I didn’t really publicly speak that much about the Asics acquisition of Runkeeper at the time. We were investors and I was on the board from 2011 until the exit. But I’ve been thinking a lot about the experience and felt it was time to share my belated thoughts.
Before we made our initial investment, I passed on the opportunity to invest at least twice previously. I had concerns and told Jason Jacobs (founder/ceo) about that. But he kept going. He raised a few rounds of seed capital before we led our round.
Along the way, he faced so many challenges. New startups popping up everywhere. Big companies that wanted to destroy him at every turn. Some of his key execs quit over the years at the hardest moments. Several key engineers didn’t want to stick around.
At one point, the company had much less than a year of capital and it wasn’t clear if the company was going to be able to raise capital again. I think we did two inside rounds over the years (never did a down round fwiw). But at that most critical time, Jason had two essential choices. Grow his way out of this particular crisis with user growth and/or revenue growth. Or cut the burn rate and take control of his destiny.
The team decided on their own to do the latter. It was intensely difficult and I know how hard it was for Jason to let go of the employees that he cared so much for. Also, significantly cutting the operating costs of the company creates so much fear and anxiety. Will everyone else leave? This signals weakness. Our competitors will take advantage of this. Who will want to partner with us?
But the reality is the company went from months of runway to years of runway. Operations and execution hit their stride. The product roadmap became focused and crisp. Jason developed a management team that believed in the new Runkeeper. This company could now survive on their own.
A few months after this incredible progress, the company was successfully acquired at a valuation north of the last round. Investors made money, common shares were in the black, and Jason who kept his head down though thick and thin was rewarded financially, emotionally. The Runkeeper vision lives on.
I don’t know many people in startup land that have more grit than Jason. It’s inspiring on so many levels. And while I have acknowledged and thanked Jason privately many times, I felt like it was time to do it out in the open.