I Asked The Whoop Founder How To Build A Billion Dollar Business

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 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 cares 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. 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, in 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 Nike?" Did how did that process play out in the problem identification?

Well, does go back to 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; Jawbone, 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 niche. 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 it 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 in 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 cons of this idea to someone that isn't a specialist perhaps, right? Yeah, I think that, you know, in 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 used 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 properly. Yeah, at the time, if you were to say, "We're going to measure athletes," everyone immediately went to sports and exercise, right? Peak heartbeat; 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 Jobs 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 lot 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 stumble 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; 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 aspirational 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. Start 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 loved the capability to order it on demand, and they said, "How do we expand from small to large?" All of a sudden, here comes UberX. 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. 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 start building products for men; they start expanding beyond just yoga wear. 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 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, Blockbuster 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 low-end data; it was a 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 afterthought? 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 blockbusters? 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 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 12-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. You know, it's like looking back on something. Oh, I'd love to see it. That was diaries, 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 do 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 disappointing 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, 25 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. Why? 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, Nike 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 going 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 businesses fail, 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 related 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, they 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 art, 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 is 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 dollars 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 I'd hoped, and the money I'd 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 define 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 have collaborated with PayPal to help enable busy entrepreneurs like yourself to continue to grow in hard times and succeed. PayPal supports small business owners by helping to take the hassle out of online payments through providing one easy solution. Being able to offer your customers a range of popular payment methods, like using their mobile wallet and PayPal Pay Later, can help keep your customers coming back for more. PayPal's complete payment solution for all your payment needs can help you convert more sales; this is fundamental to gain your customers' trust as a small business owner. So what are you waiting for? Go fail and explore how your business can benefit from using PayPal today and eventually thrive. 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 matured 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 out of school. So, you know, did you finish, by the way, or you dropped out before you finished?

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 finish 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 never-ending web of people that you can potentially meet. There's an 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 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.

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, a hard, hard decision—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've got to make sure it's the truth, and you've 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; 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, just the nuance of like hiring someone—did you give equity 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 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 trenches with them 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: 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 versus 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 iterative process. I think you have to ask this question of, um, technical de-risk: What is it about your your, um, problem that you're or the technology that you're building that you need to de-risk? 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 de-risk 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? Were we going to use, um, you know, sonic waves? There were all these different versions of the technology that we looked at, that—and then we started building prototypes, and—and so this is where, you know, you need to have, um, you know, great engineering, uh, you know, you might need to have some really sophisticated data science; 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, 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. De-risk. But—way I interviewed Tony Fadell, the inventor of the iPod—lot of 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 to 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 patent 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—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 patent 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, 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 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'd like, "Oh, I got whoop; I feel good." And so it was this—it was this 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 heartbeat, so B makes sense. Uh, now the challenge with Bobo is it means idiot in Spanish, which I didn't realize until—until doing—in—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—must bring it back, like X was El must first company, right? It just takes a while. We have a—we have a Bobo conference room at headquarters, so maybe that's our—you probably got the trademark for that—that's our hat tip to uh to B. Did you trademark Whoop 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—'cause 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—well, all 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 Whoop 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—was starting with these, you know, pro athletes, fitness enthusiasts—a cascade effect—you're doing the—yeah—and then—after fitness enthusiast, let's just say aspirational—that's me, by the way—I'm right at the bottom there—love to be a pro athlete, but aspirational. And so, you know, a lot of our um strategy—and mind you, this is a 12-year 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? Original—Cas was in the original business—origal—you're actually a genius, 'cause 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 60/40—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 one-time 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 it in 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—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; 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—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 time-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 started 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—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 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've 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 departments 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 COVID 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, no, I had COVID from Whoop. There you go. Yeah, I knew I had COVID 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, 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 a meritocracy. I run a meritocracy, 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 Sinek said, you know, the best way to run a meritocracy is in a room of people, always be the last person to speak, which I really like because if you say something upfront, it's probably going to be what the rest of the room then thinks, 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 to 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 guides 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, 'cause 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 fees. 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 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 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 member 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, 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 B2B business in my head, right? I mean, we're selling, and this is B2C. Well, this was B2C at one point, right? You know, in being the individual trainers. 2017, we first went to consumers. Okay, so but you're selling, you were selling to the trainers' customers initially. We were selling to teams and and athletes and then football teams, 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, 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 upfront to getting $30 upfront, 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 have 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.