First edition of HIT Innovation Founder Stories, we speak with Jakob Nordenhof Jønck, Co-Founder of Endomondo, where Jakob shares his story of how three former McKinsey & Co. management consultants (all former semi or professional athletes) took their passion for active, healthy lifestyles and created Endomondo, a social fitness application that turns mobile phones into full-fledged personal trainers. Endomondo is a great example of how technology can be utilized as a tool to provide consumers with the means to manage/monitor their own health and promote an active, healthy lifestyle.
In the second part of our interview podcast, Jakob discusses
- Advice on raising capital
- Pros and Cons of his management consultant background
- Endomondo’s Microsoft Health Users Group 2012 Innovation Award
- Utilization of mobile technology for consumers to manage their health
HIT Consultant: Tell me how about the venture capital process? You said you guys were pretty naive at that time, what words of advice can you give to aspiring entrepreneurs for going through this process?
Jakob Jønck: One thing is consider your team really hard. If you are starting a tech company, don’t start a tech company with no engineers on your team. We wouldn’t do that again, no chance. Then again, a lot of engineers outside of the valley are not too risk taking. It’s a bit of both. We would never start a tech company with no engineers in the founding team. So that’s one thing to look at the team. Secondly, be careful about the timing. We were lucky at some point bidding on this and the other side of the coin was that the timing of raising capital in 2008 was just a nightmare, but nobody could have anticipated that. It was the financial crisis that just broke out. Just try not to do that in those times. The thing is that when you start a company in the middle of the financial crisis is you don’t get too many competitors, because it’s just too risky starting up a company. Thirdly, I would say is it doesn’t harm to have people in the company with a track record of building startups, because when you go to VCs they care about what you have done before. So they always stress to the team, the business plan in a company like ours, so if they can see the idea and they can see parts of the potential, then there are in it. But, if you get a team with a track record of building up successful startups that have exited this is significantly easier to do to raise capital. We didn’t have that at that time. We can see that when other people are doing it. So, those are sort of the three things that we would redo if we could.
HIT Consultant: How do you feel your management consultant background help you in the process of starting?
Jakob Jønck: So, one thing that you learn is a lot about business. So you learn to understand how other companies think and you learn how to work with these companies in different ways. In all honesty, we were pretty good at creating excel files and powerpoints and all that stuff. Its a lot about what you do as a consultant. But these skills you learn as a management consultant, I’d say only really come into play about a year ago. When you get to a certain size and when you start talking to big partners not only what we are talking about today like Google and Facebook or other types of companies you are in dialog with. Let’s say you are talking to some of the biggest brands in the world about what you can do together, then the management consultant background comes in as a favor, because you know a lot about how they think and what they are aiming for and your capable of putting yourself in their place and your capable of having a very high level dialog. One of the biggest deficits an engineer has to learn is to not to be too focused on the detail, but to really try to see the high level view of it. And that is one of the biggest benefits you have as a management consultant, you constantly try to look at it from above and try to see what you can do to change stuff. That ability is something that we learned through that career and it comes in handy, but I wouldn’t say it was a real advantage to begin with to be honest. You start a company, there is nothing there. I mean your the one buying your printer, your the one changing the cartridge, your the one buying tables from Ikea. You do everything. Management consultants don’t do a whole lot, you have people to help you all around. You give orders and ask for stuff and then you do the analysis and recommendations and stuff. But there are so many things that you do not don’t do as an executive management consultant. Those are the things you have to do as a startup and you have to like doing all this stuff. It’s part of the game. In all honesty, there are more disadvantages to begin with than the other way around, but if you have the mindset and you really want to do it, you survive and you are ready when it becomes more successful. And you take these more important discussions with major companies that’s when you really start shining through I think.
HIT Consultant: You guys just recently won the Microsoft Health Users Group 2012 Innovation Award, can you tell me more about that?
Jakob Jønck: Well we were very happy that they awarded us with the award. I think for us its a signal really that what we have been trying to do here has seen recognition in the market. I see the HUG award is another sort of sign that what we are doing is not totally off. I think the way we work with Google, they invited to showcase at different events at the IO and the Prism Editors Choice that was a big recognition for us. Microsoft is another really big recognition for us not only what they have done with on Windows 8 launch, but also on the Windows 7. I think that also a sign of appreciation and recognition with what we are doing with Facebook today. We are not too concerned about awards, but we do appreciate them of course. For us its more like it gives us the opportunity to work with tech companies that are changing the world and be part of that. So I can how we can leverage what we can do and adding value to what you guys do as a platform provider. And that’s what we are trying to and having that dialog is very interesting for us and the HUC award I think is a really good sign of an appreciation of having a constructive dialog and really good dialog with these kinds of companies Microsoft included.
HIT Consultant: What are your thoughts on the state of using mobile technology for consumer benefit? What are your thoughts on that industry and how can we utilize that technology in more ways that we can put the tools in front of the consumer so that they can manage their health and stay healthier longer to live longer lives?
Jakob Jønck: Good question, I could probably talk for hours about this. I’m very passionate about it. I think we have only just seen the beginning. I’m pretty sure you have read Thomas Goetz’s book, the Wired Magazine Editor, The Decision Tree. I’m a big fan of him and I think one of his points was I remember when I read it back then that today the inaccessible of technology is so massive that contrary to just five years ago, you get to measure a lot of data. Personally, I totally agree with him and as far as technology comes down it is going to explode even further. I think the way you are going to see Endomondo evolve and also the industry, I think is a very young industry in the sense that right now you are just measuring data. You don’t do anything with it whatsoever, you leave it up to the consumer and you have quantified sales movement to believe in people’s ability to make sense of these data on their own just by analyzes and looking at it over time. I think that for most people this is not the case. For most people they need help to understand this kind of data. So I think we are only at a very very young industry, I think that this will pick up, you’ll get more and more tools to measure what your doing from a consumer health perspective. I think over time this will happen more rapidly than we probably expect. I think you are going to start seeing companies trying to make sense of the data and really help people understand what they need to do in order to improve their fitness level or their health state or their sleep pattern or whatever they want to focus on. I think there is a lot of potential in doing that. That’s the consumer side of it. I think we have just seen the beginning.
One more thing at least that’s how we look at the world is, it’s one thing to be able to track your data and you have so many devices and again its exploding. If this data and this track of what you do for it to become interesting to do over time and engaging to do over time for normal human beings instead of being more than a gadget. It has to be something more than just tracking your data and everything. It kinda goes back to some of things that was frustrating for me back when we started Endomondo that I couldn’t share my data with anyone so I could measure my own personal performance. Today, you’ll find tons of systems where the machine is able to tell the man what to do going forward. But I think all of this is the really missing the key component in making this a sustainable engaging experience over time and it is basically what’s needed to create behavioral change. I think you need the social aspect and I am 110% about that. So, I think what you are going to see at least in my viewpoint, is you are going to see the services try to integrate with services that make social to make more engaging or try to do it themselves. It is interesting to follow the game, you take a Jawbone or you take the Nike fuel band or you take these kind of services or even the Motorola Active and you go in to look at the services they provide the end user and its a very individual service for the most part. I think if you couple it with other people in your own personal network like with friends and family, people that matter to you. If they are not in on it, there is a limit to how motivating and how life changing this can all can be. I think if you get that right, I think there is a tremendous potential to create life changing behavior for a lot of people
I think there is a limit to how many people you can engage in this. The better educated you are the more you know about technology, the easier it is for you to understand what is going on. This is all skewed for the better part of society and I think the same goes for this industry. But I think we are going to reach more people than we have ever done before. I think we can do that in more engaging ways than we have ever done before.
There is one more side to the equation that I think is really interesting and that is the healthcare perspective. I think its a really difficult argument to run these days, in one way we are completely focused on the consumer side, on the fitness, on the exercise. But I can’t see why the individual consumer shouldn’t be able to take his or her data and go to their company and say, or go to their doctors and say why can’t I integrate this into what you know? So that the doctor doesn’t have to sit down and question you about how you feel, how your doing, or how active you’ve been. Knowing that physical activity is the most important factor for life expectancy and the quality of life. Knowing that, I think there is a tremendous potential in integrate these healthcare systems with consumer health data that you track on your own. There are many aspects of this, but I really think there potential there and I know that first kind of dialog that we have is something that would be really interesting. It’s not something that we are necessarily focused on too much right now, maybe not mature enough for it, but I think there is really big potential. And that’s where the end consumer gets something that where this kind of tracking your data becomes interesting not only from a social perspective, but also actually from the way you can integrate this into the other services that you have in life. So that you know when you go to the doctor or when you talk to your insurance companies you can get a lower fee. I think there is a lot of potential there.
THE CASUAL ENDO – JAKOB
Jakob co-founded Endomondo and is head of product. Jakob has a combined passion for sports and the mobile and Internet industry which is key to understanding his passion for Endomondo and healthy living. Jakob holds a master’s degree in Political Science from the University of Copenhagen. Before founding Endomondo, Jakob spent some years at McKinsey & Company, focusing on the media industry within the field of strategy and M&A.