so Will's just gone through every single step that he went through to build a billion dollar brand will ahed founded R in 2012 and grew it to $3.6 billion in less than 10 years creating one of the most groundbreaking businesses in health and fitness will tell us what we're going to learn okay so first of all you got to have a problem you're obsessed with you do a ton of research and you look at the market and then from there you can develop a business plan after you got a business plan I don't care how
much research you've done you have to commit to starting a company then from there you're both building a team and you're trying to raise Capital those are interchangeable we'll talk more about them and at some point you're going to need a prototype and then you're going to ultimately take a product to Market that'll be your first go to market strategy along the way you're going to be building values and then at some point you're going to need to have a great business model which is going to help this thing scale right so let's go deep
on problem how do you think people are listening they can identify a problem how did you do it well you have to find a problem that I think resonates for you personally I'm skeptical of the entrepreneur who kind of looks at the world and says uh you know oh I'm going to go look at this problem over here and if there isn't something that really deeply resonates for you about the problem uh you might be trying too hard to start a company so make it personal make it personal it should authentically be a problem that
you want to solve okay be authentic about it yeah I mean not the same I'm doing free education because at 15 I had to start a business and had no knowledge and I couldn't afford any courses so I think I totally resonate with this um a lot of people come to me with business ideas and they're like oh I'm going to fill a market Gap and I've invested in those businesses and then two years later I wasn't really interested in filling a market Gap and they they shut it down um you know it's so being
authentic um what else solving a problem how do you how do you I think you can also spend time talking to other people who may have the same problem so you know meet meet potential uh customers or people who are facing this problem it Community if you don't mind I think that's a build a community that care about the same problem as you right yeah I think that's right you know when I was in college I I spent a lot of time actually meeting with other athletes other coaches and I would just listen to them
about uh their problems and part of the reason I actually got excited to start whoop was I felt that people weren't didn't actually understand uh the problem that well so what do I mean by that when I went and met with coaches and particular I'd ask them the wrong question by the way I would ask them the question of hey if you could build anything or if you could measure anything uh in your in your world of sport what would it be and often I kept hearing about training and sweat analysis and movement and GPS
and really a lot of things that were very exercise specific and then when I asked the right question which was well what are the problems that you're facing as as a coach the answers I often got back were around overtraining and injury so this notion of availability how do you make sure an athlete is ready to go today and so I realized in listening to coaches so you know describe their problems that they didn't actually know what they needed to solve that problem because it wasn't actually measuring more exercise that they needed it was measuring
the other 20 hours of the day it was understanding recovery and you know it wasn't just that I overtrained it was that I under rested and this whole notion of really understanding rest became the secret I thought to unlocking this problem so I I think the problem you when you you asked the right question is so key but now you've identified it my feeling is for most people listening well someone's already doing something similar or there's someone with big money like Nike you must have looked at and thought wow they're doing something already am I
going to really compete with Nik did how did that process play out in the problem identification well does go back to the the very specific problem that you're trying to solve and it also goes back to the market that you're trying to solve it for so yes Nike was coming out with a product uh Apple was coming out with a product there were a bunch of other startups in the space Fitbit was up and coming jawone there you know there was a number of wearables that were coming into the market but when I looked at
the problem of preventing overtraining or deeply understanding the human body and when I also looked at that for high-end athletes there was nothing there I felt like there was a lot of casual data and it was targeting sort of a general consumer what I wanted was actionable data that was for the high end of the market and again owning a niche right that's basically what you're saying because that's also almost like um step-by-step process to own a nich you're not you're not competing with Nike you're providing something Niche that they're not doing tailored to that
market I mean every big business has actually done this I mean Facebook initially tailored it to universities right totally he wasn't doing for the whole world it was like right there's a problem in universities where I don't know if that girls or boy single or not totally and so they he serves the niche that product served the niche and so I think that's basically the what what you're teaching people there right when when you because sometimes when when people are identifying a problem I know that people listening and oh okay I've got this problem but
lots of people are doing it already well can you own a niche in that part of the business then you'll beat the big companies right exactly I I had a business school uh Professor who said you know it it may sound like a great idea to be selling socks and China but guess what you know oh there's a billion people obviously there's a huge market for socks in China but you actually need to start with a very small number of people and figure out who's going to really really love your thing and then get it
to a wide audience yeah I love it so within the problem process because we'll move on to research next is there anything else people need to know in your problem solving um process I think often understanding a problem means that there's something contrarian about the way that you understand it you know what is what is it that you believe about the problem that no one else believes and that's a hard question to answer but when you can answer it it's a sign that you might be on to something I call this a USP right your
unique selling point people don't maybe identify you know what partly as well it's being able to verbalize the thing you have an instinct about because that's going to move on to a minute when we talk about building teams and stuff right it's being able to communicate the conss of this idea to someone that isn't specialist perhaps right yeah I think that you know the case of whoop my understanding of the problem was that people weren't actually measuring rest and the Market's understanding of the problem was people needed to measure exercise it that was a highly
contrarian point of view then to be talking about recovery at a time when everyone was talking about exercise and interestingly I initially use my whoop to measure my sleep yeah am I getting enough sleep totally yeah so and I use it as a timer to measure my sleep initially I I exercise of course but it wasn't my initial thought I wanted to see if I was sleeping probably yeah at the time if you were to say we're going to measure athletes everyone immediately went to sports and exercise right Peak heartbe we went to sleep and
Recovery I love that okay so I think we've given people a framework for problem so let's talk about research next so tell us how you did the research bear in mind that for a lot of people that word means money um what did you do exactly research is not money and and depending on how uh technical the problem you're solving is research may be uh you know doing a lot of reading you know so for me it was really reading and I'll put part two here which is it was work I mean you know sure
I was a student but I probably went to the library I don't know three or four times a week and was checking out medical research and to be honest I wasn't even uh you know a physiologist or Premed as a student this was just something that I was drawn to what were you studying technically government and economics government economics total total parallel to this yeah but but that's where it goes back to doing research because you have to uh you know read everything you can about the space and it's work I mean you have to
really grind it out I also took classes in this space and that allowed me to meet with some experts so I would meet with cardiologists physiologists hey why is there only medical technology in this space why isn't there a mass Market consumer product that has the same capabilities these were some of the questions I was I was asking and honestly if you just keep doing this loop at the end of it you're going to have a pretty comprehensive understanding of the problem um space that you're trying to solve you're going to have a pretty good
understanding of maybe the technical capabilities you need to develop interesting enough Steve job said he ran up he rang up Atari and asked him for some materials to build something um did you do any of that did you go you know talk to competitors or potential you know people that were doing something in similar spaces was that part of the process like competitive research I mean absolutely I I met with a bunch of people uh in and around the technology space the wearable space um the medical technology space I met with a number of doctors
cardiologists physiologists and I did a of listening I mean I had my own kind of biases for what I thought I was looking for but um you know and this is kind of the last point I'll say which is oddly helpful when you're doing research like be naive you know I think it's okay to go into the the space and say to yourself I really don't know where I'm headed you know you're sort of going to just wander around as you read and work and talk to experts and that's okay uh you're going to ultimately
stum upon something and and that's what you want to look for you want to tune yourself to finding something that resonates that you haven't heard much about no one seems to be talking about but you keep thinking about and for me in building whoop that was this metric of heart rate variability I was reading medical research going back to the 1980s of how Olympians were using this strange metric called heart rate variability which I had never heard of to understand how hard to train they would wake up in the morning and they would measure this
thing on on their body and it required expensive technology and yet this thing that they measured would tell them how hard to work out I thought well that's pretty interesting and then sure enough the more research I did it turned out it was a big metric in the space of Cardiology Doctors and cardiologists were using it on heart failure patients uh there was a whole CIA operative around using heart rate variability to understand lie detection and so I'm thinking to myself wow this is a very powerful statistic why is no one talking about it and
there in lay an Insight I think I just love the word naive I mean I got a seven-year-old I think he knows more about me than anybody else because he keeps asking questions like why did you do that why did you do that like questioning everything is kind of it as well right research okay next markets talk us a little bit through this stage so generally speaking when you're building a product or service there's a whole host of different types of people that could buy that product or service in the case of wearable technology to
understand the human body there was a whole host of use cases that technically the technology could apply for you know this could go in the medical space you could be targeting you know people with heart issues this could be going into the general consumer space this could be targeting people who want to get healthy uh this could be going after young kids trying to get them to be more active but the market that I was most drawn to in part because of my own personal experience and in part because I thought there was a hole
in the market was professional athletes I thought professional athletes more than anyone else needed to understand their recovery because they're going to make millions of dollars a year on it and I also believe that that was a market that could appeal over time to a larger market now what I didn't fully appreciate at the time but I can tell you right now is a good principle of identifying a market is you want to start small small market and this is super counter intuitive especially even for investors you tell an investor I'm going for a small
Market you think they'd say no right well and by the way a lot of investors will say no because you're targeting a small Market but that's the Investor's fault that's not the entrepreneur's fault because part two is you want to find a market where people are going to love your product I love 1,000 tree fans by the way totally that's just a benchmark for everything I think and by the way start with 10 you know you're not going to get to a thousand without 10 well get 10 to bring 100 yeah that's a good good
point too so you know Target a small market and make sure they can love your your product and for for whoop that was professional athletes and the third Insight I would say that goes with that is think about how small can then go to large you know if I looked at uh Brands like Nike that I grew up um enamored with as a kid what they did really well was they built an aspir oper ational brand in one space and then they were able to carry it to a wider consumer base and so I believed
with whoop if we could start with the world's best athletes we could build a whole brand around performance now mind you in the research phase of looking at well what else was out there I also realized that medical technology was stigmatized if you were wearing a medical product it often was a sign that something was wrong with you right and so that was like the opposite of an aspirational product wearing something says something positively about you star to touch on brand here as well this is a bit of a brand brand strategy right it's a
brand strategy but it's a market Insight too where it's like the products that were in the market that could measure the data that we wanted to be able to measure had a negative stigma associated with them because it signaled something was wrong with you now we wanted to collect the same data but make it a positive signal and so uh that that was just it was a little bit of an Insight around what are the other products that were in that market it's interesting um I met Travis from Uber founder of uber and he was
talking to me about how um he kind of he he said it himself he said it publicly he copied Lyft it wasn't his idea to do the taxi sharing out he said but one of the things was Niche was limo cars limo cars were a bit like expensive seen as expensive but he he basically realized that people wanted a limo they didn't want the the image of spending a lot of money necessarily on a on a black cab well I'm glad you brought Uber up because they followed this Playbook yeah exactly small Market black cars
yes it was black cars then people loved the product they love the capability to order it on demand and they said how do we expand from small to large all of a sudden Here Comes Uber X yeah exactly and and this is why I love uh you know this sort of blueprint because it can work for any business so what else do people need to know in the market stage You could argue there's a parallel thing which is just um competition the thing about competition is often you're going to find competition in this large Market
mhm and so the advantage to the small Market is hopefully you have no competition for the longest time leave you alone because it's a small market so they don't care exactly right and so that's why when you can go from when you start here you get that chance to really develop a love and following amongst an audience and then next thing you know you're competing large uh what What's another brand that's done this in in the sports or U performance space like maybe Lululemon m right initially that was really just targeting women who did yoga
right meanwhile the juggernauts Adidas uh Nike Under Armour they were they had a huge huge following when Lululemon started getting going but that sort of essence of yoga thoughtfulness around the product all of a sudden they developed a real following and then what do you know they do from there they start building products for men they start expanding Beyond just yoga Weare to add to this and you can correct me if I'm wrong but I'm just analyzing your business for a second there's another thing I think you've actually managed to keep the small mentality so
my my my thought on this is um your product doesn't have a watch on it and I actually love it because of that but it would be so easy to and now you're large to just compete with all the large players doing the same thing so somehow you've kept both of these things you've become a large Market but you've kept a what I call a niche Focus so it's very easy to stick a watch on this but you haven't and that means you're different from all the other guys that I'm you know watching watch all
the time I'm not actually monitoring what I really what I really care about is that is that part of the strategy it is I mean I think you're touching upon something that contributes to building a small or to targeting a small Market but it's really important for any startup and it's your identity right because by the way Blockbusters thought their identity was people going to the store and buying a video and they'll never want to change that right so identity is a very dangerous thing if you get it wrong yeah and and the question to
answer here is what is what are things that you believe that other companies don't what's everyone doing here that they're missing the point so if I think back to whoop what was the competition doing well it was lowend Data it was watch and it was uncomfortable these were characteristics I thought of the wearable space you know the low-end uh data piece okay that meant we had to develop something super accurate it needed to be as accurate as Medical Technology the watch problem with the watch is that you can't wear two watches right now if it
doesn't have a screen that allows you to still wear a watch and what I thought was really important in being able to again have great data is it needed to be continuous we don't want you to ever take it off and so that that's where this idea of uh of having there be no screen and then the other thing that we really focused on was well how do you make it comfortable how do you make it personal and so if you look at a whoop it's actually mostly material right and this is super comfortable material
uh and these are actually interchangeable these bands so you can swap in and out all sorts of different bands did you think about the Comfort part as much as you did the technology part or did this come as an aftera oh it was core because if you're going to wear something 24/7 it better be comfortable and it better speak to your your identity right but you you have to say no to a lot of suggestions I'm sure you've had to add things onto this yeah oh by the way a huge piece of identity is what
do you say no to right block blusters shouldn't have said no to Netflix but other than that I think generally it's a good rule yeah I mean it's all about Focus right it's about having that kind of core identity for a small Market of people but it's also where big businesses fall off the cliff because again uh Kodak said no to digital cameras so how do you define when you should say no and when you should say yes is it is it identifying what makes you unique within the product or I mean how do you
decide I mean look a lot of businesses have failed because they said no to the wrong things you know you have to also be able to continue to innovate but if you're going to be an early stage company that's one day going to be successful it's going to be from Focus right and focus and saying no are really kind of interchangeable okay so let's move on now to the business plan cuz we're touching on it a little bit here business plan so did all of this that we've talked about now was it in the business
plan you business plan you originally drafted up tell me what was in the business plan well the amazing thing about the original business plan is that it did chart a lot of our 12y year history have you got it by the way have you still got that still any chance we could put up and show people was it confidential it's confidential uh or you know what it's not confidential it's it's personal person you know it's like looking back on something oh I'd love to see it that was diarys uh but the uh you know many
of the themes that we talked about uh for how you're actually going to build the company you know those 12 steps that we've been talking about are encompassed in the business plan so I I don't want to repeat all of them you know it's understanding a problem it's understanding a market it's demonstrating that you've done research it's building out that team and who's on the team did you actually write down because this is doesn't exist at the moment it was a 70 page document oh okay right yeah so I mean again you got to write
yeah yeah you got to work right you know sometimes I meet entrepreneurs or people who want to be entrepreneurs and they say you know how' you kind of get started and I said you know I did research on it for two and a half years yeah and in a way that's a dis appointing answer cuz it's not like a get-rich quick answer yeah it's annoying for you you got to grind and if you enjoy it and there's a problem you care about you'll do the work yeah and then you know there's a process of editing
right you want to try to distill down the essence of your idea and a huge piece of what we'll get to next which is around raising capital and building a team is how do you simplify your idea how do you make it very digestible you know initially you're going to have 20 five words to describe your idea over time you want to get it down to three words four words five words you know what is the essence of what you're doing and um and then over time the notion of a business plan is going to
become a pitch deck it's good to make something with a use in mind later right so this is going to be what maybe what your team reads so they understand the business plan and also as you say investors and look this is contrarian advice for what it's worth most people won't tell you to write a business plan it worked for me it may not work for for you but the advantage to doing this is it makes you really have to think and pressure test your ideas and wrestle with those ideas and grapple with them and
by the way when you do that work and you come out the other side you're going to have a lot more confidence as an entrepreneur Y and confidence is actually a very key component to getting the thing off the ground I I always tell people to do my maps so put your idea in the middle and figure out how it can flush out because it's sometimes with a business plan it's a bit it's a bit it's a bit linear you know like it's just written out but actually when you put it into the real world
it's a little bit harder to ensure that you can play so for example Knight could have moved into your space that would have disrupted you perhaps um so having a way of like getting around them just anyway business plan I agree with you it's it's kind of an interesting thing and you didn't use a template for anything there's no there's no like suggestion of like how how people should make the template is you know the first six or seven steps on here a business plan's all about what are you going to do right you know
who are you going to recruit how are you going to raise Capital how much money do you need how much money is it going to cost to get to Market once you're in Market how are you going to sell the thing who's your first customer how do you get big eventually how is this going to be a business that does 10 million in Revenue 100 million in Revenue a billion dollars in Revenue chart it all out and it's going to be wrong but the process that you're going to go through to understand it is going
to make you a much better entrepreneur who did you give the business plan to the first person well I actually wrote it in a classroom and so my my first uh the first recipient of the business plan was a professor who just so happened to have worked in inventure capital so he was able to give me some really good advice did he say don't do it well it's it's timely that you get to Commitment because I remember doing all this work and presenting all this work and at some point uh the professor said to me
you know is this a thought experiment or you going to build a company so what did you say I said I'm not sure right now that was at the time but um so how how do people get committed people listening that have got mortgages and bills and responsibilities there's also people you know the younger you sitting there saying well I can now go go with my degree and get a really well-paying job and pay off my student loans and how did you get to the commitment stage well I think first question for you for any
entrepreneur is what does your gut say in the world of data and Analysis and a million different ways to look at something the Forgotten question is what does your gut say and you know really thinking about that inner voice of yours and that inner calling that passion of yours what does your heart want you to do what does your gut want you to do uh you got to have spend a lot of time here and do a lot of soul searching and uh I can tell you what if it's just your head saying I'm G
to make a lot of money don't do it okay maybe I can't swear but don't do it way into the YouTube 10 minutes in they let us swear so it's fine it's all good uh but that's a good thing to underscore because uh it's not about your head saying you're going to make money it's about your heart saying you got to solve a problem that you're obsessed with but but gut I mean the problem is a lot of subconscious belief system is that starting a business is risky 90% of business is fa which is true
you know like gut can sometimes be fear right yeah I think part two is asking well what are the risks right maximum downside if it doesn't work so what sort of thing right exactly and I think risk for a lot of people is misunderstood you know there's always this business question risk of well what if the business isn't successful there isn't a lot of uh you know sort of introspective analysis of what's the risk to me if I don't do this and what's the upside for me if I do do this in terms of what
I'm going to learn about myself and so when I was 22 years old I was very focused on this notion of the risk of the business well what if it's not successful but what I didn't realize you know if I was 5 years into it looking back is gosh I learned a lot in the process right and so sure I could have done safer jobs but 27 28 29 years old if the business had failed I would have learned so much about what it takes to build a business that I would definitely be set up
for the next one and everybody would want to hire you because you understand what it's like to build a business if anyone's hiring for their own business and you understand it I think I think risk is so underestimated as an asset in your portfolio and then there's a Rel concept which is Regret which you know interview people in their '90s the biggest regret to have is things they didn't do yeah the things they did do totally and and so you know are are you going to be comfortable with the fact that you didn't do this
and this is one that'll haunt a lot of people now the good news is as every day goes by and you have regret you can change your mind and go back to your gut so uh you know don't don't underestimate these two but you are going to have to take a leap and it's going to be uncomfortable and there's going to be a lot of doubt and just know that these are all normal things I mean I made the mistake early on of thinking you know oh what would Steve Jobs do what would Elon Musk
do or bet they don't struggle with these things and look the definitely do the reality is that every entrepreneur day one is scared and doesn't know what they're doing and is figuring it out on the go no one knows what they're doing that's the AR isn't it and it's by the way it's not productive to compare yourself to other entrepreneurs uh you just have to compare yourself to yourself you got to get a little better every single day and that's how you're going to wake up one day running a big business commitment wise that's something
I do I'd love to know if this is part of your process is I tell people I'm doing it yeah look I mean the second you're committed you want to scream from the rooftop you're doing it you know uh commit did did you I mean people it's like people um you know people who are trying to quit smoking or something you know the more people they tell in their life the yeah like you're still smoking then are you you're not going to smoke are you I thought you were giving up this it's definitely a motivator
right yeah totally so did you have a lot of people telling you not to do it oh absolutely I mean the other thing is um prepare for rejection right this is um love a bit of rejection that's I think one of the hardest things once you commit to starting a company is the number of people that are going to tell you it's a bad idea that you shouldn't do it that you're going to fail and uh and at least for me at 22 years old I I guess I hadn't really faced a ton of rejection
in my life but um when you wake up and you start going out to meet with someone you you want to recruit or an investor you want to give you money I mean it drains on you to have five people a day reject you you know and um and especially people who you're meeting with because you respect you know it's one to get rejected by someone you don't like or you don't care about it's nothing to get rejected by people who you respect or ones that love you as well even you know family can sometimes
not understand they're doing like I know someone recently wanted to start a business and their parents told them not to do it and so they they listen to their parents they love them but it's it's their gut tells them to do it they want to take the risk they don't want to have any regrets and they're willing to commit but at this stage um the rejection part from their parents has stopped them doing it yeah and part of the growth of being being an entrepreneur is that you're going to have to learn how to manage
rejection that's a long process honestly it's not something that you get comfortable with in day one and if you do by the way you're off for the races uh but this was something I struggled with can you remember anyone that almost changed your mind well you have to name them of course but um is there anything you think there was one particular conversation because the commitment has to come through in that moment right when someone says this isn't going to work someone you respect isn't going to work how did you stay committed was there any
psychological thing at that point I was so uh deeply obsessed with the problem that there was no convincing me otherwise this was going to exist in the world it was going to be brought to life uh and or I was going to die trying so to speak building a team plus raising Capital they go together folks so let's do it together so tell us about how many people do you think rejected your initial thesis as far as like investing you was concerned I I would anticipate in the first 12 months of building whoop probably 50
to 100 people let's write it down 100 people said no just for people remember this yeah I don't want people to forget no is a part of the process now just like where was demonstrated even the best entrepreneurs have to learn how to deal with rejection and failure in order to eventually find success will had to go through over 100 rejections in order to get the magic formula he'd been looking for and if he hadn't done that whoop wouldn't exist today many of you watching this video will face similar experiences and so it's important to
understand that rejection and failure is all part of the process when starting a business and it's how you learn and grow from that which really defines who you are as an entrepreneur take my experiences for example in 2006 I started a comic book business called deard in Hong Kong I really believed this idea was going to be the next best thing and I invested over a million Us doar in it I even got a license deal worth millions of dollars ready to turn this comic into a Blockbuster movie however the comic book did did not
get made into a movie as ID hoped and the money ID invested into making this idea come to life had been wasted now I could have easily given up here I'd lost over a million dollars and an idea that I was truly passionate about but I knew deep down it was about how I responded that would defy me taking this failure on board as a lesson I could apply to my future businesses it was not a failure it was just a lesson on the path to success this is why I'm excited to say that I
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are you waiting for Go fail and explore how your business can benefit from using PayPal today and eventually thve you got an the Airbnb uh Brian shows all the emails of people telling him his Market is too small no one cares he's blanked at all the VC names and desperately want to know who they are cuz it's like yeah well it's a funny thing if you're competitive like I am you you kind of kept a kept a list in your mind of these are all the people I'm going to prove wrong send them and then
you know at some point you actually mature past that phase and you just totally forgot I'm 50 I haven't mature past that phase I keep sending my videos people telling him we could fix education system I keep doing it I can't stop myself you know it can be a good motivator but you'll be happier if you forget do it do it with a smile a little bit like you know step one in building a team and raising capital is you have to have a vision like you really need to have a point of view on
the world if you want to be able to successfully convince someone to quit their job or drop out of school uh I mean that that's what I was doing when I was a senior in college I was literally going around trying to convince people to quit their jobs and drop of school so you know did you finish by the way or you dropped out before you fin I actually graduated I graduated in 2012 and I was committed to starting it in you know sort of fall of 2011 so you know I didn't finished it off
so I didn't have that much time you know left in school but uh so you have to have a strong vision and and I think it also helps if you have some materials uh because materials means the business plan earlier the the work done the groundwork done is that what you mean by materials yeah you want to have uh you know um a pitch deck of some kind right what we talked about earlier from the business plan MH you want to have some kind of a a pitch deck so you're going to have Vision you're
going to have materials then you're going to really Network you know this is where you're going to meet someone who might know someone you should meet uh you know again when I met some of the initial people who joined me on the journey for whoop uh they were a string of 10 introductions I met someone it wasn't the right person met someone wasn't the right person they told me to meet someone else and so the key with with this process of meeting people is trying to get to the next person you just want to have
a NeverEnding web of people that you can potentially meet there's element of manifestation in this as well by the way because once you've listed what you need you might be standing next to them in a coffee shop and not even realize it totally yeah and that's a good point and then you got a pitch you got to sell a vision for the world and uh and look that's a learned skill raising capital and recruiting these are learned things it's not like some people have it some people don't it takes reps and I was so bad
at hiring people when I was 15 I tried to hire people they were basically told me to piss off you know like it's so hard but once you like you say it's definitely teachable introvert or extrovert you can learn it yeah it and it's one of those things you learn by rejection too totally so you know it's unfortunately kind of a process of failure and iteration uh which is you know challenging um and so you get feedback when you pitch so I'm sure the first time you pitch to an investor you got feedback and you
adjusted the deck yes yes and no so the question is how much do you let people who say no change your vision right versus how much do you let people say no make you iterate on what you're presenting and so I'm going to use the word iterate if you don't mind yep good uh because at this stage you're getting rejected right um this is this is sort of your your rejection phase unfortunately this is a theme we keep coming back to rejection it's good good what um and then guess what you're going to pitch some
more right right like it is really um a process of meeting a lot of people this is sales by the way I mean sales is just a process it's a numbers game as well to be honest right I mean you might have pitched to an investor who actually was the right investor but they had raised at that time for their fund so it was just wrong timing for them more than you now let me um introduce a useful tactic when you want to try to hire someone or you want to raise Capital scarcity if you're
talking to one investor and trying to get them across the line they're going to wait around forever if you're talking to 20 investors and you're saying hey we're getting term sheets from three people are you in or you out all of a sudden there's this feeling of scarcity the thing's about to go away the train is leaving the station do you want to catch the train and so you really really need scarcity in order to close and that leads us to the last point which is close and guess what that's not bad for building a
team either you know you want to find a great CTO guess what you've got four people in the pipeline and you say to one of them you're my first choice but if I don't hear by Friday I have to go to my next person and guess what that's called running a process but the scarcity element that makes the other person feel like okay again this is an opportunity I'm going to lose this opportunity and I have to make a decision sometimes that person actually needs to be in a position where they really make a decision
because often what you're pitching to them is something that's you know uh hard hard decision right important people by the way hear the word authenticity here because I've seen people do this and I know they're not telling the truth so you got to make sure it's the truth and you got to do the work to make sure it's the truth so you've actually got to speak to 100 to get five that are interested to be able to use the scarcity technique I see people lying in this one so don't lie uh make it true much
much better if it's actually true yeah I I mean at the end of the day you really do you have to genuinely have scarcity otherwise it's going to be hard to close yeah brilliant technique though and and actually how the world Works frankly because otherwise people don't make decisions quick enough um and yeah so close love it building a team raising money I mean just out of interest uh just the Nuance of like hiring someone did you give Equity to the at the beginning was that part of it or did you just do a straight
up good salary with something in the future how did you how did you build their success should we do a characteristics of early team okay all right so you're building an early team um let's do team characteristics how do you know if someone is ready to be part of your early stage team right this is a pretty fundamental question you know first question compatibility we're going to spell some things maybe wrong compability okay no first spell right are you comfortable working with this person do you really want to be around this person I mean you're
going to be in the trenes with spr 18 hours a day you're going to be calling them at all times your families are going to get to know their families uh you know I lived with some of the people I first started working with right that's how close I was with them second question compliment complimentary all right complimentary do they have a set of skills right that you don't have right I'm great at XYZ they're great at ABC right and and those things together make us a powerful team uh and then three I guess we're
going with the three C's are they committed do they care about the problem as much as you do right and there's a good test for committed uh which I'll I'll sort of divide as a fork here Equity versus cash if someone's committed to your mission and really believes in what you're doing and they want to be part of the founding team they want to have equity and if they're uncomfortable getting equity and let's say you're starting a tech company and they're telling you they've got this offer from Google that's all this cash guess what tell
them to go join Google okay because done exact thing by the way they want to be part of your rocket ship they're going to need Equity totally and they're going to have to take less cash and in a sense what you're also screening for is missionary verse mercenary mhm I built this whole company on the back of this so you got to find someone you're compatible with who has complimentary skills and who's deeply committed totally tell us the Prototype stage if people want to make a product make a prototype how did you do it when
you talk about building a prototype what you're really saying is what's the fastest best thing that I can build that's going to get towards what a customer is going to be buying so what is that important iteration towards having something that a customer is going to buy or is going to be that product or service that they get value from depending on how complicated your business is you might have different iterations of prototypes to get to that or your prototype is going to be the V1 thing that customers even use in our case we had
to do multiple iterations because our product was so technically complicated right we were building Hardware this had algorithms on it it needed to send data to a phone the phone then needed to collect information about it so it was a very uh iterative process I think you have to ask this question of um technical D risk what is it about your your um problem that you're or the technology that you're building that you need to drisk and in our case it was this notion of being able to accurately measure information from the human body and
so in order to determine that how we were going to drisk this technically we had to do a lot of research and then we had to build research being well why didn't this technology exist why hadn't someone figured out how to make it into this small form factor uh what other techniques were there to be able to measure the human body were we going to use sound were we going to implant something where we going to use um you know uh sonic waves there was all these different uh versions of the technology that we looked
at that and then we started building prototypes and uh and so this is where you know you need to have um you know gr engineering uh you know you might need to have some really sophisticated data science uh you're going to have to build a culture around testing and validation and then guess what you're going to build more so you know the these steps you're going to be doing over and over again in this prototyping phase and you know depending on how hard the technical problem is it may be you know five or 10 prototypes
before you really have a prototype that does what you set out to Dr risk but way I interviewed Tony fidell the inventor of the iPod lot people don't realize he actually invented it this is his formula for it too yeah it's a it's a proven formula out of interest in order because people listening again I know what they're thinking they're thinking what a lot of people will say to me they've got an idea do I need get a patent do I need to get legally protected where does that part of it fit into all of
this process did you get this patent how did you protecting well I wouldn't spend a fortune on uh protection for most Industries uh but you can find uh early stage patent lawyers who can help you you know file some initial patents and by the way a lot of that patent work is going to come from the business plan that we talked about earlier you know big pieces of our initial patent filings were literally cut copies from the business plan uh that I wrote so do you think it's true though with pentant that a lot of
the time if Nike wanted to get around it they could it's certainly true that big companies are going to copy you knock you off it's certainly true that you may not have the legal resources to co uh to compete directly with a big company but I do ultimately believe that the process of of patents um is Good from a a competitive deterrent standpoint it's also good from a validation of your technology it's it's also good from the ability to raise Capital it's also good for team building because it establishes your your Tech technically differentiated so
there's a number of reasons to have uh patents I don't think it's a requirement for most businesses if you're trying to build a very technically uh risky business I would recommend trying to file initial patents so just add it for so people can visually see SE seven is legally protected but one hack is the person who does the paint lawyer might like to invest in the business could be a person because that's going to be an ongoing need as well isn't it it still must be an ongoing need within your business to protect the things
that you're creating yeah want to talk marketing and I'm going to ask you while I just do this whiteboard was it called whoop from day one uh because marketing for me is partly a big part of it is branding so um what tell us a little bit of the history of the the naming side of it so I do think there's a fundamental question in building a business of how important uh branding is for the business now you might say well branding is important for every business uh and I'm not going to disagree with you
but in the case of wearable technology I felt a huge W weakness of everything that was in the market uh was that it lacked a feeling of aspiration Medical Technology historically was really stigmatized it had very weird forgettable names and so I wanted to develop a brand that was memorable and um and and had a positive connotation now the word whoop was a word that uh friends of mine and I would say in college to sort of Express energy or excitement for something so people would say like oh will how you feeling i' like oh
I got whoop I feel good and so it was this it was this uh upbeat word that uh friends of mine would say and and it was the kind of word that you always remembered and made you smile and so I thought those were good characteristics uh for building a brand and and uh and so the name of the company became whoop day one day one it was a company called Bobo uh which is a very different does anyone know that's that's what happened to Bobo well so the interesting thing about Bobo which by the
way had there was a clever story behind Bobo in the sense that you know it was meant to mimic your your heartbeating so B makes sense uh now the challenge with Bobo is it me idiot in Spanish which I didn't realize until until doing in Sp doing a bunch of research well don't be an idiot use it you could turn it to Advantage yeah no I didn't think I mean it it was a clever name in its own right but uh but whoop I think do mus bring it back like X was El must first
company right it just takes a while we have a b we have a bobo conference room at headquarters so maybe that's our you proba got the trademark for that's our hat tip to uh to B did you trademark whip straight away as well because that's another thing I mean marketing we just write down branding because I think it's obvious number one get The Branding right but did you trademark it straight away and did you have a problem with cuz one of the people come up with a name in a room and then they find that
it's a company in Spain already that you know helps idiots um you know like so how do you um well Al frame not just as brand but brand positioning perfect because you've got a great idea you come up with a great name guess what you're not a brand but you have a point of view on the world right and so that you've got some notion of positioning we knew that whoop was going to start with pro athletes that's how we were positioning our go to market so we were targeting small market now another way to
say small is focused when you talk about go to market or you talk about Marketing in general I think being focused so many people overlooked this they tried to do the whole market and they don't Niche down into a place they can own and another piece of being focused is you're for someone not everyone yeah and this is an uncomfortable thing you know when you're really focused on a specific group of people versus everyone uh you know a lot of companies want to be for everyone but the problem with being for everyone is then you
don't have a brand you don't have brand positioning uh because brand is is often what you stand for it's what you it's what you say no to uh and if you think about great Brands a lot of them have some sort of core and consistent message and and that brings me to the last Point here which is consistent the way to build a brand over time is to be consistent you keep repeating it you keep staying true to that positioning and then people can associate whoop with performance because they've seen it over and over and
over again in that performance space and they've seen how we talk about performance so the marketing strategy for whoop um I mean these days personal brand is a big a lot of businesses are built on the back of personal brand right so the individual let's say Steve Jobs was probably the original version of this you know Steve Jobs is a creative genius and a marketing genius and apple gets built on the back of that now Apple out you know ranks I guess him partly because he's not here anymore but like do you do you see
Marketing in those terms how how do you figure out the marketing strategy that that's allowed wo to be so successful was it you then instead allocated to the athletes or the trainers and let them do the marketing for you how did you how did you plan out the marketing yeah I mean um a lot of it was uh was starting with these you know pro athletes Fitness enthusiasts a Cascade effect you're doing the yeah and then um after Fitness Enthusiast let's just say aspirational that's me by way I'm right at the bottom there love to
be a pro athlete but aspiration and so you know a lot of our um strategy and mind you this is a 12year plan this was not like you know every two months we change who our Market is which gets back to being consistent uh do you have this in your original business plan orinal Cas was in the original business origal you're actually a genius cuz I think a a lot of people do actually generally stay in this space and assume a market without moving up they stay small well look I mean you can build a
great business being uh you know staying in a small Market but you have to own the whole thing right and it and it can't be as small as Pro athletes pro athletes by the way is one of the smallest markets there is it's like 10,000 people globally so uh you know generally speaking and getting to them is really hard yeah and they want everything for free and they're going to have agents who want to be paid and sounds like influencers kind of I'm like that now uh but no so you got them on board that
how many years when you say 12 years now that's really interesting so how many years did you say focused on that part of J well to be clear we still work with pro athletes today and today more than any um you know we have the most pro athletes on whoop than ever in the company's history but as a strategy this was like 100% of our effort for probably uh let's say three years and then you know when we went to the fitness Enthusiast Market let's call it 6040 how did you get into the fitness enus
and then that was you know um probably three years and then this aspirational we've been there for six years did it happen naturally or you made a decision right now we're switching into the slightly bigger Market of Fitness enthusiasts uh no it was strategic I mean this changed our you know our go to market strategy it changed how we were selling the product you know here it was like uh you know team sales almost here it was um direct to Consumer and by the way it was a hardware business so was a onetime fee and
then here it's direct to Consumer it's retail it's uh you know third parties this is where everyone thinks they should start that's the thing because this is the hard work team sales is hard that's not very easily scalable initially right you did the hard work first a lot of people just want to put it in a shop shop in it sales or put on Amazon in it sales right totally well it goes back to this and it goes back to love right right if you can get a market to love your product you can build
a brand and then you get to come down here was this was it profit profit mating making for you those three years did you make money or did it did no this was a this was a lousy business right but it was the seeds of a great business right because Nike do this in Reverse right Nike will go and see I'm trying to think I'm so bad at remembering all these famous people's but they'll go to an athlete and they'll make a shoe with them right so they go they go that way into it right
they kind of go to the athlete as a as a thank you Michael Jordan as a partner and and make a product with them yeah although I would argue that they follow this in an accelerated way with let's say a Jordan right I mean Step One is um get the name on board MJ right step two is design product mhm and then let's not forget right love this was a product that MJ loved and then for Mass market right Y and so that's how er Jordan is now one of the best brands in the world
everybody thinks these days that they need to build a personal brand to build a business what do you feel about that on a personal level for you I don't think so I mean I sure it could help uh it certainly helps if your personal mission is very closely tied to the brand or the product and service that you're trying to build you have to be fit and healthy yeah I mean look that's true it would be off brand if I wasn't uh but let's imagine I wasn't you know I'd probably be more in the background
right I wouldn't be um I wouldn't be you know as as forward- facing in that regard uh because maybe although I had identified a problem I wasn't necessarily part of the solution but interestingly enough that would have a misalignment with what you were saying earlier because it wouldn't be a problem you really cared about probably I think that's right I mean uh you know I I think ultimately you want to have some deep association with it but the the other piece of it is that building a personal brand can be timec consuming it could be
a distraction so through that lens you want to make sure that you've got your priorities right you didn't start a company to get famous you show a company to solve a problem to don't want fame anyway it's a pain in the ass but I love I love brands that have built a business and then the people that built the business become personal Brands I mean frankly Steve Jobs is probably like that he was although he was front and center he wasn't really famous until the business was working I actually think that's much I built my
first business no one even really knew who I was I just built a brand that people loved and then you've got something to say as well right um are you are you working on your personal brand now I'm just interested in that side of it I mean I I would say that I'm mostly focused on building whoop and it's turned out part of that process it's been valuable to you know to be out front and center and talking about the history of the company and some of the decisions that we've made so whether that means
I'm developing my personal brand or whether that means I'm supporting the company as a founder and a CEO I don't know I think you could be a massive personal brand um just before we move on to values and I think we can do what's the other one values uh an evolution of the business model um just quickly on marketing just one final thing I know people be thinking about this how did you spend money in the early days on marketing was there any any thoughts on that quickly because a lot of people will want to
have a business they don't they want to Market it they don't have a big personal brand what what what how how do you view that I think a lot of the initial marketing strategy was getting was working hard to have the best athletes wearing the product but we did not pay for that and in fact I'm skeptical of spending a lot of money on marketing early on what you're really trying to do is in a hand-to-hand combat kind of way find people who love your product find people who love your product or service I mean
that's all about direct interaction it's about your team and um and then once you have a sense for people who love your product which by the way is product Market fit which is a good expression to know then from there you can start spending money on marketing if you pay pay those people and they wear it it's reminds me of the Samsung marketing campaign where they got all these influencers to tweet and it said sent from the iPhone but they were all tweeting about how great Samsung was yeah so you got to have it authentic
right need to be authentic so let's just talk now authentic is a good lead into values but I'm going to combine this uh with business model a little bit because we we um we talked earlier that really your business model the final stage you were just showing in the Cascade of the marketing the business model the actual scalable income stream wasn't upfront in the original part of the business right like you say it's very unscalable in many ways so just talk us a little bit through how values and and the business model played out let's
talk a little bit about the characteristics of good values and then we'll talk a little bit about um what whoops values are and how that contributes to the business model all right so I'm going to I'm going to do this we'll say um sort of values guide what makes a good value and then let's just be more specific to whoop one thing to consider uh in in your values is authenticity right what's true for you yeah I think yeah what's true about your mission your company your team right it's worth just defining why values even
matter in the first place values culture are how people make decisions when you're not there MH it's how the thing runs it's not scalable without a system around that yet you run into a problem should you solve it with more time should you rush to get something out the door should you solve it with money should you uh hire a bunch of people to tackle it like your values are going to help Define how you're going to do that how you're going to how you're going to make a ton of different decisions and hire people
right again back the earlier they' got to be authentically caring about your problem otherwise don't hire right people and hiring mhm your values need to align with the people you bring into the team and your hiring process you know one of our values at whoop is to be high intensity and high humility now why is this an important combination first of all being high intensity High humility is actually somewhat unusual pairing most people who are high intensity can be arrogant most people who are arrogant uh or excuse me most people are high humility can also
be somewhat Meek so what you want to find is people who are hard charging and then people who recognize in the process of solving hard problems they don't have all the answers whoop is a particularly multi-disciplinary company which means all these different departments need to work closely together and guess what when you put three different department in a room there's a collision right people are fighting and arguing over ideas and so another characteristic of whoop is it's a meritocracy which means best idea wins even if it's not yours correct you speak last type thing right
as well yeah yeah and and so uh these are these are two characteristics that are unique to whoop which brings me over to another Value Guide which is you want them to be unique and this ties to the authenticity piece but if you have a value that's not unique uh what makes it makes it very forgettable and it makes it something that people um don't refer back to I'll give you another value for whoop That's Unique research and Fast Pace in starting the company I realized that there were a lot of research institutions that moved
at a glacial pace and I realized there were a lot of tech companies that moved fast but guess what they didn't do research they were fast and loose and so it was a differentiating value to do everything based on research but to move at a blazingly fast pace and so that goes back to having a unique value and when you can combine different characteristics of an organization uh that other companies don't have all of a sudden you now have created a capability for yourself that could be a differentiator in building the company and this has
been one of the most important differentiators for whoop we move quickly and we do everything based on Research I mean during covid we launched covid-19 tracking in March of 2020 by the end of March of 2020 we had 2,000 people report having tested positive for covid so all of a sudden we had a huge data set on whoop of what does Co look like we then partnered with CQ and Cleveland Clinic two leading research institutions by June of 2020 we were able to show that respiratory rate being elevated was predictive of covid-19 actually know I
had Co from whoop there you go yeah I knew I had a CO from whoop how I found out and later that summer we had peer reviewed research showing that respiratory rate was a key biomarker for predicting covid and then by September of 2020 it was built and in the app as an alerting system so from March to September we went from something we had no idea about to amazing research to a feature that was helping our members we would not have done that without this value I mean I think your values guide is going
to it's going to help people understand tradeoffs around cost quality time it's going to help understand tradeoffs around control risk and speed you know for example uh we have a value of bias for Action what does this mean it means we hired you to make decisions we didn't hire you to form committees I say this to every person we hire we want you to make decisions okay now let's imagine this was a values guide for a bank you know or a security firm right would they have a bias for Action no maybe they want to
optimize for just control right whereas we're optimizing for Speed but we pair that speed with research so that helps govern the business right so that's how all of a sudden you can have these unique authentic values and they lead you to a unique place right I guess this also depends this control risk uh element also depends on what part of the business is Right totally so you know there's going to be more controls around data yes for example and maybe less controls over bringing value to a user as long as it doesn't compromise data so
you got to you got to adjust this depending on what part of the business is being absolutely oper and this maybe to clarify I was thinking of as top- down control right right so do you have a business that uh is very uh has a strong hierarchy or do you have a business that's got a flatter hierarchy and typically businesses that have flatter hierarchies um can move faster a lot more work to have mediocracy I run a mediocracy too it requires um you to be humble and not know all the answers which when you're leading
a company is a tricky dilemma because you sometimes have a lot of the answers and and and I I think Simon s said you know the best way to run a mediocracy is in a room of people always be the last person to speak which I really like because if you say something up front it's probably going to be what the rest of the room then think right well it's often hard to know what the best idea is until you've heard a lot of ideas and so if you are the most senior person in a
room it it helps be classed and be able to gather some feedback along the way so this is values now let's talk how this played into business model right so the the these value guid are brilliant everyone should draft one up for themselves but how did this turn into business model tell us how the business model kind of played out a little bit cuz what I love about the way you've explained it most people think they need a business model from day one um I I feel like your business model came much later in the
process okay while you're writing that quickly I will say YouTube uh business model originally the founders of YouTube their business model was people would pay to subscribe to the channel and that's how they raised money on the back of that feis but of course when Google bought them Google didn't need that part they just ran ads around it so so yeah I'm also interested in how this plays out in an investment round kind of multi so initially whoop sold hardware and then over time we became a business model where it was a membership and it
was a subscription right so this is a a one-time fee and this is a subscription now how do your values change based on your business model if you're selling Hardware what you're incentivized to do is ship more Hardware look at companies that are exclusively Hardware right they come out with a product in September 12 months go by they come out with another version of that product maybe in different colors maybe with some slight in Innovations but they're essentially launching a hardware no innovation launching another hardware and why is there little Innovation on top of this
because they want you to buy that right okay what's the difference now if you're a membership you actually have to release more software right because when you come out with a hardware someone's now thinking next month hey am I going to keep paying for this so you have to be releasing new features every month or hopefully every week even to keep people engaged in the product and when whoop became a membership it had this enormous impact on our software Cadence because we became much more member obsessed which I would add as a very powerful value
of being a subscription when you're selling a subscription you have to fight for that uh member every day every week every month essentially you're continuing to acquire your existing members versus just focused on new customers so when you're in the hardware business it's all about new customers when you're in the subscription business you care as much about your existing members as you care about new ones because you got to keep them on it another huge aspect that I underestimated was how much this changed the way you think about customer support when you're a membership and
people are trying to pay you every month there's an expectation that comes with that around what service looks like we needed to have much better MERS membership services so over here we had what I would call customer support and you know I would give us a grade of a c whereas over here we built a membership services team and that would give us a grade of an A and the reason for that again it goes back to that membership model right you cannot lose your existing members because they have a really deep relationship with your
uh with your business long term did you at first lose members did you upgrade this oh yeah this is I mean this is iteration that happened over time right right this was um let's call it 2003 to 2018 and this was you know 2018 to present because this is more a b Tob business in my head right I mean we selling and this is B Toc well this was B Toc at one point right you know in being the individual trainers 2017 we first went to Consumers okay so but you selling you were selling to
the trainers customers initially we were selling to teams and and athletes and then football team proper Real Sports I didn't realize it was a full team and then you know in 2017 we opened up our website whoop.com where people could just buy the the hardware at one time right but did so again so when did you make the switch what made you decide to switch from say or move towards the membership model what was the Catalyst reasons that you can build a subscription right this is a question I actually get asked all the time so
we'll do it you can just send the link to this next time I ask you sa you subscription question mark can your business be a subscription okay um is there a daily or weekly habit you need to have a daily or weekly habit for people to want to pay for a subscription um is engagement High if your product has low engagement no one's going to want to keep paying for it over time right so you're you're naturally going to need to be in a business of selling something once versus trying to get people to keep
paying for it over time is it going to evolve right you look at a business like Netflix or Spotify right it works as a subscription because new shows are coming out new music's coming out right that you're going to want to watch or listen to we knew in building whoop that we had this whole uh backlog of features that we were planning to build and so someone who signed up for whoop to get one set of uh you know advice uh or one set of functionality was going to get a whole host of other features
and functionality with time and so we knew that our product was going to be able to evolve with our members and I think that that kind of gets at the last element um or characteristic that makes a subscription uh uh successful um and it's this notion of renewal you need to be able to follow your members on a on a journey follow your subscribers on a journey one thing that I'm proud of with whoop is that the core reason that someone signs up for whoop is often actually different than why they're still on it today
you know maybe there was a woman who joined whoop because she was training for a marathon and then you know 18 months or two years later um she's now pregnant for the first time and so all of a sudden she needs to understand her body during pregnancy and then she needs to understand what it's like to have a newborn and then she needs to understand uh perhaps you know some new fitness regimen okay those are all different chapters of someone's life right and fortunately we develop different features so that it would evolve throughout that journey
and that gave us again confidence to have a subscription that's a brilliant way for people to do a strength test on their own business because also people ask me all the time can I make my business a subscription revenue is a lot of cost to manage a subscri R you too like you say your membership services have to be grade A that's a big investment um out of Interest final thing on this how did you decide pricing on the membership site well you need to look at what does it cost to deliver your product or
service uh one interesting challenge with being a subscription is that it actually may change your cash flow so I'll put that over here as a business question but if you go from getting $500 up front to getting $30 up front that's going to change the rate at which you're plus you have to make the product like I got this for free in effect right and the scary thing about a subscription business where you lose capital on day one is the faster you grow the faster you run out of money there must been quite scary talk
about having all sorts of different challenges at one time so this is a this is a big decision just to say it you know our decision to do this was a bet the business decision did you raise money around the decision uh we did both right before and right after wow absolutely amazing uh I know we uh don't have any more time with you um but thank you for sharing all of this with us this is absolutely mind-blowing and we're going to go and get some chicken now
