Dick Costolo starts a fitness company, also becomes a VC

Steven Loeb · January 19, 2016 · Short URL: https://vator.tv/n/42c1

Costolo is joining Index Ventures as a Venture Partner, while also starting a company with Bryan Oki

To put it kindly, 2015 wasn't the best year of Dick Costolo's life. He was forced to resign his position as CEO of Twitter over the summer.  

Costolo, though, is not one to be kept down, and now he's revealed on Twitter what's next for him: not only is he starting a new company, but he's also becoming a venture capitalist as well.

First, he revealed more about the fitness startup that he had previously mentioned in an interview in December, including that his co-founder is Bryan Oki, Co-Founder abd former CEO of Fitify. Before that he was the Director of CrossFit at The Cave, one of the Bay Area's first CrossFit gyms.

While there are details still missing, including what the name of the company will be, he did say that the company would scale the "evolving landscape," where "the fitness industry is transitioning to a world of specialized studios and programs with a multitude of connected devices and software trackers." 

We’re building a new software platform that reimagines the path to personal fitness. This platform will go beyond measurement to motivate and drive improvement and make the road to personal transformation fun and social," Costolo wrote. "For wellness professionals, from fitness coaches to doctors and nutritionists and more, our platform will be the easiest and most flexible way to extend expertise and guidance by orders of magnitude."

So what it sounds like Costolo and Oki's new company will do is take the data collected by the many wearables and fitness trackers and use it to go deeper into analyzing the heath of each user. What exactly that would be, though, is pretty undefined at this point.

This coincides with Costolo's previous comments about the company, telling Re/Code's Kara Swisher last month that the personal wellness space "hasn't traditionally leveraged software," and that he had "a specific idea around this space that, I think, could benefit massively from software bringing brought to bear there."

Of course, Costolo has quite a bit of experience in the social space as well, and it will be interesting to see if, and how, that could possibly be incorporated into the platform as well.

Digital health is good space to get into right now, given how fast it's growing. There was nearly $5.8 billion invested in the space in 2015, more than doubling the number of dollars in just two years. Deals saw an even biggest increase, jumping to 889, up over 20 percent from the number in 2014.

For most people being the head of a startup is so much work that they don't really have time for much else, but that's not all true for Costolo, who is somehow going to manage to work in being a venture capitalist as well, joining Index Ventures as a Venture Partner.

His connection to the firm came through Danny Rimer, General Partner at Index Ventures, who Costolo called "a good friend," and who helped him get to know some of the firm's portfolio companies. Costolo is already on the board of Patreon, which raised a $30 million round on Monday, which Index participated in, and he will be also working with other portfolio companies, as well as investing as a member of the investment team. 

"We’re delighted that Dick is joining us at Index. I’ve known Dick since moving to San Francisco five years ago, and I can’t wait to work with him more directly on our future investments and to get his support with mentoring our existing companies and entrepreneurs," Rimmer told VatorNews.

One thing is definitely for sure: despite what happened over at Twitter, Costolo is not going anywhere.

"Having the opportunity to work with the great team at Index while also embarking on my own venture makes the beginning of 2016 a very special time for me, and I can't wait to dive in," he said.

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What is Twitter?

Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests. 

Where did the idea for Twitter come from?

Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.

How is Twitter built?

Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes. 

We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.

How do you make money from Twitter?

There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.

In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet. 

At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.

Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.


What's next for Twitter?

We continue to focus on building a product that provides value for users. 

We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.

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Many venture firms would be best described as a collection of free agents who pursue their own deals and share offices and overhead with their partners.  They are more mercenary than missionary and will tell you to focus more on the individual partners and less on the partnership.  We hope to have the opportunity to show you how we are different. 

We are true partners who have built our own firm together, brick by brick; the same way you are building your company. When we commit to supporting your company, each and every partner in our firm commits to contributing his or her network, creativity and resources towards achieving your success. We are big believers in the power of teams.

We believe you will want an investor with whom you can build a close, supportive relationship over a number of years, yet who will be bold enough to challenge your thinking and your expectations.  If Index looks like a good fit, we encourage you to learn about us through the stories and news articles on this website.  We invite you to read about the companies we have invested in, and to speak to the entrepreneurs we have partnered with.  Their experience is our best reference.


Dick Costolo

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