Name: Fitbit Isn't Just a Wearables Company Anymore
Uploaded: 2020-01-06
Duration: 3 min 51 s
Description: CEO James Park discusses its transformation.

 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. 

Fitbit Isn't Just a Wearables Company Anymore

Health

CEO James Park discusses its transformation.

James. Everyone knows about Fitbit and all of those fitness trackers, but you're also moving more now into healthcare and into the wellness businesses. So it's Fitbit Ah, hardware maker or health care company. Uh, I think more the latter. I like to consider Fitbit and its evolution to be more of a digital health company, where I think technologies such as advanced sensors analysis of data can start that profound impact from health care. 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 in public to around $12. Now what? How are you gonna prove to investors that you're on the right path so there 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 impact from people's health. So where's that innovation gonna come from? Is it going to be through? Internal research is through acquisitions. What's your plan? I think our strategy is gonna involve both. I think any successful company has to have a healthy mix. We definitely don't have a knot invented here syndrome. There's so many people doing crazily innovative things outside a Fitbit in digital help. And so, um, you know, at the end of the year, I think we almost have a $1,000,000,000 in cash. And you know, we want to be very wise in the way that we think about acquiring companies, but that's definitely part of our strategy. Meanwhile, you're getting a new incredible amount of competition on your traditional fitness tracker, part of the business from companies like Apple and Jawbone and Samsung. And you know who else under armour. So what are you doing to protect and grow your market share? So we've seen a lot of companies inter category over time. I think the amazing thing about our execution for 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 defined our success is one. The focus on this mission health and fitness are the primary things that if it does, it's not one of five things. One 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 you re thinking? Given all of the concerns and uncertainty about Brexit and you know, the the risk single with that? Yeah. So you know, Brexit is definitely something that we monitored, but, uh, we're not affected as much by macroeconomic trends, primarily because, um, you know, this market is so early and so large that, you know, we're going to continue to grow pretty rapidly as the company and international is a big part of that strategy. Um, you know, I've said before that, uh, you know, International for us is only 20 something percent of our revenue. But if you look at our pure companies, international typically constitutes 50% of our revenue, so that shows that international can be a powerful driver of her growth next few years. Looking ahead, let's say 23 years from now, how will we be describing? What kind of company is it gonna be? Uh, I would like people to think a Fitbit as the company that had the most profound impact under health outside of the hospital. I think too much of our health care dollars are spent 16 people on therapies, surgeries, treatments, etcetera. Whereas, you know, more money investments spent on preventative technologies. Such a Fitbit can generate much better returns for people and the health care system.