How I Built This with Guy Raz - Strava: Mark Gainey and Michael Horvath

Episode Date: May 2, 2022

Mark Gainey and Michael Horvath were two friends from college with a good idea and bad timing: in 1995, they set out to create a digital community where athletes could chart their progress and actively compete with one another. But it was just too early: software engineers said it couldn't be built, and investors didn't want to take the risk. So the two founders wound up launching an entirely unrelated business, one that was so perfectly timed that it led to a successful IPO a few years later. Still, Michael and Mark couldn't shake their original idea, and in 2008, they launched a website where cyclists could map and monitor their rides, and compete with riders across the country. The prototype was clunky—Mark jokes that "we wanted to make it as hard to use as possible"—but the timing was perfect, and Strava was born. Today, it’s a mobile app used by 100 million athletes in nearly 200 countries around the world.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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workout and you would plug it into your computer and the data would flow up into Garmin and from Garmin into Strava. Yeah. And, you know, one of the points of friction was, well, how many people have Garmin devices? And so, I mean, there was a whole period of time where Michael and I were negotiating with the likes of Costco and others just literally trying to buy Garmin's so that we could either sell them or give them away to friends so that we could get people onto the platform. Basically, we tried to make participation Strava as hard as possible.

Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how two friends who missed the competition and camaraderie of the locker room decided to capture that feeling with a nap and grew it into Strava, a platform used by 100 million athletes around the world. Subcultures often have the power to build brands. We've seen it on this show countless times. Crossfitters helped to make RX energy bars a hit. Bloggers turned WordPress into the biggest website builder in the world.

And gamers help turn Discord into a massive social network. Now often, it's a deliberate strategy on the part of the founders. Make a product that is good enough for the hardcore fans, test it on them, make it better, and then figure out how to turn it into something with widespread appeal. And some of the best guinea pigs out there happen, to be athletes, because you can gather a lot of data around their activities. Their runs or bike rides or swims can help you understand how they use the product. But more importantly,

at least in the case of today's story, Strava, people who run or cycle or swim or hike can be a little, let's say, competitive. They like to compare personal bests and distances or heart rates. And they also like to talk about the things that make their runs or bike rides better. Good shoes or socks or sunglasses or technology. So back in 2008, when Michael Horvath and Mark Ganey set out to build a platform where people could share their workout data, they decided at first to target dedicated cyclists. Michael and Mark figured if they could make something that worked for committed athletes, the kind of people who were already spending thousands of dollars on their cycling, the word would then spread to more casual athletes.

And Strava could then expand to other sports, like running. Today, Strava calls itself the largest sports community in the world, with about 100 million athletes using the app. I first interviewed Michael and Mark for our resilience series back in the middle of the pandemic, and we talked mainly about the trends they were seeing around fitness at the time. We didn't get the time to get into the story of their founding, so we asked them to come back for a longer conversation. And one of the things that's really interesting about their story is they actually tried to launch Strava or something very similar to it back in 1995. But they were just too early. They couldn't convince investors or even software builders that what they were trying to do could actually be done.

So they pivoted into an entirely different kind of company and eventually sold that company. And then the two of them went off in totally different directions into totally different parts of the country, only to come together again 10 years later. Mark and Michael first met in 1987 as students at Harvard, and in the first of many serendipitous moments in their story, they met in a group that neither of them had ever expected to change. join the university crew team. Before arriving at college, Mark had hoped to compete in track of field. And when he got to Harvard, Michael had first wanted to go out for the sailing team.

I more or less kind of showed up at the first meeting that the sailing team had and said, I think I'd like to join the team. And it was not a great first encounter. I think there were six or seven people at the meeting. They all seemed pretty serious. It didn't seem like it'd be a lot of fun. So I was like, huh, do I really want to do this? I didn't come here to do this. It was just something I thought would be fun to do. And the next day, I was in line trying to register for classes. And a bunch of other organizations were out along the line of students trying to recruit people.

And one of those was the lightweight crew team. And so I went to their meeting that evening. And that was a totally different story. It was a room full of people, maybe 60 or 70 or so. And they seemed to be having a lot of fun. And I thought this might be something worth trying. So I went to the practice the next day, and the rest is a big part of the history for Mark and me. So you joined the crew team.

Yes. And as for you, Mark, I know you're like a few years behind Michael in school. So you got to Harvard a couple years after he did. And you've been like a champion level cross-country runner in high school, I think. Correct. And so were you planning to run in college too? I mean, like, how did you end up with Michael on the crew team? So when I arrived my freshman fall, I was challenged in that I had some injuries.

I'd been suffering from some stress fractures, basically, in my leg and my foot. And, you know, that in combination with having been running competitively and hard for, you know, at least four or five, six years, I will fully admit I was somewhat burned out. Right. And then a very long story short, I was introduced to the crew program, just sort of serendipitous. part of drawing me to crew was this romantic notion that while you're out on the water and won't it be beautiful. But it turns out that's not the case when you're in a crew shell. You're staring at somebody's back.

And thankfully, that class in particular, Michael's class, were kind enough to take me under their wing and frankly start coaching me because I had a steep learning curve. You know, there's this perception that crew is like this sport of privileged, men and women and that it's like, you know, very preppy. And I'm not saying that's entirely untrue, but the part of it that I don't think a lot of people understand is that it's really hard, especially if you are in Cambridge, Massachusetts, because you have to wake up at like five in the morning or four in the morning on freezing cold days and get out into the freezing, the freezing cold river. And it's like you're practicing for a race that's like six minutes long. Yeah, no, you're right on so many levels.

the elements that you battle when you're rowing, whether it's out on the water early mornings and, you know, waiting for the ice to thaw or in the winter when you can't go on the river, but you're still forced outside to do stadiums, things like that. And then you're right. I think at one point some, I'm sure one of the mathematics majors, you know, did the math around how many hours of practice we do

for six minutes of racing. And, you know, you didn't want to know that math. Yeah. All right, here's a question for both of you. it's the mid-80s. You are in Massachusetts, and then you're getting in a freezing cold boat and a freezing cold river.

Tell me what was attractive about that to you? You know, Guy, I often refer back to the time spent on the water and the boathouse. I mean, that was my education at Harvard, without question, the life lessons there. I remember being out on a long row. So this was supposed to be just called 45 minutes along the water where we're all supposed to be pulling.

at a relatively easy cadence and working on our endurance. And the boat was just rocking back and forth. We had no rhythm whatsoever. It just was miserable. And this was at a time where we were just starting to experiment with heart rate monitors. So early days, again, late 80s. And so we're all wearing them. And the coach actually stops the boat because he can tell.

We're just, we're miserable. And he asks each of the rowers, call out your heart rate number right now. Tell me what your monitor is saying on your wrist. And we kind of go down the boat. And one of our top rowers, it was not Michael, by the way, it was somebody else. But his heart rate was like 40 beats higher than everybody else. He clearly was working way harder.

And, you know, he was trying to pull hard. He was trying to do what he thought was right. But just the fact that he was actually working harder than everybody else completely threw off our entire system and the sort of the rhythm that we had. And as soon as we got him to just actually relax and calm down, that boat took off like a rocket. And to me, that's just, this is the element of teamwork. This is sometimes, you know, go slow to go fast.

I mean, there's all these phrases that we've now used for years and decades later. They were learned right out there on the water. So while the two of you were at college together, did you, I mean, did you, the two of you particularly become close, or did that happen later? Did the two of you kind of forge a close friendship already while you were students? What I recall was it was the summer, a year after I graduated. Mark is still on the team.

And there was the Harvard Yale Princeton race down at Princeton. And we both realized we wanted to go on this trip to go see the race. And so I offered to drive. I had a car. I had a really very old and not very dependable Jeep. CJ5. So we hop in this car. It's a very cold day and the car has very little heat. But this trip is burned in my memory as the moment where Mark and I went from being classmates to being friends. And we did it down and back in the same day. We weren't, you know, wow. That's a long trip.

Didn't have a lot of options at that time. We didn't have money to pay for hotels. But this is where the friendship really started. And from there it was the rest is, you know, he's been part of my life ever since. Yeah. So after graduation, the two of you go off in different directions. Michael, you go to, I think you go to Northwestern University outside of Chicago to do a Ph.D. in economics. Yeah. And Mark, I guess you went to Palo Alto to work there at a place called TA Associates, which it's like a private equity firm, something like that. Is that right? Correct. And from what I understand, I guess your job was to call up companies and say, Hey, I'm with TA Associates, and can I talk to the CEO or the owner?

Like, you literally do that? Yes, with one extra line in there, which is, I promise I'm not selling something. We actually have capital that we're interested in investing in the business. You know, we've invested in some really fascinating companies. We're in the same place as you were. We take minority positions. We're not trying to buy you. But the mission was to get on a phone with someone and get them talking.

But essentially you were learning about, I mean, if you got a founder, an owner on the phone and they were interested, it presumably it was like a ticket to learn everything about that company and how it ran. I mean, it's like an education, right, for you. That's exactly right. I love to joke, but I mean this with some sincerity. I got paid to go to business school because every day was another case study. The good businesses had a set of principles that were almost identical. identical. It was really fascinating. But the bad businesses, there were a million reasons why they were in trouble. And so to be able to learn those different things and to understand the pitfalls.

And when I talked to recent college grads today, I'm always quick to point to, you know, any kind of cold calling sales opportunities where you can get on a phone. And yes, it's scary. My first six months were pretty miserable. I mean, I had a lot of people hanging up on the phone on me and I couldn't understand why they would do that. And then I realized it wasn't them. It was me. I had to learn the language. I had to teach them how to trust me on the phone

and that I was offering something of value. And what started as a kind of a tough job turned into just an amazing education. All right. So you've got this job at the private equity firm. But at some point, I guess you started to think, you know, I want to start my own thing. Is that, do that experience there kind of get the wheels in your head turning? It did.

The wheels had even turned earlier than that. With a good friend, we'd started a small business even when we were at Harvard. What was the business? We had this, we had a concessions business. So we figured out that at all the non-mainstream sports, you know, swimming, indoor track and field, all these sports that, frankly, were not of interest to the, you know, professional concessions guys. there were still spectators that were there. So myself and a friend of mine, Chris, would go down to a local grocery store. We'd buy a bunch of hot dogs and buns and Coke, six packs of Coke.

And we figured out that, you know, for nine cents, which was the cost of a bun and a hot dog, we could turn around and sell that for $2 at these local sporting events. And that was great. I mean, that's how I paid for all my meals and spending while I was at Harvard. So, yeah, that was the first inkling. And then you're right, talking to all these entrepreneurs. In my first job, I absolutely just had an interest to start something. And so I left.

I left the firm in September of 1995 to go pursue something. I mean, you left to pursue something that you weren't quite sure what you were going to do, but you initially took a job at a running store, right? Right. I left, but then I had to still put food on the table and pay the rent. So I went from a very nice, cushy, you know, investment job to getting, I think I got $8 an hour working at Metro Sports. But it was great because I could work at the running store for maybe four hours a day, punch a clock, and then have the rest of my time totally free to focus on whatever business opportunity I wanted to go do.

Meantime, your old pal from college, Michael Horvath, moves to Palo Alto to start teaching at Stanford. and presumably you're like you guys reconnect. In fact, I take credit here. Yeah, I think I convinced him to come to California. I had been at his wedding in Chicago. He and I had, we'd even done a race out in Chicago, we'd done the marathon together and things. But no, I was a big sale.

It was one of my best sales jobs was selling him on the merits of coming to Northern California. Yeah, so as Mark mentioned, I'd gotten married during grad school. I met Anna. And six months later, we were married. So as I'm fielding offers about different places I can go, I had some options in the Midwest, the East Coast. But these options on the West Coast were really interesting.

And Anna, same thing. She had thought of moving to San Francisco after she graduated. So we said, let's do it because Mark's there. So, yeah, Mark was a big reason why we chose Stanford over the other choices. And Mark, Michael basically made that move at a good time because meanwhile, you were thinking about starting a business. And this is even before you had an idea. And I guess you were starting to look for a co-founder, right? Yeah.

Entrepreneurship is lonely. I felt it was important. I wanted a partner in it. I wanted a teammate, right? Part of the best thing of all the experiences I had in my life that were positive were where I had teammates where we were training hard together. So I had gone out to a number of my friends. And Michael was somebody obviously that, you know, spent a lot of personal time with.

And I loved a joke that, you know, he had the office at Stanford, which was one of the few places on the country that had really good internet speed. Yeah. So we could do that. There was some truth to that, but it was also just he was somebody that I could trust and was really smart helping me think through these ideas. So Michael, help me understand this. You are newly arrived at Stanford.

Were you on tenure track there when you got there? Yes, tenure track, assistant professor. And Mark comes in and says, hey, I want to start a business. I want you to be my business partner. But like, you've got to do your tenure track stuff. You've got to write research papers. What convinced you to say, sure, yeah, I'll do this? In the beginning, I was not, didn't cross my mind that this would turn into me joining Mark to start a company.

I think I was just really excited to be thinking about starting a company. What does it take? Right. But no idea what the company was. No, we were exactly. We were exploring a lot of different paths. What were some of the ideas you were thinking about? at the time. A big range. So, you know, two examples, we were looking at things like headlamps for mountain bikes and, you know, night running and things like that. Didn't go very far

for a variety of reasons. But another idea that we were looking at was this simple notion of, you know, my friends and I who had all been competitive in, in college and in high school, you know, when we graduated, there was this void in our life. There was this hole. that we felt. I remember when TA first hired me, my firm, they said, oh, you know, one of the things you're going to love being here is you're going to get that same competitive thrill that you got while you were competing in rowing and running. Yeah. And, you know, they sold me on a lot of stuff. That was one that was a total bag of beans that they sold me because that was not the same. Great job, not fulfilling in terms of my competitive drive. So we started exploring this notion of,

could we create a virtual locker room on this new thing called the internet? A virtual locker room. Yeah, we had this concept of could we use the internet to bring all of our old buddies back together who now spread across the globe and run all their jobs and basically share their workouts. Yeah. So this was, when people ask when was Strava started, you know, the honest answer is the first business plan was written in late 1995.

It just wasn't called Strava. It was called Kana Sports. It was named after my dog, Kana, and we had this concept of we're going to go create this virtual locker room. I just want to just explore this idea for a moment because it's amazing. This is a social media idea, right? Really 10 years before social media would start to become a thing. That's right. 15 years, really.

And it was like, hey, can we recreate that feeling we had in the locker room where we were talking about our times and our achievements and kind of comparing in a supportive way? but also competitive way, you wanted to kind of recreate that virtually. That's right. The Internet would allow us to bring the community together, and it would be around being active. So very much like what Strava is today, but, you know, like you said, 1995 long before, what we think of as today as social media companies, the ones that we all know, love and hate. I mean, if my memory serves me well, the Internet in 1995 was still like mainly static pages. It was just like text, some pictures on static pages, right?

Websites were very, very, it looks like cave art compared, like if we look at it now, right? Exactly. So this was a complex idea that you had. Was it possible to do that in 1995? Turns out it wasn't. It wasn't. That's what we found out when we went out to talk to some people who actually knew how to build things on the internet or build things out of software. Who did you go see?

There was actually a website development. firm that was very focused specifically on the sporting goods industry. That's right. And so they said, you know, the things you want to do with this virtual locker room can't be done. They, you know, and by the way, they think it's a terrible idea. No one's going to share personal information on the internet with complete strangers. Well, who would do that?

Who would do that? Yeah. So, you know, we got talked out of the idea by the people who we went to see if we could get some help. They also put us, though, in touch with a number of their other clients. Because from a business model perspective, the way we thought that this virtual locker room would make money was, in a sense, through sponsorship, that you'd have these sporting good companies that would want to interact with all of the athletes who were involved in the locker room. And they, too, were very skeptical. They were like, you know, we just spent a million dollars on this new website of ours.

And we're not really sure we want to get any customers coming to this because we're frankly faced with this. this bigger problem, which is we're getting all these emails from customers now directly from consumers. With the advent of the internet, it was much easier to go to, you know, www.9i.com or trekbikes.com than it was to try to find a retailer online. So they were like, look, we don't want to sponsor you because we don't even know what to do with this website and consumer that we have. And that was what I would say that's the good news because what happened to us as entrepreneurs

was while we were disappointed that our idea didn't have merit, we were listening. And what they were telling was, hey, there's this other problem out there, which is we're getting a lot of customer email that we don't know what to do with. And Michael and I just looked at that and said, well, that's crazy. Of course you want to answer the customer email. I mean, that's gold. How do we help you solve that problem? Wait, so let me try to understand it.

So in 1995, I'm assuming if Nike or K2 or Trek bikes had a website, it was not an e-commerce website, it was not to sell products at that. the time. It was just a website and maybe there'd be some pictures of what they sell and athletes using the equipment. But there would be a button on the website that would say, hey, contact us. People would contact them because it'd say, hey, my shoes coming apart or my ski, the binding on the skis loose or something and they'd email it and nobody would respond from the company. Correct. What was, what it was, not even a button. There would just simply be an info at. Oh, info. That was the classic.

Webmaster at. Support at. Right. You know, name your company. And what was amazing was consumers are really smart. If they're on the internet, and I can click on that button and send a question saying, hey, where do I find a size 11 in the color blue? That's way easier to do than picking up the phone and calling an 800 number.

Right. But nobody was responding. They was just going into like a black box. That's right. So you can think of this as Mark and I are sort of we want to start something. We think we have a good idea. We're told it's not a good idea. but then someone hands us a problem saying, can you solve this?

It felt like here's a challenge we're up for. And we managed to get something like 10,000 real email messages printed out on paper from a handful of these companies that the web development company was working with. And we used this to sketch out what would an email customer response software system have to do? What would it have to be capable of doing to be able to handle? this flow of emails and the types of questions that were coming in and how you'd have to think about standardizing responses. So we did all this really with just without any experience in the industry of customer service. We had no real concept of how we would build this. But the most important

lesson up for me out of that was just how you don't have to figure out all the answers to how you're going to build something. You have to start with something that gets you to the next challenge to solve. And this was the first one, which was we had to design something really worth building. Yeah. Again, when we heard about customer email, we assumed that that problem had been solved in other industries. It was just that the sporting goods companies didn't yet have the solution. So Michael and I then started making calls. I remember, I started calling around to basically Silicon Valley, you know, to the big companies of the day, the intels and the Cisco's and the oracles. Because I just assumed they must be handling all of their customer email really well. And we'll take that solution. Yeah. and we'll bring it to the sporting goods industry.

So we were still hopeful that we were going to stay kind of in this industry that we were passionate about, but we were evolving sort of the solution set. Here's the irony. When we made those calls out to these other companies, nobody had a solution. Nobody was, they all had a huge problem. You figured there was an off-the-shelf solution that you could maybe sell to these other companies. Yeah, okay. Yeah, and then we could stay in sports and we can stay connected and we'd figure out how to bring that to life.

But when we learned that nobody was solving for customer email, that was the moment in time. We're like, wait a second, this is crazy. This is, I mean, this is going to be the future. This is how consumers are going to, this is how they're going to interact online. Maybe we ought to spend a little more time here. When we come back in just a moment, how Mark and Michael wind up spending a lot more time on customer email,

but how more than 10 years later, they come back to their original idea. Stay with us. I'm Guy Raz and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1995 and Michael and Mark put their initial idea of a sports startup on hold. And they pivot to something entirely different, software to handle customer emails.

Michael's parents lend them about $75,000 to get started, even though, to be frank, they don't really know. know what they're doing. Like, why did you guys think you were, like, at one point, do you say, yep, we're the guys, and then you raised your hand, and you were like, yep, we can do this. I think it's, maybe we're surprised. I'll speak for myself. I think looking back on it now, I'm surprised that we took that leap.

But I think what made it not seem like such a leap was that this was happening all around us. You had people with no domain expertise starting things on the internet because it was such a new technology, new medium, new place to do things. And so we kind of fit that model, at least, which was that we were willing to try something that hadn't been proven yet. And once we got going and started developing this, we pretty quickly became seen as, well, you know more about this than anyone else. How did you learn about it? Because this is like you couldn't just go on to Wikipedia. There was no Wikipedia. you? How did you even learn what to do next?

First off, guy, I think you're hitting an important nail on the head here. And so in my case, and Michael, what we did, I'll never forget, we did track down a little company. It was called Catapult Entertainment. This was a company again, mid-90s, that was basically allowing two Nintendo gamers that live in different cities to play and communicate with each other. and they had a part-time 16-year-old kid who was answering customer email for them. And my old roommate was in that company and he said, hey, you should talk to the 16-year-old kid. I think he's actually got a pretty good solution.

And so I remember sitting down with him in a local subway restaurant and he took a placemat, turn it over, and been sketching sort of what the screen needs to look like in the screenshots and how the emails should move and how you interact with the inbound and the outbound message. And, you know, that one fateful meeting, we turned him into a consultant to us, this 16-year-old, I think, became perhaps the first consultant we had at Kana. And, you know, we became those experts that you described. Yeah. It was, you know, you learn pretty quickly. It comes in these funny little chunks.

Guy, I think another key thing we learned from were actual live customers of our technology before we even had something we could sell. We realized that it would take a long time if we were going to build our own system. We took an off-the-shelf software called FileMaker Pro, found someone who knew how to create custom templates for it and asked them to basically build what Mark just described. That placemat sketch from the 16-year-old turned into a FileMaker Pro version of what we would eventually try to bring to market as an enterprise software. And we went out and got a handful of customers. They actually started using this system in-house and were giving us real feedback.

And so we had something to work with. The venture world was very different in the late 90s, but also this was the beginning of the dot-com boom era, what would eventually become a bus. But, I mean, there was money pouring into companies. Was it easy for you to raise money at the time? Yeah, I'd say we were early on the wave of the big investments in Internet, but we were also different. We were not a dot-com where your e-commerce, for example. example, or we weren't trying to disrupt something that was already happening in the real world, per se. We were really trying to build tools to enable those companies to be successful.

So I think we had a hard time raising capital relative to had we tried to do this two or three years later. We had a hard time because I think a lot of venture firms looked at what we were trying to offer and saying, well, why is that going to be a standalone company? Why won't that just be handled by Microsoft Outlook or the other email software companies out there that, you know, just they didn't understand the translation between personal email and customer service via email. So that started to change as you, the problem got written about more. There was a, for us at least, a very formative moment was where I can't remember if it was the Wall Street Journal started to write about how Amazon was solving this problem with building

their own solution for customer service email because they didn't, couldn't find anything. And that was really validating for what we were trying to do. But we did find eventually success with raising capital. Our Series A led by Draper, Fisher, Jervetson, DFJ. We closed that round in, I believe it was 1996, and $700,000. So, I mean, when you, of course, you look back on what you were developing back in 1995, 96, it looks like primitive stuff, right, with FileMaker Probe. But then, but back then this was like kind of innovative, I guess, right?

Because it was a solution. Yeah, it's, I go back to my days, even working at the venture firm, one of the key things that the partners used to tell me is, if you can solve a real problem where there's significant pain, it doesn't matter how small company you are, they'll listen to you. And I took that to heart, and it was proven true. The pain was significant enough and was growing fast. I mean, we started to talk to some of the larger internet companies, you know, we had clients that were now receiving tens of thousands of customer emails on a daily basis. And you do start to realize, no, this is a critical piece of their business going forward.

Yeah. And I'm the first to always admit, I mean, so much of good entrepreneurship is timing. And we got very lucky. This was 1995, 1996, right as all of that infrastructure was just beginning to be developed in a meaningful way. And within a year, we were doing million-dollar contracts. You were getting big customers. You were like, I mean, I guess it wasn't so big then, but now eBay, right? like airlines like major companies right part of our strategy was let's own the dot coms we used to joke

if we see that someone gets a venture a venture round and raises capital we should be one of the first checks that they write because if they're if they're starting an e-commerce business there's three or four pieces of infrastructure that they have to have yeah and one of those pieces is is communication um how did you go about dealing with the sky of this case. I mean, people wanted this software. Companies wanted this software. How did you manage just like bringing on staff and meeting the demand? Yeah, it was a crazy time. I'll be the first to admit. I mean, it went from two guys and a dog hanging out in an office to, I know when I left in the summer of 2000, we had just over 1,200 employees. Because you went public in 99, right?

We did. We went public in early fall of 1999. I mean, you went from the two of you. in 95 to a public company in 99. I mean, you went from zero to a, what was the market cap at its height when it was a public company? I believe it was just under 11 billion was the market count at its peak. It was insane. That's the right word for it. What explain, I mean, you go public in 99, and I think you,

Michael, you left actually, right? Just before you went public, the company went public. You decided to kind of leave. That's right. Why did you decide to leave it at that point? Yeah. So it was the summer of 1998. So about a year before we are going to take the company public, I went to Mark and I said,

I think this is where I really do have to make a choice. It's either jump all into Kana because that's what Kana needs or jump all into academia. me, I can't be, have a foot in each any longer and do well for either one. And so we did work out an advisory relationship with Kana. So I stayed connected, but in a very different capacity. And I want to be clear here. It's like, it's almost like you do have a, you have a better quality and the company has a better quality of existence if you really separate as much as possible at some level when you don't have a role to play anymore. I think in 2000, you eventually moved to New Hampshire to take a job at the business school at Dartmouth.

That's right. The decision to go back to move to New Hampshire, everything from, now we have four children, where's our place in the world? And New Hampshire seemed like a great place to raise a family. This will be a great way to spend the rest of your careers. Teaching, teaching entrepreneurship now. It can take the skills or the experiences I had, starting Kana with Mark.

It all seemed like it made sense. The puzzle pieces were fitting together. If that had been the story, the rest of the story, everyone would have said, yeah, that makes total sense. Yeah, totally. What about you, Mark? I mean, around the time the company went public, you also left. So, I mean, what did you do?

I mean, you could have gotten a sailing boat and gone around the world. Like, what did you do at that time? Did you already think I'm going to do something else? Or did you decide to take time to just kind of enjoy the fruits of that experience? Yeah, it was a focus on my personal life. And specifically, so my wife at the time, her name's Lisa, we've been divorced now for many, many years, but still one of my closest friends. And if I'm not mistaken, she became pregnant in August of 2000 with twin boys. So my life over the next year or two, I would say filled with joy when it comes to sort of Jake and Charlie, who are the twins who were born in March of 2001.

You get to be a full-time dad. Full-time dad. But, you know, there was, honestly, guy, there was kind of a dark cloud that then, for whatever reason, kind of rested over the Ganey family for a bit. And, you know, the boys were born prematurely, so we had health issues. And Lisa, unfortunately, had pretty significant health issues that carried on for a while. And then it was early 2002, I was out, I was actually training. I was actually trying to get some of my athletic life back.

unfortunately 10 days before an Iron Man event that I was training for, I had a bike accident. This was Memorial Day of 2002 and was airlifted to Stanford and emergency surgeries. Wow. That period of time for me after Kana was, again, wouldn't give it up in terms of particularly the two boys in my life and the friendships I have. But I also learned that just because you're set financially doesn't mean you shouldn't kick. keep working. When I don't work, I tend to have problems arise in my life. So I like to stay busy professionally as well as personally. You started to get anxious probably that because there's a lot. I mean, right? Because, you know, you've got the camaraderie of the people around you and a sense

of purpose. You're going to an office. You're having meetings. There's, there's tension, creative tension, but you know, you're all working towards this goal. And then all of a sudden, like, no, your phone's not ringing. You're not, you're not, right? I, I, there was a period that professionally, what I did was I spent a lot of time on boards. And I thought that perhaps that was the next chapter. And the same way Michael described his, his academic opportunities as sort of the next chapter. I saw myself as, okay, well, perhaps now I can take my experience and apply it across a spectrum of board opportunities and so forth.

But what I learned was those, I love to equate being on boards to eating junk food. and I'll be the first to attest I like junk food. Me too. I will occasionally have it. And so in the moment, being on a board can feel really good. You're contributing, you're having interesting intellectual conversations, you're thinking through strategy. The only problem is you leave the board meeting.

It's like junk food. It's just not that satisfying. At the end of the day, you're not on that team who's going and now executing all these ideas that you discussed. And it served its purpose for those four or five years that we were basically trying to stabilize our, family and get everybody back and healthy and this is this is the time i ended up lees and i divorced in 2005 so we had to go through that period in that chapter in our life as well so between the health

issues and just the family dynamics board service was a great way for me to keep my finger on the pulse of what was going on yeah yeah but it wasn't something that was going to satisfy me long term and meanwhile michael you're now living in in hanover new hampshire teaching at dartmouth at the business school there and i guess while you're there you actually get asked by some colleagues to help with their startup, which is like a health startup. Is that right? Yeah. So there's this group of scientists at the engineering school who have started a biotech platform company. And it looks like they need some help. They ask me to give them some advice. We start meeting more regularly. And by virtue of being exposed to their idea and where I see I could be helpful, I realize I could have a role to play in this nascent.

company. And so I joined as the CFO and the VP of operations at this company called Glycify. And we go through a process of raising capital. We go through building a team, building a laboratory. And I stayed with that company until 2005. And it's sold in 2006 to Merck, really good outcome for everybody involved. But what do I do next? And so I don't go back to teaching. You decide not to stay in academia. That's right. It was teaching the second year and then the third year, we're like, I'm telling the same stories. I have no way to update them and update them and bring in new things. And I think eventually I'm just looking at this and say, I'm going to become obsolete here. And teaching is a bit like boardwork.

The Mark mentioned it's, you can't go much further than just maybe giving people a few insights and telling some motivating stories. And then they have to go and go and experience it themselves and I wasn't ready to be done experiencing myself. I wanted to continue to grow and continue to learn. And meanwhile, Mark, you mentioned that you kind of were focused on, you know, your personal life and there was health and shoes and dealing with your kids and health issues with your wife at the time and your own challenges with your accident, your bike accident. During your, let's say, interregnum, because it lasted for like five plus six. years, I think. At what point did you start to think, I got to start something new? I got to launch something new.

Yeah. I think it was, as stuff stabilized in my life, as my, again, health and family situation, as those things stabilized in that 2005 time frame, Michael was just coming out of Glycify at that time. So I remember, okay, here's our chance. He's coming out of that, and I'm stable, not on wood. We're too young not to, you know, think that there isn't something else to go do here. All right. So now we're in sort of like kind of phase two for, for you, Mark, phase three, for you, Michael, which is a new old idea, right? Because you had an idea in 1995 to create a social network around athletes, people sharing their achievements. It was not technically possible to do it then. But it sounds like that idea did not die in your head.

Yeah, that's right. In that process of 2005 to 2006, we looked at consumer brands in general and said, what's missing in our own lives? And we spent some time thinking about companies that we really admired. We made a list of if we had been founders of XYZ company, what would it have been? And it was telling because it wasn't a bunch of Silicon Valley companies. I don't think there was, I mean, maybe we put Apple on there. I can't remember. But otherwise, it was all these iconic consumer brands. It was the Patagonia's. It was a virgin from the UK. It was these brands that had withstood the test of time, had been around for decades, but they just had a unique relationship with their consumer.

And if you think about our history now, we're these two enterprise software guys. And we both sort of took this leap of faith that it's like, we don't want to do that again. It would be easy to pull out the playbook and replicate another enterprise software company. We could bring the band back together and hire a bunch of folks we knew before, but there was an intellectual curiosity. And I think this is, again, I give credit to Michael where it's like, yeah, let's go do something we've never done before. We were almost going back to what we felt like when we were 25 and we didn't know how to do anything. I think because of that, the idea that had surfaced back in 1995 around the virtual walk room made sense to revisit. The problem was still there.

You know, we were now in our early 40s, but we knew that sports. and participating in games and things were meaningful to us. Yet it's really hard to do. Life gets in the way. And so could we think about software as a platform and the Internet as a way to perhaps help both inspire and motivate folks like ourselves to stay active? All right.

So the idea was let's build something. I mean, this is now, right, 2006. So it's sort of pre-app, but you've got websites now that I remember using like Map My Run and things like that that were out there. But it's still pre-mobile devices, right? It's still like a couple years before the iPhone's going to come out. And so what were you initially thinking that you would do a website that would be this community where you could track and compare your, you know, your, I don't know, your running times?

Was that the idea that you landed on? Yeah. So we got to introduce a very important person. to the story. And that's Davy Kitchell. Davy and his family live in Norwich, Vermont, across the river from Hanover. And it's my 40th, the day of my 40th birthday, and we sit down for coffee that morning. And Davy has been experimenting with, if he uses a Garmin cycling head unit, Garmin was making these pretty, with GPS in it. It was a, this is, in 2006, this is pretty bulky, pretty expensive, but he wanted to see if he can use this to try to collect some data that

could help him train better. So there was something interesting there that we said, we ought to keep talking because you seem to be working on the actual, call it the R&D of something that could be important and fit into our world as well. And so we asked Davey to keep working on stuff and see what he comes up with. And what he comes up with by the summer of 2008, spring of 2008 is what we now know is the Strava segment leaderboard. The idea that you can have people, in this case, riding their bicycles at different points in time, but they can see their times on a climb or any stretch of road compared to each other.

So this prototype that he is working on comes out of that phase of 2007, 2008. And we decide in the summer of 2008, Mark and I are now pretty sure this is going to be it. It's the virtual locker room idea among all the few other possibilities we were experimenting with or thinking about this is the thing. So, and the name Strava is strive, right? It's a Swedish word for strive. Yeah, it's pronounced definitely Swedish, but yeah, Strava is in Swedish. But yeah, we chose a name that hopefully can go around the world.

And the idea was you would run this kind of in a distributed way. You wouldn't have an office like Mark you would be on the West Coast. Michael, you'd be in Hanover, New Hampshire, and you would just kind of do it all virtually? Well, we were committed to the distributed model, but as soon as we began the process of hiring folks, we also believed in the power of face-to-face and being in person. So we opened a small office in Palo Alto. And so for Michael, did that, for you, did that mean commuting across the country? Yeah, getting on a plane more and more regularly.

All right, so you have this, so you're all kind of working towards this concept and it's going to be, I keep saying a social network and maybe that's not accurate, but it sounds like that's sort of where it was headed. But I guess something happens in 2008 that there's a breakthrough, right, that kind of changes the way you think about it. What was it? What happened? Yeah. Summer of 2008, we had a group of individuals, I think maybe no more than a half a dozen cyclists on the East Coast out in Hanover. and another half-dozen cyclists that we recruited on the West Coast. And Davy had built a very basic website.

We used to call it the green machine. It was this lovely shade of green that everybody would log into. And we made sure that everybody had Garmin cycling devices. And we asked them through the time of the Tour de France. So over a three-week period in July of 2008, would you be willing to upload to this website? And in exchange, we're going to create some competition. we're going to put East Coast against West Coast.

We just love to get your feedback and your reactions to this experience of not just going out for a ride, but then sharing that information on this Strava website. And for me, the takeaway was twofold. One was, it was clear very quickly that the cyclists who were using it were infatuated by the information they were seeing. Like there was a high level of engagement with this data and the storytelling. Davy just did this amazing job. of taking what was pretty raw GPS information

and creating a story for somebody afterwards. Takeaway 2 was just the level of interaction between the cyclists now. I mean, the level of trash talking and gamesmanship and camaraderie and the competition back and forth between East and West, it was fervent. It was just this really funny experience to watch them and they couldn't get enough of it.

And so that experience over three weeks in the summer of 2008 was really the final capital. that we need to say, okay, we may not have the business model nailed down here. There's a lot of specifics, but it was enough of an energy there and enough excitement after that quick three weeks that we said, we've got something. When we come back in just a moment, how Mark and Michael got Strava out of its awkward adolescent phase and how, because of life circumstances, they each had to learn how to run

the company. Stay with us. I'm Guy Raz, and you're listening to how I built this. Hey, welcome back to how I built this. I'm Guy Raz. So it's around 2008 and Michael and Mark are hard at work on Strava, a platform for cyclists to clock and compare their rides. And by the way, that emphasis on cyclists and only cyclists is totally intentional. Our Kana experience had taught us something really valuable, which was by just picking one subcategory of an audience or a prospective customer. And back in the Conno days, it was email response, which I can tell you, many investors said, that's not even a company, that's not even a product, that's a feature. Yet solving that problem for that one audience, open up so many opportunities for us going

forward. And so we, in many ways, applied the same thing here. We went after a passionate cyclist, not because we thought that that was going to be the sole market, but by creating that opportunity and that relationship with them, the way in which you can build an experience, it becomes really rich and really authentic for that group. And there is a leap of faith. And I always remind people, don't get confused between vision and go-to-market. In a case of Strava, our go-to-market strategy was cycling.

And lastly, the reason was there are lots of running apps that were out there and running solutions. There actually weren't very many solutions that were addressing the needs of cyclists. And so we kind of did an end around. Instead of going into the crowded market, we picked a space. that had just as fanatic, a base, but without the noise of other competitors. I mean, it's like any tribe, right? It's like Crossfitters, like cyclists, presumably, if one cyclist starts using this and loves it,

then you know that they're going to talk about it to it, and then there's a virality to it. Yeah, that's right. We knew we'd get to the other sports, but we didn't know when. We didn't know how long it would take for us. How long would we stay with cycling? And some of the biggest chance, you know, say the discussions we had was when do we start expanding into other sports. And we didn't really do it in earnest until 2012. How did a consumer interact with Strava on August 18, 2009 when you launched it?

You had to have a Garmin GPS device. That was the only device that would work with Strava in those early days. So you had to have one of those devices that would track your workout. And you would plug it into your computer and the data would flow up. into Garmin and from Garmin into Strava. So compared to today, it required a lot of work, if you will. And so, as you might imagine, grew slowly. You'd have to do all those steps that today you'd say a lot of people just take for granted

that happens to view their mobile apps. You would buy the device. You would wear it. You would cycle. You'd come home. You'd plug it into your computer. And then that data would be uploaded to a website where you could, you had a profile, basically. Basically, we tried to make participation in Strava as hard as possible.

Let's make this extremely hard and then start reducing friction. Yeah. Slowly but surely. Right. No, just as you were describing that, I was reminded of, you know, one of the points of friction was, well, how many people have garment devices? And so, I mean, there was a whole period of time where Michael and I were negotiating with the likes of Costco and others just literally trying to buy garments so that we could

either sell them or give them away to friends so that we could get people. people onto the platform. We have sometimes a phrase that we say, which is do things that don't scale. I would say we probably did this perhaps to an extreme level in the early days of Strava when we look back at it. When you, I mean, this is still again, I mean, I think the iPhone comes out in 2007 and smartphones kind of are beginning to emerge. But immediately before you launch, because you launch it in 2009, the summer of 2009, did you think that it was going to be an app first product? No. We should have moved off of web onto mobile sooner. But that's not the team we had. That's not the, that's not Mark and I. We were not big app users. So going back to this sort of, did we have the set of experiences that would ultimately make Strava the most successful? I'd say, here's an example where we didn't. We launched Strava into a pretty crowded space already. And we were on a, on a technology, on a platform, the web that was not going to become the dominant platform. And,

It wasn't until 2012 until we really had a viable mobile app into the market. We launched something in 2011 that didn't work, but it took us a while to shift off of that. Did you even have an idea of how this could be sustainable? Or did you just kind of figure, let's just build it, let's get people on, and then we'll figure out how this can become sustainable? Yeah, we actually had always had the intent to have it be that the business model was a subscription. There's a free version you start with, but to get the best of what we are building, that's something you subscribe to. Yeah.

I imagine as you're thinking, you know, sort of five, ten years out at the time you were thinking, okay, we can have a subscription option, a freemium model where, you know, there are better features if you have a subscription. Were you also thinking, and maybe, you know, we'll have some ads. And maybe because we're going to have all this data, we can also be a data broker, too. Were those parts of the equation? Actually, Guy, just point of clarification, we launched the subscription within that first year. I got you. Okay. So it was always there.

Right. We, to answer your question, you're right. We did and have, if you look over Strava's 13 years history, explored various modernization models. Yeah. And we've always come back to that fundamental premise, which is when we're building. something for our customer, for our members, and it's something that is a value enough that they'll pay us, that's a good thing. I like to state the simple idea that we want Strava to be as important as a runner's running

shoes, as important as a cyclist bike. And if we can get to that place, the rest sort of sorts itself out. I do remember the earliest business plans had the concept of sponsorship, but we said no advertising. We're not... Why is that? Why did you, why did you take that position? We already found that advertising on the websites and digital experiences that we were using,

that it wasn't, it was a distraction. It was, it may work economically for the advertiser. It may work great for the, for the platform that presents the ads. But it didn't feel like it was in the best interest of the actual experience or the customer. And so we believed, we at least wanted to start with a thesis that we could build something better than that. advertising per se so that you could basically turn your customer into the product so that you're selling their attention, that did not make sense to us from the very early days. And I mean, you also had this incredible access to amazing metadata around human health, you know, a trove of valuable information. I mean, what has been your position on data? I mean, how do you, how do you handle it? I mean, obviously people make it available for,

You know, if you've got a friend on Strava, like right now, I know that Mark took an eight-mile ride this morning at 5.30 a.m. And your average speed was 8.2 miles an hour. And I can probably tell where you live from this. But I'm just, you know, we're friends on Strava. So, right, you gave me access to it. But how do you think about privacy? How did you, did you, and did you start to think about it from the beginning when you launched it? Yeah, you're exactly right.

That privacy and trust of our athlete. in Strava for ensuring that their data is safe, that they can control how they show up on Strava. That's critically important. And if we're going to use data for any purpose, it's got to be anonymized and aggregated. And we never sell anyone's private information. We never give away anyone as the product. Yeah. And so when did you first launch the app on the App Store?

We had a version in 2011 in the App Store, iOS only. It was bare bones and ultimately wasn't successful. we rebuilt the app in the course of the next six months after launch. But it showed us the power of building mobile apps. It's just such an amazing way to give access to the experience to millions of people. So the phone is really a great entry point for getting more people into the community. One of the things that I think is so interesting about the way you launch it was you didn't actually target, you know, sort of casual athletes or, people who just took a, you know, a run once or twice a week, you actually were trying to go for

like the best athletes, like professional athletes even. Well, these are shades of gray. It's not necessarily how good they were, but how passionate they were. So you're right, we were targeting, they didn't necessarily have to be good at it. But they were probably spending thousands of dollars on it. They were probably talking about it with their friends when they weren't writing. And we used to have a phrase, you know, let's make sure we build it for the best in the world and meet their needs because if we do, they're the ones who inspire so many others to then join the platform. Here's a question.

Who is the person, like when you were describing Strava to people, who is the person you imagine would come to it? Because, you know, you are sharing your runs and sometimes your runs might suck. Yeah. So when you describe the kind of person who would go on it, what were the reasons why you thought they would go on it? Was it to brag or boast or was it to motivate themselves? Like, who was that person? It's people keep people active, and they will find the joy in the activities that they do. They will find more joy in them by sharing them on Strava.

Yeah. But I've had this insight that as people have joined Strava historically, they often don't join because they're trying to join the community. They join because they're looking for a way to track their own. personal activities. And I often refer to it as single player mode versus multiplayer mode. If you go back to our earliest days, we actually had to build an experience where if you were the only person on Strava, you would get value. Even today, with the tens of millions of people who are there, you can actually onboard to Strava and have a very private, rich experience where you can see your trends, you can, you have this digital log that's available to you. But the magic happens when you begin following.

just a few people. You referred to my ride this morning. It's nothing to write home about it. It was only eight miles. But what was fun about it was I got up there before the sunrise. And if you look at the activity, it's not my distance or how fast I was. But there was some spectacular color out there this morning that I was able to enjoy. And then to be able to share that with some friends and family, I get way more kudos today for something like that than I do, you know, a fast mile time or,

Yeah. A marathon. So one of the first kind of, one of the first things you decide to introduce once the cycling community is kind of solidified is the running. And this was a separate, this is a separate, completely separate site, right? Strava Run. It was a separate app. Separate app. Yeah.

And from what I understand, like the cyclists like went crazy. They just felt so betrayed and angry that you had this running out too. They, yeah, that's true. They were jealous that we were spending any time devoted to a sport that they didn't love. And I think what changed was the minute they understood that, hey, these are their friends who run. And they can celebrate them and build community with them in the Strava feed, which is the place where you see other people's activities. You get to decide who's in your feed. You follow them.

They can follow you back. But that first reaction of, you know, why are you ruining Strava? it was perfect before. Why are you adding these things that we don't care about? We definitely heard a lot of flack for that. So the business is expanding and you're doing well. I mean, I think you guys were able to raise a fair amount of money around this time, too, something like $4 million. But meantime, around 2010 or so, I think, there are some major personal challenges in both of your lives, which will affect who's going to lead the company. Mark, kind of walk me through what happened? Well, when we launched, I was running the business in the Bay Area. And then in 2009,

literally that spring that we're doing it, my ex-wife started to have some pretty serious health problems again. And I'm now single-parent, full-time dad. And so by early 2010, it was, hey, Michael, I really need you to run this. You needed him to become CEO. Exactly. So here I was CEO for all of, you know, a year and change. And at that point, even though he was in Hanover, I was like, I, in coming out, you know, on a frequent basis, but not out here running things. We just, he, I owe him because he stepped in in a moment in time when I needed to devote my energy to my family. So you become CEO in 2010, Michael. And in December 2013, you announced that you were stepping down and you switched positions again. I think, Mark, you come back as CEO. Michael,

without, I don't want to pry into your personal life, but are you willing to talk a little bit about that time in your life? Yeah, I'm glad to share. It's part of my story and, you know, there's a sadness to it, but there's also a continuing on and forging ahead. And, discovering some great things that come on the other side of that sadness. And so, you know, the roles we've played over the course of Strava have changed, but one thing hasn't changed, which is we're doing this together. We're co-founders together in this. So he steps in in December because in September of that year, a few months prior, my wife, Anna, had been diagnosed with metastatic breast cancer. She had been first diagnosed in 2004, had gone through treatment at that time.

It recurred again in 2006 and had gone through treatment again. And so it was a real surprise. We'd been seven years, had not had this, it sort of receded more to the background. And so in September, she's diagnosed it's a shock. It's a huge shock. And the prognosis is not great. It's metastasized into her liver and her bones. And so recognizing that and understanding what that meant for the two of us and what it meant

for my capacity to run the company. That took a while. And I credit Mark for being able to come to me and say, you've got to see this differently. You can't do both. The company's going to suffer. Your family's going to suffer. You're going to suffer.

And we can find a better way. We can find a different way. So we did. Right. Because I think at this point, Mark stepped back in as CEO. Correct. But Michael, you didn't leave entirely. You stayed on with the company.

right? Yeah. I took the role of president. I could take on as much work as my schedule would allow to prioritize taking care of my family, taking care of Anna during the last few years of her life. During your time when you stepped away, did you stay in Hanover in New Hampshire? Yeah, that's where we had kept our home there during my increasingly long. visits to San Francisco. I had an apartment in San Francisco, which I gave up. So I'm in Hanover. We have an office there. We have a growing team there, actually. And Mark is CEO running the company in San Francisco. So during that phase, I was his commute partner. He would, whenever his ride into San Francisco, it would be when he and I would talk every morning, 45 minutes or so of touching base.

And again, just the role switched here. I'm now the sounding board. I'm whatever he needs me to do. I'm doing, however I could be helpful. I'm trying to do what I can from Hanover. So you, Mark, are back as CEO now. And tell me a little bit about, I mean, how the product is being adopted. I mean, is it almost entirely just word of mouth? I mean, is it that tribe of cyclists and runners who are telling other cyclists and runners about this and, you know, wanting their friends to be on it so they can share their experiences? It is. As simple as it sounds, our greatest source of growth are our members. It's been like that from day one, and frankly, despite our efforts to come up with other

ways to grow and so forth. And it's not to say we don't have a fantastic marketing team, and there aren't things that we continue to do. But if you look at sort of the core best source of our growth, it's happy members. It's people who are engaged in Strava and are telling their friends. And yes, that was happening in 2013. And, you know, in a typical sort of network-like effect, and particularly a freemian business like ours, if you're patient and you have the resources to be patient, the flywheel does start to spin faster and faster and faster. And you could see that in our growth. Just Michael can tell you how long it took us to get our first million members. And, you know, now we had two million every month. But I think it took us, what, Michael,

eight years to see our first million members? Something maybe not quite. that long, but not eight years, but it was like three or, what was it, Michael? So I believe we hit a million daily active in 2015. What that shows you, though, is like word of mouth is slow until it's fast, right? Yes. Right. We were patient, I guess. We built patients into who we brought on as investors. We built patience into our team so that we said, it might take us a while, but we're going to get to a place that's going to be really great and it's going be very resilient when we get there. And I think that's where we've arrived to at this point. I know you came back as a CEO in 2019, right? And November of 2019. That's right. And, you know,

the business model is clear. It's a subscription model, right? And so that was where your revenue was going to come from. But the free product you were offering, I think, from what I've read, was so good that, you know, people or, you know, was, you had subscribers. but there were plenty of people who are happy just using the free product. So at a certain point, did you have to have internal discussions where you were like, you know, we got to make the free product a little bit less attractive because we need subscribers? That period in November 2019, Mark and I teamed up to come back to run the company, him as executive chair and me as CEO. It was a challenging time, realizing that we are now at that point, 10 years ago, in on a journey, the company needed to become sustainable, profitable. And so your question about the

free and paid balance between free and paid, it was, we didn't start with saying the free is too good. We started by saying we have to create more value in the subscription. Would we build more features? Yes. Would we rebalance the equation between the free and the paid by moving some things from the free side to the paid side? Yes, we would do that in the name of building Strava to be sustainable, it so that we can be here for the next 100 years. Yeah, Guy, just to give you context, because I think there's an important chapter in here where there was an important lesson

that hopefully any of your other entrepreneurs because from mid-2017, 2019, we had brought in an external CEO. And no regrets. However, during that period from 17 to 19, we were experimenting across a lot of monetization models. We were looking at, frankly, we were looking at ads in the feed for the first time in Strava's history.

We were looking at data insights. So when Michael refers to coming back and facing some challenges, but also just trying to simplify, that was what late 2019 was for us. As two founders, let's come back, remind everybody, we really only have one customer at Strava, and that is the active person who just loves being out and being active every day. And we want to build something that's great enough that they want to pay us for it. And if they want to use it for free, that's great because our free members are not just a marketing channel. Our free members are contributing their activities to strive every day,

which enhances the experience for everybody else. So companies go through these ebbs and flows, and we went through this period where we, in some ways, I'd argue, we just bit off more than we could chew. We were spread really, really thin as a company in 2017, 2018, 2019, and we learned the value of focus. We just brought it back to its basics. You know, one of the things that happen unexpectedly, I think for every business, but certainly for yours was that 2020 and then 21 just proved to be huge growth years, right? Because the pandemic, people were shut out of gyms and stuck at home. And so people wanted to exercise and want to get out.

I mean, you had 1.5 or 1.1 billion uploads in 2020. And then a 38% increase in 2021. And then you're still increasing in 2022. How many employees do Strava have now, by the way? We're close to 350. We entered the pandemic with about 180. So we've almost doubled since then. And again, this is how we invest.

We've reached profitability at this point. And so we're reinvesting the benefits back into by hiring more people, being able to do more so that we can continue to serve our community. You know, I kind of want to understand what draws the two of you together. I mean, like 15 or 16 years ago, you guys were on different sides of the country and pursuing very different paths. When Mark, you reached out to Michael to kind of get back together and build what would become Strava. Why did you reach back out to him? I mean, what is it about Michael that made you want to work with him again?

This concept of trust is a word that often gets overused but not understood. And there's just, he and I had such a long history together and being able to trust someone at a very intimate level. That's hard to define, but it's there. Second is we compliment each other very well. I like to joke that all you have to do is look at our degrees, you know, art history and economics. And there's just a yin and a yang to the way in which we think.

And the third reason I'll tell you guys that because he's got, he's got the golden touch. Michael's, you know, there's some truth to the simple fact that as long as I've known him, he knows how to make things work. He wins. Michael's a very quiet winner, whether it was Kana or Glycify, good outcomes. And I just give him a lot of credit. Well, it's, okay, so you can't see, but I'm over here blushing. So, guys, if it's okay, let me tell it from my perspective as well, which is the person I've learned the most from in life is Mark, in the sense of I've evolved and changed and ended up. understood many, many things about leadership and how to really think about the process of

creating something of value. And Mark is incredibly aware and even just the need to be able to communicate effectively. But we have the joke is if I write the first draft, it's three pages and it should be one. If Mark writes the first draft, it might be a half a page and it should be one, but he boils things down. He reduces things to what actually will people be able to understand it. And that's leadership is that you can't throw everything at them and expect them to do to make the most of the information you're passing along. And so when we look for compliment, the complimentary styles, another way, a thing, you know, the thing I see in Mark, if I boil it down to, I internalize problems. I look at them and I say, how would I solve this? What, what skills do I have?

What can I bring to the solution? Mark externalizes. He says, who can I talk to who has perspectives that will help make a great decision here. You put those two together, the analytical internal approach and the external, collect the right solutions from others, and that's a powerful combination. It just strikes me as kind of remarkable

that it sounds like you never fight, that you never had conflict. Is that true? Is that right? You answer Mark, and then I'll answer it. I'm bumbling over my answer because I think the short answer is no. Okay, all right, good, good. But fighting is,

But then I, but then there's all these caveats to that. Because our challenge, what I've, and I'll speak for myself here, our challenge is two co-founders and partners is when we don't communicate, that's when challenge occurs. As long as we're able to stay synced, it doesn't even have to be synchronized 100% of time, but as long as we have communication going, then it's pretty rare that you see fights. But, but we've had our, we've had our moments. We've had to figure out when we have our friend hat on versus when we have our business hat on. Right. That's the art. Mark, you, I mean, you know, you injured yourself and you didn't end up on the cross-country team and ended up stumbling into the crew team.

And Michael, you didn't like, you decided not to do sailing because he just didn't like the vibe there. And you happened to see the crew table when you were registering for classes. And that eventually brought the two of you together. your lives would have may have been equally interesting and great had that not happened. But definitely that steered you in a different direction and then led you eventually to founding a business together and then a second business together and here you are today. How much of your journey do you think has to do with luck, like things like that and how much do you think has to do with just how hard you worked and grind it away?

First T-mark. there's a huge percentage of my life as associated with sort of luck and circumstance because I keep pushing, because I keep grinding. So I think that there is an element of creating luck. And my thought is that I was just reading a book recently. I think it's called How Champions Win or something to that effect. And it just talks about optimism, being a learned trait rather than something you're born with. And that is what I think I do have in me is,

optimism. And with that, then, yeah, the luck comes and goes. If I look back in my life, I've had plenty of bad luck. I've had bicycle accidents and ski accidents and I've had heart problems and I've had a divorce. I can go back and look at bad luck and good luck. But if you bring optimism to things, it's amazing how the luck keep servicing in a good way. Michael? I think Mark and I are wired very similarly. We are at our heart. We're optimists. We approach challenges at as well, they represent the opportunities. I will say one thing, guys, as we have talked through our meeting on the crew team and just the path dependency of what would have happened if Mark had not gotten injured

and had stayed on the cross-country team, what would have happened in my life if that sailing meeting had been a little bit more fun? I do think about that as I have confidence that Mark and I would have found each other somehow. I just can't imagine my life without him. That's Michael Horvath, founder and CEO. of Strava and Mark Ganey, founder and executive chairman. And by the way, one of the off-label uses of Strava is that users can chart their run or bike ride

along a specific path so that it actually draws a picture. And sometimes a pretty elaborate one. Right now I'm looking at an Instagram account called Strav.art. And some of these images are amazing. There's dragons and bunny rabbits and tigers, even Frank Sinatra and Freddie Mercury. There's Queen Elizabeth and R2D2, and also images from actual art like The Girl with the Pearl Earring. And yes, even the baby on the Nirvana album cover. Hey, thanks so much for listening to the show this week.

Please do follow us on your podcast app so you always have the latest episode downloaded. If you want to follow us on Twitter, our account is at how I built this and mine is at guy ros. And on Instagram, I'm at guy.org. If you want to contact the team, our email address is H-I-B-T at ID.Wondry.com. This episode was produced by J.C. Howard with music composed by Ramtin Arabley. It was edited by Neva Grant with research help from Vera Safari. Our production staff also includes Liz Metzger, Carrie Thompson, John Isabella, Chris Messini, Carla Estevez, Catherine Seifer, Margaret Serino, Alex Chung, Sam Paulson, Josh Lash, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.