Buy a beginner-friendly app and sell it to your users as a bundle

Eric Crowley… doing a deal," we jumped right in. When you think about why Strava bought Runna, Strava has a bunch of features on there. Technically even had some old training features on there, so almost like a competitive product, if you will. But I mean, I'll give you my view right now. Obviously, I don't sit within the Strava board, but this was truly a one plus one equals six acquisition. People say one plus one equals three. This is way better than that.

Eric CrowleyWhat Strava is is Strava is an app for athletes. If you're not an athlete, Strava's not for you. A lot of people don't identify as athletes and so a lot of people actually haven't heard of Strava. I'm from Ohio and I can tell you most of my friends don't use Strava. San Francisco, everyone uses Strava. It's just a weird world that we live in out here in a seven by seven square miles of San Francisco. But what Runna did is they enabled people to go from being on a couch to running a 5K, to running a 10K, and now they're an athlete.

Eric CrowleySo for Strava, that's a massive TAM expansion, number one. Now all of a sudden you can actually be for people that are not athletes but want to be an athlete, and that is a huge TAM. Two, Strava's done a great job with consumer subscription. It's one of the best apps out there. They've been around forever, great retention. Where they struggle, though, is pricing. They had not built in a lot of different tiers to maximize price among consumers and Runna actually adds this second tier that Strava can offer, which is the bundle. We can talk about bundling, unbundling, but in consumer subscription, it's really popular with users.

Eric CrowleyYou already have a paid user who uses Strava. Runna integrated really well in Strava from the beginning, even before the acquisition. They were able to bring an ability to upsell a Strava runner or a Strava consumer with another package. I think that's why it's a good deal. The Runna founders didn't need to sell... I don't think they had to do the deal, but Strava came calling and I think offered a pretty fair price for the business.

Eric CrowleyYeah. I mean, I think it's a good question. These are two very good apps and they're built differently. People just say, "Oh, just smash them together and call it a day." Well, it doesn't work. Consumers demand an excellent experience, and both businesses are doing really well.

Eric CrowleySo if you try to smash them together and it's wrong, you just wasted a whole acquisition. I think both businesses can learn from each other. Runna's amazing at using AI inside the app. Strava's a system of record. They don't have to do that yet. Now, Mike and his team are doing some great stuff, so keep your eyes peeled. I think Strava's been learning a lot from Runna on that front.

Eric CrowleyTwo, I mean, Runna does some really good performance marketing. Jacob's right, it's a little more episodic, "Hey, I'm training for a marathon. Hey, I'm training for a big race," versus Strava is more, "Hey, this is what I post. My ride's on every Tuesday." Those are two very different use cases for the consumers, and so I think that's right to keep them separate for now, and then I think they'll make a decision down the road of when you …