Andy Hoang - Aviron & The Future of "Fitness Entertainment"

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[00:01:46] create eye-popping digital assets and social media I have a big love, big soft spot in my heart for the world of rowing and indoor rowing. So I'm excited to learn more and what you're up to. Annie, maybe you could just start giving us a little bit of your background, how you got interested in rowing, how you got to be the CEO and founder of Avaron, and then we'll take it from there. Yeah. So I give you like part of the origin story of Avaron, but I'm not a roar.

[00:03:00] I'm only like five, seven and a half.

[00:03:02] I like the same five, eight to give me a only four minutes long, but it was absolutely devastating like 30 seconds all out effort 30 seconds rest, but you couldn't unstrap in the row, you had to sit there and then you do that, you know, four rounds and everyone in So, okay, so gaming and rowing, right? So maybe start off from there, like what was the inception of these two things? Did you have an aha moment? You're like, okay, there's a problem I can solve here. Yeah, walk us through that. Yeah, exactly.

[00:05:40] I mean, it's like a lot of different journeys in my life

[00:05:43] that kind of got me there.

[00:05:45] Growing up, I had ADHD, I guess I still have ADHD.

[00:06:43] competitive, like games, and that's kind of how it started. And then it was way harder than I thought it was going to be.

[00:06:47] You know, when I reflect back, you know, I was naive.

[00:06:49] I was like, okay, it's can't be that hard to like put video games on, on a machine.

[00:06:53] But yeah, it's like, it's a very complex, complicated business.

[00:06:57] What, I mean, if you can explain it in layman's terms, like what makes it so

[00:07:00] complicated and complex?

[00:07:03] Yeah, a lot of things.

[00:07:04] So, you know, we're fortunate that we got selling is huge. And that's what makes it very, very challenging. Yeah, interesting. When did you start the company? I really did start the company in 2016 as a part-time kind of on the weekends and evenings. And then we launched the product really in 2018. So like the interesting story about us as well is we were probably the first connected rower,

[00:08:22] but we bootstrapped the business.

[00:08:24] So not many people heard about us in 2018.

[00:08:27] It really wasn't until like 2021 And what was the first iteration? Like, how is it different than what you have now? Good question. And I'm happy you asked that. So when I first started building the product, like we were like gaming is the core. Like we want it to be like like video games. Like that's what we wanted. But the truth is the product has evolved. Like we're not a video game company.

[00:09:40] What's important is that our rowing machine uses video game psychology and

[00:09:45] design to make that experience fun.

[00:09:47] So that's what makes long time to develop it. So when did you kind of realize that that's actually the business you're in? from 2018 to 2024 where we are now Yeah, so 2018 like I said I'm being serious when I said we had four people we had two developers We had one graphics person that make the animations and whatnot and then we had myself with like that was sales

[00:12:25] Everything else and we sold purely the B2B

[00:13:24] hardware changed. Maybe you guys any fundamental shifts to that as you go on. I mean, when you mentioned, I mean, seven feet, 130 pounds, that's a serious piece of equipment, right?

[00:13:30] Especially for home use. How is the hardware actually shifted over time?

[00:13:35] I love that you're asking that because it helps me sell the product for sure. You're asking

[00:13:39] out all the key questions. When we first had our ads on like Facebook and you read to the comments, like 90% of the comments are, you know, by concept to his piece of shit. Kind of kind of thing because they're just, they're so hardcore concept to it. And I love it. And I love it.

[00:15:00] Yeah.

[00:15:00] Yes.

[00:15:01] But we want to build a product for non-rowers is really what,

[00:15:05] how I describe it and like what calls it the ERG, right?

[00:16:21] It's just the ERG. That's what you train on make it complex even though, yeah. That was one of the things that we had to overcome. So you get the rower built together, you turn on the screen. The, yeah, for sure. And is it, I mean, you mentioned most of like a thousand gaming options now on the platform, something like that. Yeah. Is that, are you guys writing or programming all of those games, or is this like an open ecosystem where people can build games specifically for your hardware?

[00:19:03] Yeah, people can't build games yet.

[00:19:05] Hopefully that's something we can do one day,

[00:19:07] but what's interesting is, of hydro. I guess this is a two-part question is like, how do you guys fit into that market? Like where are you unique amongst them? I know you've already pinpoint a couple things, but love to hear it consolidated. And then also like, how is that market doing right now in general, you know, post- businesses probably will go under. But I have faith in the industry and I also I have faith in the industry that it is it is a real industry. It's just had a lot of demand that was pulled for it is it is an industry that's growing. And if you are a business that you know we're fortunate that before pandemic we weren't

[00:21:44] a venture backed business that expected acquisition cost to be you know, we were really small back then. We were fortunate enough that we were able to power through everything and become one of the top two now. Yeah. It is. I mean, people have talked about Peloton and nauseam at this point, right? And like everyone has an opinion and everyone, you know, it's really easy for people to arm share quarterback that one, right? But one of the things I've read and heard numerous times, like they paid zero marketing

[00:23:03] during the pandemic.

[00:23:04] Like they didn't just worry about marketing spend at all and, you know, we're cacking

[00:23:07] crease. I think it's going to get better, maybe Q3, when those interest rates drop, but it'll never be at those pandemic levels. So as long as you have built a business where your margins are strong, your economics makes sense and you're not churning your customers, they're not canceling the memberships, do you have a good product? I think you'll have a great business because the industry is still growing. Yeah.

[00:24:20] Good.

[00:24:21] I like, you know, I like it was and as soon as COVID hit that market just got crushed and It's funny because all those investors or a lot of them that said, no, three weeks, four weeks prior, they were calling me and say, hey, we'd love to invest in your business. So it's like the raising capital is super hard.

[00:27:04] You can have an amazing business.

[00:27:06] It's not just And it's hard to say one more thing. It's hard until you raise your first check. Because once you raise your first check from some type of institutional investor, typically they have a network and now you have a reputation. Because if one person invests, then everyone's like, okay, why do they invest? I want to know about this company.

[00:28:21] But getting that first check is literally the hardest thing.

[00:28:24] Once you get that first one done, it's exponentially easier.

[00:28:28] Yeah. think it's because we didn't have capital for the first five years of business. So between 2016 and 2021, we were grinding it like every other regular business. And I think that's why we're successful now is because even though the times are tough, they weren't as tough as they were when we didn't have any capital. And for those companies that started out in

[00:29:41] the pandemic and raised cap in the pandemic, they in the form of games, in the form of like, you know, what virtual destination coaches, whatever it is, that's how we described fitness entertainment is that we're not classes, we're not just a one type of experience, we're a variety. I think that's the key and why customers buy us is I think entertainment kind of is synonymous

[00:31:02] with variety. I think that that kind of answers, if. It's like you're going out and you're doing something with your friends. You're just like coming in, going out.

[00:32:21] And I think that's why we kind of,

[00:32:23] we borrowed that experience of like going to the movies

[00:32:26] or like playing pool and stuff. So when you get onto that platform and you go to, first thing before you even get to that platform, before you get into that workout, you can go to things like global leaderboards, we have monthly challenges, there's like all these other little nuggets of things you can do in the ecosystem. And so like, you can level up from like an elite level athlete to an Olympian, you can

[00:33:43] unlock achievements.

[00:33:44] I'm like 600 place on leaderboards, blah, blah, blah. Yeah, interesting. So I want to ask you the question. I know you're not an expert, but I feel like this is something you know a lot about. Web three. Two, three years ago, everybody in a shoot was talking about web three. Now it's barely a whisper. Like what, I mean,

[00:35:01] I know there's some parallels. You're not like, OK, this blockchain technology, we're going to make our currency based on blockchain. And then you can earn your own currency and then give it to someone else

[00:36:21] or use that currency and buy swag from our website.

[00:36:26] But it's so little different. I think that does have some reveals. I think that's going to have an impact, especially in the health and fitness space. But Web3, not so much.

[00:37:40] Yeah, not so much.

[00:37:41] Can you give us some insights, Andy, to just the modality of rowing. I think rowing was the best place to start for us because it's such a challenging workout experience. There wasn't too much competition at the time, but I think for the future of this business,

[00:39:02] it's expanding beyond rowing and bringing It's going to be that hybrid model, but I could tell you that in six months, we will know exactly where the business will be because we will be able to test and find out what the best LTVT CAC ratio is. And I guarantee you that's what we'll lean into for the next one. Yeah. Sounds like a sound way to make decisions and lead. Yeah.

[00:40:20] That's crazy.

[00:40:21] What about your journey?

[00:40:22] Like, I had Ali O'Radi on I see a lot of positive things that are gonna happen since this, I think we're gonna grow,

[00:41:41] we're gonna be successful.

[00:41:43] But I know it's gonna be,

[00:41:44] you know, back in my head,

[00:41:45] I think it's gonna be really, really challenging.

[00:41:47] So as a founder of the journey is like, Not, I'm not going to say easier, but the problems may become more familiar, right? As you go or more in, you can anticipate them a little better. I mean, is that kind of a sense that you got looking forward for your company? Yeah, it's funny because when I think back, I go, it was way easier back then, right? Like, I used to be writing the emails myself for newsletters and all this, all this stuff or acquiring customers, you know, you're just smaller business.

[00:43:02] Like, okay, I'm trying to hit 10 sales a day.

[00:43:04] I'm trying to hit like 15 sales days. the most out of my 16-year career. When you look at non-aceted connected fitness or anything like that or fitness entertainment, the categories we've identified and talked about today, but what gets you most excited about fitness and wellness technology right now? You look at the greater landscape. When we talked about AI, everyone talks about the wearables and precision medicine and all

[00:44:22] that stuff.

[00:44:23] But is there anything that you're pretty excited group and people are like, I lost 90 pounds and I'm like off medication for the first time. Right. And it literally makes you feel so good. I literally have customers because I'm the face of the company and they actually use

[00:45:43] my face to like kind of convince people to like buy our products like I'm the face of

[00:45:47] the company. The worst days, weeks, months, but then you kind of get that one little, you know, I used to keep a, I still do what we'll call a feel good file. And it was like, yep, used to just be a folder, right, with cards and thank yous in it now. It's like an email folder, but it's involved over time. But it was always like little things I could go back on. And I'm like, what I'm really, what shit's really hitting the fan, I can go back and I remember like, okay, there's some

[00:47:03] Intangible benefits out there. I guess it is tangible. Like you can really see that you're making a difference.

[00:47:05] And that's, that's, you know, I've been in this industry for so long.

[00:47:07] So that's awesome. You have to put yourselves in places where you'll find the luck, essentially. So to give you an example, like when I started the business, there would be like networking events and like pitch competitions. And I think on a lot of days, I was like, it's a Friday night, I want to drive three hours ago, pitch at this competition. But it's like putting yourself in those positions and going out and doing things you don't want

[00:48:22] to do is where you find the, is where you find that luck.

[00:48:25] And that's really what's helped the business then our company domain, Averonactive.com. And yeah, I always try to respond to emails.

[00:49:44] I was trying to sell me something. I always reply. Yeah.