Just over 10 years ago, I had my first conversation about the idea that would become Strava with serial entrepreneurs Mark Gainey and Michael Horvath. They talked to me about their bold objective of building the world’s largest community of athletes.

Since then, they’ve achieved that goal, touching over 90 million athletes and logging over five billion activities across more than 30 sports in virtually every country in the world. While subscriptions have always been a part of Strava, in the past year, they’ve moved some of their most popular features behind the paywall and an introduced a bunch of new features for paying subscribers.

I recently interviewed David Lorsch, Strava’s CRO for the inaugural D2C Summit, a new conference I co-created with Global Media Association FIPP, and want to share that conversation with you here on the podcast. We discussed how Strava determined what should be free and what should be paid as they build a subscription business around a social platform, and how to guide members to make the most of their membership.

Listen to the podcast here:

How Strava Built a Subscription Business within a Social Platform with Strava CRO David Lorsch

Over 10 years ago, I had my first conversation about the idea that would become Strava with serial entrepreneurs, Mark Gainey and Michael Horvath. They talked to me about their bold objective of building the world’s largest community of athletes. Since then, they have achieved that goal, touching over 85 million athletes and logging over five billion activities across more than 30 sports in virtually every country in the world.

Subscriptions have always been a part of Strava. In the past year thought, they have moved some of their most popular features behind the paywall and introduced a bunch of new features for paying subscribers. I’m so excited that we have David Lorsch Strava’s CRO with us to share how they have thought through what should be free and what should be paid as they build a subscription business around a social platform.

Welcome, David. Can you briefly explain what Strava is and who it’s for?

Strava is a social platform for athletes. We believe we are the largest sports community in the world with over 85 million athletes in 195 different countries. We call anybody who joined Strava an athlete. Our philosophy is that if you sweat, you are an athlete. Essentially, our mobile apps and our website are there to connect active people every day.

Our goal is to give people simple, fun ways to stay motivated, and a lot of it is around being able to compete against yourself, and other people if you are not in the same place at the same time. We believe Strava is for all types of athletes, all sports, and regardless of what device or digital fitness service you may be using. Strava is very much a platform, not just for athletes but for the entire ecosystem around digital fitness as well.

The original goal of a great community and great experience for members, how has that affected your business model decision-making being a community?

[bctt tweet=”There’s nothing more motivating than being able to share your athletic experiences with other people who are engaging around it. -David Lorsch” username=”robbiebax”]

I would start with our mission, which has been unchanged since the beginning, and that is essentially what we say to connect athletes to what motivates them and help them find their personal best. Our orientation has always been around the community and connecting people together to help them stay active. Our philosophy is very much that people keep other people active, and there’s nothing more motivating than being able to share your sport and your athletic experiences with other people, who are engaging around it.

The whole idea of Strava is it should be better if your friends were on it and we want to make it easy for people to get their activities into Strava since they are the lifeblood of Strava. We call them our atomic unit. That led us to want to make Strava very easy to join, frictionless, and ultimately deciding that we should have a freemium type model where at least, it was easy to join Strava for free.

The second thing that’s worth pointing out is that one of our other core values is authenticity. We believe that it’s very important, not surprisingly, to build things that athletes will use, and that athletes feel very natural using. That means we have leaned heavily towards a model where our primary customer is the athlete, which led us in the earliest days to introduce a subscription as our main business model so that the athlete is our paying customer, unlike certainly other social platforms or social networks that were primarily ad-based.

SSP 29 | Social Platform Subscription Business

Social Platform Subscription Business The Strava mission has remained unchanged since the beginning and that is to connect athletes with what motivates them and help them find their personal best.

 

You said subscriptions have always been a part of Strava, but along the way, you have had partnerships and sponsorships. How do you think about the role of those different constituents in the context of a bigger community and how they support your mission?

Subscription has always been our main business back since we introduced it in 2010, after the company started in 2009. It has been around since the beginning. We have experimented with other revenue models along the way. We had a commerce business at one point and we have had different kinds of digital sponsorship where we partner with brands who also effectively are our customers. We still have a business there.

What we have come back to is that it has to serve the athlete first and foremost. If there’s an opportunity to build something great for an athlete and then we bring a partner or a brand into the experience where they get some value out of it, and then we can create something at the intersection of it essentially. That could be an interesting model for us and it can be complementary to our subscription business.

The main way we do that is we have a product we call Challenges in Strava, which is essentially the idea that Strava or a partner can challenge you or a group of athletes to achieve an individual or collective goal. We now have sponsored challenges where brands like New Balance or Lululemon will sponsor a challenge in their own name and challenge our athletes to a goal.

We consistently hear from our athletes that they love these challenges. They find it very motivational. We know the brands that are sponsoring them were also getting value from them, but they are 100% opt-in and it’s all about giving the athlete the choice about whether they want to engage or participate as opposed to putting an ad in front of them, regardless of whether they wanted it to be there or not.

We have a lot of media organizations on, and one of the challenges is how to balance the needs of different audiences of your sponsors, advertisers, or partners, with those of your core community, readers and listeners. What’s interesting about Strava is that while you had many different kinds of organizations and individuals involved in your community, it has always been about athletes at the very center.

Very much and that is our core belief is that the athlete is first, and everything else has to work for them.

Before 2019, can you share why people were subscribing and then why some very loyal members chose not to pay to subscribe?

Before 2019, we were very focused on community growth and we were trying to get the biggest flywheel going we could in terms of people joining Strava and sharing activities. In 2019, we had grown from a product that has a good product-market fit with cyclists, which was where we started, to about 50 million athletes on Strava around the end of 2019. Cycling and running are our two largest individual sports. They were equal in size at that point but we had a significant portion of our athletes sharing other sports among the 32 different types of sports that we supported.

Generally, the way we thought about subscription at that point was that if there was a feature that was a single player in nature, where it was something that allowed you to understand your own activity better. For example, we have a feature called relative effort, which allows you to understand how each individual activity you do contributes to your overall fitness and to track your fitness over time. That would be something we would put into our subscription because it was very much something that was not social and didn’t relate to the network itself.

We were at the end of 2019 when we talked to our athletes about why they subscribed or didn’t subscribe. If you ask the people who subscribed, they would generally tell you, “I subscribed because I love Strava,” not because of some individual feature or set of features that they were paying for. On the flip side, if you ask our free athletes why they didn’t subscribe, they would say, “I love Strava but honestly, the free product is so good. Why would I ever bother to subscribe?” They couldn’t tell you about what the value proposition was that was behind the paywall.

[bctt tweet=”What you’re paying for on Strava should be what you love about Strava. And that got us to a shift in our paywall.-David Lorsch” username=”robbiebax”]

At that time, it was very clear, they love Strava. We had an NPS score in the mid-70s. It was clear to us that there was a lot of value in Strava as a whole, but we didn’t have a clear value proposition and a clear paywall distinction that was bringing those people who love Strava across the paywall. We set out to say, “What you are paying for at Strava should be what you love about Strava.” That got us to a shift in our paywall, which you are going to want to talk about.

At the end of 2019, you decided to double down on subscriptions. I know that there were a lot of discussions as you thought about the right way to make subscriptions more valuable, more useful for your most engaged members. Can you bring me back to November, December 2019, and some of the biggest questions and risks that were on your mind as you thought about how to implement this decision? What key role models you considered and I would love to get to where you ended up as well.

SSP 29 | Social Platform Subscription Business

Social Platform Subscription Business: Strava’s product development is oriented around building a subscription service that athletes are going to rave about.

 

We looked at where we were and we felt very strongly that we had something inside of Strava that people would pay for but it wasn’t part of our subscription then. We set out to think about how do we want to configure our paywall? We spent a lot of time looking at other digital subscription businesses. We looked at 30 different companies. Everything from Tinder to The New York Times. We generally broke down the world into three models that we saw as prevalent. The first was what we call the add-on model, which was very much where Strava was then.

That’s the idea that you have a great core product and there are these incremental premium services that are on top of it that you subscribe to. LinkedIn is probably the best example of that among the companies that are similar to Strava. There was a middle ground, which we call the freemium model. Obviously, freemium is used very broadly, but it was the idea that you have a core use case and it split right down the middle in terms of what’s free and paid. If you want to take advantage of that core use case, you have to become a subscriber. Spotify is probably the best example of that. Their core use case is listening to music. If you love music, at some point you are going to subscribe because of the advantages that you have as a subscriber in that model.

The last one was looking at more limited access or hard cap type model, which is what you see in a Dropbox or even The New York Times. That was a model that we did not feel was a good fit for Strava because it limited potentially people’s ability to participate in the network and contribute activities. We ended up in this middle ground of freemium and we realized that some of our core competitive features and the most prominent ones were something we call segments and segment leaderboards.

It made sense to go behind the paywall, and since that was a very iconic and core feature of Strava, certainly, there was a risk to us because we knew people loved it. It was something people probably would pay for it, but other people were going to be potentially very unhappy, that this thing that they had loved and contributed to a building was now going to be something that was required. You had to have a subscription to participate in it.

Putting a beloved feature behind the paywall, in this case, the segments, but also, this issue that when you have a strong community, which you had invested in for several years. You built this very engaged community. It felt a strong sense of belonging. One of the risks that we see with a strong community is that people feel a sense of ownership.

Certainly, when something changes and it goes behind a paywall, it feels like the promise for the implied contract has been changed, even if that promise was never there. How do you manage the relationships knowing that some of your most loyal and engaged members are going to be disappointed, hurt, outraged that you were taking something beloved and putting it behind the paywall?

The first thing was we wanted to make sure we had pretty clear principles about what we were doing and why we were doing it. The example in the case of segments was it was something where we knew that our athletes had contributed to them because segments are something that our athletes create. Our athletes define a set of roads or paths, and essentially determine that’s an area they want to compete in. From then, ever going forward, everybody who runs, rides, hikes or walks in that segment can compare their own performance or their performance against everybody else.

The idea was that the real value in segments and this is the thing we had to clarify in our own heads is the competition between the athletes and the analysis that we can put on top of it and what Strava is bringing to it. While the athletes had contributed to creating them, the real value was in what Strava put on top of them. We broke the world up into free versus paid distinction in terms of our philosophy.

Basically, our view was that contributing activities, browsing routes, connecting to other athletes, that category was free, but analyzing your own activity, participating or using a route that we created or suggested for you, or competing as opposed to just connecting with athletes, was going to be on the paid side. That was the rubric that we decided to move forward.

We will get to what the community reaction was but going into that, we were very aware of this phenomenon of when something is free and you make it paid, it’s very different than when you have something that is paid and you increase the price. I don’t know if you have heard the story about the Red Cross had donuts during World War II, but it’s a story that I discovered when we were going through this paywall change. The short version is basically during World War II, the GIs were given free donuts by the American Red Cross.

[bctt tweet=”When something is free and you make it paid, it’s very different than when you have something that is paid and you increase the price.-David Lorsch, Strava” username=”robbiebax”]

At some point, because the British Red Cross was asking the British soldiers to pay for their coffee and donuts, the US Department of Defense decided that the American Red Cross should equalize the situation to make the GIs pay for it. For many years later, you talk to veterans and they would still say that they were angry about what the Red Cross has done because they were charging for donuts. This mentality of something is free and then you move it into this new category of paid is a very different thing and we were very wary that that was going to upset the applecart going into it.

I’m fascinated by the whole psychology of free. There’s an excellent book called Free: The Future of a Radical Price by Chris Anderson, that gets into a lot of the details about if something is free, people feel completely different than if you even charge one penny for it. Your point about being clear about why you are charging for things that used to be free. I think it’s important for the audience. A lot of people are thinking about what should be free, what should be paid and the importance of having a philosophy.

The second point is the importance of communicating clearly what you are doing and why you are doing it is critical. In May of 2020, in the heart of the global COVID-19 pandemic, you announced that you were moving a bunch of new features, as well as a few very popular existing ones behind the $5 a month paywall. What was the reaction to that? What was maybe unexpected as a result of the timing of that decision being right in the middle of COVID?

I will get the timing and then I can talk about the reaction. The timing was interesting because we started talking about the end of 2019 when we planned this. We had a plan to make this change in April. We were working very hard on the product changes that were underneath this. In early March, the whole world changed dramatically. That was very hard and tragic for many people but we were looking at it from a Strava perspective and just saying, “We’ve got this plan to make a paywall shift.” That’s asking people to pay for something that they hadn’t been paying for, which at this point, obviously, the economy was also somewhat in a freefall.

We were also watching what was going on with people’s own behavior in the pandemic. One of the things that we wanted to do as part of this paywall shift was not just move things that were free to pay but also add value to the existing subscription by bringing new features to it as well. It wasn’t about moving the deck chairs if you will. It was about showing our subscribers that we were going to continue to invest behind them. If they became a subscriber, it wasn’t just moving things around, but we were going to continue to improve and invest behind them.

The thing that we were launching right before the paywall shifts was a feature we called Suggested Routes, which was the idea that if you are anywhere in the world, you can find a route from precisely the place you are that’s the exact distance that you want to ride, run, walk, hike. A classic use case of that would be if I go to a hotel in a city where I have never been and I want to go for a 5-mile run, and people typically go down to the lobby and they ask for like, “Can you give me a little map that shows me to run?”

They show you and you end up in the parking lot or something.

SSP 29 | Social Platform Subscription Business

Social Platform Subscription Business: Getting free athletes into the platform and engaging them is a different cycle from getting somebody into a trial or getting them to renew.

 

You get lost and they give you the thing, and it’s a 3-mile run. You want to go for a 5-mile run or you want to go for a 7-mile run and it doesn’t work. Here’s this beautiful elegant solution where we can give people the exact distance they want. They can define, whether they want to go to a hilly road, a flat road, etc. Suddenly, the idea of even suggesting to people that they should be out exploring the world feels very in direct conflict with what’s going on outside. We’ve got people telling us that we are on strict lockdown and we shouldn’t even leave our own house.

In that specific case, we decided like, “We are not going to market this feature but we are going to release it into the world because we built it.” We let it out in late March but we were obviously looking at the broader picture of the paywall shift too coming up to the deadline that we would set for ourselves.

As we looked at what was going on in the world, we saw first very strict lockdowns in places like France and Italy, where people literally were not supposed to leave their house at all except to go shopping or go to a doctor. We could see it in our own data. The activity was just plummeting, at least outdoor activity. The indoor activity was going up but it wasn’t near compensating for that.

We started to see an interesting thing going on in some of the countries like the US and the UK where things were not as strict, and people were starting to discover, “I’m working from home. This is a really tough time. For lots of different reasons, I want to get outside, explore, walk around and maybe ride my bike.” Suddenly, you had this huge uptick in activity and people getting outside.

We looked at that and we said, “We are meeting people in a way in the moment,” which is they are looking for motivation. They are looking for ways to connect with other people around their activity. This is not the wrong time to be making this change. It certainly has its risks but we can go ahead and do this, and so we ended up making that shift.

[bctt tweet=”Define clear principles around what’s free and paid, and have a model that you’re clear about.-David Lorsch, Strava” username=”robbiebax”]

Since then, it seems like it has been quite a success. People seem to have responded well to the subscription offer. You have been adding more than two million athletes a month to the community and dozens of new features for athletes as part of this deeper experience, competing and engaging with your data through the subscription. What has changed, if anything, as you have become even more focused on how to make its deeper benefits even more engaging and meaningful?

First and foremost, our orientation now is about putting our subscribers first and especially showing those people that have shown that they love Strava enough to pay us money, that we love them back. We brought a lot of new subscribers into Strava in 2020 and we want to keep them around. The most important way to do that is to show them that you are continuing to invest in the proposition that they are subscribing to. That means our product development is oriented around building a subscription service that athletes are going to rave about, and that’s our standard. We want people to be so excited about it, that they are telling their friends, not just that you should join Strava but then you should subscribe to Strava.

At the same time, we can’t forget about our whole community and our free athletes because that is a source of motivation for many of our paid subscribers. We are never going to have a model where 100% of our athletes are paid. That’s not what we are trying to go. We have to think about that broader network value. We do continue to think about investing in our free service as well, and keeping those free athletes engaged because the free people that joined are going to be the future subscribers of tomorrow.

You have done a lot of work on the member life cycle starting from when they joined as part of the community and taking them through their relationship with you. Can you talk a little bit about what that subscriber life cycle looks like at Strava? How do you think about each of those phases, and what you are measuring and trying to achieve?

It starts with what we call the growth life cycle, and that is bringing them into the network. That’s the first step of people joining Strava. Typically, the vast majority of joining is free. There is an opportunity to start the trial from day one, but most people join us free. Our goal is to get them first and foremost uploading activities, which again is our atomic unit and get them connected to other athletes because that’s where the motivation comes from, and that’s where the experience gets unlocked.

Those are the key things that we think about in terms of activating an athlete on Strava. As you move into the subscription side of it and the subscription life cycle, we think about it in terms of we want to get them into a trial. That’s the way we introduce most people to our subscription. We have people that organically subscribed as well, but the trial is a very effective way for us to get people into subscription because it does allow us then to activate them.

That’s about getting them to start to use the subscription features during those first 30 days, which is our typical trial period. We are focused on can we get them to use subscription features in their first fourteen days as a trial athlete. We spent a lot of time thinking about that, measuring that and how many subscription features have they used in the first fourteen days, which is an important metric for us. That’s strongly correlated with whether they convert from their trial.

Now, we consider them our subscribers but we are focused on that first year because, in any subscription business, the first year is that market in which somebody is a real long-term subscriber. That first renewal period, we view that as the point in which we acquire them because after that the retention tends to be good. It’s about keeping them engaged in our experience and particular subscription features.

During that period, you can’t just focus on the end and trying to wake them up when their renewal date is coming. You have to get them continually focused on it. We look at some pretty nuanced metrics, things like what we call paid days over L28, which is basically for any 28 days, the number of days during that period that a subscriber used a subscription feature. In the ideal world, it would be 100% of those days, they are like 28 out of 28 days. We are trying to move that metric up for any subscriber.

The last stage obviously is hopefully they renew, but we view it as a virtuous cycle. That’s about, “Can we get that subscriber to be an evangelist and to bring other people into our subscription?” I would say we are still early in that part of the life cycle journey for us. We have some new features that we have launched that are behind the paywall around the ability to challenge other athletes in a smaller version of a challenge, where you have to be a subscriber to participate. That’s an example of a way that we are trying to bring people into the subscriber life cycle from other subscribers. We are going to be very much measuring the way that that happens but generally, the way we measure that virility of subscription is by looking at the Net Promoter Score of our subscription, and seeing to what extent people who are subscribers are promoting our subscription when we ask them.

SSP 29 | Social Platform Subscription Business

Social Platform Subscription Business: Strava generates a tremendous amount of data, which provides useful insights both for product development and to help communities understand where people walk, run, and ride.

 

When you talked about that last phase of encouraging evangelism and your work with group challenges, people bringing their friends into the paid features, I appreciate the discipline that you apply to think about each stage and the balance between tracking their likelihood or willingness to refer with creating features that are designed to support that desirable behavior. You have done a good job of balancing those things, the metrics that you used to understand what’s happening and how you are doing. Creating features and a roadmap in the app itself to guide people to get the value that they are paying for to achieve the goals that brought them in the first place, which is so important.

At the very beginning, you were talking about how you have both a free trial and a free membership. You have this freemium model, so I can be free forever, get some great value, and you have many people in your community that does just that. You also have a free trial to the paid features. How do you think about the way those two elements work in your model with the goal of moving people into a paid subscription?

They are related but they are, to some extent, separate in the sense of like if we don’t activate somebody successfully as a free athlete and they are on the platform, connected to other athletes and engaged, their likelihood of taking a trial, converting in a trial or even being a subscriber at the end of the day, when their renewal period comes up, it’s not going there.

We do view those as two separate ways of engaging with and activating our athletes. That growth lifecycle, if you will, of getting free athletes into the platform and engaging them, operates independently of the subscription layer of getting somebody into a trial or getting them to renew at the end of the day. Does that make sense?

I asked because it’s a challenge that I know a lot of people that are participating are facing where there might be a certain amount of value that you can get for free forever, but there are also benefits of the paid offering. It can be confusing to somebody new to your organization to figure out like, “What am I supposed to do? Am I supposed to just dive right into the paid trial? Am I supposed to get acclimated first, understand the value and build habits?” It’s a question a lot of organizations are facing.

I appreciate your insights there. We have a global audience. I know that they are appreciating your story because Strava is truly a global organization, operating virtually in every country in the world. How do you build something global that is particularly out of what is essentially a highly local location-specific activity?

I don’t think we have some secret sauce or playbook that I can say like, “This is the magic.” We have benefited from just the inherent nature of Strava and the way we built it that it’s supposed to be better if your friends are on it. It’s supposed to have virality in the core product itself. Generally, what we have seen is typically where we have grown internationally, there’s some fire that has been lit. Not necessarily by Strava, although we try hard to do that but often by external factors.

Two of our biggest markets that have been successful were the United Kingdom and Brazil. Those were markets that not coincidentally probably lit up for us after the Olympics occurred, in both of those countries. There was some element of people getting excited about the sport and the sports that we support related to those events. We started trying to take that initial fire and then we try and accelerate it through our country’s marketing efforts.

Our playbook is around how we use influencers in the community and people who are prominent athletes. It’s not necessarily professionals. They could just be somebody who’s an organizer of a local club and is very well connected in a city like Paris or London, to propagate Strava out, to try and use what we call our local broadcast network. This has literally hundreds of athletes in each of these countries, to spread the word of Strava through the way that they are engaging with their own community. That’s a core part of our success in local areas and geographies.

The other piece of it is definitely we have seen a lot of success from the press and media, and we have a focused effort there. One of the great things about Strava is we generate a tremendous amount of data, which is very interesting to the press for telling stories about what’s going on with people in their active lives. We also have these incredible athletes on Strava. Everything from Tour de France professionals, including the people that win the Tour de France all the way down to people who might not be professional athletes but are doing amazing things in their athletic life as well. Those things can be interesting to amplify outside of Strava. It’s one of the ways that we have built word of mouth for Strava.

Can you share an example of a data story?

At the end of the year, we do something called “year in sport,” where we look back and we identify the key trends that we are seeing on Strava, and that’s something that we propagate out and share with the press. In the last few years certainly, we spent a lot of time looking at what we saw going on as a result of COVID and the way that people were behaving in their active lives. I think it resulted in a lot of interesting stories, and those are reflected back on how people’s behavior had changed pretty dramatically in a positive way as a result of COVID.

You talked about how you light a fire and how you build a community in a new market. I also know that you think pretty hard about how to localize for culture, attitudes towards subscription, willingness to pay. These are issues that a lot of people are facing as they enter new markets. How do you think about that, the payments and willingness to pay are some of the logistical challenges around particular regions?

Certainly, from a subscription marketing point of view, we are moving to a much more local model thinking about how we introduce promote marketer or subscription to our athletes in a culturally relevant way and aligned with the calendar in their country. There is very much an athlete calendar in each of these countries that tends to move with the sports that are popular and obviously the climate and things like that. We’re trying to move towards more of a model where at least within a specific region, we are thinking about the way that we market our subscription very locally.

The other big opportunity is around pricing, which is something that we are working on of localizing our pricing. Quite honestly, Strava’s pricing is not very well localized, and we know that. There are a lot of places in the world we are overpriced, quite candidly. There are places where we feel like it’s relative to purchasing power and the economy in those places. We are not charging a price that makes sense relative to how we would maximize our subscription, but build the value for our community and our athletes.

The last area, which is interesting, and we are still at the forefront is just thinking about the product, experience as being localized. It gets interesting and pretty nuanced in terms of how we think about it. I will give you one example. In a country like Japan, there’s a very popular format of running called Ekiden, which is essentially a relay race. It’s the most popular format of racing in Japan, not just at the professional level but all the way down to the high school level.

We think about this as something that should be represented in Strava in a way that’s reflective of what’s going on. If people are in an Ekiden race, which is a relay race, we should show you their race and their activities in a way that they are aggregated together and you see what happened. That doesn’t occur in Strava, but we know that would be something valuable in that specific market. It’s not necessarily a format that’s focused outside of Japan. Those are the decisions we have to make of like, “At what point do we make our product localized for that particular way that athletes are using or active in sport in that country?”

I would love for you to share some advice for organizations that are built around community and on a social platform, and balancing the need to grow active users with the need to convert subscriptions. What advice do you have for our readers?

I would go back to saying defined clear principles around what’s free and paid, and have a model that you are clear about. Understand what’s contributing and necessary for the core health of the network, the growth and engagement of the network, and then figuring out where you are adding value to what the members are contributing in terms of their participation and their content. How differentiated is that can you charge for it? That’s what we talked about.

In the beginning, I would say do not assume just because something is social which involves connecting people, competition or any of these sorts of things, it has to be free. For a long time, Strava made the assumption that things that were social in nature inherently had to be free. We have realized that people actually will pay for these experiences. You have to be clear at least in Strava’s case that your focus really is on your subscription.

We have seen that there’s a natural tendency in our product development that if you don’t tell people, “We are focused on a subscription,” their goal is going to be getting this thing in the hands of as many people as possible because they want to see people using the cool product and the cool feature they have built. If you are not being clear like, “We want to build for our subscribers,” there’s a natural tendency to build things, at least within the inside of Strava that are cool for athletes and get them in the hands of as many athletes as possible, which means we don’t charge for them.

[bctt tweet=”Just because something is social, involves connecting people, competition or any of these sorts of things doesn’t mean it has to be free.-David Lorsch, Strava” username=”robbiebax”]

Can you tell us something about the churn rate of subscribers and successful ways to get churn rate down?

Churn rate is probably the most important thing that we are focused on from a subscription business, from a subscription perspective. Our approach to it is about engagement during the subscriber’s term. In other words, getting them to be active and engaged with the features that we know are correlated with retention. It’s really focused on getting them to use features versus trying to intervene at the end.

We do think there are opportunities certainly if somebody is canceling. We don’t actually want to make it hard to cancel. We think that’s an important signal to get if people want to cancel, but if somebody does ultimately cancel, there are opportunities in terms of understanding why they canceled and how you win them back.

SSP 29 | Social Platform Subscription Business

Social Platform Subscription Business: While Peloton and Zwift are hardware-software combined models, the Strava model is hardware agnostic.

 

For us, that’s as big an area as just trying to prevent somebody from churning because one of the nice things about Strava in particular is that because we have a free network, people who canceled their subscription, they don’t leave Strava. They just become a free member. They are still around, and so we have an opportunity to win them back in our subscription.

Do you offer rewards to your members who bring in new members?

We don’t. In the early days of Strava, we did something like that, and it’s something that we are definitely thinking about. It’s a very fertile area. I wouldn’t be surprised if you see something along those lines of the future.

Have you identified an ideal minimum number of social connections for a healthy subscriber? Do you employ tactics to accelerate social connections to make it easier for people to find connections?

Yes, we do. Strava is a vertical network, it’s focused on sports. We don’t find that you have to have a very large network to get the benefit of social motivation that comes from it. We are looking to get you connected to basically two or more people. That’s the goal. Once you get connected to two or more people and you are engaged, as you are alluding to, we are obviously trying to grow your network.

We are very active in trying to use machine learning to understand who are the opportunities to connect with other people in terms of what are the natural paths to finding those people that you would want to connect with. We continue to try and build people’s networks. The average follower group of Strava is twenty people. It’s not like Facebook where you would be having 100 people that you are following.

Which countries are the most active in the world using Strava data as the benchmark?

I’m not sure I know the answer to that off the top of my head. I would have to say that’s probably one that I would have to come back and look into. My sense is I would not be surprised if it was Brazil, just based on what I do know about our data. I don’t think I can say off the top of my head definitively which country that is.

Can you talk a little bit about how you see the health and fitness sector developing, and maybe a little sneak peek of what’s in store for Strava in the future what we might expect?

The really short answer to that would be we have used Strava very much as a platform in the middle of it. That’s what we are focused on is connecting athletes and connecting the broader ecosystem that’s out there. In Strava, we want it to be the center of it. We say our vision is for all the world’s activities to live on Strava. If you think about the broader world, there are a lot of interesting things going on, obviously in terms of digital fitness at home with companies like Peloton and Zwift.

They are interesting business models. They are hardware, software combined models but that’s not our model. Our model is very much one that’s hardware agnostic. We would like to be switched in the middle and we want to play nicely, and have been very successful playing nicely with all these wonderful companies that people are using in however they want to be fit.

Thanks so much, David. That was David Lorsch, Chief Revenue Officer at Strava. This episode was recorded live at the FIPP Direct-to-Consumer Summit and I’m delighted to be able to share it with you here. For more about David and Strava, go to Strava.com. For more about the summit and to access the other interviews with stories from The Economist, Tesla and Nike among others, go to D2C.global. For more about my work with subscription and membership models, go to RobbieKellmanBaxter.com. If you love the show, please leave a review on Apple Podcasts. Mention this episode if you especially enjoyed it. We read all the reviews and we want your feedback. Thanks for your support. Thanks for reading the show.

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About David Lorsch

SSP 29 | Social Platform Subscription BusinessDavid Lorsch is Chief Revenue Officer of Strava, the social platform for athletes and the largest sports community in the world. Strava was founded on the principle that connecting athletes to each other can help them find their personal best and currently serves over 90 million members in 195 countries. Strava is also one of the leading digital subscription services globally. Lorsch is responsible for Strava’s core subscription service, its digital sponsorship business, and leads partnerships, business development, and revenue strategy and operations.

Lorsch joined Strava in 2013 as Vice President of Strategy and Business Development and led the development of Strava’s partner ecosystem to help Strava become the platform at the center of digital fitness. Prior to Strava, he was a Partner with Calera Capital, a private equity firm, where he served on numerous boards in consumer and financial services and established strong partnerships with founders and entrepreneurs to help them develop and execute their strategies.

Lorsch holds an AB in Philosophy from Harvard College and an MBA from Harvard Business School.

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