When I founded UP! International and started to develop the paceUP! app together with Mathias Ericsson our target was to create a fun and rewarding platform for fitness and recreational races. As we developed the business plan and financial scenarios for paceUP! we quickly realized that the business model for this type of venture needs to be international. The income from every user is either none or very small, and for the company to make an attractive profit an active user base of more than 100,000 users is necessary.
We were ready for the grind – what is often referred to as ‘the long desert walk’. We felt very passionately about paceUP! and it was an exciting and serious project for us, our first startup, as we tested the business model, and built the app and user base.
Meanwhile, something caught our eye. The founders of FunBeat wanted to sell their business.FunBeat was founded in 2005 and has built an impressive Swedish platform to support users across a wide range of fitness activities. FunBeat provides support for logging and analyzing training, as well as abundant and very interesting user generated information such as training programs, training routes and fitness related discussion threads. When looking for a training program or an answer to a particular fitness topics in Swedish through Google the results generated very often contain links to the FunBeat site.
Over the years the maintenance and modernization of the site has been running behind. Some of the forum users have moved to newly created Facebook groups and other users have moved to more mobile friendly alternatives. This has led to a declining active membership count and a failing business model.
It was still early days, but the opportunity seemed too good to be true. And after several months of trying to get in touch with the FunBeat team we finally met for lunch, and six days later the deal was closed. What convinced them was our similar mission to track and log a wide range of fitness activities and motivate people to take on new challenges.
For paceUP! the acquisition of FunBeat provides an opportunity to shortcut the very difficult early days of start-up. The immediate benefits include;
- hundreds of thousands of users
- millions of logged activities
- a very loyal user base of active site- and mobile app users
- fully developed solutions for premium subscription and advertising
Our immediate focus is to understand the needs of the FunBeat users in more detail. We are planning focus groups to understand them and their priorities in more detail. The insights from the focus groups will be used to prioritize the necessary improvements and upgrades. Already now we understand that the FunBeat site will have to become mobile friendly and that the app has to be modernized.
In the long run we are convinced that the paceUP! and FunBeat users are very similar and that creating a fun and rewarding platform for fitness and recreational races will benefit both user communities. Our business in Sweden will then become the platform from which we launch our international expansion.
It wasn’t the path we’d initially imagined but we’re learning fast that after 20 years in the corporate and consulting world, running a startup is as much about agility and jumping at opportunities as it is about long term strategy.
Read more, download our app, and follow our journey here; https://paceup.se