Innovator of the Year - Dave Monahan, CEO

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How Far, How Fast, How Fit?

Shelton’s FitLinxx is running away from the pack with its miniature wellness and activity monitors

By Karen Singer

Dave Monahan tries to walk or run three miles a day. He keeps track of his progress with the Pebble, a wearable wireless gadget slightly larger than a quarter, which measures his stride, distance, active minutes and calories burned. Tapping it several times gives him instant feedback with a growing clockwise display of tiny pulsating LED lights that all light up in a circle when he’s reached his daily goal. He logs onto a website for more detailed data.

Monahan is CEO of FitLinxx, which created the Pebble and other wireless activity-tracking and health-monitoring devices used mainly in corporate wellness programs.

“Initially, when we went into the market it was a lot about reducing health-care costs,” Monahan explains. “It still is, but as important, if not more important, is employers understand that by improving somebody’s health, employees are more productive.”

FitLinxx works with more than 50 partners, including WebMD, National Jewish Health and U.S. Preventive Medicine, which customize its products for businesses and individuals.

Headquartered in Shelton, FitLinxx has 70 employees, research and development operations in Westborough, Mass. and offices in the Netherlands and the UK.

On February 6, FitLinxx announced its activity monitors had logged more than 100 billion steps — enough to walk to the moon more than 250 times and burn six billion calories.

Cornell University roommates Andy Greenberg and Keith Camhi started FitLinxx in 1993, with a workout tracking system for strength and cardio gym equipment.

“I was in physics, he was in computer science, and we fell in love with technology and behavior change for health,” says Greenberg, now senior vice president of marketing and product development for GlobalFit, a FitLinxx partner providing wellness programs for businesses. “Incentives vary anywhere from cash into your payroll to T-shirts and gift cards, to simple recognition for team challenges.

“We’ve seen remarkable results,” Greenberg adds. “Companies typically only get a small percentage of [employees] for wellness or smoking-cessation programs, usually one percent. With our programs, 50 percent engage and six months after signing up 75 percent of them are still doing it.”

Gyms remain a part of FitLinxx’s business, according to Monahan, who joined the company in 2006 from Microsoft, where among other jobs he ran a sales team in Washington targeting the corporate market. “We were focused on partners and with helping them build applications and solutions,” he says.

Monahan saw potential for a similar approach in the health, wellness and fitness market.

He spent his first six months at FitLinxx “looking at different options” for the company to expand beyond workout monitors accessed by gym users.

The monitors are “still out there, in about 450 facilities, and we have had really good traction with wellness centers, hospital centers and YMCAs,” Monahan says. “But it’s not a growth business. “What I identified was we needed to find new technology, and develop it or buy it.”

­­Tom Blackadar had the technology he was seeking.

In 1997, Blackadar, founded a company called FitSense to develop  an accelerometer (motion-detecting sensor) measuring calories burned based on the amount of time a foot is on the ground and off the ground. Reebock used the innovation, he says, in Traxtar, a children’s athletic shoe launched in the late 1990s to track running and jumping.
FitSense subsequently developed the FS-1, a wristband wirelessly monitoring speed,  distance and heart rate. 
“That kept us alive while a lot of companies went away,” Blackadar says. “Then we started moving toward health care. I wanted to get into employee wellness programs.”
The advent of consumer directed health care paved the way, with the enactment in 2003 of federal legislation creating Health Savings Accounts (HSAs). Individuals covered by these high-deductible health plans, and their family members, can make tax-deductible contributions for qualifying medical expenses. Employers also can make HSA contributions not taxable to them or their employees.
 
FitSense refined its wireless protocol working on medical devices for other companies and “built the first platform for collecting data that would show up on the Web regardless of the entry point,” Blackadar explains. “We protected it in compliance with HIPAA laws (providing federal safeguards for personal health information).”
FitSense also created the ActiPed, a small wireless activity monitor that clips onto an athletic shoe. 
Blackadar contacted FitLinxx in fall 2006, hoping to interest the company in his products. 
“I met with Dave [Monahan] in October,” he says. “By November we had a letter of intent to merge the companies, which took about six months. We had the same vision, and got along just famously.” 
Blackadar became chief technology officer of FitLinxx.

“Bringing the companies together sort of led into where we are today,” Monahan says. “Our core is providing the devices and data services to partners that build custom applications to users. Some are helping people lose weight; others focus on employee health.”

WebMD, for example, uses FitLinxx’s Pebble and wireless weight scales.

“We sell the devices to them and charge them a monthly fee based on active users,” Monahan says. “They’re selling to the customer; we’re in the background providing data and services.

“We also have a lot of patents and intellectual property, which we license to companies like Nike, and we have other license arrangements with medical diagnostic companies.

Monahan attributes as much as 75 percent of  health costs to three bad habits –– smoking, not exercising and not eating right. “If we don’t help people get healthier,” he says, “that doesn’t change the problem.”

Blackadar credits Monahan with improvements to FitLinxx’s latest product: the Pebble, a waterproof activity tracker introduced in 2012. It can be worn on a waistband, belt, pocket or footwear and operates on a coin cell battery lasting as long as a year, depending on use. 
“Dave has got a designer’s eye, and it’s almost jewelry,” he says. “The Pebble knows if you’re runing, walking, biking or using an elliptical, and turns everything into calories.
“We have it on all the major league umpires and the Boston Red Sox [players],” Blackadar adds.
Future versions of the Pebble will track swimming and other activities, now logged as active minutes.

“I think FitLinxx stands out as a very affordable, simple great solution,” says Henry Albrect, CEO of Limeade, a FitLinxx partner helping companies engage their workforces in wellness activities promoting health and productivity. Clients include student financial services company Nelnet and sporting goods retailer REI, whose CEO Sally Jewell is President Barack Obama’s nominee for Interior Secretary.

“It really boils down to a price/value thing,” says Greg Nobel, chief growth officer of Healthrageous, another FitLinxx partner. “There are more expensive products like Fitbit, but you can get the Pebble for half the price and almost all the functionality.

“We take the machine learning technology platform found in Pandora and Netflix into the world of health care,” Zobel explains. “Our primary customers are large health plans and large employers. The way our platform learns about you is by answers to questions or through data through devices like the Pebble. Your activity data gets uploaded to our website where you see it displayed and get electronic coaching.”

The Pebble recently became available directly to consumers for $59 through a website launched by a new FitLinxx partner, Wellocracy, on January 8 at the Consumer Electronics Show in Las Vegas. The latest wearable fitness tracking devices were at the show, where FitLinxx shared a booth with Qualcomm.

The market for consumers buying these devices, however, is “pretty limited,” according to Sarah Rotman Epps, a senior analyst for Forrester Research. In a recent report, she writes “wearables” such as Nike+ Fuelband and Fitbit (its latest wristband monitors sleep), appeal to only four percent of U.S. online adults, or around eight million people. These folk typically own smartphones, embrace new technology, buy organic and enjoy exercise in their spare time.

“FitLinxx has a really intersting business model; it’s B2B [business to business], and they’re just thinking about marketing to consumers,” Rotman Epps says. “They’re mostly focused around the workforce, which is tapping into a lot of really hot trends right now, including consumerization of health care and all the problems of having workers just sit at desks all day. There’s so much information out now on how that’s killing all of us. The broader trend is what you can do with sensors.
FitLinxx has taken a different approach by going to corporate partners, “which is smart,” adds Rotman Epps. “They seem to have a solid business model, with  partners in the health-care space that help their products conform with the latest research.”

The strategy appears to be working.

Funded by investors, the private company became profitable around three years ago and hasn’t needed to raise new capital in four years, according to Monahan.

“We’re very independent,” he says. “We’re not looking to raise capital, and just reinvest money back into the company. We’ve doubled the size of the business in two and a half years. This year we’re looking at 50-percent growth, and I think we could get higher than that.”

Monahan declines to give details about company finances.

One hint comes from the Connecticut Technology Council, which chose FitLinxx as one of a dozen software firms on its 2012 Marcum Tech Top 40 list of fastest growing technology companies in the state. Selection is based on revenue growth over the most recent four years, and eligible companies must have at least $50,000 in revenue in the first year and $3 million in revenue in the fourth year.

FitLinxx also is having success using the Pebble to reduce its own employee health insurance costs, with a corporate wellness program featuring an online application to track goals and an hour three days a week for wellness activity.

“We are eating our own dog food, Monahan says. “We were facing 20 percent increases every year [in health insurance premiums] and couldn’t do it any more.” The initiative began in 2010, when the company began offering consumer-directed health plans with HSAs. Fitlinxx contributes money to the HSAs of employees who achieve quarterly wellness objectives.

A FitLinxx case study reports the company’s annual health-care costs shrank nine percent, from $500,000 to $455,000, and employee health-care premiums fell 29 percent, from $100,000 to $71,000. Other results include a 95-percent program participation rate, 73-percent success rate and 13. 5 increase in daily activity time per employee.

Looking ahead, Blackadar sees opportunities in the home
Medical-monitoring market. 
“Ten thousand people every day are turning 65,” he says. “How do we make it such that wearing sensors is not your concern when you get up in the morning, and make sure that the information that comes off them is useful and you don’t have to have your cellphone?”

Monahan expects “more of the same but better” in coming years. “We’ve had our devices out there for a lot of years, and keep changing and adjusting,” he says. “Our customers are asking for continued transparency, and to make it easy, simple and give them more options where to place the device and ways of dressing it up. We have a very "blog/buyvalium//#valium_generic">valium generic set of data on the back end.”

He currently is exploring ways to work with health insurance companies and consumer providers.

“Four to five years ago we had to beat doors down,” Monahan says. “Now we have people coming to us.”

 
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