Strava Wants You Back
Last month the fitness giant tightened its paywall and announced it was recommitting to core users. Here's what has to happen for that to work.
Anyone who uses the social-fitness app Strava undoubtedly noticed the host of new features that the company steadily rolled out this spring. They ranged from the flashy (a robust new route-planning tool) to the mundane (splitting moving time and total elapsed time).
Those new features were part of a larger plan. Collectively, they’re the carrot to lure back lapsed members who’ve grown frustrated with the service’s drift away from core users amid an ever broadening focus on growth. Then, on May 18, Strava swung the stick: most of its new features, and many popular existing ones, like segment leaderboards, were moved behind a $5-a-month paywall.
Strava has always been a “freemium” service, with access to some features reserved for members who paid an annual fee (a fee that changed over the years). But as I reported last year, many nonpaying users didn’t see the need for premium access; they got most of what they wanted gratis. After years of trying to adhere to its original business model, Strava’s decision amounts to an abrupt shift. The company is betting that it can transition to a subscriber business model, which comes with massive, possibly existential risks.
Reaction to the paywall announcement was split. A number of nonpaying users complained that Strava’s move was an affront to to their loyalty over the years. Others pointed out that if you faithfully use a service, you should value it enough to pay for it, especially as Strava’s ask isn’t exactly a huge amount.
There’s a lot more logical weight behind the “pay for what you use” argument. What value free users offer a consumer service is unclear at best. But there’s also something vital missing from that message. Namely: Strava needs to prove to users that it really is worth paying for. The problem? Its track record there is uneven.
The shift, which cofounders Mark Gainey and Michael Horvath announced in a letter, marks both a beginning and an end for the business. Launched in 2009, Strava began as a scrappy startup geared toward cyclists and runners. It attracted athletes who loved the opportunity to virtually measure themselves against their own best efforts, and those of others, on real-world routes, spurring everything from “Strava or it didn’t happen” memes to a Twitter account called Strava Wankers to the term Stravasshole.
Through its first ten years, the company’s strategy focused on adding ever more users, but it struggled to monetize them. Strava has never disclosed how many of its 60 million accounts belong to people who subscribe. Cosmo Catalano, a longtime Strava user (and an eloquent critic), has done the most detailed analysis I’ve seen and estimates that just 2.2 percent pay to use the app.
The $79 million in annual income that those roughly 1.3 million subscriptions net sounds more flush than it probably is, when you factor in the pay for 180 employees (likely well over $20 million a year based on average software-engineer salaries and a widely used multiplier for employee costs), office space in high-rent areas like downtown San Francisco, and considerable server and data expenses.
With the freemium model, Strava wasn’t going to be able to convert enough nonpaying members into paying subscribers to get it to break-even status. Nevertheless, under the leadership of former CEO James Quarles, who was hired in May 2017 and left in November 2019, Strava effectively doubled down on the approach. The company added more integrations with fitness brands, from Barre3 to LiveRowing. It unveiled a Facebook-like posts feature that let users publish photos, videos, and journal entries. And controversially, it began an advertising program called Sponsored Integrations, which essentially turned its users into unwitting brand pitchmen and women by tacking ads onto any workouts done using equipment from a paying company.
The goal is clear: Strava has long been overwhelmingly reliant on subscription revenue and is finally making peace with that.
Some of those changes, like posts, were met with indifference. Others—principally Sponsored Integrations—drew anger. Worse: amid Strava’s ever broadening focus, the core product began to suffer. The company struggled to fix bugs and became increasingly remote and unresponsive to users’ concerns.
In November, Quarles was shown the door, along with a number of other employees (including some engineers, in what seemed to be a cost-cutting move). Horvath replaced him, marking his second stint as CEO, Gainey assumed the role of executive chairman, and the pair put in place their new plan to win back users.
Some of the Quarles-era initiatives are being dropped outright, like the widely loathed Sponsored Integrations. Others, like third-party app integrations, are being quietly back-burnered in favor of new features that Strava says better serve its core users’ needs.
You can tell Strava has pivoted away from Quarles’s expansive “all athletes” vision, because almost all of the 50-plus features Strava has introduced this year focus on the core outdoor endurance sports that Strava started with. The Routes feature offers algorithm-driven recommendations for new rides and runs at home or in a new city. Matched Rides/Runs analyzes changes in user performance on a given route over time. Improved workout-analysis tools track metrics like power output or, for swimmers, stroke rate.
And crucially, all of that stuff is now available with a subscription that costs $5 per month. (The company did away with the à la carte “pack” pricing structure it tried last year). The key move, however, was putting Strava’s original killer app—segment leaderboards—behind the paywall, too (though some segment features remain in the free version, including PRs and search capability). The top-ten leaderboard rankings are still part of the free version as well, but unless you’re really fast, you’re gonna have to pay to see how you rank on that climb.
The goal is clear: Strava has long been overwhelmingly reliant on subscription revenue and is finally making peace with that. Rather than gently prodding users to pay and looking for new ways to make money off those who don’t, it’s focusing intently on user revenue and being far more strict about what it gives away.
“We are not yet a profitable company and need to become one in order to serve you better,” wrote Gainey and Horvath in their letter to users. Short on specifics, Strava says that subscription earnings will go toward an increased effort to develop new, improved features for paying members. But new features alone probably aren’t going to lure back lapsed subscribers, who should be the company’s prime target.
For one, there are already bugs to fix. The recommendation engine of the new Routes feature has been plagued by the entirely foreseeable hiccup of routing runners and riders across private land. Other updates marketed as new are underwhelming. For example: a few weeks ago, I got an email touting Strava’s efforts to clean up segment clutter. This is absolutely welcome, but is it really new? Or is it just basic product maintenance that the company should have been doing anyway without expecting kudos?
Strava’s biggest challenge is to prove to users that it’s changed. The company has to show that it’s responsive to users’ concerns, wants, and needs. It has to listen. That means devoting as much effort to fixing bugs as it spends developing new features. It means visibly engaging with users in its support forums and on channels like Reddit’s r/Strava community, which has become the default home for core users looking to ask questions, problem-solve, and complain. It means being quicker to respond to legitimate concerns about issues like privacy and making its communication strategy humbler. All of this is something Strava can only prove over time but something that’s as important a resource here as money.
Ultimately, success or failure depends on genuine patience by the company’s board. Only a year ago, everyone I spoke with at Strava was—publicly, at least—devoutly in support of the Quarles plan, which the company dumped wholesale mere months later. And there may have been resistance to the new plan, too. If Strava’s latest course change doesn’t yield positive progress (profitability or a steady advance toward it) in a year, I wouldn’t be surprised to see an investor revolt and yet another pivot or a sale.
But if Strava can pull this off, its success might be even more meaningful than the typical tech story of exponential growth. It could result in a durable, sustainable product built around a community that loves and values it and feels valued in return. It’s how Strava started. It’s what it always should’ve been.