Shape Up The Nation Wants People to Let Their Friends Help Them Lose Weight

10/18/10

It’s not often that companies offer a reporter his choice of an orange, clementine, banana, or energy bar when he arrives to do an interview. But on a recent visit to the Providence, RI, headquarters of Shape Up The Nation, which dishes out wellness programs on its social networking platform, the staffers were eager to push healthy snacks.

Among the fruit-pushers was Mike Zani, the company’s CEO. Zani, who was a coach of the U.S. sailing team for the 1996 Summer Olympics, is a big believer in the influence of our social circles and those around us on the choices we make about our health. There wasn’t a single overweight person in sight at the office. The firm lets its employees juggle their work schedules a bit to allow them to exercise, Zani said. During our interview, one employee decided to step out of the office to walk Zani’s Beagle, Pluto. (The CEO assured me that his employees volunteer to walk his dog for exercise, and he doesn’t ask them to do it.)

Shape Up The Nation has grown significantly since it was founded in 2006 and won its first business from CVS Caremark (NYSE:CVS), the Woonsocket, RI-based pharmacy chain. The firm now has 19 Fortune 500 companies among its 150 clients, Zani said. In August, Excel Venture Management and Cue Ball Group, both of Boston, led the firm’s $5 million round of Series A funding, betting that its use of social networking and other team-oriented strategies to help people improve their health would lead to further growth.

“Our platform enables people to be more engaged in their health because of the peer-to-peer support,” Zani said, “and it gives you access to more relevant peer-derived content.”

From a nearby bookshelf, Zani pulled down a copy of “Connected,” the popular 2009 book about the influence of people’s social networks on their behaviors, which was co-authored by the Harvard University professor and social scientist Nicholas Christakis. To support his point, Zani cites the work of Christakis and others who are researching ways to encourage healthy behaviors. (The Newton, MA-based startup MedNetworks has licensed technology from Christakis’s lab for its software that analyzes how social networks influence people’s health decisions.)

Shape Up The Nation has its own ties to academia. Its two founders are students at Brown University School of Medicine, Rajiv Kumar and Brad Weinberg. Kumar co-founded the company after launching a nonprofit called Shape Up Rhode Island, which operates statewide exercise and weight-loss competitions. Many of the early teams that participated in the nonprofit’s competitions were from large companies in the Ocean State such as FM Global, Gtech, and CVS. This helped to convince the Brown medical school students and their advisors that there was a viable business model, Zani said.

The company has evolved its strategy in recent years with the introduction of its social networking software for participants in its wellness plans—which, understandably, have attracted self-insured employers that have an interest in keeping their workers healthy to reduce healthcare costs and lost productivity due to illnesses. “We play the role of [healthcare] cost-reduction by prevention, ultimately,” Zani said. “And we’re using constructs of peer-to-peer support and engagement to help people improve their health.”

Established players are also taking a serious interest in social networking as a way to increase the effectiveness of wellness plans. For instance, Franklin, TN-based Healthways (NASDAQ:HWAY) formed a Boston startup called MeYou Health last year to develop social networking games that encourage people to adopt healthy behaviors. The plan is for MeYou’s games to eventually be sold to major employers through Healthways.

Still, Shape Up The Nation has stood out among wellness plan providers for its relatively inexpensive service and high participation rates. The firm’s programs are a tenth of the cost of traditional weight-loss plans, and its programs typically attract about a third of a company’s eligible employees, Zani said.

In fact, the company has had 200 percent annual revenue growth since 2008, Zani said. He took the helm officially in November 2009, after Kumar and Weinberg, who had been taking leave from their studies at Brown, decided to return to and finish medical school. Both co-founders continue to work for the company on a part-time basis.

Zani, 41, apparently knows how to grow a business. After he finished Harvard Business School, he and a business partner raised money from investors to buy Plymouth, MI-based Ledco, a maker of the mounting systems that hold laptops inside police cars and other vehicles. As president of Ledco, Zani grew the firm’s annual revenue five fold in four years. In early 2009, the emergency equipment provider Havis bought Ledco for an undisclosed sum.

“Many of America’s largest companies, including Cargill, CVS Caremark, and Cleveland Clinic have recognized this opportunity” at Shape Up The Nation, said Juan Enriquez, a managing director at Excel Venture and a board member at the company, in an e-mail. “Shape Up The Nation expects to triple sales year over year because client after client has achieved extraordinary results.”

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