James Park is on a mission to make you fitter, faster, stronger and more productive. His company Fitbit has put its activity trackers on millions of wrists in the nine years since it was founded, and won endorsements from US presidents, real and fictional: Both Barack Obama and Kevin Spacey, of US political drama House of Cards, are devotees.
Fitbit’s wristbands track everything from heart rate to steps walked to hours slept in any one day. Fitness addicts use them to log every aspect of their life, and they are a common incentive for those looking to shed surplus pounds.
But Park, who co-founded Fitbit and led it to one of 2015’s biggest technology IPOs, believes that wearable technology is only at the cusp of its potential. Suitably enthusiastic for a man leading a company encouraging people to resist their increasingly sedentary lifestyles, Park – a former Morgan Stanley analyst, investor and one of a series of tech entrepreneurs to have dropped out of Harvard – is bullish about what Fitbit can accomplish, despite growing competition.
The rise of the wearable
In the last couple of years, a torrent of wearables has gone on sale, with technology groups seeking the next cash cow amid softening smartphone sales. Last year, the Apple Watch was released, with the company’s executives touting its advanced health features, while Samsung, Microsoft and Xiaomi all make their own smartwatches and fitness bracelets.
Fitbit, though, is ancient by wearable standards: it was founded in 2007, and released more than a dozen products since. More than 40m of Fitbits have now been sold, and the devices, able to spot unusual increases in heart rate, have been credited with saving lives andspotting pregnancies ahead of time.
Park says Fitbit’s relentless focus on health and fitness has enabled it to carve out a real market as other companies still try to figure out exactly what wearable technology should do. “We’ve known that pretty much from day one of the company that [fitness] was really the killer app for our devices, and for nine years we’ve invested heavily in making Fitbit almost the Kleenex of the category,” Park says, pointing to statistics showing it has almost 30pc of the wearables market, against no more than 15pc for any of its rivals.
From start-up to IPO
The company is not shy about its prowess: multiple consumer awards are crowded onto a desk at the entrance to Fitbit’s offices, in the technology mecca of San Francisco’s South of Market district. And unlike many of its neighbours, who have continued to gorge on private equity cash, Fitbit took the leap onto the public markets in June.
On its first day as a listed company, shares surged 20pc, valuing the company at $4.1bn and valuing Park’s stake at $600m. The months since then, however, have not been so kind. Shares have lost over half of their value since Fitbit’s IPO, amid a widespread tech malaise. Park says this hasn’t affected the company. “For us there’s the stock price and the financial performance, the stock price isn’t something we can really control but financially we’ve been doing really well,” he says.
“Year over year we grew 149pc in revenue and we’ve been profitable for a while, so I don’t think it’s really changed the culture of the company, we still think very long term.” One event that weathered the company’s share price was January’s unveiling of the Fitbit Blaze, a fitness-focused smartwatch, which added more advanced features such as the ability to read text messages and control a smartphone’s music.
Fitbit had previously stuck to wristband-style devices, and the release of a watch, seen as a perilous step into territory occupied by Apple, was not welcomed. But Park is adamant that the Blaze – two thirds the price of Apple’s smartwatch and with a longer battery life – can compete, and says the Apple Watch, which boasts thousands of different applications, can be overcomplicated.
The Apple Watch
“I think it’s a great product and Apple’s a great company, but it’s a product that probably does too much,” Park says. “Really our research has shown that people who search for an interest in the Apple Watch do not overlap with people who search for and are interested in Fitbit. I think the biggest problem with the category today is they do so many things and it hasn’t been really clearly communicated to people why they should need one of these devices.”
Park may have a point: Last month, the smartwatch maker Pebble, which had entered the market before many of its bigger rivals, said it was cutting 25pc of its staff. Apple Watch sales are believed to be solid, if relatively unspectacular. But the Blaze, focused on fitness, has shown good signs in its first week on sale.
Park points to its position on Amazon’s top sellers lists, and last week, Fitbit said sales of the watch had reached 1m in the first month, while a new wristband, the Alta, had reached the milestone in three weeks.
Analysts have, however, worried that the wearable craze could wear out, rather than lifting off. Studies have suggested that many people ditch their fitness trackers after the novelty wears off – the digital equivalent of a New Year’s gym membership – but Park says people are actually becoming more engaged with their Fitbits: 72pc of people who bought one in 2015 were still using them at the end of the year, an improvement on a year earlier.
He also dismisses suggestions that activity trackers could be a niche product for a fitness-obsessed subset of the population. “If you look at the aggregate of all of our users, actually they’re not really that fit, the average Fitbit user is a little bit overweight; they are more active than the average population but we think that’s because we’ve managed to increase their activity levels over time.”
As well as selling directly to consumers, Fitbit has a growing corporate business, with major companies, largely in the US, offering the devices to staff in the hope that a more active workforce will mean more productive employees and lower health insurance costs. Fitbit also sees itself as having a wider part to play in the battle against severe obesity. “We feel that our devices can play a huge role in addressing lifestyle-driven conditions, that’s really our first step in addressing the much broader healthcare issue,” Park says.
How to make wearables smarter
That could be a huge market. But Fitbit is competing against the might of Apple and others, and knows it will have to keep improving its technology to stay at the front of the pack: everything from blood pressure monitoring to analysing DNA, and extra smart features such as payments are all tentatively suggested as potential new areas by Park “If you look at all the things that encompass consumers’ health it can include heart rate, blood pressure, in the future it might be genomics and so on,” Park says.
“And while you’re wearing these devices, I think there’s huge opportunity for them to connect and interact with the broader world whether its richer notifications or integration with the cars or homes or buildings or payments or [identity] authentication.”
He is naturally tight-lipped about how many of these are being developed in Fitbit’s research labs, but says there are “things in multiple different phases”. The company’s spending on research and development has ballooned from $27.9m in 2013 and $54.2m in 2014 to $150m last year, suggesting a major expansion of scientific ambitions. Fitbit is also looking at ways to better use the data it collects – many fitness gadget users find that while their devices collect a lot of information, that alone doesn’t help them become more active: “A big part of our R&D going forward is our software intelligence that gives people insights and coaching,” Park says.
If wearables really are set to take over, Fitbit has had a strong headstart. But it can’t afford to stand still.