WEBVTT - Businessweek Extra - Fitbit CEO James Park 0:00:02.520 --> 0:00:06.400 This is Bloomberg Business Week from Bloomberg Radio. I'm Jason 0:00:06.480 --> 0:00:08.920 Kelly and I'm Carol Masser. Welcome to the Bloomberg Business 0:00:08.960 --> 0:00:11.680 Week Extra. It's our weekly podcast bringing you an in 0:00:11.720 --> 0:00:14.640 depth interview you will not hear anywhere else. This week. 0:00:14.720 --> 0:00:16.880 James Park he's the CEO of the chairman, the co 0:00:17.079 --> 0:00:21.000 founder of Fitbit. He's a return guest, Carol, and it 0:00:21.120 --> 0:00:23.439 was really interesting to catch up with him basically a 0:00:23.560 --> 0:00:26.639 year since our last conversation to get a sense of 0:00:26.640 --> 0:00:28.840 where they are. This is a company, as he says, 0:00:29.360 --> 0:00:32.280 very much in transition. Here's that conversation. Talk to us 0:00:32.280 --> 0:00:35.440 about the announcements this week, and let's lead with the service, 0:00:35.600 --> 0:00:38.919 the prime service, because I think that's an interesting um 0:00:38.920 --> 0:00:41.599 expansion of where you guys are going. Yeah. Absolutely, so, 0:00:41.640 --> 0:00:43.920 we had a we have a lot of exciting announcements 0:00:43.960 --> 0:00:46.520 today across software and service as you mentioned, and also 0:00:46.600 --> 0:00:50.239 devices as well. And it's all too in support of 0:00:50.240 --> 0:00:52.120 our company's mission, which is to make everyone in the 0:00:52.159 --> 0:00:55.320 world health here and in particular to make health accessible 0:00:55.560 --> 0:00:58.240 to everybody. That's really important for us. And at the 0:00:58.280 --> 0:01:00.720 same time we're also in the middle of transforming our 0:01:00.760 --> 0:01:04.319 company from being a purely devices company to again being 0:01:04.319 --> 0:01:07.080 more of a services and device company with more predictable, 0:01:07.360 --> 0:01:11.360 recurring revenue streams and premium is a really important step 0:01:11.480 --> 0:01:14.600 in that transformation. So what we announced is a all 0:01:14.640 --> 0:01:18.080 in one, comprehensive health service that takes data right from 0:01:18.080 --> 0:01:21.720 your wrist and turns it into actionable and personalized guidance 0:01:22.120 --> 0:01:25.480 and coaching that helps you get more active, eat better, 0:01:26.000 --> 0:01:31.240 and seed better. It has programs, insights, content, coaching, motivate 0:01:31.319 --> 0:01:34.399 motivation in the form of health games, health report that 0:01:34.440 --> 0:01:36.360 you can take to your doctor. So it's no longer 0:01:36.400 --> 0:01:38.600 just about hey, you took this many steps. It's like, okay, 0:01:38.600 --> 0:01:41.280 you did this, so hey, how here's something else. Absolutely, 0:01:41.319 --> 0:01:44.280 it's it's what's beyond the metrics, It's what's beyond the data. 0:01:44.400 --> 0:01:47.280 So how do we actually coach you and guide you 0:01:47.720 --> 0:01:50.240 to the next step? And that's incredibly important. That's what 0:01:50.240 --> 0:01:53.120 we've been hearing that our users want next from Fitbit. 0:01:53.320 --> 0:01:55.400 We'll tell us more about that, because clearly this is 0:01:55.440 --> 0:01:59.680 a response to the market. What did you specifically see, 0:01:59.680 --> 0:02:02.800 what did you specifically here from your previous products that 0:02:02.880 --> 0:02:05.080 sort of got you to this. Well, it's it's not 0:02:05.120 --> 0:02:07.480 so much from the market, but it's really from our customers. 0:02:07.480 --> 0:02:10.560 Because we we collect a lot of data from our users. 0:02:10.600 --> 0:02:13.160 We also see, you know, how well they're doing, you 0:02:13.200 --> 0:02:15.040 know how much weight they're losing, how much sleep that 0:02:15.080 --> 0:02:18.720 we're getting, And we felt that focusing more on the 0:02:18.760 --> 0:02:22.000 software and services aspect of health was really the next 0:02:22.040 --> 0:02:24.520 step in getting our users to become healthier. I think 0:02:24.760 --> 0:02:27.200 we had taken to the limit what we could do 0:02:27.240 --> 0:02:29.760 with just giving people metrics, and they really needed to 0:02:29.800 --> 0:02:32.440 understand what to do with that data. James, what I 0:02:32.480 --> 0:02:35.040 do wonder and I agree Jason, I talked about this 0:02:35.080 --> 0:02:37.359 a lot. I do think that the healthcare area, there 0:02:37.440 --> 0:02:39.680 is going to be a day where somebody every almost 0:02:39.720 --> 0:02:42.399 everybody has some kind of device tracking kind of their 0:02:42.440 --> 0:02:45.360 healthcare metrics. At this point, you are, though, competing with 0:02:45.400 --> 0:02:49.080 some really big players, Apple, Samsung among them. Um, you 0:02:49.160 --> 0:02:52.240 have a significant market share, they have a significant market share. 0:02:52.240 --> 0:02:55.440 How do you compete against those big players? First of all, 0:02:55.440 --> 0:02:59.000 we're the number two wearable brand in the world. People 0:02:59.080 --> 0:03:02.200 know the Fitbit brand as being really focused on health 0:03:02.240 --> 0:03:05.440 and fitness rather than a hundred other things as well, 0:03:05.720 --> 0:03:07.840 and so the way we design our products and services 0:03:08.120 --> 0:03:11.520 reflects that. So, for instance, our Harvard devices have a 0:03:11.639 --> 0:03:14.280 lot of battery life, ranging from five days to over 0:03:14.360 --> 0:03:17.480 seven days, and that allows us to do things like sleeptracking. 0:03:17.560 --> 0:03:21.280 You can wear devices seven and sleep is such an 0:03:21.280 --> 0:03:24.200 important part of your overall health. So for instance, in 0:03:24.320 --> 0:03:26.799 Versa two, which we just announced, uh, there's a few 0:03:26.800 --> 0:03:30.480 new sleep features that were launching, including sleep Score, which 0:03:30.520 --> 0:03:33.639 tells you with a simple number, how well you've slept 0:03:33.720 --> 0:03:36.920 throughout the night. We're also launching a feature called smart Wake, 0:03:37.000 --> 0:03:39.560 which tries to wake you up at the right moment 0:03:39.640 --> 0:03:42.400 in the morning. I love those kind of devices because 0:03:42.400 --> 0:03:44.480 it really does give you a better nights sleep. Yeah. Absolutely, 0:03:44.480 --> 0:03:47.360 we're trying to solve people's real problems, and I think 0:03:47.400 --> 0:03:50.040 if we stay focused on that, um, you know, the 0:03:51.600 --> 0:03:54.040 we are we are, But you know, first of all, 0:03:54.080 --> 0:03:56.400 we have to worry about our customers and make sure 0:03:56.440 --> 0:03:59.640 we're improving their health. And I think to that extent, 0:03:59.640 --> 0:04:02.040 if we developed products and services that do that, I 0:04:02.080 --> 0:04:04.480 think the competitive element in some way takes care of 0:04:04.520 --> 0:04:08.040 itself well. And tell us about your conversations with investors, 0:04:08.080 --> 0:04:11.280 because obviously it goes without saying you watch the stock 0:04:11.360 --> 0:04:14.200 price more closely than we do investors are skeptical they've 0:04:14.280 --> 0:04:18.800 driven the price down. Help us understand what they're saying, 0:04:18.839 --> 0:04:21.240 what you're saying back to them in terms of how 0:04:21.480 --> 0:04:25.920 this transformation and transition you know, may pretend better revenue, 0:04:25.960 --> 0:04:28.760 better profits in the future. Yeah, I think investors right 0:04:28.760 --> 0:04:30.960 now have a weight wait in seattitude, and you know, 0:04:31.440 --> 0:04:34.040 I think we we acknowledge that and understand it. And 0:04:34.120 --> 0:04:36.760 we had some challenges earlier, you know, being very upfront 0:04:37.000 --> 0:04:40.000 with the launch of our Versa l product that said, 0:04:40.040 --> 0:04:42.120 we learned a lot of lessons from that launch that 0:04:42.160 --> 0:04:44.719 we're going to carry forward um. But you know, we're 0:04:44.720 --> 0:04:48.080 continuing to execute on our transformation, and I think what 0:04:48.160 --> 0:04:52.200 investors UH have to look forward to is, you know, 0:04:52.400 --> 0:04:54.800 for instance, with the launch of Premium, that we are 0:04:54.880 --> 0:04:58.080 hitting important milestones. The launch of Premium is going to 0:04:58.600 --> 0:05:01.920 accelerate our transform shan into a business that has much 0:05:01.920 --> 0:05:04.880 more predictable revenue streams, and we're doing things that even 0:05:04.920 --> 0:05:07.760 accelerate that. So, for instance, we announced the deal with 0:05:07.800 --> 0:05:10.680 the Nation of Singapore that bundles together hardware and services. 0:05:10.680 --> 0:05:12.520 And from what I understand, you beat Apple to get that. 0:05:12.600 --> 0:05:15.200 Is that true? We can't talk about the competitive element. 0:05:15.279 --> 0:05:18.120 But you know, the government of Singapore is a very 0:05:18.160 --> 0:05:21.520 forward looking nation state, and you know, we're really happy 0:05:21.560 --> 0:05:23.200 to to work with them to try to improve the 0:05:23.200 --> 0:05:25.600 health of their citizens. And the next step as well 0:05:25.760 --> 0:05:28.560 is with the launch of Premium and Versa two. We're 0:05:28.800 --> 0:05:32.880 bundling together Versa two and Premium together at retail and 0:05:32.920 --> 0:05:35.560 we're trying to transform again the idea of Fitbit not 0:05:35.640 --> 0:05:38.440 just as a hardware company, but as a solutions company 0:05:38.480 --> 0:05:41.480 that includes both hardware ants off. So talk to us 0:05:41.520 --> 0:05:43.760 a little bit more about premium, because it does feel 0:05:43.800 --> 0:05:46.080 like we're at this moment where whether we're talking about 0:05:46.080 --> 0:05:49.160 streaming services, whether we're talking about other elements in our 0:05:49.160 --> 0:05:51.920 lives where people are a little more comfortable paying up 0:05:52.279 --> 0:05:55.600 for quality. Who's the market How big is it for 0:05:55.640 --> 0:05:57.960 that premium product? Yes, so we did a lot of 0:05:57.960 --> 0:06:01.279 market research before launching our pre m service. So the 0:06:01.320 --> 0:06:04.040 great thing is UM a lot of our users twenty 0:06:04.080 --> 0:06:06.760 seven million active users were willing to pay for service, 0:06:07.120 --> 0:06:10.080 and actually two thirds of them were already paying for 0:06:10.160 --> 0:06:12.560 some type of health service or app to help them 0:06:12.560 --> 0:06:15.520 get more active, eat better, see better, etcetera. So UM 0:06:15.560 --> 0:06:17.920 the launch of Premium at ten dollars a month or 0:06:17.960 --> 0:06:20.560 seventy nine dollars a year is actually a lot of 0:06:20.640 --> 0:06:23.680 value for users. Rather than paying ten dollars a month 0:06:23.760 --> 0:06:27.080 for three or four different apps. Uh, they can pay 0:06:27.120 --> 0:06:31.800 for one integrated service that's incredibly affordable. So what ultimately 0:06:31.880 --> 0:06:34.360 is the mix between services and hardware? Do you ultimately 0:06:34.360 --> 0:06:36.680 see that in terms of revenues and profitability that it's 0:06:36.960 --> 0:06:40.159 three quarters is coming from services. Uh, you know, we 0:06:40.240 --> 0:06:42.359 can't we can't talk to the mix right now, but 0:06:42.480 --> 0:06:48.040 we do expect for premium and other non device revenue 0:06:48.080 --> 0:06:50.960 to actually have a meaningful impact on our gross margins 0:06:51.000 --> 0:06:53.400 and we want to wrap to the increase the mix 0:06:53.440 --> 0:06:56.040 of our revenue that comes from premium over time. Can 0:06:56.080 --> 0:06:58.559 I Can I just follow? Because it is interesting about 0:06:58.640 --> 0:07:00.719 kind of what Wall streets per option is right now, 0:07:00.800 --> 0:07:03.520 about your company and and this kind of explosion that 0:07:03.520 --> 0:07:06.039 we're seeing in the fitness space. You among them. But 0:07:06.160 --> 0:07:08.760 it's interesting like City Group has said that your shares 0:07:08.760 --> 0:07:10.520 may be worth two dollars a year from now. They 0:07:10.520 --> 0:07:12.960 say that you lack a mass appeal smart watch with 0:07:13.040 --> 0:07:15.880 full two way texting functionalities such as an Apple Watch. 0:07:15.960 --> 0:07:17.720 What do you say to them? And this is one 0:07:17.760 --> 0:07:19.720 of the two animals that have a cell rating. There 0:07:19.720 --> 0:07:22.320 are folks, I think there's three buys, five holds, two cells. 0:07:22.480 --> 0:07:24.360 What do you say to the investment community that they're 0:07:24.440 --> 0:07:27.760 kind of missing about your picture and your story? Yeah. So, 0:07:27.840 --> 0:07:29.960 I think the first thing is that actually we've grown 0:07:30.440 --> 0:07:34.160 device shipments year over year. Even our fitness tracker business, 0:07:34.160 --> 0:07:38.160 which people thought was a stagnant category, we grew tracker 0:07:38.240 --> 0:07:42.440 unit shipments year over year. Versa is an incredibly best 0:07:42.480 --> 0:07:44.920 selling smart watch, not just in the U S so 0:07:45.120 --> 0:07:48.280 around the world. And we've grown or active user based 0:07:48.280 --> 0:07:52.120 steadily year over year. Uh, and it's sticky. You get 0:07:52.120 --> 0:07:54.239 a user and you yeah. So one of the stats 0:07:54.280 --> 0:07:56.840 is since the start of the company twelve years ago, 0:07:57.240 --> 0:08:00.840 thirty three of our users are still active using our devices. 0:08:00.880 --> 0:08:04.200 And if you think about it, versus a typical health 0:08:04.240 --> 0:08:06.840 and fitness product like you know, a treadmill or a 0:08:06.880 --> 0:08:11.440 gym membership, etcetera. You know that's measured in weeks of 0:08:11.440 --> 0:08:15.320 retention of users over twelve years are still with us. 0:08:15.320 --> 0:08:17.840 And I think that's incredibly sticky. And we have twenty 0:08:17.840 --> 0:08:21.120 seven million active users and that's an incredible foundation on 0:08:21.240 --> 0:08:23.560 top of which to launch a premium service. All right, 0:08:23.640 --> 0:08:26.560 So let's talk about in some ways the other end 0:08:26.640 --> 0:08:29.800 of that spectrum, the accessibility piece. Because we talked so 0:08:29.880 --> 0:08:33.080 much about sort of the affluent fitness market. You've talked 0:08:33.080 --> 0:08:35.960 about that with us before. Clearly the premium product is 0:08:36.000 --> 0:08:38.960 in part aimed at them, but pushing this down to 0:08:39.200 --> 0:08:43.880 a much broader population it's good for business, clearly, it's 0:08:43.920 --> 0:08:46.400 also kind of good for society. I think we would 0:08:46.400 --> 0:08:48.600 all agree. How do you do that? How do you 0:08:48.640 --> 0:08:51.400 make it access? Yeah? Absolutely, that's a that's a primary 0:08:51.440 --> 0:08:54.000 focus of the company. So, first of all, we try 0:08:54.040 --> 0:08:57.680 to make our devices as accessible as possible. And you know, 0:08:57.760 --> 0:09:01.200 first aspect of that is its cross platform. Our products 0:09:01.200 --> 0:09:04.880 work on both Android and iOS. We've driven down the 0:09:04.880 --> 0:09:08.479 price points of our devices or tracker products are incredibly 0:09:08.520 --> 0:09:11.520 affordable versus a full blown smart watch from some of 0:09:11.559 --> 0:09:15.240 our competitors. And through our health solutions business, we try 0:09:15.240 --> 0:09:18.800 to work with employers and health plans and needed nations, 0:09:18.840 --> 0:09:22.480 leading health plans from United and Humanity to either partially 0:09:22.520 --> 0:09:26.360 subsidize or fully subsidize our devices and software. And a 0:09:26.440 --> 0:09:30.240 great example of that is with United Healthcare. Uh, you know, 0:09:30.320 --> 0:09:34.720 for seniors, Fitbit devices are fully paid for benefit in 0:09:34.800 --> 0:09:37.959 forty two medicare advantaged plans in twenty seven states. So 0:09:38.120 --> 0:09:41.280 we are working very hard to make what we're doing 0:09:41.400 --> 0:09:44.480 not just uh, you know, something that's accessible to the 0:09:44.520 --> 0:09:47.640 well off, but to everyone. How many people access it 0:09:47.840 --> 0:09:50.680 in their health plans? Uh, you know, we don't break 0:09:50.679 --> 0:09:53.440 out that number, but it's it's growing, and health plan 0:09:53.480 --> 0:09:56.600 adoption is a key part of how we plan on 0:09:56.679 --> 0:09:59.200 driving our user base and again of making what we 0:09:59.240 --> 0:10:01.360 do accessible to a lot of people. Do you anticipate 0:10:01.400 --> 0:10:04.280 more contracts like you've got in Singapore other Asian nations 0:10:04.360 --> 0:10:06.960 kind of signing on, because what's interesting is we're seeing 0:10:07.559 --> 0:10:10.280 as people have moved up the economic scale right in 0:10:10.360 --> 0:10:11.800 terms of the type of food they're eating and so 0:10:11.880 --> 0:10:14.000 and so forth, we're seeing more health problems, whether it's 0:10:14.040 --> 0:10:16.880 diabetes and so on. So I'm curious if you see 0:10:16.960 --> 0:10:19.880 more contracts like what you've got in Singapore and other 0:10:20.120 --> 0:10:21.800 in other areas of the world well as As you 0:10:21.840 --> 0:10:24.760 clearly said, it's a global problem, and I think people, Yeah, 0:10:24.800 --> 0:10:27.040 people are trying, you know, they're beginning to realize that 0:10:27.160 --> 0:10:30.440 so one in three adults around the world have more 0:10:30.520 --> 0:10:37.480 than one serious chronic condition whether it's diabetes, hypertension, cardiac condition, sleep, bapania, etcetera. 0:10:37.880 --> 0:10:41.760 And we've got to find creative ways to combat this problem. 0:10:41.800 --> 0:10:44.320 You know, technology isn't the end all be all, but 0:10:44.679 --> 0:10:47.160 it plays an important role. But technology has to be 0:10:47.240 --> 0:10:51.319 incredibly affordable and accessible. Well, speaking of technology and fitness, 0:10:51.440 --> 0:10:54.240 we're all sort of captivated by Peloton, you know, releasing 0:10:54.240 --> 0:10:57.240 It's S one. It's clearly a big moment. It feels 0:10:57.360 --> 0:11:00.520 like in this intersection of technology and fit this what 0:11:00.559 --> 0:11:03.560 do you make of this moment? Where we are now? 0:11:03.640 --> 0:11:06.640 You know, we've sort of gone through this boutique fitness craze. 0:11:06.760 --> 0:11:09.800 Technology seems to be coming to the four in home 0:11:09.920 --> 0:11:13.960 more personalized. Where are we in sort of the evolution 0:11:14.200 --> 0:11:17.280 of our sort of broader fitness journey. I think we're 0:11:17.360 --> 0:11:19.360 right on the cusp of something that's new. I mean 0:11:19.400 --> 0:11:21.560 you saw that, you know, we want public. Three years 0:11:21.600 --> 0:11:25.040 ago Luvango just went public as another digital health company, 0:11:25.080 --> 0:11:28.560 Pelicons going public. So I think what this all says is, 0:11:28.920 --> 0:11:32.240 you know, we're at the cusp where technology, data, machine 0:11:32.320 --> 0:11:35.440 learning is going to enable new advances and health and 0:11:35.440 --> 0:11:39.920 fitness technology that again allow the quality of care, a 0:11:40.080 --> 0:11:42.640 high quality high level of quality of care to be 0:11:42.720 --> 0:11:45.600 accessible to a lot of people, and that's incredibly important. Well, 0:11:45.640 --> 0:11:50.240 and does it also maybe pre sage a moment where 0:11:50.400 --> 0:11:52.440 Wall Street and the investors sort of get a little 0:11:52.480 --> 0:11:54.520 bit more comfortable with the metrics that they can use 0:11:54.559 --> 0:11:57.000 me And it was interesting even reading Pelotons as one, 0:11:57.320 --> 0:11:59.280 you know, they're coming up with new ways to think 0:11:59.320 --> 0:12:01.880 about sure and about monthly usage and all these different 0:12:01.920 --> 0:12:04.800 things because part of the case, it seems, is that 0:12:05.040 --> 0:12:07.839 Wall Street just doesn't fully understand doesn't have the right 0:12:07.920 --> 0:12:12.840 models to to fully value fitness company. And that's actually 0:12:12.880 --> 0:12:14.280 one of the challenges for us as well. And I 0:12:14.320 --> 0:12:16.040 think we have a double challenge where we have an 0:12:16.120 --> 0:12:19.880 enterprise business coupled together with a consumer business. So I 0:12:19.920 --> 0:12:22.079 think one of the challenges and opportunities for us is 0:12:22.120 --> 0:12:25.360 to help investors understand the opportunity in our business. What 0:12:25.440 --> 0:12:27.720 I also do wonder and I feel like you guys 0:12:27.760 --> 0:12:30.480 are going at it um in terms of, you know, 0:12:30.520 --> 0:12:33.000 providing accessibility, because I do think for a long time, 0:12:33.520 --> 0:12:35.600 memberships to clubs and so on and so forth was 0:12:35.640 --> 0:12:40.120 really for wealthier individuals. Um, how does making it more 0:12:40.160 --> 0:12:43.360 accessible kind of change the market size? That's out there absolutely. 0:12:43.360 --> 0:12:45.640 So the way we think about it is who you are, 0:12:46.200 --> 0:12:48.800 where you live, how much you make shouldn't dictate the 0:12:48.880 --> 0:12:52.200 quality of care that you receive. So through technology, the 0:12:52.240 --> 0:12:56.160 promise of remote care, remote monitoring, I think this is 0:12:56.200 --> 0:12:59.240 where you know, from a business perspective, the addressable market 0:12:59.640 --> 0:13:02.520 become is much much larger, and at the same time, 0:13:02.520 --> 0:13:04.880 we're helping so many more people. So that's what's exciting 0:13:04.920 --> 0:13:06.840 to me. And when you look at the universe of 0:13:06.880 --> 0:13:11.200 companies that are out there, are we headed for, especially 0:13:11.240 --> 0:13:14.960 as the market gets bigger, an era of another rafted 0:13:15.040 --> 0:13:18.199 startups coming? Are we looking at an era of consolidation? 0:13:18.400 --> 0:13:20.520 Like what's going to happen next? Do you think, as 0:13:20.520 --> 0:13:22.480 this market materitan, is there a company out there that 0:13:22.600 --> 0:13:25.640 you'd be interested in working with more closely? Uh? You know, 0:13:25.720 --> 0:13:27.720 I think the great thing is right now if you 0:13:27.720 --> 0:13:30.439 look at the whole ecosystem of health apps and services 0:13:30.440 --> 0:13:33.520 and companies, there's a lot of innovation going on and 0:13:33.559 --> 0:13:37.640 then there's a lot of opportunities for partnership and you know, 0:13:37.840 --> 0:13:40.160 for for me, I've been at this for twelve years 0:13:40.200 --> 0:13:42.880 and and you know, we're a very mission driven company. 0:13:42.920 --> 0:13:45.240 So it's just very exciting for us overall to see 0:13:45.280 --> 0:13:47.599 this whole area explode well, and I do wonder about that. 0:13:47.600 --> 0:13:50.240 I was thinking about that. You know, twelve years in, 0:13:51.200 --> 0:13:52.839 you're a very young guy, but you're sort of an 0:13:52.840 --> 0:13:56.200 old man and this isn't in some ways, maybe maybe 0:13:56.400 --> 0:13:59.120 being at this businesses aged you more than you but 0:13:59.200 --> 0:14:01.560 you've seen a lot um. I mean, what's the biggest 0:14:01.640 --> 0:14:04.640 change over over that twelve years, you know, both running 0:14:04.640 --> 0:14:06.920 this company and also sort of seeing the evolution of 0:14:06.960 --> 0:14:09.160 this market. Yeah. I think one of the biggest changes 0:14:09.400 --> 0:14:11.280 is when we first started out, I think people were 0:14:11.280 --> 0:14:13.959 just skeptical about the very concept. You know, was it 0:14:14.040 --> 0:14:17.240 a fad? Would everyone use this? And uh, you know 0:14:17.280 --> 0:14:20.760 it's from the early, very early stage with venture investors 0:14:20.800 --> 0:14:23.320 as well. Uh, And one of the challenges we had was, 0:14:23.400 --> 0:14:26.080 you know, again, so actually around this concept of accessibility. 0:14:26.080 --> 0:14:28.920 A lot of the early venture investors were very serious 0:14:28.920 --> 0:14:32.480 cyclists try athletes, so they thought, you know, what's the 0:14:32.560 --> 0:14:36.200 market for a simpler device that you know, is usable 0:14:36.320 --> 0:14:39.280 by by more people. They didn't quite get it. And 0:14:39.280 --> 0:14:41.760 and now it's clear that this whole area is not 0:14:41.880 --> 0:14:44.520 a fat That's the biggest change that I've seen that's 0:14:44.560 --> 0:14:47.520 I think really fascinating. Do do investors get it? Does 0:14:47.560 --> 0:14:49.480 Wall Street get that part of it that it's not 0:14:49.600 --> 0:14:51.480 just kind of a cool thing that all right, I 0:14:51.520 --> 0:14:53.320 want to, you know, check in with it, but it's 0:14:53.360 --> 0:14:56.320 become a much more um thing that maybe becomes a 0:14:56.360 --> 0:14:58.800 way of our living. I'm not sure they're there yet, 0:14:58.840 --> 0:15:01.280 but the way I see it is if wearing a 0:15:01.360 --> 0:15:06.920 device and being signed up for service helps you detect 0:15:07.440 --> 0:15:11.560 diagnosed diseases at a much earlier state, help you manage 0:15:11.600 --> 0:15:15.080 those conditions, and at some points literally save your life, 0:15:15.080 --> 0:15:18.600 Like you'd be crazy not to wear one of these devices. 0:15:18.640 --> 0:15:21.480 I do wonder though, just to play Devil's advocate for 0:15:21.520 --> 0:15:25.120 a second, we're also at this moment where we're maybe 0:15:25.120 --> 0:15:27.920 some of us a little skeptical about technology and all 0:15:27.960 --> 0:15:30.880 the ways that it impacts our life or invades our life, 0:15:31.440 --> 0:15:35.720 whether it's privacy, whether it's just our reliance on our devices, 0:15:35.800 --> 0:15:38.640 you know, mostly like a smartphone or something like that. 0:15:39.000 --> 0:15:42.880 How do you sort of kind of thread that needle 0:15:42.960 --> 0:15:46.160 of we want to enable you know, good technology and 0:15:46.240 --> 0:15:49.000 data collection and things like that, but ultimately you're about 0:15:49.000 --> 0:15:51.360 an active way of life. I mean that that's a 0:15:52.240 --> 0:15:55.680 that's a maybe tough road to to walk at some point. Well, 0:15:55.720 --> 0:15:58.800 for us, it's actually been easy from the data privacy 0:15:58.840 --> 0:16:03.320 aspect because our business model isn't predicated on advertising and 0:16:03.480 --> 0:16:05.440 selling data at the third party. So actually, from the 0:16:05.520 --> 0:16:08.240 very beginning of the company, we've had a very strict 0:16:08.480 --> 0:16:11.160 privacy policy where we've told our users we don't sell 0:16:11.200 --> 0:16:13.480 your data at the third parties, we only share your 0:16:13.520 --> 0:16:17.040 data with explicit opt in consent um and so, and 0:16:17.080 --> 0:16:19.840 we don't work with companies on our health solutions business 0:16:20.360 --> 0:16:24.320 that don't abscribe to our bill of rights that we've created, 0:16:24.720 --> 0:16:28.520 which include things like you can't have punitive measures uh 0:16:28.560 --> 0:16:31.600 in place for people who don't participate or who don't 0:16:31.640 --> 0:16:34.320 hit certain goals because at some point, you know that 0:16:34.320 --> 0:16:36.920 that could have been a trend. Uh. So, I think 0:16:36.920 --> 0:16:40.360 we're very aligned with with our users. Again, we're a 0:16:40.440 --> 0:16:43.960 very mission focused company. We're a brand that has stood 0:16:44.000 --> 0:16:47.680 for you, helping you, uh, you know, get more healthy 0:16:47.720 --> 0:16:50.120 and get more fit, and you know, I think our 0:16:50.160 --> 0:16:52.360 our users are very aligned without a very passionate about that. 0:16:52.440 --> 0:16:54.920 Speaking of alignment, I am curious about the medical community 0:16:54.920 --> 0:16:57.120 because I do feel like you have to have them 0:16:57.240 --> 0:16:59.040 on board to say, you know what, this is a 0:16:59.160 --> 0:17:02.560 useful device I'm gonna recommend to my patients. Where are 0:17:02.560 --> 0:17:05.159 we in that? I think, honestly, we're in the in 0:17:05.200 --> 0:17:07.879 the early stages. I think there's a lot of forward 0:17:07.920 --> 0:17:11.920 looking doctors who have embraced digital technology and remote monitoring 0:17:11.920 --> 0:17:15.439 technology into the way they care for their patients. I 0:17:15.440 --> 0:17:18.400 think there's a lot more room to to go from there. 0:17:18.680 --> 0:17:20.520 One of the things that we're launching with our premium 0:17:20.560 --> 0:17:23.560 service is this health report, where we've actually worked with 0:17:23.640 --> 0:17:27.840 leading physicians to create a summarized view of the data 0:17:27.920 --> 0:17:33.080 that we're collecting off our devices. And we hope that report, 0:17:33.160 --> 0:17:36.200 because it's been constructed with the help of doctors, creates 0:17:36.200 --> 0:17:39.520 a very productive dialogue between patients and physicians in the 0:17:39.560 --> 0:17:42.399 context of an office visit. So you talked about a 0:17:42.480 --> 0:17:47.480 company in transition, transformation, whatever word you choose. Where are 0:17:47.560 --> 0:17:54.160 we along that sort of timeline and when is it complete? Uh? 0:17:54.359 --> 0:17:56.800 Sooner rather than later, I think, you know, the premium 0:17:56.800 --> 0:18:00.560 announcement is one that we've eagerly anticipated intern really, and 0:18:00.600 --> 0:18:03.840 I think a lot of outsiders, including investors, have waited 0:18:03.840 --> 0:18:06.640 for as well. You know, it's a very visible and 0:18:06.720 --> 0:18:09.439 tangible step in us saying, hey, look, we're not just 0:18:09.520 --> 0:18:12.600 a devices company anymore. We're a solutions company that includes 0:18:12.640 --> 0:18:16.200 services and hardware, and we're shifting our revenue streams from 0:18:16.240 --> 0:18:20.399 episodic device sales to more recurring and predictable revenue streams. James, 0:18:20.440 --> 0:18:23.159 how much, though, are you worried potentially about whether we 0:18:23.240 --> 0:18:25.399 go into recession? How does that impact your business? Is 0:18:25.440 --> 0:18:30.359 this considered something that's not a necessity in harder economic times? 0:18:30.359 --> 0:18:33.320 I'm just curious about that. You know. I can't speak 0:18:33.320 --> 0:18:37.760 about macroeconomic issues, but I think you've You've been around 0:18:37.800 --> 0:18:40.240 with your business through the crisis and stuff, so you won't. 0:18:41.080 --> 0:18:44.120 I think we managed successfully through that For us though. 0:18:44.160 --> 0:18:47.840 I think health, Um, it's it's not the discretionary thing. 0:18:47.840 --> 0:18:50.920 It's I think something that's really important in people's lives. 0:18:51.040 --> 0:18:53.359 Do you think that? Jason thinks that. I definitely think that, 0:18:53.359 --> 0:18:56.040 But does it Does the world at large kind of 0:18:56.040 --> 0:18:59.240 think that at this point? Um? I think given the 0:18:59.600 --> 0:19:02.720 just awareness and explosion and health and fitness apps and 0:19:02.760 --> 0:19:05.840 services in the amount of money that consumers are spending 0:19:05.880 --> 0:19:08.720 even today, I think it's something that's here to stay. 0:19:08.840 --> 0:19:11.639 That was James Park Fitbit CEO. He's also a chairman, president, 0:19:11.760 --> 0:19:13.879 co founder. But you know, as you mentioned, the company 0:19:13.920 --> 0:19:16.960 is definitely in a transition. This space is getting increasingly 0:19:17.040 --> 0:19:19.640 crowded and this company is trying to make its mark. 0:19:19.720 --> 0:19:22.639 Wall Street not necessarily all in on it, but they 0:19:22.640 --> 0:19:24.480 did have some news this week, and we'll see how 0:19:24.480 --> 0:19:26.280 it plays out well. And what I liked about him 0:19:26.320 --> 0:19:29.080 is he's all in for sure. I mean even you know, 0:19:29.200 --> 0:19:31.320 what we saw behind the scenes was after we were 0:19:31.359 --> 0:19:35.200 done taping, he actually fixed my fitbit for me, and 0:19:35.400 --> 0:19:38.000 I like that. I like when it's healthline, I know, 0:19:38.160 --> 0:19:41.560 exactly genius bar to use the nomenclature of one of 0:19:41.560 --> 0:19:44.159 their big competitors, but you know, seeing him sort of 0:19:44.240 --> 0:19:46.480 in the mix there, I mean, he's having to make 0:19:46.560 --> 0:19:51.000 this case to Wall Street, which so far remains skeptical. Yeah, exactly. 0:19:51.040 --> 0:19:53.000 I will say though, that emphasis on healthcare, I do 0:19:53.080 --> 0:19:55.560 feel like that's the next big territory to be untapped, 0:19:55.560 --> 0:19:58.240 and they're definitely playing into it. You've been listening to 0:19:58.280 --> 0:20:01.320 Bloomberg Business Week Extra short of tune into Bloomberg Business 0:20:01.359 --> 0:20:04.160 Week Radio Live Monday through Friday at two pm Wall 0:20:04.160 --> 0:20:06.880 Street Time. I'm Carol Unser and I'm Jason Kelly. This 0:20:07.080 --> 0:20:10.560 is Whooper M.