On Strava, you are an instant athlete within the broad spectrum of ‘athlete’; your every move is tracked and logged, and you transform your regular activity instantly from amateur to elevated with access to high tech stats and tracking that is all too seamlessly linked to your tracking devices. The addiction and podium climbing itch has begun. Strava (the “Company” or the “App”) is one of the best examples of a well-executed and addictive platform model that can thrive solely off of monetizing its data. This post explains how Strava built a passion platform that boasts 42 million users and is financially self-sustainable.
The Story
A lot of Strava’s success is on the back of it being created by enthusiastic athletes, for enthusiastic athletes. The platform was developed by Mark Gainey and Michael Horvath who met while rowing at Harvard University, and Strava was their idea of a ‘digital clubhouse’ that could keep the motivation of a team’s camaraderie alive. Founded in 2009 and headquartered in San Francisco, California, the Company has now raised four rounds of venture capital funding, generated impressive revenue of US$26MM in 2018 and is currently valued at US$213MM as a private company.
While other competitors in the space such as MyFitnessPal, Runkeeper, MapMyFitness appealed to a certain stage of an athlete or a specific activity, Strava was able to dominate the social network of fitness apps through its strategy of appealing to and providing services to the most avid of athletes, which inherently captured the needs of all athletes under this broad umbrella. Brilliance. Gareth Nettleton, Strava’s director of international marketing, states:
“We thought that if we built it so that it was good enough for a pro to use then it would still have an appeal much further down the pyramid.”
Further to, Strava captures everything and everyone to interact with their network: its seamless linkage to megasocial media platforms like Facebook and Instagram, as well as pairing to nearly all GPS and health trackers to their app/website/database including smartphone GPS’, Fitbits, Garmins etc. Anything that connects people to fitness tracking is now a peer of Strava’s.
The Value Add for Users
It’s an impressive platform any active user knows is addictive through its behavioural nudges in the form of ‘badges’ that encourage activity and motivation that otherwise wouldn’t have been created without the App. Some of these behavioural innovations include the creation of challenges and subsequently awarding ‘Trophies’ to users by completing certain athletic milestones – a way to encourage participation and healthy competition. Additionally, it’s said to be ‘the Instagram of fitness’ in the way it organizes user activity into a ‘feed’ and saving user activities to their profiles. The platform is completely informal amongst users and mutually beneficial, encouraging usership through this feedback loop. Further to, within its positive online community, there is an opportunity to match users working towards similar achievement-based goals with others in the platform. Users’ posts get feedback from the community and that encourages a loop of usership driven by positivity – it is not a platform for critical feedback.
Strava’s pathways include all technology that is used for physical activity, cameras on phones that can publicize and capture athletic activity, and on the ground races and organizations or companies that conduct races and encourage physical activity.
To encourage participation, Strava focuses on innovations that allow this including it’s incredible ability to allow users to relive the event – it’s application encompasses the before, during, and after of any activity, and can be shared with friends/communities the way you want to (pictures etc.). Strava must always be the seamless and fully integrated network in the user’s active life.
Nettleton says: “People now use it as much as a storytelling platform as they do a training partner. The storytelling is the sticky thing – the reason people come back to Strava is to keep up with their friends…We never set out to build a social network, but now we increasingly find that when people wake up they’re checking their Strava feed as they’re checking their Instagram and Facebook feeds.”
The Monetization
What is fascinating about the Company is that they came across a goldmine of data collected by its users: their tracked activity, across the world. Thus birthed the DBA (Doing Business As) of Strava that is ‘Strava Metro’ which is the heart of the whole operation and monetizing the data collected by its millions of users to then sell to local metro organizations and urban planners. Not only is this allowing the platform to financially thrive by finding a ‘money-side’ of their platform that allows their service to be given for free to its users, it also aligns with their values of giving back to communities in which they operate. Strava therefore depends on the growth and participation of its users, and its platform is only as successful as the data the users provide. Nettleton states,
“The amount of people using Strava now in big conurbations means that we have pretty much the world’s best data on runners and cyclists and the roads they use.”
The data they collect provide insights on how non-drivers commute to work and how a city moves, which is a valuable data source for city planners. Nettleton continues,
“The only way you could collect this data previously was to have clickers or clipboards on the side of the road. It’s very easy for us though.”
The Privacy Issues
Nevertheless, this new market of selling a user’s location does not go amiss to new problems that come with it. Some highlight that the app gives rise to major privacy issues in the publicity of its data collected, namely that of disclosing the locations of intentionally secret locations such as military bases, or raising concerns towards stalkers and the like. Strava, like a multitude of novel tech companies, will come across dangers of operating that were never considered or imagined at inception. Strava currently gets around this by selling its data anonymously, however has no real solution to the tendencies outside their control i.e. the actions in the hands of users giving the App the right to track their location. And rightly so… how far does business responsibility go? As of now, Strava has shown it is truly aligned with the right intentions of the users and communities they operate in, and it has been serving the Company well with much public acceptance and a strong social image, so far.
Strategy in the Age of Decentralization 