No. 311: Whoop and The Flywheel

Image: courtesy of Gear Patrol

It was a saturday morning in Columbus and Central Ohio was on its last day of hosting the Arnold Classic. Arnold Schwarzenegger hosts an annual event for athletes across fitness, strength, and endurance in town and while we avoid most of it, there was one meeting that I had to take. Alexis (my oldest daughter) and I met for brunch with Iceland’s Katrin Davidsdottir, one of the most recognizable alternative athletes in the world, a two-time “Fittest on Earth”, and family friend. The two athletes discussed the typical sports topics: hard work, diligence, and resilience. Katrin is at the top of her craft and Alexis is an athlete in her own right. The conversation was between two top competitors who recognized each other’s talents, drive, and natural abilities. In this part of the conversation, I was just a bystander.

We quickly moved to more practical matters: the economics of commerce and product marketing. Davidsdottir is also the most marketable athlete in her field and one of her sponsorships is with Whoop. Whoop is a physical band that measures athletic analytics like: strain, depth of sleep, and heart rate variance (HRV). The band allows you to subscribe to an athletics analytics SaaS. In a recent podcast with Whoop, Davidsdottir discussed her journey from a small country to a lucrative, American lifestyle as a competitive athlete. She swears by it; so do I – but for different reasons.

When we recognized the distinct-looking bands wrapped around our respective wrists, we began talking about our affinity for the product. We viewed Whoop from two vantage points: she’s an elite athlete and I’m an entrepreneur – both career paths are stressful to the body, mind, and central nervous system. We went on and on about how often we see the in-app metrics and how it influences our daily decisions. I knew that Whoop would be a force, this conversation confirmed it.

Linear commerce is a core tenet of 2PM’s understanding of the commerce ecosystem. It’s the active prioritization of audience-growth. Product manufacturers typically seek to outsource demand generation. Brands, that are ahead of the curve, emphasize their audience’s growth as much as they address their physical product’s development. And vice versa, digital media companies that follow linear commerce prioritize organic and loyal growth over commodity clicks. By building a system that allows peers to privately compare their lives, Whoop has – perhaps mistakenly – developed its most effective flywheel.

A flywheel is a device that stores and distributes energy. Retail management will use  the term to describe the sociology of keeping customers engaged, allowing engaged customers to attract like-minded consumers.

Jonathan Poma is the Founder of Loop and the Chief Evangelist Officer at Brand Value Accelerator; he recently stepped down from the Chief Executive role to spend more quality time with his family. Part of this decision was stress-driven. He’s also an avid technologist. Poma was in the first 1,000 users of Slack, an early Uber user, and when he finally joined Whoop – I knew that it was only a matter of time before he began to maximize the platform’s functionality. In a recent conversation with him, we discussed the platform’s latest development for us non-athletes. A consumer will be hard pressed to find Whoop branding or messaging that represents consumers like us. When Poma made the request to Whoop for group reporting access, Whoop allowed him to use the “team” functionality for a test group of colleagues. After a few weeks of this using this group setting, Poma chimed in:

Whoop is 100x cooler than I even thought it was two weeks ago.

Prior to this in-app solution, we found that we’d screenshot our best fitness and recovery days and send them to one another via iMessage. Our Whoop group began to grow until we averaged 1-2 new buyers per week; we’d often pitch our friends on buying one so that we’d be able to compare our data. All high risk entrepreneurs, Whoop’s ability to track fitness, sleep, and strain on the central nervous system became a necessity for early-adopting entrepreneurs – a group that traveled often, slept sub-optimally, and works long hours. Our crude iMessage format evolved into an ability to check, compete, and support colleagues.

Through the mobile and desktop applications, we have full visibility of one another’s holistic health. It drives conversations around work ethic, reduction of alcohol / sugar, and improving physical capacity. In this way, Whoop has successfully duplicated the value of the group fitness experience and replaced it with personal software. In essence, the grouped colleagues are always working towards health and training goals in concert.

Despite a selection of elite athletes as sponsors and a top podcast, Whoop is primed to jump the chasm by promoting this functionality for its civilian consumer. In this way, Whoop’s latest offering may become its greatest (and most timely) marketing asset. Why? Data suggests that consumers are evaluating their relationships with: health, community, and luxury – at scale.

2PM Data: On Telemedicine

In a recently published index, 2PM tracked 45+ of the top companies in telemedicine on the DTC Health Index, a list that comprises a list of companies that are privatizing the healthcare industry. Whoop, a company that’s raised $49.8 million, is part of a larger trend towards consumers owning more of their own health and wellness. It is showing, Whoop’s on-site traffic has doubled in the last six months. Of this traffic, only 6% of is by way of paid customer acquisition. The flywheel is spinning.

On desktop and mobile web in the last 6 months

Anticipated growth in digital health systems and analytics are driving a lot of this interest. For instance, Apple recently innovated around this effort to democratize consumer care with its ECG app. And Core is launching a meditation device that actively tracks its effects by tracking HRV. Whoop is one of a handful of platforms that tracks heart rate variance, a measure that allows consumers to quantitatively measure the strain on their central nervous system. Entrepreneurs and other high risk professionals have used this measure to discuss their levels of stress and depression for a time; however, HRV’s interest is growing quickly in non-athletic spaces.

What is HRV? It is the delta between successive heart beats. The heart’s irregular rhythm causes heart beat timing to change. It was initially used by emergency room healthcare professionals to predict patient mortality rates post medical emergency. The application of HRV is now being studied as a measure of physiological response to stress and exercise. The higher the number – on your 30-day baseline – the more recovered the body.

2014-2024: digital health market size ($ billions)

2015-2020: projected CAGR for the global digital health market

On Health and Modern Luxury

In a recent report by Business of Fashion: “The Future of Luxury is Freedom” , the magazine’s resident retail prophet discusses the changing definition of luxury. Doug Stephens writes:

Today, luxury is evolving once again and brands are wrestling with the fact that consumers are increasingly shifting spend from products and services to experiences. This is especially true among young consumers in the West. According to a 2018 Harris Poll study of US millennials, 78 percent say they’d rather spend money on a “desirable experience or event over buying something desirable.”

In No. 265, we discussed this in the context of Peloton, the in-home cycling and media phenomenon that shares a somewhat similar target consumer with Whoop.

It’s no longer sufficient to define luxury products by how difficult they are to attain. Time is the scarcest resource and the ultimate luxury. Being a modern luxury brand is about being self-aware. These brands sell time as a scarcity and then build products around it.

Health and wellness – a scarce resource measured by time and ability – is emerging as one of the most foremost American luxuries as traditional healthcare costs skyrocket. For direct to consumer (DTC) healthcare companies like Whoop, their platform has somewhat accidentally entered the conversation. While designed for athletes working to peak their physical performance, Whoop has found its software co-opted by normal consumers who use the software to measure the markers that influence the scarcity of a consumer’s time and ability.

Whoop is a company of about 100 workers who more than likely train, sleep, and work with the band that they’re helping to build, improve, and market. As the trends around healthcare, luxury, and self-quantification continue to converge in the company’s favor – consumers will will see more of HRV in the context of quantification.

In this way, Whoop and its community are contributing to more than its own marketing flywheel. The long-tail effect of the popularization of HRV means that we’re bound to see more products that address one of the top questions in Whoop’s community: “how do I improve my HRV?” This is the question that will launch its own consumer product sector.

Read the No. 311 curation here.

Report by Web Smith | About 2PM

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