2015 INC. 5000 RANK: 53
HEADQUARTERS: San Francisco, CA
YEAR FOUNDED: 2007
2014 REVENUE: $745.4 Million
3-YEAR GROWTH: 5,057%
Fitbit, maker of the must-have namesake accessory for the obsessively active, is sprinting toward a $9 billion valuation following its recent IPO. With 20.8 million bracelets sold through March, the San Francisco-based company owns 85 percent of the market; it sold 10.9 million bracelets last year. Maintaining that momentum is going to be one of the next big challenges for CEO James Park and CTO Eric Friedman, both 38, but they have a plan.
--As told to Will Yakowicz
Park: Our inspiration was the Nintendo Wii. In late 2006, I waited at Best Buy at 6 a.m. to get one. I was amazed by the way Nintendo had combined the hardware and the sensors with amazing software to create this holistic experience that made gaming into something that was active, fun, and positive. We started Fitbit in early 2007, just months after the original Wii experience. The mission has been the same since then--how do we use technology to help people get healthier and more active, specifically by giving them data and guidance and inspiration?
At the start, we were pretty naive. Our background was in software, and we had no experience building hardware other than a class in college. Close to the launch of our first product, we were at a contract manufacturer in Singapore when we discovered at the last minute that the radio range of our device was one inch. We hadn't assembled the product in its final form until the late stages, because of delays. The problem was that a cable from the display was too close to the antenna and interfered with its performance. As a stopgap, which I hit on in our hotel room the night before the factory was supposed to finish a big order, we put in a balled piece of tissue to push the cable away from the antenna. It helped increase the range.
But the hardware is only half of Fitbit. More than two-thirds of our engineers are software engineers. The reason we invest so much in software is because the real magic of the experience happens at the software layer. A big part of what makes the Fitbit experience so special is the social experience--people can compete with friends and family across a variety of metrics, they can communicate, they can cheer and taunt. It's the social features that keep users engaged long term.
Friedman: We are neither a software company nor a hardware company--it's the dynamic of the two. The great hardware makes the bracelet very wearable and fashioncentric, and the software collects the data and makes the experience, so the Fitbit magic is that both sides go hand in hand.
Park: You can think of Fitbit as the world's largest fitness social network that has been monetized by the sales of hardware.
We have grown our market share effectively over the years, even though we're in such a crowded segment, with Jawbone and Garmin being our closest competitors but still pretty distant. In the case of Apple, our thought is that this category is incredibly large; in 2014, there was more than $200 billion worth of consumer spending on health and fitness services. There are a lot of opportunities for multiple companies to succeed spectacularly. Our strategy is to give consumers a lot of choices and a lot of ways to enter the Fitbit ecosystem and stay there.
Friedman: We don't focus on beating competitors. We are just trying to build great stuff for users, which has been our mission since day one. Part of the fun in building a consumer company is to build things consumers want. If you keep building stuff they like and love and stay focused on that, that's the most important thing.
Correction: An earlier version of this story misstated James Park's age. He is 38.