In early 2008, Jason Jacobs was actively looking for a business idea to pursue. He knew he wanted to start his own business—he just didn’t know what that business would be. Anticipating the need for start-up funds, he lived like a bootstrap entrepreneur, even though he had a good job. He was trying to save at least two years of living expenses to support himself when he settled on a business to start.
Trying to settle on a business idea was frustrating for Jacobs. He looked at clean tech, enterprise software, and several other alternatives, but nothing resonated. He got so frustrated that he started training for a marathon as a way to clear his head. While training for the marathon he tried several of the devices that were available at the time to time and track practice runs, including GPS-enabled watches and the Nike+iPod device. Although the devices worked, he found preparing for the marathon to be a fragmented experience. Different devices offered different features, but none tied the whole experience of training and running together. Jacobs had his business idea.
He would create a company that would combine his passions for running and technology, and build a Webbased platform that would allow runners to integrate the hardware devices they were running with a Web-based platform that would provide them analytics, coaching, running-related tips, and social support. In this sense, Jacobs’s business idea created a “turnkey” operation for runners interested in tracking their progress.

Getting Started
After a brief period of indecision, Jacobs quit his job to focus on his business idea full-time. He remembers thinking, “Now you’ve got your idea and you’re going to work on it nights and weekends in a coffee shop—are you kidding me?” He started asking around about people who might help him get started. He was introduced to some traditional Web site developers, who wanted $50,000 to $75,000 to build the site and functionality he envisioned. Although Jacobs had a tidy sum of money tucked away, these suggested fees were just too high. He met three guys who were willing to moonlight to help him get his project off the ground at a much lower cost. He didn’t bite, thinking that if he was going to commit full-time he didn’t want to hitch his wagon to people who were only in it part-time. He then became acquainted with a two-man development shop that listened to his idea and asked him if he’d thought about building an iPhone app. That thought had never occurred to Jacobs, but sounded like a great idea. The iPhone app store was set to debut on July 12, 2008, in just a few months, and the two developers had just received a development license from Apple. They hadn’t built an app yet but were eager to try, and offered Jacobs a deal if he could pay for their first development effort. Jacobs knew he could go back to the three moonlighters to get the Web site side of the business built. So in Jacobs’s mind, the business that was taking shape was to build an iPhone app, with the help of the two developers, that would time and track a runner’s runs, along with a Web-based platform, built by the three moonlighters, that would take data from the app and provide runners analytics, coaching, social support, etc., regarding their most recent runs and their entire running programs.
Jacobs now had a six-person team—himself, the two-man development shop, and the three moonlighters working on his business idea. The six held weekly meetings during the development process, and as unorthodox of a structure as it was, it worked well.
Both sides delivered on time, and the system was put together and was ready to go for the launch of the iPhone app store.

Doubters, Good Press, and Execution Intelligence
When Jacobs talked to others about what his team was building, there were plenty of doubters. The biggest source of skepticism focused on whether people would actually run with their iPhone. To Jacobs this was a no brainer. The iPod was a perfect analog. Just two versions earlier, the iPod was nearly as big as the iPhone, and people ran with their iPods. Still, the doubters remained unconvinced. Another source of skepticism was Jacobs’s team. He was literally his company’s only full-time employee, yet he was about to debut a high-profile app in the new iPhone app store.
Generally, the problem with using contract employees rather than hiring people full-time is that a company runs the risk of the contract employees getting distracted or not delivering on time—whatever the excuse might be. Jacobs gambled in this regard and it worked. The two-man development shop and the moonlighters came through in an exemplary manner.
In the midst of the skepticism, one thing that worked in Jacobs’s favor was perfect timing. The opening of the iPhone app store created lots of press, and news outlets were eager to profile apps that would soon be available for the iPhone. Jacobs worked this angle to his favor and RunKeeper, the name he gave the app, got lots of prelaunch press. The launch of RunKeeper also aligned nicely with the emergence of Twitter and with the growth of interest in Facebook. RunKeeper engaged its users from the beginning via both Twitter and Facebook, and created a “community” of users around the RunKeeper experience. A little guerilla marketing also helped. For example, Jacobs ran the 2008 Boston Marathon dressed as an iPhone, and periodically posted on Twitter as he ran. The idea was to draw attention to RunKeeper and the iPhone app store in general. The payoff was a front page story in the New York Times.
Although Jacobs promoted RunKeeper when he could, he remained laser focused on execution, and turned down many promotional opportunities. In his mind, the best way to build RunKeeper was through creating an exemplary user experience. Jacobs’s success in this regard can be seen in the numbers.
RunKeeper has a freemium business model, meaning that the basic download is free and users can pay $10 for the premium service. As of mid-2010, 54 percent of the people who bought the premium service from mid-2008 until the present day are still active RunKeeper users. That’s an extremely high retention rate for a smartphone application.
A photo of the RunKeeper app in action is shown next. Along with timing a runner’s run, the app shows how fast a runner is running (in mph), the number of miles run, the calories burned during a workout, and the pace of the run (in minutes per mile). The bars in the middle of the screen show how the pace has varied during the run. All this data can be automatically uploaded to the RunKeeper Web site, where a user can keep a history of his or her runs and run a variety of analytics on past and present workouts. An especially enjoyable feature is that the RunKeeper app allows users to stream their runs in real time, allowing others to follow them. The results of RunKeeper runs can also be automatically posted to a user’s Twitter or Facebook account, providing the runner extra incentive to do well because the results will be immediately available for friends, family members, and other followers to see.

Discussion Questions
1. Which of the characteristics of successful entrepreneurs, discussed in this chapter, do you see in Jason Jacobs? To what degree do you think these characteristics have contributed to RunKeeper’s success?
2. To what extent do you think RunKeeper’s basic business idea “adds value” to the lives of its customers? Who is the ideal candidate to be a RunKeeper customer?
3. To what degree do you think it would be easy or difficult for another company to imitate what RunKeeper is doing?
4. Spend some time studying the RunKeeper app. What functionality do you think the app should have that it currently doesn’t have?

Application Questions
1. Make a list of three things that you are passionate about. Don’t worry if they don’t seem like logical choices for business ideas. Many people have built businesses around things that didn’t seem like logical choices for business ideas like art, music, fitness, and spending time with family. Now brainstorm business ideas that might align with each of your passions.
2. Do you think Jacobs will achieve his dream of building a billion-dollar company? If so, write a brief scenario that describes your view of how Jacobs will achieve this objective. If you don’t think Jacobs will achieve his dream, explain why.