Oct 14, 2013 ยท 2 minutes

Americans spend billions of dollars on workout videos, sportswear, and gym memberships each year. Losing weight is hard. Convincing people who live in a country where over one-third of adults are obese to pay for products and services that might help them lose weight is easy.

Or at least that's what the team behind PumpUp, an app that creates personalized workout routines, thought before the app's launch.

The team planned to charge PumpUp users $10 per month. Then the app was released in January, and they realized that many users were downloading the app, using the free trial, and then abandoning it once they were expected to pay for the service. It seems that it's easier to convince people to pay for physical equipment they might not know how to use than it is to convince them to pay for an app that teaches them how to work with what they've got.

"We kinda came out thinking 'Wow, this is cool, people will use the free trial and then pay for the product after they've had a really good experience,'" says PumpUp co-founder Phil Jacobson. "I guess in the era of free apps, in a market as crowded as the one for health and fitness apps, that model doesn't work really well."

Jacobson is right. The software market is dominated by companies that can afford to make their apps free and rely on advertising, in-app purchases, or other add-ons to make money. In the fitness market that often means selling a physical product like the Nike FuelBand, Jawbone Up, or Fitbit Force and using it to subsidize online services. PumpUp didn't have that option.

So the team ditched the subscription service and opted for a freemium model. Their user-base dramatically increased -- Jacobson says that the app now has over 100,000 users, many of whom interact with the app each day. PumpUp only offers one in-app purchase at the moment, but Jacobson says that more will come after the company grows and attracts more users.

PumpUp is scheduled to appear on "Dragon's Den," a reality television show where desperate inventors and startup founders pitch their products to investors who typically offer small investments for a lot of equity, in an attempt to subsidize all those freeloaders. (Jacobson did not comment on whether or not PumpUp received funding after visiting and recording an episode of the show set to air in November.)

The company released an updated version of its iOS app on Friday meant to encourage users to be more active by interacting with other users in a fitness-focused social network. Fitocracy, a competitive service, introduced something similar last fall. PumpUp might become a social app with which people interact not just because they want to lose a few pounds, but because they've made commitments to other people.

Now the company just has to figure out how to make all of those people pay for its services.

[Illustration by Hallie Bateman for PandoDaily]