When you spend any moment at under armour melbourne australia, you’ll hear that question time and again. Founder and CEO Kevin Plank really likes whiteboards, and his favorite use for these people is usually to write out leadership maxims for his team. Inside and outside his office, whole walls of floor-to-ceiling whiteboards contain dozens of curt principles he’s scrawled over the years: Expedite the inevitable. Perfection will be the enemy of innovation. Respect everyone, fear nobody.
These commandments are meant not as simple inspiration or hard rules, he says, but together form a system of “guardrails” that permit everyone under him to operate as entrepreneurs by channeling his thinking. The Plank principles are drilled into new employees during the weeklong orientation, and they’re painted everywhere in the hallways at company headquarters, a former Procter & Game factory about the Baltimore waterfront. Think just like an entrepreneur. Create as an innovator. Perform such as a teammate.
Plank provides the affect and intensity of a head coach–direct eye contact, military analogies, air of an individual you may not want to disappoint. “Winning is part of our culture–it’s who we have been,” he says in the lofty office overlooking the harbor. (The sole artwork behind his desk: a huge UA logo, its letters stacked to evoke arms raised in victory.) “And culture is actually created on habits.” Perhaps the most significant guardrail, and the company’s official mission, is wanting to “make all athletes better.” It provides long equaled thinking about clothes as high-performance gear, but recently it’s taken on a major new meaning.
In the last two years, Under Armour has spent close to $1 billion buying and buying three leading makers of activity- and diet-tracking mobile apps. By doing so, the corporation has amassed the world’s largest digital health-and-fitness community, with 150 million users. Plank envisions those users, and their metrics, like a big data engine to drive from product development to merchandising to marketing. Many observers, though, balked in the $710 million cost of the acquisitions, questioning whether Under Armour could quickly produce any roi–a pair of the three companies were unprofitable–not to mention flourish in a location that shares little with making shirts and shoes. Longtime staffers worried the moves would crimp company performance, affect bonuses, or divert focus from the core business. Plank spent more hours than he cares to count, such as a large slice of his winter vacation just last year, in a single-on-one conversations to persuade them otherwise. “It was important,” he says, “that it 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 likes to state that the real key to Under Armour’s success is the fact he never centered on each of the reasons it couldn’t happen. A former Division 1 college football player, Plank famously bootstrapped Under Armour’s launch in 1995 equipped with one easy insight: The cotton undershirts football players wore under their pads slowed them down whenever they became soaked with sweat. After prototyping a moisture-wicking, formfitting alternative–made of fabric for women’s undergarments–and testing it on ex-teammates, Plank setup shop within his grandmother’s basement and, just before he went broke, scored his first big sale, to Georgia Tech. The company continued to produce a whole new industry for performance apparel, IPO’d in 2005, now sponsors a number 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 remains every bit the entrepreneur, chasing audacious dreams–chief and this includes overtaking Nike because the world’s largest sportswear maker. Under Armour leapfrogged the longtime number two, Adidas, from the United states sportswear market in 2014, but worldwide it’s still third. And Nike remains far larger, with more than $30 billion in revenue in 2015 Which happens to be element of why Plank wishes to move so aggressively. Nike has with regards to a fifth several 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 real work is only beginning, though, as Plank has adopted the level of world-changing ambitions more widespread to your Google or Facebook. He envisions that Under Armour Connected Fitness will “fundamentally affect global health.” This month–doubters be damned–the corporation will start selling some biometric fitness devices and a smart scale made in partnership with the Taiwanese smartphone company HTC. The move will put Plank in direct competition with Fitbit and Apple inside 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 generally owned by Joe Mansueto.)
“Under Armour has become a phenomenal success story,” Swinand says. Its stock has risen steadily–almost 2,000 percent in the decade since its IPO. “But once you’re hitting a residence run every quarter about the core apparel business, why mess around with a moon shot?”
Plank rarely admits to much uncertainty or doubt, so it’s telling that he or she echoes Swinand in describing Connected Fitness’s ambitions as being a “moon shot.” But another of his whiteboard sayings comes to mind, that one courtesy of his friend and former U.S. 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 when the Under Armour founder cold-called him in July 2013. Plank explained which he loved Thurston’s app MapMyRun. “I run five miles three times per week, I log everything, I check out routes as i travel,” Plank began. “What are you doing using the company?”
Thurston replied that he or she was about to raise more venture capital to pursue ambitious expansion plans: The company had bought several hundred domains based upon every exercising, and planned to produce new services for each. Thurston and his investors saw MapMyFitness as poised to become the best digital health-and-fitness network.
A couple of weeks later, Plank and three key lieutenants showed up early with the New York City offices of Allen & Company, where Thurston and his team were huddling making use of their bankers. The MapMyFitness team got about twenty or so minutes right into a detailed PowerPoint presentation when Plank interrupted. “This really is awesome,” he was quoted saying, “but I would like to hold you back and go talk to Robin myself for several minutes”–without having bankers running interference. Forty minutes later, Plank and Thurston returned, and Plank asked the MapMyFitness team if they’d like to visit Baltimore, straight away, to look into the Under Armour campus.
It wasn’t 11 a.m. once the group–as well as under armour outlet australia, who’d been waiting with 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 in the campus, as well as some oatmeal cookies, on the stunned app makers. Within 2 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 as a top fitness app from the iPhone’s earliest days, tells the storyline in his new office in downtown Austin, in the brand-new building where giant images of Under Armour athletes adorn the walls (amid, of course, motivational mantras) and several hundred new engineers and also other tech employees work. At first, Thurston says, Under Armour’s interest was really a puzzler. He’d entertained partnering with insurance firms and media companies, but he always worried they’d exploit each of the data MapMyFitness gathers about people’s personal habits in ways that could violate the trust he’d created with the community. Under Armour had simply never occurred to him like a home for his company.
But the initial 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 have been touch-sensitive and may contact data displays as well as change color with all the tap of the finger. “I made this to suit your needs,” Plank believed to Thurston. (In truth, it had run like a TV commercial; Plank explained it was made for someone like Robin 02dexipky though “I didn’t know who Robin could be.”) He wanted to be sure that Thurston wouldn’t bolt following the sale, but would instead see a fantastic opportunity and lead it. Under Armour had been a tech company, in its way, Plank explained–however it had struggled with digital.
At Under Armour headquarters, workers’ breaks often involve workouts, like this one with an artificial-turf field overlooking Baltimore’s Inner Harbor.
None of the products in the “Future Girl” video existed then–along with a variation of just one is hitting the market now–but merging performance products with performance data and interactive technology had been a top Under Armour priority, given Plank’s instinct that that’s where the world was going. Plank had directed a team a long period earlier to create an “electric” product, and they’d put together the E39 compression shirt, which had sensors a part of the fabric to follow an athlete’s heart rate. The shirt launched at 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 compete with hardware companies that employ a huge number of engineers and constantly prove incremental innovations.
“It’s absurd you are aware more about your vehicle than you understand about the body,” says Plank. He’s betting athletes’ personal data will turbocharge their fitness and Under Armour’s future.
“It’s very normal for a product company–which is really what Under Armour is–to get gone along the path of trying to make hardware,” says Thurston. “They are fully aware the distribution channels, they understand how to sell products, they know how to market them. But because they started doing their homework about what was happening within the space, they found that the strength [of digital fitness] was really locally.”
Plank also knew it might take years to create a community like Thurston’s. “It wasn’t that I didn’t are aware of the right solutions to be seeking from engineers. I didn’t even know the right questions you should 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 put priorities for less than Armour’s digital transformation. Thurston identified four key pillars of health–sleep, fitness, activity, and nutrition–that he or she based upon Plank’s “make all athletes better” mission. Once that vision snapped into focus, Plank saw an opportunity not only to be considered a collector of human activity data but in addition to become the central processor that turns that data–no matter what whose device or app collected it–into useful insights. “OK. Let’s get it done,” he told Thurston a 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 people to log the meals they eat, and Copenhagen-based Endomondo, a personal-training curriculum whose users are almost entirely away from U.S. Under Armour suddenly had not merely the world’s largest digital fitness community but numerous engineers and reams of user data also.
Merely one big question loomed: How could any of which help Under Armour chip away at Nike’s dominance, or at best sell far more workout shirts?
Throughout the railroad tracks from your Under Armour campus, a minimal redbrick building houses the company’s innovation lab, where president of product and innovation Kevin Haley leads a team of biomechanists, designers, engineers, plus a psychologist to produce shoe and apparel concepts. You will find 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 greater secretive the operations. The prototyping room is locked down from all of the but a couple of select employees and executives, who must pass a biometric scanner to get into.
Before you take within the innovation lab, Haley come up with Under Armour consumer insights department. At the beginning, “the secrets of our own success was which we were the consumer,” Haley says. “Kevin was really a football player. He just knew. But slowly, we got over the age of our consumer.” The business stopped bragging about not using focus groups and started tapping its sponsored athletes for product insights, sending researchers to check in people’s closets, and running online surveys.
What Under Armour didn’t know with much precision, though, was how people used its products after buying them. “You only know if someone swipes credit cards or perhaps not,” as Haley puts it–and even that only happens a couple of times per year for just about any customer. “We call something a basketball shirt, but is definitely the guy wearing it to football practice? Is the boyfriend shirt he gives to his girlfriend something she wears as pajamas?”
But armed with data from Connected Fitness apps, Haley says, he could take design cues from 150 million those who, having downloaded an exercise app, are exactly the target audience: “There’s unbelievable data in there. You realize their running pace, just how far they go, how frequently they go. You literally determine what type of Greek yogurt they utilize.”
It’s too soon to discover many new releases due to all the new data–developing a bit of gear normally takes eighteen months–but Haley points to one. The corporation learned from MapMyFitness data how the average run is 3.1 miles–“not one or two miles, not five miles, but 3.1,” Haley says. And once it arrived at making the Speedform Gemini athletic shoes, that was released last January to largely rave reviews, the business added “charged foam” padding tailored to that particular type of run.
“The toughest question for people like us is not, Are available cool technologies out there?” says Haley. “It’s, What do you want me to function on? This gives us unbelievable insight that’s both incredibly broad and deep, with the exact same group of people we’re marketing toward.” That could be especially helpful in both 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 while no more than 11 percent from the sales are international, 35 % in the Connected community is away from United states
Still, our prime-stakes bet on Connected Fitness will likely be slow to settle. Under Armour recently increased its projections for the next 2 years, estimating it would nearly double net revenue by 2018, to $7.5 billion (up coming from a previous estimate of $6.8 billion). Only $200 million–a paltry 2.7 percent–should come from Connected Fitness. But Thurston likens his digital community to “having a Super Bowl-size audience every single day,” and one of the most immediately practical moves is going to be using those apps like a marketing channel. An attribute called Gear Tracker, as an example, allows under armour online melbourne users to log these shoes they prefer when they go running, and have a reminder when their mileage suggests it’s time and energy to buy brand new ones. A partnership with Zappos makes ordering replacements easy.