Melanie Lauer - HOI & Kettler's Entry Into The US Market)

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. Pocket Suite has you covered. On average, fitness business professionals that sign up for this app see a 30% boost in income. That's because it's simple and has everything you need and nothing you don't. You can easily sell packages and subscriptions. Control your billing in one place. No need for Venmo, PayPal, or any other merchant solutions. Save backforth time with clients and prospects with a custom booking link. Set up automations to cut down on admin time, like client renewal reminders, seamless client onboarding, contracts, intake forms, etc., etc. Look, I know this because I used it myself. It took me less than 10 minutes to get set up and fire off my first client invoice. If you're looking for a time-saving, simple application that allows you to combine three softwares in one with a clean, professional look for clients and prospects, then you have to check out Pocket Suite. Go to pocketsuite.io. That's S-U-I-T-E. Check out the Apple App Store or Google Play to learn more and give it a free test run. You can also click on the link in the show notes for my special referral offer. That is PocketSweep.io. This episode of the Future of Fitness is presented to you by the FitTech Club, a business network run by the creators of the FitTech 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 minute. Gyms are exploding figuratively, and their constituent parts are ending up at home, outdoors, 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 FitTech 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 TriSports, says about the FitTech Club.

We have joined the FitTech Club because it gives us access to the most recent innovations in the industry. It gives us access to a unique network and to potential business partners that help us develop our business further.

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Thank you very much for the invitation, Ari.

Yeah, it's a pleasure. I have been looking forward to this because I I really want to get the insights. First of all, you're a very competent leader and executive. Uh, it strikes me in every conversation we've had. And I'm really excited to get the insights from Europe, you know, because as I was telling you pre-interview, uh over here in the United States, we tend to be American-centric. We kind of, you know, focus inward, and rarely do we kind of look at some of the trends outside of the country and what we can learn from that and uh what's going on out there. So to get your insights, and then I know you guys are doing a major entry into the US market, uh, I'm sure that's an interesting ride for you. Um, love to get some insights on that as well. So, naturally, a great place to start, Melanie, is maybe just give us a little bit about uh your background and how you got to be where you are with Kettler.

Absolutely. So, my name is Melanie. My background is sales marketing and product management. I studied philosophy, which is not that typical for being in a role as CEO, but actually it helps me a lot in um understanding things and working things out and up. So I also have my focus, as I said, in marketing sales and product management, still in my role as CEO. And my background is completely not in the sports industry. So I worked in my past positions in the technology technology sector. So I was setting up partnerships with tech companies and dealing with the most recent technologies worldwide. So it was mostly software and hardware. And um yes, and once it's a long time ago, two years ago, I got a phone call from the investors of TreeSpot, and they asked me, Do you wanna give Catla a second life? And um, since I love the brand, because I knew it from childhood on, um the first answer was yes. And this actually gives me the chance to combine my law for sports and my law for technology, and that's quite a huge and fantastic opportunity for me.

Yeah, that's fantastic. So, a couple things, maybe you should tell people where where are you located?

Yeah. So I personally live in Munich and our headquarters is based in Switzerland, so close to Zurich, around 20 minutes by car. Um, you might think about why is she living in Germany when she actually works in Switzerland? Um, when I started working for TreeSport, it was always important for me not to hire people only located in the area where the headquarter is. And this goes for me, and this goes for anybody else that we hire. So we hire by skills, we hire by attitude, we hire by quality, but definitely not where you're based. And um, that was also pre-COVID times that I always preferred working digitally to the people, but then with the best. And that way we have partners in the US, and we have partners working for us in the UK, in Portugal, in Germany, Austria, Switzerland, you name it. It's quite a diverse and international team, but um it's great. So it's it's it's a lot of fun. But Drehspot actually, the the history of the company is is quite old, just like the history of Gatler, which is more than 70 years old as a brand. So TriShot was 15 years ago part of the Oatlo group, um, which is quite a big group in Europe selling apparel and things like that. And going back in that time, um, it was decided once to carve out a TriSpot AG, it was somehow um a Swiss distributor dealing with fitness equipment. So Nautilus, Boflag, Schwin, you name it. So all the big brands that you also have in the US over there. And we did the business um as a distribution business, working with the retailers in Switzerland. And then um Ketlau, which is one of the leading fitness brands in Europe, went in insolvency a third time. And our investors said it's such a great brand, so we have to preserve it because we sell it, but also because the brand has such a brand awareness in Europe. It has 92%. So actually, everybody knows it. When you say I'm working for Catla, they all, oh, I know it. I know it. Um, I was sitting on a home train as a child, and my brother has this, my sister has this. Everybody has an item at home that has that actually has attached the Catland brand. And that's quite quite a good position for restarting a business. But nevertheless, it was quite a huge challenge because we were the little Swiss distributor, and now from that moment on, it was December 2019, we turned into the role as a company working internationally, first step in Europe, but also producing goods. And we took the license right for the brands, which doesn't mean that we had contracts. So we had to begin everything from scratch. So we had to add retailers, distributors, we had to build our own B2C business, we had to implement POS. And that's what we actually did the first month. So we have set up over 130 retailer contracts. We are at 250 POS now in the DAC region, and we are in the market, also with distributors in 36 countries, which is quite a lot when you have to think about that. Actually, every market in Europe works quite differently. So it's not just one big fish that you get out of the water, it's several little mini fishes. And this is what we were dealing with, and we also had to build up at the same time the organization. So hiring people, find the right um agencies, helping us to work on new products and new ideas, and at the same time, not only preserving the brand as it was, which was always standing for quality, for trust, um, we also had to make it sparkle again because it has lost a lot of innovation during the times of the insolvency. And then came I when the journey has started. And since I was out of a completely different business, so it didn't have anything to do with sports except a private way of doing sports. The first thing I realized when I entered a retail store is oh my god, this is all so ugly and all so comparable. There is nobody who has a great USP, and the only thing that defers them if they have a touch screen or not, but that's basically it. And then I thought we have to change that. And I did a lot of workshops, I talked to a lot of people, and before I actually got to the stage that I was thinking, oh, do we have to add another brake system into the models, or is there resistency that we have to add? I was thinking more about the bigger shape. And I talked to architects, I talked to um future scientists, and I wanted to dig into how does home evolve in the future, because this is actually where where people should be using it, not hiding it. They really should have it in their most favorite room. And I mean, if you consider that we are 1.2 billion more of us in the next years, that's a lot of people, and over 70% will live in the city. So there will be no more garage, there will be will be no more additional rooms to you know to storage um your your fitness equipment. And then I was thinking about which company in the world made a really not attractive product to one of the most attractive products in the world, and that is definitely Apple. When you think about back in the old times, it was always that yellowish, ugly screen, and it was loud, it was noisy, and actually the only thing you did was just hiding it if you had the luxury having it at home. And um, so I simply took my phone and I contacted one of the ex-designers from Apple and I asked him, Hey, do you want to join us? Do you want to help us on the path of reinventing the brand? And he said, Yes, that's great. That's a great, great challenge, and I wanna support you in that. And then he was helping us finding the right agency, um, which we discovered with four people. It's an agency based in in the UK, and they actually did a lot of things, the first class for British Airways, they designed um cars like the Neo Car that was launched in China some years ago. They did some design chairs, so a lot of different stuff, but always with a high, um, high approach, high um perspective on how does a really cool object look. And this is what we implemented as well. So we had the first designs, and what was always also important for me was it should not be what we as a team decide is cool for the brand or is cool as a product. So we went out and asked the people. We did a lot of market research, and this is also how it came to the selection of the product that will be launched this year. And um, this would be the first step, and then the second step will be of course that all the other product categories will follow up on that product and um will have the same design language, but also actually the same innovative technology. And now that we are talking about it in technology, I was also researching a lot, and thanks God there is LinkedIn. Um I was researching for engineers, and I talked to one, I talked to another one, and then I found a company called EnergyFit. They were previously called NPD, they just renamed. They're based in California, and they were the ones we choose to help us on the technology side. So really bringing the right technology into the product, having a cool UXUI, having the right programs on file, having the right connectivity and things like that to build up to. So it was actually really it's an international product, I'd say, that we first gonna sell in Europe, and then surprise, surprise, we will also bring into the market in the US. It's not sure when, but what is sure, it's not gonna be launched under the CatLab brand because we only have the rights for Europe. Um, but it's gonna be launched under the brand name Hoy, some completely new brand name that has to be introduced from scratch on into another market. So that's that's our vision and the next step, I think.

Wow. I mean that's um that's a long journey from buying basically taking over a brand, right? And that's all it had. Like you mentioned 92% awareness rate of Kettler, right? And then having to rebuild everything else around it, and now you're going international with it. That's that's an impressive run of work and uh and networking. I've uh, you know, working with a FitTech company here in the United States, I've I've and you, I've seen what you guys have designed with Hoy in the bike, and it is beautiful. Like I, you know, I'm not a stationary bike type of person, but it is a beautiful thing. And I think I was talking to Emma Berry about it. And the best way to describe it is like it's it's got this really, I don't want to put it in a box, but it's got a really cool, like minimalist look. You know, like um my wife and I have a we just built a home last year and it's it's Nordic, you know, it's it's uh uh that's what it looks like. It's just it's black house with gabled roofs and four corners, and that's it. Very simple, um, not a lot of extra space. So when we put things in it, um we have to be very thoughtful and considerate about what we're putting in there because we only have a certain amount of space. It's intentionally small. And I think when you look at the trends of, you know, especially the younger generations, that's where people are going. Like, you know, not too many people are billing, you know, building these huge homes or having huge apartments. They want to share cars, they want to share bikes, and they want to, you know, so it's this minimalist thing that that you guys are, I think, tapping into whether you did it intentionally or not. Um, but it's it's a really, really cool thing. And and for people who want to go look, uh, Hoi is H-O-I. Um, you can kind of Google it maybe and and see what what's going on so far. But I guess when you to when you look at the design, is that what you guys had intended? Uh, were you going after a specific type of person? And you know, is the product connected? Is it can it be connected? Like, give us give us a little more details on the product.

Absolutely. So we decided that we have to build three different types of bike, but with the same frame. And that's by the way, we're why we also call the bikes frame. So that's the product name itself. And um, we decided that we also want to offer different customer groups the chance um to really train with the bikes. So because when we look into a target group, to a customer group, we have all the ages that we're covering, which is fantastic. I mean, we we have customers that are 19 and we have customers that are 99. And and this is a bridge we have to build. Of course, with a bike, nobody who's 86 will jump on an indoor cycle, that's for sure. But nevertheless, it was a huge customer crew that we had to embrace. And at the other hand, we have different levels. So we have the beginners, we have the intermediate, we have the the really the pros that want to ride that kind of bike. So what we did was three different price points, and um there will be uh um a magnetic brake, there will be an induction brake, they will have different resistancies, and one will have an LCD touch screen, the others will have um a common touch screen. So um it's also from the features, it's completely different, all the three of them. So there will be NFC. Um actually, every bike will have full connectivity. So every FTMS-based um app and every BLE-based wearable will be able to connect to it. And we also have integrated in the one with the highest price point, um, NFC, that you can also work with the Apple Chinkit, which was one of the things we wanted to do. So definitely we will meet the expectations of every target group in terms of power, in terms of price, and in terms of customer experience itself. And what we also realized is um the color spread. So we do not offer it in black only, so we will have the chance to have it in green and yellowish and terracotta, in gray, in um in a dark gray. So there will be a lot of possibilities for the customers in order to get what they want. Um what I also have to say, we were thinking a lot of do we add a display that is 15 inches or even bigger because that's the trend. And in our first designs, it was integrated. And once we had the prototype standing in front of us, I said no, we're not gonna do that. And the reason is really easy. So when you have multiple fitness equipment at home, it makes no sense to have a huge screen on every equipment because you have to buy that. It's not coming for free, it has to be included in the price, and you buy it. And the next thing is since I come from the technology sector, I know that it's not just expensive, it also has a very short life cycle in terms of doing updates and new releases and things like that. So after five years, you can actually throw it away. And our strategy as Ketler was always to have goods that you can have for a lifetime. So we have customers who say, Hey, I'm I'm your customer, I bought um a Ketler home trainer 30 or 40 or 50 years ago, and that's our intention, and this is the value of Ketla, and that's how it should stay. And this is why we decided you do not have to buy the huge screen, bring your own device, and actually, if you want to train with our bikes or with all the other equipment, you we do not fix you in the Ketla world or in the Hoi world or anything. You need to be flexible so you will be able to train with your most favorite app and we will take care that it will be connected, that there probably will be an interactive connection as well. For example, if you use Kinomaps, that you can attach the TRATMA and things like that, and that you are free. We do not want to force you to stay within our own world because that's not the spirit that is out there. Everybody wants to choose the best, the best that fits to himself, and not being forced using something just because there is one company who wants to earn in every every center of the business. And at the other hand, we are also not software specialists. So we are coming from the hardware side, and this is something that we are really good in. We are really good in developing hardware, we are really good in meeting the customer needs. But software would be a completely new thing. And therefore, we offer and I would say we offer a service thing. So we we definitely have an app where you can do some on-demand classes, where you can um collect your um trainings and your parameters, but that's not our main business. Our main business is hardware, and that's probably what defers us from the newcomers that were succeeding in the market the last year. So, as I said, full flexibility and a long, long life cycle that makes it worth buying it. And the next thing is that we're also taking care of, since we have those different target groups, um, we give our customers the chance to finance it. Um this year we're also gonna kick off a renting strategy so people will be able in our pilot run in several countries to rent something instead of buying it, but makes it makes it easier for somebody who has a smaller wallet. So that's that's how we work. Full flexibility in everything that we are doing.

Yeah, I I appreciate that. You know, I it immediately comes to mind uh the company C2, who is known for uh rowing ergs and ski ergs primarily. I know they have other parts of their line. Uh, they've been around forever and they are considered, you know, the gold standard when it comes to indoor rowing, especially. And they have had every opportunity to get into the connected device game, right? I'm sure they've been answered multiple phone calls of companies that want to work with them and you know, put them into the same world of hydro and city row and all these connected rowers. And uh, but they haven't. They stuck to their lane and they just become the best erg that they can. And I think they're gonna be around for another 50 years because they made that choice. They focus like what you guys are doing on what they're excellent at, staying in their lane. Uh, so I think it's a it's a it's a great strategy. Uh, I want to make sure that we give enough time to Melanie to your introduction into the United States market, right? Um I guess first question there. What are the differences that you've noticed so far between the US and the Europe market?

So the S broke so differently. So we've had a lot of conversations with people being in the US, being in the sports industry, but also um just being a retailer or being a PR agency. So many different points of views that we collected and that we have experienced. And the lesson we learned is it's much more complicated than setting up something in Europe. Because in Europe, um as I told you, we um had our own key account managers and sales managers for the Dach regions of Germany, Austria, Switzerland. And what we then did was simply working together with distributors in the other countries, which means we make a contract with them, they promote the product, they connect to retailers, they make subcontracts with them, they take care about everything, the after sales, the logistics, um the second service, the first level service, whatever. And they just buy the product from us. So that's the perfect setup, actually. Of course, there is some margin that you share, but nevertheless, you do not have that high investment. When we started up plans for the US, we also thought, okay, that's the easiest way, let's go with distribution, then we can be really quick, and we have low investment, and then we found out there is not something like distribution in the US. So either you have somebody who um does your whole setup in terms of taking care of aftersay service, of logistics, and then even building up a network with retailers, then you're lost. You have to find somebody doing that. And um the other opportunity is running through marketplaces only that have a full service offering, but nevertheless, there needs to be someone in the country handling it. That starts with a time difference. I mean, when when you have somebody on the West Coast for Europe, when then somebody wants to reach you, um, you have to you know get into bed really late to be to be accessible. And this is something that makes it also quite complicated. So, as I said, we are still on the track of setting up the strategy, but it turns out to be quite quite different. And it's the same, by the way, in B2C. So, in the B2C business, once you have a good product in Europe and you invest a little bit into marketing, of course, the typical stuff like SEA and things like that, you can really build a brand. So it could be that you involve PR agency, it definitely makes sense. But it's not necessary to make that huge noise that you need to do in the US before you even enter the market. So that's completely different. So I would say from an investment point of view, um, Europe is much an easier market ever than the US market. That's so different.

And I I find it even more powerful that you say that because you mentioned earlier in the interview that you work in 36 different countries. Like I look, you know, the US is one country, yet it seems to be a bigger pain in the ass than the other 36 combined.

It is. It is definitely also if you work with the other 36 countries, of course you have to take care about translation, you you give the um distributors marketing support, that you develop material and things like that. And when you do the website, um, you actually have to take care that it ranks good in all the search machines, search engines, and do a little bit SEA. I mean, it's not easy, but it's easier than in the US because here you have to make a show. And this is so not necessary in Germany. Because if something is good, the market picks it up automatically.

Yeah, I guess that leads to my next question too, Melanie. So, do you think being a European brand, having a European style, and you know, like we discussed earlier, it's it's you the bikes are artwork in my mind, like they're functional art. Um does that come with some advantages to to you know the market in the United States? Like, how are those types of brands perceived? And and yeah, how how's it what's your thoughts on that?

So I I think being a brand from from Germany, Switzerland, or actually Europe is always a huge benefit in the US. Yeah. Because um also if it if the products are not produced in in Germany, and also if we are um working with international teams, nevertheless the heartbeat is fully European. And that's what it is about. And I think Americans love that. They are so into that. And that's a big, big plus when we're gonna enter the market, definitely.

Yeah, I agree. I love European stuff. And when I think of German, Swiss, I think of uh well-made, precision, you know, like well-thought-out design.

Absolutely. And it's always the trust and the engineering and the quality. I mean, that's also in all industry industries that you're looking for. If it's the big sports brands like Adidas, Puma or something, or big designers that we have in Europe when you think about apparel and fashion, and it goes back to the cars. I mean, Audi, BMW, all that things are European, and and they they have really set the standards and and the image that, of course, all other European brands can benefit of.

Yeah. Um couple more questions about the US expansion. So when you look at building a network, um, you know, I know you guys invested in the FitTech company, uh, that comes with an immediate network, right? It's how we got introduced. Um how have you found, you know, especially with the challenges of the time, the time differences and language. And I mean, you speak fantastic English. Uh, I only speak one language and I speak it not that well. Um, you speak probably how many languages do you speak?

Um, I speak Italian, German, English, and I understand French.

Amazing. Um, so when you look at the networking opportunities here and just branching out, like how is it how is it reaching out via LinkedIn with people in the United States, um, you know, as opposed to you know, European countries? And then how does working with a networking group like the FitTechs company help?

So, first of all, I think um LinkedIn was a huge help. And what I also saw that um Americans really react to emails, that was that was that was also lesson learned. So the reaction time is quicker than if you contact somebody from um from Europe. And the other thing was that the reason that we joined the FitTech Club was the huge network that you guys have, and not just the network, but also the knowledge. I mean, most of the conversation we had about the US market went through you. And by the way, not only this, because we're also working on digital assets. For example, the company that we're working for, for the app that we just launched some some days ago, that's also a US company that we get introduced to by the FitTech Network. So, product-wise, it helps us to develop ourselves, but also sales-wise in terms of um you know building new sales opportunities. So that's for me, FitTech Club is the best investment that you could ever do as a company. And the next thing is the LinkedIn stuff. Um, I mean, that's the easiest. And if you and that's my personal recommendation, if you want to contact somebody via LinkedIn, try to get the highest level as possible that sits in the company that you want to work with. Because they usually react the best. And um, that's also how I got into contact with Apple. That's how I got into contact with any other company that we are working now that I did not get introduced to while the FitTech network. So that's my two advisors.

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So that that was definitely the experience we made. And we actually got a lot of new customers by doing that. So not just partners for products and things like that. That always worked. Great thing is the higher the positions, the more they do also follow up. Sometimes if I write somebody, then they follow up on me saying, Did my my employer also answer you properly? And so that's that's quite fantastic. So you keep the loop.

Yeah, yeah, great insights. So I want to take, I guess, a few steps back and just look at the kind of the market globally and and trends. I mean, today is uh January 28th in 2022. So, you know, here in the United States, we've seen a huge boom in COVID. Um, we're hoping that you know, some gyms have shut back down, some areas of the country have been, you know, put into some form of you know lockdown again. But ultimately, the the sense that I get is people are tired, they want to get back to normal life, and that I think the consensus is that this could be the final push of COVID before it just becomes normal. So, that being said, do you think, how do you see um, and I I want to add one more thing to that thought before you can answer these questions? But I was talking to you before this that I I've talked to a lot of franchise, franchisores and gym chains and things like that, and they're feeling very confident in early data and what they're seeing, that people are going back to gyms. Um, but from your perspective, what does that mean for the home fitness market? Is it is it gonna crash back down? Is it gonna continue to boom? Is it gonna stay steady? With you uh, yeah, what what do you think is gonna happen?

So when I take um my perspective on it, um B2C wise, I would say that the sales that we are seeing right now and the sales that we will see um during the next years, um they will be nice. And they will be not on a level that we saw in 2020 or in 2021, but they will still have a solid growth. But actually, when I look into the home fitness market, especially um the established brands, they usually do not have um that B2C channels for that for them, it's gonna be a tough cookie in 2022, and the reason is really obvious. So in 2021, there was nothing available until June, July. So everything that you that came into the warehouse was sold immediately. But um in summertime, the supply chain became better, and this is when the companies, the retailers and distributors were able to build stock. So they have placed several orders, products came in, they had a lot of stock, and then they went overstocked. And the thing is that we will see in 2022, in the first half of the year, that there will be nearly no sales because they still have a lot of product. And the sad story is during 2020 and 21, the pricing on the home fitness market was really stable because customers paid what they had to pay in order to get home fitness equipment into their home. But now that they are overstocked and retailers they need cash, they need warehouses that are not that full, and so they start promoting it, giving it out for a better price. And that somehow crushes the market a little bit. But I'm sure and I'm really confident, once that overstock is sold out, and this will happen at least until the end of August, early September, then there will be a normal development. And I'm also sure that of course we will not grow on a level as 2020 or 21, but there will still be a growth that is higher than the usual 5 to 4% that we had the last year in the pre-COVID times. And the reason here is also obvious. Um there are around 65,000 people that are dying each year as a consequence of air pollution, and around 45%, that's just a number from Europe, they are directly linked to heart diseases. So all the deaths that are happening. And more than 30% of the Europeans, they are up-east. So there has to happen something. People need to move. And this can happen either in gyms, this can happen at home, this can happen outdoors, but there will be always a growing market, especially when you think of that the rich nations are getting more and more and more and more. So the sicker our work makes us, the more we will individually try to compensate that and preserve our health and invest into fitness. And this is gonna be the driver for the next years.

Yeah, that's great insights. And I I I agree. I agree with just about everything that you said. And you know, I I think if anybody who's in the fitness, health, and wellness industry understands that um the biggest threat through the pandemic for people was being unhealthy. Right. Um and then catching the disease. And and we over here in the United States, you don't even have to be uh you don't have to look at the statistics, you can just walk around. I mean, I look, I walk through the airport and I see a lot of very overweight people, right? Um, I think that's always an interesting population subset, is like airports and shopping malls, right? Um it doesn't take a scientist. Like we're we're an unhealthy country. Uh what is that? I mean, what is your feeling about Europe overall? Is it is it the same issues? Is it obesity? Is it um you know, diabetes, things like that? Is it, you know, I guess diseases of affluence, right? Is what I would call it. Like we have a we have too much food here that's cheap and bad for you in the United States. Um, do you see the same things in Europe?

Um I see I myself have to have two children, so one one of them is four, the other ones is eight years old. And um what I realize the lower the social status, um the unhealthier the nutrition is, and the more kids getting up ease. So because cheap food is not the good food. It starts with meat, it starts with vegetables, whatever, and usually you compensate. You can buy for one euro, you can buy a hamburger in McDonald's. You can never ever make a proper meal with one euro when you're at home. So, and and that's that's I think the sad thing that the rich and the poor um they will completely defer. And probably that would also impact um in the fitness itself. So somebody who has nearly no chance to feed his family will not have the money to go to the gym. They will not have the money to invest into digital fitness offerings or even a mobile phone with apps or something. So that's that's the sad thing. And I think politics, they have to involve there, they have to go to school, they have to educate, and there has to happen something socially. And um, this is also something that we are looking at at the moment, seriously. How can we have help um people who do not have um the chance to actually afford those kind of things? How we can how can we support them? So that is one part of the story. The other part of the story is um the fridges are full. Um you can eat whatever you want, a lot of food gets just wasted and thrown away. So we are really having the luxury problems, and people are just getting fed. That's the reality. And this is something that we have to educate on, and that we are also responsible for within all for all the people working in the fitness industry.

Yeah, great, great insights. So uh I always ask this question, you know, towards the end of uh my conversations, Melanie, and I ask in the spirit of collaboration with people who will be maybe listening. But what do you, as a company, as an executive, leading this charge into uh United States, what do you need right now? What are some of the biggest challenges that you're facing and what do you need help with?

So the biggest challenges we are facing is definitely bringing the production back to Europe. So that's one of the biggest targets that we have set ourselves. Um we produce in China right now, which is definitely fine, but we saw that we have to split risks and also the trend goes much more into sustainability. And sustainability not only includes material that you're producing with and the circumstances, the infrastructures, it also includes, as we all know, CO2. So this is a target we set ourselves, bringing part of the products back to Europe. But also here the challenges are different. When you go to China, you go to one company and they do everything for you. It's a one-stop shop. When you want to produce in Europe, you probably have to deal with 50, 60, 70 um sub-dealers that help you bring the product on fire because actually there are no factories that do the whole job. You still have to source something from there and there and then assemble it, put it together. So that makes things much more complicated. And this is something that we are working right now to get this done. So that's challenge number one, definitely. Challenge number two is still the uncertain situation in the supply chain. Actually, the market was trending, that the containers are getting cheaper. But now we see the development with a COVID-0 strategy in China that this simply doesn't happen as soon as everybody was thinking back in December. And I mean, it's just four weeks have passed, and the picture is completely different again. And this is something that that really creates an instability, and um, of course, there is a pricing point, which is also a challenge. So you have a certain price level for a product, some competitors they amend their pricing to the market conditions, which also, as I said, include the higher pricing for the containers, but some do not in order to win some market share. And this is the you know, where you need a feeling can I, can't I, which which uh part of the cake do I take my own, which one do I forward to customers? So that's that's quite challenging the price situation, I'd say. And then the next one is also um the the the offering on the market. So in the last years, um such a massive number of competitors have shown up in the landscape, which has never been the case in the years before. So it feels like everybody does fitness. It's the big FRL brands, they want to do fitness, it's um everybody wants to jump on the train, and that makes um competitorship really, really strong. Yeah, and that you really have to take care of uh what's the USP that you can bring out, what's what's really something that defers your company, um, keeping the balance between all of these things, um costs, pricing, USP, that's one of the biggest challenges, I'd say.

Yeah, it's it's uh you know, I've been in this industry for a long time now, almost 15 years. And 2021, the speed at which things changed and competitors came into the market and caught up with leaders. And you know, I I just some of the journeys I've been on with companies that uh are in the wearable market. And it just, you know, if you're three months, you know, uh if you if if you don't launch launch three months after what your target launch date was, your whole strategy changes. That's how fast it's happening because of what Apple's doing or what a new whoop investment that came in. It's it's happening so fast, and you have to be so strict with your your deadlines. Uh, it's crazy. I mean, I would imagine you're feeling that too.

Yeah, and yeah, and you have to be really flexible. I just can't tell you one story. Um, when we were working on the app and think about, yeah, we launched an app. And so we were, of course, first of all, thinking about a model where with the subscribe business and with um with money coming in on a monthly basis, so recurring business, classic, classic type of thing. And then came Apple with an offering under 70 euro per year with fantastic classes, and we thought, sorry, it's it's not just Apple, it's this and that and Puma, they all have their own apps, they're all for free. We we will not be able to charge for it. Also, if the price that we had in mind was really low. It was just uh just for having a price, it was really low, really affordable. But we skipped the idea. And this is also when I talk, especially to companies who have a digital setup and who had the great idea about recurring, founding recurrent recurring businesses and during the pandemic, they all have to change their strategy. They have to make the hardware price higher, they have to adopt things, they have to reduce their development plans or features in order to keep profitable, and that makes life so hard, incredible. And I see the same for us when we started with a BOR for the bikes. In the in the last months, we added so many other features because they came so many new ideas, and the longer something takes, the more the more you have to add up on that.

Yeah, but that's it's just the world before.

It's crazy.

Yeah, it's so it's so fast. It's it's mind-blowing. And uh, you know, you add on top of that, just you know, looking at what we've seen so far in in 2022 is uh you know, you're seeing uh inflation over here and you know, market corrections and things like that over the last two years. I mean, you know you can't just pump $4 trillion into the market over the last two years through you know the government funding and not expect some sort of correction. And so now there's a lot of uncertainty in the economy and what's happening, but I think it's gonna work out just fine by the end of the quarter, personally. Um, at least that's where my investments are. So we'll see what happens. Uh but that's uh yeah, it's a very interesting time. I think this is gonna be a very telling year. Um I'm excited for you guys coming into the market. Like I said, I love the product, I love the leadership team. Um, and uh, I think you've done great work. And you know, obviously there's a ton of work to go. So um with all that, you know, Melly, if if you want people to get a hold of you or talk to you, um, or you know, is is the Hoi website up and running? Where do you want people to go online? Give us give us all the the goods where people should go.

Absolutely. So at the moment, um, the Hoi bike or Hoi bikela bike is not available yet. It will take some time. Um so late summer, I'd say. So then you can, but you can when you Google it, you can definitely find some pictures. Or actually, when you look into my LinkedIn account, there is one in the header. And um, yeah, there is no Hoi website yet, but you can check out ketlasport.com, and there you find what we have on the shelf right now for the customer in Europe.

Awesome. Well, Melanie, thank you so much for uh joining me. I guess it's a Friday evening for you. Uh I really appreciate it, and uh, it's a pleasure. I know we'll be talking soon. But ladies and gentlemen, Melanie Lauer.

Thank you very much, Harry.

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, 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 possible. Lastly, if you'd like to learn more, get in touch with me, simply go to the futurofitness.co. You can subscribe to our newsletter there, or you can simply get in touch with me 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.