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How Whoop Makes Money?
5 minute read · Issue Number 52 · January 22nd, 2021
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Today’s article features part two (2/4) of the Sports Business Models Miniseries (SBMM), where we analyze four different business models (aka, how a business makes money) in the sports industry. Last week, it was all about Barstool Sports.
Today, we’ll learn about Whoop — an exciting wearables technology company. Next week will be about Mark Cuban. And the fourth one will be decided by you:
What sports brand do you find fascinating? What sports business model would you like me to cover? Let me know by answering this form.
Let’s whoop it!
Whoop is a wearables company that makes a sensor-equipped strap that tracks your activities 24/7 (i.e., movement, sleep, and workouts) and then provides a multitude of performance metrics and other data based on that activity.
“Our mission at WHOOP is to unlock human performance. When you choose to partner with us, we’ll do everything we can to help you find your inner potential.”
In a nutshell, Whoop’s nylon band monitors your heart rate and other key metrics to assess your body. The technology uses LEDs and photoplethysmography to get those measurements.
If you want to understand how the technology works, check out this video:
The cool thing about Whoop is that it’s like having a coach who takes care of you by explaining different strategies to improve your wellness.
Some compare Whoop to an Apple Watch or a Fitbit, although they are very different in the design because a Whoop strap has no screen.
The strap connects to the Whoop app, where you get all the insights around sleep (quantity and quality), recovery (based on your heart rate — signaling that you need more rest or need to back off on training intensely), and strain (how much energy you exert in a day).
How do they make money?
Initially, Whoop charged 500 USD per wearable. Nevertheless, it has dropped the price of its wearable down to free. Today, Whoop bases its business model on a subscription service.
Users sign up for a monthly subscription starting at $30 (and decreasing), and they include the wearable devices for free.
The price depends on what you would like to measure and use the data for (six months of data for $30/month; 12 months for $24/month; or 18 months for $18/month).
One of its business model goals is to enable accessibility to most budgets — most people can pay 30 USD monthly, instead of putting down 500 USD in one shot.
Whoop has been proliferating over the last 12 months due to an increased interest in health during the pandemic. The company has raised more than $200 million in funding to date, and it is one of the few companies disrupting the consumer wearable market.
A subscription-only model for wearable and software pushes people to wear the device for an extended time and provides accurate revenue streams for the company.
A key and exciting factor of Whoop that I’d be interested in following is the analytics. The amount of data they will collect and put together to understand better human bodies, health, and wellness could significantly improve our lives in the future.
🎙How Athletes Make Decisions?; This week’s Halftime Snacks features Lee Waters — a Sport Psychology expert with over ten years of experience working in various sports such as Football, Archery, Waterpolo, and Rugby. We talked about the decision-making process, the role of pressure, our senses' value, and how human evolution changes the games' competitive nature. Listen on Apple | Spotify | Google.
🧑🏽💻Cyber Security has no end date...; A fellow reader of the newsletter wrote this excellent piece about the never-ending battle against cyberattacks and data breaches, even in the sports industry!
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Until next week,
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