HIT Innovation Founder Stories:Jakob Jønck, Co-Founder, Endomondo

March 20, 2012
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Jakob Nordenhof Jønck,Co-Founder, Endomondo

Jakob Nordenhof Jønck,Co-Founder, Endomondo

There is an emerging community of digital health entrepreneurs utilizing technology innovation to help transform healthcare. In an effort to provide coverage of this growing community and inspire future digital health entrepreneurs, HIT Consultant has launched “HIT Innovation Founder Stories” where we will speak with a digital health founder to share their journey from inception to launch, obstacles/challenges, and lessons learned.

In our first HIT Innovation Founder Stories, we speak with Jakob Nordenhof Jønck, Co-Founder of Endomondo, where Jakob shares his story of how three former McKinsey & Co. management consultants (all former semi or professional athletes) took their passion for active, healthy lifestyles and created Endomondo, a social fitness application that turns mobile phones into full-fledged personal trainers. Endomondo is a great example of how technology can be utilized as a tool to provide consumers with the means to manage/monitor their own health and promote an active, healthy lifestyle.

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HIT Consultant: Tell me how Endomondo was started?

Jakob Jønck: Endomondo is four years old. We came together for three years discussing different things we wanted to do and basically we all had a shared lust for active lifestyles. We all came from various backgrounds in semi or professional sports and we really wanted to see what we would do there to leverage that lust of what we did when we were not working as consultants. One of the things that was pretty obvious back in 2006-2007, social media was really coming on strong. It was back in the day when MySpace was the leading community, but Facebook was rapidly picking up. We figured that was an interesting trend. At the same time, I remembered we were using different kinds of devices. I was a Sun Tool watch user and other people were using Garmin and some people were using the Nike iPod. People were using a ton of stuff to track their training.

So, what was a real obstacle for us in terms of sharing when we’re not doing it together was that all of these tracking instruments were using their individual data files. So, I literally could not play with anybody using a Sun Tool watch. At that time, Sun Tool didn’t have anything online so it was only an individual experience that I did. Those were sort of the two big things, one of them being very irritating to us. The other thing was to be really into this game, to use these instruments it came off a pretty high intro price. The entry price for a Garmin at the time was pretty expensive for the high-end watches and was well above $500 dollars for the stuff that we were using meaning basically the people who would use it was a relatively small group of people. At that time, I personally stopped doing semi-pro sports; you know you just wanted to have fun with your friends being active not just necessarily the elite or semi-elite people.

So the sheer cost of these instruments was a real obstacle for us, basically, was just playing having fun with ourselves and our friends. We sort of put these three things together and we bet on the mobile and this was contrary to every industry report at the time. We bet that GPS was going to go mobile by 2010 and by 2011 it will be really common. We made that bet in 2008 and nobody believed us at the time, nobody.

We came out with the first tracker/app in 2008 and this does not sound like a long time, but this was before the iPhone had GPS functionality enabled. So, nobody could look at their phone as being a sports device and when we tested this on people, they were like: “Yeah, I’m never going to run with my phone or cycle with it. It’s just a hassle to bring your phone onto this.” But we really believe in it, because we thought we could make an instrument close to free and make it in a scalable way and using the functionality and technology that was becoming common. Secondly, we thought we could really totally cross the other barrier of being able to share data, because we could integrate with other technology we could get our hands on. So, we really tried to break these barriers down by creating what we did and that mobile tracker, that mobile app, was what we really needed that boost to create this community to be integrated with other types of devices.

So, that was what really drove the project; a lot of love and some critical thinking on what we can do to leverage technology to overcome these barriers at the time and we saw them as real issues. So that was the founding story and since we were so early on, it took a while to really catch on. But again, the iPhone completely changed this game for everybody. First of all, because GPS in your phone became available for a lot of people, Nokia had driven this beforehand, but soon as the iPhone came out they started losing ground.

The app stores of course helped this equation a lot. We benefited from being the early one out in a lot of different platforms and really had a chance to build a product with the users hand-to-hand to get really good feedback on what worked and what did not work. So, that was sort of the principle and I think really from the fall of 2010, that’s when the snowball really started to hit. When you saw the general availability of these phones coupled with social media being what everybody was used to and integrating across different systems. That was sort of the point in Q4 in 2010 where we really started to snowball…started to run and it’s been a really fun ride every since.

HIT Consultant: What is the meaning behind Endomondo?

Jakob Jønck: So actually to be honest we were looking through more than 3,000 URLs. One of the issues when you start a tech company that is relatively difficult to actually get a name that is not already claimed. But at the same time, we really wanted to find something that would resemble a community, activity and other kinds of stuff. Endo is short for endorphins. Mondo is the world in Esperanto, which is the international language and is also the same in Italian and if you exchange the “o” with the “u” in Spanish. It is really to create a world of endorphins. That’s where the name comes from and it came up in a brainstorm between Mette, Christian and I. Somebody was saying endorphins and I’m an old language student so it was like mondo then Endomondo and people was like no it is kind of too long. It kind of just stuck and today we are quite happy about it. We never anticipated or wanted Endomondo to be something just for runners. We really wanted to create a network for people that were active, a social fitness network. That was what we wanted to create, so being for runners only or bikers only was never really the essence of what we were trying to create. So today we are very happy about our name because it does not talk too much to any particular sport, it talks to a broad range of people

HIT Consultant: What gave you guys the foresight to see so far ahead before the iPhone? What made you guys see that vision and know it would work?

Jakob Jønck: We did not know it was going to work. That was the bet we took. From the beginning, when we saw this, we had a vision of a social fitness network, but neither of us really believed that we could do this. Becoming a Facebook of fitness, just like that. We basically thought that okay so Facebook and others they are claiming the social community space per se. So, in order to create our own, we could either build that within the Facebook platform, which was not possible at the time, or we could try to create our own. In order to do that, we needed a tool to do that, we needed a tool to drive engagement. And that tool, you know, is actually the same that was on the really expensive sport watches at the time. That tool we had to bet that the mobile was going to make it and that we could bring that cost down.

We looked at all these industry reports, you have to remember we were working at McKinsey at the time and I was working in the media sector in the media industry. So, I was into these numbers all the time for different global media companies looking at all the different media verticals. One of them being the Internet, and also the mobile industry, which was closely connected. It was not a matter of if the GPS came out into the phone; it was a matter of when it was going to come out. So, that was where the confusion and discussion came up and I remember that before the iPhone came out, people were betting that it was going to happen in 2013-2014; that was when you would see the general availability response. But the iPhone just changed this completely and in all honesty, we bet on it, but it was also a strike of luck that our bet came true.

HIT Consultant: I’m glad you touched on your management consultant background, were you guys bootstrapping while working as management consultants while building from the ground up or did you just leave McKinsey?

Jakob Jønck: So, we were definitely talking about this way before we left. We were talking about different things you know. I was the one working in the media vertical. I remember one day Christian called me up and said, “Hey I quit, I can’t do this anymore.” We talked about this for a long time, almost three quarters of a year where we met for brunch, lunches and stuff when we could. We were traveling a lot, at McKinsey you travel a lot, so predominately you meet on the weekends and discuss. And that’s what we did and when he called me up, I was like, “Ok, let’s go for it, this is what we want, let’s go for it now.” There is never good timing so we just went for it. But we completely quit our jobs and went for it, there was no in between in our mind. We really didn’t believe in creating a company without doing it full time, especially when you are working at McKinsey working 60-80 hours a week. So it was either/or and we chose to go for it full on. There is a bonus system there, so we had a bit of bonus. Not a whole lot to be honest, but enough that would take us half a year out without going totally bankrupt. And we thought that was going to be enough to get funding; we were pretty naïve at the time. Then, Lehman Brothers went down; there were a lot of things we didn’t anticipate. One of them was Lehman Brothers and the entire financial crisis which totally shut down on the cash flow from investors and VCs (venture capitalists) around the world. So we found ourselves in the mist of all of this trying to raise money for a project where no trends and no experts were bidding on us. So needless to say, it was a complete disaster really trying to raise money. We ended up bootstrapping for a year and a half with no money whatsoever and we took all the loans that we could get individually and we tossed them into the company.

A major deficit of being McKinsey consultant was none of us could actually code and I don’t think we would do the same thing again. We were an over-managed company and not enough tech expertise, so with all of the money we did some jobs here and there and we got a prototype out there and that was enough to get a little bit of cash in there. We didn’t take cash for the first investment; we didn’t use it for ourselves at all. We hired engineers right away and they got equity. They saw the potential and we did that for quite a long time. We were bootstrapping for 18 months with no salary and then we started earning like next to nothing just to pay the really basic, like the rent. We still couldn’t really survive, but we wouldn’t go too far into debt. This changed with the first round of capital but it took more than two years for people to really see this trend.

Part two of this interview/podcast with Jakob coming soon.

CLICK HERE TO DOWNLOAD ENDOMONDO TO YOUR PHONE

THE CASUAL ENDO – JAKOB

Jakob co-founded Endomondo and is head of product. Jakob has a combined passion for sports and the mobile and Internet industry which is key to understanding his passion for Endomondo and healthy living. Jakob holds a master’s degree in Political Science from the University of Copenhagen. Before founding Endomondo, Jakob spent some years at McKinsey & Company, focusing on the media industry within the field of strategy and M&A.