Jim Crowell - 2023: The Year in Review

[00:00:02] Hey everybody, welcome to the Future of Fitness, a top-rated fitness industry podcast for over four years and running. I am your host, Eric Malzone, and I have the absolute pleasure of talking to entrepreneurs, executives, thought leaders, and cutting edge technology experts

[00:00:17] within the extremely fast paced industries of fitness, wellness, and health sciences. Please stop by FutureofFitness.co to subscribe and get our interviews with summaries delivered straight to your inbox. You'll also find our free industry report on artificial intelligence,

[00:00:34] five industry experts, five different opinions, and tons of valuable insights for free at FutureofFitness.co. Thanks for listening and on to the show. Hey friends, Eric Malzone here. I've had the honor of interviewing over 750 professionals

[00:00:54] across the fitness, health, and wellness industries. There's one thing I know for sure. Without a doubt, there is a tremendous opportunity to leverage a highly valuable and relatively untapped network of independent podcasters and content creators. Traditional advertising isn't what it used to be.

[00:01:09] Costs are high, consumer trust is low. I've seen the results firsthand and can assure you there's a much better way to connect with your target audience and emerge as a thought leader in our industry. That's exactly why I've launched the podcast collective. The ultimate solution

[00:01:24] designed to empower executives, founders, and thought leaders in the fitness, health, and wellness sectors. Our mission? To help you leverage the extraordinary opportunities within our handpicked network of independent podcasts. We don't just place you on podcasts. We make

[00:01:38] you unforgettable. One-on-one coaching ensures that you show up the right message for the right audience with confidence and swagger. We create eye-popping digital assets and social media overhauls to ensure that you are optimizing each and every appearance. Key introductions to strategic partners and potential enterprise clients provide

[00:01:57] unparalleled value that only a professional network like ours can offer. We work with a very limited number of clients to ensure the highest level of service, so please don't hesitate to reach out and learn more. Go to podcastcollective.io to learn more and contact me directly.

[00:02:13] That's podcastcollective.io. We're live. Jim Crowell, welcome back. Yeah, man. It's been a little while. I appreciate you having me back, especially kind of end of the year timeframe. Yeah, it's really fun. We did this a couple years ago, a year in review. I think

[00:02:30] it was two years ago for some reason it didn't do last year, but it's always great to get your insights. I mean, you and I have known each other for such a long time. I think it's been

[00:02:36] 12 years now. Lots of stories in between then and now, but we're both still in the industry, right? Still punching and jabbing, and it's always great to catch up because you're always doing interesting stuff. I mean, we'll catch up every few months, but I always find you're

[00:02:51] out. You're doing something really new and cool. Thanks for having us on. Thanks for coming on. One of the things I want to talk about first, then we'll get into the year review, winners and losers of 2023. How we'll remember this year, we'll forecast how we'll look back as

[00:03:07] we're crotchy to old men and we'll look at 2023 and say, God, I remember when, right? So it's going to be a lot of fun. First and foremost, you're going to be speaking at the Connected

[00:03:15] Health and Fitness Summit coming up in February or in a panel of some sort. You're engaged. I think I'm doing the pitch panel, so I'll be one of the pitch judges. I don't think I'm speaking

[00:03:25] unless that's changing. I don't know when they'll pull your car, man. Well, it's a great event and maybe you can, because you've done it before, if you can explain to the audience what is it that

[00:03:36] do you like about Connected Health and Fitness? Why is it a little bit unique compared to the other conferences that you go to? Well, what I liked about it is that a lot of the people

[00:03:44] that you want to talk to are there, but it's not 5,000 people walking in a gigantic space. It feels more intimate than a lot of events which I like because I like getting into actual business discussions and so you can do that very, very easily there. The slate of

[00:04:01] speakers was really interesting. To be fair, I think a lot of events have really interesting speakers, but it's so closely tied together and sort of knit together that it feels more intimate. I appreciate that primarily about it. Obviously, I love the pitch event just because

[00:04:18] I love to see new companies and hear how they're positioning and understanding the innovative side behind what they're doing. Awesome. Awesome, man. Well, people can learn more ConnectedHealthandFitness.com. Of course, if they want to join, there's the discount code of FOF10

[00:04:33] and people can put that in and get 10% off their fee there. It's a great event. Encourage you to check it out. It's in LA. Yeah, so the Sage House. Now, how long have you guys

[00:04:45] actually been an entity? Has it been a year and a half, two years? Time has flown by over a pandemic time, but give us an update on what you guys are doing. I'll do this really quickly.

[00:04:53] I actually made a very tiny little investment back in 2018 into a friend of mine's gym. I did it through an entity called Boost Capital. Boost Capital ended up becoming

[00:05:05] what is today called Sage House Capital. Then we put a holding company on top of it called the Sage House. Now, we have a consulting business called Sage House Advisors. We've got the investment

[00:05:16] business called Sage House Capital and then the hold co is on top of it. That really came together in early 2022. We're about two years in with that brand and entity structure. To be fair, the entity structure continues to get a little bit more complex as we make

[00:05:34] additional investments and put some operating vehicles together and everything. It's been a super fun last couple of years. It's fascinating for me to think about this sort of a structure, because my goal was to come out and be enduring capital in a holding company format as compared

[00:05:54] to a fund. No issue with a fund, but just for me, I wanted to try to create a flywheel of really strong assets that maybe we never had to sell. If we do that well, I'll let you know in

[00:06:05] 25 years, but if we do that well, that's really the goal is to have compounding traits within the company structure. Yeah. I feel like there's some things that people may not know about you too, Jim. You've been in the fitness industry for a while. You've worked at just

[00:06:20] about every level. You're not just somebody who's come in from an outside industry or from finance and built this holding company, but you've actually worked in the trenches. Maybe give people some insights on that. Yeah. I started coaching athletes when I was about 15.

[00:06:38] So I've been coaching soccer and basketball and tennis. And I played tennis at Penn State. So I've been around weight rooms and sports for my entire life and have a huge love of that.

[00:06:48] I got out of college and was a hedge fund trader. So I was trading commodities in Socketrina, go through the golf and the craziness behind commodities. So I cut my chops in the financial arena through the hedge fund game. And then I just completely changed course

[00:07:03] and decided to open gyms after I just fell in love with CrossFit, frankly. So I opened my first CrossFit gym in 2010. And I did everything. I mean, I had a great business partner early

[00:07:12] and everything. So we were working together, but I coached a bunch of classes. I did my own accounting. I learned how to do sales and marketing, built what was a terrible

[00:07:22] brand back then, right? Just sort of learned what it took to run a gym. And we had a bunch of success in those facilities. And what I liked about CrossFit back then was that it was just

[00:07:32] pure capitalism. It's just like, if you do well, you do well. If you do poorly, well, you'll probably go out of business. I liked that. And so I learned how to do that entire thing.

[00:07:42] Ended up selling those. And then I went down to OPEX where I was coaching education initially. And then we did facility licensing and remote coaching was a big component of

[00:07:51] that. So it's funny to think about it now, but I got into the remote coaching game back in like 2011. So this idea that coaching is going online is not a new thing for me. And I've seen what

[00:08:04] really seems to work in these systems and where technology needs to support and where it doesn't help. And then I left OPEX in 2020. And that's really where the Sage House concept was born and been consulting and investing in. We've done, gosh, almost 25 investments in only fitness

[00:08:21] and wellness at this point. And so I get to see a very wide swath of the fitness and wellness arena, which for me, if anybody who knows me, it's like, I just love that. I love getting to

[00:08:32] see and kind of learn how all these different business models and products and ultimately how the consumer, which sometimes the consumer is the coach or the gym, but how the consumer interacts with these products is something that I'm extremely, extremely interested in.

[00:08:45] Yeah. Yeah. And you love the work. Like, yeah, I can honestly say like a lot of people say, no, I love work. No, Jim loves the work. And anecdotally, it's like when we're working together

[00:08:57] on the Morpheus project years back is at the end of the day, it was like a 12-hour day. We're all really tired and we're all like, let's just, we're going to sit down and watch a movie

[00:09:06] and just let our brains... And then I'm like, look over there's Jim on his laptop as we're watching the computer like building out models with Excel. I'm like, okay, this guy doesn't quit man. It's crazy. Like you love that's what I'm trying to make. I love the work.

[00:09:20] Let's not be too good about that. I sometimes overwork, but I do love the work. Yeah. Yeah, awesome. Well, let's get into this. So the first place I'd like to start is like when we

[00:09:30] look at the year in review and we're just said that we're, you know, people just right at the end of the year here. That's where you record. And who do you think who or what were the big winners? Who are the big losers of 2020?

[00:09:41] This is a hard question. I think the big winners are the companies that didn't raise too much money in 2020, 2021 and even into 22 and have a product that isn't so complex that the consumer doesn't understand it. And so, you know, we can get into some

[00:10:02] company names if you want, but what I'm seeing in 2023 is a lot of very, very intelligent people building very intelligent products that don't actually connect to the consumer yet. So think about all of the AI components and all of these suggestion engines and all of these

[00:10:22] smart wearable products, right? And then you ask yourself, oh, interesting. So like, how does the consumer interact with those things? And in many cases, they simply don't. They don't want to do work, right? I want to look at my Apple Watch and see the rings closed

[00:10:38] without doing anything. And so I think that what's happening in 2023 are the companies who aren't spending all kinds of money who are figuring out how customers actually interact with their either their apps or their hardware or their services, right? So in gym,

[00:10:56] and it's those companies that are seeing how consumers like or dislike the product that are actually starting to win. I think the other huge piece in its coming to fruition is infrastructure, meaning what powers the industry. So, you know, I will keep in mind to be fully transparent,

[00:11:15] we have investments in some of these companies. Okay, so let me just throw that on the table. But I look at companies like Mover, which is a movement based assessment software,

[00:11:25] and that's starting to plug in across the board, right? And it's like, is it health? Is it fitness? Is it gyms? Don't care, right? But if you need to understand movement and how it interacts with

[00:11:35] the customer, we have a very simple system that can do an assessment and it can then feed you exactly what you need to fix those things. I would argue a sensei is the same way with

[00:11:45] computer vision and how that starts to be able to both coach and also understand what's happening inside of a fitness space or inside of now a VR, you know, related products. Really interesting how that's becoming sort of the backbone. You know, Rook is another one that's aggregating all

[00:12:02] these wearable data elements and saying this is what it actually means to be healthy, etc. I've watched, you know, verb is another great one too because they're starting to say, hey, this is how communication can work. And here's how AI actually supports a fitness-related

[00:12:19] experience. So not just through open AI, right? Like they have millions and millions and millions of messages to understand what actually constitutes positive or negative feedback. So I'm a huge believer in infrastructure. I will continue to be a believer in

[00:12:33] infrastructure. And I think 23 was the year that both B2B, well, really it's B2B, right? B2B started going, I'd rather integrate than build. And so I think you're going to see

[00:12:45] a pure hockey stick of how that actually goes out to the world. In terms of brick and mortar, I'll be honest with you, I think franchising is in a very unstable place. And I don't mean from a consumer sentiment standpoint. I mean from a, the franchisors

[00:13:05] have a lot of, and not all franchisors, but a lot of the franchisors have a lot of ground to make up when it actually gets to do you have trust with your customers. And I spent, I've spent almost

[00:13:18] this entire year studying the brick and mortar and the franchising world, how it functions, how it grows, how you build trust and run a process. And the trouble that I have with the general notion of it is that CapEx, meaning the build out costs, etc. are extremely high

[00:13:36] right now. And the net worth components of a lot of people are not strong enough for them to actually get out of the gates without a perfectly executed presale. And so there's a lot of people who have

[00:13:49] gotten out over their skis in brick and mortar and don't know what to do, but they've signed a 10 year lease. And I think that's kind of literally in this moment beginning to erupt a bit.

[00:14:00] And so I think that certain franchisors have a lot of ground to make up as it relates to, are they actually providing a consistent product to a large percentage of their existing franchisees? I'm always going to be a believer that an in-person experience is a beautiful one.

[00:14:17] I, you know, we're working on something right now. So we believe in that. But franchising is, I think, going to have some headwinds for the next 12, 18 months. And how is that different than a corporate own location or an independent gym? Like how is that,

[00:14:33] how are those situations unique to franchising? Let's just, let's go at this initially from a risk standpoint, right? So if I'm a franchisor, then my risk is much more asset-liten. I don't have as much money to put out for each facility that goes up. I am not technically

[00:14:50] on the hook for if that facility does well or not. Of course, I want them to do well because I get, one, I want my brand to be great, but two, I want the royalties that come off of the brands that

[00:15:01] do really well from a revenue standpoint. But the corporate gyms forced the corporate entity to win in all of them. Otherwise they legitimately have liabilities on their balance sheet. So it's just a different business model. Usually people would suggest that corporate

[00:15:17] gyms grow a lot slower. And frankly, the reason is because it takes longer, because you got to get more assets to build more gyms. But you get a stronger, you get a stronger brand if you do it well, because you are in control of how everything

[00:15:33] works soup to nuts start to finish. Franchising is certainly a stronger amount of control than licensing or affiliation, right? But it is not quite as strong as a corporate. And it's, the thing of this, it's always been interesting me at work with some

[00:15:46] large franchise chains over the past five years. And my getaway says, I've run a small gym in my life, two of them, right? And it's not easy. It takes a lot of work. There's no, I haven't

[00:16:00] seen white words just like a business in a box. You just set it up like a McDonald's, right? And then it just people come and they just buy your stuff. I just haven't seen that

[00:16:07] yet. So it's always been like in my gut, I've always been like, I have a question like, how do you make it so streamlined that it just, anybody can be an operator of a franchise,

[00:16:19] a fitness franchise and make it work? It just doesn't seem, it seems like unique in the marketplace compared to other franchise models and other industries. Yeah, I don't think that that's any franchisors fault, honestly. Like in terms of this general question, I think

[00:16:34] it's that human beings when they go into a fitness franchise, and let's just go boutique. So let's not call it planet fitness right now, but that's a great example. But if we go boutique, you know, for fitness franchise, the coach trainer instructor, whatever they're called inside of that

[00:16:50] four wall gym is incredibly important to how people perceive the experience. And so if you try to go too fast, if you don't educate your coaches, if you don't get proof that your coaches are in fact quality and can deliver this experience, you immediately have something

[00:17:07] that is less consistent and less good than technically another franchise or a corporate gym would have. And so I just think that the bar is higher than let's say you put a Chipotle down, right? Somebody who puts, you know, a scoop of avocado is a very different interaction

[00:17:24] than a coach who's trying to like be six inches from you to help you understand how to do a kettlebell squat. You know what I mean? So the education factor is incredibly important, not just for running a process, but for interacting and engaging with humans. And that's tough.

[00:17:43] And you know, I would add to that too, is that the environment of fitness like you and I have talked about, you've written and talked about, you know, how it's an emotional experience, like someone in fitness is very emotional, which means that the environment has to be,

[00:17:56] you know, has a certain humanity to it. Like you have to be able to say someone address them by their name, right? Like ask him how things went last week. Hey, how's your kid? How's, you know, whatever I mean, it's got to be this welcoming environment where

[00:18:08] people can come in and feel encouraged and feel warm and welcome versus like just a place to eat. Like, no, I'm just in there to get my food. Like, no, this is this is an experience that

[00:18:18] you have to foster. And that's, it's not something you can easily just scale up once you find a formula because there is no true formula outside of like, you know, the human interaction. So I think that's a key part of the mess.

[00:18:29] Well, it's, I'm a probability guy, right? So I look at that and I go, well, what's required, you need to hire bedside manner and teach skill. So in theory, that's two parts of the marketplace. Obviously, that's terrible language. But if I can hire better people

[00:18:46] and I can create processes around increasing my probability as having hired a better person or better people, great. And then if I can train them better and better and better and prove that

[00:18:57] my training is better and better and better, then this business in a box is closer. But the notion that somebody can buy a franchise and never step foot in it, don't know about that, right?

[00:19:08] Unless you're paying more than what, you know, I've looked at a lot of FDD docs in the last year, I would argue there is a lot of absolute nonsense as it relates to the cost structure

[00:19:19] of what is being proposed as the norm for these facilities. And so yes, you could pay more and hire better GMs. And obviously master franchises would do something like that, of course.

[00:19:31] But if you don't have the right talent that is educated the right way and manage the right way, you're going to work an awful lot in that facility. So the idea of owner operator

[00:19:42] still can be beautiful for a franchise. If you want to be an owner and the GM operator, talk about somebody who has a significant amount of skin in the game and who really cares. But this hands off operator in one facility, that's not playing out right now,

[00:19:58] at least not in the fitness stuff that I'm looking at. So people need to understand what the realities of these are. And again, you can make lots of money doing franchising, but you

[00:20:08] need to be clear on what the real game is. And I think that's why the trust factor for certain franchisors is quite low, is because they're selling something that isn't actually reality. There's a subset that I find very interesting in the franchise world. And that's like the

[00:20:22] whatever we want to call it, the wellness slash recovery slash longevity, right? Where it's almost like an integration of medicine and kind of a stab at preventative health care. How do you feel about that segment moving forward? Because I feel like over the

[00:20:34] last two years, it's really emerged this year, it's emerged very strongly as a category. Yes. What do you forecast for that? I think there's lots of different types of wellness. There's clearly like medical concierge

[00:20:45] health, which is very different than recovery places. I think one of the best recovery places is pause. They're doing a really nice job of building that out. If I go to principles though, to me, there are a couple of factors that I have to understand before I give

[00:21:04] a thesis, right? One is, is it human centric or is it technology centric? So do I walk in, see a front desk person and then just go sit in a cold plunge, then a sauna,

[00:21:17] then a float tank, then I do my red light recovery. Am I just walking technology to technology or is there a human experience where I'm being led through a certain type of concierge something? If it's the former and it's tech-based, well, you probably have a capital

[00:21:37] heavier, meaning it's more expensive to open, but an operating expense lighter model. So in theory, you might be able to get better EBITDA margins, which franchising, it's all about EBITDA margins

[00:21:47] right at the end of the day. And so if I can prove that out, that's really interesting. Now, the issue with that is that that technically could become a commodity if everybody's using

[00:21:58] the same technology, right? So if you don't have your own technology, if you don't have a very unique take on how it works, or if you don't have better processes, better real estate components, which,

[00:22:09] you know, John from Paws, right, was a real estate guy as far as I know before. And so like, he really is thinking about all those elements as well, which I can tell you from looking at

[00:22:16] franchising over the last year, that's really important. And so you have to have those systems better and better and better. But in theory, if there isn't a tangible, differentiating factor, then there is a bit more risk that somebody could try to duplicate it. And

[00:22:33] so you have to stay out ahead with customer captivity, etc., etc., etc. If you go to concierge health-ish, right, where like, there's a doctor or there's a wellness practitioner, whatever the terminology is, you still face those issues that we talked about from fitness,

[00:22:49] though a little bit different. They need to be better engaging because I think the reason why wellness is coming through is because people are quite fed up with a general doctor experience,

[00:22:59] right? Like I don't want to walk in there and get 96 seconds from my doctor, not really be able to ask questions and then get sent this huge bill for whether it's supplements on the natural side,

[00:23:10] or it's actual big pharma stuff on the medical side. And so I think what you're seeing is like, what's the experience that I as a consumer like, because yes, I think that this stuff will be

[00:23:21] connected to insurance, right now people are paying out of pocket for it. And so it's the companies that have the better experience that are working. Did that answer the question or is that...

[00:23:30] Yeah, I mean, there was no real specific question. I want to get your thoughts and opinions on the category in general, which I think you just did really well. Well, so it is definitely emerging.

[00:23:40] Longevity and wellness as it relates to longevity is here. So like if we want another 2023 theme, I think it's here. And I think it's because of Peter and Stacy Sims and Huberman and right? Yep. So it's here. And so now the question is, is people are going, okay,

[00:23:59] I want to try it. And you know, I don't have the internal data, but those places would to say, are they continuing to use it? That's what I would want to know the most and not for two or

[00:24:08] three months, but for like six or 12 months, it'd be fascinating to know if people keep coming in and using it. I'm a huge believer in the concepts, but only if people have a general

[00:24:19] level of health and exercise and good food as well. Otherwise, I think it's a band-aid, right? It's like, I don't care how many cold plunges you do if you're eating fast food and not moving,

[00:24:30] it just doesn't matter, right? So if doing cold plunge gets you to eat better and exercise more, I'm all for it. I'm all for it. But there are a lot of people who are like,

[00:24:41] so I just need to do a cold plunge and I'm good. It's like, no, that's not going to work. Yeah. So I like the category. I do think the category is quite separate of fitness generally.

[00:24:53] So like I'm not fully there that these massive facilities doing all things under one roof will work as simplistically as people think they will because I think that people are beginning to separate the brands in their brains. I go here to train hard, I go here to recover

[00:25:14] in a relaxed way, I go here for my meditation, I go here for my medicine. I think that is important to remember. And so lifetime coming in and putting wellness clinics all for it.

[00:25:26] And I think that could potentially work, but notice that at least so far, it's a different brand. So it's like, I can go to lifetime, but I'm going to have two bills and whatever.

[00:25:34] It's like, interesting. But will everybody go to lifetime for that? Or will they want the niche expert in that thing? I think there's a lot of people who will want the niche expert and

[00:25:45] they're perfectly fine to go to a different place. So I think there's a place for both of those things is what I'm saying. And to your point on what I often say about the emotionality

[00:25:54] of fitness and wellness, there's no chance in my opinion, like literally I put this at 0.00001% that one company will rule all of fitness and wellness. I just do not see it coming

[00:26:09] because the way that you have to speak to consumers is so different to get them to take action in fitness and wellness. Yeah, it's a really interesting take. One of the things

[00:26:17] I want to cover is like, I feel like public companies, you and I were talking before we started recording, have really gotten a lot of at least in our industry press, have really gotten a lot of attention this year, good and bad. I mean, F45, Expo, Peloton, Nautilus,

[00:26:31] Slashbow Flex, Planet Fitness, all these companies have been in headlines quite a bit. And it's interesting to me to see fitness companies listed in Wall Street and how Wall Street is reacting to our industry overall. So when you look at all these headlines of these companies

[00:26:48] in the public sector, what are some of your takeaways this year and thoughts moving generally speaking, Wall Street hates fitness. Right. I mean, let's just be realistic, right? They don't like it. You could argue that it looked

[00:27:03] like they were going to like Expo until I don't remember May and Expo has gone from 36 to it was at eight and now it's back at 11 or as we're talking today. There's a lot of reasons for

[00:27:15] that. Okay, obviously the big research report from Fuzzy Panda was not good for Expo. And you know, there's been some recent Bloomberg articles that are not good. But what was most

[00:27:26] interesting to me is that you didn't see a boatload of new buyers come in when the stock got knocked in half. Right? So like if you look at the volumes, the volumes, at least from what I've seen and

[00:27:37] I'm not deeply studied it, the volumes are on the way down, which means people like, I'm probably done with this. And so until you see an event where the volume pops back up, I think that the sentiment has probably changed to the more negative. Now, planets,

[00:27:53] stock has looked generally pretty good. Lifetime got beat up this year and maybe they're kind of, I'm saying this in a positive way, like flatlining to try to figure out what's next, right? But lifetimes looked okay. Peloton has just been god awful since, you know, whatever 20 early 21.

[00:28:09] I will say though, I think Peloton is figuring some things out and maybe I'm wrong, but I think they're beginning to figure some things out. I don't think that that's really reflected in the stock price, but I looked at the most recent earnings reports and I was like,

[00:28:22] interesting good amount of cash on the books. They're actually starting to get some things cleaned off of the books finally. I mean, I'm a big fan of Barry McCarthy. So like, I think he's very, very smart. I don't know personally, but I think he's very, very smart.

[00:28:35] And so they have chosen a pathway, right? And the pathway is inclusivity. And that's what they're going to die on that hill, right? And so it's like, I respect that's what they want to do.

[00:28:46] And so I think that Peloton needed to do something like that because they need a captive customer base which has been historically their competitive advantage. So, I expand on that. What do you mean by inclusivity? Like when you see that, because when I look at

[00:28:59] Peloton, I look at so far this year just like them throwing a bunch of stuff against the wall, hoping someone knows. Which they have. Yeah. Right. So where do you see the clarity in in the direction moving forward in specifically inclusivity?

[00:29:11] I will go to two, and I'm sure people will want to argue this with me, but I will go to a couple years ago, the Christmas ad that you either saw an ad for somebody in a $15 million New York

[00:29:23] penthouse apartment or you saw the ad where it looked like the guy was telling his wife she needed to be hotter. Right? Like, it's like, that's an interesting brand, you know, for Peloton,

[00:29:35] right? Like the more elite crowd and whatever. You now see a much, much more diverse set of instructors, a much different tone of voice. You see them pushing back on where their ad

[00:29:50] dollars are going to go. Now some people would argue that was a big mistake, right? But they're picking their lane and they're saying this is going to be Peloton and we're going to build

[00:29:59] a culture around it and we're going to build a customer base around it. Like it or not, this is it. Now one of the things that Peloton as far as I know still has, people like doing the

[00:30:09] damn rides. Yeah. We can't forget about that. People like doing Peloton rides. So if Peloton starts to see their subscriber base grow, the stock will go up because at least from what I saw,

[00:30:23] they have enough cash on the books to handle it unless there's some big event that I don't know is coming. But I think that Peloton is beginning to understand who they are. To your

[00:30:32] point, they've thrown a lot of things against the wall. I think they're starting to be like, yep, didn't work, didn't work, didn't work, that worked, that worked, lever that, lever that. And it seems like they're moving in that direction. But I would not consider myself

[00:30:43] like an insider expert on it at all. Yeah. That's interesting because I want Peloton to do well. I cheer for Peloton. It seems like a lot of people in the industry have just

[00:30:53] kind of just want to tear him down. That's what it is. Yeah. I know so many people, I mean more than any other fitness company out there, truly. I know so many people

[00:31:04] who got a Peloton and still ride to this day one, two, three, four, five times a week who just can't find any consistency anywhere outside of the Peloton. It's like, that's awesome. Yeah. That's awesome. You don't do strength training? I get it. You keep riding that

[00:31:18] damn Peloton. That is a powerful, powerful thing. Now, of course, other companies do the same thing. I'm not saying Peloton's on their own, but that's really important for us to remember is they created something that a lot of people liked to do for exercise.

[00:31:35] You brought it up too. Strength training seems to have really a renaissance moment over the last year. It's really starting to come into the forefront. I've talked about numerous times on this show. We've seen the numbers. People are more engaged in strength

[00:31:48] training, especially women. Anecdotally, I go to my gym. It's harder for me to get a squat rack. I got to wait now, which is great. I used to be grumpy. People don't even know how to lift,

[00:31:59] get out of my way. Now I'm really generally excited about seeing it. Do you agree with that trend that strength training is up? And then what do you think may be driving it? Yes, in a big way, I believe in that trend. And we're putting dollars behind it

[00:32:13] for what it's worth. I think a lot of this is stemming from the studies that are showing that strength training is really important for aging. And so let's just start there. It's like more people think there's a medical reason to do it, so they will stomach some like,

[00:32:29] okay, like I'm not quite sure. So like I'll get on a machine and then I, man, I see all these people who look yoke doing a back squat. So like maybe I'll grab that kettlebell and do some squats with the kettlebell. And so what I'm seeing,

[00:32:41] because I'm still training in the Glovo gym right now, which is fascinating, research material. I'm seeing more and more people looking at their phones and it looks to me like they're looking at programs. And so I think strength is becoming more accessible

[00:32:55] because there's programs that help people understand what to do and how to do it digitally. So you don't have to pick a number, $100 an hour for personal training to do a back squat. And I think people believe that it's now important to not necessarily be bodybuilders strong,

[00:33:13] but to get more strength because muscle helps you burn fat and muscle helps you age better. You know, Gabrielle Lyons and like that crew is really nailing this point home. And you know, because there's an MD behind a lot of people talking about this right now,

[00:33:31] regular Joes are saying, I'm going to try that. And then I'm telling, I just posted about this a couple of days ago, when you do strength training for the first time,

[00:33:39] if you do it safely, you really start to feel it and then you really start to feel momentum because you're like, I did that seven pound dumbbell two weeks ago and now I'm on the 10.

[00:33:50] It's like, that feels good. I want to keep doing that. And so I think there's a lot of emotional components and also let's just call it structural components behind this trend. I don't think it's going anywhere. I think if anything, it's going to be bigger.

[00:34:03] Yeah, it's interesting too. And I don't know if you saw this, but total release to small report, there's more of a trends report now as you know, all this stuff is very encouraging. Of course, you know, their numbers are going to be

[00:34:13] skewed to people with strength training because that's what total is. Yeah, but you're right. I mean, some of the things like we talked about motionality of it, but we all know like a novice weight lifter.

[00:34:22] So when he's just getting into it, we'll see extreme progress in the initial six months. Right? Like it's crazy and where else do you get that? Like, you don't jump on an exercise,

[00:34:31] like a cardio piece of equipment and see this huge trend in progress. That's big for people. So interestingly enough, I would argue that you could see a lot of progress generally speaking in aerobic, but that's not how almost anybody does it. It's like, I get on the treadmill

[00:34:49] and I walk. It's like, awesome. Great. But that's very different than moving up a physically new dumbbell. Yes. Like went from the seven to the 10. It's like, what did you do on the treadmill? I walked another couple of minutes. It's like, ooh, let's definitely hammer home on that.

[00:35:05] You went from seven minutes on the treadmill to nine minutes. That's a celebration. And so I think right, that's one of the reasons I think coaches are so important is because they can call out that little thing and make the person recognize it's like,

[00:35:19] you pushed yourself and got better. And getting better feels really, really good. And so I think whether it's tonal or I mean, like, you know, we love obviously speed and proteus, right?

[00:35:29] And so, like you start to look at those products and you go, it's now becoming easier to quantify, right? And so there's a lot of really cool assessment based stuff. And there's a lot of really cool training based stuff to help you understand if you're getting stronger,

[00:35:44] which feels really good. And so let's go back to the treadmill example. I do know, can I run a mile on, I don't know, speed seven? And then can I run a mile two months later at

[00:35:53] speed eight? That's interesting if I can do that. Now I can do that in the same format, except with strength first time ever. That's really cool. Yeah, I love it. I want to make sure we give, I've been thinking about this question

[00:36:04] all morning and how to phrase it because I think how you phrase questions is important. So when we look back in 2033, right? And we can zoom out a little bit from outside of the industry.

[00:36:15] When we look back 10 years from now on this year, I think it's one of those like frog boiling in the water moments, right? Or maybe as we're going through, we're like, huh, that's cool. Back to my

[00:36:26] day, right? Huh. Wow. I can't believe that happened. But there's been a lot of moments this year that I think we should have looked back historically and be like 2007 was such a critical moment for technology, right? For so many different reasons. The iPhone release was big

[00:36:38] and then, you know, open source program, things like that. Like it was just a really big year for technology. And I feel like we're kind of seeing something like that this year. So here's the

[00:36:46] question 10 years from now, when we look back on 2023, what do you think we're going to remember it for? Oh, weight loss drugs. And, you know, and the GLP ones I think was huge. And I think that that is such a large percentage of the market. Now obviously today

[00:37:00] it's very expensive and it's invasive, but clearly that will start to change. Or at least I believe that will start to change. I think the actual use of artificial intelligence

[00:37:12] is it's still early in the fitness space. So a lot of it's still clunky and not really that good. But it's actually being used and being tested, you know, at scale right now, which I think

[00:37:22] is very, very interesting. I'm going to go back to infrastructure. I think the the APIs and SDKs. And so like the pipes are being built in the fitness industry to allow a lot of companies to start that would have otherwise not been able to have remotely this

[00:37:38] kind of technology before. I think that's going to have a big component, you know, important elements to just creating companies. I think that we're going to look at 2023 also as the year that people recognize that they need other humans and or mental health support. And so

[00:37:59] like I feel like this year in particular is a very different feel around psychology, telehealth, telepsychology, etc. And I think that that is going to have far reaching effects just simply from a stigma standpoint, which gets new startups into the mix,

[00:38:17] which gets a lot more people to try it, which allows a lot more data to be collected and those things at least initially in my mind hit first. And certainly there's a lot of hardware

[00:38:29] components, but maybe that's a different category. No, I agree with all those. And I think especially generative AI, I mean, we're going to look back. And then this time like about

[00:38:37] a year ago, we didn't really have chat GPT, like it wasn't if we didn't have access to it. And it's incredible how fast it's moving and how it's become just a quarter. So like this morning

[00:38:48] to prepare for this interview, I was asking chat GPT questions. One year ago, I didn't have that. Yeah. Right? I was asking, okay, give me a list of these types of companies, do this for me,

[00:38:56] and then refine the list. And I was like, you know, everyone's starting to get to use it more and more. And that's mind blowing, Jim. Like, you know, like the future is here. And I don't know

[00:39:05] if people really have grasped that yet. Yeah, I mean, most everybody that I know uses it in some capacity, you know, some version of open AI or obviously Google just released their newest

[00:39:19] version, like it's going to move intensely fast. It sounds like we're pretty darn close to a version of quantum computing, which is going to upend everything when that comes out. And so

[00:39:29] I do believe that our brains are being rewired in real time to change the way that we both do work and demand things. So think about how much our world changed when we started being able to ask

[00:39:47] Google at dinner, who won this game or what, you know, this, you know, historic event was. But now imagine when it can actually answer complicated things. That's really interesting. If we put the fitness and wellness lens on it, I'm seeing some incredibly ambitious projects,

[00:40:06] right? Like, I am seeing a lot of people plug into open AI and then build their own, you know, MLAI type components within that. But I'm also seeing some very, very smart people build their

[00:40:17] own versions of AI that let's just call it or more generalizable, meaning I can ingest this data from a gym, from a coach, from a system. And that data gets ingested and spits out the answer.

[00:40:33] IE what did I say right out of the gates? The stuff that asks too much of the consumer and that forces too much time and energy isn't being picked up. You're going to see that data become important because there are now engines that can understand all those different

[00:40:47] things and make recommendations and or fitness wellness programs, you know, and then start to intervene with the client or the member when is necessary because it has that level of understanding. It's definitely going to be highly disruptive. I think if done correctly in a

[00:41:07] positive way, but it's going to be highly disruptive of the space in the space. Yeah. And I feel like I can't remember who guessed I had, what guess I had on this year that put

[00:41:17] it in this way. It's like we're kind of at that point when the internet came out, there was like DOS prompts, right? But it's how we are actually interfacing with the technology. Yep. Kind of we're in that sweet moment right now, like how we get interfaced with this

[00:41:31] game changing, like world changing technology. And I think that's something a lot of very, very smart people are working on. Couldn't agree with you more on that by the way. Okay. Yeah. So looking forward because we've even talked about the year, but in 2024 as we go on,

[00:41:47] what has you most excited? I'm sure we covered a bunch of it, but maybe just to recap, like what are you really excited about, Jim? I'm a bit of a weirdo. So let me start there.

[00:41:55] I think you're going to see some consolidation in the space. And so I think you're going to see multiple brands team up and some of them are going to be stronger than others,

[00:42:03] but I don't think they're going to be eight versions of X piece of hardware and or software. So I think you're going to see that it's starting to happen behind the scenes,

[00:42:13] but I think you're going to see more of that. I think you're going to see a lot more integration technology make existing experiences significantly better. So again, go back to infrastructure, like that's really starting to happen. And with a little bit of, I'm way oversimplifying it,

[00:42:30] but with a little bit of design work and existing apps mixed with these APIs and SDKs, you actually can enhance the experience whether digitally or in person in a pretty significant way. I think there are going to be headwinds in franchising. Just that's my opinion. I hope

[00:42:46] I'm wrong because I think in person is such a valuable tool. I think customers want it, but I think franchisors are going to have a tough 2024 just rebuilding some stuff. I mean, I still think Planet Fitness, etc. are going to be pretty strong. And I think that we're

[00:43:01] going to see, I think you're going to see a big, big push into experiential digital because I think the Oculus three is a giant step up. I think the Apple VR headset, I can't remember what it's

[00:43:16] called, but I think that's a gigantic step up. You know, guys like Ryan DeLuca have been working on VR brick and mortar for like seven years and it's getting good. And so I think you're going

[00:43:29] in Lumen, right? Lumen is an interesting brick and mortar concept that's coming out. I think you're going to see a big push in the new version of experience. And so I think we'll go

[00:43:42] a long ways in 24. I don't know yet just to be fair what the customer though is going to latch on to the best. And so I don't think that a humanly coached experience is going anywhere. So I just

[00:43:55] want to be careful, clear on that. But I do think there are going to be lots of new and interesting experiences that people will like and want to try because it's getting easier to put it together.

[00:44:05] And the like you're saying the underlying tech stack is now being build on a bull much better so that these systems can come out with out being a $50 million initial investment. Fascinating. Love it. Well, Jim, I know you got to run to other meetings this morning.

[00:44:22] Where'd you like people to go? They want to learn more with you. What's the best place for them? Yeah, I'm just Jim Kroll on LinkedIn CROWELL. And as I always do, email is Jim at the Sage

[00:44:32] House. So feel free to hit me up or if you've got some amazing ideas, I'm happy to take a look or get on the call. Yeah. And I encourage people to use. So it's really fun talking to

[00:44:41] you. Awesome man. Thanks for having me on Eric. I always enjoy it. Yeah, ladies and gentlemen, Jim Kroll. Hey, wait, don't leave yet. This is your host, Eric Malzone. And I hope you enjoyed

[00:44:53] this episode of Future of Feminist. If you did, I'm going to 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. iTunes, Spotify,

[00:45:07] Cast Box, 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

[00:45:18] message, whatever it may be. Please share this episode because we put a lot of work into it and we want to make sure that as many people are getting value out of it as possible. Lastly,

[00:45:27] if you'd like to learn more or get in touch with me, simply go to thefutureoffitness.co. You can subscribe to our newsletter there or you can simply get in touch with me

[00:45:36] as I 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.