Elan Paulson is an exercise-curious, occasional guest blogger on FIAFI.
The world of business has many concepts to describe how it sells things to people. One is innovation. According to Clayton M. Christiansen here and in other places, there are two main kinds of innovation.
- Sustaining innovation refers to how businesses with many resources (those that dominate the market) make a product better for their target consumers.
- Disruptive innovation refers to how businesses with fewer resources explore new ways of meeting the demands and interests of new or underserved consumers.
According to Christiansen, sustainers focus on improving a product, while disruptors challenge sustainer dominance by focusing on changing processes (of product creation, distribution, etc.). Disruption occurs when the innovation becomes mainstream.
There’s more to say about these concepts, including my critique of them as lens for sense-making, but for the moment I want to use them to understand WayBetter, a subscription service that has emerged in the health and wellness app industry.
In its About section, one of the WayBetter co-founders describes its services as “a whole category of games that help people stick to their commitments” because “life is better when you can turn work into play.”
This is what he means: Users bet their own money that they can accomplish a specific time-bound exercise goal. After the allotted time, users who achieved the behaviour-based goal receive back their own money (through a point system) as well as a cut of what was ponied up by those who did not meet the goal. Picture-taking and sync-ups with exercise tracking technology are put in place to minimize cheating.
In Christiansen’s terms, WayBetter is a disruptive innovation for how it has found a new process to promote exercise behaviours. (Its name suggests that it has literally found a “better way” to exercise). While other companies sell on-site, group-based fitness memberships and training services, WayBetter offers the flexibility of anytime, anywhere activity as well as the support of a group. WayBetter emphasizes how the process is fun: pay yourself for exercising. WayBetter has developed a market not in exercise programming but in exercise motivating.
However, WayBetter is a disruptor not because it turns “work into play” but because one could regard this as a betting service, or a form of gambling. (Waybetter). On one hand, the “game” is betting on yourself, and getting back your money simply by doing the exercise that you said you would do. On the other hand, an enterprising exerciser could choose “runbets” that other exercisers might be less likely to complete, thus maximizing their chance of a higher return than what they initially bet. WayBetter turns exercise into a game of predictive markets, and exercisers into investors.
So, it’s possible to think about WayBetter as a disrupter not for how it reaches underserved consumers (read unsuccessful/unmotivated exercisers) but for how it has created a new market—one of venture capitalism. Motivate yourself not simply to do exercise but to earn money off of the failure of others to motivate themselves to exercise.
At the moment, WayBetter’s dietbet claims 700,000 users, and the runbet website boasts that users have logged over 1,677,000 miles. I don’t know details about its income, but WayBetter takes a rake of each bet and uses third-party advertising. With no compensation, stock, acquisitions, or other company information currently available on Bloomberg, it’s not fully clear whether WayBetter’s disruptive innovation will become a sustained innovation.
But I believe it will become a sustained innovation because the value of its ability to change behaviour pales in its ability to change in mindset about exercise not (only) as a game but as a financial investment. WayBetter’s legacy may very well be how it and other services like it will change the very meaning of exercise by casting it (explicitly or implicitly) in market terms.
And, whether consumers win, recover, or lose their money, WayBetter still comes out Way Ahead.