In 2016, WayBetter was stuck in the weight loss business with our first product DietBet. We could grow the product with an increase of marketing partners, but that wasnāt the step-function growth that the CEO wanted.
To break us out of the slump, I suggested we try the business in an adjacent vertical: step tracking.
Our product provided multi-week fitness challenges. Players all start and finish on the same days. Thereās a bet required to join, but itās not winner-take-all. Instead, everyone who completes the challenge splits the pot. The bet provides the proven motivation mechanisms of reward and loss aversion.
For our weight loss challenge, the goal is to lose 4% of oneās weight in a month. We didnāt know what a good step challenge should be. The only recommendation was by the American Heart Association to get 10K steps per day.
After looking at step data for a few customers, I discovered that the 10K step goal is a myth. For some people, 10K might as well be 100K. For some commuters, they hit 10K by noon. We had to solve how to give every customer a meaningful goal.
After a lot of trial and error, I invented a proprietary algorithm. Using a customerās step history, we would provide them with personal goals for the game. But we had to find out if people would accept a $40 bet with other people with lower step goals. We emailed some customers and got more on the phoneāit turns out everyone was fine with personalized goals. They wanted to get healthy, not take money from someone who was less in shape.
There were many other challenges to solve: pricing, duration, making it worth the effort, UI, and more. We solved them all by running continuous beta challenges and doing up to 5 code releases in a single day. After launch, we kept the pace up with the mantra āship and iterate.ā
Doing research on fitness tracker APIs, I was walking around Manhattan every day with 5 devices on my wrist and 3 phones in my pocket. It was so much fun!
The two step trackers with the largest market share in were Fitbit and the actual iPhone and Android devices. Modern phones tracked steps by default, right out the box. So for the first release, we opted to support steps from phones and not Fitbit, since there were many millions more people with phones. This was a bad idea.
While more people had phones, people who wanted to play a step game already had Fitbits. So while phones had a greater market share, Fitbit ruled for the folks who installed our app. Our audience was 85% women. After the mistake to support phones first, I also learned that women's pants have tiny pockets. Many women donāt carry their phone all day. Many fields like nursing and teaching make it difficult to carry a phone.
We had some very irate early customers, but luckily we were able to hurry up and add Fitbit support to quell the riot.
StepBet went on to be a valuable product for WayBetter and generate many millions in revenue. It supports a premium subscription and is a strong viral growth channel. As of today, the app is ranked 4.5+ starts in both app stores and continues to grow.