20VC Whoop Founder, Will Ahmed on How CEOs Can Perform at their Highest Level, Why There is Value in Struggle Early On, Why Realism is Overrated in Startups and How To Create a Culture of Delegated DecisionMaking

In this episode, the host welcomes Will Ahmed, co-founder and CEO of WHOOP, a health and fitness company revolutionizing human performance through wearable technology. Ahmed discusses his transition from athlete to tech entrepreneur and the origins of WHOOP, which arose from his own experiences with overtraining and a desire to understand recovery. He highlights the importance of resilience and the role early struggles played in WHOOP's success, emphasizing the value of overcoming challenges and the danger of "foie gras startups" that receive too much funding too early. Ahmed also delves into the mindset of an athlete versus an entrepreneur, the significance of hiring and empowering the right team, and the company's evolution from selling hardware to adopting a subscription model. Finally, he shares insights on personal growth, maintaining health through consistent routines, and WHOOP's vision for integrating more closely with healthcare in the future.

• WHOOP is a company focused on unlocking human performance through wearable technology.
• Will Ahmed is the co-founder and CEO of WHOOP.
• WHOOP has raised over $400 million, with a valuation of $3.6 billion.
• Investors include SoftBank, Accomplice founder, Collective, Foundry Group, IVP, and others.
• Harvard Management Company (HMC) has been managing Harvard University's endowment and investing in venture capital.

"To date, Will has raised over $400 million for WHOOP, with the last round valuing WHOOP at $3.6 billion and with a cap table including the likes of SoftBank, Accomplice founder, collective, foundry Group, IVP and more incredible names."

This quote highlights WHOOP's financial achievements and the high-profile investors involved in its funding.

• Will Ahmed transitioned from being an athlete to a technology entrepreneur.
• His experiences as a squash player at Harvard led to the founding of WHOOP.
• The desire to understand recovery and the effects of training on the body inspired the idea for WHOOP.
• Ahmed read over 500 medical papers and wrote a physiology paper while at Harvard, which became WHOOP's business plan.

"I was always into sports and exercise. I was playing squash while I was at Harvard, and I just generally felt like I didn't know what I was doing to my body."

This quote explains the personal motivation behind Will Ahmed's pursuit of understanding physical performance, which led to the creation of WHOOP.

• Being an athlete helped prepare Ahmed for entrepreneurship.
• The drive, individual contribution, teamwork, and leadership in sports have parallels in building a company.
• There is significant overlap between the experiences of athletes and entrepreneurs, which can lead to success.

"I think, generally speaking, playing sports and being an athlete prepares you for a lot of good things in life."

This quote emphasizes the belief that the skills and mindset developed through sports are beneficial for entrepreneurship and life in general.

• Ahmed believes that early challenges are valuable for entrepreneurs.
• Struggles help build resilience and give perspective on what constitutes a real challenge.
• WHOOP faced difficulties in product development, scaling technology, and establishing a business model.

"Those challenges, I think, helped us build a resilience as an organization."

This quote underlines the importance of overcoming initial obstacles to strengthen an organization's resolve and capability.

• The timing and amount of capital raised are critical for a startup's success.
• WHOOP faced existential technology risks that required substantial investment to overcome.
• Ahmed suggests that for ambitious projects, raising a lot of capital can be beneficial.

"I do think raising a lot of capital can be helpful."

This quote indicates that for certain types of ambitious businesses, securing significant funding is advantageous.

• Ahmed argues that being overly realistic is overrated in entrepreneurship.
• Startups that succeed have already achieved something statistically unrealistic.
• Ambition and enthusiasm are important, and entrepreneurs should not always heed advice to be realistic.

"Realistically, 90% of startups fail. So the 10% that are successful just in their own right have achieved something that's unrealistic."

This quote highlights the inherent unrealistic nature of startup success and the need for ambition beyond conventional expectations.## Balancing Realism and Vision

• Founders often struggle with whether to maintain an unwavering vision or adapt to realistic challenges.
• The importance of evaluating if the original vision is still valid amidst difficulties.
• Persistence and belief in the original vision can prevent premature quitting.

"I think a good question to ask yourself is the original vision that we set out on wrong."

This quote emphasizes the importance of revisiting the initial vision when facing challenges to determine whether the vision still holds true and if it's worth persevering through difficulties.

• A significant percentage of startups fail due to disagreements between co-founders.
• Maintaining a strong partnership and overcoming disagreements is crucial for long-term success.
• Complementary skills and mutual respect among founders can prevent conflicts from becoming detrimental.

"Well, the one you see a lot is founder conflict."

This quote highlights founder conflict as a major reason for startup failure, underscoring the need for founders to work harmoniously.

• Choosing partners with complementary skills can lead to a successful collaboration.
• Deference to each partner's expertise helps avoid internal conflict.
• Empathy and gratitude toward team members can foster a positive work environment.

"The first thing is I found partners that are incredibly complementary, that much overlap in the things that we're good at."

This quote illustrates the importance of selecting business partners whose strengths complement each other, leading to a more effective and harmonious working relationship.

• Deciding the extent of disruption versus empowering existing roles in the market is critical.
• WHOOP aimed to disrupt health monitoring but chose to empower personal trainers rather than replace them.
• Understanding the market and choosing where to be disruptive can facilitate technology adoption.

"So we could have built technology that said, this is going to replace your trainer and this is going to replace your coach. But we were pretty mindful of the fact that if we did that, it would make it very hard to get the technology into the market and get the technology adopted because we actually needed coaches and trainers to want to use it."

This quote discusses the strategic decision to create technology that complements existing roles in the industry rather than replacing them, ensuring better market reception and adoption.

• Differentiating between chaos as a byproduct of growth and drama as interpersonal conflict is vital.
• Startups should embrace chaos while minimizing drama to maintain focus and direction.
• Addressing drama quickly and effectively can prevent it from undermining the company's mission.

"Choose chaos over drama, choose speed over control."

This statement encourages startups to prioritize rapid growth and innovation over strict control and to manage internal conflicts efficiently to avoid derailment.

• Trust is the foundation of any working relationship; loss of trust necessitates difficult decisions.
• Firing should be framed as a decision beneficial for both the company and the individual's career growth.
• Transparency and direct communication are key when letting someone go.

"The moment you lose trust in someone you're working directly with, it's important to have a conversation about why you've lost trust in them and can they earn it back."

The quote underlines the importance of addressing issues of trust head-on and suggests that losing trust may lead to necessary terminations for the health of the company and the individual's career.

• WHOOP values speed as a differentiator in the health technology space.
• Embracing a culture of moving at an uncomfortable pace is communicated early to potential hires.
• The right time to bring in experienced executives is when they can align with the company's pace and culture.

"We tell people that in the interview process, and we tell them that when they joined. And it helped self select who's right for our organization and who's not."

This quote explains the company's approach to hiring by being upfront about their fast-paced culture, which helps in attracting the right talent who are comfortable with the company's dynamic environment.## WHOOP Culture and Decision-Making

• WHOOP culture values empowerment and decision-making at all levels.
• Top-down control is seen as a hindrance to speed and efficiency.
• Empowering more people to make decisions leads to a faster pace of operation.
• The company has moved towards prioritizing pace over control.

"So if you have a company culture of control, especially top down control, where I want to know every decision that's being made today, that's going to require a ton of meetings, it's going to require a ton of committees, and it's going to slow things way down."

This quote emphasizes the negative impact of a top-down control culture on the speed of decision-making and overall company agility.

• It's important not to rush hiring processes despite the need for pace.
• Deliberation in the early stages of hiring ensures alignment and clarity on roles.
• Once the hiring criteria are established, the process should move quickly.
• Cutting slack out of processes and reducing unnecessary consensus can speed up decision-making.

"I think in the sort of upfront stage you can be fairly deliberate and maybe to your question, this would be the slow part of it, right? Where you're ultimately focused on having everyone have alignment, but then you're in the mode of, okay, we know what we're looking for, let's go."

This quote highlights the balance between being deliberate in the initial stages of hiring to ensure alignment and then accelerating the process once the hiring criteria are clear.

• Trust is given to new hires with the expectation of success.
• Responsibility is increased incrementally as new employees demonstrate capability.
• Startups have the flexibility to allow employees to grow beyond strict job descriptions.

"I tend to lean in on trust. I like to hire people and believe that they're going to be successful."

This quote reflects the speaker's philosophy of starting with a high level of trust for new hires, fostering a positive and empowering work environment.

• The goal for founders should be to build a team capable of hiring great people independently.
• Scaling the mission and vision is crucial as the company grows.
• The CEO engages with new hires through Q&A sessions and has contributed to the onboarding book.
• Onboarding processes should be efficient to maintain a fast-paced culture.

"How quickly can I build a team to hire great people without me? How can I scale the mission or vision pitch as much as possible?"

The quote implies the importance of delegating and scaling the hiring process and company mission to maintain growth as the company expands.

• Differentiating personal performance from company performance is crucial.
• Founders should not equate their self-worth with the company's ups and downs.
• Meditation and self-improvement practices can help maintain a healthy mindset.
• As a company grows, the CEO's role shifts from individual contributor to manager.

"It used to be that if WHOOP had a bad day, I thought I had a bad day. And if WHOOP had a good day, I had a good day."

This quote illustrates the early conflation of personal and company performance and the speaker's journey to separate the two for better personal well-being and leadership.

• It's acceptable for one's identity to be tied to their work and passion.
• Performance should be viewed independently of the company's fortunes.
• Recognizing the shift from individual contributor to manager is a critical transition for founders.

"It's okay, I think if your identity is closely related to what you're building and your career and what you're passionate about."

The quote distinguishes between identity and performance, suggesting that while one's work can be a significant part of their identity, their sense of personal achievement should not solely depend on the company's success.

• Raising capital can be challenging, especially when transitioning business models.
• WHOOP's transition to a subscription model was pivotal despite initial difficulties.
• Memorable fundraising experiences include securing investment from a customer in Dubai.

"We had this hairy moment where we were transitioning from being a hardware business to being a subscription that ended up being the right decision for the business."

This quote recounts a critical juncture in WHOOP's business model transition and the associated fundraising challenges that were overcome.

• Long-term efforts in technology and business model development led to WHOOP's success.
• The shift from selling hardware to a subscription service was key to scalability.
• Consumer retention rates were high, but initial sales were low, prompting a strategic shift.
• The company's success seemed sudden but was the result of years of groundwork.

"WHOOP is a good example of? It takes, like, a really long time to be successful in what feels like overnight."

The quote encapsulates the narrative of WHOOP's journey to success, highlighting the often unseen long-term effort behind a seemingly rapid rise to prominence.## Transition to Subscription Business

• WHOOP transitioned to a subscription business model in May of 2018.
• The decision was influenced by the desire to offer a more accessible entry point and long-term value to customers.
• The subscription model also aligned with the company's vision to resemble high-growth companies like Peloton rather than lower-multiple companies like Fitbit.
• WHOOP's technology had reached a point of reliability and distinctiveness, supporting the subscription model.

This was also around the same time that Fitbit, as a publicly traded company was trading at about one times revenue, which isn't great, and peloton as a private company was trading at about 20 times revenue. And so I was asking myself, well, do we want to grow up to look like Peloton or Fitbit?

This quote explains the strategic decision-making behind WHOOP's transition to a subscription model, considering market valuation and growth potential.

• WHOOP charges a premium subscription fee due to its unique value proposition in health and fitness technology.
• The company sees its service as a daily life coach, an alerting system for health, and a behavior change tool.
• WHOOP aims to deliver consistent value to customers, with the option to cancel if unsatisfied.
• The company offers an initial low-cost entry with free hardware, betting on the user experience to prove value.

What is the daily value of a life coach, or the monthly value of a life coach, or the monthly value of having an alerting system to tell you to see a doctor? It's not like that doesn't really exist.

This quote highlights WHOOP's approach to pricing based on the unique daily and monthly value it provides to users, which is innovative in the health tech space.

• Will Ahmed finds inspiration in Phil Knight's book "Shoe Dog" for its perseverance and dedication to product development.
• Ahmed emphasizes the importance of visualizing the end state to overcome challenges and maintain focus.
• His personal workout routine is varied, including working with a trainer, playing squash and soccer, and occasionally engaging in yoga or spin classes.
• Ahmed focuses on optimizing sleep quality, aiming for efficient REM and slow-wave sleep, and shares tips for improving sleep, such as avoiding food and alcohol before bedtime and ensuring a conducive sleep environment.

I like to mix it up, and then I also play golf from time to time.

This quote illustrates the variety in Ahmed's workout routine, reflecting a balanced and diverse approach to fitness.

• Quality sleep is more important than the duration of sleep.
• Ahmed aims to maximize REM and slow-wave sleep through lifestyle adjustments.
• He suggests avoiding eating close to bedtime, limiting alcohol, wearing blue light blocking glasses, and sleeping in a cold, dark room with high air quality.

The secret to sleep is the amount of time you spend in bed being quality sleep.

This quote emphasizes the importance of sleep quality over quantity and introduces the concept of optimizing sleep through specific habits.

• Consistency is key to achieving health and fitness goals.
• Ahmed believes that high performance is about delivering exceptional output over time.
• He encourages people to be consistent in their health and fitness efforts for sustainable results.

High performance is exceptional output delivered consistently over time.

This quote encapsulates Ahmed's philosophy on health and fitness, highlighting the importance of consistent effort.

• WHOOP's mission is to improve health, which is particularly relevant during a global pandemic.
• The company plans to innovate and make it easier for people to understand their bodies and improve their health.
• WHOOP aims to integrate more closely with the healthcare industry and medical professionals in the future.

I think that WHOOP as a technology is going to continue to innovate and continue to make it easier and easier for people to understand their bodies and improve their health.

This quote outlines WHOOP's future direction, focusing on innovation and deeper integration with healthcare.