THE WEEKLY HOWL IS BEING COMPARED TO STARBUCKS

Shoe Dogs: Under Armour released a functional fitness shoe, the UA TriBase reign, on December 26. I don’t know why you would release a new product the day after Christmas but this means that UA is throwing its hat into functional fitness. From The Barbell Spin:

The shoe weighs in at just 10.3 ounces and has a 2mm heel-to-toe offset. The upper is made of a combination of a tough ripstop material and durable mesh. The medial and lateral part of the shoe feature rubber wrapping to add durability, especially during rope climbs.

The heel appears to have a bit of a lower profile than current shoes available on the market, but includes an external heel counter for increased stability and a locked-in heel.

There appear to be four colorways available – black with a gum sole, white with a gum sole, white with a black sole and red with a black sole.

The UA TriBase™ Reign will be available in both men’s and women’s sizing beginning the day after Christmas at UA.com. The will retail at $120.

This is notable because the Reebok-CrossFit apparel deal is coming up in 2020. The relationship between Reebok and CrossFit is strained to say the least. Reebok got sued by CrossFit last year for withholding royalty payments and it’s tough to see how you can repair that relationship in such a short period of time. Previously, I thought that it was a given that Nike was going to pick up CrossFit because Reebok (and parent company Adidas) had blown it and Under Armour didn’t seem all that interested in functional fitness. Apart from the Big 3 of athletic apparel, there aren’t many companies that are major players in both shoes and apparel. The only one I can think of is Puma and they trail the Big 3 by a significant margin. I also couldn’t see CrossFit signing with a company that didn’t already make a functional fitness shoe. Because of that, I didn’t anything standing in the way of Nike snagging the deal. This changes things and I think that Nike will have a legitimate challenger for that deal. I even wonder if the odd timing of the release is a result of Under Armour wanting to get its shoe out there as soon as possible. Perhaps they really wanted to be able to say that they had been selling a functional fitness shoes since 2018. I still think that Nike gets the deal but they are going to have some competition.  

Real Estate: It’s no secret that traditional retail is struggling and gyms are snatching up some of the prime commercial real estate once occupied by the giants of the retail industry. However, it seems that not only are gyms filling those spaces, they are making the surrounding spaces more valuable. From the SF Chronicle:

Having an Equinox in an office building makes other tenants happy and drives office rents up, said Weinhaus. That’s motivated landlords to convert upstairs work space into fitness space even in pricey office markets like San Francisco, he said. In contrast, some upper-floor stores in San Francisco’s Union Square and Mid-Market have struggled and building owners have sought to convert retail space into offices.

Being near, or even in the same building, as housing and office uses is deliberate. “It’s really about convenience and daily need,” said Weinhaus. “People are coming to us day in and day out.”

Gyms and fitness centers can thrive in upper floors and basements, where traditional retailers might struggle, said Helen Bulwik, a veteran retail consultant and senior partner at the Newport Board Group. A local operator, Fitness SF, recently leased second-floor space at the new Transbay Transit Center.

The difference is gyms draw members who are more dedicated, rather than casual shoppers who might overlook an upper-level retailer, said Bulwik. They can also offer different services like yoga, Pilates, strength training or cardio, which means they don’t cannibalize each others’ sales, she said.

“You can kind of stick a gym anywhere. It’s kind of like Starbucks.”

              Just a few years ago, landlords were hesitant to sign leases with gyms. Now they’re seen as a sign of prestige and being compared to Starbucks. Plus, gyms can thrive in the locations that have been traditionally considered less desirable. That is remarkable. It feels like every time I read something about gyms and commercial real estate, it gets better and better. It went from (landlords don’t want to lease to gyms) to (landlords have to lease to gyms in order to fill anchor spots) to (gyms are a must-have because they drive rents up in their buildings).

Military: The military has traditionally tested the fitness of its service members with a 3 part fitness test (upper body exercise, core exercise, run). The advantage of that formula is that it is relatively easy to test. You don’t need much equipment and you can test hundreds of people at the same time. This is a huge plus when you have service members deployed all over the globe in all sorts of conditions. Now the U.S. Army is rolling out a new fitness test that consists of six exercises and requires a decent amount of equipment. This won’t be an easy for deployed units to conduct. A couple of officers stationed at West Point have submitted a proposal for a modified test. From Army Times:

 Two West Point instructors have a possible answer to that issue, which they outlined in a piece published by the academy’s Modern War Institute on Dec. 7.

“What about the special operators, foreign area officers, and soldiers assigned to remote locations or any of the 800 small bases abroad?” Maj. Zachary Griffiths and Capt. Andrew Ferreira ask.

Griffiths, a Special Forces officer currently serving as an instructor in the social sciences department, is a fellow at MWI. Ferreira, an infantry officer, is a survival swimming instructor in the physical education department.

“This test stresses similar movements and energy systems, but removes space and equipment requirements that will make the ACFT impossible for some units to execute,” they wrote, proposing a six-event alternative that can be done with limited equipment and space:

  • Three-rep deadlift with a straight bar, rather than a hexagon-shaped one.

  • Standing broad jump, rather than a standing power throw.

  • Hand-release push-ups, same as before.

  • A modified sprint-drag-carry, with dumb bells or other 40-lb items instead of kettle bells.

  • Leg tuck, same as before.

  • Twenty-meter multistage shuttle run, rather than a two-mile run.

My first reaction was that exempting people who are deployed in challenging environments seemed like a better answer but the more I thought about it, I came to realize that this is also a good approach to fitness in general. Working out when you’re traveling can be challenging. You probably don’t have access to all the same equipment that you do when you’re at home. When you’re at home and you have your full fitness resources at your disposal, then you can do your full routine. But when you’re on the road and you have limited resources, then you have to replace exercises that require a lot of equipment (which you may not have access to) with exercises that require less or completely different equipment. You don’t have to give up on your workout just because you don’t have access to your regular gym. You just have to be creative and flexible.

Motivation: Halle Berry shared her 2019 fitness goals on Instagram. While she is a paragon of fitness inspiration, her goals left something to be desired. From Women’s Health:

Halle then sent people to her Insta stories where she spelled out her goals for 2019:

1. “Get bad ass banging abs.” I’m a little confused about this one, since this is Halle freaking Berry, who has abs you can shred cheese on. But I guess there’s always room for improvement!

2. “Learn a new martial art.” Halle already adds martial arts into her training, but apparently there’s more to learn. Also, she’s directing and starring in an upcoming movie about MMA, so clearly she’s motivated by her work.

3. “Inspire more people.” Just peruse her #FitnessFriday posts. Done and done.

4. “Run more.” SAME.

5. “Do Bikram yoga.” Halle is already pretty big into yoga, but Bikram is pretty intense. It’s usually performed in a hot and humid room and most classes run for 90 minutes, making it no joke.

Obviously, this works for Halle Berry but this is not the best way to set your fitness goals. A goal should be measurable. How do you measure “bad ass banging abs”? How do you measure “run more”? If she runs 1 more mile than she did in 2018, has she achieved her goal? I doubt that is what she has in mind. These goals are vague and unmeasurable. You want your goals to be S.M.A.R.T. (Specific – Measurable – Achievable – Relevant – Time-bound). For #4, a better goal would be to run 500 miles in 2019. For #5, do Bikram yoga 3 times a week. Even better would be instead of a subjective aesthetic goal like #1, set a specific goal for a particular exercise. Do 20 consecutive hanging leg lifts. That way you would actually know when you’ve achieved your goal.   

Everything’s for sale: I missed this because it dropped right before the holidays but Flywheel Sports had tried to sell itself last year. From the Financial Times:

Flywheel Sports, the boutique cycle studio, hired advisers to explore strategic options including a sale of all or part of the company, but has since pulled those plans after it failed to drum up investor interest, multiple people briefed on the process said.

The company, which competes with indoor cycling studio SoulCycle, considered a sale earlier this year after growth slowed from the rapid pace it recorded when it first launched in 2010, the people said.

The slowdown and operational problems damped enthusiasm from prospective bidders and Flywheel ultimately decided to end the sales process. The company is known for its high intensity cycling classes that sees riders compete against one another, with their results projected on a screen in front of the class.

Also:
One person familiar with the sales process said that investors who looked at backing Flywheel raised concerns that its management team had been spread too thin in the run-up to its launch of the home stationary bike, and that it trailed leaders including Peloton and SoulCycle in the home and boutique fitness space, respectively. Slowing sales growth at the company’s studios was also flagged as an issue.

It is surprising that Flywheel wasn’t able to find a buyer because private equity firms have been buying up fitness companies and boutiques are the hot segment of the fitness industry. Does this indicate an issue with boutiques at-large or is it Flywheel specific?

-Possibility #1: Wall Street is concerned about a global slowdown in 2019 and possible recession. Boutiques have been growing like crazy but the market is becoming saturated and $34 fitness classes might not sell very well in a recession.

              -Possibility #2: Flywheel is losing the cycling wars to SoulCycle and Peloton. Both companies are staying focused on their physical milieu (brick and mortar for SoulCycle and digital for Peloton) and seeking growth by expanding into other disciplines. Flywheel is trying to grow by expanding from brick and mortar to digital. Perhaps this strategy is not working and prospective buyers didn’t like what they saw in Flywheel’s financial statements.

The fact that Flywheel was looking for a buyer makes me think that #2 is more likely. My guess is that Flywheel has been burning through cash developing Flywheel Anywhere (“operational problems”) and wanted a buyer with deep pockets to rescue the company. If everything was great, then I don’t think that Flywheel would have been looking to sell itself. I am still surprised that someone didn’t want to snap up one of the big names in the boutique space.

Tidbits:

-Exercise is the Fountain of Youth

-Build out your home gym in 2019

-The Marine Corps is making changes to its fitness tests

-Please forward to this to any life insurance provider that wants to use fitness tracking data

 

THE WEEKLY HOWL IS TRYING TO MAKE ATHLUXURY HAPPEN

Black Tuesday: Last week, CrossFit laid off a lot of people. By a lot, I mean about one-third of its corporate staff in Northern California. From Boxrox:

Last Tuesday more than 40 CrossFit Staff were fired. This is close to 30 – 40% of the members of CrossFit’s Santa Cruz, CA office.

The vast majority of these individuals were from The CrossFit Games media team working in video, photography, graphic design and logistics for The CrossFit Games.

              Fast-growing companies aren’t the first thing that you think of when it comes to layoffs but it’s not unheard of. The downside of fast growth is that it can be very difficult to manage that growth well, particularly when it comes to managing costs and headcount. What’s interesting about these layoffs is that they seem to portend a complete change in strategy. The layoffs were concentrated in multi-media positions, i.e. the people that document the CrossFit Games. Of course, this means that major changes are afoot for the Games:

Our sources tell us that this is part of a move by Greg Glassman away from concentrating so much on The CrossFit Games, to shift the Media focus towards ‘CrossFit Health’, and to pay more attention to health rather than competition. One source told us that Glassman is ‘anti-games’, seeing the spectacle to showcase the sport in a dangerous way. 

Also:

According to our sources, there is a strong chance that the Regionals format that we all know and love will completely change! It looks like there will be a series of different events that will now count towards qualification for The CrossFit Games. Rumours have talked about competitions such as the Dubai Fitness Championship amongst others. 

It looks like Greg Glassman wants more focus on the affiliates and less focus on the Games. The question is whether CrossFit is a sports company or a fitness company? Up until now, the answer has been a fitness company that does a lot of sports marketing. But no one has infinite resources which means that tough decisions have to be made sometimes. From Morning Chalk-Up:

Today, CrossFit has more than 15,000 affiliates worldwide; more than half of those are located outside the United States. Perhaps even more impressive is the fact that Glassman has more affiliates in the U.S. than Howard Schultz has Starbucks.

Yet a significant portion of CrossFit’s financial resources goes to building and supporting a competition for the 0.01% of athletes, resources which could be going to support training and equipping these affiliates on the front lines in the fight against chronic diseases.

“We chose to make these changes to refocus our efforts towards the core of CrossFit: our affiliates, seminars and certifications, and our core mission: preventing and reversing chronic disease,” an anonymous source within CrossFit said.

Assuming that Glassman sees CrossFit as a fitness company, then it could make sense to outsource a lot of the Games work. CrossFit could probably convince CBS Sports to produce those documentaries for them. The cable sports networks need a ton of content to fill the air waves with. Let CBS Sports do what they do best (create content) and save a ton of money in the process. Then, get rid of Regionals. Right now, there are 3 rounds of CrossFit competition (the Open, the Regionals, and the Games). The Open is pretty cheap to conduct, all the competitions take place in the affiliates. Plus, it’s a big deal to the affiliates and a great way to promote and grow CrossFit. I can’t see them getting rid of the Open. The Games is the showcase of the sport and fitness in general. It has to be expensive to put on but they sell a lot of tickets, have a ton of sponsors and a TV deal. They’re not getting rid of the Games. The Regionals have to be more expensive than the Games (they hold 9 competitions all over the world) but without the same revenue streams as the Games. This they could get rid of. So how would athletes qualify for the Games? Use other competitions as qualifying events. Create a circuit of competitions in which athletes earn points. Earn enough points and you’re in. That way, CrossFit isn’t footing the bill for all of these competitions. And I am sure that competitions like the Granite Games would be more than happy to serve as a CrossFit Games qualifying event. This way, CrossFit can serve as more of a governing body for the sport. It can set the standards and hold the championship. This also might encourage more people to invest money into fitness competitions with the dream of becoming an official CrossFit event. The season would start with the Open in February, have a circuit of qualifying events through the spring and early summer, and then culminate with the Games in late summer. It might even be more fun than the current setup. The qualifying events can develop their own history and feel.  The downside to all of this is that you lose some control over your brand but that is something that CrossFit has never been afraid of. This is a company that uses an affiliate model instead of a franchise model. Yes, CrossFit will lose some control over its brand but this will free up a lot of cash that can be invested in growing/supporting the affiliate base.

Update:

-The Open is moving to November

-From the Open, every country with an affiliate will send one man, one woman, and one team to the Games

-The Regionals are out, there will be 16 qualifying events, win one and you’re in the Games

-The CrossFit Invitational is out

Good Old Days: Deadspin published an oral history of the original Gold’s Gym in Venice Beach this week. It is a good read and I highly recommend it but one paragraph stuck with me:

Charles Gaines (author of Stay Hungry and co-author of Pumping Iron): Among other things that’s not widely understood about bodybuilders, I think, is how good they feel. Working out they have these endorphins cascading their bodies. They’re eating enough meat for a male lion every day, and lying in the sun and screwing whoever they want to screw. It was a kind of paradise. They’re always tanned and they’re in great shape. That sense of physical well-being and pure physical pleasure was a big part of that scene.

              It’s a little provocative but this isn’t this why we all work out? Because it makes us feel good today. You feel good after your workout, it feels great to be in shape, and you’ll be more attractive to whoever it is you want to attract. These guys were just some of the first ones to get that and they built their lives around it. There was no money or prestige in it back then. They were bodybuilding bums who wanted to see how much they could transform their bodies. It’s crazy to think that this little hole in the wall gym in Venice Beach helped create the fitness culture in America but it did. And it sprung from a desire to feel good through exercise.    

Real Estate: If you want to run any kind of retail business, then finding the right location is critical. You want someplace with good visibility but you don’t want to get killed on rent. And it needs to be the right size and type of space. All of that gets harder when you opening up a gym (although it has been getting easier lately). And it gets even harder when you’re opening up a climbing gym. From Curbed:

The number-one challenge to developing a climbing gym is real estate, says Helt, and finding the right property, one that’s both big enough for a multimillion-dollar rehab, and, in the case of facilities that offer rope climbing, tall enough—often needing 45-foot ceilings or more.

What’s been especially interesting, and in some cases frustrating as the industry grows, is how climbing’s emergence runs parallel to both the post-Recession real estate recovery and a seemingly insatiable desire for warehouses and post-industrial properties for a variety of industries, including residential and commercial development, microbreweries, e-commerce such as Amazon, and in some states, cannabis growers.

“I think the word is out on how cool industrial warehouses can be and everyone wants it,” says Lance Pinn, co-founder and president of Brooklyn Boulders, a chain of climbing gyms with four locations in the New York, Boston, and Chicago area. “Once upon a time, there was a sweet spot when it came to cost and availability. For our first few facilities, we caught them just in time. But now, that ship has sailed.”

              There has been a lot of press coverage on the retail apocalypse and the death of the shopping mall. There has not been much coverage on the growing demand for industrial spaces (or the evolution of the warehouse gym). This has made finding a good space for a climbing gym very tough.

That’s one of the real challenges facing climbing gym developers; Finding massive spaces for adaptive reuse close enough, or soon to be close enough, to a large customer base, but before the real estate gets too expensive.

That’s led gym developers to focus on transforming any spaces that fit the bill, no matter how unique. Everything from churches to movie theaters to a hospital power plant have been remodeled for climbers.

              Most businesses just have to worry about square feet, not cubic feet. There is one bright spot in all of this.

Helt believes the challenges of funding and finding a new space actually work to the industry’s advantage. It’s hard to burst a bubble when it takes so long to open a new facility. He sees opportunity in places like the Dallas and Houston metro areas, with millions of potential climbers and less penetration.

              They don’t even get into the expense of opening up a climbing gym. It is not a cheap endeavor.

Stop trying to make Fetch happen: Athleisure has been the hot trend in athletic apparel the last few years but the industry leader has been resisting. Now it appears that they’re giving in. From Vogue:

 Throughout Nike’s 47-year history, athletes have always come first. That’s been a long-standing advantage for the brand—ultimately, it’s hard to argue against LeBron James and Serena Williams picking up trophies while wearing that swoosh. But as the lifestyles of the well-off pivot to a more natural fusion of exercise and daily life, and as athleisure becomes a fashion statement, Nike has lagged where other activewear monoliths have thrived. That’s about to change with its newest womenswear launch, Nike City Ready, a collection of athluxury pieces that targets the modern woman in an urban center, the woman who sees Bella Hadid leaving a training session in high-waist leggings and a bodysuit and wants to do the same.

              I think that Vogue understates how big of a deal this is. Nike prides itself on being a sports company that designs its products for elite athletes. They believe that this is their competitive advantage. For example, their running shoes are all designed for runners with narrow feet and good biomechanics. That is not most people. New Balance has been selling shoes in both lengths and widths for decades. It is not a radical idea that the size of someone’s foot could vary by both length and width. But Nike has resisted selling anything that an elite runner would not run in. Which is why it’s so weird to see them give in on athleisure. They have some very aggressive revenue goals that need to be met but still. Athleisure is the exact opposite of what Nike believes is a pillar of its success. They must think that athleisure isn’t going away anytime soon and that they can’t afford to be left out of it. 

The 7 Z’s of leadership: As a business school graduate, I have been trained to be a sucker for wisdom dispensed in a particular alpha-numeric format. Which is why I got excited about this article in Inc. 3 C’s? I am in.

Beyond the wellness movement, Geisler sees three key drivers of the boutique boom. You could call them the three C's: consistency, community, and constraint. Consistency is at the heart of any chain's appeal; like Levey, who was frustrated by how all-over-the-place yoga classes could be in their approach, consumers want to know what to expect from a business, no matter which location they enter. Geisler, a fan of Starbucks, makes sure that in all his studios little things like the layout of the bathrooms (and the free toe socks at Club Pilates) don't vary from one location to the next.

Community is the social aspect of working out. Exercisers want to get some of the same feeling they get from going to a cool bar or nightclub. The candlelight and loud dance music at Y7 certainly create a club vibe, but Levey says the rigor of the sessions themselves is what inspires bonding. "There's a sense of camara­derie," she says. "You're going through this difficult workout together."

A sense of shared affinity helps explain why people will pay more for membership at a single-purpose boutique than they would for a full-featured, big-box gym. "People who have dogs go to dog parks. Why?" asks Geisler. "Because everybody at the dog park has a frickin' dog. We're animals. We like to go to the watering hole together."

And we prefer the most popular watering holes. Hence, another aspect of boutiques' unlikely appeal: constraint. Small studios make for small classes that fill up fast, and when classes are frequently booked up or oversubscribed, it's a lot easier to charge $25 or $35 for a spot. "Look at the old nightclubs. People waited in line for hours," says Geisler. "Everybody wants to be part of that."

              The first 2 aren’t anything new but I am intrigued by the third C: constraint. The comparison to night clubs is interesting since fitness studios are the new night clubs (according to some). I have a hard time wrapping my mind around it because I’ve never been a night club guy. I hate waiting in line so I can stand in a loud, crowded space and be over-charged for drinks. Exclusivity in the form of long lines does not appeal to me. I have always thought that the hassle of booking SoulCycle classes sounded exhausting as well. But everyone is not like me and exclusivity definitely sells. Personally, I’m more of a Peloton guy.

But not everybody has time. Peloton's founder, John Foley, had worked at Barry Diller's IAC, Barnes & Noble, and Evite when, in 2011, he found himself getting frustrated by how hard it was to get a spot in a spin class. In Manhattan, where he lived, SoulCycle and Flywheel classes led by popular instructors were often booked up a week in advance. "I was thinking, if 2,000 people want in and only 50 people can get in, that, to me, screams distributed technology," he says. 

              What would that make Peloton? The equivalent of an intimate gathering of friends? You can just show up whenever you want and you’re guaranteed someplace to sit. And you don’t have to have your ear drums assaulted by music that is way too loud.

Tidbits:

-The women only model comes to CrossFit

-Google Fit gets an overhaul

-Online coaching is on the rise

-The ghosts of gym class truly haunt us all

-A gym designed for Instagrammers

THE WEEKLY HOWL IS BODYBUILDING IN MIAMI

Steroids: The Miami New Timespublished an article on the self-described “Pablo Escobar of steroids”, Richard Rodriguez, this week. It is a wild read. Rodriguez made millions selling steroids online and lived a lavish lifestyle in South Florida.

In fact, as the feds soon laid out in court, Rodriguez had built one of the largest online steroid operations in U.S. history. While celebrity bodybuilders flexed on Instagram inside his gym and hawked drugs from his website, Wellness Fitness Nutrition — WFN for short — Rodriguez sold nearly $10 million worth of steroids in two years. He bought a McLaren and a Mercedes-Benz SLS, gifted his wife Cartier jewelry and trips to Europe, and became famous in pro bodybuilding, where he was widely known as Dr. Rodriguez even though he had no medical degree.

Now, after pleading guilty to conspiracy to distribute a controlled substance and awaiting sentencing, Rodriguez has offered New Times an unprecedented look at how a steroid operation works today.

Interviews with the steroid kingpin and his associates, hundreds of pages of court filings, and thousands of sales records from his business make two things clear: Scores of clients, from attorneys to medical doctors to cops, brazenly bought his illegal products online before he was busted, and five years after New Timesexposed the Biogenesis steroid clinic — which eventually led to an unprecedented round of suspensions in Major League Baseball — Florida authorities still have little interest in slowing the rise of unregulated steroid clinics in the state.

With drugs shipped in bulk from China and then mixed in legal pharmacies or Rodriguez's own labs, it was almost comically easy for WFN to sell powerful compounds banned by the FDA for human consumption. If a pair of snitches hadn't ratted out Rodriguez to the feds, he might still be lording over a musclebound Miami empire rather than spending his days in a New York prison cell.

"Florida is a vanity-driven state where the market for steroids is enormous," Rodriguez says. "Most of our profit didn't come from power builders or pro athletes; it was just regular guys like you and me."

Some thoughts:

-The next time that someone tries to claim that their sport does not have a PED (Performance Enhancing Drug) issue, just remember how many people are willing to take steroids just to look good. No imagine that there is money and glory at stake and no one is willing to do what it takes to gain an edge on their competitors. 

-Bodybuilding has got to have the worst culture when it comes to PED’s. It has to be the only sport that has separate drug-freecompetitions. And there are a lot of people who doubt whether the athletes competingin natural bodybuilding are really clean. It’s just accepted that everyone involved in the sport is taking a ton of PED’s.

-Prior to 2000, the fitness culture in the U.S. was dominated by bodybuiding. Since then functional fitness has growing and gaining influence and I think that it is a great thing. Bodybuilding’s relationship with PED’s and obsession with aesthetics at the expense of function always troubled me. That kind of culture should not dominate the fitness landscape. 

-Read the article. It’s amazing how quickly this guy built an online steroid empire and how fast it all fell apart. 

Manage your time: Fitness apps are all the rage these days and POPiN has been getting more than its share of attention. The app is a way to purchase gym time by the minute instead of paying for a membership or a day pass. Business Insiderdid a profile of POPiN and one paragraph stood out to me:

The app also emphasizes that time truly is money. Knowing that I was paying by the minute, I was hyper-aware of the quality of my workout and didn't waste time scrolling through my phone or dawdling like I normally would. Each action or repetition felt more intentional — it'd be wasteful otherwise. 

            This is how you should always workout. I don’t think that the existence of pay by the minute services like POPiN will change the way that everyone approaches fitness but it would be great if it did. It drives me crazy to watch people who waste their time in the gym because I imagine that they bemoan the fact that they spend all this time working out yet fail to get the results that they want. Now I will want to read this paragraph to them. 

Business to Business: Subscription models have always been the envy of the business world.Lately, entrepreneurs have dedicated themselves to bringing that business model to new industries. One of the more high-profile ones has been MoviePass, an attempt to make movie theaters a monthly subscription. The company has been struggling to reach profitability, in fact it loses money on every subscriber. Now AMC has announced its own competitor service. Forbespublished an article on and decided to make a comparison to the fitness industry:

MoviePass has built a money-losing business on monthly memberships for unlimited movies. Now AMC Theatres is coming out with their own entry in that business model, A-List, which will cosst $19.99 per month for three movies a week. These movie membership plans have much in common with gym memberships, but also some important differences. A closer look reveals that MoviePass looks unsustainable, but AMC can probably make their membership plan work.

Gyms that rely on monthly membership build their business model on the knowledge that a large number of people will sign up (many of them right around New Year Day) and then rarely cross the doorway to the gym. In fact, some estimates suggest that two-thirds of gym members never use the gym to which they belong. That lets them keep average costs lower because they don’t need to stock the gym based on their actual paying membership, instead they can size their facilities to the ones that actually show up.

MoviePass has one membership plan that allows you to watch a movie a day for $9.95, plus a more limited option of three movies a month for $7.95. However, unlike gyms, MoviePass has to pay when a member uses their membership. A gym is just crowded if more members than expected get dedicated. In contrast, MoviePass has to pay the full ticket cost for every movie their members go see, so higher usage is much more expensive to MoviePass than to a gym. This difference is not a trivial one; thanks to those costs, MoviePass is losing $40 million a month, and those loses are expected to increase. Unless MoviePass can find a new revenue stream, somehow monetizing the data from its members at an incredibly high rate, it seems doomed.

            Yes, there are a lot of people who pay membership dues and rarely use it. The problem with this is that people don’t like to pay for something that they never use. So they cancel their memberships and now the gym has to acquire a new customer to replace the one that left. And it is always more expensive to acquire a new customer than it is to retain a current one. I don’t expect anyone to feel sorry for the fitness industry but it always irks me when people assert that gyms have some magic formula. Subscription models are nice but there is nothing magic about high churn rates. 

The rich get thinner:There is a national conversation about income equality but less well-known is fitness inequality. And the two appear to be correlated. From the Washington Post:

We found that, overall, median household income does the best job of predicting physical fitness out of the variables we looked at: The more money you have, the more exercise you get. You need disposable income to buy a gym membership or running shoes, after all.

The CDC study takes this relationship one step further by looking at the types of jobs people have in each state. States with higher percentages of people in managerial and professional roles, which tend to pay more money, have higher rates of physical activity.

We also turned up an interesting correlation between religiosity, or rather the lack thereof, and physical fitness: States with higher numbers of nonreligious people had higher rates of exercise. As the Public Religion Research Institute has reported, cities tend to be “hubs” for the religiously unaffiliated, and they're often full of the types of high-paying jobs that the CDC links to higher rates of exercise. There may also be a simple mechanism at work by which people who don't go to church have more time to exercise on the weekends.

Conversely, fitness is negatively associated with the share of people in a state who voted for President Trump in 2016. This is where we need to point out, emphatically, that simple correlations like these don't tell us much about causation. It seems highly unlikely that pulling the lever for Trump would somehow make a person decide to hang up her running shoes. More likely, Trump support is related to a whole host of other structural factors, like income and demographics, that also relate to rates of fitness.

            First off, correlation is not causation. The Post acknowledges this but seems to want to find a cause in their data. I believe that it’s a cultural issue. Educated people who live in urban areas are more likely to value fitness. There are a thousand articles about millennials who can’t really afford SoulCycle but value it so much that they find a way to pay for it. That type of person is also less likely to attend religious services and support Donald Trump. 

It does take money to exercise but not as much as people think. Fitness can be as cheap and low-tech as you need it to be. The biggest financial issue holding people back is a lack of walkable/runnable neighborhoods. But that’s more of an inner city issue than a rural one. Although if you’ve ever tried to run in a rural area, you may have found that it’s not always a friendly environment for runners.  

We have a lot of divides in our country. I think that this is another by-product of our diverging cultures.             

Real estate: Once upon a time, landlords did not like gyms. That is no longer the case. The commercial real estate industry has embraced gym operators and they are snapping up some of the best locations. GlobeSt.comtalked to CBRE about this development:

GlobeSt.com: Why have fitness tenants become such active retail occupiers? 

Petra Durnin: Fitness clients seek more experiential retail options that extend beyond the workout period. Fitness centers provide a service that is internet proof, occupy much of the space left behind from big box/department store closures, fill non-peak retail hours, and attract new customers willing to travel farther for unique fitness experiences. The natural partnership between anchor tenants such as grocers is formed due to the trend towards healthy living. Nearby amenities such as restaurants, coffee shops and personal services attract gym goers, increase foot traffic and sales.

            Landlords used to dislike gyms because they didn’t believe that gym-goers were the right kind of foot traffic, i.e. shoppers. A lot has changed in the last few years. Beyond being “internet proof”, gyms attract affluent consumers multiple times a week. It’s hard to imagine how landlords ever considered that a bad thing. What else might change in the coming years?

GlobeSt.com: Is this a lasting trend? What is your outlook for fitness center activity? 

Durnin: A future trend could be for fitness clubs to locate near residential communities or medical/hospital complexes. They could partner with mixed-use and lifestyle centers with a larger experiential platform instead of traditional retail centers. Boutique fitness clubs could look to diversify further to provide an even more personalized experience with unconventional offerings such as trampoline parks and skydiving centers.

            That was very vague. It’s I don’t think that CBRE has a good sense of where the fitness industry is headed. Have you ever been to a trampoline park? You could fit at least 5 boutiques into one trampoline park. That is not something that you offer on the side. Neither is indoor skydiving. 

 

Tidbits:

-So you think that your hamstrings are strong?

-Reebok tries and fails to have evidence from its lawsuit with CrossFit sealed

-You  pre-order Dave Castro’s book

-The CrossFit Games are staying in Madison through 2021

-BuzzFeed goes long on Russell Berger

THE WEEKLY HOWL IS WORKING ON HIS GLUTES

Sports Gym: One of the joys of watching sports is getting to see what the human body is capable of. It doesn’t seem like a huge stretch to think that sports fans would be inspired by their favorite athletes to push their own limits and test their own fitness. The San Francisco 49ers must think that it is the case because they are building a 49ers-branded gym in San Jose. From the San Jose Mercury News:

Heavy construction started about three weeks ago on the 36,500-square-foot, two-level facility at the Westgate Center Outlet Mall on Saratoga Avenue, about 10 miles from the team’s Santa Clara headquarters. With a budget of more than $6 million, the cost of building the gym is about double an ordinary facility, said the 49ers joint-venture partner, Mark Mastrov, founder of 24 Hour Fitness.

“49ers Fit is going to be cutting edge in every sense of the word and we’re going to leverage our unique organizational assets in ways that will make 49ers Fit one of the most dynamic gym experiences in the country,” said 49ers president Al Guido.

The problem is that there is no established link between sports and fitness. Football fans don’t watch a 49ers game and then get inspired to hit the gym. If that was the case, then how was the obesity rate in this country been skyrocketing at the same time that sports (and the NFL in particular) achieved record levels of popularity? You don’t see gym traffic spike after big sporting events like the Super Bowl or the Olympics. The truth is that most American adults have put sports and fitness in two different silos in their mind. There will be a marginal benefit to a 49ers-branded gym but it probably won’t come close to pay for the licensing expense.

People select gyms based on convenience. And convenience is closely linked to location, either to home or work. There will be some people who will join 49ers Fit over another gym because they are 49ers fans. That is the marginal benefit that I mentioned. But you’re not going to get fans who live 1 hour away. Because the even the most die-hard isn’t going to waste 2 hours of their day just so they can say that they work out at 49ers Fit. Plus, you may even get people who decide not to join because they are fans of a different team. If you were a Raiders fan, would you want to be a member of 49ers Fit? And then there’s this:

Members may also find themselves sweating alongside 49ers past and present and team cheerleaders, Mastrov said, adding that the gym’s walls will be decorated with photos of prominent 49ers, including the late Dwight Clark.

“It’ll give you a chance to be and feel like you’re a little bit closer to the 49ers than you’ve ever been before,” Mastrov said. “You’ll get to rub elbows a bit with the 49ers family.”

Oh please. Does anyone actually believe that players are going to be working out here on a regular basis? Even the language that Mastrov uses is vague. You “may” see some 49ers and you’ll get to “feel” like you’re closer to the 49ers family. This is all sizzle, no steak.

Just a number: It’s become a pretty standard practice for gyms to offer new members some sort of fitness assessment. The stated idea is to help that member set their fitness goals. You don’t have to be a conspiracy theorist to imagine that the real goal is to sell that member personal/group training sessions in order to achieve those fitness goals. I don’t necessarily have a problem with that but are gyms being responsible in their assessments. From the Daily Beast:

So Shatzkes took it. During her assessment, a personal trainer took her height and weight, then told her that, according to the gym’s chart, her body mass index, or BMI, put her in a category right under obese.

“I looked at this and I was shocked because I’m in really good shape,” she told The Daily Beast. “I’m a runner and I eat really well so I looked at him and I was like, ‘How can this be?’”

The trainer deflected the question. And when Shatzkes, who’s 55 and works as a radiologist, reached out to the gym management for an explanation, she received the same kind of deflection.

“The chart was manipulative and there was a lot of pressure for training and it was clearly directed towards making me—and people—that they were less fit than they were and therefore needed training.”

              The BMI is trash. Don’t trust anyone who uses it to categorize people by weight. At best, it’s lazy and at worst, it’s deceptive. I understand the pressure to sell people personal training but this is counter-productive. Scaring members into becoming a PT client isn’t a long-term path to success. You really think that person is going to continue to purchase sessions? Shame and fear are not the way to promote fitness.

The bottom line is that not everyone is looking to reshape their body or change their diet, and certainly not by way of a controversial, potentially misleading statistic. Alyssa Chaplin, a 27-year-old special education teacher, told The Daily Beast that the numbers from any kind of body analysis she’s had has made her feel bad about herself. She’s been avoiding a free personal training session at her gym.

“Some people want a trainer to be able to stay the way that they are. I’m not necessarily going to do a drastic weight loss, and with what’s been offered to me, I feel unmotivated rather than motivated and you feel forced to go to the gym rather than go to the gym because it feels good,” she said. “I think rather than measure stuff, they should ask: What are those areas you’re not happy about, we’re not going to measure it right now but let’s talk about it.”

It’s not that hard to find a way in which someone can improve physically and enjoy a higher quality of life. But it will take more effort than just measuring someone’s height and weight and telling them that they’re overweight.

Ross Hurley, a certified strength and conditioning specialist who works with MotivNY and has worked for various gyms, told The Daily Beast that the fitness world is moving toward rethinking fitness assessments as “How well do you move” versus “How much weight do you want to lose?”

“We’re starting to look at people from a movement perspective and say, ‘Hey if you’re the kind of person who wants to do obstacle courses or play with your kids, here’s the kind of workout for you,’” he said.

This is where every gym should be moving toward. It’s a move from extrinsic to intrinsic motivation. Instead of trying to shame someone, sell them on moving better, getting stronger and fitter. That is how you’re going to attract the type of PT clients who will keep coming back. 

Putting the work in workout: Being a gym operator is to be in the real estate business. Now some operators are looking to expand the uses of their real estate. From CNBC:

Americans are increasingly working outside the traditional office, and it's fueling a need for affordable workspace. At the same time, boutique workout classes and fashionable athleisure wear have made fitness very fashionable. So some companies are marrying the two ideas and hunkering down at the gym.

A Gallup survey of more than 15,000 adults found 43 percent of U.S. employees spent some time working remotely in 2016. As internet access becomes better and more widespread, that the figure will probably increase.

There's also a booming start-up industry that thrives in a collaborative, open environment. There were 415,216 startups in 2017 according to the Bureau of Labor Statistics, a 28 percent increase from a 30-year low in 2010. (The government defines a "start-up" as a company with at least one employee that's less than a year old.) The National Venture Capital Association reported U.S. venture capitalists invested $84 billion in 8,035 companies last year, the largest annual amount in a decade.

Start-ups often aren't able to provide perks that larger companies use to lure and retain employees, such as free cafeteria food, manicures and kombucha on tap. So being able to offer a luxury gym membership is a competitive bonus. Plus it can lead employees to have a healthier lifestyle.

"[The trend] kind of coincides with a high-performance individual that considers fitness an integral part of their life," said Equinox Fitness Clubs CEO Niki Leondakis. "There's an exponential amount of people thinking about work-life balance differently." After seeing sidewalks outside its locations crowded with members answering email, Equinox began to open co-working spaces in some of its upscale locations.

              There is a convergence occurring here as gyms are adding co-working spaces and co-working spaces are adding gyms. Even I have to admit that this is kind of weird. I’m surprised that people would want to work at the gym. I would like to do that but I wouldn’t expect that other people would want to do that. I have to wonder if a full-fledged move into co-working is a good move for a gym operator. It’s one thing to offer members some space that they could use and it’s another thing to have members running their startups out of the gym. It could be an interesting move but they might have to adjust their pricing accordingly.

 Working out of a fitness center can also cut costs for a new company or a freelancer. In pricey cities like San Francisco and New York, many small companies may not have funds to rent a full office space.

WeWork hot desks — where people don't have a dedicated workspace but are allowed to use the facility — start at $220 a month. For comparison, the office space in a gym often comes with the monthly health club fee. For instance, the New York Life Time charges $190 a month, while Equinox prices can start at $160 monthly depending on your city.

              The expectation for a gym is that a member will spend 1-2 hours a day max at the gym. The expectation for a co-working space is that a member will spend 8+ hours a day. Of course, a co-working space would have to charge more than a gym. If this trend continues, we’ll see how Lifetime Fitness and Equinox adjust their pricing.

Derriere Extraordinaire: I may be dating myself but I remember when the epitome of feminine beauty in our society was emaciation. Fortunately, that is no longer the case. From the Washington Post:

Gone are the willowy, ­flat-bottomed, Spandex-wearing workout queens of the early ’90s. Instead, today’s gluteus craziness celebrates the curves of Kim Kardashian, Beyoncé and Nicki Minaj — and seems geared toward confidence and strength, as well as sex appeal. “The focus is on curves, and that appeals to everyone,” says Bec Donlan, a personal trainer and the founder of Sweat With Bec. “But I also want you to be strong.”

Donlan attributes the renewed focus on glutes in part to the body positivity movement’s acceptance — and celebration — of curvaceous figures. She also thinks we’ve reached a more pragmatic moment in fitness culture. Her example: The average woman can’t transcend genetics to look like Heidi Klum — but she can create a firm behind. “Rather than everyone being desperate to have that stick-thin model bod, which genetically is not possible for 99.9 percent of the population,” Donlan says, “we are more accepting of what our bodies are realistically capable of.” 

Stephen Pasterino, a physical therapist turned “pre-hab” trainer, whose streamable workout concept P.volve focuses extensively on shaping the butt, hips and thighs, has a similar assessment. “It’s not about being skinny right now,” he says. “People want that athletic, strong, lean look — everyone is looking for that feminine physique, and the butt is a major part of that.”

 

              The other major shift that I have seen is the rise of functional fitness. Fitness culture used to be split between bodybuilding and aerobic training. This split was also split between men and women. Very few women participated in bodybuilding-type training. Did the shift to functional fitness (and its emphasis on squats and deadlifts) drive a change in female beauty standards or did changing beauty standards drive a shift to functional fitness?

Law enforcement: The NY Post published an article on an NYPD officer who started organizing workout classes for other police officers. It was pretty standard fare until it dropped this doozy:

When NYPD Officer Mike Counihan began posting shirtless selfies of his ripped chest and monstrous biceps to his Instagram back in 2015, it wasn’t just to show off.

“It was about breaking the stereotype that you see on TV that cops are these out-of-shape guys who just eat doughnuts all day,” says the 210-pound, 33-year-old, Westchester native who’s amassed a nearly 180,000-person following on his Instagram, @NoDonutsHere.

“I wanted the account to encourage cops to live a healthier lifestyle — it’s tough with our schedule and demanding job, but I wanted them to see that it’s possible to get in shape.”

He had recognized a problem that’s plagued the NYPD: The Post reported in February that obese cops are a growing problem on the force, partially due to the fact that there are no physical fitness requirements to stay on the job. Several cops reported feeling nervous that fat cops wouldn’t be able to do their jobs well.

              There are no fitness requirements for police officers in the largest police department in the country. That’s crazy. There is a physical fitness requirement to join the force but not to stay on it. How does that make sense? The military conducts physical fitness tests twice a year. The demands of serving in the military and being a police officer are very similar. Police officers should hold themselves to the same standard. A little internet research shows that while many police departments do not have an ongoing physical fitness requirement, some do. But how is this not a standard requirement? And it is difficult to argue that this hasn’t led to a problem either.

Attendees included Officer Aaron Lohman, a 6-foot-5 Long Island cop who “binge ate constantly” to deal with the stress of his job. At the end of 2015, he weighed more than 425 pounds.

“And when I say more than 425 pounds, it’s because my scale only went up to 425,” Lohman, 35, tells The Post.

“I was eating what I call the police food groups: pizza, fast food, Chinese food — anything that was open past midnight.”

One night, he dreamt that he couldn’t keep up with an assailant who threw him off a building. In the dream, “as I was falling, I saw my 5-year-old daughter living her life without me.” He woke up and knew it was time for a big change.

              And this doesn’t appear to be an isolated incident. Also from the NY Post:

Ex-NYPD cop Jose Vega provided a vivid example of the problem last week when he filed suit for a job-related disability pension — because his weight soared from 180 to 395 pounds during 17 years on the force.

Multiple NYPD sources blamed the situation on the lack of any fitness mandate once cops graduate from the Police Academy.

“You see some of these officers out there: They’re fat, they’re sloppy, they’re disgusting and they’re not healthy,” one cop said.

The FDNY, by contrast, requires that firefighters and emergency medical technicians undergo comprehensive, annual physicals that include weigh-ins, cardiac exams, blood tests, X-rays and hearing and vision checks.

Those who fail to meet official standards are sidelined until they do, the FDNY said.

              This is just a no-brainer. Every police department in the country should have some sort of annual physical fitness requirement. It appears that the opposition to this stems from the union but I would love to hear their argument.       

TidBits:

-Rogue Fitness formally announces acquisition of OSO Barbell

-RIP Fat Mac

-Dave Castro is at it again

-More on gyms in malls

THE WEEKLY HOWL IS BACK ON THE BENCH

Love the Pop-In: The gym membership is a pretty basic business model. You pay a monthly fee and get unlimited access to a gym. It doesn’t matter if you use the gym or not, you pay either way. Most people think that’s a great deal for the gyms. They get their money either way and a lot of people pay them for nothing. But people won’t keep paying for nothing forever. Eventually, those no-shows will cancel their memberships and the gyms will have to acquire a new one to take their place. But what if members could sell some of that unused time? From the Boulder Daily Camera:

Shea's solution? A sharing option, a la Airbnb, that allows gym members to sell access to non-members for unused days and classes, often at discounted rates.

"What do we do nowadays with under-utilized assets? We monetize them. The car, the spare bedroom — you find ways for them to provide additional value to the owner while extending greater accessibility for those who want them."

In operation about eight months, Flex Gym Share, has so far gotten buy-in from four Boulder fitness facilities: CrossFit Sanitas, ONE Boulder Fitness, Amana Yoga and The Spot Bouldering Gym.

The gyms get a small cut from each booking. They can pitch Flex as an added benefit to members, hopefully retaining them through the slow summer months.

"People are more inclined to want to spend time outdoors, so a mindset that happens is, 'I'm probably not going to be at the gym, so I'm going to cancel my membership,'" said Kyle Fitjie, operations manager at ONE Boulder. "People are also less inclined to sign up in the summers."

Even active members can benefit, said John Seben from Amana. 

"Our members usually practice 3 to 5 times a week, but we offer like 35 classes and the memberships are unlimited," Seben said. "So with those 35 classes, there's all kind of opportunity."

              This is an intriguing idea. I’m for anything that addresses the un-affordability of the drop-in. I should be able to purchase a day pass for $5-10. It amazes me that gym operators continue to overcharge even as there are startups being built to address this problem. If I was a gym operator, I would cut out the middle man and offer a reasonable drop-in fee. But that stubbornness is creating an opportunity that entrepreneurs are starting to exploit. Good for them and the idea of utilizing unused capacity like this has a lot of potential. We’ll see how many gyms are interested in signing on with Flex Gym Share.

Real Estate: Department stores are struggling and malls are desperate to fill those crucial anchor spots. Lately, they have been turning to gyms to fill them. But there are only so many big box gyms in this country and we have a lot of malls. And mall operators have taken a liking to the fitness industry. How many businesses bring people to their location multiple times a week? That generates a lot of foot traffic, something that shopping malls are in need of. So, what are malls doing? From USA Today:

The shift is not only being spurred by retail owners catering to the changing tastes of customers who want to do more than shop when they hit the mall, but wellness businesses that desire the foot traffic and ready-made storefronts left behind when traditional stores and restaurants make an exit.

Gilad says there currently are 50 Vitality Bowls around the country, and several have found a home in storefronts vacated by frozen yogurt and cupcake businesses. 

"Typically they have all the plumbing and electrical we need,'' she says of such locations, "so (as) a remodel, that can save us thousands of dollars.’’

Shaun Grove, president of the Club Pilates fitness chain, expects that in roughly the next year, 5% to 10% of their clubs will be located in spaces that once housed retailers. 

 

At outdoor malls, "we find more of these Toys R Us (stores) and the Sears and the Blockbusters that have gone out of business,'' Grove says. "What we're seeing — and we have been seeing over the last several years — is these landlords wanting to break up those centers into four or five pieces and bring in different boutique fitness concepts that are all very complementary to each other.''

             I love to see that malls have fallen in love with fitness. Breaking up those anchor spots is a big move for landlords. They recognize the value of the fitness industry in attracting young, affluent consumers to their malls. Finding the right location is crucial to the success of any business and gyms traditionally had a hard time getting into the best spots. That has changed for both big boxes and studios.

The Death of the Trainer: We live in the age of science fiction and the media loves to speculate on which occupation or industry will be the next to be “disrupted” by technology. Lately, I’ve been seeing a lot of articles proclaiming that Artificial Intelligence will render the fitness trainer obsolete. MarketWatch took it a step further this week and wrote that trainers are in danger, not from AI but from crowdsourcing.

How it works: A person who wants to create an exercise plan creates a personal profile on the app, with information including their work schedule, interests and exercise preferences. Then, someone else on the app—who is not a fitness professional—creates a week-long exercise plan for them, based on exercise and health guidelines that CrowdFit provides.

At the end of the week of exercises, the user gives feedback, and the planner creates an updated schedule for the following week. There were 46 participants in the study, who were divided into three groups.

One group received exercise plans using CrowdFit from non-fitness experts. The researchers paid the planners $7 per plan. The second group got exercise plans from personal trainers. And the third group received exercise plans made by non-fitness experts, but on Google Docs rather than CrowdFit.

A team of experts — who all either had a bachelor’s degree in sport and exercise science and/or national certification in personal training — evaluated each plan. Based on these evaluations, the team determined the CrowdFit plans were as effective as the ones created by personal trainers. Their criteria: Whether they incorporated basic exercise principles, their compatibility with user preferences and schedules, and whether they included enough aerobic activity.

Participants also found them easier to understand than the professionally-created plans, the researchers said. “There may not yet be a substitute for a trainer prompting a person through a routine on the gym floor, but the role of the expert is expanding to become more collaborative,” said co-author Molly Welsh, an assistant professor of kinesiology at Seattle University.

              First off, personal training is a luxury product. A small percentage of people who go to the gym are personal training clients (think low single digits) and they are not very price sensitive. These people are willing to spend money for the personal attention they receive. All these AI trainers are not going to affect personal trainers nor will this crowdsourced training app. The existence of Honda Accords doesn’t stop people from buying Porsches. Personal training is a luxury and people pay for that privilege.

Second, people pay for a trainer for reasons other than just the design of a fitness plan. They do it for the personalized attention. Crowdsourcing provides no personalized attention. Third, they don’t seem to understand how crowdsourcing works. What is the motivation for spending your time designing workout plans on this app? People respond to incentives, what is the incentive here? Huffington Post and Bleacher Report offered the opportunity to have thousands of people read something that you wrote. Wikipedia offers the chance to be a part of something big and noble. What is CrowdFit offering that will be compelling enough that people will want to devote their free time to it? If they think that people will work for free just because they made an app, then they are going to be very disappointed. Fitness training is not a terribly hard field to break into either. If that’s what you want to do, then you don’t need to “pay your dues” on some app to do it.

How Much Ya Bench: The CrossFit Regionals are coming and Dave Castro has released the events. And the big news is that the bench press is back. After years of being ignored by CrossFit, the bench press is making an appearance in the qualifying event for the prestigious CrossFit Games. No word on whether it will also appear in the actual CrossFit Games this summer. The workout is as follows:

10-9-8-7-6-5-4-3-2-1 reps for time

Deadlift, 295/220 lb.

Bench press, 195/135 lb.

Squat clean, 145/105 lb.

This workout is known as “Linda”, one of the benchmark Girls workouts. However, the bench press has never seemed to be an integral part of CrossFit. This is the first time that the movement will be contested in either the Regionals or the Games. I’ve always found this a little strange. The bench press is one of the 3 powerlifts and the other 2 lifts have been incorporated heavily into the CrossFit repertoire. My only guess is that there has been a bit of an overcorrection. The bench press has always been a favorite of bodybuilders and gym bro’s and its ubiquity has even led to parody on Saturday Night Live.  I think that CrossFit has always wanted to distance itself from that perception and the bench press was a casualty of that. I’m glad to see that they may coming around on that. It’s a great compound lift that deserves its place in the functional fitness world. However, after the rash of torn pectoral muscles that occurred at the Regionals last year, I am both curious and a bit nervous to see how this pans out. Hopefully, the athletes have adjusted their training to account for this.

TidBits:

-You can book classes in Instagram now

-Grip strength is important

-Does Orangetheory have a wearable tech problem?

-You should be keeping a workout log

THE WEEKLY HOWL NEEDS AN ORIGIN STORY

Nutrition: The hallmark of a true Silicon Valley techie is the belief that everything can be hacked. I’m not just referring to the act of breaking into someone’s computer network. A hacker believes that the answer to any problem is more technology and that you should always be searching for increased productivity and efficiency. We’ve started to see hackers tackle health & wellness and it doesn’t look like it’s going to stop anytime soon. From Bloomberg Businessweek:

Like most of the health fads that catch on in Silicon Valley, this one broke through thanks to word-of-mouth—and a Medium post. Entrepreneur Sumaya Kazi extolled its virtues to 650,000 readers, while venture capitalist Phil Libin and others preached about it to anyone who would listen. Their miraculous idea was in fact a very old one: eating nothing at all for long stretches of time. Monthly Google searches for “intermittent fasting,” which has become a catchall term for various forms of the practice, have risen tenfold over the past three years, to as many as 1 million. That’s about as many as “weight loss” gets, and more than “diet.” Now comes the next step, as businesses try to turn various forms of the craze into profit.

The idea may sound troubling depending on your relationship with food, but paid-for fasting regimens are finding a new audience in the Valley, partly because they’re framed in terms of productivity, not only weight loss. (Fasting falls under the techy-sounding buzzword “biohacking,” like taking so-called smart pills or giving your brain tiny shocks.) There’s a growing body of research and anecdotal evidence showing a link between periods of noneating and increased focus and output, and perhaps even longer life. “Periods of nutrient restriction do good things,” says Peter Attia, whose medical practice focuses on the science of longevity. “The subjective benefits are evident pretty quickly, and once people do it, they realize—if this is going to give me any benefit in my performance, then it’s worth it.”

              There is actually some science behind this idea unlike many other bio-hacking schemes. But it still makes me a little nervous to see Silicon Valley eye nutrition as yet another industry that needs to be “disrupted”. It’s not that we don’t have major issues with the food industry in this country; it’s that I don’t trust Silicon Valley to be any better at addressing those issues than General Mills. As the venture capital money flows in, so does the pressure to make huge returns for those firms. Huge returns on the business of not eating for long periods of time. How is that going to work exactly?

 

Hvmn (pronounced “human”) pitches customers mostly on productivity and performance. Its chewable coffee cubes and other dietary supplements are supposed to enhance focus and cognitive function. One product contains synthetic versions of ketones, compounds your body creates when it’s fasting long enough to burn fat. Hvmn markets the drink to athletes ($99 for three small vials) as a way to boost performance and accelerate recovery. “It’s more efficient fuel for the brain and body,” says co-founder Geoffrey Woo, though he says they aren’t meant to replace the benefits of fasting.

 

              Oh, by selling everyone a bunch of supplements. You can see why I am skeptical that this is going to re-invent nutrition. What we need is for the healthiest foods to be the ones within arms’ reach of the majority of people. We do need people to lower their consumption of food but I don’t see how you make that a huge, scalable business. We need an attitude change towards food.

 

 Venture capitalist Libin, who lost 60 pounds fasting, acknowledges it isn’t for everyone. “It’s just something that works super well for me,” he says. “I have more energy, more stamina, more mental clarity. My mood is better—all of this stuff. And I’ve measured all of it.” 

             

              Whatever you put into your body should make you feel good in both the short-term and the long-term. Phil Libin gets this, it just may not be the basis of the next billion dollar company.

 

Wearables: Fitbit is trying to figure out who it wants to be right now. Its roots lie in fitness tracking but competing with Apple in consumer electronics is not going well. From MarketWatch:

Fitbit Inc.’s smartwatch sales are gaining some speed, but its tracker business continues to sputter.

The wearables pioneer missed expectations by selling 2.2 million fitness trackers in the first quarter as interest in basic trackers waned. Overall revenue fell as well, and came in just above Wall Street’s estimates.

Fitbit executives said they now expect revenue from smartwatches to exceed that of fitness trackers in the second half of the year. The company predicts some more pain on the tracker side, especially in the near term. Fitbit delivered a revenue forecast of $275 million to $295 million for its second quarter, which came in below the FactSet consensus estimate of $310 million.

The company’s second-quarter outlook reflects the fact that management expects the tracker business to see “worsened decline in Q2 versus Q1,” Fitbit Chief Financial Officer Bill Zerella told MarketWatch after the earnings release came out. Channels continue to “de-stock” trackers, he added, but the company predicts some improvement in the second half of the year.

              The landscape for Fitbit is perilous. Demand for fitness trackers is declining as consumers are shifting to smartwatches but all smartwatch roads lead to Apple. Fitbit realizes that it need to evolve, become something else if it wants to survive. From Fast Company:

 

Fitbit is a company in transition. It’s trying to reduce its reliance on direct-to-consumer sales of fitness devices by providing high numbers of them to health insurers, healthcare providers, and big employers. All of these players are taking on financial risk for the health of their members/employees, so they have an interest in providing tools that promote fitness and wellness.

Fitbit stock got a lift earlier this week after it announced plans to use Google’s cloud service and healthcare API to offer a care management and coaching platform for healthcare providers. Adam Pellegrini, who leads Fitbit’s Health Solutions team, told me that in the future his company hopes to use Google’s machine learning capabilities to draw insights from large sets of patients, and perhaps analyze the data to find (and proactively treat) patients who are likely to be headed for health problems in the future.

              Shifting to an enterprise model makes sense. There is a lot of potential in the digital healthcare field but if I was a Fitbit board member, the question that I would be asking is what is preventing Apple from following us into that market? Blackberry dominated the enterprise smartphone market until employee desire to use their iPhones at work led to the rise of BYOD (Bring Your Own Device). What is different about smartwatches? There is nowhere you can hide from Apple in hardware. It’s not like Apple isn’t already exploring how the Apple Watch can detect health problems. The best path forward for Fitbit is as a software company. Abandoning hardware would be a bitter pill to swallow but sometimes that’s what is needed.

               

Buzzwords: Wall Street is not very familiar with the fitness industry. There are only a handful of publicly-traded fitness companies which means that the industry does not get much coverage from either the analysts or the media. And fitness is a weird industry. Think about a big-box gym. It’s a subscription business (membership), a services business (personal training), and a retail operation. But now that Planet Fitness is flying high, we get to see some of these Wall Street-ers makes sense of fitness. The results are not great.  From Investor’s Business Daily:

 

Membership to the no-frills gym starts at just $10 per month. An upgraded $21.99 Black Card membership offers perks like discounted merchandise, free haircuts, unlimited used of massage chairs and spray tanning. Meanwhile, rivals like Gold's Gym or LA Fitness offer membership plans that can cost more than $500 a year.

Planet Fitness' inexpensive membership is available thanks to its massive scale. The gym has more than 1,500 locations in all 50 states, Canada and Latin America, and boasts membership in excess of 10 million.

"If you look at the concept, it's a 20,000-square-foot box that's full of all the cardio and strength equipment you can imagine," R.W. Baird analyst Jonathan Komp told Investor's Business Daily. "There's a lot of capacity and scale they are able to drive with the model. That facilitates the low price, then they are able to advertise their proposition and it fuels the awareness for its distinctive value."

              What do they mean by scale? In business, scale typically refers to economies of scale. Economies of scale refer to the reduction in cost per unit that occurs as production of that unit increases. The classic example is an auto manufacturer. There are massive fixed costs that go into building and operating an auto plant. But as you make more cars, the average production cost of each car goes down. This analyst describes a basic gym and then tries to say that Planet Fitness’ “scale” allows it to charge this much lower price that is the foundation of its success. THIS DOESN’T MAKE ANY SENSE!!! Has this person ever set foot in a gym? What does he think goes in LA Fitness? This man is just spewing out some jargon and buzzwords and hoping that no one notices that he has no idea what he is talking about.

 

Radioactive spiders: What do superheroes and companies have in common? They both need a good origin story. For superheroes, it’s important to understand how an ordinary man comes to dress up as a giant bat to beat up criminals. For companies, it’s important to create a founding narrative that communicates the company’s mission and values. It’s also important to create an origin story that doesn’t make you look stupid. Brrrn, a cold workout studio in NY, has crafted its origin story. From Refinery 29:

 

At Brrrn, they offer three types of workouts, with different degrees of chilliness: 1st˚, a yoga-inspired workout in a 60-degree studio; 2nd˚, a core and cardio workout in a 55-degree studio; and 3rd˚, a strength training workout with battle ropes in a 45-degree studio. The classes sound gimmicky, for sure, but the creators of Brrrn insist that there's a deeper reason why they choose to keep their studio so frigid.

As the story goes, Jimmy T. Martin, one of the co-founders of Brrrn, was training a client who told him she couldn't stand the heat, and felt like she exercised better, and looked and felt her best during the cold winter months. "It got me thinking, if those things are true, then why aren’t we turning the thermostat down?" Martin says. He pitched the idea for a cold workout studio to Johnny Adamic, a self-described "big skeptic" with a background in public health, who told Martin he had to do some research before he got on board.

 

              Seems like a reasonable story. The only problem is that Brrrn has already told the NY Post their origin story. And that story was a little more…honest.

 

The idea has been about three years in the making: Martin had always been intrigued by the way some of his clients exercised in the cold — one told him she felt more motivated and just worked out better in the winter months. It occurred to Martin that with all the gimmicky fitness classes in the city — including dozens of heated options — there had yet to be a cold class.

             

              At least, they’re omitting the part where they blatantly admit that they were looking for a gimmick.

 

Retailpocalypse: What do you call it when a brand uses fitness events to engage and excite consumers? I call it fitness marketing and we’re seeing more and more companies using it. Now Macy’s has purchased an experiential retailer and hopes that it can shore up sagging sales at its flagship store. From the Washington Post:

 

Macy’s, the 160-year-old mall standby, is looking for a new audience — and thinks it has found it in a Manhattan concept store.

The department store chain on Wednesday said it purchased Story, a small “experiential retail” shop in New York that offers yoga classes, cooking workshops and a lineup of quirky merchandise that changes every few weeks. That keeps shoppers coming back, said the start-up’s founder, Rachel Shechtman.

In other words, it is the opposite of Macy’s sprawling suburban stores, which are piled high with a predictable selection of run-of-the-mill clothing and housewares.

              Fitness is appealing because it is viewed as internet-proof and it attracts young, affluent consumers. Macy’s isn’t the first retailer to go this route and they won’t be the last. Malls and department stores are starting to realize the potential that fitness has for generating foot traffic. People are passionate about it, they need to do it every day, and it’s actually good for them. Fitness is the best product in the world. And now there are companies that want to give it away in order to sell more merchandise.

 

MLM: There is a very fine line between a multi-level marketing operation and a pyramid scheme. Multi-level marketing is a business model in which the company uses a non-salaried workforce to sell a product or service. Members can make money by both selling the product/service and by recruiting more members. The difference is that in a pyramid scheme, the only way to make money is by recruiting more members into the operation. It can be very difficult to tell the difference sometimes. You may have heard of LuLaRoe, a multi-level marketing company that sells athleisure wear. It is the latest company that has been accused of crossing that line from MLM to pyramid scheme. From Bloomberg Businessweek:

 

Now, she, along with Blevins, are two of thousands of women who claim they’ve been duped by LuLaRoe. In the past year the company has faced more than a dozen lawsuits. The largest, a proposed class action, calls LuLaRoe a pyramid scheme focused on recruiting consultants and persuading them to buy inventory rather than actually selling clothing. Since the lawsuits were filed, consultants have fled LuLaRoe by the thousands. Many say the company owes them millions of dollars in promised refunds. Women have garages, closets, guest rooms—and, in one case, a farm shed—filled with LuLaRoe clothes they say they can’t sell.

 

              Personally, I think that MLM’s are like a dysfunctional relationship. The relationship between the company and its salespeople is inherently flawed. Any decent salesperson will tell you that the first question that they ask to a potential employer is about their territory. They don’t want to have to compete with salespeople from the same company. It’s hard enough competing with salespeople from other companies. The MLM model is built on recruiting more and more salespeople. It aims for salesperson saturation which means that each salesperson will earn less and less as time goes on.  This is how you get a MLM company pressuring people to buy inventory that they can’t move. It is also the way that the FTC identifies the line between pyramid scheme and MLM.

 

By definition, multilevel marketing companies are pyramid-shaped, with a few people at the top level, some in the middle, and the majority toiling at the bottom. This kind of hierarchical structure is legal as long as the company’s main goal is to sell a product; it becomes a scam when the goal is to lure people into buying inventory regardless of whether they can sell it. There are state laws against pyramid schemes, but at the national level the job of spotting them falls to the U.S. Federal Trade Commission. It primarily does this by checking to see if a company abides by a standard established in the wake of a 1972 lawsuit against a now defunct beauty products company called Koscot. The Koscot standard, as it’s known, says that while a company can compensate people for recruiting new sellers, it can’t base that compensation on how much inventory the recruits buy. Most state laws, including California’s, also require compensation plans to be based on sales.

             

It doesn’t appear that LuLaRoe followed this rule. They also encouraged female members to be “subservient” to their husbands and to get gastric surgery in Mexico. There are a lot of MLM companies that sell products in the health & wellness space. If you’re thinking about getting involved with any of them, then read this article.  

 

TidBits:

-Peloton is opening its treadmill studio in Manhattan

-The Rock is still looking for contestants for his new fitness reality show

-Have your next birthday party at the gym

-Meanwhile in China

-The treadmill was designed to punish criminals

-Virgin Active says that over half of its members use tech in the gym

 

THE WEEKLY HOWL IS CLOSING MORE STORES

The OG: It’s easy to forget what a young industry fitness is. Prior to 1980, the commercial gym barely existed. We’ve become accustomed to seeing a gym on every corner but that wasn’t always the case. In many ways, the modern fitness movement was born when Dr. Kenneth Cooper published Aerobics. From the Bangor Daily News:

Fifty years ago this month, Cooper published the groundbreaking book “Aerobics.” He’s written 18 more books since, but this was the one that set the course, the plan and the theory that led to the popularity of running as well as arguably to every spin class, step class, Latin dance class, aqua exercise class, obstacle-course run, boot camp workout and high intensity interval training.

Think of him and his book as the ancestor whose name might not be familiar to younger generations, but whose influence is as palpable as the DNA that gives us blue eyes or dark hair or the inability to carry a tune.

“Dr. Cooper’s work provided me the pathway to establish my fitness industry career,” says Terri Arends, group fitness director at the Aaron Family Jewish Community Center, which is known for its innovative and large array of classes. “I am so blessed I can get up daily and truly love my work.”

Cooper wrote the book when he was a physician in the U.S. Air Force. His wife, Millie, typed the manuscript. It has sold 30 million copies and been translated into 41 languages.

“I wanted to motivate people to take care of themselves,” Cooper says of a time when close to 45 percent of Americans smoked (compared with 15 percent today) and only 100,000 jogged (a number now well in the two-digit millions). “I said, ‘We need to get this out; it will save lives.’

It’s widely accepted now that working out is good for you but it wasn’t that long ago that there was a stigma around the idea of working out. People thought lifting weights would make you slow or that we were all born with a finite number of heart beats. That sounds stupid but people believed it. Donald Trump still believes it. Dr. Cooper began the work of changing the thinking around exercise.

The book spawned a phenomenon that wasn’t always positive. “There was initially controversy in what I did because I was taking care of healthy people,” he says. When he was interviewed by Barbara Walters, “she was very rude,” he says. “She called me a fraud.” (But, he adds, when he told her he had an ongoing exercise program with the U.S. Air Force, “she found what I was telling her was truthful and she was impressed.”) On the ABC show “Nightline,” he debated cardiologist Henry Solomon, author of a book called “The Exercise Myth.”

“I was a radical,” he says.

              I wonder how much we are paying for that attitude shift. As we were transitioning to a more sedentary existence, there was a generation that was led to believe that exercise was bad for you. It’s even scarier to imagine a world without Dr. Cooper. Who knows what shape we would be in.

Real Estate: People love to give Amazon for almost every trend affecting the business landscape today. Why did Borders go out of business? Amazon, of course. However, it’s never quite that simple. There was more than Amazon at play there. That Retailpocalypse is the same. From the Durham Herald:

Large stores being transformed into new uses is the new normal, said Charlie Coyne, CBRE’s director of retail services in Raleigh.

“I wouldn't call it a trend anymore, it is here to stay,” Coyne said. Big-box retail locations across the country are being turned into fitness gyms, medical offices and municipal facilities, he added.

More than 90 million square feet of space is expected to be vacated in 2018, according to real estate data firm CoStar Group. Last year 105 million square feet of retail closed.

“The U.S. is just over-retailed, with too many stores and too much square footage,” he said.

            Commercial real estate fell in love with retail space years ago and they over-built. From Bloomberg:

 

Even though retailers have been retreating for years, the country still has about 24 square feet of shopping space per person, many times more than any other developed nation, according to research firm Green Street Advisors.

 

Now they are scrambling to fill big spaces and turning to a group that they have long shunned: gyms.

 

Triangle Rock Club announced earlier this week that it will put its third Triangle location in the former Walmart building at 1010 Martin Luther King Jr. Parkway. Construction will be done in two phases and will eventually account for 32,000 square feet. The first phase will get the gym up and running in Durham, while the second phase will include a roof lift and additional square feet to accommodate taller walls.


“We’ve been searching for the right opportunity to expand into Durham for nearly 4 ½ years, and we’ve found the perfect location for our newest (and largest) facility,’ said Triangle Rock Club Managing Partner Joel Graybeal in a statement.


            Triangle Rock Club was looking for 4.5 years! It’s not that easy to find 30,000+ square feet but still. I am excited to see what getting prime real estate will do for the fitness industry. The openings that I’m personally seeing are trampoline gyms. They seem to popping up everywhere these days.

 

Supplements: Speaking of store closures, GNC announced that it will be closing 200 stores this year. And it is not the only supplement retailer to hit hard times. From Fortune:

GNC Holdings is joining the parade of store chains closing a big number of stores as they look to fix their businesses.

The vitamin retailer said in a regulatory filing late Thursday that it plans to close 200 stores this year, a number that could vary depending on its ability to renegotiate leases or move some stores. GNC operates small but ubiquitous locations, with 3,385 stores in the U.S. and Canada, along with franchise stores and small areas within many Rite-Aid stores. It has another 2,000 stores abroad.

But the vitamin industry is full of turmoil that is taking its toll on GNC and its rivals. Vitamin Shoppe has interviewed turnaround advisers according to the Wall Street Journal, while Vitamin World filed for Chapter 11 bankruptcy protection last year. GNC reported consolidated revenue dropped to $607.5 million in the first quarter, from $654.9 million in the year-earlier quarter.

              GNC doesn’t seem like a particularly smart company. It took them until 2016 to figure out that consumers will check their in-store prices against the online ones. So it’s not surprising that it is struggling to contend with the rising role that social media plays in the supplement industry. From Vox:

 

About five years ago, companies realized they could use social media to promote these supplements as youthful and fun. Hum Nutrition was one pioneer. It offers a range of brightly packaged supplements that are heavy on formulas for beauty-related concerns like acne, anti-aging, and hair growth. It launched in 2012, but the brand started its Instagram account in 2014, coinciding with the announcement that it would be carried in the beauty retailer Sephora. In the past year, Hum’s Instagram account has become more stylized, featuring a mesmerizing, undulating rainbow pattern when you scroll through it on mobile.

Facebook ads for the brand are now ubiquitous. When it landed a $5 million Series A investment at the end of last year, one if its investors noted that one of the attractive qualities of Hum was its “strong engagement on social media.”

 

              The supplement industry is expected to grow rapidly over the next few years but it appears the action is shifting to online sales. The only question is whether any of them are worth your money.  


One membership to rule them all: The proliferation of boutiques specializing in one fitness discipline has created a huge opportunity that has yet to be realized: aggregation. The one problem with boutiques is that most people want to do more than one thing. Maybe they go to SoulCycle four times a week but what do they do on the other three days of the week? Right now, they probably pay for a monthly membership at a big-box gym or they purchase more a la carte classes at another boutique. That is a very inelegant and expensive solution to their problem. Every entrepreneur understands that a consumer’s pain point is their opportunity and this is a big opportunity. From the Daily Herald:

Freeplay is a new app-based fitness company hoping to make exercise fun again.

“We like to say it’s like recess for grownups,” said Adam Chavez, Freeplay co-founder.

When users sign up for Freeplay, they get access to about 40 different exercise locations around Utah County. These locations include Crossfit, yoga, climbing, swimming pools, regular fitness gyms, trampoline parks and even batting cages. Freeplayers can use all of these options anytime they choose, just by checking in at the gym through their app.

Nate Bagley and his wife have been avid Freeplayers almost since the app first launched about a year ago. Bagley, who exercises about six days a week, loves being able to rock climb one day, swim the next, do some weight lifting later, and stop in for yoga at another point. He feels the $79 he pays each month is more than worth the price.

“It gives me access to a huge variety of ways to work out for a super reasonable price,” Bagley said last week while hanging out in Lehi’s Momentum Indoor Climbing — one of the many Freeplay locations. “It’s my favorite app on the entire planet. It really is.”

              A visit to the FreePlay website was not as illuminating as I had hoped. It’s hard to tell if this is just the Utah version of ClassPass or if they are doing something different. The one apparent difference is that you get access to a wide variety of fitness facilities. That could help with the issue of crowding boutique classes that ClassPass ran into and also work towards offering users a more comprehensive fitness experience. That’s a great price point but the relationship with gyms will change as they start sending more people there. Maintaining that price point will be a challenge.  

You’re a fad: The Hippocratic Oath starts off by asking new doctors to “first, do no harm”. I consider this to be a great rule of thumb for the fitness community as well. The first rule of fitness should be to do no harm. The second rule should be to get people moving. And the third rule should be to give people what they are paying for. We are starting to witness the rise of the recovery industry, businesses that offer recovery services and products to people who engage in intense exercise programs. From the LA Times:

Cryotherapy, a freezing treatment used by elite athletes such as LeBron James and Michael Phelps, is just one of the pricey injury recovery and prevention strategies that are exploding in popularity in Los Angeles — despite a lack of scientific evidence in many cases to support their efficacy. Cryotherapy alone is expected to grow to a $5.6-billion global industry by 2024, up from $2.5 billion in 2016, according to Grand View Research, a market research and consulting company.

The remedies — which also include IV therapy drips, vitamin-infused booster shots, hyperbaric oxygen chambers and compression therapy — cater to workout fanatics who insist an old-fashioned ice pack and a Gatorade won't suffice. They're now being offered at so-called wellness boutiques dedicated to administering the treatments; medical offices, weight loss clinics and traditional spas are also getting in on the craze.

              Do these services pass the 3 rules test?

-Do no harm? Probably a pass here. None of these procedures sound like they would harm someone with the possible exception of cryotherapy. There has been a reported death but this sounds like an issue with the therapy not being conducted properly. Being in close proximity to liquid nitrogen carries risks but these should be mitigated by extensive safety procedures.

-Get people moving? We should adjust this to get people recovered and I’m not sure.

Drip Doctors in downtown Los Angeles, for example, offers more than two dozen intravenous drips and booster shots to increase energy, promote faster recovery and aid in weight loss.

There's an $89 Hydroboost IV vitamin drip "perfect for those who need instant hydration," a $30 Supercharged booster shot for customers who are looking for "an intense burst of oomph" or a wallet-busting $220 Limitless IV vitamin drip. That one is billed as "an 'all in one' concoction" that will "optimize performance, neurological function, immune support, detox, and keep you feeling rejuvenated."

Skeptics contend that there is little benefit to IV drip therapy for people who are essentially healthy, saying people are capable of hydrating sufficiently and getting the nutrients they need through food. They instead point to a placebo effect.

              My first impression is these people would be better served from relaxing at home and drinking water for a couple of hours instead of fighting the LA traffic to get to Drip Doctors. The stretching boutiques seem to be the most worthwhile but there is probably less money being invested in them because of their labor-intensive business model. I’ll push on this one.

-Give people what they are paying for? This looks like a fail to me.

But some of the unconventional therapies, while no doubt trendy among the bootcamp-spinning-yoga-kombucha crowd, have been heavily criticized by those who doubt the purported benefits and say providers are making misleading and potentially dangerous claims.

A consumer update by the Food and Drug Administration in 2016 deemed cryotherapy — now offered at boutiques in Santa Monica, Beverly Grove and Costa Mesa — "a 'cool' trend that lacks evidence, poses risks." It said despite claims that cryo helps treat conditions like Alzheimer's, fibromyalgia, migraines, rheumatoid arthritis, multiple sclerosis, stress, anxiety or chronic pain, "this so-called 'treatment' hasn't been proven to do any of these things."

              That’s some straight snake-oil salesmanship. Save your money. If you want to recover, get more sleep, hydrate yourself, maybe get a massage or stretched out. The best fitness is low-tech fitness and the same goes for recovery.

TidBits:

-London gets its first human-powered gym

-What is your fitness personality?

-It’s not your imagination, kids don’t get tired

-Money burning a hole in your pocket?

-The Rock talks motivation

-24 Hour Fitness is working with Microsoft and Adobe to customize its members’ experience

-The Boston Marathon was a glorious mess

THE WEEKLY HOWL IS RUNNING FOR CONGRESS

Sports marketing: For me, sports and fitness have always been intertwined. I have a strong interest in seeing what the human body is capable of and how hard you can push yourself. That’s why I am puzzled by the lack of correlation between sports fandom and physical fitness in the U.S. I’m sure that there are several reasons why this is so but I would bet that this is one of them. From Vox:

There’s a reason sports heroes like Michael Jordan have been appearing on cereal boxes for decades. Food and beverage companies have learned that spending billions of dollars on marketing targeted at kids as young as 2 can sway the food choices they make for a lifetime. Yet we have become numb to this advertising because it’s all around us — and it’s a major and often ignored driver of the obesity epidemic. 

New research in the journal Pediatrics reveals the precise role America’s beloved sports leagues play in this marketing blitz. The first study to quantify food marketing to children through professional sports organizations in the US, it casts these leagues in a new light: as key peddlers of junk food to children. 

The paper, led by researchers at New York University, focused on sports sponsorships — or the money food and non-alcoholic beverage companies pay teams to use their logos, brands, and products in sports venues and advertisements. The researchers found that major sports leagues like the NFL and NBA have millions of young viewers (about 412 million under the age of 17 per year, to be exact). And that food and non-alcoholic beverage companies — including McDonald’s, PepsiCo, Mars, Kraft Heinz, and Kellogg — were the second-largest category of sponsors to these leagues, after only the auto industry. 

The food sponsorships are ubiquitous — appearing in the names of playing fields and the socks players wear on those fields (see photos above and below). What’s more, the vast majority of the snacks and drinks featured through these sponsorships is overwhelmingly unhealthy.

              This association with sports gives these products the veneer of healthiness. Meanwhile, the obesity rates in this country have skyrocketed, especially among children. We need to start regarding junk food ads the same way that we regard alcohol and tobacco ads. We’re already lagging behind the rest of the world:

“There are data showing that when kids see a given food that is branded with a character or a superhero or a sports hero, they eat more of it than they would if it didn’t have branding or marketing, and they say it tastes better,” Kahan added. “[Marketing] strongly impacts kids’ assessment of food, kids’ desire for food, and ultimately creates potentially lifelong preferences for given foods and given brands.”

This is why groups like the World Health Organization have long suggested stricter regulations on food ads targeted at kids. And it’s why many countries, from Chile to Ireland to Norway, have followed those recommendations, cracking down on food companies’ abilities to reach kids through bans and restrictions on advertising and marketing.

              Sports should be inspirational and a gateway to physical fitness. Somehow, we’ve turned them into vehicles for selling junk food. That is completely backward. I hope that one day we address this issue.

Follow the money: The fitness industry is extremely fragmented, which is why there aren’t many publicly-traded fitness companies. This does not mean that Wall Street hasn’t developed an appetite for fitness, it has just found a different way to indulge it. The Street ran a piece this week on private equity firms buying up fitness properties. It’s easy to forget how much of a presence PE has in the fitness industry right now. The article mentioned TPG (Club Pilates, Cyclebar, Row House), L Catterton (Pure Barre, Bodytech), TRT Holdings (Gold’s Gym), TSG Consumers Partners (Planet Fitness franchises). That doesn’t even incude LA Fitness and 24 Hour Fitness which are also PE-owned. What makes fitness properties attractive:

Studios and gyms at large make for an attractive investment because the overhead costs are low, according to industry experts.

"What [Investors] like about it is the upfront cash flow," said Tom Bonney, a senior managing director at CBIZ CMF and an adviser to private equity firms.

Many independent studios are just beginning to scale nationally and many are in the early stages of their life cycle. Notables include the franchised DEFINE Body and Mind, a Texas-based studio that focuses on a fusion of yoga, ballet and Pilates; specialized workout-oriented gym MADabolic, also franchised; and New York's CityRow. Most charge monthly subscription fees to their gyms, though services like ClassPass, backed by Singapore investment firm Temasek Holdings among others, also allow patrons to use different studios for a monthly fee.

"In a subscription model, customers pay upfront and then the company operates the facilities," Bonney told The Deal. "Secondly, if you have a model that works, you can replicate it and stamp out hundreds and thousands of it."

              The subscription model is attractive but is this good for the fitness industry? The upside could be something like Exponential Fitness, which is TPG’s banner brand for several studios that it has acquired. The industry is so fragmented that some consolidation could be good for it. Perhaps PE firms can help fitness companies build national brands. The downside is the debt. The way that PE firms typically operate is to primarily use debt to make an acquisition and pile that debt onto the acquired company. These debt payments can become crippling. Case in point: the retail industry. From the New Republic:

We are in the midst of a mass extinction in retail. Over the past five years, dozens of retailers—once the bedrock of malls across the country—have shuttered. The most recent victim was Toys ‘R’ Us, which announced it was going out of business last week, a collapse that could cost as many as 33,000 jobs.

Many are blaming the stores themselves for failing to adapt to the rise of e-commerce and changing consumer habits. Others have pointed the finger at the rise of one-stop-shopping behemoths like Walmart and Target, both of which have made life hell for category killers like Toys ‘R’ Us. Some see the enduring impact of the Great Recession, while others still—including Toys ‘R’ Us—blame millennials for not having enough kids.

These explanations have some merit (with the exception of the millennials one). But the biggest ongoing threat to retail is debt. Over the past several years a number of major retailers have been saddled with billions of dollars in debt by private equity firms. Toys ‘R’ Us, for instance, was hit with over $5 billion in additional debt after it was acquired by private equity firms KKR and Bain Capital in 2006. With annual interest payments of over $400 million a year, Toys ‘R’ Us didn’t have a chance.

Private equity is remaking the retail environment, causing even successful companies like Toys ‘R’ Us to go out of business. And they’re fundamentally remaking American commerce in the process, with Amazon, Target, Walmart, and Dollar General set to benefit. Meanwhile, private equity is more or less getting off scot-free.

 

              Could this happen to the fitness industry? It depends on how much debt is piled on each company and whether there is some kind of market shift that requires investment. Toys R Us was still profitable, it just couldn’t afford to continue making those debt payments and respond to the threat of online commerce. The other issue is that there has to be an exit strategy. PE firms have outside investors who demand a certain rate of return in a certain time frame. That means that they can’t hold onto their portfolio companies forever. They need to either take these companies public or sell them to another PE firm. Since there are not a lot of publicly- traded fitness companies, I worry that the main exit strategy will be to sell to another PE firm. There are 2 downsides to this. Each company will already have been “fixed” by a PE firm. What can the next firm do except try to cut costs even more? Plus, the company will have to be sold for more money than it was bought for which means that over time the debt payments will only get larger.

              One emerging option as a strategic buyer is the hotel industry. Hotels are both purchasing gym operators outright and partnering with them in order to expand their amenities offerings.

Hyatt Hotels Corp, in August, acquired Exhale, a 15-year-old branded concept that "addresses mind and body through spa and fitness," with intentions to grow the brand via freestanding locations and within appropriate Hyatt Hotel product. The deal followed Hyatt's acquisition of New York-based Miraval Group, a provider of wellness experiences, from an affiliate of private equity firm KSL Capital Partners LLC for $215-million deal in January 2017.

Marriott International Inc. recently signed a partnership with SWERVE Fitness cycling studios, which will give guests of its W Hotels special access to rides and gear during their stay. SWERVE memberships now receive special perks at the W Hotels of New York.

"Fitness continues to play a more integral role in other areas of the leisure economy," wrote Jefferies analyst Randal J. Konik in an early March note. "Hotels have made a splash in the fitness M&A landscape over the past 18 months as acquirers. We believe that in addition to pursuing exits via larger fitness players or the public markets, boutique studios could find non-fitness strategics an increasingly possible route for monetization."

              The Related Companies, the real estate behemoth behind the Time Warner Center in NYC, is also the owner of Equinox and SoulCycle and is pursuing new fitness deals. They’re also backing Equinox’s quest to build a fitness-oriented hotel. If more hotel chains decide to get into fitness, then this could be a viable exit for the PE firms but we will see. The trend right now is partnerships. Owning and operating gyms will have to be viewed as an attractive venture on its own merits for the hotel industry to put both feet in.  

A parting thought on private equity: what if the fitness industry ends up being run by a bunch of suits who don’t know the first thing about fitness? Maybe I’m being paranoid. Or not.

The fitness industry at large is far from peaking, according to Bonney, as more trends emerge and millennials continue to gain spending power. "As fitness breaks into more verticals — boxing, biking, rowing, yoga — we're going to see continued investment."

"Have you heard of people working out with cow bells?" he asked. "As long as these trends keep coming, the market will accept a lot more capital and continue to evolve."

              Cow bells? Does this guy seriously think that people are working out with cow bells?

Malls: I have covered how malls are reinventing themselves with the help of the fitness industry numerous times. I wanted to include this piece from The Morning Call not because it has some new insight into that but because it condenses the strategy to 3 letters:

Shoppers’ tastes have changed, Hughes confirmed, and can be traced to the changing of the guard generationally.

“Regional malls were the retail centers of the universe. On the weekends it was a destination event to go to the mall,” Hughes said. “I think what we're seeing is a value change with millennials. They want experiences. That’s what a shopping mall has to provide today.”

The formula being used to do just that is known as the “triple F” — food, fun and fitness. Even a decade ago, a fitness center or gym in a mall was a harbinger of tough times, Hughes said. Now, it signals a mall in the midst of reinvention. Medical service centers, interesting dining options and entertainment offerings provide experiences and services that millennial consumers are after.

            I would prefer the 3 F’s over the Triple F. Triple F sounds like a low-rent version of the wrestler Triple H. The 3 F’s sounds like more something you would learn about in business school. Either way, it’s a great way to remember what shopping malls are doing to stay relevant. But I have one bone to pick with this article:

Along with the new look, part of an ongoing project, the mall brought in one of the triple F’s that Hughes mentioned — fun. That came in the form of the Sky Zone Trampoline Park, whose patrons have filled the parking lot. While much of the trampoline park was made possible by converting common space inside the mall.

              Doesn’t a trampoline gym fall into fitness as much as it does into fun?  

Fitness Campaigning: One of my favorite topics is companies using fitness to market their products and services. I call it fitness marketing and we’ve been seeing more and more of it lately. Perhaps it is time for this blog to coin a new term: fitness campaigning. From Mens Health:

They say running for office takes blood, sweat and tears. Suraj Patel’s political campaign is definitely leaning on the sweaty side.

The 34-year-old is running for Congress in New York City, and part of his strategy is to get more people to vote. One way he’s doing that? Sweating it out with potential voters in group exercise classes, then talking to them afterward about his campaign.

"Young people don’t vote in the same numbers as older people, and part of that is because the way most politicians engage with people is from a bygone era," Patel told Menshealth.com. "I wanted to figure out a way to infuse politics into the day-to-day lives of people. A lot of young people congregate around workout classes."

Which is why Patel set up special events with group exercise studios around New York City. So far, he's held events at spin studio Flywheel, treadmill studio Mile High Run Club, and a yoga studio. The first hour or so is completely devoted to the workout, no politics included. Afterward, although sweaty and a bit out of breath, Patel makes a small speech, answers questions, and lingers with participants.

              It’s the same concept as fitness marketing. Both marketers and politicians covet young people and realize that fitness is a great way to reach them. I wonder if we’ll see this become more common. That might depend on whether Mr. Patel’s campaign is successful.

Flexology: I think that it’s safe to say that flexibility is the neglected middle child of fitness, forever overshadowed by her flashier siblings, strength and conditioning. That may never change but that doesn’t mean that flexibility can’t get more attention as the fitness industry grows. From Outside:

 Enter the stretching studio. Practitioner-assisted stretching, as it’s sometimes called, is a growing craze in the fitness cosmos. The thinking goes like this: all of us, from serious runners to hunched desk jockeys, have neglected our fascia (the thin veneer of tissue that encases various muscles and organs), our joints, and a whole slew of other problem areas that even yoga can miss. Between Stretchlab in Los Angeles and franchises like Stretch Zone, Lymbr, and Stretch U with locations around the country, a growing army of stretching coaches and flexologists (they’re really called that) have assembled to bend us into better health.

In recent years, research has increasingly questioned the virtue of static stretching—passively holding a position for an extended period—before exercise. “When muscles are cold, static stretching isn’t that effective,” says Meir Magal, a fellow at the American College of Sports Medicine. The growing consensus suggests that it doesn’t prepare our bodies for whatever we’re about to do, and in some cases it’s even counterproductive.

As the chatter around static stretching has intensified, an array of alternatives have emerged, such as mobility training—a more targeted attempt to increase range of motion—and something called proprioceptive neuromuscular facilitation, a regimen designed for high-level rehabilitation that’s popular among athletes. Flexologists, for their part, have appeared on the scene to replace our bad old stretches with controlled, and repeated motions—some focused on fascia, others tailored to select muscles—with the added benefit of professional assessment and guidance.

              First off, I love the term “flexologist”. That’s fantastic. I kind of want to become one just so I can say that when someone asks me what I do for a living. Let’s talk cost: $160 for a 90 minute session is eye-opening. This is definitely the top-tier with that much personalized attention. Price-wise, this is similar to getting a massage, also a great recovery tool that it is out of range for most people. This also sounds similar to a Thai massage. Anything built on one-and-one interaction cannot scale which will limit its growth potential but I am curious to see how the focus on flexibility filters down.

TidBits:

-It’s all about underwear placement

-April Fool’s Day comes early this year

-Today’s children are less fit than their parents

-Confessions of a fitness tracker reviewer

-It pays to start young

-To grunt or not to grunt

-Mat Fraser and Cassidy Lance-McWherter win the CrossFit Open

 

THE WEEKLY HOWL REMEMBERS THE MICROSOFT KIN

Fitness Trackers: FitBit is in a bit of a bind. They are one of the first names that come to mind when anyone mentions fitness trackers but the industry is barbell-ing. Apple is taking over the high-end with its line of Apple Watches and foreign companies are taking over the low-end with very cheap trackers. So what is a mid-size hardware company to do then? Launch a line of fitness trackers that are designed for children. From TechCrunch:

The Ace was inevitable. Sure, Fitbit is leaning into smartwatches with today’s launch of the Versa, but the company’s current line of fitness trackers left a key demographic unserved. The new wearable, which is essential a scaled down version of the company’s entry level Alta tracker, is aimed squarely at kids aged eight to 13.

              My pet theory is that fitness trackers are following the same path as smartphones. This would make the Ace the Microsoft Kin of fitness tracking. What’s that you say, you don’t remember the Microsoft Kin? That’s because it was a short-lived disaster. In 2010, Microsoft tried to sell a phone built around social networks that would appeal to teenagers. What was never clear was how this was different from a true smartphone. The Kin was a quasi-smartphone that still required a full-priced data plan. It made no sense and it was never clear why teenagers would want one. It was a product made for no one.

              Tech products don’t need to be designed for specific age groups. Especially if you are trying to sell that product to young people. Young people tend to be more proficient with technology than older people so why would you try to sell them a less sophisticated product? Maybe you’re thinking that parents will want to save a few bucks when buying a fitness tracker for their kids. Well then, you shouldn’t price it at $99. The thing is though that underneath this ill-advised hardware launch is the future of FitBit: software.

The biggest differentiators here are on the software side. Parents can add to the ace to a family account on their own mobile device to track their kids’ activity. The app will also let them vet the friends they add for competing fitness goals and limit the information kids see on their own app, if they device. If the kid has a phone, the Ace will also display call notifications.  

              This makes sense but it doesn’t require manufacturing a separate line of hardware. FitBit needs to focus on this kind of software innovation. They have a strong brand and an intimate knowledge of the fitness tracking market. Unfortunately, they have the misfortune of competing with Apple in hardware right now. 

Where there’s smoke: A couple of weeks ago, Strava found itself at the center of a national security controversy over its heat map. The heat map was illustrating routes that were getting a lot of use by Strava users. This was a worldwide map and people were able to identify forward operating bases in Afghanistan as well as where American service members were walking and running on military bases. Strava is still trying to figure out how to deal with this. From Reuters:

Strava is launching a new version of the heat map, a tool that displays data in map form, that will bar access to street-level details to anyone but registered Strava users, Strava Chief Executive James Quarles told Reuters. 

Roads and trails with little activity will not show up on the revised map until several different users upload workouts in that area, the company said. The map will also be refreshed monthly to remove data people have made private. 

Security experts previously spotted on Strava’s map what they believed to be the movements of U.S. soldiers in Africa and of people who work at a suspected Taiwanese missile command, all of whom had shared workouts apparently without realizing the implications.

              Why do I feel like Strava would be better off just scrapping the heat map altogether? I still think that Strava doesn’t quite grasp the challenges of protecting its users’ privacy with its own ambition of becoming the social network for exercise. I suppose that they are embracing the Silicon Valley mantra of moving fast and worrying about the consequences later.

Inclusivity: Have you ever felt like an outsider? At some point in your life, have you ever felt like you didn’t belong wherever you were? It can be a profoundly alienating experience that makes you want to withdraw even more from your environment and the people around you. Most of us have experienced that at some point in our lives. But if you’re reading this, then odds are that you don’t feel that way when you walk into a gym. Most likely, you feel like you belong there and you may even feel like you’re part of a community. However, the fitness world makes a lot of people feel like outsiders. From the Washington Post:

Many folks who eschew regular workouts have said they are really avoiding the recurrence of painful past experiences, such as fellow gym-goers blatantly mocking them, trainers saying their physical efforts weren’t good enough and street harassment for simply taking a walk outside. One new mother described to me her wonder that the glares she experienced ceased only when she had a newborn in tow.

The prevailing myth about overweight and obese people is that if they just worked harder, they would become thin, but that’s actually not a typical outcome. Jennifer Kuk, a kinesiologist and associate professor at York University, says, “Weight management science is very complex, and much of how the body responds to weight-loss attempts is outside human control.”

On any typical day, higher-weight people may have to put extra emotional labor into getting mentally prepared to take on our appearance-driven fitness culture. Even a locker-room comment of “I’ve seen you here a few times. Keep up the good work!” can feel condescending.

              The gym can be an intimidating place. There is no doubt about that. If I was an overweight or obese person, then I don’t think that I would feel comfortable in a gym. We need a culture change and not just the fitness culture. We need our entire culture to change in the way that we view and treat overweight people. The other thing that we can do is to stop focusing so much on weight. Instead we should focus on what our bodies can do. Everyone is not built to run marathons and have six-pack abs. Some people are built to lift heavy things. That can be a source of confidence and pride and it’s a lot better than feeling shame for not being able to conform to what society considers an attractive body type.  

Motivation: For a lot of people, there is only one measurement that matters when it comes to their fitness: their weight. Is this an antiquated and deeply flawed way to measure your fitness? Yes, absolutely. It discourages people from strength training, can promote unrealistic body composition goals, and is often not compatible with how most people actually want to look. But what numbers should we be looking at? GQ has some answers:

Check your body measurements

Confirm that you are shrinking or expanding as intended by taking circumferential measurements of relevant body parts. Waist circumference, for example, is an effective way to track changes in a place that many of us watch the closest: belly fat.

              This is a superior way to measure body composition.

Check your performance

Bench pressing a tad more, doing one more bodyweight squat, shaving ten seconds off your mile time, and squeezing out one or two more pull-ups than last week all show that you’re making meaningful progress. This means that if you’re not keeping a simple workout diary that commemorates what you accomplish in the gym each day, you're missing out on valuable data, and you should fix that right now.

              Focusing on what your body can do rather than on what it looks like is much healthier and much more fun. It also enables a shift from extrinsic to intrinsic motivation.

Check your clothes

We all want to look hot naked, but if your clothes are starting to fit better in the right areas, that’s a sign that good things are happening to your body, even if the scale is less effusive with its praise.

              This is an easier way to track your body composition.

Check your camera roll

Let’s be honest: Whether you want to lose or gain weight, looking a certain way is probably more important to you than a number. Act like it by taking infomercial-style before-and-after photos at regular intervals. The camera doesn’t lie, and over a long period of time, you’ll see exactly what physical changes are or aren’t happening—a brutally honest visual element to accompany the rest of your data points.

              Better to focus on what you look like rather than on just what the scale tells you.

Check yourself

Assessing how you feel on a day-to-day basis is probably the most overlooked way to measure whether everything you're doing is good for you. Are you sleeping better? Do you feel healthy? And, critically, is your sex drive at... full speed? “A healthy libido tends to indicate that things are going well,” admits Romaniello. “Decreased libido is a sign that something needs to be changed.”

              Working out should make you feel good. This is the number one reason why I love fitness. This is more qualitative than quantitative but it I still an excellent way to assess whether your routine is working.

Crossfit: The CrossFit Open serves 2 masters every year. The first is the need to have a first stage in the qualification process for the CrossFit Games. Athletes qualify for the Regionals (where they compete for spots in the Games) by participating in the Open. As its name suggest, the Open is open to anyone who wants to compete and thousands do. The second master is to drive CrossFit participation and give thousands of CrossFitters an opportunity to test themselves against the rest of the CrossFit world.

Typically, CrossFit has balanced these two demands by making the Open events a little “easier” and then ramping up the difficulty in the Regionals. What do I mean by “easier”? Keeping the weights lower and avoiding some of the more challenging and technical exercises like muscle-ups. Most people can’t deadlift 405 pounds, never mind crank out reps in the middle of a metabolic conditioning work-out. But that is the kind of thing that you would see in the CrossFit Games. This has been a source of frustration for some CrossFitters who would like to see an event lineup that is closer to what is programmed in the Games. They feel that the Open favors people with higher levels of aerobic fitness and lower levels of strength. Well, be careful what you wish for. From Barbend:

Last night, we concluded the final athlete submissions for the third 2018 CrossFit Open Workout 18.3. If you’re currently competing in the Open, then you probably don’t need us to remind you just how tough this workout was. And for those not competing, to give you context, Open workout 18.3 involved a total of: 800 double-unders, 48 muscle-ups, 40 dumbbell snatches, and 40 overhead barbell squats (if you completed it, which almost no one did).

Oh, did we mention there was a 14-minute time cap to get all of this work done? 

18.3 proved to be so tough that very few athletes actually completed all of the work in the given time allotment, and most ended up treating this workout like an AMRAP.

Wow. It’s almost as if Dave Castro wanted to shut all those people up with the CrossFit equivalent of a kick to the nuts. The 18.3 work-out is below:

2 Rounds for Time with a 14 minute time cap:

100 Double-Unders
20 Overhead Squats (115lbs/80lbs)
100 Double-Unders
12 Ring Muscle-Ups
100 Double-Unders
20 Dumbbell Snatch (50lbs/35lbs)
100 Double-Unders
12 Bar Muscle-Ups

Real Estate: It’s no secret that shopping malls have been filling the department store void with big box gyms. There just aren’t that many businesses that are interested in leasing more than 30,000 square feet of retail space but gyms are one of them. The hope is that gyms and restaurants will generate foot traffic that the retail stores can take advantage of. Appearing on CNBC, retail expert Jan Kniffen threw cold water on that idea.

"Putting things in to get somebody to come to the mall is a good idea. The bad news is when it's something like a gym you don't get very much cross shopping," Jan Kniffen, CEO of J. Kniffen Worldwide Enterprises CEO, told CNBC's "On the Money" in an interview.

The retail consultant says people may go to a juice bar, or something that's related to their work out —but that's about it. As for malls that are putting in grocery stores, Kniffen says while that may drive foot traffic, it's only to that particular store.

"When you put in a grocery store, people do not go in the mall. They go into the grocery store, they shop, and they go home."

              He has a point about people who come in before and after work. They are on a schedule and are highly unlikely to start window-shopping. I would like to see some data on this though. The percentage of gym-goers who also browse might be lower than someone who is going to a J.C. Penney but the foot traffic is probably higher. Where does that leave the overall number of gym-goers/browsers? Also, a gym-goer might go to the gym 3-5 times a week. That’s 3-5 times a week that this person is seeing the signs for all those retail stores. That’s great exposure and makes it much more likely that this person might make a separate visit to go shopping. That person is still engaging with the mall 3-5 times a week which is mallrat territory. There are not that many businesses that people visit as often as they visit the gym. Mr. Kniffen should not underestimate the value of that.

Leadership: Hey, guess what? Fitness leadership is now a thing. From the Harvard Business Review:

This hasn’t gone unnoticed by some leaders, and a new generation of CEOs taking a cue from this last bastion of the Protestant work ethic. In contrast to “transformational” and “authentic” leadership, which has been criticized for being fuzzy and wishy-washy, “fitness leadership,” as we refer to it, offers a more concrete approach. As a hard-working employee, you will be measured by and rewarded for the long hours you put in at the office and the gym. In exchange, a fitness leader can offer a sense certainty, justice, and camaraderie in a time where employees are otherwise plagued by uncertainty, injustice, and isolation.

Henrik Bunge is one such leader. He’s the CEO and self-titled “Head Coach” of Björn Borg, the Swedish sports fashion company named after the tennis star.

Last fall, we joined Bunge and his employees for “sports hour,” a mandatory fitness class for all employees every Friday between 11 and noon. In pairs, we were throwing kicks and punches at each other, with the kickboxing instructor yelling, “C’mon, harder!” from the podium.

After class, Bunge explained his sports-meets-work philosophy when we met for lunch at an elegant Thai restaurant. “Take a football player. He will always know how he performs. But if you go to the marketing department and ask them, they’re usually clueless.”

              This seems more like an offshoot of sports leadership than anything else. Sports appeal to a lot of people because it is easy to see the link between the work you put in and your results in competition. It is viewed as a true meritocracy by most people where the business world is not seen that way by most. That, and a focus on teamwork, has made sports leadership models attractive to generations of leaders and managers. Fitness has the same link between work and results that sports has and thanks to CrossFit, fitness is now a sport.

              What’s different is that it’s not easy to incorporate traditional team sports into the corporate lifestyle. The CEO might think that Bear Bryant and Mike Ditka might be great role models but it would be difficult to organize tackle football games at lunch. Fitness on the other hand is very easy to incorporate.

Intrigued by our lunch meeting with Bunge, one of us embarked on an ethnographic study of the company which has now lasted for over a year. Since September 2016, Torkild has spent a couple of days a week at the Björn Borg headquarters, attending workshops, meetings, and fitness tests; having lunch with and talking with employees; and participating in sports hours (25 to date). As part of this research, we have learned that team leaders run wall squat competitions with their teams, that staff members measure their physical strength through push-up competitions, and that many break the monotony of work with a game of ping pong. One Friday morning, a male employee walked into the kitchen area, topless, to show that he had achieved his physical target: a six-pack abdomen.

              This type of culture is not going to be for everyone. And it sounds like it has led to a lot of turnover at Bjorn Borg. The test will be if this leads to more productive and dynamic employees. The KPI’s seem to indicate that it is doing that. We will see how many companies follow their lead. It is also important to note that Bjorn Borg is a sports apparel company. Trying to install this culture at a retail or manufacturing company could be much more challenging.

TidBits:

-Adidas is bringing fast fashion to sneakers

-Fast Company interviews the founder of Barre3

-ClassPass Live is…live

 

 

THE WEEKLY HOWL IS STILL GOING TO THE MALL

Look to the smartphone: Fitness tracking is a fairly new space but it appears to be following the same path as cell phones. First, smartphones swallowed the cell phone market as well as any other hand-held electronic device (digital cameras, portable GPS units, PDA’s). Then, Apple swallowed the smartphone market. Smartwatches are the smartphones of the fitness tracking space. They are swallowing the fitness tracking market leaving only the very low end. From Business Insider:

  • Companies that focus on fitness tracker wearables are seeing shipments decline. Fitbit, which also generates most of its sales from fitness trackers, saw overall shipments decline 17% YoY during Q4 2017, marking the fifth consecutive quarter of YoY decline. And Fitbit's first smartwatch, the Ionic, failed to meet the company's aggressive goals, according to CEO James Park. Meanwhile, Xiaomi saw shipments decline 5% YoY to 4.9 million in Q4 2017. 
  • But Apple, which focuses exclusively on high-end smartwatches, saw 56% YoY growth in shipments, and overtook its competitors as the No. 1 wearables vendor. Apple's smartwatch shipments spiked to 8 million in Q4 2017. This propelled the company to become the single biggest wearables vendor for the first time, as it captured 21% of the market during the quarter, and pushed Fitbit and Xiaomi to the side in the process. Apple's impact was so substantial that the Apple Watch's stand-out Q4 was the driving force behind positive shipment growth in the overall wearables market during the quarter; without Apple, the wearables market would have contracted, according to the IDC. Overall, shipments of wearables grew 8% YoY to 38 million units in Q4.

If I worked in the fitness tracking space, there are only a few strategies that I would pursue:

1)      Be Apple and make smartwatches

2)      Go after the low end of the market with very cheap fitness trackers

3)      Focus on software (create fitness apps that will run on the Apple Watch)

4)      Do something with hearables (although I would be concerned that Apple will get into this too with the AirPod)

5)      Be Google or Samsung and try to corner the Android smartwatch market

Basically, I would not try to compete with Apple in hardware. I would either use their platform to make apps or try to capture a segment of the market that Apple has no interest in. Despite this trend, investors are still lining up to put money into fitness tracking hardware ventures. From Bloomberg:

Twitter Chief Executive Officer Jack Dorsey and Golden State Warriors All-Star Kevin Durant are among the newest investors in Whoop Inc., a wearable fitness tracker popular with professional and elite athletes.

The $25 million Series C funding round was led by UAE71 Capital, said Whoop Chief Executive Officer Will Ahmed. The latest investors also include former National Basketball Association Commissioner David Stern. The venture arm of the National Football League Players Association was already a backer.

That’s alright, they can always pivot to software down the road.

Cycle Stars: Just in case you weren’t quite sure that the boutique cycling phenomenon isn’t personality-driven, the NY Times is running profiles of cycling instructors now.

Ms. Chaumet was born in Paris and was raised on the west coast of France, where, as a child, she liked archery, horseback riding and surfing. Before her spinning career, the self-proclaimed tomboy (she pairs cotton sport socks with Gucci loafers outside the studio) flitted between jobs. There was waitressing at Joe Allen in Paris and folding shirts at Quiksilver, all while flying back and forth to California, where she was she was a surf instructor in Santa Barbara and a chef for the crew of “Unusually Thicke,” a reality show starring Alan Thicke and his family.

“I was really living the life there,” Ms. Chaumet said on a recent Tuesday after class, sipping a second allongé at Fragments cafe in the Marais. “I didn’t have too much money, but I’d wake up, go swimming, then work in a cafe for a bit and maybe take a yoga class. At 5 or 6, I’d surf before happy hour.”

But when she came back to Paris to renew her visa, her mother and grandmother urged her to make something more of herself. As if on cue, Dynamo discovered her growing presence on Instagram and asked her to train as one of their coaches.

“It would stop me from going back to California and traveling,” she said. “I had to do it fully. I’m really competitive with myself.”

Before she started training at Dynamo, she traveled to Mysore, India, to get a 200-hour yoga teacher certificate at the Ashtanga Yoga Mysore center. In 2016, while building her Dynamo clientele, she started Trés Intense Hip Hop Yoga, a 60-minute vinyasa flow class that she teaches four times a week at a cavernous space just off the Champs-Élysées.

              Cycling instructors are like rock stars now. I wonder how many of them have endorsement deals. How does this impact the cycling studios? It seems like this should give these instructors a lot of power in their relationship with the studios. SoulCycle has IPO ambitions but I have to wonder how scalable their business is. Can they keep finding charismatic instructors that keep people engaged? How strong is the SoulCycle brand versus an individual instructor’s brand? I can’t think of a good parallel here either. The entertainment industry is somewhat similar with movie stars versus movie studios or movie franchises (Marvel, Star Wars, Harry Potter). I’m not sure that is a good comparison though. The big question is whether SoulCycle adherents would follow their favorite instructor to a new studio or stay loyal to SoulCycle.

Military Fitness: The obesity epidemic has reduced the pool of eligible talent for the U.S. Armed Forces. Senior military leaders have been wrestling with solutions to this problem for years. Now the Chairman of the House Armed Services Committee has a novel idea. From the Military Times:

“Should we make it easier for someone who has, for example, expertise in computers to serve in the military even though they can’t meet all the physical requirements?” House Armed Services Committee Chairman Mac Thornberry, R-Texas, said during a media roundtable on Wednesday.

“Maybe there needs to be limited exceptions for these high demand areas. All of these are good discussions to have.”

The comments came as Thornberry’s committee is starting its annual work on the defense authorization bill, a massive budget policy measure that sets a host of authorities and priorities for the following fiscal year.

Earlier this month, researchers at The Heritage Foundation reported that more than 70 percent of 17- to 24-year-olds in America today are ineligible to join the military under current Pentagon requirements. About half of that group did not meet physical fitness or health requirements for service.

              This is an interesting idea. On one hand, it makes sense that the infantry would require a higher level of fitness than a cryptology specialist or a radar operator. On the other, just achieving a passing score on the PFT (at least the Navy one) is not hard at all. Lowering the standards much more could make the whole thing irrelevant. Maybe it would make sense to get rid of the whole thing or just focus on weight, at least for office-based jobs. I don’t know what that would do to the military’s culture though. There are no easy solutions to this problem. The DOD is going to have to get creative in order to maintain readiness. This idea is as good any other one at this point.

Real Estate: One side effect of the retail apocalypse is that shopping malls that have survived have been courting gyms to fill the anchor spots that used to be occupied by department stores. The other side effect from a fitness standpoint is that the mall walkers are losing their place to exercise. I had forgotten about mall walking. There was a lot of media coverage in the 1990s but almost none recently. But people are still doing it. From Racked:

Mall walking is exactly what it sounds like — a form of exercise where people walk in shopping malls. According to a resource guide created by the CDC, malls are the second most frequently used venues for walking, right behind neighborhoods. Why do people prefer them over parks and gyms? A few reasons: roomy corridors, a weather-proof environment, close parking, proximity to bathrooms, ample amounts of benches and fountains for resting, and, of course, it’s easy. Most of its participants are elderly, but some are new moms with strollers who find the wide walkways optimal for exercising.

              This is unfortunate. There is nothing else like a shopping mall in terms of indoor walkability. But malls are closing and there is nothing that is going to stop that.

However, with malls closing at a rapid rate and online shopping (i.e., Amazon) becoming the norm, the question is, “Where will mall walkers go?” and even more broadly, “What is like a mall?” 

In 2017, 18 retailers, including Payless, The Limited, and Toys R Us, filed for bankruptcy, and closed hundreds of shops across the country. It is projected that in the next five years, a quarter of America’s 1,100 shopping malls will shut down. Sears, which had 3,800 locations 10 years ago, is down to 1,104 stores; last year Macy’s closed 68 stores and J.C. Penney closed 128. Malls depended on these anchor, big-box chains to attract shoppers and then funnel foot traffic inside to smaller retailers, but as department stores vanish, this traffic flow has de-congested. According to TIME, between 2010 and 2013, holiday shopping at malls dropped by 50 percent.

              What are communities/landlords doing with those spaces? Shopping malls take up huge parcels of land. What future purpose is that all that land going to be put to? It may not be realistic but it would be great if communities put some of that land towards space that people could exercise in. Something like a public park with a walking path or a track. It wouldn’t protect the mall walkers from the elements but we need all the walkable real estate we can get in this country.

Tinker Away: ClassPass has introduced the variable pricing model that they were talking about last fall. From TechCrunch:

“We’re a subscription company, and we are aggregators just like Netflix and Spotify,” said ClassPass CEO Fritz Lanman. “But we look at companies like Uber, who have dynamic pricing, and see an opportunity that combines the best of both worlds. Marketplace pricing incentivizes customers to find great value and opens their eyes to a new workout they would have never given the time of day to.”

But how do they determine this pricing?

ClassPass has created an algorithm that takes into account all the data the company has collected after years of seeing how people browse, book, and attend fitness classes. The algorithm uses a wide array of inputs, including time of day, day of the week, weather, location and much more, to determine what a fitness partner should charge for any given class.

This also allows fitness partners to include high-demand, peak, premium inventory that has historically been unavailable on the ClassPass platform.

The new pricing structure is as follows:

  • $45/month: 27 credits (2-4 classes)
  • $75/month: 45 credits (4-6 classes)
  • $135/month: 90 credits (8-12 classes)

It concerns me a little bit that the CEO felt the need to pitch ClassPass as “Netflix/Spotify meets Uber but of fitness”. Besides that, this move makes a lot of sense. It will help studios fill in under-capacity classes and steer users away from over-capacity classes. I think that dynamic pricing is an under-utilized technique in general. The downside of this is that people seem to hate dynamic pricing. Which is probably why it’s under-utilized. Uber has done more to mainstream the idea of dynamic pricing than any other company in recent memory though. Maybe ClassPass has enough overlap with Uber customers to make this work.

CrossFit Open: Two weeks ago, Dave Castro released the first event of the 2018 CrossFit Open and it had a rowing component in it. The guidance was that the rowing machine used had to count calories in manner similar to the Concept 2 rower. Now CrossFit is disqualifying scores that used the Xebex rower.

According to research from The Morning Chalk Up, Xebex claims that their rowers are indeed of similar calibration to Concept 2 and that they “believe that it is approved for (the) Open.”

But the day after Varela and Bennett were awarded the top two spots in 18.1, CrossFit HQ removed their names from the top of the leaderboard. Their spots now belong to Denmark’s Nicolai Duus (487 reps) and Iceland’s Hinrik Ingi Oskarsson (480 reps).

CrossFit HQ published a statement on Wednesday night to confirm the rumors: You can’t use a Xebex rower for the CrossFit Open.

Last year, there was an issue with barbell burpees in which participants were loading up the bar with the smallest plates so that they didn’t have to jump very high. Those participants were disqualified from the competition. That was an understandable but still avoidable situation. I understand if it just didn’t occur to the organizers that people would try to game the work-out like that but it’s not that outside of the box either. The Xebex thing seems to be even more avoidable. Why not just list approved brands of rowers? It’s not like there are thousands of them. They left it open to interpretation and this is what happens. 

I wonder how much this will hurt Xebex. No CrossFit affiliate will want to buy a Xebex rower after this and it can’t be good for the overall perception of the brand. This is also a big win for Concept2. They’ve always been the preferred rower by CrossFit but this will put even more pressure on other companies to emulate Concept2’s method of measuring calories. I’d love to see a study on the CrossFit effect on established equipment manufacturers like Concept2. How much has it helped them and hurt competitors?

TidBits:

-ESPN reviews SoulActivate, the new offering from SoulCycle

-Strava has added an opt-out to its heat map in the privacy settings

-Shaquem Griffin has only one hand but that didn’t stop him from benching 225 pounds 20 times at the NFL Combine

-New deadlift record of 1,041 pounds at the Arnold Strongman Competition

-Roger Bannister, the first man to run one mile in under 4 minutes, has passed away at the age of 88

-44% of the people competing in the CrossFit Open are over the age of 35

 

THE WEEKLY HOWL IS WORKING OUT IN FRONT OF THE MIRROR

Everyone loves free stuff: A couple of years ago, I overheard a conversation about a business idea. The idea was a signal on your car that indicated that you were going to perform a U-turn instead of just a turn. The 2 men discussing it were very excited about it and thought that it had enormous potential. But I could tell that they didn’t understand the difference between a product and a feature. They seemed to think that they could market this as a product when it is really just a feature that could be offered on an existing product, a car. Why am I bringing this up? Because I am seeing a rash of startups that want to pay people to work-out. I’ve written about why that doesn’t really work from a motivational perspective but I also think that it would be a struggle to base a business around that concept. The idea of giving people money or free stuff to exercise may not be a viable basis for a company. But it could be an effective marketing tactic for companies that sell something else. Nike is expanding the offerings on its mobile app in order to create a robust membership reward system. From TechCrunch:

Some of the Unlocks in partnership are quite nice and align well with the Nike performance audience. Buy a Nike Epic React Flyknit shoe in an exclusive color (Nike’s newest comfort design that many are seeing as a response to the Adidas Ultraboost) and you’ll get four months free of Apple Music. Doing workouts can earn you exclusive playlists and more.

Headspace, a guided meditation app, will ship exclusive playlists, discounts on membership and guided runs that focus on the more self-aware side of exercise.

ClassPass is giving out class credits when you make Nike purchases, which should align well with current members and boost membership via lead generation.

The biggest and most popular new Unlock will likely be the Birth Month promotion, which gives you discounts that last an entire month and gifts when you make purchases like a one-month ClassPass subscription or even tickets to a home game of your favorite team. The personalized promotions are an enormously rich vein for Nike to mine and I’ve not seen a lot of it in the apps to date, so it’s encouraging when they say that they’re explicitly tailoring this based on activity in the apps and purchase history.

                  Nike isn’t trying to solve the obesity epidemic by giving away 3 weeks of Apple Music. They’re just trying to keep consumers engaged with the Nike app and the Nike brand. And their business model isn’t based on paying people to do something. It’s a marketing expense. Some ideas aren’t a company, they’re just a marketing tactic.

Recovery: Fitness is based on three things: exercise, nutrition, and recovery. The first 2 things are what most people consider fitness. The third thing is a business opportunity in an industry that is poised to explode. From Bloomberg:

High-intensity workouts are more popular than ever, as lay people mimic the way professional athletes train. Now coaches and doctors have brought that elite approach to the recovery process, helping non-pros use high-tech tools to avoid injury and heal faster.

“We’re definitely seeing a proliferation of recovery services,” such as cryotherapy and infrared saunas, says Alexia Brue, chief executive officer of the health website Well+Good. But the benefits of these immersive procedures typically come with frequent use, something too expensive or inaccessible for people not named Tom Brady. For the average workout fiend, the most effective products to arrive on the scene are compression sleeves, which can feel as ridiculous as sitting in a massage chair at the mall. In practice, however, I’ve found them to be amazingly restorative.

Boutique gyms such as Tone House Fitness LLC, a Manhattan studio that claims to have the hardest workout in New York, offer compression technology using the NormaTec Pulse system, which aims to improve circulation and reduce soreness after intense sessions. To train for the latest Star Wars film, the cast used a product called Game Ready, whose compression sleeves are connected to a device that rapidly circulates ice water while mimicking natural muscle contractions. It also looks like a proton pack from Ghostbusters.

                  This stuff isn’t cheap. The author went to a 15 minute recovery session and paid $15. That’s after paying $34 for an exercise class. Most people won’t be able to afford this but this is clearly aimed at the high-end boutique user. How will something like this filter down though? Will we start to see the big-box, mid-markets gyms offer recovery services? I feel like this is a couple of years ahead of its time. I don’t think that most people worry too much about recovery outside of sleep. Any company that wants to break into the big time will probably have to educate consumers on why they need recovery services.

Etiquette: Jerry Seinfeld did a bit once on catcalls. The joke was that these were men who were out of ideas on how to attract a woman so they resorted to just yelling things at them. That’s all I could think about when I read this piece from GQ:

A few weeks ago I was practicing my squash serves alone at the gym. One wall of the squash court is entirely glass, and people pass by it to get to the basketball court. The layout encourages an audience, which is fine when you’re playing a match but terrible when you’re a woman, practicing alone in the horny hours (7 to 10 P.M., at my gym). At one point I looked around to see half a dozen men on the long bench by the glass, elbows on their knees, watching me. I'd have been flattered if I wasn't terrified. A few minutes later, one guy banged on the glass until I opened the door and popped my head out. He was musclebound and a little bit orange, suggestive of time spent in Jersey. He just wanted to ask me my name, he said, and tell me that I had really impressive calves. (I do.) His friend stood nearby, uncomfortable but useless. I said “okay” and shut the door. Twice more the man knocked on the glass, giving me a crazy smile and a thumbs-up when I turned around.

                  Sometimes, I feel fortunate that I am not a woman so I don’t have to deal with this crap. Not only are these men who have run out of ideas but they also have no clue that they’re being creeps. It’s the gym, mind your own business. It is inappropriate to openly leer at someone while they’re working out. And what is the point of knocking on the glass? Do they really think that a woman is going to be knocked off her feet by a thumbs-up? Maybe I need to write an etiquette guide for men that consists of all the ways that a man shouldn’t bother a woman at the gym.

Mirror, mirror: There are a lot of startups rushing into the streaming fitness space right now. The question for any entrepreneur is how can I differentiate my product/service from everyone else’s? For one startup, the answer to that question is mirrors. From Inc.:

A new fitness-technology startup wants to stream exercise classes in your living room--no TV screen or equipment required. Here's what you do need: a mirror.

The company, fittingly named Mirror, has developed a responsive device that looks like a full-length mirror and will stream a range of on-demand personalized workouts, including yoga, Pilates, cardio, strength, and boxing. The smart mirror reflects not only your own image but also shows an instructor and other workout fiends (if you're in a group class).

Mirror, which launches publicly Feb. 6 and has raised $13 million in funding, was founded by Brynn Putnam, the creator of NYC-based gym boutique Refine Method.

"To me, working out at home always meant compromising--your workout is going to be less fun and less effective and more frustrating," says Putnam, a former Inc. 30 under 30 honoree. "So for me, enabling people to work out without sacrifice is just really going to change how people live the rest of their lives."

                  I have one question: are there any capabilities in the mirror that will differentiate it from a flat-screen TV? Because Mirror won’t say. If there is something that Mirror can do like analyze your form, then this could be interesting. If there isn’t, then why do consumers need to buy another screen. We’re inundated with screens and they’re not cheap. If you can’t create a compelling argument for why someone should buy another one, then you’re in trouble. Manufacturers are under-estimating device fatigue. The lesson of the smartphone is that people want to own less devices that perform more functions. Just because you have created a beautiful product doesn’t mean that consumers will want to shell out money for it. It still has to fulfill a need.

                  It’s not a good sign that Mirror doesn’t want to get into the details or pricing of its product. They are saying that “there are also key metrics that measure your performance on screen”. That’s very vague and I am still skeptical. And I would still want to know why these capabilities couldn’t be transferred to a television. Entrepreneurs solve pain points. No one’s pain point in 2018 is that they don’t own enough screens.

Mallrats: The mall closest to my home had turned into a bit of a dump.  The owner hadn’t renovated it since the late 1970’s and it was looking very dingy. Which was a shame because it was in a great location in a coastal community in Southern California. Finally, a couple of years ago, ownership decided to invest some money in it and started renovations. They also decided to utilize the new playbook for shopping malls in this country. Step 1: replace a department store with a gym. From CNBC:

The number of gym leases in malls has doubled in the last five years, according to commercial real estate information firm CoStar.

Joe Coradino, CEO of Philadelphia-based PREIT, which owns 22 million square feet of retail space in malls across the Northeast and Mid-Atlantic, is actively recruiting fitness companies to fill his malls. Planet Fitness, Orangetheory – big names that draw big numbers back into the mall space.

"People are not just taking up time at the gym here, they're going to the gym, they're cross-shopping, they're buying clothes, they're dining out, they're doing things that are more than just working out," said Coradino.

They're working out and then walking into both retail and restaurants. All part of the mall metamorphosis from straight retail to full-on entertainment centers. Apparel used to make up 70 percent of the mall space, according to Coradino. Now it is about 40 percent.

Online shopping is causing the drop in retail traffic at malls, while fitness is growing fast, with both discount gyms and so-called boutique studios, which command higher prices. Mall gyms can take up a large footprint or a small studio space.

                  The mall added a gym (24 Hour Fitness), a multiplex (Regal), and a row of restaurants (Yardhouse, Cheesecake Factory, Dave & Busters). And business is booming. It is an entertainment center where you can also do some shopping. And the gym was the first of the 3 to go in. Who ever thought that gyms were going to save the American shopping mall?

Does anyone actually wear boots: Tough Mudder SVP Cathrin Bowtell sat down with Cheddar to talk about TM’s new franchising venture, Tough Mudder Bootcamp. Tough Mudder wants to go after Tier 2 and 3 markets (i.e. not NYC, LA, Miami) because they believe that they are underserved and they have strong populations of Tough Mudder participants. TM plans to mitigate the wealth gap by offering classes at $15 a session as opposed to the $30+ we’re seeing from a lot of boutiques right now. Oh and TM doesn’t want you calling them boutiques because Tough Mudder is a gritty brand. Kidding aside, I like to see that TM is actually making an effort to differentiate. Too many players in the industry fail to do so. How many companies have tried to jump into the low cost segment without any differentiation from Planet Fitness? Except for a higher price of course. TM isn’t making that mistake. They also want to be less dependent on star instructors by emphasizing teamwork and leveraging technology. If I was a potential franchisee, I would be very excited to see this. Reliance on star instructors is an understated risk for boutique operators. If you’re interested, it’s a $50K franchise fee and $200-300K in startup costs. No one ever said that opening up a gym was going to be cheap.

The Great Outdoors: Fitness can be as cheap as you need it to be. No one needs a bunch of fancy equipment and work-out apps to get into shape. You don’t even need a roof over your head. Some communities in the U.S. are starting to catch on that and building outdoor community gyms. Seattle has built 16 gyms throughout the city. They’re nothing fancy. Looks like a chest press, an elliptical, pull-up and dip bar, and a few more pieces of equipment. But it provides a free option for people in that community. More cities should be taking note of this.

TidBits:

-It’s 90% mental, the other half is physical

-Local man abuses gym equipment in order to attract attention towards himself

-It’s not you, it’s me

-Activist investor is pressuring Brunswick Corp to spin off its fitness equipment business (Life Fitness, Hammer Strength)

-The DOD is reviewing its fitness standards

-The Rock is creating his own fitness reality show, the Titan Games

-PopSugar reviews the Fly Anywhere bike