Fitbit started in May 2007 by James Park and Eric Freidman. For the fiscal year ending December 2015, the company’s revenues increased an impressive 149% to $1.858 million. The company has products in over 48,000 stores worldwide, which is quite a large number of stores.
How the Company Started
Park was an early adopter of the Wii and how it was able to help people with their fitness goals. He reached out to business partner Eric Friedman to come up with a device that could help people using wearable technology.
The company received four rounds of funding, each increasing substantially per round, for a total of $66 million. The company had its IPO in 2015. The IPO has not been as successful as it hoped. Park has reclassified his company as wearable fitness (and hence its strategy), whereas it was considered a consumer electronics business at the time of the IPO.
The company had to overcome the sameness factor. That is if people wore the technology and did the same routines consistently, the readings from the devices would not change much from day-to-day.
This caused people to pack up the devices over time. What the company did was create an ecosystem where device owners engaged with other device owners, as well as with the website and social media. This required them to continue using their devices.
Analysts who follow the company, are concerned the company will not be able to maintain its lead as more players get in on the action. While Apple’s smart watch may be geared towards generalized applications, others like Nike have developed wearable technology for athletes.
As competition heats up, this will put pressure on the company to step up, which won’t be easy.
Why it Works
People don’t truly understand their bodies the way they should. They don’t know what their optimal heart rates should be nor do they know what comprises a good BMI, etc. A Fitbit device can help reduce that knowledge gap by providing a baseline. When people know what their numbers are, they can research where those numbers should be.
Certain models of Fitbit allow sharing with friends (who also own a Fitbit). This gives people the incentive to do better than their friends. They can set up challenges and push each other.
The company has the advantage of being first-to-market. The name Fitbit is synonymous with wearable fitness devices and people will likely turn to them first. More competition has entered the arena including big players like Apple and Samsung. Therefore, the company will need to come up with ways to effectively keep their product strong.
The company has concentrated on the category of wearable fitness, unlike Samsung and Apple. It can focus all of its efforts on this category. Fitbit is also developing an ecosystem for Fitbit users that incorporates its website and social media. Users can share information with other users of the device and sync up with those devices.
A big draw for users is that it works with both Android and iPhones for syncing. If you are one type of user over another, those won’t matter much. But, it expands the reach of the market.
If people do keep wearing the device, it can give you reminders that you’ve been sitting too long and you need to be more active. This can be a great way to motivate you into getting some physical activity.
The mission statement of the company is to help inspire people to live healthier lives. By staying true to this message, users tend to stay loyal to the company. As mentioned earlier, the company’s ecosystem gets people hooked and makes it tougher for them to leave. Part of this ecosystem is the ability for users to track their exercise as well as their diets.
The company has also joined in several campaigns including Feeding America, where it donated food. This generated buzz and brand recognition.
There are several well-known people who own and use Fitbit products. President Obama, Ryan Reynolds, James Pattinson all are Fitbit users. While the company doesn’t necessarily have endorsements from celebrities, it certainly doesn’t hurt that high-profile people are seen wearing their devices.
Fitbit products made it onto lists for the 2015 holiday season. This is a great selling feature for the company and can be used as part of its strategy. Because it did well for the holidays, there are plenty of people who received a Fitbit as a gift and have the potential to become converts of the technology and the company.
Many Fitbit products sold on Amazon have high ratings, where 5-star ratings are dominant. Reviewers for one instance of the Fitbit Flex 2 stated that the device did not work and there were multiple complaints. Others of this same device claimed it did not sync with Android devices.
Another big complaint from users is that it is not accurate when it comes to step count. However, people who are familiar with how the step count is implemented know that it is based on arm movements.
So, you could be sitting still and if you talk with your hands, it will register steps. This could be seen as a design flaw or people come to accept that is the way it is calculated. Perhaps having an ankle device as well could streamline this process.
It’s possible to measure the number of steps based on the distance (and time) you travel (GPS) but not all devices support GPS tracking. This too would be an estimate as not everybody’s stride would be the same.
Other authority websites post reviews about individual products. For instance, CNET.com gives a 3.5 rating for the Fitbit Blaze. Macworld.com has a 4.5-star rating for the Fitbit Alta. PCMag.com rates the Fitbit Charge 2 as a 4.5 as well.
Interestingly, on a website called TrustPilot.com, reviewers complain that customer service is lacking for Fitbit. The average rating for over 200 reviews is 3.8. If you take a look at these reviews, they seem extreme on either end.
Best customer service to worst customer service, etc. Usually, reviews in the middle give more of a truer picture but there aren’t many to draw from.
Lessons Learned By The Business
- Fitbit learned how to keep customers in the loop and wanting to continue with using the company’s products. The website, social media, apps, and the device all work together to keep the users engaged. This helps to strengthen its brand loyalty.
- The data they have available allows them to quickly ascertain how customers are using their products and adjust future renditions based on this data. In many cases, this data is instantaneously available which is incredible.
- The company learned how to create a strong community. It accelerates in this by taking advantage of the various channels it has available.
- The company excelled at making their brand ubiquitous with wearable exercise technology. Customers will think of Fitbit before others.
How Other Businesses Can Learn From This
The company attributes a large part of its success to having specific goals. It is, after all, a health tracking company with the goal to make as many people as healthy as possible. This laser-focused strategy can help them hone in on the best ways to accomplish this for people.