Will Ahmed - Optimizing Human Performance – [Founder’s Field Guide, EP. 39]

My guest today is Will Ahmed, founder of fitness wearable company WHOOP. What started as a business plan in 2011 has evolved into the 24/7 health-tracking device you’ll often see on athletes across professional sports. During our conversation, Will and I discuss how his own backstory ties into the founding of WHOOP, the key design decisions they made in the ultra-competitive wearables market, and how the company grew slowly before inflecting in recent years. Will shares awesome details on health tracking and what it might look like in the future as a preventative tool rather than simply a tracking tool. I hope you enjoy this great conversation with Will Ahmed. For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Klaviyo. Klaviyo is the ultimate marketing platform for e-commerce. With targeted segmentation, email automation, SMS marketing, and more, Klaviyo helps you create your ideal customer experience. See why Klaviyo is trusted by more than 50,000 brands, like Living Proof, Solo Stove, and Nomad, to help them grow their business. For a free trial, check out klaviyo.com/founders. ----- This episode is brought to you by Eight Sleep. Eight Sleep's new Pod Pro Cover is the easiest and fastest way to sleep at your perfect temperature. Simply add the Pod Pro Cover to your current mattress and start sleeping as cool as 55°F or as hot as 110°F. To embrace the future of sleep and get $150 off your new mattress, go to eightsleep.com/patrick or use code "Patrick." ----- Founder's Field Guide is a property of Colossus, Inc. For more episodes of Founder's Field Guide, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes [00:02:45] - [First question] - The founding story of WHOOP [00:05:45] - Narrowing in on the problem to focus on solving [00:08:58] - Overview of analyzing and quantifying recovery, strain, and sleep [00:15:52] - Downsizing the problem set to deliver an affordable solution [00:18:48] - What he’s learned about hardware product road mapping [00:21:43] - How many people wear their WHOOP all-day [00:22:05] - Early lessons from taking their wearable tech product to market [00:26:25] - Ways in which they landed their first high-profile athletic brand ambassadors [00:27:55] - Interesting methods that proved successful in their marketing tactics [00:32:06] - Observations of making the switch to a subscription service [00:34:00] - Why big apparel companies failed where WHOOP didn’t [00:35:20] - Changes in behavior from users who learn about their habits using WHOOP [00:40:18] - His philosophy on business partnerships and how he developed it [00:44:56] - How he ended up with a paddle from the Navy Seals [00:47:13] - Ways WHOOP stays ahead and upcoming trends in the wearable tech space [00:50:13] - Data beyond HRV that will become more accessible and affordable to track [00:51:09] - The extent that data and software relative to hardware are a key part of WHOOP [00:53:06] - Lessons learned about effective leadership on a personal level [00:56:13] - Notable differences in his leadership style from then compared to now [00:57:34] - Thoughts about business defensibility in such a competitive space [00:59:44] - Reasons behind why WHOOP products don’t have a screen [01:02:13] - Valuable lessons for other entrepreneurs when studying WHOOP’s story [01:05:03] - Systems in place that allow for their speed and pace of growth [01:06:31] - What makes a day of work fun for him [01:08:39] - Why we shouldn’t measure our steps [01:10:01] - What is the kindest thing anyone has ever done for him

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Patrick O'Shaughnessy?

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• 0:45Patrick O'Shaughnessy?

  create your ideal customer experience. See why more than 50,000 brands like Living Proof, Solo Stove, and Nomad trust Klaviyo to grow their business. Keep your customers coming back. Get a free trial at klaviyo.com/founders. That's K-L-A-V-I-Y-O dot com slash founders. This episode of Founder's Field Guide is brought to you by Eight Sleep. Eight Sleep's new Pod Pro cover is the easiest and fastest way to sleep at your perfect temperature. It pairs dynamic cooling and heating with biometric tracking to offer the most advanced solution on the market. Simply add the Pod Pro cover to your current mattress and start sleeping as cool as 55 degrees or as hot as 110 degrees.

• 1:26Patrick O'Shaughnessy?

  It also splits your bed in half so your partner can choose a totally different temperature. I was so impressed after using Eight Sleep that I became an investor. To embrace the future of sleep and get $150 off your new mattress, go to eightsleep.com/patrick or use the code PATRICK. Hello and welcome, everyone. I'm Patrick O'Shaughnessy and this is Founder's Field Guide. Founder's Field Guide is a series of conversations with founders, CEOs, and operators building great businesses. I believe we are all builders in our own way, and this series is dedicated to stories and lessons from builders of all types. Founder's Field Guide is part of the Colossus family of podcasts, and you can access all of our podcasts, including edited transcripts, show notes, and resources to keep learning at joincolossus.com.

• 2:13Speaker 01

  Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

• 2:39Patrick O'Shaughnessy?

  My guest today is Will Ahmed, founder of fitness wearable company Whoop. What started as a business plan in 2011 has evolved into the 24/7 health tracking device you'll often see on athletes across professional sports. During our conversation, Will and I discussed how his own backstory ties into the founding of Whoop, the key design decisions they made in the ultra-competitive wearables market, and how the company grew slowly before inflecting in recent years. Will will share some awesome details on health tracking and what it might look like in the future as a preventative tool rather than simply a tracking tool. I hope you enjoyed this great conversation with Will Ahmed.

• 3:18Patrick O'Shaughnessy?

  So Will, maybe the right place to start here is the actual founding story of Whoop itself. This is kind of one of the classic X number of years to become an overnight success stories. I love founding stories of businesses, like why you started it, what motivated you. Maybe you could begin by telling us that founding story.

• 3:33Speaker 02

  Yeah, I mean, a lot of the origin for Whoop came from, I think, my own passion as being an athlete, just always being into sports and exercise, generally speaking. I was someone who used to play really a dozen different sports growing up, and I ultimately went on to play squash at Harvard. And the experience of being a college athlete proved to me that I knew very little about how I trained or how my body was getting fitter, whether I was prepared for a match or a game. And so that just somewhat naturally led me down a rabbit hole of physiology research. I was someone who used to overtrain where you get fitter and fitter and then you sort of fall off a cliff. It's the ultimate betrayal in sports, along with getting injured.

• 4:15Speaker 02

  And so I got interested in what could I do personally to prevent overtraining? What could I measure about my body? What did it mean to train optimally? How did rest and recovery play a role in performance or in training? And I read something like 500 medical papers while I was an undergrad at Harvard. And what was interesting about that physiology research is that there were indeed metrics that you could measure that could give you a real sense for your body and the status of your body. And there were a couple of observations I made about those metrics. One, those metrics typically required obtrusive and in my opinion antiquated equipment to measure them. And two, they weren't all revolved around exercise.

• 4:57Speaker 02

  There was a real focus, I think, this would have been around 2010, you could say, while I was doing some of this research, I was maybe a 19 years old college student. And there was a real focus on just exercise and more is more. Could you do a two a day? Could you do a three a day? And yet, the metrics that I found fascinating often were being taken outside of exercise or while you were sleeping or while you were even at rest. And so that I thought was quite interesting and I was surprised that no one was really talking about it. And so from there, I took a class at, I believe it was MIT's business school. That was how do you take an idea and turn it into a business plan? Which was really appropriate need for me at that time because I really didn't know how to start a company.

• 5:42Speaker 02

  I had worked a little bit in finance. After my freshman year, I worked at a hedge fund. After my sophomore year, I worked at a great investment bank called Allen and Company. After my junior year, I worked at a great private equity firm called Lindsay Goldberg. And I think internships are great at showing you what you may not necessarily want to do as much as showing you what you do want to do. And so I got the sense that finance wasn't going to be the right path for me. And separately, all I could think about was this idea for measuring the human body. And by fall of my senior year, which would have been end of 2011, I committed to starting Whoop.

• 6:18Patrick O'Shaughnessy?

  So what did it look like at the beginning? Because I'm always interested in, so you've got this kind of big problem space you're interested in. How did you narrow down what to focus on in terms of measurement? And what to focus on in terms of form factor to start? Because those things, obviously, they're related and you can't do everything, especially as a young entrepreneur. So how did you deliberate? What went into your decisions to focus on, say, HRV or recovery early on?

• 6:43Speaker 02

  Well, my calculation was that the notion of optimal training was really just a balance between strain and recovery, which is to say that if your body is well recovered, you want to put a lot of strain on it. If your body is less recovered or run down, you want to put less strain on it, or maybe not put any strain on it. And so that got me very focused on this idea of how could you measure strain and how could you measure recovery? And all the research that I did was then through the lens of what could contribute to measuring strain, what could contribute to measuring recovery? And the process of doing research also got me more fascinated by recovery, because I felt like there was

• 7:27Speaker 02

  a real focus in sports and in exercise, stress and strain, but there was less of a focus on recovery. And this even happened for me when I would go talk to coaches and athletes. Whenever I asked coaches and athletes what they would want to be able to measure, they got very focused on being able to measure more about exercise. It could be video analysis, it could be sweat analysis, it could be location, it could be more nuanced heart rate monitoring. And yet, when I asked them what their problems were, they always came back to availability, some notion of an athlete being injured or not prepared for the game. They overtrained or they weren't ready to go. And so I thought there was a mismatch between the solutions

• 8:12Speaker 02

  that these potential customers were telling me and the problems that they were describing. And there's a good nuance there for entrepreneurs listening to this. I think that prospective customers are very good at describing their problems. I think that it's the entrepreneur's role to figure out the solutions to those problems. And my bias to listening to this problem and also thinking about my own experience was that I really needed to understand recovery. And recovery ended up being a combination of physiological metrics and really accurate sleep analysis. And it's worth noting that the original vision for what we would measure was like a straight line. It took, you could argue, eight, nine years to actually build what we originally envisioned.

• 8:59Speaker 02

  But the paper that I wrote in 2011 was titled "The Feedback Tool: Measuring Intensity Recovery and Sleep." And the three main pillars on Whoop today are strain, recovery, and sleep. And that's now going on close to 10 years later. So from a vision for what this thing was going to measure and do, it was a really straight line. And a lot of other things about the business were a bit of a zig and a zag, like I think many startup founders would describe. But the core vision of what does this measure and why does it measure it was understood from day one.

• 9:30Patrick O'Shaughnessy?

  Before we go deep into the business part of this story, I would love to understand for the audience those three things and the science behind them in a little bit more detail. So recovery, strain, sleep, three really important things. How did you decide what to use to measure those things? What is it about those three things that matter? Maybe we could take them one by one. You can start wherever you want, but walk us through those three key things that Whoop is centered around.

• 9:55Speaker 02

  Well, the way that Whoop functions today, just through the lens of strain, recovery, and sleep, is that it's trying to live a step ahead of you. I felt like the problem with physiological measurement or data collection in general was it was overwhelming amounts of information without a clear, concise point of view on you should do this. And so I wanted to create a system that lived a step ahead of you. And again, back to this idea of balancing recovery with strain, Whoop sets up your whole life to try to stay a step ahead of you on this daily cycle. So you wake up every morning with a recovery score from 0 to 100%, which is red, yellow, green. We'll come back to what makes that recovery score accurate, but the notion is that that score is going to tell you how prepared your body is for

• 10:40Speaker 02

  strain. Then, over the course of the day, Whoop is telling you how much strain you've accumulated. That could be in the form of exercise, could be in the form of stress, it could be in the form of daily activity. And Whoop will essentially be telling you to keep going, or hey, you've accumulated enough strain for the day.

• 10:58Speaker 03

  Whoop may even say, hey, you shouldn't put any strain on your body. Like, in a lot of ways, Whoop is the first fitness product to tell you not to exercise. And at the end of the day, Whoop looks at the strain that you've accumulated, and then it'll tell you how much sleep you need for tonight to recover for tomorrow. And then you get the sleep analysis, and that leads into a new recovery and so forth. So that's the daily cycle of Whoop, which, again, is designed to live a step ahead. There's also a weekly cycle that looks at how well those variables are being followed and how they're interacting with one another. Are you, in fact, training properly? Or is your body in a state of optimal? Are you getting enough sleep? Are you sleeping consistently? And then there's even a monthly feedback loop,

• 11:40Speaker 03

  which will look at more detailed analysis of various behaviors and lifestyle decisions that you might be making in your life. So, okay, you took melatonin seven out of 30 days before you went to bed. Is that helping you sleep better or worse? And looking at that across, again, 70 or 80 things that you might want to track. Everything from alcohol consumption to a new diet to meditation to even relationships or prescription drugs. So that, in a nutshell, is what Whoop is doing, is it's creating daily, weekly, and monthly cycles to give you feedback and to try to give you an actionable sense for what to do. In terms of strain, recovery, and sleep, each has a variety of different physiological metrics that make it up.

• 12:24Speaker 03

  Recovery is probably the single most unique and complicated thing that Whoop brought to market. This idea that you just wake up with a color that's telling you how ready you are to go. And that encompasses a combination of heart rate variability, resting heart rate, respiratory rate, and your sleep quality. And we can go into each one of those with as much detail as you'd like. I would say that heart rate variability was the thing that, for me, as a student, just reading about this space, really jumped off the page. Heart rate variability, for people who aren't familiar, it's a lens into your autonomic nervous system. Your autonomic nervous system governs your body. And it's really a measurement of the time between successive beats of the heart.

• 13:09Speaker 03

  If your heart's beating at 60 beats per minute, it's not beating every second. That's a pretty counterintuitive concept, but there's variability in the amount of time between beats. So it might beat at 1.2 seconds, and then 0.8 seconds, and then 0.7 seconds, and then 1.3 seconds. And it actually turns out that that variability... Is a good thing because it's a sign that your autonomic nervous system is in balance. Your autonomic nervous system to geek out for half a second is this relationship between sympathetic and parasympathetic activity. So sympathetic is activation. It's what makes your heart rate go up, blood pressure up, respiration up. It's what's happening when you're thinking about something or you're exercising or even when you inhale, that's sympathetic.

• 13:53Speaker 03

  Parasympathetic is all the opposite. So heart rate down, blood pressure down, respiration down. It's what helps you fall asleep. When you exhale, that's parasympathetic. And what you want is for every sympathetic, for there to be a parasympathetic response. That's a sign that your autonomic nervous system is really in true balance. And the more in balance your sympathetic and parasympathetic, the higher your heart rate variability. And so heart rate variability is a phenomenon that really dates back to the seventies with the invention of the electrocardiogram and also the early proliferation of heart rate monitors. And it was fascinating for me to read about the studies that had been done on it.

• 14:35Speaker 03

  Now, mind you, they weren't big studies, but Olympic powerlifters were using heart rate variability in the eighties to determine how much weight they should lift on a given day. I was like, wow, that's pretty fascinating. I've never heard that. The best cyclists in the world were using heart rate variability to determine when they woke up in the morning, how hard they should train that day, whether their body had properly recovered from their last go. You know, Tour de France cyclists, I was like, wow, I'd never heard of that. Cardiologists were using heart rate variability to determine whether a former heart failure patient was at risk for a heart attack. I was like, wow, that's powerful. The CIA has even used heart rate variability for lie detection tests.

• 15:18Speaker 03

  So I said to myself, okay, this is a pretty fascinating statistic. Why is it not mainstream? And it turned out largely because of the technology required to measure it. For the most part, it required an electrocardiogram to measure, and that's twenty, thirty thousand dollar hospital equipment. And how could you make it something that was far less expensive to that and available to the masses? And what could that then do for athletes and then humanity at large? So that got me really excited. And we'll probably talk more about sleep in a little bit, but I'll just simplify this in saying that the first thing we needed to prove, starting

• 15:59Speaker 03

  summer of 2012, was that we could measure heart rate variability accurately from the wrist, not invasively. And so I think a lot of building a company from scratch is figuring out what you need to prove at what stage. That was the first thing we needed to prove, was that we can build technology that can measure this thing that medical literature proves is relevant, and do it in a non-invasive way that's never been done before.

• 16:25Patrick O'Shaughnessy?

  Can you tell the story of how you did prove that, especially in hardware? I'm always fascinated by shrinking a $20,000 cost and probably form factor that's larger, down to something much smaller and much, much cheaper. How did you attack that problem?

• 16:39Speaker 03

  Yeah, it's first worth noting that I had really good partners from day one, or at least from starting in summer of 2012. John Capalupo, our chief technology officer, and Aureliani Nicolai, our lead mechanical engineer, both joined me that summer and are co-founders of Whoop, and enormously brilliant in each of their own way. John studied a lot of the hardest computer science and math classes at Harvard, and he was a sophomore when I met him. So he was probably 19 years old when we first started working together. And it was funny, we started working together that summer, and I said, you know, it'd be great if we could prototype the hardware for these things faster than we are today. And he said, I've got this guy living on my couch, actually, Aureliani. Something didn't

• 17:24Speaker 03

  work out with his job. He's from Romania. And somewhat serendipitous, but next thing you know, Aurelian comes down to the Harvard Innovation Lab, and he had manufactured all these interesting prototypes at various points in his Harvard career. So he was a very talented mechanical engineer, especially for rapidly prototyping early engineering projects, which in 2012 was a fairly unusual skill set. I mean, today, 3D printers are much more popular. But back then, it was very unusual to meet someone who was exceptionally good at high-quality 3D printing. And that happened to be exactly what Aurelian was really gifted at. So John was the math and science whiz, Nikolai was the hardware whiz,

• 18:07Speaker 03

  and I at least thought I had some perspective on what we should measure and why and what we were going to do with it. And we looked at a variety of different ways to be able to capture heart variability from the wrist. Some were pretty far out there, like even listening to various audio that was going to be coming off of your body. And we explored some really crazy stuff. But we ultimately felt that photoplasmography, which is effectively shining LED underneath your skin, was going to be the best way to do it. And so then, from there, it was building prototypes that could shine this light and then testing our algorithms for interpreting that light into heart rate or heart rate variability against gold standards.

• 18:50Speaker 03

  So we bought an electrocardiogram, we used heart rate chest straps. I mean, today, Whoop has collected over a million data sets of Whoop sensor data against these various gold standards. But back then, we were basing it on one data collection at a time, which is funny to think back on. And so you're tweaking algorithms against really noisy data and trying to get that data to look like what an electrocardiogram would tell you.

• 19:21Patrick O'Shaughnessy?

  What have you learned since then about hardware product roadmapping and improvement? Like, in what ways has Whoop most improved as a piece of hardware? And how do you think about projecting that into the future and running an organization where that matters?

• 19:34Speaker 03

  I think the key with hardware is you have to have a really strong point of view on why you're building it and how it's going to function when it exists. Hardware is really not a deal where you're iterating in real time. Hardware is, this is how I envision this thing working perfectly in the real world, under a lot of different scenarios. And having a somewhat uncompromising point of view on that, because once you actually start going to build hardware, there's so many things that pull you away from that original vision. There's the size related to it, there's the cost related to it, there's the trade-offs. I mean, that's why I also go back to have a really clear point of view on why you're building it.

• 20:19Speaker 03

  Whoop has always had a very clear point of view on what we do. We want to be the best tool for measuring the human body. We're very focused on health monitoring and we're great at all the things that we do for all the things that we don't do. You can't make a phone call with a Whoop strap. It doesn't have a high-resolution screen, it doesn't have a microphone, it doesn't have a speakerphone, certainly doesn't have apps on it. You're not going to flag an Uber with your Whoop. And I bring those things up because in the process of building hardware, someone's going to say, "Oh, well, what if it vibrates to tell you you've got an email?" Or, "Well, I talked to a customer and they wanted to tell the time, maybe we could put the time on there somewhere."

• 21:04Speaker 03

  There's all these things that come up that pull you away from what is that core reason for building your hardware? And I think that Whoop has been successful in the wearable space because we had a very narrow and very strong perspective on why we were building hardware. Now, we took risks elsewhere within building hardware. So, for example, we felt so strongly that continuous data, Patrick, was the key to health monitoring. I mean, continuous in the sense that you wear the product 24/7. We felt so strongly that that was important that we invented a modular charger.

• 21:38Patrick O'Shaughnessy?

  I remember putting it on for the first time, very unique.

• 21:41Speaker 03

  Yeah, so you can slide on this battery pack that charges your sensor without you ever taking the sensor off your body. And mind you, we made that decision at a time when the company was still pre-revenue, still hadn't launched, was burning too many venture dollars. And that was going to make it take longer and cost more. But again, it goes back to why are you building the hardware? We wanted to have our own hardware so we could control everything about the system. So we knew every data point that was collected. So it was by far the most accurate and so it could be worn 24/7.

• 22:16Patrick O'Shaughnessy?

  Do you have a sense for what percentage of people do that, that actually wear it 24/7?

• 22:20Speaker 03

  Yeah, I think we look more specifically at the percentage of people that wear Whoop for over a minute in a day and wear Whoop for over 18 hours. And I believe that those percentage points are about 2% or 3% apart. So if someone's wearing Whoop in a day, they're very close to wearing all the time, which is something we're quite proud of.

• 22:43Patrick O'Shaughnessy?

  I love the idea of like what you don't do being really important for hardware and not getting sucked into like scope creep or something. If you think about the early days of the business side, we'll probably talk more about some of the science and the data, et cetera, as we go here. But let's just assume we've got this great thing in these three categories and it's super valuable to people. What were some of the early lessons or big breaks on the business side? How did you start to figure out how to get this thing into market in ways that made unit economic sense and in ways that would allow for big growth and learning? What were the early lessons there?

• 23:16Speaker 03

  Well, making Whoop a business was actually, I think, in hindsight, the hardest thing that we had to overcome. And it may in part be that I'm a first time CEO. Whoop isn't just the first company I started. It's my first full-time job. So I just had maybe less experience with it. But I think, given how many wearables have failed in this space, getting the business model right wasn't trivial. Our origin stories were in sports and they were in sports for two reasons. One is that We felt that professional athletes would need this data the most and therefore be by far the most logical early adopters and maybe be willing to pay more for it than your average consumer.

• 23:59Speaker 03

  And two, I was deeply inspired by Nike as a company, still am. And I felt that Nike did the best job of any brand of making their products aspirational in large part through the lens of who wore their products. The feeling that you had from Michael Jordan's shoes or from Tiger Woods's fist pump that red Nike shirt on. Those were things that really affected me as a young person growing up. And I aspired to build Whoop in a similar way to how I believe Nike was built, which was that if you can authentically get the best athletes in the world to wear your product,

• 24:43Speaker 03

  you can in turn build a real brand. And people often ask me about competition and how the competition's evolved. In those earlier days, let's call that 2012 to say 2014, I was much more nervous about what big sports apparel brands were going to do in this space than I was what tech companies were going to do. In 2010, if you asked me by 2020, who's going to own the wearables space, I would have guessed it would have been a large sports apparel brand because they're so good, for the most part, at telling an aspirational story around health and fitness. Now, fortunately, they've turned out to not be very good at building technology, right?

• 25:26Speaker 03

  And you've seen Nike enter and exit the space, Adidas enter and exit the space, Puma enter and exit the space, Under Armour spent over a billion dollars, I think, with limited success. So they haven't been that successful. And part of what was core to our DNA in building Whoop is that we wanted Whoop to grow up to look more like Nike than IBM. And a lot of our strategy for working with professional athletes first revolved around that. There's one major difference, which was that we refused to sponsor athletes. We did not want to pay athletes to wear Whoop. And in some ways, it was a gut check for me on whether the product worked.

• 26:07Speaker 03

  Because I felt like if the product could actually measure recovery and tell you whether you're prepared and help you understand your sleep for the first time in your life, if you're one of the best athletes in the world, wouldn't you be willing to pay for that? And by the way, if it couldn't deliver on all that value, there was no amount of money I thought I could pay an athlete to wear something 24/7 that they didn't get value out of. And so that was a stubbornness that started in the earliest days of the company. And look, it led to two of our first hundred users were people like LeBron James and Michael Phelps. And in some ways, working with these very high-profile athletes, it gave us, I think, a couple of extra years to figure out our business model because investors and others

• 26:50Speaker 03

  gave us credit for being this kind of cool, cutting-edge technology before we had figured out the business plan.

• 26:58Patrick O'Shaughnessy?

  How did you get to those athletes in the beginning? This is a sales question. To what do you attribute that success?

• 27:04Speaker 03

  The secret to getting to anyone high-profile is to figure out who in their life has a big influence over them that other people don't know. So in the case of professional athletes, that is certainly not their agent or their coach, family members, because everyone knows those people and it's going to be a hard path to actually getting to the athlete. In 2014, the personal trainer was a very underrated person in a professional athlete's life. Today, they have maybe big Instagram followings and they've become a little bit more sexy, if you will. But back then, it was a bit of a thankless job. And it turned out that the personal trainers for people like LeBron James and Michael

• 27:47Speaker 03

  Phelps spent way more time with them than almost anyone else in their life. And so the path to getting to athletes of that caliber was to get their trainers interested in Whoop. And by the way, that was the right entry point as well from a technology standpoint, because the trainers needed to like it and figure out how they were going to use it. It reminds me of one other nuance that we had in building Whoop, which is that we always wanted to be a tool for coaches and trainers. We didn't want to, out of the gates, try to replace them. And when you create a disruptive technology, you have to decide how disruptive you want to make it. And we very intentionally did not want to disrupt that equation, which is to have a trainer competing with our technology.

• 28:28Patrick O'Shaughnessy?

  Yeah, and so I'm sure that that's continued, that you are a complement to an awesome fitness regimen, or sleep regimen, or whatever. In the early days, I liked this idea, you got more credit because of the profile of your customers. At some point, you have to start scaling, both hardware production and marketing, and all the things that would go with a business like this. What did you learn in the second phase about marketing? What counterintuitive or interesting lessons stand out? Once you got that original entree, what then started to work? Because from my perspective, that's used Whoop and became aware of it at a certain point, it seems to have followed a fairly exponential, like, awareness curve. So I'm just curious how much of that was payoff from that early work versus other additional things that you've learned about marketing?

• 29:11Speaker 03

  Well, we entered the consumer market at the end of 2016, early 2017. And we were selling Whoop for $500. It was a one-time fee. It was one of the most expensive wearables on the market, if not the most expensive. And what we saw from people who bought it is, over the course of the next 12 months, they actually continued to wear and use it. There was some fear, I think, from investors or other people that, can you really use the same metrics to monitor a LeBron James that you can use to monitor an everyday executive or recreational enthusiast? And our belief, which is now proven to be true, is that you could.

• 29:55Speaker 03

  So the fact that people were still really using the product and not taking it off.

• 30:02Speaker 03

  Was a big breakthrough in that of itself. If you look at the success or failures of companies like Fitbit and Jawbone and others, they did a phenomenal job distributing their products. I mean, I think Fitbit is one of the best distribution stories through the last 20 years. The fact that they were able to 5X their units year over year for that long was truly amazing. The problem is that they won the wrong game. They won distribution, they didn't win product. And they had these crazy drop off rates. Within three weeks and within three months, an overwhelming percentage of people that had bought the product were no longer wearing it. And we didn't have that problem. We had a problem in that people weren't buying that many of them.

• 30:46Speaker 03

  And we were still really, really tiny in the grand scheme of things. So that's where we started thinking about our business model. It's also true that we looked at what was going on in the public markets. At that point, Fitbit was a publicly traded company and trading, I want to say between one and two X revenue, which isn't great. And Peloton, which wasn't a public company yet, but was in the private markets, was trading as high as 20 times ARR. And I said, gosh, wouldn't you rather grow up to look like Peloton than Fitbit? So that was one thing that just stuck out to me was how much more credit you get as a business if you have a subscription versus if you have one time hardware. On top of that, our hardware cost of goods was coming down.

• 31:28Speaker 03

  And that's a little bit of a notion of just building a company and scale and working at supply chain and manufacturing for quite some time. But our cost of goods was declining to a point where we could all of a sudden start to be decreasing the amount of money we made upfront. When we were selling for $500, it cost us between $250 and $300 to make the hardware. So it wasn't like we were trying to gouge our consumers. It was just really expensive to make the tech. And so over time, that started to come down. And we saw people were wearing it for a long time and we wanted to be more of a subscription business. And so in May of 2018, we transitioned the whole business to being a subscription. And essentially said, look, we're going to bet on our technology and our product and our analytics.

• 32:12Speaker 03

  And give people the ability to try Whoop for a dramatically lower price. And if they fall in love with it and we continue to add value to their life, then it'll be better for both parties in the long run. And so that transition was a unique business model and one that really resonated for the consumer market, which is why it feels a little bit like Whoop has been this overnight success, although we've been working at it for quite some time.

• 32:39Patrick O'Shaughnessy?

  What do you think was the most interesting observation during that period? I started after the move to subscription. What were the inflection points or the moments that stand out most in memory for six or 12 months of that timeframe?

• 32:54Speaker 03

  Well, Whoop as a subscription, which is to say that there's no notion of buying hardware.

• 32:59Patrick O'Shaughnessy?

  You get the device as part of the subscription.

• 33:01Speaker 03

  Yeah, the hardware comes free with the subscription. There wasn't a single analog that we could find to that. So in a lot of ways, we were building it on the fly and learning about it. We started with you could just buy a six-month membership for $180. And if you liked it, you would continue on paying 30 bucks a month at the seventh month. And then over time, we decided you should be able to buy for 12 or 18-month memberships and get it at a decreased rate. And then we realized that even the people who are getting it at the lowest rate, which was at that time $180, were still using it after the sixth month. So we said, well, what if you could sign up for only $30, but commit to six months?

• 33:45Speaker 03

  And that in itself became a huge inflection. Because then you had people who could go to the website and be like, oh, this is powerful. It's like a 24/7 coach. It's going to tell me how much to sleep and improve my recovery. And all these interesting people wear it. Okay, I'll try this. And then you go to checkout and it's like, oh, wow, it costs 30 bucks and they're going to send me a free piece of hardware. That was pretty disruptive and that created a really powerful inflection in itself. And once you get to a place where you've got a really good funnel, I mean, this gets back to the marketing question, but a really good funnel of get people to your website, explain the product and have a certain percentage of people you know are going to check out and buy it.

• 34:28Speaker 03

  Then marketing becomes really fun and it becomes very execution oriented.

• 34:33Patrick O'Shaughnessy?

  Why do you think the big apparel companies failed at this?

• 34:38Speaker 03

  I ask myself that sometimes. I think if I were an advisor to them in 2010 or 12, I would have encouraged them to think about it through the lens of their origins. The book Shoe Dog is a great book. Phil Knight writes about creating Nike. What's interesting about that book is about two thirds of it are the first five or eight years of the company where it's a bit of a mess. And I think it's called Blue Ribbon Sports for most of the book. And the thing that comes through, at least from my experience, is how much Phil Knight describes that first shoe and that shoe needing to be able to make

• 35:19Speaker 03

  people run faster and that obsession with getting it lighter and Bowerman doing bizarre things with irons and other things to try to shrink it.

• 35:29Patrick O'Shaughnessy?

  The waffle iron for the sole.

• 35:30Speaker 03

  Yeah, the waffle iron. And so it was all about performance. And I think that if you're a sports apparel brand and you're going to create something that you want your highest performing athletes to wear first, you need to start with performance. And I think that the sports apparel brands lost that in the evolution of the technology.

• 35:53Patrick O'Shaughnessy?

  In the world of performance, one of the things that has always interested me most is feedback loops, that behavior change can become unlocked with tighter feedback loops, especially with data feedback loops. And you mentioned, I can't remember the number you said, but let's say, you know, drinking and there's a couple of the things that melatonin was the example you gave. With all that data, what are some of the most interesting things that you've learned? One thing I hear all the time that was true for me is that you just drink way less. Drinking makes you sleep like shit and you just realize it really quickly. What are other examples like that? What has it been like to see that data accumulated and learn lessons in real time?

• 36:29Speaker 03

  Yeah, we describe this phenomenon as you can only really manage what you measure. And the reason that people dramatically decrease alcohol consumption is one example, is that they quickly realize just how much it affects their Whoop data. In another way, it's a fun way for people to realize that Whoop has some level of intelligence.

• 36:48Patrick O'Shaughnessy?

  Yes.

• 36:49Speaker 03

  Because. You do everything exactly the same, but you have two drinks and the next day whoop says you're run down. You're like, how does it know that I did that? But it just, the reality is that unfortunately alcohol is quite bad for your autonomic nervous system. Now, there's a variety of examples like that that are quite common. Another one is phone usage. So, looking at your phone before you go to bed, people track that quite regularly in whoop. And not surprisingly, we see that if you're staring at your phone right up until the minute you go to sleep, it tends to disrupt your sleep quite dramatically. How much time before you go to bed and eat? So typically, we see if you eat within two to three hours of bed,

• 37:31Speaker 03

  that pretty dramatically messes up your sleep. Most people gravitate towards having darker and colder rooms. They'll notice, whether they put it in the app or they notice it anecdotally, that if they're in a warmer room, it seems to dramatically change their sleep performance. There's a lot, actually, that people seem to discover about what they do from a routine standpoint right before bed, maybe even just a certain conversation they had with their partner or their spouse that screws up their sleep. So I think it gets people more mindful. And the big wins are related to, I think, understanding sleep.

• 38:10Speaker 03

  If you think about whoop as a, with mass market appeal, it's helping people understand sleep. If I asked someone who doesn't measure their sleep, how many hours of sleep did you get last night? Often what they'll say is, I went to bed at 11, I woke up at 6, so I got seven hours of sleep. That's pretty good. Now, the reality, and you know this, Patrick, is that that person spent seven hours in bed. Seven hours in bed doesn't translate to seven hours of sleep. Within the seven hours they spent in bed, they spent time awake, they spent time in light sleep, they spent time in REM sleep, and they spent time in slow wave sleep. Now, light and awake are virtually irrelevant for your body's

• 38:53Speaker 03

  performance. REM and slow wave sleep, that's where all the magic happens. REM is when your mind is repairing cognitively. That's when you're dreaming. So people who say they can't remember their dreams, or they don't know if they had a dream last night, they might not be getting enough REM sleep. And obviously, for probably a lot of the people listening to this podcast, getting REM sleep is super important because they want to have high cognitive function. And slow wave sleep, that's when your body produces 95% of its human growth hormone. So this idea that you get stronger in the gym is really false. You know, you actually tear your muscles in the gym. You repair them during slow wave sleep, which is when you get stronger. So slow wave sleep is so critical. Now, let's go back to the person who spent seven hours in bed.

• 39:37Speaker 03

  That person may have gotten a total of 30 minutes of REM and slow wave sleep, or that person may be getting over five hours of REM and slow wave sleep. Now, getting 30 minutes of REM and slow wave sleep total versus five hours, it's so hard to understate like what a profoundly different life that is. I mean, the person who's getting five hours is happy, high performing, high functioning. They are living a great life, I promise you. If you meet someone who gets over five hours of REM and slow wave sleep, they are living a great life. I don't think I've met someone who gets that much REM and slow wave sleep, who isn't living a great life. If you meet someone who's getting 30 minutes, unquestionably, they have issues going on.

• 40:21Speaker 03

  And the reality is there's a ocean between 30 minutes and five hours in terms of how much REM and slow wave sleep you get. Mind you, the biggest excuse that people give for not great sleep is I don't have time. We're not talking at all about spending more time in bed right now. All we're talking about is take the time that you're in bed and make it better. Make it more valuable, get more bang for your buck. That's the thing I've personally focused a lot on as an entrepreneur, and it makes the world of difference in virtually everything you do in life.

• 40:51Patrick O'Shaughnessy?

  How would you describe your philosophy of partnerships? So I really liked how you described when creating the hardware, what not to do, being a key part of the strategy. And this is what you provide to consumers and users of the product fits into a bigger scheme, you know, what they eat and what they sleep on. I'm an investor in Eat Sleep, you know, as an example. There's all these complementary things, even the fitness apparel brands. What is your philosophy on business partnerships? And how did you develop that philosophy?

• 41:22Speaker 03

  I would say the core thing that we think about with partnerships is, does it feel authentic? And A lot of what we learned from our own success of working with professional athletes and teams and having this bias towards not sponsoring athletes and not paying them to like our product, but rather if you see a whoop on a professional athlete's wrist, it means that they are getting value out of it. A lot of what we learned from that was the power of authenticity. And if you look at some of the partnerships that we've done, often they've grown from this authentic, organic place. And then the partnership side is to amplify it. So what would be a good example of that?

• 42:06Speaker 03

  We saw within CrossFit that if three people within a CrossFit box started wearing whoop, within three months, the whole box would be wearing it. Okay, that's a great grassroots growth story. And it turned out that even the best CrossFit competitors were wearing whoop to figure out how to train for the CrossFit Games and whatnot. So, fast forward, we're now the official wearable of CrossFit and we're working on all sorts of different content to create around how CrossFitters can best use whoop. About two and a half years ago, maybe three years ago, I realized that a lot of PGA Tour golfers were wearing whoop. Whenever I was watching golf, which I like to do frankly, I would see a whoop strap

• 42:51Speaker 03

  on a new golfer's wrist. And I didn't know any of those golfers at the time, but something was just happening organically. And by early 2020, let's say, I would estimate about 60% of the PGA Tour was organically wearing whoop. Now, sometimes they'll wear it under their sleeve versus on their wrist, so you can't always tell if they're immediately wearing it. But that was again, a huge organic growth. And then in the summer of 2020, one of the professional golfers on tour, Nick Watney, realized that he had COVID-19 from his whoop. And it led him to getting tested and it led him to testing positive and it led him to dropping out of the tournament.

• 43:33Speaker 03

  And within 24 hours, Jay Monahan and the PGA Tour procured over a thousand whoop straps for every professional golfer and every... Caddy, every media member, every staff member to create what they thought would be the safest bubble. Now today, Whoop is the official wearable of the PGA Tour. I use this as examples because it started in this very authentic place. The version of this that I'm also very excited about right now is what we're calling Whoop Live, which is bringing heart rate data and other physiological data live to the broadcast. I've long thought that professional sports need to innovate more on the way that you watch and consume their sport.

• 44:15Patrick O'Shaughnessy?

  It's like the data coming off a Formula One car.

• 44:17Speaker 03

  Exactly. And we've started doing this now in golf, where you'll see professional golfers' heart rate in real time while they're playing over certain shots, which I think is really cool. And we're going to do this hopefully across a lot of different sports properties. One thing you probably recognize, Patrick, is that there's a difference between Whoop the brand and Whoop the product. Whoop the brand, back to our earlier conversation, is trying to live in high performance, anchoring around sports, anchoring around really the most aspirational, highest-performance space

• 44:59Speaker 03

  in the world, because we think that that tells a great story around health monitoring. It makes health monitoring cool, rather than, a lot of health monitors are almost a stigma on someone's body. We want to make health monitoring cool. And Whoop the product actually needs to appeal really to anyone who puts it on their body, where I don't care if you're a 13-year-old girl or an 85-year-old man, if you put on Whoop, it's going to tell you something valuable about how you can improve your health or improve your performance.

• 45:28Patrick O'Shaughnessy?

  Can you tell me the story of the paddle over your right shoulder with a little military insignia on it in the spirit of partnership?

• 45:35Speaker 03

  Well, we've gotten to work with the Navy SEALs quite a bit, which is, I think, one of the most fascinating organizations out there. And because we did a lot of work with the Navy SEALs, they actually sent me this paddle that I've got here in my office, which is a paddle they give to everyone who becomes a Navy SEAL. And it's effectively an inexpensive paddle that demonstrates the resourcefulness or resilience that you need in order to operate as a SEAL. So, anyway, I'm quite proud to have been able to support that community. Whoop is certainly very proud that we get to work with a lot of Navy SEALs and grateful to have this paddle in my office.

• 46:11Patrick O'Shaughnessy?

  Ever put Whoops on SEALs going through Hell Week?

• 46:14Speaker 03

  We have, yeah.

• 46:15Patrick O'Shaughnessy?

  And what's the story, if you're able to share? Can't be pretty.

• 46:20Speaker 03

  It's probably a lot of what you'd expect, yeah. Look, I mean, the interesting thing about Whoop, and take a population like the Navy SEALs, is that the Navy SEALs are in that outlier category of being able to push their bodies past where their bodies should be pushed. And that's an amazing capability to have as a mindset, for your mind to be able to control what pain you feel or don't feel, and to be able to tell yourself that you can do anything, even under circumstances that may be bad for you. The problem with that is that your mind can take your body to a place it shouldn't go. I experienced a less serious version of that, just as an athlete who overtrained, but that's a form

• 47:05Speaker 03

  of it. You see this probably all the time with executives, entrepreneurs who burn out. We both do. Those are examples of hard-driving people pushing their bodies to a place that isn't quite right. And what Whoop does a very good job of, not during Navy SEAL Hell Week, because that is what it is, but what Whoop does a very good job of is it gives a hard-charging person permission to let themselves rest.

• 47:33Speaker 02

  And it becomes a third-party objective perspective on, hey, you need to get some more rest, dude. Chill out. And so for a lot of people, I think that's been one of the most valuable aspects of Whoop.

• 47:46Patrick O'Shaughnessy?

  If we come back to product and the original strain, recovery, sleep, I am fascinated by where this might start to go. So you mentioned HRV was hard to measure early on. It seems like every year we're getting, whether it's pulse ox or blood oxygen levels or something else, we're going to be able to measure more and more about our body biomarkers that matter for our health and for our things like fitness. So the product's about staying ahead. How do you, as a business, stay ahead of what that roadmap might look like? And I'd be fascinated to hear what it might look like. What might we see at the consumer level in the next decade?

• 48:24Speaker 02

  Well, I think it'll be even sooner than the next 10 years. I think the advantage to V1 of wearables being, to put it politely, underwhelming, is that most people are drastically underestimating how dramatically wearable technology is going to change everything about their health and the healthcare system. I truly believe that health monitoring has the potential to dramatically increase human lifespan and turn a lot of curative costs within the healthcare system into preventative costs. Lifespan, because it's going to show

• 49:06Speaker 02

  people the three to five things on a daily or weekly or monthly basis that they could tweak or change that'll make them healthier. And by really simplifying that information, it's going to create healthier lifestyles. The healthcare side of it, I mean, all the problems in healthcare and the reason it's so screwed up is it's all curative costs. If you can shift a curative cost to being a preventative cost, then there's enormous savings associated with that. And the promise of health monitoring is it can tell you something's about to happen before it happens. You're someone who's at risk to having cardiovascular disease, or you're going to have a heart

• 49:49Speaker 02

  attack in the next year, or you're about to have a heart attack, go to the doctor. The dumbest day of the year is when you go have that annual checkup with your doctor. It's on a random day, and the first thing you do when you go in is they put a pulse oximeter and a heart rate monitor on you. I mean, that is so antiquated and so ridiculous. And it takes into no consideration, what are the 25 things that just happened a moment before you put that stuff on? Are you super caffeinated? Are you well rested? Or whatever? So I think that continuous measurement of the human body will be able to predict an enormous number of disease states, illnesses, et cetera, before or at the early onset of

• 50:34Speaker 02

  them happening. And instead of going to see a doctor on one random day a year, or after some terrible thing has happened, you'll know when you should go see a doctor and why.

• 50:46Patrick O'Shaughnessy?

  What are the vectors? You measure what you manage, like you said earlier. What are the ones that are most interesting to you? So let's say HRV is in the bag. We can now measure our HRV at reasonable cost, and it's really valuable. What are the things that are the equivalent of that $20,000 thing that you first approached back in 2012 today that will become cheaper, that are valuable, or maybe even further along that curve, but things beyond HRV that are going to be good for us to measure on a continuous basis?

• 51:15Speaker 02

  Well, some of this I have to keep a little closer to the chest, Patrick, because we're working on a lot of it. But I don't think that it requires too much imagination to think about the 10 to 20 things that are being measured when you go into a doctor's office, or when something bad happens, and to assume that all of those will be able to be measured in the form of non-invasive wearable technology.

• 51:43Patrick O'Shaughnessy?

  To what extent are data and software relative to hardware a key part of all this story for Whoop specifically?

• 51:51Speaker 02

  A lot of it's the algorithms. I forget who said it, but they said if you're serious about software, you should build your own hardware. It's so true because by controlling your own hardware, you control the sampling rates on a lot of data collections. One very popular early venture capital perspective I remember getting from skeptical investors was like, oh, you should just build the software and it pulls data from all the different hardware places. The problem with that is that every hardware is collecting data at different frequencies and related and with different accuracy. And if you don't quite know how

• 52:32Speaker 02

  accurate the statistic that you're getting is, it's very hard to then build a score on top of it or a feedback loop on top of it. What's so empowering about controlling the whole end-to-end equation, everything from the sensors to the rate at which they sample data, to the rate at which they transfer that data, to the algorithms that then turn that data into something like a raw metric, say heart rate or heart rate variability or slow wave sleep, to then the algorithms that sit on top of that that turn it into a recovery score or a sleep performance score, to then the algorithms that sit on top of that that tell you, well, because you got this sleep score, it's clear that

• 53:15Speaker 02

  you shouldn't have melatonin last night. I mean, there's just so many layers within that that by controlling all the layers, you have so many different places where you can be innovating. And from where I sit, that's a really empowering technology stack to get to interact with. And I can't quite imagine how you could build very innovative technology without controlling that entire stack.

• 53:39Patrick O'Shaughnessy?

  I'd love to ask a few questions about company building, given the unique story. Starting with leadership, you gave a great example earlier of what I mean about being very stubborn on the vision and the purpose that you're doing this in the first place as an arbiter of major decisions. But if leadership's about recruiting and decision-making, ultimately, what have you learned in a unique business model like this one about effective leadership for yourself personally? How have you gotten better?

• 54:07Speaker 02

  Such a good question, and I think about it a lot. I would say around when I was 24 years old, 25 years old, Whoop had probably raised tens of millions of dollars at that point. The company was about 25 people. And I felt internally like I was really failing as CEO. And I felt like I wasn't managing stress well. I could feel almost a chaotic energy about me. And around that time, and largely because of it, I learned how to meditate. I got into transcendental meditation, and I've been doing it every day since. And so that was one mechanism that changed my life, first of all, but certainly changed

• 54:52Speaker 02

  how I thought about leadership. Because it forced me to be much more contemplative. And the thing about meditating is that it allows you to look at yourself in the third person. So it's as much about the value that you get from the 20 minutes of meditating as how it sort of changes the way you approach the rest of your life. And I found that, for me personally, I would all of a sudden hear myself saying, "Will's about to get angry," before I got angry, or "Will's about to do something rash," before it happened. And so that became a really helpful tool in just how I thought about things.

• 55:31Speaker 02

  Around that timeframe, I also realized the difference between the company's success and my own personal growth. In part because I was, I think, a young founder. But I think this is the case for many entrepreneurs, unfortunately. You tie your self-worth, or you tie your own performance, very directly to the performance of the company. If Whoop had a good day, I was performing well. If Whoop had a bad day, I was performing poorly. If Whoop was failing, I was failing. And that's not a very productive way to run a company. And you really have to work very hard to try to separate those two paradigms.

• 56:13Speaker 02

  Whoop can be performing great or not so great, independent of how I'm growing. And once I got very focused on how can I get a little better as a leader every day, or a little better as an entrepreneur every day, or a little better as a manager every day, it really helped pull me out of the performance of the business. And so that was another tool that I would say overall improved my leadership. And we can talk about how the leadership changed, but a lot of this, as you can probably tell, came from an enormous amount of self-reflection in the process of building the company.

• 56:45Patrick O'Shaughnessy?

  What has changed most like on the ground? Tactically, if I were to come shadow you for a week in 20 whatever versus today, what would be the most notable, visible differences?

• 56:57Speaker 02

  Probably the way I handle feedback or disagreeing, dissenting points of view. I think in those very early days, such a high percentage of feedback that I got was negative or some form of a disagreement with just the core vision, that it felt very core to my identity almost. And so I put up a real wall to negative feedback. And someone told me it was a great piece of advice. You should really try to hear people's feedback. You don't necessarily have to listen to it. And that's, I think, a very helpful lens in general for leadership, which is try to absorb feedback and wrestle with it and then decide what decision you want to make.

• 57:40Speaker 02

  But you'll get even far more credit if it's clear that you're someone who's paying attention to different points of view. And then over time, I guess you get so comfortable with feedback, where now it's almost like a source of excitement for me when someone on my team disagrees strong with me about something. Because then I get to, makes you ask yourself this question. Why do I feel so confidently about this thing being one way or another? And that creates its own interesting debate.

• 58:07Patrick O'Shaughnessy?

  Do you think about defensibility in the business? Is that something you're actively trying to, especially now at your size, proactively manage? Meaning be intentional about things that you might do that will make it harder for others to follow in your wake?

• 58:23Speaker 02

  We do, although I wonder how intentional it is. I mean, Whoop is really focused on continuing to build at this question of how we can dramatically improve people's health. And also the fact that Whoop is a subscription. It forces us to be releasing new features at a pace that is, I would argue, much faster than other people in the space. We've benefited, I would say, in large part by not being that affected by what competitors in the space do. For example, every wearable that came out, I think in the last eight years, or at least

• 59:07Speaker 02

  most of them, did step counting. We just felt it wasn't a core metric. We didn't think it was physiologically relevant. I can talk about why I don't think steps is particularly relevant. So we never measured it. And that's one of maybe 20 examples. The other common one being having a screen that put us on our own path and made Whoop unique. And so I wouldn't say that we're super affected by competition. We rarely have a meeting to talk about something that competition has done. When Amazon very directly knocked off our design, I mean, you never want to have a trillion dollar company.

• 59:44Patrick O'Shaughnessy?

  Talked about that a little bit.

• 59:46Speaker 02

  Yeah, you never want to have a trillion dollar company meet with you for investment and then two years later, launch a direct copycat version of your technology. And when it happened, there wasn't even remotely a feeling of crisis. I mean, it was something that various members of the management team were almost laughing about because of how clear it was that they had copied us. And I guess that comes from a place of confidence that we feel like we're building something that's differentiated and feel like we're building something that already has a lot of layers of defensibility.

• 1:00:17Patrick O'Shaughnessy?

  Why no screen? This is like, to me, the most interesting one. I remember liking being able to look down at the Apple Watch and see a heart rate when I was running, when I was doing a lot of running. And that's like such an interesting design choice that so stands out. And obviously, there's a lot of thought behind it. I'd also love to know why I should stop looking at my step count. But why no screen? But it's a really interesting one.

• 1:00:38Speaker 02

  So the second you have a screen, you're a watch. And there's a lot of questions around what additional value do you get if you're a watch? But it also forces you into a much narrower design lens, which is that you're a very risk-based product. And you're therefore also competing with all the other watches. I have a lot of respect for watches. I really don't like the idea of competing with watches, whether that's your Rolex or your Timex or a smartwatch, like an Apple Watch. It's interesting how many people wear a Whoop and an Apple Watch. And there's a separate lens that we look at, which is less so screen or no screen.

• 1:01:21Speaker 02

  It's this question of building wearable technology to be cool or invisible. Those have always been the two paradigms that we've focused on. And you'll find that a lot of wearable technology is stuck in the middle in what I would sort of describe as no man's land. And cool is really developing something that aesthetically resonates. I mean, if you're wearing something 24/7, that says a lot about you. And it needs to be something that you feel good about wearing all the time and jives with your color preferences or your aesthetic. And a lot of the way Whoop has been designed is to allow for an enormous amount of customization.

• 1:02:02Speaker 02

  I mean, you can wear Whoop in about 100 different variations and different colors and different materials. And so that has been our lens towards cool. How do you design something that people want to wear all the time? Separately, there's a question of whether people wear a watch 24/7 or not.

• 1:02:20Speaker 03

  The other frontier is invisible, which is how do you make this technology effectively disappear on your body? And that's the area that we've really spent years focusing on, and we'll have more to announce about it in the future. But the general idea is that it disappears. And I think once people realize that the technology can actually disappear on their body, it'll again make more sense why it doesn't have a screen.

• 1:02:46Patrick O'Shaughnessy?

  I love that. Any closing thoughts on some aspect of Whoop's journey as a business and as a product that we haven't talked about that you think would be valuable for other entrepreneurs out there to hear?

• 1:02:59Speaker 03

  One is thinking about how you run the company at relative stages. And I would ask entrepreneurs to think about whether they're at a stage where they're more of an individual contributor or more of a manager. Because that becomes a painful transition often for entrepreneurs. And it's something that you want to at least be aware is happening. A stage of 20 people, you actually can still have an enormous output as an individual contributor for the organization.

• 1:03:29Speaker 03

  Somewhere between 50 and 100 people, that percentage of being an individual contributor versus a manager really starts to tilt towards manager. And now Whoop is 500 people, and most of my role needs to be being a manager. But you'll notice that tension occurs when you're still thinking of yourself as an individual contributor or you're diving deep on specific decisions that you should be delegating. Another way to look at this equation is through this notion of speed and control. So speed is how fast you as an organization are moving. How fast are decisions being made? How fast are features being released? How fast are marketing initiatives getting done? Go, go, go. What is your pace?

• 1:04:13Speaker 03

  Control is effectively how much you as a leader or a manager feel like you're influencing or aware of all of the decisions that go on in a day. And I realized years ago that

• 1:04:30Speaker 03

  I wanted Whoop to move at a really uncomfortable pace. In fact, it's a reason that we hire people. It's a reason that we fire people. It's core to our DNA. If you talk to someone who's been at Whoop for six months or 12 months, and before they worked at a slightly larger organization or even another startup, they will tell you that the amount that they've seen happen in six or 12 months is just orders of magnitude faster than what they've seen at other orgs. So it's core to our DNA. And the challenge with wanting to move at that pace is I'm also someone who has a high attention to detail. And so it's almost a little bit in conflict. You have to actively pull yourself out of things in order to allow the company to accelerate and go at that pace. And so I've given up control in a lot of ways

• 1:05:14Speaker 03

  so that the company can continue to move at this really uncomfortable pace. And that certainly wouldn't be the right decision if I were running a bank, when there's probably other different forms of technology that need to be somewhere else on that control pace spectrum. Thinking about your role and thinking about your business on some of these scales, I think is a healthy exercise.

• 1:05:36Patrick O'Shaughnessy?

  I'm really interested in the idea of pace in companies. What do you do to make it possible? What system settings are there in the business that are geared a certain way that allow for more speed and pace?

• 1:05:50Speaker 03

  Well, you have to, first of all, really empower people. I mean, you have to emphasize that we hired you to make decisions. And we say that on day one. I mean, you're here to make decisions. You're not here to form committees. And you have to have some also, I think, patience or acceptance that things are going to break along the way. Certain bugs may occur. A press release may go out that you haven't even read. You have to accept that it's going to be uncomfortable. But as long as you build that into the DNA, the appropriate way to think about mistakes and bugs

• 1:06:31Speaker 03

  and review processes, as long as you've got that in a good place, I think culturally, it allows you to push the envelope elsewhere. Now, of course, there's certain clients or certain categories of things where you may need to have a slightly different set of checks and balances. But often a manager can establish that with his or her team to say, hey, this thing, we're going to need to do an extra review process on or whatnot.

• 1:07:04Patrick O'Shaughnessy?

  How do you have the most fun in this environment? What goes on today where at the end of the day you're like, damn, that was a fun day?

• 1:07:12Speaker 03

  Honestly, running whoop is like a dream job. It's the most fun company. I mean, I have a limited understanding of what it's like to work at another company, but the people are exceptional in that because we've built so much from scratch. On one end of the spectrum, we're doing signal processing algorithms with engineers who previously worked on how to detect bullets being shot and how to develop missile launching systems. So on one end of the spectrum, you've got these really brilliant engineers. And on the other end of the spectrum, you've got people designing apparel and soft goods and how to figure out what's the right thread to optimize for sweat versus swimming.

• 1:07:53Speaker 03

  And somewhere in the middle, you've got the marketing of all that and the fascinating professional athletes or executives or influential people that we meet on a daily basis who happen to use whoop because the product resonates for them. It's an environment that's constantly pushing my left side and right side of my brain and often at the same time. So, and then the product, the product is a product that's, it does have a double bottom line. We're not just selling a thing. It's a technology that our members write into us every day has changed their life, whether quite literally it has saved people's lives or they've gotten benefits and now they sleep more or they quit this thing. So it's a very energizing company to work for.

• 1:08:37Speaker 03

  And it's also an interesting case study in momentum. A number of years in building whoop, it was very hard. It was hard to get the technology built. It was hard to sell it. It was hard to find the right business model. It was hard to raise capital. And if you can figure out ways to still have momentum during all of that stuff that's really hard and painful, when all of a sudden a bunch of things are going your way and you still have that same attitude, it just feels like the wind has turned and it's at your back and you feel like you're moving really fast. It's awesome.

• 1:09:12Patrick O'Shaughnessy?

  Why should we not measure steps?

• 1:09:13Speaker 03

  Okay, we'll pick on steps for half a second. So the first question is, are you actually measuring steps? If I move my wrists a half a dozen times, I probably get six steps. So there's just a real question of whether or not the movement of your wrist correlates with the number of steps that you take. Let's put that aside for a second. Let's assume that we get a very accurate step count. On a day where your body is rundown, a perfectly reasonable thing to do might be to go for a long walk. Well, if you go for a long walk, that gives you a high number of steps. So even though your body was rundown and you did the right thing, you got a high number

• 1:09:57Speaker 03

  of steps, that there's this break in the relationship between what's the status of your body and what's your step count number. On the flip side, your body might be peaking physically and you crush a cycling ride or you crush a weightlifting workout. Both of those would be examples of things that gave you fairly low steps, but had very high strain on your body. So again, there's a disconnect between the status of your body and what might be recommended from the point of view of strain and what the steps are actually telling you.

• 1:10:34Patrick O'Shaughnessy?

  I ask everybody the same closing question after a really cool conversation. I love just thinking about where this product might go. What is the kindest thing that anyone's ever done for you?

• 1:10:44Speaker 03

  Well, I think that my parents raised me with a lot of love and encouragement, and I think that they were very kind. My father immigrated to this country when he was 22 from Egypt with very little. And my mom is very intellectual and very thoughtful. So in a way, my parents blend this sort of street smarts and book smarts. And I think they taught me at a young age how to apply those filters to the world and they showed me that in a loving way. And I think that that did me a lot of good in becoming an entrepreneur, long before I ever knew what an entrepreneur was.

• 1:11:16Patrick O'Shaughnessy?

  Well, this has been so much fun. I learned a ton. I knew some going in about the product and the business. I know a lot more now. Thanks so much for the time.

• 1:11:23Speaker 02

  Thanks, Patrick. I really enjoyed it.

• 1:11:25Patrick O'Shaughnessy?

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