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Fitbit Isn't Just a Wearables Company Anymore

July 05, 2016 00:00 AM UTC
- Updated April 29, 2020 17:45 PM UTC

CEO James Park discusses its transformation.

Transcript
James, everyone knows about Fitbit and all of those fitness trackers, but you're also moving more now into health care and into the wellness businesses. So is Fitbit a hardware maker or a health care company? I think more the latter. I like to consider Fitbit and its evolution to be more of a digital health company, where I think technology, such as advanced sensors, analysis of data can start that profound impacts on health care system. But this new direction that you're going in is punishing your stock. Fitbit stock has dropped from about $55 a share a year ago, shortly after you went public to around $12. Now, how are you going to prove to investors that you're on the right path? So there's only so much we can do to control the stock price, but what we're trying to do to disprove people is continue to execute. We've done that over nine years as a company. Our financial performance every year, every quarter has been exceptional. And I hope to continue to do that. And the way we do that is by continuing to deliver amazing products, which have profound impacts on people's health. So where's that innovation going to come from? Is it going to be through internal research? Is it through acquisitions? What's your plan? I think our strategy is going to involve both. I think any successful company has to have a healthy mix. We definitely don't have a not-invented-here syndrome. There's so many people doing crazily innovative things outside of Fitbit and digital health. And so at the end of the year, I think we almost have a billion in cash. And we want to be very wise in the way that we think about acquiring companies, but that's definite part of our strategy. Meanwhile, you're getting an incredible amount of competition on your traditional fitness tracker part of the business from companies like Apple, and Jawbone, and Samsung, and Under Armor. So what are you doing to protect and grow your market share? So we've seen a lot of companies enter a category over time. I think the amazing thing about our execution over the past nine years is that many of these companies have come and gone. So we take every new entrant very seriously, but I think what's defined our success is one, the focus on this mission. Health and fitness are the primary things that Fitbit does. It's not 1 of 5 things or 1 of 10 things like many of our competitors. And I think that focus has served us pretty well. You've talked about moving more into international markets. Are you still thinking that, or are you rethinking it given all of the concerns and uncertainty about Brexit and the risks that go with that? Yeah, so Brexit is definitely something that we monitored. But we're not affected as much by macroeconomic trends, primarily because this market is so early and so large that we're going to continue to grow pretty rapidly as a company. And international is a big part of that strategy. I've said before that international for us is only 20-something percent of our revenue. But if you look at our peer companies, international typically constitutes at least 50% of our revenues. So that shows that international can be a powerful driver of our growth next few years. Looking ahead, let's say, 2-3 years from now, how will we be describing Fitbit? What kind of companies are going to be? I would like people to think a Fitbit as the company that's had the most profound impact on their health outside of a hospital. I think too much of our health care dollars are spent fixing people on therapies, surgeries, treatments, et cetera. Whereas more money investment spent on preventative technologies, such as Fitbit, can generate much better returns for people and the health care system.