In the event you spend any time at under armour outlet, you’ll hear that question over and over. Founder and CEO Kevin Plank really likes whiteboards, and his awesome favorite use for these people is usually to write down leadership maxims for his team. Outside and inside his office, whole walls of floor-to-ceiling whiteboards contain lots of curt principles he’s scrawled through the years: Expedite the inevitable. Perfection is definitely the enemy of innovation. Respect everyone, fear no-one.
These commandments are meant not quite as simple inspiration or hard rules, he says, but together comprise a system of “guardrails” that permit everyone under him to use as entrepreneurs by channeling his thinking. The Plank principles are drilled into new employees during the weeklong orientation, and they’re painted all over the hallways at company headquarters, a former Procter & factory on the Baltimore waterfront. Think like an entrepreneur. Create such as an innovator. Perform just like a teammate.
Plank provides the affect and intensity of a head coach–direct eye-to-eye contact, military analogies, the environment of someone you do not desire to disappoint. “Winning is part of our culture–it’s who our company is,” he says in their lofty office overlooking the harbor. (Really the only artwork behind his desk: a giant UA logo, its letters stacked to evoke arms raised in victory.) “And culture is created on habits.” Perhaps the main guardrail, and also the company’s official mission, is trying to “make all athletes better.” It offers long equaled thinking about clothes as high-performance gear, but recently it’s adopted a big new meaning.
During the last 2 yrs, Under Armour has spent near to $1 billion buying and making an investment in three leading makers of activity- and diet-tracking mobile apps. In that way, the company has amassed the world’s largest digital health-and-fitness community, with 150 million users. Plank envisions all of the users, and their metrics, as a big data engine to operate everything from product development to merchandising to marketing. Many observers, though, balked with the $710 million expense of the acquisitions, questioning whether Under Armour could quickly produce any roi–two of three of the companies were unprofitable–not to mention reach your goals in an area that shares little with making shirts and shoes. Longtime staffers worried the moves would crimp company performance, affect bonuses, or divert focus from your core business. Plank spent more hours than he cares to count, together with a large chunk of his winter vacation a year ago, in a single-on-one conversations to persuade them otherwise. “It had been important,” he says, “that this not merely be my decision.”
Under Armour team-sports designers, discussing concepts for uniforms and gratification gear they’re making for Plank’s alma mater, the University of Maryland.
Plank loves to claim that the real key to Under Armour’s success is that he never focused on every one of the reasons it couldn’t happen. A former Division 1 college football player, Plank famously bootstrapped Under Armour’s launch in 1995 furnished with one simple insight: The cotton undershirts football players wore under their pads slowed them down after they became soaked with sweat. After prototyping a moisture-wicking, formfitting alternative–created from fabric for women’s undergarments–and testing it on ex-teammates, Plank set up shop in his grandmother’s basement and, right before he went broke, scored his first big sale, to Georgia Tech. The business proceeded to create a totally new niche for performance apparel, IPO’d in 2005, and from now on sponsors several of the world’s greatest athletes, including Jordan Spieth, Stephen Curry, and Lindsey Vonn.
Today, Under Armour has 13,500 employees around the globe and nearly $4 billion in revenue. But Plank continues to be every bit the entrepreneur, chasing audacious dreams–chief among them overtaking Nike because the world’s largest sportswear maker. Under Armour leapfrogged the longtime second, Adidas, inside the Usa sportswear market in 2014, but worldwide it’s still third. And Nike remains far larger, exceeding $30 billion in revenue in 2015 Which happens to be element of why Plank desires to move so aggressively. Nike has about a fifth as many users on its Nike platform as Under Armour does on its apps, as well as in 2014 the shoe giant turn off its FuelBand fitness-tracker business.
The true work is only beginning, though, as Plank has adopted the type of world-changing ambitions more prevalent to a Google or Facebook. He envisions that Under Armour Connected Fitness will “fundamentally affect global health.” This month–doubters be damned–the company will begin selling a set of biometric fitness devices along with a smart scale made together with the Taiwanese smartphone company HTC. The move will put Plank in direct competition with Fitbit and Apple in the fast-growing wearables market. It’s a bold, characteristically Plankian bet–as well as a “very risky” one, says Morningstar retail analyst Paul Swinand. (Morningstar and Inc. are both owned by Joe Mansueto.)
“Under Armour has become a phenomenal success story,” Swinand says. Its stock has risen steadily–almost 2,000 percent from the decade since its IPO. “But once you’re hitting a property run every quarter on the core apparel business, why mess around having a moon shot?”
Plank rarely admits to much uncertainty or doubt, so it’s telling which he echoes Swinand in describing Connected Fitness’s ambitions as a “moon shot.” But another of his whiteboard sayings one thinks of, that one thanks to his friend and former Usa Special Operations commander Admiral Eric Olson: Nobody ever won a horserace by yelling “Whoa!”
Robin Thurston, co-founder then CEO of Austin-based app maker MapMyFitness, got his first taste of Plank’s high-speed force-of-will approach as soon as the Under Armour founder cold-called him in July 2013. Plank explained that he loved Thurston’s app MapMyRun. “I run five miles three times a week, I log everything, I search for routes once i travel,” Plank began. “What exactly are you doing with all the company?”
Thurston replied which he was approximately to improve more venture capital to pursue ambitious expansion plans: The corporation had bought several hundred domains based upon every physical activity, and planned to produce new services for every. Thurston with his fantastic investors saw MapMyFitness as poised in becoming the top digital health-and-fitness network.
A few weeks later, Plank and three key lieutenants showed up early with the The Big Apple offices of Allen & Company, where Thurston and his team were huddling using their bankers. The MapMyFitness team got about twenty or so minutes right into a detailed PowerPoint presentation when Plank interrupted. “This is certainly awesome,” he explained, “but I would like to hold you back and go talk to Robin myself for a couple minutes”–without the bankers running interference. Forty minutes later, Plank and Thurston returned, and Plank asked the MapMyFitness team if they’d like to go to Baltimore, right away, to look into the Under Armour campus.
It wasn’t 11 a.m. if the group–in addition to under armour shoes online, who’d been waiting in the airport to hitch a ride on Plank’s jet–pulled up at Under Armour headquarters. Former Washington Redskin LaVar Arrington opened Thurston’s door, and offered a tour from the campus, along with some oatmeal cookies, towards the stunned app makers. Within two weeks, the parties had agreed that Under Armour would discover the startup for $150 million, and Thurston would remain atop MapMyFitness and grow Under Armour’s chief digital officer.
Thurston, a onetime professional cyclist who maintained MapMyFitness’s position like a top fitness app from your iPhone’s earliest days, tells the storyline in the new office in downtown Austin, within a brand-new building where giant images of Under Armour athletes adorn the walls (amid, needless to say, motivational mantras) and many hundred new engineers and other tech employees work. Initially, Thurston says, Under Armour’s interest was really a puzzler. He’d entertained partnering with insurance carriers and media companies, but he always worried they’d exploit all the data MapMyFitness gathers about people’s personal habits in such a way that would violate the trust he’d designed with the neighborhood. Under Armour had simply never occurred to him as a home for his company.
But the very first thing Plank did for the reason that private meeting in New York City was pull-up an idea video Under Armour had created earlier that year called “Future Girl.” It showed a young woman starting a morning workout in clothes that had been touch-sensitive and could contact data displays as well as change color with all the tap of your finger. “I made this for you personally,” Plank believed to Thurston. (Actually, it had run as a TV commercial; Plank explained to me it absolutely was manufactured for someone like Robin 02dexipky though “I didn’t know who Robin will be.”) He wanted to make certain that Thurston wouldn’t bolt after the sale, but would instead see a fantastic opportunity and lead it. Under Armour had for ages been a tech company, in its way, Plank explained–nevertheless it had struggled with digital.
At Under Armour headquarters, workers’ breaks often involve workouts, like this one by using an artificial-turf field overlooking Baltimore’s Inner Harbor.
Not one of the products from the “Future Girl” video existed then–and a variation of just one is hitting the market now–but merging performance products with performance data and interactive technology was a top Under Armour priority, given Plank’s instinct that that’s where the world was going. Plank had directed a team many years earlier to create an “electric” product, and they’d put together the E39 compression shirt, that had sensors a part of the fabric to track an athlete’s heartbeat. The shirt launched on the 2011 NFL training combine to much fanfare, but a simplified consumer version–a sensor-equipped chest band–had only niche appeal. That experience made Plank realize Under Armour couldn’t take on hardware companies that employ a huge number of engineers and constantly come out incremental innovations.
“It’s absurd you are aware of a little more about your car than you know about your whole body,” says Plank. He’s betting athletes’ personal data will turbocharge their fitness and Under Armour’s future.
“It’s very normal for the product company–which is really what Under Armour is–to obtain gone along the path of trying to generate hardware,” says Thurston. “They are aware the distribution channels, they realize how to sell products, they realize how to market them. But since they started doing their homework of what was happening in the space, they found that the strength [of digital fitness] was actually in the community.”
Plank also knew it might take years to create a community like Thurston’s. “It wasn’t that we didn’t are aware of the right strategies to be seeking from engineers. I didn’t even know the correct things to ask,” Plank admits. “I’m a sporting goods guy.”
Following the MapMyFitness acquisition closed at the end of 2013, Plank and Thurston proceeded uncharacteristically slowly, taking time to set priorities for Under Armour’s digital transformation. Thurston identified four key pillars of health–sleep, fitness, activity, and nutrition–he based on Plank’s “make all athletes better” mission. Once that vision snapped into focus, Plank saw an opportunity not just to become a collector of human activity data and also to become the central processor that turns that data–irrespective of whose device or app collected it–into useful insights. “OK. Let’s practice it,” he told Thurston 1 day in late 2014. Through the following March, they had spent over half a billion dollars acquiring two more companies: San Francisco-based MyFitnessPal, a nutrition-tracking system for folks to log the meals they eat, and Copenhagen-based Endomondo, your own-exercise program whose users are almost entirely outside of the United states Under Armour suddenly had not merely the world’s largest digital fitness community but countless engineers and reams of user data also.
Merely one big question loomed: How would any of that help Under Armour chip away at Nike’s dominance, or at a minimum sell far more workout shirts?
Throughout the railroad tracks through the Under Armour campus, the lowest redbrick building houses the company’s innovation lab, where president of product and innovation Kevin Haley leads a team of biomechanists, designers, engineers, as well as a psychologist to formulate shoe and apparel concepts. There are weather chambers to re-create different exercise scenarios, devices that stretch and compress materials, gait-analysis systems, washers and dryers, 3-D printers, laser cutters, and countless other machines. The deeper you enter in the long, narrow lab space, the better secretive the operations. The prototyping room is locked down from all of but a couple of select employees and executives, who must pass a biometric scanner to get in.
Before you take within the innovation lab, Haley came up with the Under Armour consumer insights department. At the beginning, “the secret in our success was that people were the individual,” Haley says. “Kevin had been a football player. He just knew. But slowly, we got older than our consumer.” The organization stopped bragging about not using focus groups and started tapping its sponsored athletes for product insights, sending researchers to look in people’s closets, and running surveys online.
What Under Armour didn’t know with much precision, though, was how people used its products after buying them. “You just know if a person swipes credit cards or otherwise,” as Haley puts it–as well as that only happens a couple of times each year for virtually any customer. “We call something a basketball shirt, but may be the guy using it to football practice? Is the boyfriend shirt he gives to his girlfriend something she wears as pajamas?”
But furnished with data from Connected Fitness apps, Haley says, they can take design cues from 150 million people who, having downloaded an exercise app, are precisely the target market: “There’s unbelievable data within. You understand their running pace, how far they go, how many times they go. You literally understand what brand of Greek yogurt they use.”
It’s too early to see many new releases due to each of the new data–developing a sheet of gear often takes eighteen months–but Haley points to one. The organization learned from MapMyFitness data that the average run is 3.1 miles–“not a couple of miles, not five miles, but 3.1,” Haley says. And once it stumbled on making the Speedform Gemini running shoe, which had been released last January to largely rave reviews, the organization added “charged foam” padding tailored to that particular type of run.
“The toughest question for all of us will not be, Are there any cool technologies around?” says Haley. “It’s, What do you need me to function on? This provides us unbelievable insight that’s both incredibly broad and deep, with the exact same group of people we’re marketing toward.” Which can be especially useful when you are the 2 huge growth opportunities for Under Armour. More than 60 percent of Connected Fitness’s users are women, who take into account just 30 percent of Under Armour’s apparel sales. And although approximately 11 percent of their sales are international, 35 % of your Connected community is beyond the Usa
Still, the top-stakes bet on Connected Fitness will likely be slow to get rid of. Under Armour recently increased its projections for the following a couple of years, estimating that it would nearly double net revenue by 2018, to $7.5 billion (up from your previous estimate of $6.8 billion). Only $200 million–a paltry 2.7 percent–may come from Connected Fitness. But Thurston likens his digital community to “possessing a Super Bowl-size audience every day,” and just about the most immediately practical moves will likely be using those apps like a marketing channel. A characteristic called Gear Tracker, for instance, allows under armour sale melbourne users to log the footwear they utilize when they go running, and obtain a reminder when their mileage suggests it’s a chance to buy new ones. A partnership with Zappos makes ordering replacements easy.