Brian Kirkbride - FitLab & Nike Studios

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[00:02:04] creators, then we are for you too. Go to podcastcollective.io to learn more. That is podcastcollective.io. Now onto the show. All right, we are live. Brian Kirkbride, welcome to the future of fitness. Thanks, Eric. It's great to be here. Thank you.

[00:02:25] This is, I've been looking at FitLab for a while and seeing all the facets that you guys have to your business and been so curious to learn more. And thanks to a lucky interaction at Ursa and then getting connected to you. Here we are.

[00:02:42] So I couldn't be more thrilled and curious about everything that is FitLab. And yeah, let's just get into it, Brian. How did you get to be the co-CEO co-founder of FitLab and give us that journey? I know you have some Nike DNA.

[00:02:57] There's a lot of things going on here, so give us that and we'll go from there. Yeah. So the mission at FitLab is to build the first truly integrated platform for the next generation of fitness and wellness consumers. So that's a lot, right? Super broad.

[00:03:13] I'm sure we'll talk a lot about what that actually means in terms of what we're delivering. But the kind of short-ish answer to the question is, and in this industry from kind of every side of it as a venture capital and growth equity investor, as an investment banker,

[00:03:29] obviously kind of big company executive at Nike and now on the startup operating side for a long time. And as much as we've seen a lot of kind of new stuff, right? A bent of connected fitness and that sort of stuff, the industry itself really hasn't changed.

[00:03:46] So when I was at Nike, kind of longer story about why I went to Nike, but at the end of the day, the short version of that is when you look at really we think about an athlete

[00:03:54] pyramid and when you think of most people who you're trying to help achieve their fitness and wellness goals, it really we believe comes down to a lot of inspiration and motivation. And when I was kind of just on the purely financial investing side, when you look

[00:04:08] around at who's good at that, Nike's pretty good at that. So that's what led me to Nike. When I was at Nike, we became the leader in really one of the founding drivers of digital fitness.

[00:04:19] We built a training club, a running club, plus a fuel and the fuel band. So we really were talking to millions of fitness members at a time in the industry where others were talking to thousands or 10,000. And so we're really the leader in digital fitness.

[00:04:37] But when you again, if you just really put yourself in that athlete pyramid, what do people need? I've just never believed that people need a digital fitness solution or need a boot each fitness solution or need a mass participation event.

[00:04:52] We just have things we either like to do or we have goals we want to achieve, right? We want to look better. We want to run faster. We want to get stronger while a little longer, whatever it may be.

[00:04:59] But the industry has always been a mass participation event provider. I'm a fitness equipment manufacturer. I'm a big box operator. And so we just keep jamming the thing we have down whoever uses it. And the reality is we see that in turn rates, right?

[00:05:14] Unless you're at that kind of super low price where it's like an option for fitness, right? You see that in turn rates. You certainly see it in just macro health data. It's just not working for the vast majority of people because we know they want choice, right?

[00:05:30] And now, kind of again trying to wrap it up, you start to look about a decade ago and you just see this new wave of consumers coming. You know, millennial and Gen Z consumers taking over the market and to stereotype just a very,

[00:05:43] very different consumer set from a behavioral standpoint than X. I'm an X than X and boomers, right? Like we would take, you could jam a contract for a big box down my throat and that's just what he did. So I did it. You don't get, yeah.

[00:05:57] This consumer expects digital integration. They expect community. They expect real depth when in their brands and authenticity in their brands, they expect a really connected and integrated and accessible environment. And like that's just not how the industry has ever operated.

[00:06:13] And so at Nike, we started to look at how do we pull those things together? Because we obviously had this huge brand to leverage and this footprint in digital. And the reality is it's really hard if you haven't built your business, your operating

[00:06:28] structure, your infrastructure to be able to provide an integrated solution across that spectrum. You're just mashing stuff together and there's financial reasons to consolidate some of those operations, but it doesn't improve life for a consumer.

[00:06:44] So the answer to the question is we wanted to build and integrate this integrated platform. We tried kind of mashing some stuff together, but there's just too much friction and it ends up being that from a consumer standpoint, there's no benefit to a multi-brand portfolio

[00:06:59] unless it actually comes to me in this integrated environment. And to do that right, we had to build it. We had to build the infrastructure. We had to build the organization. We had to build a tech layer that let us understand where the consumer is across

[00:07:10] this kind of flywheel of offerings. But we believed if we did that, there would be massive consumer benefits. We could actually provide the choice and variety and guidance that people wanted across their actual objective, not just here's the boot, here's the hit boutique service.

[00:07:28] I have to try to sell you because that's the thing that I have. And obviously selfishly, we could monetize. We could acquire a consumer once and monetize them across a much broader. Yeah. You can also say it's really interesting the differences in the expectations of consumers by generation.

[00:07:44] I don't think in my lifetime I'm a Gen X too. I've seen such a disparity between the characteristics. Like Simon from Pear Sports was on this podcast a few years ago and he put in such a good storyline like he was hanging out with his daughter.

[00:08:00] It was at the red box, you know, those things where you can go rent a DVD. And yeah, well, the daughter went for it. She was, you know, I don't know how old, let's say five, six. And it's a push button thing.

[00:08:11] But she was trying to swipe the screen and he just on him like, okay, well, these consumers have an expectation of certain things that maybe we didn't have in a prior generation. So it's just, I guess it's just the acceleration of technology that's really driving that.

[00:08:28] Like they're just, they're native to these things, right? Yeah. Well, and it's when you think about it, it's absurd for fitness and wellness to have not adapted at the rate that almost every other sector we could think of has. Right?

[00:08:45] And it's just, hey, we want you to sit down on the couch and grab a beer and eat some pizza and watch a movie, which were kind of all defaulted. So like, yeah, that sounds pretty awesome. This is a like carve an hour out of your day.

[00:08:57] Come suffer with me, figure out what to do with your kids, figure out how to deal with that stress of work. And by the way, pay me a whole bunch of money to do that. But figure it out yourself.

[00:09:08] Here's my thing and just you're going to have to figure out how all this stuff works together to actually achieve your goal and for you to stay healthy. We're asking so much of a consumer in our industry and our consumer wants to do those

[00:09:19] things as the benefit that we have. We all want to want to be healthy. It's very different in practice when you're saying, OK, you actually now at seven thirty after all your meetings and feeding your kids and all that stuff have to get to the gym.

[00:09:31] That's a lot. And to just arrogantly say, and I'm going to keep pumping the same thing I've been selling for the last 30 years and expect consumers to continue to love it despite the growth and the massive disruption we've seen in

[00:09:45] connectivity and community and brand authenticity in every other sector that frankly isn't asking as much as when you I guess here's a big question to have for you. When you say integrated platform, what does that mean?

[00:09:57] I mean, those are those are words that are pre comprehensive of many things. So I don't know how you want to describe that maybe in like an anecdote of what a consumer should experience like. Yeah, just expand. Yeah. Yeah. So there's a couple of different lenses to it.

[00:10:12] So let me first provide the hey, what are the elements of that platform? So if you think of it as a flywheel and really in simplest terms, it's we think of it as kind of a services layer and then a product layer.

[00:10:25] And so the services layer to us is is in person. We think of that as for us predominantly boutique fitness studios and mass participation events. That's really when you look at that services layer. It's about a hundred billion dollars of annual spend that in person aspect to it

[00:10:42] is 95 percent plus of that spent. Right. The third element to it is in is at home, which we all think of as digital and to some degree some equipment, obviously very small amount from a from a market spend currently growing nicely.

[00:10:57] But as we all know, or I think we all have conviction on at this point, like that is how people train, right? Sometimes we do train at home. So this argument of like hybrid is dead after covid is absurd. That is that is what we do.

[00:11:10] So that's that's part one. We want to have multiple brands in that service layer because we need to be able to help people train in multiple modalities, right? We think there's about 10 to 12 key modalities that we need to cover

[00:11:21] to be able to address the things people want to do. And it's perfectly probably many more than that, but we don't want to go kind of too far into the into the tail. So we think about multiple brands, whether that's, you know,

[00:11:33] a hit concept, a strength concept, the yoga concept, all of those sorts of things. So we have brands like XPT on the wellness side and McGregor fast on the combat side and racked on the strength side and sanctuary on the hit

[00:11:44] side, we have kind of different brands to fill those needs that provided in a very, again, very specific environment. Right? When you walk into our strength concepts, it feels very, very different than when you walk into our yoga concept because you're looking for different things.

[00:11:57] We're not trying to stretch one thing across this super broad training spectrum and tell you it's perfect for all of those. That was one of the things we learned at Nike. It's just you end up building to lowest common denominator and it's not perfect for anybody.

[00:12:10] Okay, so that's a service layer that then also does service layers act as channels for your products. So products are things like fitness equipment, obviously fitness, parallel accessories, nutrition and supplementation. That's more like five, six hundred billion dollars of annual spend.

[00:12:25] It grows a little more slowly than then the service side desks. But when you own some of the service channels, you obviously can then integrate those products. So not only can we provide our members with stuff that is built to work

[00:12:39] together that they use together, maybe at the studio and they can also have at their house. But since we know what you're doing at that studio, we know what you're training. It's much easier for us to go.

[00:12:50] Here's also some of the nutrition that you should be thinking about. So that's that flywheel is kind of services wrapping into products and the way without going super deep into the weeds, the way that I think is easiest to visualize it is we think of that

[00:13:06] flywheel from a consumer standpoint as the FitLab house. So, you know, when we just had a McGregor fast app to offer to a consumer, that was what we did. So we tried to acquire consumers to have a McGregor to do a McGregor fast subscription that frankly, again,

[00:13:25] we know they're training at gyms. We know they're doing other stuff. So we're only satisfying a very, you know, one part of a very broad fitness and wellness interest for that consumer. Two, for us, we're only monetizing got a hundred bucks a year.

[00:13:38] Now, you know, as we look at that house, that is just a door into the house. Right. So you open that door, you know, in the McGregor fast room, there's studios, there's equipment, there's nutrition, there's this kind of hole. This is what you love to do.

[00:13:53] There's everything you need to do in that room. And that's just a room in the house. There's also the racked strength room, because we know you like to train in strength sometimes. There's yoga Vita for when you want to do recovery with yoga.

[00:14:07] All of those rooms have that same flywheel, right? So we have that same economic opportunity and same complete service for you in each of those rooms. And we've built that house on one foundation, one tech architecture, one integrated organization so that it is all connected for you.

[00:14:21] Meaning we know that people like you like to go over here in this room and there's a hallway built for it. And I won't go too far deep into that analogy, but the way the industry has historically broken down is either one,

[00:14:33] you were different consumers in each of those, right? We're all fighting for kind of user idea on a consumer. So we don't actually know that you're in that room, in that room, in that room. We just know that there's a consumer over here, over here, over here.

[00:14:43] So we can't actually help you train across all of those things. That's an architecture issue that's actually really, really substantive and difficult to solve. And the, you know, predominantly in this industry, it's a lot of franchises

[00:14:55] and a lot of mom and pop franchises and none of it works together. So, you know, my I can't actually go within the same studio network by my office and by my house, let alone have me direct you to sometimes

[00:15:09] go to XPG and sometimes go to RAC and sometimes go to, you know, a Ragnar event like none of that they don't have reciprocity. You have to have 18 different memberships again, like if you don't build it to work as one offering to a consumer, it's not integrated.

[00:15:23] It's just a mashup of stuff. And I would say our industry has started the consolidation stuff. You know, we can kind of continue to see consolidation of offerings, but none of that benefit is really reaching the consumer. It's just mashed together. None of it works together.

[00:15:36] You can't guide people across. You can't actually introduce them to different concepts because there is no reciprocity between the different franchise basis. Like there's no consumer benefit to it. And so integrated platform does sound like this, you know,

[00:15:49] businessy speak, but really it means you can you can assemble assets or you can actually build one service for a consumer and doing this. The latter is what we're doing, but it's really, really, really different in terms of how the consumer.

[00:16:05] Yeah, you really have to take first principles approach, right? To how this goes, just kind of scrapping the current models and saying, no, this is going to be completely different. We're going to reinvent it based on the technology

[00:16:18] and what we think is coming down the pipe as far as technology and opportunity and trends and demands of the consumer. So, yeah, it's it's a that's a big bite to chew on, man. What I know it's all in process, right?

[00:16:31] Of the architecture and the vision being built. But, you know, maybe give us an idea like paint the vision of the consumer experience from X amount of years when you think this is going to be ready to go. What will that be like? Yeah. Yeah.

[00:16:45] So so the great thing now is that again, if I just stick with that house, that house is built, right? So we have that architecture where we do have one user identity. We all have assembled the, you know, about five hundred, six hundred doors

[00:16:58] in in our pipeline of our global licensing network, franchisee network where we do them as kind of large territory deals. So all of the brands work together. So what that allows us to do is go, you know, we'll stay with this.

[00:17:14] You are an XPT, you know, we met you as an XPT experience participant where you went and spent two and a half days with us learning different aspects of a healthy lifestyle and contrast therapy and breath work and training.

[00:17:26] We now, you know, understand what your goals are from that experience and we can actually help you put a roadmap together where we go. Hey, my goal is, you know, I'm an R XPT consumers or tend to be kind of a more higher level than that athlete here.

[00:17:42] So their goals tend to be around optimization and kind of overall performance, not just physical performance, but kind of I want to perform well at work and at home with my family and I want to look good and I want to feel good.

[00:17:55] And so what that looks is, you know, hey, you're interested in training strength and conditioning, kind of 60% strength and 40% conditioning. So we're going to introduce you to RACT, which is our strength concept. There's a studio here and here's, you know, programming centralised

[00:18:12] at home, we're going to have you do yoga recovery, you know, once every week. We're going to have you do XBT contrast therapy once every week. And then we're going to get you, you know, interested in some runs

[00:18:23] and there's a Ragnar event that's coming to town three months from now. So we're going to get you on a training programme. All of that lives in one place for you. You don't have to go figure out that, hey, maybe I'd like to do that run

[00:18:34] and maybe I may not, you know, it's the friction, right? I can say, hey, go. I know I like to train strength. Now go find a place to do that, right? If you're not interested in going on your own in your garage. We remove all of that friction.

[00:18:49] We give you one plan at one place, but access to these really deep authentic environments where you can go do today's session in the right place in the right format and have all of that work on an integrated basis. Obviously, the product stuff pulls through that, right?

[00:19:04] If you do want to train at home, hey, with RACT and with XBT, here's the equipment that you'll need to train at home. So you don't have to go figure out what that is.

[00:19:13] You can access it if you love using the assault, you know, runner when you were at Nike training studio, then you can obviously have access to that at home. But it's just removing the go figure it out part and letting you be one consumer.

[00:19:30] And look, we're not going to fix everything for everybody, right? You're people are going to love something that we don't address. We can't hope we can't aspire to that because then you just become too thin and not focused enough.

[00:19:41] But we can address the big stuff and we can make it work together. And you can, you can like what we all know is you look at churn rates in the industry. And it's not just what, you know, there's certainly a spectrum of like,

[00:19:52] hey, good operators look more like 18, 24 months and bad look more like three to six months. So there's there's certainly a, you know, performance aspect to it. But there's also just like if you go do sprints every day for two years,

[00:20:04] at some point you're going to get injured or bored. Like it just is. There's very like there's a very small number of folks who are just going to stick with that. So we have to provide choice.

[00:20:15] We have to be able to genuinely tell you it's not best for you to come into the studio today. I've done three really intense sessions in a row. If all I have is a hit studio, like, of course, I have to tell you to come into the studio.

[00:20:27] That is the only I can't tell you to go somewhere else and risk losing you. When we have this integrated network, we can go, hey, we really need you to do a recovery day.

[00:20:35] Here's a yoga session you can do at home or, hey, here go hit up this XBT recovery center and do some breath work and do some contrast there. You can still feel like you had an active day, but you're not going to be pounding your body

[00:20:46] into submission because it's not the best thing for you. So it just allows us to be flexible and to be an actual partner in the objective, as opposed to again where the industry has been is just I just have to jam this thing down your throat.

[00:21:01] Or it's been big boxes where like, hey, you can do everything if you come here, but then it's kind of not great at anything. Right? It's like you still just walk in the door and now you just have to figure out what you're doing within the space.

[00:21:10] It doesn't really solve that. We're trying to hit both by providing the depth and the right environment, but also provide. Yeah. Interesting. So I'm getting this right. A consumer will kind of enter in your ecosystem from a number of different ways, right?

[00:21:27] Then you based on maybe some data, personal data that's collected between the geography and interests and like all that. All the stuff you get, you can now start to personalize their journey through suggestions, kind of like choose your own adventure book, right?

[00:21:44] Where they can start to really start to pick and choose where they want to go. But it's all easily contained within your ecosystem and they don't really have to go anywhere. And then there's certain benefits to them because it takes a lot of thinking out of it,

[00:21:54] which is the biggest thing for a lot of consumers in the world of fitness. They just don't want to think right here that all the time. Like, well, I go to class at XYZ Gym because I don't think I just show up. The program is done.

[00:22:04] They just go all of my day, right? So is that is all that done through an application? Like, is that how it's done or how are you guys? What's the main point of contact with consumers?

[00:22:15] Yeah. So I think there's so you can come in through any of those doors, right? You might have come in through Ragnar Max participation event or XPT or fit plan or sanctuary or whatever it may be. And then I would say there's a bunch of different architects, right?

[00:22:29] As you think about folks, there are some people who know exactly what they want. There are a lot of people and there it is just the friction of, you know, it's kind of like when you look at an at home workout,

[00:22:40] if you don't get them to bite pretty early on in the menu of things you're showing them and the recommendations that you're showing them. Once you lose them in like, I'm going to search through a library

[00:22:49] to see if there's a workout that you're losing most of those people, right? They're going to spend 15 minutes searching the library and then go, I said I already wasted 15 minutes. I'm not going to do it.

[00:22:59] So you got to you have to direct them quickly into something that they like. The good news is, hey, you know, we've all learned the industry has learned and frankly across industry, we've all learned to go, hey, people consumers who like this thing like these other things too.

[00:23:13] Right? So we can show you very easily. You should like this. If you don't buy it on those, we also learn then that, hey, you're OK. So you're more in this consumer side who likes these things. So that's that's pretty easy.

[00:23:24] I think the more and super important, I think the more interesting thing to me is more consumers when you think about that athlete pyramid don't know what they want. They just want to look better or they want to like so there it's way more interesting.

[00:23:40] So if you came in through again, I'll just say like the McGregor fast app us being able to to introduce you to a Ragnar mass team based mass participation event endurance event and give you something to aspire to. Right.

[00:23:55] So if we go back to that motivation, like we need to give purpose to the session. We can't just hope that you wake up in too many things in fitness, but a vast majority of our industry. We just go, hey, we have this pretty cool thing.

[00:24:05] And if you wake up feeling disciplined and motivated, then you should show up and you'll like it. And what we really need to be able to do is provide context to like why the session matters.

[00:24:14] So if I can get you to sign up for an event, you have a purpose. And now we have a reason that it's important for you to train today and a reason for you to actually put a plan together and think of yourself on a more disciplined basis.

[00:24:25] If we can get you to do that for two or three months because we have this event, then you've seen some progress, right? You've built some discipline. You've probably seen some results. You've built a community, built a little bit of confidence.

[00:24:36] Now you have a chance at being a long term, you know, more successful fitness consumer, except where people get lost. There is well, what's the how do I put my plan together to be able to finish this event?

[00:24:47] That's the easiest thing on the planet, whether in a studio or through a personalized program. Right. Like that stuff has been around since even for us old guys, like you hit your marathon, but your little marathon date in the in the

[00:25:02] in the website and you got this 16 week program printed out. It was analog and boring and wasn't dynamic at all. But it's that easy, right? It's an even easier today. So it's that stuff that's more interesting, right?

[00:25:15] It is, hey, when it all works together, you go, well, I started with this, but I really like again, we'll go. I really love that assault runner, that assault runner. Let me over to assault where I saw some integrated programming with

[00:25:26] Regnar. I looked at Regnar and there's this amazing event that's coming, you know, to my area in four months. And there's this integrated training program for that event. And that also works with, you know, say Nike Nike Rum Club,

[00:25:42] which there's a running club by me where I can go do that stuff. Like that is way more interesting to me. That serves the, the I know what I want and I just need somebody to kind of

[00:25:50] assemble the pieces for me and have it all work together with one membership and one access and all that sort of stuff. The way more compelling or interesting, exciting opportunity is the folks who don't where you can lead them across that house.

[00:26:06] If we stay with that analogy by kind of showing them things that they should like and not having to go, hey, you should go do an event. You should like figure out an event and then I have this program,

[00:26:18] like I can do this personalized program that once you figure out your event, like I can spit out that. It's like, well, yeah, that's that there's too many friction points in too many places you're going to lose the vast majority of consumers.

[00:26:28] You have to kind of get them in, give them specific direction. And it's just got to be easy and as trivial as that sounds or simplistic as that sounds that like that's all the complexity from an operating standpoint is making things simple for a consumer statement.

[00:26:42] Yeah. No, it's a challenge. It's a worthwhile challenge. I mean, it's kind of one of the biggest problems that we have, whether people recognize it or not, is we just we don't have the what's for a comprehensiveness across the board to really see where

[00:26:56] where the journey is going from us clients because it's so different now. I mean, in the pandemic, literally, you know, not literally, but like the gym model kind of blew up, right? And it wasn't the health club or the gym is no longer the center

[00:27:08] of the consumer experience. A consumer is the center of everything and there's too many spokes on that wheel to really, you know, have a good insights or control or influence over that journey. So it's it's an interesting thing that you guys are doing here for sure.

[00:27:22] And one of the things I want to give some some good times here on this conversation is the Nike studios. It's pretty exciting. I think there is amongst the industry, there is both excitement and a little bit of nervousness that Nike is entering in because

[00:27:38] is there a brand bigger? Right. So give us some insights into, I think you said eight night in Nike studios are coming coming out and, you know, what's the timeline on those? What's the experience like? What's the difference? How are they leveraging the brand?

[00:27:52] Like all the questions that people want to know, give us some insights on that. Yeah. Yeah. So we're doing 10, we have two open and then eight more come in here over the summer and obviously the goal isn't 10, but like that's what's in in construction currently.

[00:28:06] Look, I think the high level on Nike is people should be nervous. You know, I mean, if you need when you go to me again, that's what brought me to Nike for almost 15 years ago was that they are better at this than anybody else.

[00:28:20] And it is exactly who they are like they are, you know, it was started by Phil and Bill Bowerman, who was his coach when he was at University of Oregon. Like coaching and training is the DNA of Nike. Right?

[00:28:37] Like that mission statement is to bring inspiration and innovation to every athlete in the world. And there's a asterisk where if you have a body or an athlete, it's the best mission statement on the line. So this is who they are.

[00:28:47] They've wanted to do it for a long time, but obviously the footwear and apparel thing's going pretty well for them. So they have to be really thoughtful about how they do that. So we, as I mentioned, kind of started when I was there, let this

[00:28:59] school on the studio side started when I was there. So it's amazing to be able to partner with them on kind of the other side of the table, to be able to bring it to life. We're starting with two concepts.

[00:29:11] The first is a Nike training studio, which is really like a functional training circuit where it's structured enough that you're not spending, you know, half of your workout transitioning, but still allows us to provide enough variety that it's always changing, very fun, flexible workout.

[00:29:27] We have kind of very different, we have formats that have very different intent, intense and objectives because, you know, if the intent of that workout is strength, we need you to not, you know, what happens a lot when you go to these things.

[00:29:40] So this turns into a boot camp because we know the industry knows people like to sweat. And so it ends up just being cardio with great weights, right? We're just telling you to jump around with 15-pound weights and like you're never getting stronger with that.

[00:29:51] You'll feel, people will feel wrecked and they'll feel sweaty and they'll look at their watch and they burn 700 calories. So they feel good about it. But it was not doing the thing that it said it was doing. Nike, with Nike, obviously it's very important to leverage

[00:30:04] their decades of industry expertise and provide structured workouts that actually are periodized the way that you would help train an athlete that where we get into the right intense, the right frameworks, the right structure. And when you do that, there's a lot of education you have

[00:30:21] to do because consumers have kind of been groomed to expect that it's just sweat, sweat, sweat, suffer, suffer, suffer, heart rate up. And it is a shocking amount of consumers who don't understand that like, now today we need to breathe and pick this thing up

[00:30:37] and it's going to be heavy. Like it should be hard and that's what we're doing today. So anyway, it lets us do that in kind of a really, really amazing, beautiful Nike environment. And then the other one is a boot camp.

[00:30:49] It's Nike Running Studio and it's our version of a better boot camp where there is a tread section and a strength section. So that format seems a little similar, but we are having much more of a group experience. So you're not staring at a mirror and your console.

[00:31:07] You're in a group formation all running, looking at the same direction in front of you as a group screen, which will provide some guidance, but also lets us pull data from the treads and provide kind of a game like environment where

[00:31:20] again, it lets us do very specific intents. We have an indoor class endurance capacity and a sprint class. So those structures are very different. It's not just like, hey, the interval goes from two minutes to two minutes and 15 seconds. And we're calling that our endurance format.

[00:31:36] That endurance format is you're on that tread for 22 and a half minutes doing some work and the game is going to be different. Right. The interaction is going to be very different. You know, in a capacity class, you know, we may

[00:31:49] be having you stay at a certain level and the game is going to kind of show you that you're trending below your line and we need to get you back up there. And in a sprint, it's going to basically say, Hey, we're only measuring this difference in pace.

[00:32:03] It's because what you run into often is people won't use the recovery interval, right? They just want to go as far as they can and keep their heart rate up because the game is points, flat points or whatever it is. And that's cool.

[00:32:14] But in our, if we want you to actually behave the way we want to, we have to not reward you for that interval and reward you specifically for how different your peak is from the low. So we actually are going to reward you for being low, not

[00:32:26] just not reward you. So the games, let us do that in a really fun way in an immersive way, in a way that's different from everybody else in the industry. And we get to do it in kind of a very where we're like, we're a team, right?

[00:32:36] It's not just this isolated, you know, maybe I can compete with the person next to me or look at that. It's, it's we're all here together trying to do something we can hit studio against studio or region that gets region.

[00:32:48] There's just some really fun ways that we can make that experience feel, feel different. So and obviously all the standard, you know, kind of, there'll be some really nice Nike embellishments that make it feel different. So really excited about those formats.

[00:33:01] You know, I think the goal would be that there's more formats again. They have, they look at the world, I think very similarly to how we look at it, which is there's just a need for the industry to do better for the consumer that the consumer needs choice.

[00:33:14] They need these authentic experiences. They need a trust guide. And at the end of the day, the vast majority of people need in person. And I do think, you know, the the gym, at least the old version of the gym may have, you know, its role

[00:33:29] in people's fitness and wellness lives may have changed during COVID or people may have noticed it was changing during COVID. But it is still what most people like again, if you go to where the spend happens and what people are looking for, particularly this consumer, 67% of

[00:33:43] this like millennial and Gen Z base, which is that that cohort is about 85% of gym members, 90% of fitness users, 67% of them prefer to training groups. They want community, they want guidance, they are looking for that solution. We can do some of that in an at home solution for

[00:34:02] the vast, vast majority of people. It is a different degree of connectivity and community. And you know, you don't have, for the most part, you're not going to have lights and music and coaching in these kind of very different environments.

[00:34:13] So we look at it as exactly what you said, which is the consumer needs to be the center. There are different archetypes of consumers. It all needs to be integrated. We go through different peaks and valleys of what our interests is and what our interests are

[00:34:26] and where we want to be. And that will continue to change and should change and it should be flexible and it should be adjustable. And that's not just by the way over like every couple of years, our interest changed. Like that's this week. I'm just tired.

[00:34:38] And so we need to be able to kind of give you something where you can still feel like you're making some progress, but it isn't come suffer with us for 60 minutes. Let's do some breath work. Let's do a little bit of yoga. Let's do some meditation.

[00:34:51] And now, you know, we feel like we can kept this steady stream of healthy behaviors. It's much easier to get back into it. Whereas if we lose people for even just five days, three or five days, it's getting them back is different.

[00:35:04] It's it's you got to kind of, you know, work really hard to get that workout feels like a really big challenge for folks. So that's that's the shfield. But look, I think Nike is, you know, again, and I should say the response, the consumer

[00:35:19] response to these studios, these first two that are open and we got four, I think in pre-sale. Like the industry should be worried. It's incredible. Like we obviously expected them to be well received, but I would say that the consumer response has been way beyond anything.

[00:35:35] You know, I imagine and what exactly. So what is your relationship with the Nike studios? Are you guys like a launch partner of theirs or promotion part? Like how what does that relationship? Yeah. I mean, so we operate on and operate the studios, obviously work super closely

[00:35:50] with with Nike have a great team that we interact with daily and then have really gotten great support across the organization. Obviously, you know, incredible sport research, let's work research lab there that we get to leverage and we're doing some really interesting things that have

[00:36:06] a really cool kind of running form technology that a lot that that we're doing some some integration with obviously on the marketing side and the brand development side. So we're integrated throughout the organization but have a very close relationship with with a specific team that is awesome.

[00:36:23] But yeah, we with their partnership or basically partners and and we own an operating and are those a plan for those to be owned or those can be franchise? Like what do you guys think, Eric? You say it. We got I think we'll we'll figure it out.

[00:36:38] I mean, I think a goal for Nike, you know, for us, it's it's really more about, hey, let's let's show how amazing these studios can be for consumers. And then on the business side, we'll you know, we'll certainly all figure

[00:36:53] out the best way for that to achieve all of our goals. But if it's, you know, if it's cool, cool, I appreciate that. And is it give you some insights on the actual like locations, like general footprints, like type of markets you guys are looking at?

[00:37:07] Like, yeah, give us some of that. Yeah. Yeah. I mean, so we certainly think globally, we think, you know, US first, but I think globally on the studio side, we we do our our territory deals very similarly to how the industry has has done them internationally, historically.

[00:37:28] So so we do kind of these larger territory deals, even in the US, we have one in the northeast already. We're finalizing one in the Southwest, which includes Southern California in the next few weeks, working on one in Texas, the Northwest and the Southeast.

[00:37:46] So kind of all of that stuff is moving really, really well. But that that studio footprint just basically starts to, you know, kind of does this this kind of exponential curve as you as you get those in place and start them rolling

[00:38:00] on the own side, we do Southern California. For the most part, that's the only place that we really have built that we like to build our studios on the Nike side. The first two markets are Southern California and Austin, Texas. So the first Austin's video opens.

[00:38:16] Think in about a month or so, month or two. Right on. So in kind of expanding again into Fitlabs, so you guys have a lot of different brands. I mean, recently, RPM, right? Assault, give us insights into the types of brands that you guys are looking to acquire.

[00:38:34] And then when you do acquire them, what is that partnership look like? You know, are you bringing the teams in? Are you like, yeah, how do you, because that's culturally acquiring brands is very challenging. I'm sure I don't have to tell you that, right?

[00:38:47] You know, that the numbers and all that stuff is the easy part, but getting everything integrated into one big happy family can be challenging. So what, yeah, first question is, what type of brands are you guys looking to bring in?

[00:39:00] And then how are you incorporating them into the ecosystem? Yeah, I mean, the first part, I think we just look for MS sounds almost so trivial when you say it, but like, we need brands that people are incredibly passionate about that consumers are incredibly passionate about.

[00:39:15] So when you look at fitness, it's just hard, right? If you go back to kind of that part of the discussion. So you need brands that, you know, if you look at Ragnar, people are getting tattoos and not like a, not one or two people. Like it's common.

[00:39:29] So it's not just like we need brands where people are wearing a T-shirt or putting a bumper sticker on the car. Like we need that, but you need that kind of wild passion. If you look at assault, like, if somebody knows what an assault bike is

[00:39:42] and you mention assault, like you see their intellect or face goes, oh, like you can see them. Yeah, of course. Suffering just thinking about it. That's incredible, right? Like it is like having brands that impact people like that is amazing.

[00:39:58] And again, in fitness, we just think that's what it takes. You know, XBT is the same thing. Like when you talk to people, go down to an XBT experience, like they'll cry at the end and talk to you about how it's changed their life

[00:40:12] and how they think about purpose and that sort of stuff. So that is, it sounds ridiculous when you say that, but like that's what we look for. You know, certainly we're very structured and thoughtful about how we go, okay, well this is a hub in the flywheel.

[00:40:25] Here's sectors within that hub. You know, here's something we're missing or we think is super interesting. But the first filter on should we build or is there an opportunity to acquire something is just like, is there something that people really, really love?

[00:40:41] That doesn't need to be huge, right? Like one of the things we're really good at is, say there's a thing, you know, if we say on the studio side, there's a brand that has three to five locations. So they've proven the concept,

[00:40:54] but we can see how it resonates. We can see that, but you know, getting from five studios to 500 studios is just a totally different thing. That's the part we can be really good at because as good as we, as the team is at designing concepts, building concepts

[00:41:10] from scratch, we built rack from scratch, we built, you know, others from scratch. There's magic to it. And when people have done that part they've like pulled that magic together of here's how everything fits together and here our consumer is and we can see it,

[00:41:23] that's what you're looking for. Then there's a whole bunch of questions of like, is there a deal to be had, right? Is there, you know, you get it to all the kind of transaction realities of, you know, is it possible to bring that brand in?

[00:41:36] A lot of times that takes time like assault was multiple years, multiple discussions, you know, you just kind of gotta be patient and find the right time and continue to grind through that stuff. But that's how we look at it. Like at the end of the day,

[00:41:49] if you don't have something, we can acquire a consumer, but if they don't love it and they're just gonna churn out in three months, it doesn't really, there's no point to it. So you just have to have things that people really, really love and that resonate like that.

[00:42:05] And I think across our portfolio, if I were to point to, so I think, you know, from a differentiation perspective for us, yes, I think this integrated platform is way, way harder than anybody thinks, anybody who hasn't done it thinks. I think it's incredibly complicated

[00:42:22] both on the technology side, but also just on the infrastructure side. And once you have a different infrastructure, different network of partners, fixing that stuff isn't like we can fix that any year. It's like years and years and years to unwind and fix that

[00:42:37] if you can actually ever do it. So that's a really, really big deal. But I would also say, you know, the days of just me too fitness brands, I think are over. I just think the economics when you just look at KAC and LTV for those things

[00:42:53] just aren't going to work. The market's just becoming, I think more efficient. And so if you don't have brands that really mean something that really have a purpose and a definition and a tight consumer target, I just think those are really hard and we're seeing that, right?

[00:43:09] We're seeing a lot of things just kind of not give up. That's a horrible way to put it, but just we're seeing that consolidation start to really happen. A lot of them are just doing away. Some of them are getting kind of plucked up for smaller amounts.

[00:43:22] I'm not saying that all bars are going to work. Like obviously that's not true. But if you aren't thinking first and foremost about why is this really awesome for a member, I think it's going to be a problem. And that's probably the other thing I'd say about Nike

[00:43:34] is, you know, that was probably my biggest learning from when I was there is that that is what they're really good at. They are really, really relentless on why is this awesome. Right, like from a capital standpoint, like how are you guys going about the acquisitions?

[00:43:48] Are you, do you have a large fund backing you? Like how was that working? Yeah, that's been a journey to be honest with you. You know, so when we started it, when Mike and I started it, it's really the anti-VC, you know, the venture pitch obviously

[00:44:04] is supposed to be like, I'm going to be the world's best at this. And then maybe five years from now, when I dominate that market, I'll start to think about, you know, kind of concentric circles. And our hard one thing unfortunately was like,

[00:44:16] yeah, we want to integrate the whole industry, which is not a great pitch to VCs. So we really, we were able to find some who saw the vision, fortunately. And then I would say, but like navigating that, especially navigating that during COVID and then during interest rates,

[00:44:33] but like all of that stuff is just, it's been a journey. Now it's a little different, right? You know, now you look at the business and again, that house is built. So it's one thing when I'm telling a story of here's who I want to be

[00:44:48] and not to suggest that we've built it and it's smooth sailing from here, but we are the thing now, right? There's a whole ton of work we have to do, but you can see the house. And so now it's different. It's also a different asset class of investor

[00:45:01] that we're talking to as we think through kind of our next, we are kind of having some conversations on who that partner should be as we think about this next phase. And but it's a different asset class that we're talking to, right? It's now kind of more growth

[00:45:15] than private equity investors who are looking to kind of consolidate an industry and build on a diverse, like build a diversified offering like they see the vision and I don't have to convince you that it might be a thing in the future.

[00:45:30] But it is today, you can see the diversified economic streams. You can see the benefit that we have versus some of these singular offerings in the industry. So the answer is to date, it's been kind of we have a great family office behind us.

[00:45:43] We have a couple of venture firms behind us. And then really we're out now kind of having a bunch of conversations around a more growth. Last question for you, Brian. What is the biggest challenge that you are facing as a CEO right now?

[00:46:01] Or Q2 2024, and this I asked this in the spirit of, as a community of an industry here, how can we help? Yeah. Well, so I'd probably have different answers if my objective was like, hey, how can the industry help?

[00:46:15] I think our biggest challenge at FitLab candidly this year is focus, right? So there's, if you look at these brands, we do have 10 or 11 brands today. There is so much benefit to this diversification and to this choice for our members. The challenge for us as an operator is

[00:46:40] we can't be spectacular at everything at the same time. Any operator, not just FitLab, which means there's just so many incredible things. We have to move to a phase two or a phase three. And you have to be relentless about what are the one

[00:46:58] or two maybe three things that you can do. And so there's just like, your life as an operator is choice and trade off, right? Like realistically, and those are really hard. Like there's just so many incredible things that we want to be able to do.

[00:47:14] And our risk is being too shallow across too many things versus kind of sacrificing timeline on some things so that we can be really awesome. So if you look at our year right now, obviously I talk a lot about studios. Like that is really where our heads are

[00:47:28] in terms of like getting those territory deals really ramping, getting these eight or these nine studios we're building with XPT and Nike open here over the next four or five months. Like that is really our focus because that has to be the primary focus.

[00:47:47] Obviously we look at Assault and RPM and getting those two brands together and all the products that we have really too of I would argue the best brands in functional training, getting those to work on a more integrated basis for our consumer making sure that we're plugging them

[00:48:01] into those studio offerings in the right way. That is probably our number two. And then you kind of get into some of the more optimization stuff of how do we bring those brands together in a way that's really powerful? Like we just had our first Ragnar event

[00:48:15] this season in Southern California last weekend. And it was incredible to see we had I think eight of our brands were there. So we had fitness classes going at the finish line. We had fitness classes going on from other brands.

[00:48:27] We had XPT doing breath work and contrast therapy. We had Assault there so people are checking out the runner like having that sort of even when you just look at like literally the tangible physical manifestations of that house coming together are super, super powerful for us this year.

[00:48:42] So like those are really the three things we have to put the whole organization against. And I mean, there's 25 things underneath that that it sucks not to work on. Or they're not to, you know, obviously you keep some things moving forward slowly,

[00:48:58] but that is my biggest challenge right now is there are 25 things that we should be doing but we just can't do all of them at the same time. You know, obviously if you look at kind of broader macro context, I think there's some things

[00:49:13] that selfishly are going to be good for FitLab and a handful of folks who are well positioned. But I just think we're going to continue to see a lot of stuff going away and consolidation but not like not from a position of strength, right?

[00:49:28] Kind of consolidation because we just can't go on our own anymore. And that's a bummer to see but I just think you have a lot of operators who kind of fought through COVID and then fought through a really tough macroeconomic environment

[00:49:42] and you're just kind of tired or the debts do or you know, whatever it might be. And so I do think there is a ton of opportunity in the industry but there's going to be kind of a correlated amount. Well, Brian, I appreciate this has been,

[00:49:59] like I said at the beginning, I've just been very curious to learn more about FitLab and kind of the inner workings of what you guys do and the vision obviously it's easy to look at the brand so you guys are working with and acquiring to have some idea

[00:50:12] but the clarity from the top down is very valuable. People want to get in touch with you or your team or anything like that. Where would you like them to go? Yeah, I'd say come check out the website.

[00:50:24] Best place for us is go check out the website fitlab.com. That will give you a better sense of what the brands are and kind of what the touchpoints are. Obviously, I think probably LinkedIn is as boring as that answer is for me personally

[00:50:39] it's probably the easiest connector. Thanks so much for spending almost an hour for me today and explaining all this and very cool stuff. I truly wish you the best of luck and I'm really excited for Nike Studios. I can't wait to go check one out personally

[00:50:50] so keep up the great work and yeah, ladies and gentlemen, Brian Kirkloff is here. Thanks Eric, have a great day. Hey, wait, don't leave yet. This is your host Eric Malzone and I hope you enjoyed this episode of Future of Feminist. If you did, I'm gonna ask you

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