We've seen this pattern before.

A new technology paradigm emerges. Early adopters build defensible businesses. Then the category explodes.

The performance layer represents the next wave of consumer and enterprise software. It transforms passive tracking into active guidance, closing the gap between measurement and behavior.

Why Now

Three secular trends are converging:

1 ) Infrastructure maturity.

Sensors are everywhere. Over 1.1 billion wearable devices are in circulation. IoT deployments have reached critical mass. The cost of continuous measurement has collapsed to near zero. We can now instrument human behavior at scale.

2 ) AI at an inflection point.

Language models and machine learning have reached a threshold where personalized insight generation is both computationally and economically practical. The real breakthrough lies in translating complex datasets into clear, actionable guidance that drives behavior.

3 ) Proven willingness to pay.

Companies like Whoop (from $239/year to $359/year, or $25–$40/month) Oura ($5.99/month after buying the hardware), and Strava ($80/year premium) have shown that users will pay for actionable performance insights—with tens of millions of premium subscribers supporting strong retention and recurring revenue

The Market Opportunity

Let's look at the numbers.

Global data volume hit 149 zettabytes in 2024, growing to 181 zettabytes this year. But volume isn't the story. The real story lies in the widening gap between data captured and data acted upon. That gap represents hundreds of billions in value creation.

Performance-oriented markets are already sizable and growing:

• Fitness tracker market: ~$60.9 billion in 2024. Expected to surpass $160 billion by 2030.

• Application performance monitoring (APM) software: ~$6 billion in 2024, projected $13+ billion by 2030.

• Smart wearables market: ~$84 billion in 2024 expected to double by decade's end.

Strava now supports over 135 million athletes worldwide, repeatedly setting new records for engagement and growth

These markets already demonstrate real demand, paying customers, and predictable growth trajectories. The open question now is which verticals will emerge next.

What Makes These Businesses Valuable

Performance-layer companies enjoy durable structural advantages:

1) Network effects through data.

Every additional user and every additional data point makes the system smarter. Benchmark cohorts get larger. Pattern recognition improves. Personalization becomes more accurate. This compounds over time.

2) High switching costs.

Users accumulate years of historical data. The longer they use the product, the more valuable it becomes. Leaving means abandoning that history. We're seeing this play out in fitness (Strava, Whoop), sleep (Oura, Eight Sleep), and metabolic health (Levels).

3) Premium pricing power.

Users pay for actionable insights, not raw data. Whoop charges $239 annually. Peloton's app costs $12.99/month. Strava Premium is $79.99/year. The willingness to pay exists because the value is measurable.

4) Strong retention.

While specific retention numbers vary by company, Strava crossed 135 million users in 2024 on its platform with consistent year-over-year growth. Whoop and Oura retention remains high even at premium prices. These products build habits that stick.

Category Expansion

The pattern started in health and fitness because the feedback loops were obvious. Run faster. Sleep better. Recover smarter. The metrics were clear and the outcomes were personal.

But the same dynamics apply across domains:

→ Financial performance.

Moving beyond account aggregation to spending optimization, investment performance analysis, and financial health scoring. Companies like Copilot and Monarch are building here.

→ Learning and education.

Shifting from grades to learning velocity, knowledge retention curves, and adaptive study systems. The K-12 and enterprise learning markets are both open.

→ Professional productivity.

Calendar analytics, deep work tracking, meeting efficiency scoring, and energy management. Tools like Clockwise and Reclaim are early entrants, but the market is underpenetrated.

→ Team and organizational performance.

Collaboration pattern analysis, workflow optimization, and team dynamics measurement. Lattice and Culture Amp have shown enterprise buyers will pay for this.

→ Gaming.

3.32 billion gamers worldwide. Massive performance datasets. Nearly 90% churn because players don't see paths to improvement. Zero infrastructure to close that gap. This is a greenfield category.

The Opportunity Ahead

The performance layer is becoming infrastructure.

Just as every company needed a website in 2000 and a mobile app in 2010, every domain with measurable outcomes will need a performance layer by 2030.

The technical challenges are significant, but they're solvable. The market timing is right. The customer's willingness to pay is proven. The next Strava, Whoop, or Oura is being built right now. The question is which vertical it's in.

This is part one of a series examining how category-defining companies built their performance layers. Next: Strava's evolution from GPS tracker to the social network for athletes.

About the Author

Jonathan Sirotin is the CEO and Co-Founder of Erdos AI, building the performance layer for gaming. Previously, he founded Alpine Esports, scaling it to a top-10 North American esports organization before exiting to WGG. As a professional Rocket League player, coach, manager, and tournament organizer, Jonathan has spent years at the intersection of competitive gaming and performance optimization. He's building the infrastructure that 3.32 billion gamers need but don't yet have.