By SUSAN LAHEY
Reporter with Silicon Hills News
Kevin Callahan, co-founder of MapMyFitness recounted his entrepreneurial journey at Austin Startup Grind at Capital Factory Monday night–two weeks after his company announced it was being acquired for $150 million by Under Armour.
The acquisition will bring together a company that has never been sold before with one that has never acquired…so they’re going to do the “slow bake,” Callahan said. Under Armour has a heavy football culture and history whereas MapMyFitness is also sports oriented but full of runners and cyclists. Still it’s a great fit considering where the fitness industry is going. “Right now wearables are hot and trendy,” he said. “But soon wearables will be embeddable then embeddable will just be….” With all the available data, he said, your shirt monitoring your temperature, your shoes counting your steps, your watch monitoring your heart rate, it’s overwhelming. “Is it steps or reps or calories I should be paying attention to?” he asked. “We want to distill all that down and create a compelling story to educate you and help you get to how you want to feel through your exercise.”
Callahan is one of those successful entrepreneurs who got there by building something he, himself, wanted.
Birth of a Serial Entrepreneur
As a kid, Callahan lived in nearly a dozen countries because his father worked for the state department. He was “a typical, anti-social, socially awkward, Star Trek, Star Wars nerd,” before moving to South Africa for high school. There, he said, he was away from computers and cable TV and had a life experience that was unique for “a dorky sci-fi guy.” He wanted to stay in Africa but his father told him he would only pay for college if Callahan studied in the United States.
He studied at Johns Hopkins and was considering a career in space tech. He received a leadership grant with NASA working on products that simulated microgravity environments. But while he was in college, working toward his bachelor’s in mechanical engineering and economics, the dotcom world exploded and he decided he’d rather be involved with this new, fast-moving medium.
He started to launch on online food delivery company for college campuses called Easy Meals. It was supposed to help students find treasures, like the pizza place that delivered at 2 a.m. But it turned out that most of the restaurants he meant to feature had no website at all. When companies found out he could program websites, he was offered $100 an hour to create sites and decided to become a web design agency.
In 1999, he started working with a new website, Voter.com, which meant to bring politics back to the people. Voters would put in their zip code and see their elected officials. The site linked candidates to the issues the voters supported. It was listed among the top 22 most popular news and election sites for the 2000 elections.
But, he said, “The candidates didn’t like it and the elected officials didn’t like it. We started scoring elected officials on their votes. They didn’t like that.”
By 2001, the dotcom bubble had burst. Callahan became a management consultant for six months. He had to wear a suit and help a bank do call center integration. And he hated it. One day he was contacted by a small travel insurance company he’d built a site for previously. They wanted an update. But instead, Callahan and the business owner started working on a new project that would be bootstrapped. At this point, Callahan said, he was living in Boston, in his mid-20s, and all of his friends were bankers and lawyers. He decided if he was going to be poor, at least he’d be happy. So he liquidated his life in Boston and moved to San Diego.
Running for Fun and Profit
He also joined Team in Training and began to train for marathons to raise money for cancer research.
It was 2005, Callahan said, and GPS watches cost $400 a pop. Without one, the only way to gauge how far you were running was to drive the course and look at your car’s mileage. But Google had just released its mapping API and Callahan decided to create a very easy website that let people use Google maps to calculate the distance of their runs: the beginnings of MapMyRun, the precursor to MapMyFitness.
The website started getting a lot of traction, sharing, comments and feedback. Meanwhile the insurance business he’d been working on was collapsing. Suddenly it dawned on him that he could put banner ads on the run mapping site and actually make money at it. He thought of calling it Poorman’s GPS.com. He’s glad he thought better of that.
In 2006, Callahan teamed up with Jeffrey Kalikstein, who became the company’s CTO, though Kalikstein lived in Austin and Callahan, at the time, lived in Denver. They also met Robin Thurston who had independently started his own website for cyclists, MapMyRide. Thurston, he said, had a strong business approach and saw a lot of opportunity.
Thurston invested $1.5 million to give Callahan two years to really figure out a business model. It would cover his and Kalistein’s salaries, money for designers and servers. They came up with a number of options beyond running and cycling including hiking and walking mapping and dog walking, for various customer groups. They added an online training log, the community component, started sponsoring virtual events, and were among the first 200 apps in the iTunes store.
At one point, Callahan said, they got a phone call offering a quarter of a million dollars to white label the site. He called Thurston to ask “What do I do?” Thurston replied: “Take the fucking money.”
They wound up monetizing everything they could and relentlessly sending emails to clients. That may have been obnoxious, Callahan admits, but it kept them going when the economy went south.
When they offered the paid, premium membership for $2.99 a month, he said, “Some of the more vocal users came at us with pitchforks….. Robin said ‘The ones who complain are usually the loudest but that doesn’t mean that’s the bulk of the users. Let’s let this bake for awhile.’” He was right, the complaints died down and the subscription service is now a key part of the business.
In 2007, Callahan said, Reebok came out with a campaign that was all over the Boston Marathon: Go Run Easy, with a site that was exactly like MapMyFitness. “I thought, shit, there goes our business,” Callahan said. But while the Reebok site was briefly successful, it didn’t capture the experience MapMyFitness gave its users and it faded out.
By 2011, the site was listed among Time magazine’s Top 50 websites. A year later it was on Inc. magazine’s list of the 500 fastest growing companies and named on Time’s list of top apps.
And two weeks ago, it sold for $150 million. Total investment up to this point has been $23.5 million.
“We’re looking at this space and being one of the early players, innovators,” Callahan said. “I knew there would be a time when there was a lot of commoditization going on…. The only way to win is to consolidate. They have a locker room culture, a football culture….. They’re not shy about telling us they want to dominate the industry.”