GeoPalz

Why Nike's startup accelerator matters

June 11, 2013: 6:40 AM ET

The company is trying to jumpstart the wearable computing revolution -- not just hop on the Silicon Valley bandwagon.

By John Patrick Pullen

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FORTUNE -- Nike's Fuelband activity monitor is all about the numbers.

So when Dylan Boyd, managing director of the Nike+ Accelerator partnered with TechStars, took the stage Monday at Nike (NKE) world headquarters in Beaverton, Ore. for the program's demo day, he revealed some interesting stats from the accelerator's three-month stint. Over the previous 84 days, the 10 participating startups had earned 3,472,366 NikeFuel points while giving 4,683 pitches and participating in 2,880 speed-mentor sessions. And logging long hours and late nights in their Portland, Ore. workspace, they also drank 6,412 cups of Starbucks (SBUX) and Stumptown coffee (and recorded a high score of 212,256 on the office PAC-MAN machine).

But now that they're ready to launch, one figure matters more than any other to these fledgling firms: investment capital. Nicholas Chirls who manages seed investing for New York City-based Betaworks was impressed by the companies presenting, likening the quality to those put out by accelerators like Y-Combinator. "A lot of these companies seemed relatively far along, a number are producing revenue, and some have real user-bases, already," he says.

"It was a tremendous success, for the community, Nike, and TechStars to come together and show that the future of Fuel and quantified self can be delivered," says Boyd. Backed by $20,000 in seed funding and tapping into Nike+ APIs, mobile SDKs, and Fuelband data, these 10 companies showed that the future of wearable computing may be all in the wrist.

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Chroma Games: Sporting a camouflage jacket, jeans and big white sneakers, Chroma co-founder and CEO Marcus Estes had a distinct look on stage, but his Portland-based active video game studio stood out on its own after he presented their first title, Jump Bots. The game is simple: use NikeFuel points to customize a virtual robot and battle against your friends' creations. But the concept is much more complex than that. With a compulsion loop that rewards playing, games can be addictive. Working out, meanwhile, can be painful (until you hit the 60-day point, which is when the body responds by lowering fat and/or building muscle.) Chroma is looking to take the pressure off game designers to build titles around micro transactions, and instead use "motor transactions." In other words, if you want a better Jump Bot, you've got to move your body to make that happen.

CoachBase: Every year, 135 million kids play sports, and all have coaches -- most of whom are parents that are totally unprepared. Hong Kong-based CoachBase is targeting the 46% of coaches who spend more than $100 on materials each year, with a platform that offers a high-quality content library featuring drills, videos, and effective techniques. The company already has a popular iOS sports app, with 150,000 paid users and adoption by the NBA, but the Nike integration takes its platform to the next level, measuring the intensity of players and showing how their game improves over time. Seeking $1 million in investment, CEO Keith Rumjahn is looking to move the company permanently to the U.S. and grow his team.

FitCause: Pulling down an average of more than 5,000 NikeFuel points per day (more than any other Nike+ Accelerator startup) the New York City-based team behind FitCause is starting a movement for good, converting fitness data into currency to fundraise for causes. Looking to raise $500,000, CEO Laura Temel outlined how individual users can build campaigns or corporations can sponsor their own causes that people can donate their NikeFuel points to. With nonprofits like Make-A-Wish Foundation and the American Heart Association already signed on, FitCause is eyeing the $20 billion donated by big brands and $4 billion raised by charity races each year to show how much potential this idea has. Facebook seems to think so, too, mentoring the startup and giving its app open graph integration.

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FitDeck: Hitting the deck and pumping some side plank pushups, FitDeck founder and CEO Phil Black wowed the crowd immediately. Then the audience learned the former Goldman Sachs bond trader has graduated from Yale and Harvard Business School, is a former Navy SEAL (and the tallest one on record), and has already sold $4.3 million in fitness-based playing cards out of his garage. But with the Nike+ Accelerator, the San Diego-based company is looking to digitize and quantify data from its popular fitness card sets that range 40 activities, like yoga, kettle bell, and even golf. Seeking $500,000, the company already has success in the app space, with 2,600 downloads of a series of $10 apps that has 66% of users making in-app purchases.

GeoPalz: "Imagine a world where kids' daily physical activities powered their digital devices," says GeoPalz CEO Rich Schmelzer. For modern parents, whose children average 7.5 hours per day consuming media on devices, this is a distant dream. But the Boulder, Colo.-based company's iOS device gaming peripheral, iBitz, is poised to get kids and parents jumping for joy. Fitting either on shoes or the hip, iBitz syncs with a virtual iOS pet -- the more steps the child takes, the healthier the pet gets. NikeFuel is converted to virtual coins that children can spend in ways their parents agree with. Want a pick-axe in Minecraft? That'll be 5,000 steps, Sally. You can even pick prizes from Amazon.com (AMZN), or use the tracker to automatically unlock your iPad after certain activity goals are hit. With Target (TGT) and Best Buy (BBY) ready to stock it in the fall, retailer agreements formed in 21 countries already, and 1 million units in the pipeline, GeoPalz is seeking $5 million in investment, and Schmelzer has a solid track record of success. Remember Jibbitz, the decorative toggles for Crocs? Yeah, you can blame him for those.

GoRecess: Boutique fitness classes are eating the big box gyms' lunch, with more than 100,000 locations in the U.S. doing $24 billion in business each year. But with all those classes come overwhelming options. Much in the same way Open Table puts butts in restaurant seats, GoRecess CEO Megan Smyth has started getting them to fitness classes, with a system that earns commissions by recommending nearby classes that match users' interests. With Nike+ integration, the company is raising $500,000 to integrate FuelBand performance into classes, not only allowing friends to pair off against one another, but to recommend specific activities to help people reach their individual goals.

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HighFive: Advertising doesn't usually get the pulses pumping for the active set, but HighFive, a Boston-based ad network for health and fitness apps turned a lot of heads during its presentation. With the idea that a little encouragement can go a long way, co-founder Brent Gilmore showed how targeted ads that gave a reward after your tenth yoga class, for example, are a great way to create high-impact experiences for a print. Already rolled out into the popular CrossFit app myWOD, HighFive experienced 44% redemption rates -- and redeeming even meant entering an email address. Brands are charged on a pay-per-click model. News of a partnership with EA Sports' (EA) Yogafy app drew applause from the crowd. And with 25,000 health and fitness apps on the market -- 90% of which are free -- Highfive already has 10 paying customers, and seven of its Nike+ peers are integrating the ad platform into their apps.

Nextstep.io: Like Mint makes sense of your money so you can hit your financial goals, NextStep wants to help people hit their fitness goals by rethinking their daily activities. To put it in terms that hit home, CEO John Schnipkoweit demonstrated how the app could extend a users' life by two years, simply by walking to the farther-away coffee shop for her daily afternoon cup. By connecting to services like Google Calendar (GOOG), the Cedar Rapids, Iowa-based service can suggest things like turning sitting meetings into walking one-on-ones. Looking to raise $350,000, the company plans to build runway and connect to more data sources in its search to make sense of the quantified self.

Sprout: Sitting is the new smoking, says Sprout CEO Martha Switzer, and with $8 billion spent on corporate wellness in 2012, human resource departments agree. This Toronto-based Nike+ participant has already pulled together $500,000 with an enterprise app that helps companies track, manage, and mentor employee wellness. With FuelBand integration, Sprout helps companies measure employee activity and motivate employees with company leader board challenges. Using more sick days, having lower productivity, and filing more insurance claims, inactive, unhealthy employees cost companies $900 billion, says Switzer, and by forgoing immeasurable programs like the company softball team for programs like Sprout, they'll be able to better quantify their return on investment. Already working with clients like TD Bank (TD), and McKinsey & Company, and in conversations with 50 major brands for more customers like Coca-Cola (KO) and the National Hockey League, the company is looking to raise $1 million.

Totem: From running a Tough Mudder to picking strawberries, everyone, every day, has an adventure to share. That's the philosophy behind New York City-based Totem, and CEO Alex Howell wants to collect all the information on your mobile phone and Fuelband to help tell those tales. Totem syncs to platforms like Facebook (FB), Path, Instagram, and Nike+, of course, to create interactive postcards of journeys. Take, for example, a bike ride from Brooklyn to Queens. Totem catalogs your GPS-tagged photos, videos, check-ins, and tweets along the way, so you can share them online and with other Totem users looking for things to do. With FuelBand integration, the company is building out "quests," or massive challenges to motivate people to move. And in looking to raise $500,000 to build out its team, the company is just at the beginning of its adventure, too.

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