Focus on making a change – success will follow
We sat down with Runtastic CEO Florian Gschwandtner to talk about his life as an entrepreneur guided by the heart of an athlete, the mistakes he’s made along the way, and how he has translated his vision into reality.
In autumn 2008, with two master’s degrees in his pocket, Florian Gschwandtner started working as a project manager for an IT company. Two weeks in, he wrote a letter to the CEO suggesting process improvements. The CEO then asked Florian to his office with a speech prepared: “You’re a project manager. That’s what you should focus on. Stick to your area and don’t look elsewhere.” This was a pivotal moment for the persistently curious and resourceful Florian, who didn’t understand why the company wasn’t tackling the low-hanging fruit.
Around the same time, Florian’s classmates René Giretzlehner and Christian Kaar were developing a GPS monitoring program for a sailing regatta. The three young men built on their concept, brought Alfred Luger and his economics expertise into the mix and, by the summer of 2009, the idea for a tech start-up was born. “You’ll be back in three months,” Florian’s former boss said when he handed in his resignation. This only encouraged Florian, who was now determined to work even harder just to prove him wrong. Florian’s main motivation, however, was a relentless desire to make people healthier and happier. As a dedicated athlete and “product guy”, as he calls himself, that same vision continues to guide his work as the CEO of the highly successful fitness start-up Runtastic, now part of the adidas Group. Leading his team by example, Florian (now 33) always makes time to prioritize his health, too.
Florian, what came first: the love of sport or the love of tech?
It was sport, or rather movement. I grew up on a big farm, and in order to get a glass of water I had to walk 50 meters. At age six I started playing football and later in my teens I joined a gym and took up running.
When you launched the first Runtastic app in 2009 you didn’t get any funding. How did you finance the start-up phase?
Back then, there was no real start-up scene in Austria, or Europe even. There were companies, sure, but compared to now it was a totally different game. We drafted our business plan, made forecasts and approached investors. We tried really hard but the responses were devastating: “That’s not a company; that’s a gadget.” “Four founders? That will never work!” We then worked full-time in other jobs and invested all our earnings in Runtastic. For marketing we relied on word of mouth. Facebook was getting popular in Europe around that time, and they were our launch partner. Posting your runs on social media became popular, so we got plenty of free publicity. It wasn’t until 2012 that we had our first real marketing budget.
You started making money early on. Even so, did you ever run into setbacks that made you consider throwing in the towel?
Kind of, but we always saw them as challenges. Some projects flopped, but we didn’t look back. This ‘fail fast’ mentality is important in the start-up world. Plus, I just didn’t care how much money or time had been spent on a failed project, our experiment with Google Glass being one example.
You talk a lot about looking ahead. When you first started out nearly seven years ago what did you envision for your company?
We never had a three-year plan, for example, because in the digital world that’s totally unrealistic. We didn’t have an exit strategy either because we never focused on that. We wanted to build a profitable company. We wanted to hire great people and develop a great product. We wanted to help people get fitter and healthier. That was our vision – still is – and it’s what we’re committed to.
What’s the biggest mistake young entrepreneurs and start-ups make today?
They expect to be successful and earn a lot of money fast when they should be concentrating on making a change instead. With the right mindset and attitude financial success will follow. Runtastic became profitable because we had to monetize since day one. Today’s start-ups seem to rely on big investors.
Is that a good or a bad thing?
You’re always in a better position if you don’t have to negotiate for money. For some tech start-ups, however, it’s necessary to have money up front for scalability. But even then you shouldn’t neglect the business model. I’m old school like that: if you build something, you should earn money with it.
To know a little bit more about the foundation of the company is great, specially coming from the CEO.
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