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Fitbit's CEO Shares His Most Important Advice for Startups

July 07, 2016 00:00 AM UTC
- Updated April 29, 2020 17:46 PM UTC

James Park explains what entrepreneurs need to look for.

Transcript
James, you had planned on a career in medicine. You were a student at Harvard. You dropped out at age 21. You started two companies before you landed on Fitbit. Why did you take that risk? That's a good question. I took the risk, because for me, entrepreneurship has been part of my upbringing. So my parents moved to this country from Korea in the '70s. And they started off owning a wig shop, an ice cream store, a fish market, dry cleaners, urban sportswear. And while I probably hated to admit it back then, I think looking back, it probably had a very profound impact on my outlook in life and what I wanted to do. So while my parents strongly urged-- I say urge is kind of a euphemism-- they're probably stronger words to use here-- urge wanted me to be a doctor. I do think I caught the entrepreneurial bug from them, and I was really driven by the sense that I wanted to do something and leave my own mark on the world. Everybody dreams of starting a company and making a lot of money. What is the hardest part of starting your own company? Well, one, I don't think you can focus on the money. You have to be focused and passionate about the mission and purpose of the company that you start. So that's the most important thing. And I think that's explained a lot of our success. Some of the mistakes I made previously is that my co-founders and I would-- I think the common would be pivot zigzag based on market conditions or how we felt on a particular week or day. But at Fitbit, we really stayed true to our mission from day one. You got to tell us what was the easiest part? Those early days are always really exciting, where you have the idea, and you're so excited and consumed about it, you can't stop talking about it with people. And it's such a small group of people that you're working with. I think nothing can ever replace those early days. What would you say was the most important lesson you learned about starting your own company and being an entrepreneur? I would have to say that it's actually ignoring advice that someone gave me. So it was during my first startup, where there was a late '90s-- like a dotcom boom. And an investor told me, you're not spending money fast enough. And so that obviously led to some issues with that first startup. And so when my co-founder and I started Fitbit, we wanted to do things very differently. We were focused on efficiency, on getting to profitability as quickly as possible. Because being cash flow positive gives you that independence from investors in the capital markets and allows you to set your own direction. Well, speaking of money there's been a dearth of companies that are going public these days, tech companies. Why is that? If you're cash flow positive, you're not at the whims of the capital markets. You're not forced to go public. You can choose the time and place of doing so. And again, that's the most important thing companies can do, set your own destiny. You took off Fitbit public a year ago. How do you feel about that decision today given that Fitbit stock is well below its IPO price? I still feel great about that decision, because even today our public valuation is 10x or less private valuation. So by that measure, I think the IPO was quite a success. And again, look, we can't control the stock price, but we'll continue to execute as a company. So just as a final thought, what's the best advice you would give to an entrepreneur about starting a company? Raise more capital than you think you need. That's number one, because it's inevitable. You'll always spend more, things will take longer. You experience setbacks that you didn't expect, and that cushion of cash lets you sleep at night.