Anton Oparienko (COO, Upsilon): Today I'm pleased to have Erik Pavia with me, the founder and CEO at Pantheon. Erik, tell me just in a few words about yourself and your background? How did you get to creating your own product?
Erik Pavia (Founder and CEO at Pantheon): I'm from El Paso, Texas, in the middle of the desert. My parents are immigrants from Mexico into the US. A lot of what I'm working on is inspired by that experience of growing up in a low income and low education attainment family. I studied business and economics at the University of Texas, and then I went on and got a law degree from Stanford, although I have never practiced law.
After graduation, I went into working for a software company. I was on an early startup incubator team at Stanford called StartX, working with Stanford entrepreneurs, and I decided that I was not going to practice law because I wanted to work in startups.
I joined a company called Knotch. We were initially building a very sticky interest-based social network. This was around 2012, 2013, when building social networks was the craze. Unfortunately, we couldn't scale the startup to the degree needed to create a profitable, successful business.
We moved from building a consumer social network into building an enterprise software company. Now that company is building ad analytics for large companies. When I was there, we were mainly focused on Fortune 50 companies, helping them measure how well their content marketing performed and then working with predictive analytics to improve the quality of their content marketing.
Anton: Given your educational background, does it help you when managing a company? For example, in matters related to contracts and legal regulation?
Erik: I have two degrees in the US, law is a graduate degree. My first degree was business management, and that with a law degree enabled me to go into a startup to be the head of operations. I was responsible for pretty much everything except sales or engineering, and that included all of our legal and finance, but also things like HR recruiting. I was just a jack of all trades business person.
I spent the second and third years of my law degree focused on understanding how startups work and taking relevant classes. I took computer science, product design, and finance courses at Stanford to get that breadth of experience. And being at the school and meeting people from the industry is worth the investment even if you're not necessarily going to work in the thing you're studying.
And of course, having a law degree helps a lot. I can think of two areas where it is irreplaceably useful. One is connected with contracts. We need to review them to understand what's going on and why certain terms are the way they are within the contract. It is also about understanding the whole of why a business entity exists in one form or another, dealing with investors during the startup funding process, and figuring out how you're going to give out compensation or equity to employees.
The product that I'm working on now is not a legal tech product. It doesn't help from the perspective of deciding what features to build or talking to customers, but it does just help with understanding the reasons for what we do.
Anton: Let's talk about Pantheon. How did you start it? Where did the idea come from?
Erik: As I mentioned, I come from a low-income family where there was a lot of obesity. My younger sister was diagnosed with diabetes when we were children, and I have a phobia of needles. And so, that was this very scary experience to watch her go through. Now, having to inject herself two to three times a day with insulin. It inspired this question at a very young age: why do people make decisions that are damaging to something as important as their health?
I've been trying to answer that question since I was 14 years old. I read a book about incentives called Freakonomics, which led me to study economics and business. I thought I was going to be a healthcare policy lawyer, and that's why I went to law school. I got to law school, and I realized that health care policy doesn't work. It actually makes things a lot worse, most of the time, at least here in the US. The way that the insurance system is set up is counterproductive to health. I was in the tech epicenter of Stanford, and I realized that there was an avenue that I could have an impact through technology.
I took a course with a very prominent professor at Stanford named BJ Fogg. He teaches about behavior change and how to make sticky and engaging products. When I was there, he taught a class there called Behavior Design for Better Health for the first time. After it, I decided to build a health product, but I just didn't know what it would be and what it would look like. Again, I'm not an engineer, I didn't know how to build hardware. I wanted to learn about building a startup first and then come back to this problem when I felt ready.
About two years ago, I got tired of working in the ad world and decided that I would build a product with a lot of these concepts I've learned around behavior change in behavior design. The high-level premise for what we're doing is taking all of the technology that we know works to get people to click on another ad, scroll on their social media feed for ten more minutes, and play World of Warcraft for another hour. Taking all of that technology and applying it to help people be less sedentary. There's a lot to do on the health and fitness side in terms of custom healthcare software, but we think that the piece that's missing is engagement. There are sensors and digital products out in the world, great content that tells you how to work out. But people aren't just getting up and doing this stuff, and that's our main focus and the thing that differentiates us from what's already on the market.
Anton: Did you start the company by yourself, or did you have some partners? How did you approach it?
Erik: Initially, I was on my own. I recruited some former coworkers to be my technical leads, CTO, and head of product. Right now, it's just me and the CTO. The head of product decided he didn't want to build a startup. But being non-tactical, it was critical for me to find somebody who could actually build what we need to build.
I was working with these two guys before and had a great work relationship with them. We've known each other for a very long time, so it felt like a very natural fit to work with them on building the product. My CTO and I met before we started working at our previous company. He had developed a video game for Microsoft Kinect that got people to exercise through movement, through motion capture. It's a problem that he's been thinking about for a very long time, as well.
Anton: Now, it has become very popular to embrace sport and a healthy lifestyle, and we see many fitness/wellness apps in the market. What makes your product stand out from competitors? How have you attracted users in such a highly crowded environment?
Erik: Yeah, it is definitely crowded. We’re differentiating, like I mentioned, around the engagement piece. We currently don't do many things that most people would expect a fitness app to do because it's not a differentiation point. For example, we currently don't track any workouts. You can't open the app and say, "I'm going on a run." And have it track how far you ran or how fast you ran. We'll do this stuff in the future as we build the development team and have the resources.
What we're focused on internally is how do we build a very sticky product that people open up not just every day, but multiple times a day? That is actually very differentiated. We've talked to hundreds and hundreds of customers about how often they open their fitness trackers or their cycling product, or the weightlifting product. Usually, people only come to these apps when they're ready to work out, which is only a couple of times a week for most people.
Our approach is to create changes in your behavior if we build a very sticky product where the mode of engagement in physical activity. We can get you coming back to our product two, three, five times a day and giving you small things to do, like going on a five-minute walk or doing a three-minute meditation, then we will have a bigger impact than if we sit around waiting for you to get to the gym.
Anton: How do you get comprehensive activity data? Do you use sensors for this?
Erik: Almost all of the hardware products have open APIs that you can plug in to get data from. The Apple Watch, the Garmin, all of the wearables. There's one that doesn't, which is Whoop. They don't have an open API yet. If we're not connecting to one of those APIs, then we're just getting sensor data from the phone. So, Google Fit and Apple Health both allow you to gather information around how much people are walking in aggregate, and then they also have motion sensor access. If you wanted to track how many steps people were taking in real-time, you could do that, as well.
That's another thing that we're banking on. We don't need to worry about the hardware because that's pretty commoditized to some degree. There are sensors everywhere. The data is out there, it's just figuring out what to do with it and how to use it in a productive way for the end-user.
Anton: So you can basically just use your phone and Pantheon app for workouts, right?
Erik: Sure, we've built the product very focused on accessibility. We know that these fitness trackers can be pretty expensive for many people. We are focused on designing a product accessible to people who only have their phones and measuring things based only on steps.
There's also an argument to be made that what matters is not the absolute number of activities that you do, it's the trends in your activity. Are we helping you do more than you did yesterday? When you think of things from that perspective, the absolute accuracy of the information you're gathering doesn't matter. You just need relative accuracy.
For people who are just on their phone and they don't have a fitness tracker, then really what we're just focused on is like, "Did you do more steps or whatever movement that is being recorded by your phone than you did a week ago? And if you did, then we're doing our job."
Anton: Has connected fitness changed the fitness industry, and how do you see its future development?
Erik: Yes, and I think what Apple is doing with pushing the Apple Watch so hard incentivizes all the other tech industry players to follow suit. I don't know if they got there on purpose, but they're pushing the Apple Watch incredibly hard, as well as their health initiatives. There are rumors about AirPods with motion sensors in them that can track your steps. They're leading the charge.
Even just from that point, we're going to see a more significant proliferation of sensors. If they decide not to do that, I think it's something that's going to happen anyway, just because of one of the big industry or maybe cultural shifts that I've seen. When I first started thinking about this stuff, it was 2009, 2010. Having a Fitbit on you all the time was weird, you were either somebody who's trying to lose weight, and so, it was like a weight loss thing, or you were a nerd. But serious fitness people didn't use Fitbits, or just everyday people didn't use Fitbits.
That has shifted dramatically, where I think it's something that people now want and expect. I guess we'll continue to see the proliferation of sensors of all sorts, like heart rate and blood oxygen sensors, because people start to understand their value.
Anton: What are your plans for Pantheon?
Erik: In the very abstract, what we're hoping to build is an AI brain weapon, as I call it. What I mean by that is, if you look at the products on the market today, they're all using very advanced technology to prey on your vices. Facebook has AI teams built out to get you to spend more time looking at ads. The technology that they use is taking advantage of our most basic instincts for the way that we like to discover content.
We want to build, using that same technology and product design, something that enables you to do what you want for yourself. We think it's a lot more useful to flip the equation and use this stuff in a way that's good for us. You see this happening in education already. I think Duolingo is doing a pretty good job, at least on the design side.
We're a two-person team, and we're pretty small. Right now, the product still feels very beta, and our focus is on building out our technology stack the way that other technology companies do. It's going to start very simply with an app. As we bring in more users and more data sets, we'll be able to expand to doing more of this algorithmic work.
Next up is, let's take what we've built and build a social network around it, use that as a tool to bring users in, and start creating content. We want to be doing a lot of stuff with procedurally generated content based on the data we're collecting. We'll scale and build more advanced technology as we go.
Anton: Pretty much your plans go beyond the fitness app, it's more of your companion or behavioral building app?
Erik: I don't know if we'll get into education or anytime soon, but I think a companion is a good analogy. We use the word companion internally quite a bit. I don't know if you play video games, but the analogy I always use is Cortana and Halo, who sit in your brain and tell you where to go. We think there's some metaphorical version of that. Something that's helping you make the right decisions and guide you based on the information that we're gathering about you.
Anton: How do you think the fitness app market will change in five years? What can we expect regarding technology and modern innovations?
Erik: In many things in society, there are two big populations of people who use technology: pro users and the everyday person. I think that's just going to get bifurcated even more. In the US, especially, it's a huge problem where most people are obese, and most people are overweight. I think we're going to have a trend in the market where you see companies like Whoop that are building products for the high performers. And then there's going to be this entirely different segment focused on people just trying to get back to the regular state of zero and not being overweight, of not being obese.
Right now, I don't see many people playing in the second space. Everybody looks pretty focused on the performance, which is excellent. I believe it will result in a higher proliferation of sensors, more types of information being gathered. Levels is a company popularizing a lot of continuous glucose monitors. And then maybe eventually some of that starts to trickle down to your average person, but I don't think it's going to be the case that we don't have gyms, we don't have personal trainers for a very long time. Because, again, most people are still in an inactive, overweight state. It will take decades of change for that population segment to become part of the high-performing segment that uses all of these connected devices and the Tonals and the Pelotons.
Anton: Where can we download your app?
Erik: You can download our app if you go to joinpantheon.com. Right now, it's focused on providing a fun experience for groups of people. So, friends or coworkers, we call them teams. We'll be expanding into building an accessible and friendly social fitness app over the next several months. If you want to download it, claim your username, invite some of your friends on the app. You will start seeing many of those features being rolled out over the rest of the fall, the winter, early into next year. We're hoping within a few months that it's going to be a feature that allows you to search for a friend, find them, see what they're up to, follow them. We'll start to build that open social fitness platform from there.
Thank you, Erik, for sharing your story. And thank you for this exciting conversation!