s “heat map” feature that threatened to damage the public’s view of the app. Some of the public and media became concerned, but Mark credits the current CEO, James Quarles, for doing a good job educating them about the service and addressing their concerns. Fortunately, the company hasn’t faced any obstacles that have threatened to completely derail the company, but it also hasn’t been easy.

Mark said that through his ten years of experience at Strava, he has learned a lot about how to successfully start and manage a company. He says one of the biggest things that he learned was how to balance data and intuition. Although they have accumulated a lot of data through Strava, he said that the best approach is to just trust your gut. There is a lot of data that can convince a person to do this and that, but he said that the best way is to follow your instincts.

He also learned how crucial the brand image is for a company and how important it is to stay true to your vision. Mark and Mike had set out from the beginning to build a trustworthy and authentic brand. They had determined that to successfully build the confidence of their existing base and stay true to their vision, they couldn’t cater to everyone. He doesn’t lose sleep over not serving everyone, because having too broad of a reach could compromise your core principles.

Today, Strava is nothing less than a success. With over 2 billion activities logged and over 80% of users coming from outside of the United States at the time of publication, it can be safely said that it has grown from its initially small company. The wealth of information that they have gathered has allowed them to include innovative new features. For example, there is currently a beta feature that allows users to have a custom route created for them based on heat map data from its users. Strava only has the power to do this through the impressive amount of data that they gather from their users.

Mark is optimistic for the future, and is encouraged by the number of users and companies that are encouraging others to try athletics. He mentioned a partnership last month with New Balance, that allowed Strava users to try shoes and “cash in” their mileage in exchange for a pint of beer. He sees huge future opportunities for Strava to collaborate with companies like New Balance, Garmin and Suunto.

He advises that aspiring entrepreneurs should not sweat too much whether their idea is good or bad, because chances are the result won’t be the same as what you intended. When he founded Kana back in the 90’s, he initially wanted to create a company that would serve as a virtual locker room for athletes. But when he reached out to companies like Mizuno Shoes and Trek Bicycles, they were reluctant, but informed him of the opportunities in email management. His original vision that was way ahead of its time created important connections that led to a completely different company.

One thing he said about entrepreneurship stood out. He said: “Look. You want to be an explorer. Jump in with an idea, get going, and start talking to people about it because the more you do that and your objective. There’s a high likelihood if you’re persistent, that you’ll get to a really interesting business.” His first try didn’t match his initial vision, but his second surely did.

Strava is a prime example of what can happen when you follow your passion. Mark’s lifelong passion for sports brought him to create a company where he lives and breathes it every day. It’s not just him either, as Strava’s 2 billion activities clearly show. His work clearly demonstrates how following your passion can help others follow theirs’ as well.

A special thank you to Mark Gainey for taking time out of his busy life to talk to me about Strava and his story.

If you want to learn more about Strava, you can find their website here. You can find our last interview with Airbnb here. If you’re interested in the most recent business secrets, check out our Business Knowledge page. If you want to stay up to date with the most recent BWS news, follow us on Instagram!