Eric Posner - Swerve: SaaS'izing A Legacy Model

Hey everybody, welcome to the Future of Fitness, a top-rated fitness industry podcast for over three years and running. I am your host, Eric Malzone, and I have the absolute pleasure of talking to entrepreneurs, innovators, and cutting-edge technology experts within the extremely fast-paced industries of fitness, wellness, and health sciences. Please stop by futurefitness.co to subscribe and learn more. To live your healthiest, longest life possible, you need to understand what's going on inside your body. People age at different speeds, and generic annual blood work doesn't properly evaluate your biological age, but Insight Tracker does. Insight Tracker is a truly personalized nutrition and performance system designed to extend your health span and slow down the aging process. Created by leading scientists in aging, genetics, and biometrics, Insight Tracker analyzes your blood, DNA, and fitness tracking data to identify where you're optimized and where you're not. You'll get a daily action plan with personalized guidance on the right exercise, nutrition, and supplementation for your body. Add InterAge 2.0 to any plan to calculate your true biological age and see how you're aging from the inside out. For a limited time, get 20% off the entire Insight Tracker store. Just go to insight tracker.com forward slash future. That's insight tracker.com forward slash future. This episode of the Future of Fitness is presented to you by the Fit Tech Club, a business network run by the creators of the Fit Tech Summit, Europe's leading conference devoted to fitness and health technology. Look, friends, the fitness industry is changing faster than ever. The intersection of technology with fitness and health is growing bigger and more dynamic by the moment. Gyms are exploding figuratively, and their constituent parts are ending up at home, outdoors, or on your wrist, or in entirely new places with brilliantly new concepts. Investors are pumping astronomical amounts of money into the market like we've never seen before. The Fit Tech Club believes that collaboration is the advantage to these times of change. That's why the club aims to bring thought leaders together to inspire them by making the right contacts at the right time and giving insights to the industry's most relevant and current trends. Here's what Melanie Lauer, CEO of Kettler and TriSport, says about the Fit Tech Club.

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If you're interested in the fitness technology game and looking to accelerate your growth, I highly suggest you check out fittechsummit.com or forward slash club to learn more. You can join the highly valuable newsletter, apply for the FitTech Club itself, or simply learn more or connect with people like me. That's fittechsummit.com forward slash club. All right. We're live. Eric Posner. Welcome to the future of fitness, man. Thanks for having me, Eric number two. I've been looking forward to this since we had some opportunity to spend time in person. In person, isn't that cool that people do that again now in Miami for Ursa? So it's you know, just getting to know you. I really enjoy our conversations and I'm excited to highlight what you guys are doing at Swerve because it really is interesting. And I think a lot of a lot of gyms will benefit from it. The industry will benefit from what you guys are doing. Obviously, you're seeing a lot of early success now. So let's start with this, Eric. As always, just maybe give us a little of your backstory. How'd you get to be the CEO and founder of Swerve?

Awesome. Well, first off, thanks for having me. And uh yeah, to just to jump right into it. So I guess, you know, I've been a team sport athlete my whole life. Played lacrosse throughout high school, went on and played division one. After I graduated college, worked at an investment bank in a sales job. And what I started doing was I started to take my clients to boutique fitness classes and found that it was just the ultimate way to connect with people and to build relationships. And really, instead of doing the typical steak dinners and drinks, booking these classes, just you just connected with humans on a whole nother level. And really, what started off is taking one or two people to a 6 a.m. spin class, it grew to a group of 20 of us every single week. And it felt like being on a team again. And so my my co-founders and I, we felt like there was an opportunity within the boutique fitness world to essentially pull all these positive attributes of team sports into a boutique setting. And that's where we came up with the idea for Swerve, which was the world's first team-inspired indoor cycling studio. And I guess to give you a little bit more information, you know, we because we were working sales jobs at the time, we took that idea to our clients who we were taking to the classes, and they were like, listen, we love it, we get it, you should pursue this, but just know that, and and we'll back you if you quit your job and you put up your own money. So this was back in 2013 that we we put up our life savings, we quit our jobs, and we started Swerve and opened up our first location in Flatiron. And yeah, haven't haven't looked back.

So you started in uh in an actual brick and mortar setting, that's right, in 2013. And give me kind of a little bit of the early journey, and then how did you switch to now the you know digital, you know, technological side of of where you guys are in current state?

Yeah, so you you know what was interesting is that so when we launched Swerve, just to give you a little bit more information on how we started and then how it's evolved. So with the what how the concept worked is that you had three set teams in every location competing against each other. And so for instance, there was a section of of bike of call it 60 bikes in a studio. You had 20 bikes on red, 20 on blue, 20 on green. So if you were to pick a bike, you would just pick a bike on any team, but then and you'd have a console on your bike that would show your you on show you your own personal metrics, but up on scoreboards behind the instructor, you'd see team scores. So it was all about gamifying the experience and motivating through teamwork. So, with that, you know, we going back to we launched it in 2013 and found success pretty early on, even though it was such a competitive landscape within Flatiron and in New York City. We were able to get up to four locations, really bootstrapped our way there, and then the pandemic hit. So the what was interesting though is that we we were told by all these private equity groups that um you know get to three or four locations, and that's when we would they would be able to come in, provide some growth equity, and help us scale nationwide. And so that was really our goal was bootstrapping our way there. And we accomplished that before the pandemic hit, but obviously the pandemic put a put a halt on our growth plans, but we had recognized there was this bigger dynamic at play, and we saw a different opportunity within the landscape in that uh big box gyms and boutiques were essentially going at it and battling, and you know, uh boutiques had the benefit of being able to be an expert and truly harness community in their craft, in their modality. Whereas gyms, they have so much to worry about. So, and it's and it's really challenging. There are a lot of pieces to their business between all the modalities, the personal training, the you know, the all the equipment, all that, and the sales and whatnot. So we thought that there might be an opportunity to partner up with gyms and to power their cycling studios. And this was so even before the pandemic, our vision started to go that way, and we started to talk with many of the big box gyms within uh the US and got close to signing some deals, but then the pandemic hit and put that on pause. So, fast forward now, um, pandemic hits, and we came up with a quick jerk reaction to rent out our bikes because we needed to figure out how to get revenue through the doors. So we rented out our bikes, and we were put in touch with the woman by the name of Marion Roman, who was on Peloton's co-founding team. And so we reached out to her and said, Hey Marion, you know, we just rented our bikes out to our members, we dropped bikes off with our instructors, they're now streaming classes over Zoom, but they've never taught in front of a camera before. Can you help us out? So she started doing some consulting work for us, you know, a few hours a week. And fast forward two years later, she's on full-time as our chief content officer, helped us. We shut down all of our locations except for one. That's now our production studio. And and now the way that our business model works, and similar to what I was saying about the vision of powering cycling studios within gyms, we are now doing that and doing it through this tech platform where we go to gyms and we say, Hey, you have a cycling studio, you have bikes, let's put up a large TV screen or video wall at the front of your cycling studio. And then what we do is that we live stream all of our classes into that studio. And the way that our technology works is that it can pull the data off of any bikes that they already have. So that's a key key thing here is that we are a truly equipment agnostic. We pull the data off that and then we gamify it as such that your studio is a team and you're competing against all the other studios on the platform globally. So that is the new business model.

That that's really interesting. And there's a couple questions. I want to get into the psychology of working as a team as well. I mean, I I'm a competitive person. I played team sports like you did, always been competitive. I love being on teams. You know, individual sports are great, but being on teams, you know, uh is just so much more fun. Now, that's not for everybody, though. Not everyone's competitive. Uh, when you look at the psychology of you know having people, you know, kind of the general Joes and Janes, you know, competing with each other as teams, like how how does the general person who hasn't been competitive in the past, you know, engage with this? Or are they yeah, well, explain a little bit more on that. I'm very curious.

Yeah, so you know, another thing that I would add here is that Swerve's vision is really is to build this as a new team sport. And because we're a team, all of all of our founders are team sport athletes, we've recognized all the benefits of, you know, just like you said, the camaraderie, the fun, um, the competition that's built into it. But I think the the biggest like takeaway is that it's also an inclusive experience. And so the inclusive piece is very important. And that's what we learned, really operating um the brick and mortar studios for seven years. It was all about optimizing for the psychology around how do you motivate the masses. And you know, we were going to cycling classes where they had individual leaderboards where your name is up against other people, and that kind of bled into the culture of you then you'd walk into the class and you'd kind of you'd eye people up. You were in there to compete against others. And yes, in a sense, that that can be very motivating. But we felt that if you are in an experience together and competing as a team, you still get that motivating factor, but yet that the camaraderie piece is something that can get you to work even harder. So, so yeah, that's something that we've been optimizing for. And, you know, we've had people who have said that they're they're not competitive at all. But then once they they get into a class and they and they they don't want to let down their team, so they work harder. But we've also figured out how to, so for instance, the way that we structure a class, um, which is a way that nobody's doing out there in the market, is that there are always four quarters in class. So at the end of every quarter, we have a challenge. So whether it's a beat-based challenge or a power-based challenge, or you know, you're you're either racing against other other studios globally, or you know, we're setting a benchmark for your for your team, and then it's about improving. And we we sprinkle in the scores in a way that is not too overpowering or or doesn't make it so that you're constantly just fixated or focused on those scores, and you but you're but yet you're in the experience, enjoying it and getting just enough of the the competition that uh you need to remain inclusive.

Yeah, one of the things I've noticed, and I learned this lesson in CrossFit too, is that uh, you know, there's certain people who were on teams, right? Love team sports, and they're they're automatically gonna get drawn to this this type of thing, right? Uh just like it did in CrossFit. When you take a CrossFit class, you're you're part of a team generally. It feels like it, even though you're competing individually, but it's the shared suffering, right? Uh and I know that seems like a harsh term, but it is what it is. Like, and that whether that's you know in a CrossFit class or a Swerve environment or um, you know, all the way from Navy SEALs or to, you know, someone who's in a a small business unit who's burning the midnight oil together in the same room, right? There's just some kind of bonding that goes on when there's suffering that's being shared. And you can look to your left, look to your right, and see that people around you are are dealing with the same thing that you are. It's it's very yeah, it's it's it's a very human thing, right? I mean, is that something that you guys sought out or did you kind of figure it out as you were going?

Definitely. And I think, you know, the way that we have been able to, because uh when you look at boutique fitness as a category, and you hear the word community all the time, right? And then that's how they've been so successful, is because they've been able to build community. So the focus for us was that, but we felt that when going to these classes, they weren't actually harnessing community within the experience. It was either before or after the class. So that's where for Swerve, you know, when you sign up for a Swerve class, let's say you're gonna go take the 7 a.m. class, you know, you're you're signing up for an experience that and when you get there, you're in it with everybody else, right? You're all on one team. So what that does is it creates this very icebreaker-friendly environment and channels more hooting and hollering and high-fiving amongst riders than you would get if you were in a class where you're just competing against one another. So that's where exactly what you're saying of that that shared suffering, but also being in an experience together makes everybody feel accomplished. And that also increases the conversation and the connection after class.

Got it, got it. So, from a business perspective for gyms who are your now your core clients, right? What's the problem that you guys are solving when you when you outline that for gym owners and facility owners? What are you guys looking to solve?

I appreciate you asking this because you know, when when the pandemic hit, it really forced us to think long and hard about where the opportunity was for our business and within the industry. And first and foremost, you know, we're about if if we're we need to create something for the end consumer, so they are they are the priority. And what we recognize is because of the pandemic, for a year plus, the consumer was stuck in their home taking classes behind a screen. So whether it was a Peloton or an iPhone or a tablet, you know, what that did is it just completely normalized a virtually led workout, but it also introduced them to a top instructor, right? Whereas they may not have and may not have had that in their small town in, say, Middle America. And so that was one thing that we knew we had to solve for, is to give them an amazing experience wherever they were in the world. And the hypothesis was that if we are to put up a big screen inside of a cycling studio and you know, make it very like a theater-like experience, that you know, would they rather be taking a cycling class at home alone behind a screen or with a group in a room where they can feel that energy and that connection piece and that camaraderie of being with others? And fortunately, we'll get to this later, but uh Crunch being our first partner gym, they gave us the opportunity to test it out in New York City. We took over two of their locations, and fortunately, the the data you know has been truly exceptional. So we're we're very grateful that they gave us that opportunity. But so the consumer has adopted it. And that's something that we're we're super excited about. Um, but then the other pieces for the gym is that the pandemic spurred labor shortages, right? When the when the pandemic hit, to cut costs, what they did, what what gyms did, what we all had to do is to is to you know stop holding classes, either because the government mandated it or because it was just hard to justify filling up our class schedule when not as many people were showing and it was, you know, it's added cost. So a lot of instructors within the industry actually left and are no longer instructors, they had to find work in other places. So now that the world has opened up and is coming back, gyms are sitting on cycling studios that maybe they're doing one class per day, right? So that's just sunk cost for them of real estate that's being underutilized. So that's where we go to the gyms and we say, hey, you know, by putting up this screen and allowing us to live stream in, we're actually going to give you a live class on the hour every hour, fill up your schedule so that you can meet the schedule, so you can meet the schedule of all your members so that they can get an experience. And um, for you know, we've been able to prove now that it's a way not only for gyms to to drive their revenues and to increase usage, but it's also a way for them to save on cost, which is a whole nother, you know, situation at hand with uh what we're seeing with the economy and just the rise and the pressures of inflation. You know, any ways that gyms can save costs and and provide a better experience for their members, you know, that's something they're seeking out. So we've been able to deliver upon that.

Yeah, that's a really solid solution, Eric. I I'm curious about the technology too, because you you've mentioned some really interesting, I haven't had an opportunity to experience it. You know, I'm in northwest Montana and there's just not a whole lot of tech here yet. But what tell me about the technology? I mean, you get the bikes to speak to it. Like when these classes start, I have a lot of questions, but I'll just let you explain it in more detail. When the classes start, does somebody have to be there to turn it on? What does your tech stack look like? How does this whole thing work with as much detail as you can offer here? People age at different speeds, and the date on your license may not represent your inner biological age at all. If you're looking for ways to extend your health span and slow down the aging process, the keys to health and longevity run in your blood. That's why Insight Tracker provides you with a personalized plan to boost your metabolism, reduce stress, improve sleep, and optimize your health for the long haul. Created by leading scientists in aging, genetics, and biometrics, Insight Tracker analyzes your blood, DNA, and fitness tracking data to identify where you're optimized, and more importantly, where you're not. You'll get a daily action plan with personalized guidance on the right exercise, nutrition, and supplementation for your body. Add Interage 2.0 to any plan for a definitive calculation of your true biological age to see how you're aging from the inside out. I was proud to find out I'm a few years younger than I thought I was. For a limited time, you can get 20% off the entire Insight Tracker store. Just go to insight tracker.com forward slash future to check it out, learn more, and get your own. It's insight tracker.com forward slash future. On to the show.

So that's another huge benefit to the gym is that this truly minimizes operational headaches for them because once the screen is put up, we control it fully. We turn it on, we turn it off, we troubleshoot things remotely. So it is very much like set it and forget it for them. Um, they do not have to have somebody in the room. We've created images and videos at the start of class that help riders with setup and to explain what's going to go on within the experience to maintain a safe environment. And then the instructor comes on live. It's literally, it's like live television, right? Where the instructor comes on. What we've been able to do is we've been able to figure out a solution so that we don't have to integrate with Jim's backend systems, but yet we can still, we still know how you know Eric Malzone is riding on bike two in Montana at the Montana location. We we are able to tie you to a certain bike, um, and then uh which makes it so that there's there's this two-way communication. So the instructors can actually call out, they can call you out because they know where you're riding, but mostly they're calling out studios because then that's obviously how they can how they can uh motivate the masses. Because with, you know, we have a handful of gyms on board right now, but as that goes to hundreds and thousands of locations, to be able to call out the studios is is a way to to motivate even more. But in terms of the the technology, yeah, so we so we go in. So if a bike has a console on it, it either uses Ant Plus or Bluetooth technology. So what our what our tech can do is that's how it can pull the data from those consoles via Bluetooth or Ant Plus, and then it goes into our database, and that's where, and then we can then our software, we've customized and built it to then convert it to this team based gamified experience. And that's where we're showing you up on the screen how your studio is doing, you know, in in specific. Like challenges, how you how your team performed, you know, did you win the challenge? You know, have you improved? All that. So that's that's I'd call it like the video game that we are creating.

So is that is there like a receiver or remote device that goes in there, or is this done through phone apps? Like how is that how is that hardware served up?

Yep, yep. So there's a receiver in it, and then also what's called a Nook, which is essentially like a mini computer. So the receiver is is getting all of the data from the bikes. That receiver then speaks to the Nook. The Nook is then put it sending that information back to it to the cloud, which then spits it out to the TV screen and what the consumer is looking at.

Got it, got it. So from a gym perspective, like what's their starter package look like? Like what do they get? They have to have a big TV, they have to have the receiver, their Nook. What else, what goes into all this?

Yeah, so we we provide the Nook, we provide the receiver, we provide so all they have to do is is pay for the screen. Which and the beauty of it now is that TVs are just the the price of televisions have gone down so significantly as technology has advanced. So it's it's amazing. And so really, you know, an upstart cost could be just a couple thousand dollars to put up a TV screen. And then yeah, we're pretty fortunate to to be able to prove uh, you know, immediate ROI and to and for that payback to be very quick.

Every time I walk into Costco, right? They're so smart at Costco, they just put the huge TVs right in front of you as soon as you walk in. I'm just like, do I need that? I need that. Do I need it? Right? I need it. Uh, but it's just these things, you mass it like 80-inch screens for like, you know, a couple thousand bucks nowadays, which is just um blows my mind because when I remember I bought my first big screen TV, it was like three grand, and it was like this, you know, crappy 48-inch TV that weighed, you know, 120 pounds. Um, yeah, it's that technology is pretty amazing. I want to get into because I think there's a really cool aspect of what you guys are doing, the vision for this as a global sport, right? What's your inspiration for that, I guess? And you know, have you have you seen this, you know, somewhere else out there that kind of inspired you to apply it to us? And what's the overall vision for where you think this thing could go?

Yeah, so you know, this was also the biggest learning from Swerve 1.0 of our brick and mortar business now to Swerve 2.0 is that so although we are every class with Swerve 1.0 was this team-based competition, what we learned is that when we gamified things on a macro level and had these challenges. So for instance, we did a corporate challenge where teams of six would participate in this challenge, and so they would enter it as, say, Goldman Sachs or Citigroup or Rent the Runway, right? They would enter a team and those participants could ride at Swerve at any at any class, anytime during the month of the challenge, but their scores would feed up in onto this, uh, you know, onto the website that we built to show you how your team is comparing to the other teams. That's one example of a challenge that we held and gamified it even further. And what we saw is that the the members who participated in these challenges, their lifetime value was actually 18 times higher than anybody else who came to Swerve. It was really about what did we learn and what was the most successful, and then how do we turn that into a full-on business model and to really blow that out. And so that's what we're doing now of now creating these teams where this, you know, now that your studio is a team and it's you know, and everybody's competing together. So this is really just version one where you know you're you're up against the other locations, but then as we continue to build out this our vision of being a team sport and creating these sub-teams within it, or even you know, we've held a challenge with Crunch. The two locations that we started with of 34th Street and Union Square in New York City, uh, we tallied up how many wins they had within a month. And we saw usage spike pretty significantly because people love that. They get really into it. And so I think there's just so much that we can do to drive this home as a team sport, with whether it's splicing it up as, you know. So I know I I mentioned this before we started this call. I'm currently in Los Angeles right now, with normally based in New York City, but here because we're launching with Crunch in a few weeks on the West Coast. Actually, by the time we launch this, by the time this podcast is released, we'll have already been uh launched within the West Coast Crunch locations. But, you know, something that Crunch had mentioned, what they're so excited about, is just the innovation around being the first uh to ever have East Coast versus West Coast locations competing in the same class. Right. So that alone of have of being able to carve out regions competing, um, there's just so much that we can do to really um continue to drive home stickiness for what we've learned to be so uh impactful.

That's an area are you guys looking at any elements of you know, like web three as far as like, you know, move to earn, uh tokenization, gamification, those areas. Is that on your radar at all?

I'd say at the moment it's more so taking inspiration from esports, right? Because I think what esports uh has done such a great job with is like is really nailing down accessibility, community, and content. And those are like three major buckets of what of what we're doing. And and you've seen esports really explode over the years, so that's more along the lines of of where we see you know our North Star.

Interesting. Uh that I like I really like that. I love the you know virtual community. You know, I started using my tonal machine, never really thought I would be doing at-home connected fitness, but I got one, and man, I have to say, like just even joining their Facebook groups and kind of seeing what's going on, there's something to it. You know, I we're in this recalibration right now, which I've talked about numerous times on the show of you know, the balancing now of you know, where's the pendulum gonna land when it comes to the balance of connected, digital, in-person and all that. And it's it's really there is something to it. You know, I'm I've been always a staunch proponent of the in-person experience, but I don't say there's really something to it. It's just the new version of where we're at with fitness. Uh Eric, I want to get into a little bit and share what you can, but you know, what what are some of the numbers that you guys are looking at as far as you know, employees, money raised, like users, like yeah, what do you guys got?

Yeah, and actually I just want to touch upon one thing quickly that that you mentioned there, you know, in terms of um digital communities. And and I think there's some some brand, as you mentioned, like the tonals of the world, like there are a lot of companies that that are are doing a really amazing work and providing an awesome experience at home and building a digital community around that. And there's without a doubt a place for that in our market, right? And so I think we're we're learning here, and and you've been speaking about it on the podcast of it's not one or the other, it's not in the gym or at home, right? It's it's where how does the consumer want to consume it at a certain point in time of their life, right? And whether it be they just need more convenience or they hit a certain age. And and so I I think for for Swerve, though, you know, where the focus lies is really being the bridge between this digital and the physical world of fitness. And as I referenced all of these positive attributes that we can provide to the consumer and to the gym partner with a with a digital product, but then using technology to get people together, that is something that we feel is so powerful, right? Is that like so we're you we're using technology to get people into the same room and connecting and in an experience as one because it's also been a period of time where people feel more isolated now than ever before because of the pandemic. So that's really the focus from a tech perspective for us is connecting more humans. So, anyways. Yeah, what about the numbers? Where are you guys at? So, yeah, so we we you know we kicked off a seed round to be able to prove out this idea, and that was back in November of 2021, right when we launched with Crunch. And so, yeah, we're we're seven months in. And as I as I referenced, the business case has been incredibly strong. I mean, we're we're showing month-over-month retention of high 80, low 90% of riders who are coming. Uh, we are accounting for it's over, it's it's between 40 and 50 percent of group exercise bookings within our gym partners. So that that factors in all other modalities. So, you know, swerve is just one modality of cycling, and we're making up for almost 50% of group of those group exercise bookings, which you know, we are so we're essentially proving to play a big role within the within the group exercise ecosystem for these gyms. So that's something that you know we're we're really excited about. And like I mentioned, we've proven to to not only save them on cost, but we've opened up whole new revenue streams. So now that our gym partners have Swerve underneath their roof, they're able to market that they have a boutique offering that is actually included free of cost to the members. They could take unlimited swerve classes if they become a member at their gym. So now when you think about it for from the consumer lens, you know, before if you wanted to take a swerve class, you were paying $34 a class. Now you could pay $34 to get a gym membership and get unlimited SWERV classes plus all of the other amenities offered at that gym. So the value proposition to the consumer is also really strong. But with that, we're also on you know other third-party booking platforms where non-members are able to book Swerve classes within within our gym partners, if that's assuming that they they use third-party platforms, which many of our gym partners do, and that's a whole new revenue stream for them that that we've been able to increase of non-members booking Swerve classes and now getting them underneath their roof uh to visit their gym. So I can't, I can't dis I can't disclose the exact amount uh that that that we're driving, but what I could say is that it's it's been pretty significant. And going back to you know, this the ROI model, that's that's everything, right? Is when we're talking to gyms, being able to show them show them this model and and why it's gonna pay off and how quickly it will pay off. So that is uh something that we are now armed with.

Yeah, and that's uh, you know, without naming names, there there's been a lot of you know cool technology features that health clubs and gyms have adopted, but don't really drive revenue. You know, they're just a feature that maybe they can talk about during an onboarding session with a new client. Like, hey, we've got this cool, look at this flashy thing we got, right? But is it actually driving a, you know, better results for the consumer or revenue? Um, and a lot of times those two things align, uh, which is a beautiful thing. Uh, what about your partners? I mean, I know yeah, what can you tell us about your partners? I want to name a few, but um, I don't know what what you can speak of yet, but like third-party bookings, things like that. Who are you guys working with there?

So to start, so Crunch, as I mentioned, was the first partner gym that we launched with. Um, and they are on uh ClassPass and Gym Pass. So, so people were able to book those classes, swerve classes through those. We, I know you're you're happy to hear that I've been speaking to to Brian uh in terms of getting centered involved there. So, yeah, we're we're working, we're working on that and and making introductions um and working on getting more gyms on the centered platform because it really seems like an amazing platform. And that's again just another way for gyms to to get more people through their doors. I was just gonna say, uh going back to the to the data is and what what you were referencing about, you know, for the gym partner, um, you know, what we've been told by by all the gyms out there, and what we've also learned now within partnership with them is that group exercise, the role that it plays for a gym partner is that they they've they have the data to support that for members who go to the group exercise classes within the big box gym, their lifetime value is higher than for the members who don't go to group exercise classes. So that's another point that we're now able to drive home is okay, Swerve is now operating under your roof, making up for such a big piece of your group exercise offering. So how we're able to impact lifetime value is something that, you know, we it's only been seven months, so we're still working on getting the data behind it, um, but we feel pretty confident there's going to be very powerful data there to show how we're able to increase lifetime value of the members.

Yeah, that's a huge metric. I mean, it's uh, you know, retention lifetime value is it's everything. I mean, you know, on the boutique side, the grind of constantly having to get new people in, uh, and then, you know, that that that's probably what burns out most studio owners. And, you know, it's no different at the health club level, uh, but you just have more people helping you with it. So um, it is interesting. Man, I want to discuss because we're sitting here at the end of July in 2022, and you know, the environment, the economic environment, which we alluded to earlier, is is uh inconsistent, I guess is the best way to put it. I don't know, but we've seen a lot of headlines over the last 30 days of you know, very large companies. You know, the we mentioned total and F45, Peloton, of course, has its woes right now, you know, a lot of massive layoffs and a lot of shifts in the industry. Uh you know, when and first of all, I just want to say like I'm on LinkedIn a lot, and there's a certain population of people on that who seem to relish in the downsizing and you know of of what's going on with some of these companies. I don't want to get it. I mean, at the end of the day, you see, you know, hundreds of layoffs happening. These are real people at the end of the day with real jobs and real worries, and you maybe you don't like their company or brand, but like don't be a dick, is what I get what I'm trying to say. Is this a tough time? And you know, it it's more than just numbers that you see on a post or on a uh, you know, a headline. So anyway, that's my my short diatribe on that. But when you look at the uh economic environment that we're seeing in now, you know, what what concerns do you have? Where do you see opportunities for swerve? What do you what are you taking away from overall the the fitness industry right now? Uh do you think we're heading into good times, harder times? Which what's your what's your crystal ball telling you, Eric?

I I would say um, well, first and foremost, for for the people who are losing their jobs and and and all the layoffs, like it is very sad. And and I love when I see people posting on LinkedIn saying, hey, you know, like if you've just been, you know, if you've lost your job, like let message me. I'm here to help. Right. And I think and I and I have been seeing a lot of that as well. And so I do think there are a lot of amazing people in our industry, and it's really just about finding them, you know, and uh and and and and um and so for people listening to this, if they are out of a job, like my suggestion is just to just to be bold and reach out, and you'll recognize and the more conversations you have, the faster you'll find, you know, the your people and your tribe within this industry, there are a lot of amazing ones. Um that in terms of the the industry overall, you know, I I think it was really nobody could have anticipated a global pandemic. So for the all these layoffs that you're hearing about, I think you know, these companies like like Whoop and like Peloton, you know, you're you're you you see this spike in demand, so you want to be able to meet that demand, and you're it's very hard that you don't have a crystal ball to be able to say to predict when things are like all the supply chain issues or or or how to properly manage through it. So I I think they've been dealt with really hard cards because you you see demand, you want to meet it, right? That's like the first thing that the business owner is is thinking. Um, but it but and it's a lot easier to what what what's the saying, you know, uh to be Monday morning quarterback. What I don't know. Yeah, yeah, Monday morning quarterback.

Yeah, yeah.

Yeah. So, you know, and and say, like, oh, well, they shouldn't have spent so much money and they shouldn't have made so many hires. And like, look, it's it it it was a really it's a very challenging time for for a lot of businesses to to be able to predict, you know, how things were gonna shake out. Um so it makes sense that that right now with where the economy is going, that they'd want to tighten their belts. Um, you know, as it relates to Swerve, and and you know, this was another thing of the this the this point of reflecting upon where the opportunity lies for us was really about how do we solve for all the issues that we were experiencing or you know over the years. And I would say one of the key pieces was it was also really hard to manage so many instructors with having four locations. And to and so for the for our competitors who had a ton of you know, 80 plus cycling studios around the uh around the US, like I can't even imagine how challenging that would be to maintain the quality of your brand. So that's where for us we figured, you know, okay, by consolidating our business model into you know this tech platform that where as we add on more more gyms, we're able to just turn on, you know, we're streaming into more locations, um, and we can keep a smaller team that is the best of the best and be able to invest in them and not have hundreds of employees. I think that that was the the goal and the vision for us. Um but then also for for gyms, you know, because of you know, they're they're not so what I would say is your what the pandemic also has done is it's brought health top of mind for the consumer. So that is a a tailwind for us. It's just how are you how are you positioning your product um to be able to get that you know that share of the consumer's wallet? And where we've seen a big spike and um is that you know these HVLP gyms have done extremely well coming out of the pandemic. So there's so the low or mid-priced uh gyms are and and it makes sense because they're also opening up to a whole new consumer who maybe didn't have a gym membership, that the way that they want to step into it is by paying $30 a month and not go right into a hundred to a hundred and fifty dollar membership. Um, so that's where you know a handful of our of our gym partners currently are doing quite well and are and are positioned really well. And so that's where, and we know that they have cycling studios. So for us, you know, being very focused on on the uh gym chains, but then also we we've now proved it pro proved that we are a solution for gym chains that want to help drive more traffic and help um help get more people into their gym. So, you know, I think that's we're the way that we're positioning ourselves is number one is because we can tap into the equipment that they already have, they don't need to pay more to buy to buy new bikes, right? So that's something that uh gym chains are they they love to hear that, right? Because um they're looking for they're looking for solutions for their existing hardware, um, and we can provide that for them. Um, and then to be able to price it in a way that they're gonna save money um is another huge perk and way for us to to kind of factor in that the economy is going through a a bit more of a a rocky time. So that was a very long-winded way of answering your question.

Yeah, that was a good one. I mean, ultimately, I think you know, one of the things that the significant value that Swerve offers is you're you're optimizing what they currently have, right? And that's something that uh before people go out and start engaging in new additions to their gym and spending a lot of money and you know, risking all that, like just have take what you currently have as far as inventory and space and optimize it. You know, make those business economics or unit economics work even better for you. And that's that's a really uh key solution when things start to get tight is you know, don't go out and spend a ton of money, just look at what you currently have and and boost that revenue or that profitability as much as you can. Uh, Eric, one of the things I'm curious about too is I I always like asking questions, but as a founder, you started this venture in what I think you said 2013, right? You uh you've probably gone through a lot of ups and downs, you know, especially during the pandemic. Absolutely pivoting hard and all that. How has this journey been for you personally uh as a founder so far?

So, you know, when I left my job from when I worked in finance, it was a high-paying corporate job. And but I just knew that it was it was not fulfilling. And you know, I was more so thinking about my paycheck than anything else. And so making that jump into entrepreneurship and um just taking on all the challenges. And you know, I went from being in a salesperson to then turning into having to learn how to be a leader, a manager, a creative, you know, everything, right? That's what an entrepreneur is about, and entrepreneurship is about. And so um, I think that whole process has been like, you know, business school on the fly. Um, but with that, also recognizing that you know, our whole ethos for Swerve is around uh is around team, right? And I've also recognized that for entrepreneurship, like it's a team sport as well. And I've learned so much from my peers, from other entrepreneurs who have been willing to help me, from mentors. And therefore, you know, I it's it's my intention and goal and what I love helping others as well. And it just becomes Becomes this stronger community of people who are looking to get better and impact the world. And I think that's there's as much as we have these up ups and downs of entrepreneurship. I think that's the the guiding light for us and what really lights me up. You know, being able to connect people in a room and then bettering themselves and to hear the stories from members who are just, you know, tell us that we've changed their lives. You know, like that's real, that's what gets us up in the morning and what we're in this for. So what I could say is that, you know, I used to have a whole lot more hair on my head, um, but it's it's it is uh it is well worth it because of the the fulfillment factor. Um and every day is a new challenge, and and we you know you get punched in the gut, but you you wake up each morning with a with a fresh start and uh and just need to maintain a positive outlook on things and and just continue to push forward. And that's how uh you know growth.

That's great, Eric. So uh final question I always ask is you know, given um what your your beads now are in in the in the spirit of collaboration, right? But what do you guys need? Who who should be reaching out to you? Who would you like to talk to right now?

So, you know, our our our main goal right now is to get in front of more gym partners. Um, you know, we've as I as I as I mentioned, um, we've we've proven to be an amazing solution for gyms. So so now um we're just we're looking to to get out there and to help more gyms. Um I you you also mentioned our you know how how have we raised capital, where we're at. Uh, you know, we we've we've uh as I referenced, we we raised the seed round to to kind of prove out the idea. Unfortunately, now that the business case is really strong. We've got a good amount of LOIs in hand and a bunch of gym partners that we're um either currently launching in or about to announce. Um, but with that, it does take capital to support rapid growth. So um we are soon to be kicking off around. So I think the the timing will be quite uh optimal here. So it's really gym partners and uh potential investors who would want to get on board the rocket ship.

Awesome, man. Awesome.

Well, Eric, where where do people uh where would you like people to go online once they so I would say you know, our our website, swervefitness.com, you could find us. We're we're pretty active on Instagram at SwerveFitness. Um and if uh if you want to reach out to me, it's just Eric E-R-I-C at SwerveFitness.com and would love to connect.

Yeah, and you spell Eric the right way. So congratulations on that.

Uh well hey Eric, it's you're clearly not biased, right?

Yeah, yeah, clearly. It's been a lot of fun, man, and congratulations so far on on what you put together. It's really interesting uh business proposition, and the technology has a lot of potential. So it's gonna be exciting to watch you grow and uh I appreciate you spending some time with me on a Friday morning and and discussing what you guys are doing. So, ladies and gentlemen, Eric Posner.

Thanks for having me, Eric. Always always great speaking to you.

Hey, wait, don't leave yet. This is your host, Eric Malzone, and I hope you enjoyed this episode of Future of Minute. If you did, I'm gonna ask you to do three simple things. It takes under five minutes and it goes such a long way. We really appreciate it. Number one, please subscribe to our show wherever you listen to it, or iTunes, Spotify, Castbox, whatever it may be. Number two, please leave us a favorable review. Number three, share. Put it on social media, talk about it to your friends, send it in a text message, whatever it may be. Please share this episode because we put a lot of work into it. We want to make sure that as many people are getting value out of it as far as possible. Uh lastly, if you'd like to learn more, get in touch with me, simply go to the futureoffitness.co. You can subscribe to our newsletter there, or you can simply get in touch with me as I'd love to hear from our listeners. So thank you so much. This is Eric Malzone, and this is the future of fitness. Have a great day.