If you’ve ever heard someone talk about their recovery score or claim they skipped a workout because their WHOOP told them to — you’ve witnessed the WHOOP effect.

WHOOP isn’t a smartwatch and it’s not trying to be. Unlike most fitness wearables that pack in general-purpose features and one-time ownership, WHOOP takes a different route. There’s no screen, no notifications, and no step counter in sight. What WHOOP offers is something else entirely: a membership-based model built around insight, not ownership.

At first glance, WHOOP’s model might seem expensive. You pay a monthly or annual fee and never own the device. Compare that to the majority of fitness trackers and smartwatches on the market, which you typically buy once and own forever — often with access to basic health data included. But WHOOP isn’t trying to compete in that space. They're not trying to be for everyone.

They’re building for the 1% who train like pros — people who don’t just want data, but know how to use it. Recovery, strain, and sleep performance aren’t side features — they’re the whole product. And with that audience in mind, WHOOP got rid of the $500 price tag and started building a solution that speaks to members, not customers.

What started as a niche fitness tracker has evolved into one of the most successful examples of Hardware-as-a-Service — where the device is free, but the value lives in the data.

Here’s a breakdown of WHOOP’s business model evolution — and what every physical product company can learn from it.

WHOOP at a glance

Company: WHOOP Inc.
Website: www.whoop.com
Employees: ~800 (as of 2024)
Founded: 2012
Founder: Will Ahmed
Headquarters: Boston, Massachusetts, USA
Industry: Wearable tech, health and fitness analytics
Products: WHOOP 4.0 wearable + WHOOP Body smart apparel
Subscription Products: Monthly membership (includes hardware, software access, data insights, and coaching)

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The beginning: Premium tracker, premium price

In its early years, WHOOP was focused on elite athletes and serious biohackers. The product — WHOOP Strap 2.0 — sold for around $500 and offered in-depth recovery, strain, and sleep data.

It was powerful, but not scalable. High costs and limited appeal made it a hard sell to mainstream consumers.

The pivot: subscription-first thinking

In 2018, WHOOP made a bold move: ditch the price tag, and charge for the value instead. Instead of selling the tracker, they began offering it for free with a monthly subscription (starting at $30/month).

This flipped the model:

• No more upfront cost
• Focus on retention, not just acquisition
• Ongoing value through software, insights, and coaching

Is WHOOP more expensive? Technically, yes but that’s the point

On paper, WHOOP’s model can appear more expensive than many mainstream fitness trackers. Most competitors — whether it's a smartwatch or a fitness band — charge a one-time fee, and you own the device. But WHOOP isn’t trying to compete on features or price.

They’re not building for the general user. They’re building for the high-performers — the 1% who train like pros and care deeply about recovery, strain, sleep quality, and performance insights. For this audience, WHOOP isn’t a gadget. It’s a coach.

• Traditional wearables are general-purpose devices.
• WHOOP is a focused, performance-first coaching platform.

They charge for:

• Deep recovery analysis
• Sleep coaching
• Strain tracking
• Personalized health insights
• A private community of high-performers

And most importantly: WHOOP doesn’t just track your data — it tells you what to do with it.

Upgrades, swaps, and member perks

WHOOP’s business model is built on long-term relationships. That means upgrades are part of the plan — but they’ve had to refine it over time.

• Members with >12 months remaining on their Peak plan get free upgrades to new devices (e.g., WHOOP 5.0).
• Others can choose to either extend their plan or pay a small fee for the latest model.
• WHOOP introduced a premium tier (WHOOP Life) for access to even more advanced hardware (e.g., WHOOP MG with EKG).

While they received backlash in 2023 for tweaking the upgrade policy, WHOOP responded by increasing transparency and flexibility.

Device recovery and sustainability

WHOOP isn’t just about high performance — they’re also working on sustainable practices:

• Returned or swapped devices are refurbished or responsibly recycled.
• WHOOP has a formal upcycling program, allowing users to pass on their devices to others.
• Accessories from WHOOP 4.0 aren’t compatible with 5.0 — which drew criticism — but future iterations are expected to improve backward compatibility.

This shift toward circularity aligns with the broader trend of making hardware-based services more environmentally sustainable.

What other product businesses can learn from WHOOP

WHOOP’s success holds lessons for every company offering physical products:

1. Sell the outcome, not the object. People don’t want trackers — they want better sleep, recovery, and performance.
2. Lower the barrier to entry. A free device beats a $500 device every time — if the ongoing value is clear.
3. Think like a service company. WHOOP innovates through software, feedback, and member engagement — not just hardware upgrades.
4. Build for retention. WHOOP’s business only works if members stick around — so the entire experience is designed to make that happen.
5. Plan for the full lifecycle. From device delivery to upcycling, WHOOP considers what happens before, during, and after membership.