“Our goal is to teach forever habits.” Joanna Strober has reimagined the youth weight loss industry through her wellness program, Kurbo. Tune in to hear Joanna talk with Robbie about the role of a human coach in a digital program, how to communicate with both parents and kids, and instilling habits in customers for the long term.
Joanna Strober is an entrepreneur and investor who founded Kurbo, the first digital weight loss platform for kids. Joanna grew Kurbo into a subscription business so successful that it caught the interest of WW (Weight Watchers reimagined), one of the biggest names in wellness. She is currently the CEO of Kurbo and a Senior Vice President at WW. Before diving into the weight loss industry, Joanna was Senior Managing Director at Sterling Stamos, and co-authored Getting to 50/50. Joanna earned a Bachelor’s Degree from University of Pennsylvania and a JD from UCLA school of Law.
7:00 – Joanna talks about what triggers people to enroll in subscriptions and what motivates people to make subscription a habit
9:52 – Robbie and Joanna talk about the 7 key areas of competence in a subscription business, and about why WW is more passionate about their subscription mission than their subscription product
16:40 – Joanna talks about Kurbo’s FOREVER PROMISE
17:24 – Kurbo’s “reverse freemium” model, and the power of breaking the mold when it comes to adopting a subscription model
19:50 — Robbie and Joanna talk about customer success, its importance, and what it looks like
23:50 – Joanna explains why human connection is essential and hints at Kurbo’s “Secret Sauce”
27:00 – Weathering negative social media storms
34:40 – The challenges of the launch, scale, and lead phases of growing a business
37:00 – Joanna gives advice to entrepreneurs who want to start a business in THE MEMBERSHIP ECONOMY and investors who want to fund a business in THE MEMBERSHIP ECONOMY
39:22 – Joanna gives advice to smaller companies undergoing acquisition by a larger company
40:20 – Robbie’s speed round
Robbie Baxter: Joanna, welcome to the show.
Joanna Stober: Thank you. Robbie. I’m very excited to be here. I can’t imagine anything more fun.
Robbie Baxter: Me too. So I wanted to start by just giving you a chance to talk a little bit about what Kurbo is and why you found it.
Joanna Strober: So Kurbo was started six years ago, really, at the very beginning of the digital health revolution. I’m not even sure that at the time, digital health was a topic that people were actively discussing. But I have three kids, as you said, and my youngest, excuse me, my middle guy, had kind of developed a weight problem. And at the last time we went to the pediatrician and the pediatrician said, “Well, you know, you really need to start worrying about this”. Thank you very much, and sent us home with really no tools. And I started making a lot of phone calls and try to figure out what I was supposed to do in order to help him. And the one thing that I learned is that there are in person programs. It’s actually I have a crazy statistic for you. There are 37 programs in the country right now that are seen as high quality and 15 million overweight and obese kids.
Robbie Baxter: Wow, I can’t even do the math on that. But that’s like a million patients for every program.
Joanna Strober: Right. So we happen to live near one of them, which is the Stanford Pediatric Ray control program. And they had a really good program. But the issue was it was in person and my son didn’t want to go. And it required me to also leave work to go and I just started thinking like what, why do you have to do a program like this in person when the thing that my child likes most in his life was his cell phone. And it wasn’t clear to me why it couldn’t be offered remotely. And so that’s what we decided to do was we licensed the Stanford program and we spent about a year working with game designers and UX designers and content providers and educators and turning it into a remote program that people could do wherever they were.
Robbie Baxter: And it wasn’t all automated though.
Joanna Strober: No, there’s a coach. So there’s an app and the app has all the education that you will learn in program. But in much shorter snippets, you know people’s attention span are usually about three to five minutes max. And so everything is given to you in very short short snippets of information and also in a fun, engaging way. And then we connect you to a coach. So you connect to a coach once a week and you talk to that coach and they see the information that you’re doing all week. So they see the foods that you’re eating. They see if you’re exercising and then they give you personalized information on how to eat healthier and live healthier based on the information that they gather from the app
Robbie Baxter: So that’s really interesting that you had the digital part, but you also had this very human component. How did you find cool coaches that the kids actually wanted to relate to
Joanna Strober: You know what’s interesting, that’s actually one of our secret sauces, is that kids really like motivation, motivators is my best word for it, that they’re not looking for a teacher. They’re looking for someone who they aspire to be like, and someone who is interesting to them. So we actually recruited a lot of athletes for example. So we have a lot of athletes on our program. We have yoga instructors on our program, we have all sorts of people who like working with kids. You have to have experience working with kids, but people who would be motivational to the kids and that they would relate to in a way that they might not relate to a doctor if they had to go to a once a week doctor’s visit.
Robbie Baxter: So once the kids are in the program it sounds like they like it. They like the coaches, they’re engaged. I would think, though, that one of the hardest things is how you get them into the program in the first place because you know, I was, you know, full confession I was a chubby kid like I would not have wanted to be part of any kind of a weight loss program. And I also even though my mom is a pretty assertive, direct and forthright person, I don’t know how she would have broached the subject of me maybe benefiting from a weight loss app.
Joanna Strober: Yeah, it’s a hard topic, isn’t it. Weight. I mean, It’s amazing what a difficult topic weight is in our society. We have attached so many different emotional meanings to it. One thing we do is we talked to doctors and doctors often are scared to tell a child that their BMI is high or that they’re considered an unhealthy weight because they know the child’s going to be insulted and so instead of feeling like it’s a health issue, there’s they’re scared to bring it up and parents feel the same way; parents look at their kids and they want to be helpful, and they want to help them to live a healthier life and yet at the same time the parents think well if I tell my child that we’re going to work on this together, that it’s going to be an insult, right? And so, other societies don’t have that. In Asian societies it’s much more straightforward. But in the United States, just the weight issue has so many laden things.
So we found is that we really wait for triggers. A trigger could be a doctor’s visit where the doctor says you to your child you have an unhealthy weight. Sometimes the trigger is the child gets teased at school and comes from their parents that they were being made fun of. Or maybe there was the dreaded middle school mile and they couldn’t run it as fast as the other kids in the class, right?. Doesn’t everyone remember that not running that mile as fast as the other kids in the class and they come home, “Mom, I want to run the mile faster”. And then that’s something else that we can help with sweet.
Robbie Baxter: So you talked about triggers. And I think a lot about in most subscription business models, you have to have the trigger that allows you acquire a new subscriber and new member to your program. And then there’s also the hooks, which are the things that make it a habit that engage the person, hopefully for forever. Can you talk to me a little bit about some of the hooks that you used in onboarding new members both the parents and the kids and how you make Kurbo a forever habit.
Joanna Strober: So, It’s interesting the way you talk about forever to happen. So to answer your first question, the coach is the key for us if the child establishes a relationship with the coach, then they look forward every week to having that coaching call
Robbie Baxter: They look forward to it.
Joanna Strober: They do. They love it. We get emails all the time from parents thanking us and saying they their child doesn’t want to stop doing Kurbo. They don’t even need it anymore. But they love their coach and they formed a relationship with the coach.
A lot of parents have a problem that they don’t know how to talk to weight about what their kids, as I mentioned, and so it’s a safe place. It’s a safe place to talk about the challenges that you have with our coaches and they’re trained in those techniques to make it a safe place. So they the kids, the kids respond very, very well to the coach and that’s really the key is that bonding that happens immediately.
But with regard to your forever transaction that’s a more interesting question because we found two things. First of all, the better our program is the less time someone actually needs to use it for
Robbie Baxter: Right. It’s kind of like dating. So you know when I was doing research for the membership economy I talked to one of the founders Alan Blue of LinkedIn and before that team founded LinkedIn they had this other company called SocialNet, which I know you’re familiar with as well. And they were really committed to building a forever transaction with the people they served. In other words, taking a long term approach, aligning the goal of a member with the goal of the organization and trying to build something that was really credible and trustworthy. But the problem was with dating is that if they do their job well, you find your soulmate in not so many months and you leave, and you may or may not even want to tell other people about the source of your success. So they said, next time we start a company, we are going to make sure we have a much longer runway to build relationships and they started LinkedIn, which of course is from the time you start your career until you end your career and now people are joining as students, you and I both have college students who are on LinkedIn and have LinkedIn with us, all the way through post retirement. So how do you deal with that since weight loss is usually a pretty fine.. active weight loss is a finite transaction.
Joanna Strober: Yes. And the other part of it is that our goal is to teach people forever habits. But then they don’t need us actually, right? So it’s actually more interesting. Our goal really is to teach forever habits and to teach people how to live healthier, how to make healthy choices and and really our goal is to put ourselves out of business. If I can teach you those skills so that every time you go to a restaurant or every time you go to a party you know how to make healthy choices or you have the confidence to maybe spend less time at the buffet table or.. all those things. Those are the skills we want to teach you. We want to teach forever habits. They just might not be forever customers of ours.
Robbie Baxter: You were acquired last year by Weight Watchers, WW, and that’s as you know, has been one of my favorite companies for their forever transaction and membership model. And one of the things that I love about Weight Watchers is they have different programming for people who are in that active phase of weight loss and for people who have already achieved their goals and their kind of official policy or point of view is that you need check-ins in order to maintain a healthy lifestyle. And I’m wondering if you think that is different with kids and families or whether you can see a place where your model goes on beyond that active weight management phase.
Joanna Strober: Yeah, so I think that people will always go through phases in their life where they need extra support and our goal is to be there for them for that. Right. Someone may do Kurbo when they’re eight and then when they started high school go through additional stressors and also a coach would be valuable to them to work through some of those issues.
Robbie Baxter: So back to the dating model. I find the love of my life. So I leave my dating community. We break up. I come back. As opposed to, I keep working with them. Is that how you’re thinking about it? So it’s kind of in segments, you come, you stay for six months you’re gone for a year. You come back when you’re feeling like you could use a little support.
Joanna Strober: So we absolutely want to be there for that. I suppose you’re right we have to think about this as both a social enterprises and as a business. As part of my social mission I would love it if I could just teach people healthy habits, and teach them how to live healthier, and we would be not needed. That’s actually truly a goal. But the reality is that things happen, stressors happen and people do need to sometimes get additional help.
Robbie Baxter: Well, one of the things that you had brought up, that we’ve talked about many times together is the difference between fixing something that’s broken and being proactive about the health so you know when you give those examples of triggers, you know, your doctor tells you need to lose weight, you’re teased or bullied at school. That can be very, very motivating. But really, all of us should be learning healthy habits and maybe we should be subscribing to programs that maximize our healthiness. But I think that’s harder to sell. People like aspirin not vitamins.
Joanna Strober: I think that’s true. Right. I mean, look at diabetes right like diabetes is affecting such a large percentage of our population. And there are a lot of things that people can do to not get diabetes and it’s unfortunate that so many people wait and have diabetes treated instead of being able to do things that would prevent type two diabetes from happening in the first place. So, you know, truly, my goal with with Kurbo is to teach kids, at a young age, how to live healthier so that a lot of those other things don’t happen to them later on.
Robbie Baxter: So I want to switch gears for a minute, and I’d like to, you know, I have a seven step process for subscription or membership businesses, kind of seven key areas of competence that an organization should have. And I want to just walk through them and hear your thoughts on each one. What has worked well for you and what challenges you’ve seen. The first one is organizational structure. So, the kinds of skills that you needed and the kinds of metrics you needed and the kinds of culture you needed to create. Because this was your first time working in a company, right? You were an investor prior to launching Kurbo. So how did you think about establishing the right kind of organizational structure, metrics and cuture.
Joanna Strober: So the one thing that is the most fun about this company and this product is that it attracts people who are very mission driven. And really for us that comes first. If people are not super excited by the mission. Of helping fight childhood obesity and make an impact, like that. And it’s not the right company for them. The good news is there’s a lot of people who care about that. And we were able to attract great people to come. And it’s just so much more fun to work in a company where you care about what they’re doing and care about, deeply about, the mission. And so that’s kind of what comes first with everyone that we talked to is, you know, why do you want to come work here and what excites you about working on this and from that comes a lot of other benefits.
Robbie Baxter: It’s very different than like a typical Silicon Valley company where the first passion is about the product as opposed to the first passion being about the mission.
Joanna Strober: That’s right. So we have a lot of people who work for us because they’re just really excited about the mission and working on this problem that really impacts so many kids. And so from organizational structure, everyone from the engineers to the marketing people everyone came to us in large part because they were attracted to the mission.
Robbie Baxter: And what metrics do you use, what are the most important metrics that you use as a CEO and Founder and now in this bigger organization. What are the metrics that are most important to you.
Joanna Strober: Yeah. so fundamentally it’s cost of acquisition of a member. It’s how long a member stays with our program. It’s how often they engage with the program, how many times a week do they login. How often are they using the app, how many times do they use the coaching. So really engagement is key for us. We have found that, you know, the more engaged, someone is, obviously, the more likely they are to be successful. So it’s super important to us to get that to happen. And then, you know, how long someone stays with it is also key, right, we need you to stay engaged for a while. This is not a short fix. And that’s important to understand.
Robbie Baxter: What’s a while?
Joanna Strober: Well, most of the programs, if you go to an in person program they try to get you to start for six months. And we actually found that was too long. It was threatening for people to think about signing up for six months.
Robbie Baxter: – kind of overwhelming.
Joanna Strober: Yeah, right. Really, I have to do this for six months. But the interesting thing is that most people, for us, sign up for three months and then stick for six months. So once they sign up and they like it they don’t mind continuing for six months. It was just threatening to them to sign up at once for six months.
Robbie Baxter: So onboarding is really important then, because you want them to make that decision. I mean, in almost every subscription business, and I don’t think that this is different with you, you lose the most people in the first days after they join. It’s kind of a failure to launch situation. Or organizations that have a free trial, they never get past the free trial. How do you, what are the techniques that you’ve used to effectively onboard a new family. So so I sign up. You see, you know, Robbie signs up for her kid. What happens, how do you make sure that I stay and that my kid stays and that we thrive.
Joanna Strober: Yeah, so we’re actually at about 90% on that. And it’s really through that…
Robbie Baxter: 90% retention, from the first day?
Joanna Strober: From the first day first signup, yes.
Robbie Baxter: Which by the way people is really good and very unusual.
Joanna Strober: The way we do that is through a personal connection. I mean, we have an immediate phone call that goes out. It’s not just an email. You get a phone call and we say welcome to the program. We’re really excited to have you and we’re matching you with a coach. And we want to make sure, here are the things you want to work on. Here’s the type of coach that you want to have and the faster we can make that phone call happen and then get the coach to connect the more likely we are to be successful at it.
Robbie Baxter: Got it. And how do you think of your funnel in terms of bringing people in, you know, sometimes organizations have a really wide funnel. Lots of people come in and lots of them churn out sounds like you have you know, fewer people churn out of the ones that come in and I think part of that is due to where you’re, you know, you talk about cost of acquisition and where you’re sourcing your new members from. How do you think about the funnel and what happens before that initial moment of transaction, and then what happened after?
Joanna Strober: So, we don’t do mass marketing. We don’t try to get the funnel as wide as possible. We found that that was not cost effective for us.
Robbie Baxter: Now Weight Watchers WW is on TV all the time. But that is not the approach of Kurbo.
Joanna Strober: That’s right. That’s not our approach. So we are much more targeted. We work a lot with pediatricians and we do a lot of marketing through pediatricians, which we found to be very impactful. We sometimes work with schools. We have worked sports teams, but we don’t go to world to do marketing, we’re able to make that cost effective acquisition strategy. So instead its much more targeted, and it means we have a higher conversion rate on our website. And it also means that, you know, we’re able to keep the costs lower.
Robbie Baxter: Which makes a lot of sense because if you want to keep a subscriber for six months, you need to be attracting the right people. And anybody who comes in the front door and leaves the back door before the first month is over, you’re going to probably lose money on them. So to me, that makes a lot of sense that you’re staying really, really focused. And then is there anything on the back end. What do you do when someone’s finished. Six months, you know, I talk about a forever promise, you have a forever promise which is a lifetime of health.
But your program, the active part is about six months. What do you do to counsel people out.
Joanna Strober: So we have two things. First of all, someone can use our app forever. And we have many people who will stop doing the coaching and then they continue using the app to track their foods and to keep them on track. So, that is our forever practice. Our forever promise is once you do our program you are always a Kurbo participant, you can always have access to all the data and you can always have access to the training in the skills that we offer. And so we have people who’ve been with us for many years, who, you know, go on and off of using the app, they just don’t have a coach. So that is truly are forever promise, I guess, is that you can have access to that.
Robbie Baxter: So they are staying with you through the app.
Joanna Strober: That’s right.
Robbie Baxter: And do you track that as well. Once somebody stops working with a coach, do you track how often –
Joanna Strober: Yeah. And how often they track foods and how often they track their exercise. We track all that. Yeah. And we have people who’ve been with us for many years.
Robbie Baxter: So it’s interesting, just thinking about this now, I don’t think I’ve ever really realized this. It’s almost like a reverse freemium model for free at the end.
Joanna Strober: Right, exactly. You get the free at the end.
Robbie Baxter: You can’t come in free at the beginning, but you know one of the things that’s interesting, you and I have talked about this a lot, one of the challenges I face a lot when I’m working with organizations that want to build membership models is that they want to copy a model that they’re familiar with, they say we want to use freemium because that’s what LinkedIn does or we want to do a free trial because that’s what Netflix does, but you really have to look at your own model as something unique and what your objectives are, and I mean, I know you’ve kind of moved from thinking about putting freemium at the beginning to really putting it at the end. Which is a really interesting idea. Once somebody has the education to be able to kind of self manage.
Joanna Strober: Right, exactly.
Robbie Baxter: So I love that. I think that’s really, that’s really interesting. Can you talk to me, since we’re talking about pricing free and paid. How do you think about pricing and maybe can you walk us through a couple of the different stages of how you consider different pricing models and how you landed on the one where you are now.
Joanna Strober: Yes. I wish it was particularly scientific. We have an interesting pricing model that our goal is to be accessible to a lot of people. But we have, you know, we’ve mostly just done it through trial and error and tested what, what makes sense. We have found that there’s not a lot of change in our revenue depending on what our pricing is in a pretty wide range.
Robbie Baxter: So inelastic. You have an inelastic product. If people need it. It’s binary. Either I’m going to sign up and do it as long as it’s in a reasonable range or I’m not interested, even if it’s one cent.
Joanna Strober: That’s right. Within a pretty wide range.
Robbie Baxter: Maybe not one cent. Yeah, that makes sense, right, because if you need to lose weight and you’re motivated to lose weight you’re probably less concerned, like what is it worth to be at a healthy weight, right. It’s priceless. So that’s, that’s really interesting. So you found that there’s a range and you’ve focused on a price that you feel is fair and accessible.
Joanna Strober: That’s exactly right.
Robbie Baxter: Going back to your mission.
Joanna Strober: Yes, exactly. It’s all around that.
Robbie Baxter: Great. So we’ve gone through five things. We’ve talked about the org structure. We’ve talked about the funnel. We’ve talked about onboarding, we’ve talked about the role of free. We talked about pricing. Now I want to talk about customer success. So customer success is this very popular term, particularly amongst software as a service, you know, business to business software companies that have realized that if they’re going to charge a subscription to their customers, Instead of letting them just buy the software outright or get a site license, that there’s a very real risk that people are going to leave. So they’re investing more and more, in what they call success professionals, who make sure that a person that is using their products and services is getting the value, they’re paying for. So if you drive your car off the showroom floor that’s your problem. If you don’t ever drive that car, you still paid the full amount of the car. But if you’re subscribing you can cancel at any time. So having some kind of a customer success program that ensures that people are getting the value they they came for is really important. And I’m wondering if that’s something that you think about. So not just in that onboarding phase, but later maybe let’s say month or two, or a month four, how do you ensure that the person, both the child and I would guess the parent, the whole member family, how are they getting the value that they’re paying for.
Joanna Strober: So first of all, we actually have two business models. So we sell both to consumers and we sell to businesses. And that’s both insurance companies and employers. So we have customer success managers just exactly doing what you’re talking about which is working with working the corporate accounts. So, those people are giving reports to their corporate accounts each month. Here’s how many people. Here’s how many kids signed up. Here’s how many coaching sessions they did. Here’s how long they stayed with the program. And so we have that exact role for the B2B clients. And that’s really important. With regard to that consumers the customer success really goes back to the coaches. Right. It really goes back to is the person forming a relationship with the coach and we actually monitor our coaches very closely. So we monitor all their interactions and everything takes place on our platform, a lot for safety, but also just to make sure they’re doing the job. And then we can followup with the coaches if we have any concerns. They really rarely happen but we do work very closely with our coaches and monitor them to make sure that they’re being effective with the families they work with.
Robbie Baxter: Yeah, it’s got to be harder running a subscription business with kids involved.
Joanna Strober: Yes. We have a lot of safety built in. I mean, a lot, a lot, a lot of safety built in so that’s first and foremost. I mean, I’m a mom. Most of the people who came through our company at the very beginning were parents. We care deeply about the safety of our program. And so everything was built on that premise, that all of our coaches are mandated reporters, they are they’re trained in how to deal with eating disorders. They’re trained extensively on how to deal with family dynamics. They’re trained on a whole spectrum of things to measure that safety is the most important thing we work with.
Robbie Baxter: Wow, thats great. So the last thing on my wheel is technology. You were an early investor in a lot of consumer internet businesses, eToys, Baby Center, Blue Nile. Tell me what it’s like to run a technology business that’s not really technology business.
Joanna Strober: So it’s an interesting thing, isn’t it. Because in the end, our success was only partially dependent on the technology. The technology, our app, has to be good, it has to be fun and it has to be engaging. And I wish I could tell you that, you know, AI had evolved to the point where we could be doing everything solely with technology, we just can’t. So the technology is a tool toward our success, but it’s only one of the tools that are in our wheelhouse . People are always asking, well how do we get rid of the coaches. I don’t think we’re close to getting rid of the coaches. I don’t think that AI is good enough that we’re going to be getting rid of the coaching anytime soon.
Robbie Baxter: And what I keep finding is when you remove people from one part of the business model they pop up somewhere else because we want that connection. We want that human connection. And you said earlier so beautifully that you know for a lot of the kids it’s not about the education its about the motivation of the connection. And my personal belief is that’s your secret sauce.
Joanna Strober: I think that’s exactly right. I mean, I think that the secret sauce of WW when it got first started, as I understand it, is people coming together in groups. And that group thing was really effective.
Robbie Baxter: You know, my grandfather was one of the very first male group leaders in New York. I don’t think I ever told you that. It’s a community. And the interesting thing there is the group leaders are so passionate about the relationships and that is what ends up motivating people as much as, if not more than the process and the systems and technology. It really comes down to having somebody encouraging you and keeping you accountable.
Joanna Strober: Right. So one thing we found that’s different with kids and adults is that kids really don’t want to be in a group. So they didn’t have the same craving for group.
Robbie Baxter: The Stanford program was group, wasn’t it?
Joanna Strober: It’s group, but they also do individual sessions and there’s just a lot of power with the one on one sessions for kids, more than groups. And we will eventually try to figure out how to do groups, but that’s just much harder. They’re not as engaged. The kids don’t find benefit from the other kids in the same way that you and I might if we were doing a program together.
Robbie Baxter: Yeah. Interesting. Okay. So last year, as we mentioned, last year your company was acquired by weight watchers, WW. Can you talk me through what you thought would happen when you were part of WW. And then maybe what it’s really like because I think a lot of people listening are either considering acquiring a membership business to help them create a culture of membership in their organization or are like you entrepreneurs in subscription or membership businesses. That are thinking about an acquisition as one potential, let’s not even an exit, but as a step to greater platform.
Joanna Strober: Yes, we had been in business for about five years. And we’re growing but, kind of getting back to the mission, we really wanted to be growing much faster and we wanted to have a much bigger impact at a bigger scale than we had on our own. And there was almost no one that I would be interested in partnering with to do that, but I looked at WW and the opportunity to work with was so exciting because they had the science, they had real science backing up their program and real experience. And then they had a lot of passionate users and people who really have a lot of success on their program. So I used to answer the telephone and Kurbo and I would say every day someone would call up and say I’m a WW member and I want something like this for my kids. And so it just became really clear to me that the perfect place for us to be with be with a group of passionate people who felt part of a community and who wanted to help their children. And so that was really why I wanted to work them.
Robbie Baxter: And the weight watchers brand, now the WW brand, it’s so well known and so closely associated with membership long term relationship real support and a very science based approach to weight loss. No fads so that must have been exciting. To kind of have that that platform.
Joanna Strober: Yeah. There is no other company that I wanted to work with. But the opportunity to work with them was so great because there was so much overlap in mission and in values.
Robbie Baxter: And what’s it been like being there.
Joanna Strober: You know it’s been really good. I’ve been really lucky. My team is really loving it. They get more resources they get access to really smart people who know how to build subscription businesses, but also who know how to look at the science and we have access to an incredible team of scientific advisors who are advising us on evolving. So we feel really fortunate. My whole team is there and really feels very, very fortunate. And we’re learning. So it’s great because we went in thinking, you know, we had things to teach them and they had a lot to teach us. So it’s been a very symbiotic relationship.
Robbie Baxter: So it’s been a good, a good merger acquisition.
Joanna Strober: I feel so lucky.
Robbie Baxter: Because I hear a lot of horror stories from entrepreneurs, to be honest, especially in subscription businesses where they’re used to being very data driven, being really close to their customer, having strong member relations, being mission driven, and moving really fast and then coming into a large organization. And for some good and some bad reasons not being as effective and having this vision, like I talked to one one entrepreneur, he said, you know, I thought we were going to get acquired and then we were going to have access to all of their technology and all of their experts and their platform. And what ended up happening is they kind of left us off to our own devices, but with a lot more layers of management.
Joanna Strober: So I’ve been really lucky. I have to say I feel really lucky. It’s been a really good experience for me.
Robbie Baxter: Were you lucky or did you do goof due diligence about who to partner with, was it steps that you took along the way during that acquisition phase to set the groundwork to make this happen. Or do you feel like, you know.
Joanna Strober: Look, nothing ever is just luck, right, you have to work really hard to make luck happen. We’ve done that. So we were very vision and mission aligned and we had a lot of conversations before everything to make sure that was really the case.
Robbie Baxter: And there were other suitors, I imagine, that were financially attractive, but maybe not mission aligned.
Joanna Strober: Right. So for us, the mission really came first. And so, look. Is there more management is there more process. Absolutely. But the trade off of more resources has been a good one for us.
Robbie Baxter: Okay. So one thing that I know that surprised you and maybe was more of a negative experience was, this summer, there was a social media storm around Kurbo and Weight Watchers. Can you walk me through what happened and why it happened and how your members reacted.
Joanna Strober: Yeah, is was quite an experience as you know because I was calling you quite a bit, Robbie what am I supposed to do. It was super interesting and baffling to me. So, you know, we’ve been in business for five years and we’ve got no criticisms. We had five star reviews across the board on the app on every review that had come out about us. We had articles written about us that were universally positive, lots and lots of press that was universally positive. Then the announcement comes out that we’re working as part of WW, and initially for about five hours it was quiet, and then all of a sudden Twitter took off. We were trending on Twitter. We were on every news station in the country. We were internationally famous for about five minutes and it was universally bad. It was universally.. Somehow, the idea of helping kids lose weight was then turned into giving kids eating disorders, criticizing them for not being of a healthy weight, telling you should never help kids lose weight, they’re just going to do it through intuitive eating, which is what the New York Times said, and never help them because they’ll just intuitively eat out of this.
Robbie Baxter: My mother-in-law did intuitive eating when she was pregnant with my brother in law and she gained 75 pounds because her intuition told her to only eat donuts.
Joanna Strober: Right? So the New York Times came out with an article written by someone who was pitching their book saying just like kids do intuitive eating and it will all work out. We know where intuitive eating. We know that, any parent knows where intuitive eating leads. You don’t choose to eat broccoli instead of cookies. Your body tells you the cookies tastes really good. We initially started trying to respond, right, and we start trying to answer and then we realized that this was such a storm. That it was useless to answer. And we just had to let it pass. And every author who has written a book about weight or has written a book about health at any size, who has written a book about eating disorders decided to use this as their news peg to get attention to their own their, own thing they wanted to write about, and it was crazy. And I had to just kind of sit there and watch quietly. You asked, the one thing that was the most rewarding to me was how many of our members emailed and said, how can we help, we know this is not true. We know that everything we’re reading in the press does not resonate with what we know we’re experiencing on your program. How can we help and we just said, be quiet. Because we didn’t want them to get attacked and my number one priority was to protect the kids and to protect the people who were doing our program. I didn’t want them to have any negative feedback. So we just went and took down all their pictures and we just tried to make it so that none of them.
Robbie Baxter: You took down their pictures off the website? So just to be clear, you have success stories on your website, you have quotes and stories.
Joanna Strober: Yeah, and we took down a lot of them and we changed them and we edited it all as fast as we could totally to protect our members. That was our number one goal and because some of them were getting mean comments and we didn’t want that to happen. But they were all emailing saying how do we help you. And then actually what was so rewarding in the New York Times in the comments, all these people were writing in “I did it this article is just wrong”. But you know, that’s not an interesting story. The interesting story, the thing that takes off on Twitter is, you know, the opposite. And so we realized we just had to live through it and wait and it did go pretty fast. It didn’t feel fast at the time, but it did go pretty fast. One of my good friends who’s a really smart person said, look, listen to the criticisms take what you can from them and then you can move on. And we got some actually when we were able to look at what the criticisms were, when the whole world is looking at your product, some people come up with some really good ideas. And so we were able to actually get good feedback from people and we took that and put it into the product, we put additional safety measures and we put more restrictions on who was able to use it. And I feel like we actually made the product better after. And I mean, the good news is revenue is up.
Robbie Baxter: I don’t know that I believe that there’s no such thing as bad publicity. I think there is such thing as bad publicity. But in your case the people who were angry would never have been your members anyway. The body positivity movement that is sort of the anti-fat shaming kind of community, not going to be, you know, members of Kurbo and on the other end, disordered eating is not something. And in fact, the way Kurbo’s designed. I mean, I remember from the very beginning. That was something that you were very aware of is how do we design something that even if somebody who did not have weight to lose joined, it would be safe for them.
Joanna Strober: We had this huge advisory board. We work with a lot of eating disorder specialist in making the app in order to make it safe and effective, and safe was number one. And that was our number one priority the entire time. But you can’t get that, that’s not a sexy story right so that doesn’t come out when people are criticizing.
Robbie Baxter: But I wonder. I mean, you said your business is doing well. I wonder if hearing about this. One of your biggest challenges has been awareness. Like a lot of people don’t know, when they come to you, they say we didn’t know this great thing existed and now that we know this is just what we need. I didn’t know there was a thing just like WW that was for kids. And so when they hear about it. Do you think that you would go through it again. Did it work out, or would you say you know what I would rather be growing at a slower pace, the organic way than to have had to take my team and my members through this maelstrom,
Joanna Strober: It’s a good question. I don’t know that I entirely know the answer. Some of the some of the maelstrom was helpful. Other parts was not helpful. We did learn a lot. And we made our product better. And so on some level, the feedback did help us to make the product better. I think we made some mistakes in how we talked about and, you know, whether we were as ready as we should have been for the media criticism I don’t know the answer to that. I’m sure we could have been more prepared and put more on our website about the safety features that we had in there that people did not know about. But a lot of the outrage had nothing to do with us. It had to do with people wanting attention to themselves. I mean, one of the largest eating disorder groups made me really sad. One of the largest eating disorder groups, I had all these emails from the person running it saying how much she loved our app and how much she loved our products and she wanted to have something similar for her group. And then, you know, given the opportunity to tweet against us, did so because it got attention to her organization. And so things like that are painful to go through and not something I would have wanted to repeat
Robbie Baxter: So I think about membership businesses having sort of three stages of maturity. The first one is when you’re just trying to figure out what’s the ideal model. How do we meet people’s needs you know product market fit. Getting air cover to give yourself time to start to grow having enough, you know, these are the early day conversations. How do you get enough funding to invest. Where do you experiment, all of that. That’s phase one, that was kind of, I think of that as kind of the first, let’s say, four or five years of Kurbo. Then there’s the phase of rapid growth. We’ve got our model. It’s working. We just need to get it out to the right people so that they know about us, because we know once they come in the front door, they’re going to get results. We’re going to deliver on the promise. We’re going to get paid fairly for it. And that’s, you know, so I think the first phase is launch, the second phase is a skill phase. And then the last phase is a lead phase, which is when you become the leading player in your space and the challenges are different there. One of which is you have a big target on your back. So you’re somebody who has really gone through all three phases, through that acquisition, in pretty rapid time. Most companies it takes 30-40-50 years before they have the leadership issues. Which phase do you think is the most challenging.
Joanna Strober: You know I have loved building this business. I think it’s all been challenging, but I have felt so lucky, almost all the time, to have been able to do this. I think the most challenging changes a lot, right, when we first started we didn’t know if it would work.
Robbie Baxter: You did a test just to see do people actually lose weight.
Joanna Strober: Right. Were kids going to do the app, were kids going to engage with it. That was really challenging. It was fun, but it was really challenging. We had no idea what those initial outcomes were going to be
Robbie Baxter: You had a lot of hypotheses you were testing. Would the parents want it. Would the kids want it. Would they be willing to be. Would the coaches be good enough. I mean, you had. Did you translate the Stanford program into a digital footprint.
Joanna Strober: That’s right. As I mentioned earlier, right, with digital health just started, which is when That the only way you could deliver a program like this would be in person.
Robbie Baxter: Like four o’clock on Tuesdays.
Joanna Strober: Yes. Exactly right. With the whole family in attendance.
Robbie Baxter: And a big binder of pages for your child to read.
Joanna Strober: But I do think that part is the most fun, when you are coming up with the ideas and thinking about it and trying to think about how to make it all work, that was the most fun and the most taxing but that adventure of trying to figure this out was really rewarding.
Robbie Baxter: I want to ask you for some advice. It would be remiss if I have you here in the room. I gotta get advice for people that are listening. So some people that are listening are entrepreneurs or want to be entrepreneurs, thinking about a new business. Some of them are working in big companies trying to start a subscription business or scale it. What do you want to teach people, what’s your advice for somebody who is running a membership economy business, what would be the most important thing that you would tell them if they haven’t done it before.
Joanna Strober: So Robbie. The Forever Transaction. I think ideally if you’re going to start a subscription business you listen to Robbie Baxter. And you find a business that people are going to use forever.
Robbie Baxter: I did not pay her to say that.
Joanna Strober: A lot of businesses are in some ways like Kurbo. They stop. The need for them stops. And that makes it much harder to run a business. You have to charge a lot more. It’s a lot harder if someone needs it forever. One actual promise that WW makes that I love is that it continues wellness. You think about well that never goes away while the idea of weight loss does. So I think if I was starting over I would think about different ways of doing wellness or having something people would pay for, for a longer period of time.
Robbie Baxter: You spend so much energy building the relationships with them, it’s a shame to see them go.
Joanna Strober: Yes. That’s exactly right.
Robbie Baxter: There’s probably more that you can do to contribute to their wellness. We didn’t really talk much about this but you had quite the successful career as an investor. And you were an early investor in consumer internet plays, including subscription and membership models. What’s your advice as an investor to people who are trying to get funding in a subscription or membership business.
Joanna Strober: I advise a lot of people on this and I think it’s a combination of you have to have a lot of courage and a lot of belief in your idea and you really have to sell it strong. I think a lot of people are not as good at the selling part. They have a lot of belief in what they are doing but they don’t necessarily have that excitement come across when they’re pitching that idea to other people. And I think you have to think really big and you have to think really boldly and you have to keep on pitching over and over again. And not get discouraged when people keep on saying no. And that’s a hard combination.
Robbie Baxter: Some people just don’t get it at all, right? And you can’t try to convince them, they’re eyes have to light up.
Joanna Strober: Yes. That’s exactly right. And then other people are not going to be interested and that’s okay and you move on. But if you have the level of excitement and you’re able to pass that level of excitement on to other people, I think that’s key especially at the beginning.
Robbie Baxter: What’s your advice as an acquired company head. You’re an entrepreneur. You ran this business. You got acquired. This is happening more and more we’re seeing. Dollar Shave Club was acquired for a billion dollars by Unilever. Harry’s Shave Club was just acquired by the people who make Schick. What does that feel like, and what is your advice for someone who is going through that process.
Joanna Strober: You know I think you have to be humble. In the end you’re going into a big organization. And from everyone that I’ve talked to and the advice that I got, it’s more likely that you’re going to bend to the large organization than they are to bend to you. And if you want to make it successful you’re gonna have to do a little bending. And be humble. And know what you don’t know about that large company. And I think if you do that they will enjoy working with you much more and you’re much more likely to be successful.
Robbie Baxter: Great. Okay. Last thing I wanted to do, and again this is my first episode so we’ll see if this works, is I wanna do a little speed round. I had a couple of quick questions for you and I just want you to, off the top of your head, tell me what comes to mind. Ready?
First subscription you ever had.
Joanna Strober: Highlights Magazine
Robbie Baxter: Favorite subscription today.
Joanna Strober: That’s either The New Yorker or The Atlantic. I couldn’t tell you which one.
Robbie Baxter: What your employees love working about working for you.
Joanna Strober: The mission.
Robbie Baxter: What your employees hate working about working for you.
Joanna Strober: It’s hard to walk away from it. We care a lot and that makes it stressful.
Robbie Baxter: Your superpower. If you were a superhero what would be your superpower.
Joanna Strober: Empathy.
Robbie Baxter: And what is the one thing you want people to take away from this interview.
Joanna Strober: There’s nothing more fun than building a mission driven company. And you go through a lot of ups and downs in a company and if you believe deeply in what you’re doing and that you’re able to help people at the same time as building a company, that is just one of the greatest opportunities in the world.
Robbie Baxter: Thank you so much Joanna Strober for being my inaugural guest on Subscription Stories.
Joanna Strober: Thank you. Invite me back please.
Robbie Baxter: I will.
Robbie Baxter: You’ve been listening to Subscription Stories, with your host Robbie Baxter in conversation with Joanna Strober, Founder of Kurbo. To hear more success stories of entrepreneurs creating a Forever Transaction in this new and exciting membership economy, subscribe to the podcast wherever you get your pods. Please give a rating and review to help us craft these interviews closer to your interests.
Thanks for listening and for your support.
“There’s nothing more fun than building a mission-driven company.”
—JOANNA STROBER, CEO KURBO
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