Ryan DeLuca - Black Box VR & The State of VR Fitness

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. There is one thing that fires me up. It's elevating the personal training and coaching industry. For that, the Workout app is an absolute game changer. No more promoting top brands without compensation or dealing with confusing social media links. In just a few clicks, Workout's user-friendly app lets top trainers and coaches curate and share the world's most sought-after fitness brands like Typerite, Vega, and more. Product lines covering everything from fitness equipment to supplements and apparel. Save time and boost your earnings with generous commissions and bonuses every time your client purchases the product you've already endorsed. Do not wait. Maximize your income and streamline your business with store by workout. Discover more at workout.com. That's w-r-k-o-ut.com. Just 1-0. W-R-K-O-U-T. Go get it. All right, we are live. Ryan DeLuca. Welcome to the future of fitness. Hello, thanks for having me. Yeah. You are an interesting cat. I have to personally thank you. I can't imagine how much money I spent on bodybuilding.com in my 20s. And uh sounds like I have to thank you. Yeah, right, right. Uh so you know, for people who don't know, obviously you're, you know, one of the founders or co-founders of bodybuilding.com. Is that right? Correct. Yeah, the founder. Okay, founder of bodybuilding. And now um you are uh, you know, up to your elbows in in virtual reality at Blackbox VR. So uh, you know, quite a storyline you got there. So maybe we can start with that. Uh Ryan, give us a little bit of your backstory and how you got to be where you are now.

Sure, yeah. So we have to go all the way back to the 1900s. This is a future of fitness podcast. It's also, I guess, history now. But yeah. But basically, you know, a few years after high school, like 1999, I started a company called bodybuilding.com and um just basically out of the garage, you know, like no outside investment. And it was just uh, you know, me and a couple friends were like, hey, let's go create this website where we could like, you know, share information about how to work out and of course sell products, like, you know, protein powders and pre-workouts. And um, you know, basically from right then for 17 years, it was basically 24-7, you know, building the company. And you know, we grew it to 800 employees. You know, we were about half a billion dollars in annual revenue when I left in 2015. I was the world's most visited fitness website, you know, a huge community. So, and obviously, you know, selling thousands of products uh to people like you. That uh it's funny how often I I hear that same thing where it's like, man, back in my 20s, you know, I was on the forum every single day and you know, buying products. And it's just it's so cool to look back now and just see how what the impact of all that was. Because you know, when you're when you're there, you know, behind the computer and in the offices, like you hear from some of your customers and some of your visitors, but just not nearly all of them.

Yeah, I mean, I can't imagine. I I I would probably estimate that I tried at least a dozen pre-workouts that I read on T Nation and then went over to bodybuilding.com and went for it.

I've actually got my optimum amino energy right here. Nice, nice, nice. Yeah. Uh that was the fun part is always trying the new stuff.

Yeah, and when you said back to the 1900s, man, you just made me feel really old. I was like, a history lesson we're doing now. Uh anyway, so um you you founded bodybuilding.com tremendously successful business, right? Um, and then you exited, you sold. How did how did you end that chapter?

Uh so in 2015, um, you know, about 16, 17 years after really getting started, sold the business to Liberty Media. They're like kind of a media conglomerate out of uh Denver. And you know, they had bought a piece of the business years earlier, and so basically just sold the rest of it to them at that time. And it really came down to, you know, I was I was still having a lot of fun, and you know, we had a great team and we were growing fast. And but it started to get just a little bit tired, you know. Like the it was when you get to be such a big company with 800 people, like you walk in the door, you know, after the weekend and you're like, there's so many things that we want to work on, these innovations, these new things we can do. And then you like pulled into like an HR meeting and finance meetings, you know, and all great stuff. But it just kind of got to where it's like, you know, I wanted to get back to doing, you know, startups and innovation. And so give somebody else a chance, you know, sold the rest of my shares to Liberty Media and took a six-month break, tried to take longer, but got bored. And so that's when I got into virtual reality.

Over that roughly like 20 year span, when you look back now, Ryan, at the at your run with bodybuilding.com, what what was like your favorite chapter of that book? Like when was it the most fun for you?

I think in the the early years, you know, when you're really just figuring things out. I mean, this is early of like cyberspace, you know, so it's like everybody they don't know what this thing's gonna be. This, you know, you're inventing stuff as you go. Like every day there's some new pattern, you know, that somebody's like, oh, we're gonna do like a shopping cart where you'll add to your cart. And you know, we're gonna have a search engine on your side, and it's gonna be like in this location. And I remember like the first time we could actually do video, you know, it was like mind-blowing. And so we went to Home Depot and got some lights and you know, cameras and started doing exercise, you know, database content and things like that. And it just continued to be like that all the time, where like something new would come and you say, okay, how can we use this to help us with our mission of helping people reach their health fitness interference goals? And so it was really those early years, I'd say probably like 2003 to 2008, where it's like so much of that was happening. And that's when we really started to get that traction where you started to see like, you know, we were growing, you know, crippling in size year over year, and just trying to manage that and manage growth, you know, which everybody knows it's like, you know, you you have a team of 10 people, like once you've learned how to manage a team of 10 people, and then it grows to 50 people, like everything changes. You know, everything breaks down, you have to completely do it a completely different way. And I really did thrive on that, you know. Of course, with you know, a great team and uh people always uh helping and supporting, but it really was those years of just that fast growth and and figuring out how to use this new technology to create cool products.

Yeah, yeah, fascinating. And it turned into such a big company. I mean, did you did you want to get into entrepreneurship before you got into bodybuilding.com or or did it just kind of happen to you?

It was my goal, like since I was little, you know, it's like kind of the typical story, you know, it's like I was I was focused on that. You know, I was really into bodybuilding and fitness, you know, I was reading all the muscle magazines like in high school and you know, almost embarrassingly, because there's these big guys in posing suits, and I'm you know, reading the magazines and in class, you know. But it's like I really wanted to just learn everything I could about it and just kind of be a part of that world. And with the goal of being like a uh trainer and have like my own personal training studio. And in a way, bodybuilding.com was like a training studio just on a different type of scale, which wouldn't have been possible before the internet.

Yeah. Yeah. So, you know, you you sold it, right? And for people can just Google it, you you've done extremely well uh with that. So, first of all, why you got bored, um, you wanted to get back into the game. Why virtual reality? What was it that I mean, did you look at different things and kind of select, like, okay, this is the category I feel really passionate and and looks promising, or how how did you make that decision?

Well, we've been looking at virtual reality at bottommillion.com actually for a few years because you know, we were really focused on that new technology. Like I said, it's like, hey, with mobile apps, you know, now we can do something there, like what can we use, you know, these things for and all sorts of different like web 2.0 type of features. And so you started to hear about virtual reality with like Paul Merlucky and Oculus and the you know, the big Kickstarter campaign. So we actually bought one of their development kits and you know, we had it just there to play with a little bit. And you know, immediately, of course, you know, when you put on the VR headset for the first time, it's like mind-blown, you know, like I can't believe that I'm actually moving around, I can see other people and all that stuff. And what really came down to after I left BodyMan.com was what I really strongly believe in is using technology to help people to adhere to their fitness goals. And the crazy part is like what we learned the most at Bodyman.com was that we lost most of our customers when we lost them, not to Amazon or GNC, but to the couch. And that's really what the fitness industry in general is dealing with. And it's actually a really interesting part of the fitness industry because not that many industries are people that kind of come in and then they just like leave. Like you don't just like buy shoes and then I'm good, I'm never gonna buy shoes ever again because I decided not to, right? Like you might be buying different shoes or different types of shoes. But with fitness, so many people would buy protein powder. And I always used to wonder like how many people actually consumed all of it. You know, we got to assume, like, oh, we sold this many billion servings of protein powder, but how many of them are sitting in a in a pantry closet, you know, half full with dust on it. And so we did as much as we could to really figure out like how do you actually get people to adhere to fitness? Because that, as we all know, is the only secret to fit and success is just consistency over a long period of time. And so with virtual reality, we looked at it and said, there's this, there's something really magical here about using true video game psychology to make people want to work out and want to stick to it versus just being focused on, you know, the discipline and the grit and the grind and all the kind of like, you know, no pain, no gain. It's like, how can we take some of the misery away and how can we make it something to actually look forward to? So, really, the innovation is how do we use video game psychology to get people to stick to their fitness program and not just on a screen or not just with basic, like, you know, you're riding a bike through some gates or some kind of time, things like that, or basic leaderboards. Like, how do you take that next level?

Yeah, yeah, it's it is an interesting psychology. And I I think for most people, even myself, really, who you know, fitness is just is just like brushing my teeth, right? I just kind of have to do it. It's it's it's like a task, it's just something you check off the list. And uh that's not particularly sexy or motivating, right? But you just something, you know, like no one no one wakes up in the morning and they're like, I can't wait to brush my teeth. It's gonna be a great day. I'm gonna brush my teeth, it's gonna be awesome. Like that just doesn't happen, right? And the same with working out for most people. Um so you you starting.

Oh, go ahead, please. I mean, on that note, it's like when you think about how to create a habit, right? You read the books, like the best way to create a habit is like to make it easy, to you know, have a reward. There should be pleasure. Like, obviously, when you people, you know, start, you know, smoking or drinking, it's like there's an immediate reward, it makes us want to go back to it or watching Netflix or playing video games. If you wanted to make it very difficult to create a new habit, then every time you did the thing, there would be pain. You know, like I really want to read more books, but every time I do it, I'm gonna like shock myself. Like once I open the book, right? Like psychologically, we're just gonna avoid that as much as possible. And for people that aren't fit, I mean for everybody, but especially people that aren't fit, like working out is extremely painful, extremely miserable, uncomfortable in a million different ways, psychologically as well. And it's something that you don't see quick rewards from. Like, you know, like you think you're gonna like have a six-pack in like, you know, six weeks, but it's like it's gonna be a long-term-term thing. And so if you put all those things together with the fact that you're sacrificing doing things you actually want to do, you know, so it's like I not only am gonna feel pain and not see rewards, I'm also going to not be able to, you know, play video games, hang out with my friends, go to net, you know, watch a Netflix show, do anything else. And so it's no wonder that nobody wants to do it.

Yeah, and it's it's you're making me reflect because uh like not like six months ago, I was pretty close to a six-pack, right? And like holidays, just got back from a two-week vacation. I'm like 10 pounds heavier than I was six months ago. It's so fleeting, right? That's the frustration, is like, you know, part of must be like, oh, god damn it, like why I even try now. It's gonna be another, you know, like two, three months before I get to where I want to be. And then, you know, one thing is gonna derail me. And it is, I mean, it's an interesting point. And and we wonder why, as a fitness industry, that we uh we only get to that 20%, as you and I are discussing. Like, you know, we and even narrower, Kelly Starrett was on the show and he he pointed it very particularly. We're even, if you look at even narrow, we're just really good at getting people in our vertical healthier and fitter, right? Getting to that optimal level, but we're just kind of left everyone else behind.

Um part of it is also that the people that are creating fitness products, like we have a passion for fitness. And so to be a good entrepreneur, you have to have empathy for people that aren't like you. And many people in our industry, they're focused on look, I love the pain, I love working out hard, I love like pushing myself, I love competition, you know, competing against other people one-on-one or in a team. And there's a lot of people that just don't think that way. And when you create products for yourself, then that's what you're gonna get, is all the people that are like you, which are a small percent of the population, are gonna be attracted to that product and they're gonna jump between the different products that that people have created all for that group. But the people that aren't like you, it's almost like the opposite. Like when I talk to people about we're trying to get people off the couch and use virtual reality video games to get to do that, there's always the comment of like, why not just do you know, squat every day and use, you know, chalk and like, you know, like all the be hardcore, like what's the big deal? And it's like, if it was that simple, then everybody would be doing it. But being able to understand that mindset of like for a lot of people, exercise is something that they not only not do, they avoid as much as they possibly can.

Yeah, and even being more, I guess, empathetic on it is like maybe they just don't have time. Man, you know, like you you look at um, you know, someone who's working two jobs, single parent, like the it themselves, their body, their health just drops down the priority list significantly. And it's easy for people to talk about who, you know, have the resources and the time and the motivation and can understand, you know, delayed gratification in the process, right? But not everyone has that luxury in life, maybe just people who are dealt those cards. So it's it's it's just uh it's a it's the problem in in the fitness and and health industry and fitness and wellness industry is like, well, how do we get to those other 80%? And it's been really challenging to do so. So um, you know, I I want to take one step back here with you, Ryan, and just talk about the the state of VR. And then, you know, just my uh, I guess, observations and awareness of what's been going on in VR, you know, there's a lot of output in 2018, 2019 of what was going on. I think you guys had a lot of I I heard black box VR all the time during that time frame, right? And pandemic happened, connected fitness, you know, things got very convoluted within the fitness industry. And maybe it just hasn't grabbed as many headlines because there's been so many other things. And as we're talking right now on uh, you know, this is February of 2023, there's tonals all over the news again, um, right? And for for many reasons. And I love tonal. But, you know, so what give us some update? Like, what's been going on over the last three or four years within the VR fitness space?

You know, it's like a lot of technology, it's like there's kind of fits and spurts, you know, where it's like suddenly some new thing will come out and like everybody's talking about it. And it's like a finally like VR theater where it's gonna become mainstream. This is like the iPhone moment. And VR has had a whole bunch of those moments, like since the 90s, you know, back in the Lawn Moorman days and those first kind of headsets where, you know, everybody's like, oh, here it is, you can see it at arcades. And the technology is was just not ready yet. And then in 2015-16, when we saw Oculus, you know, uh come out and get purchased by Facebook for you know three billion dollars, that was kind of another moment, like, oh, here we go, it's happening. And then it kind of will get in these little mini winters almost where it's like, oh, it didn't quite happen as fast. The technology's going a little bit slower than we thought to be developed. But behind the scenes, it's all getting better. Like the amount of investment that went in during those periods that you're talking about, like 2016 to kind of 2018, there was billions of dollars going from the biggest companies in the world into the fundamentals of VR, whether it's the software, uh obviously the hardware, and all those things are now about to come to market. You know, so we hear about the Apple reality headset coming out this year, Meta coming out with the new versions of their headset, a whole bunch of different people are are are finally bringing all that technology to light. And so it's really it's been a whole bunch of behind-the-scenes development that's that's getting to that point where we hope this is the actual moment. But I think when Apple announces their headset, that'll definitely be pushing things forward.

Yeah, yeah, that's a big one for sure. Uh, and what do you think have been the obstacles for mass adoption with VR? Is it is it the actual hardware? Is it costs, a mixture of everything? But what do what do you think it is?

It's probably a mix. I mean, it feels a lot like the internet back in the first days of bottomillion.com, where it was like it was, you know, people didn't know what it was. It was confusing. There wasn't that much great content out there. You had to have a computer and an internet connection and all these different things, and people were just kind of confused by it. So we're kind of a little bit there where the headsets are still just a little bit too big and bulky and uncomfortable. Of course, they're getting you know better every day. Uh the software, there's not that much great content. You know, there's some really great games and things, but like for the day-to-day use for the average person, it's not quite there. And it takes enough people, like enough of your friends to be there, which is the whole idea of what Apple's trying to push is like, look, this is gonna be the new version of FaceTime where we're gonna be able to actually, instead of being on like a video podcast, we would be able to actually be in the same room together and actually feel like we're in the same room together with like realistic avatars. So it's it's kind of a mix of everything. But like I said, it's like a lot of that stuff is is finally coming to a point where it's cheap enough, it's easy enough. You know, with the the MetaQuest headset, you know, it used to be you have to have a PC, you've got to hook up all this stuff around your room. And that's really only going to be for like hardcore enthusiasts. But the later versions, you know, that have come out are you could just put the headset on and just know what to do without having to think much about it.

Ah man, you know, I've still yet to try VR. I haven't uh what I know I know it's the podcast over. Where's the I know, I know. Uh I've talked about that. I I um maybe I have actually about four years ago. It was very brief. Uh, but I I I see a potential. I mean, we'll get in later into the existential questions around it because that's I'm always curious to get people's thoughts on that. Um, so tell us about Black Box VR now, right? In in Q1 2023. What is the where are you guys at? Um, what was the experience like for the consumer and what have you innovated on since, you know, or I guess over the past few years?

Yeah, so basically what we've created is a virtual reality gym experience. So you actually go to the our gym locations, kind of like an Orange Theater or an F45, like you have a membership. Uh in the locations are private booths where you'll go in and that's where the headset is. We actually have created our own exercise machine that goes together with VR. So that was one early innovation that we realized we needed. Like we didn't want to just create uh a cardio experience, you know, that's something where you know you're jumping around and playing games, and there weren't it, there wasn't anything like that. Now there's like Beat Saber, which is like a very popular like rhythm-based game. Uh there's Supernatural, which actually just got purchased by Meta for $400 million. And there's all these other like kind of boxing classes. Les Mills has their own boxing class in VR. So there's a lot of those cardio experiences. What we wanted to create was a resistance exercise experience. So we had to create our own electronic resistance machine that's mapped in VR, automatically controlled by the game engine. And then of course we had to create the game from scratch because there's obviously nothing like that. So we went and did all the research on like, okay, what's the best way to put together a game that will be something that people will want to play, not for the fitness aspect only, because they actually enjoy it first and they get the side effect of the fitness aspect. And that take a takes a lot more work than just doing something where it's like you're uh, you know, there's a trainer there, and okay, now, you know, do you know 15 chest presses? And it's like we wanted to make sure that it was actually a strategy game that got you less focused on the exercise part and more focused on the gameplay and the strategy and the fun aspect of it. So that's kind of where we're at today. We have you know hundreds of members throughout the couple of gym locations that we've been testing. And as you mentioned earlier, you know, getting ready to launch a franchise concept. But what's been amazing is seeing exactly what we hoped is those people that never were able to stick to a fitness program before. You know, they had gym memberships, they had trainers, they always wanted to, but they just couldn't stick to it. And now they're like on a streak of like 300 workouts without missing one, you know, lost 100 pounds, feeling better than ever. And it really just comes down to they're not focused on the exercise, they're focused on playing the game and winning the game and teaming up with people.

Yeah. I want to unpack that a little bit. Two questions, and I'll wrap into one here. Is the first of all, why did you decide to focus so much on strength, right? And number two, um, and then I'll let you, then I'll shut up and let you answer. The uh how exactly are you gamifying strength? I understand boxing, I understand cardio, right? You can do a lot of cool different things with the gamification of it. So yeah, unpack those two things. I'm I'm curious about that.

Sure. Yeah. So obviously coming from bottom of the oncom, you know, big believer in resistance training, strength training, and not just for you know, growing muscle and being stronger, but for every part of life, like you know that uh just as well as anybody. How valuable that really is uh to an average person. So that was one big part of it. Number two was when you create just a cardio experience, like it's pretty easy to copy. And so we were kind of thinking forward. It's like you know, once somebody came out with a couple of these rhythm dance games, like people were knocking them off and creating versions of them. And it's kind of trying to create your own YouTube channel now on training or or like a diet tracking app. There's just so many of them, it's so easy to create software-only experiences. So we said we wanted to kind of take it to that next level where we had a longer-term uh vision of what we wanted to do. And then from the gaming aspect, so we basically take a lot of what you see like on games like Clash Royale on your phone or Fortnite or like some of these like esport games like League of Legends, and we basically turn it into you're using the different exercises to do the attacks. So instead of you know, pressing a button under controller to shoot the fire beam, that's when you're doing a chest press. And however strong you actually are, that's the resistance level that we give you. And that changes over time using some machine learning. The basic idea is that you're going in there and you're using your actual body's fit. Is in order to choose the right attacks to then win the game against right now, it's an NPC competitor. And so there's things like uh squats, deadlifts, overhead press, lap pull down, bicep curls, you know, chest press. So a full body exercise program that we're able to fit into like a 30-minute, really intense, kind of more like cross-fit style uh fitness program with cardio in between where you're doing different strategic components. But so there's it's really turning the fitness moves into game mechanics.

And and who's engaging with it from a consumer um standpoint? Like, is there have you noticed like there's a certain avatar, or is it um, you know, no pun intended with avatar, dual purpose?

It's been kind of a bigger mix, right? Yeah, yeah, good. Yeah, it's been kind of a mix. Um, you know, we thought it might just be like more hardcore gamers, right? But it's like really it's anybody that that grew up with games. I'm 45, so I'm kind of like right at that top level of where people like I grew up with like the first Nintendo, right? When I was like, you know, six or seven, that's when Mario Brothers came out. Anybody older than me, a lot of times they grew up more with sports and more traditional stuff, and they didn't really get into video games. But everybody younger than me is, you know, they understand games, they've played games their whole life. You know, it's it's the biggest media industry by far, right? It's bigger than you know, TV, movies, sports, anything video games are. And so it's but it's been a surprising mix of like, you know, 60% men, 40% women. So, you know, you might think it would even go more in the in the male direction, especially with resistance training. But there's just something about the game aspect that really does bring in kind of a wide swath of people, different goals. You know, it's not just people that are trying to uh gain muscle, but some people just want to feel better. It's obviously a lot of people want to lose fat. Uh, but it's it's it's been surprising. In fact, it's actually made it difficult because we're trying to like nail down like what is that persona? And then every time it's like, well, it's it's a pretty wide persona. But I will say it hasn't been really the fitness bro or like the typical kind of uh the person that does work out uh consistently. They do like the competitive aspects of it, but you know, they've got their plan, and so they're not quite as interested in it.

Yeah, yeah. I think we're we're the same age. And uh so were you a legend of Zelda, Super Mario's, or Mike Tyson Punch Out Guy? All of them, yeah.

Yeah, it's kind of a fun fact. I was the I was the Nintendo champion of Idaho in uh fifth grade. You know, they they came to Idaho one time, they did the championship, and it was you know, it's a relatively small thing, like some some locations are by. And I actually won that, almost got beat up by some sixth graders because they were mad that I beat their score, you know. But they haven't come back again, so I still say I'm the the reigning Nintendo champion.

Oh, that's great. I'm honored. I'm honored to have you here. Um that's what I'll be signing on the graphs later. Right. Uh COVID and the pandemic, right? Uh it it drastically shifted a lot of things within the industry. Obviously, the um brick and mortar in-person experience suffered greatly and is now recovering. The connected fitness market boomed, right? Uh, and now it's kind of settling into wherever they're gonna settle. Uh, what happened to VR? What went on during that time frame?

Um, so for us, it wasn't good. Obviously, we had just opened up our San Francisco location, and that's probably one of the worst places you can open up a retail location uh pre-pandemic, you know. So uh, you know, the good news is we had been open a few months, so we learned quite a bit from the first people using the experience. So, and that's really the goal of any startup is to get to market as fast as you can, just so you can learn and iterate and pivot. And so we were able to take that pandemic period and really just heads down, focus on the things we know we needed to change from the software and the hardware. Uh, but overall, it was uh for VR in general, like VR wasn't quite ready. You know, you would think that that would have been a moment where it's like, oh, everybody is immediately going to these VR experiences. And if that happened again in the future, like, you know, hopefully it never does again, but VR will be in a much better place. So it's kind of a missed opportunity for VR in general. But for us in particular, it was uh a time to slow down and and focus, but it was definitely not a positive in any way.

Yeah, yeah, it was it was tough for a lot of people. And yeah, you're right. San Francisco is probably one of the worst places to have a brick and mortar during that time. You couldn't sneak anything. Yeah, yeah. Um and you know, when you look at that the hardware and the software model that you guys have produced, right? Versus, I guess, what's the long-term strategy on that? Because you strike me as someone, you know, who who's looking not just for 2023, but you know, the next 10 years. You know, what what helped you shape that that model and that strategy?

I mean, it really came down to the fact that we wanted resistance training, we wanted to use an exercise machine that we had to develop, and we weren't ready to ship it, you know, to people's houses because you know, people aren't really looking for that type of thing. So it was really early. So we kind of looked at it like the you know, the model of we needed to figure out the product, test the product, and then get to a point where the mainstream awareness of VR fitness was to a point where people would be receptive to this. And so having a location-based business was very helpful for us because we could be there with people. Obviously, we could maintain the machines and you know anything that we needed to do, teach people how to use the equipment. Uh, and then it came down to we're strong believers in building community. And that's what video games have done such a great job of doing, also. Like, you know, people when they they asked me about VR, like, oh, it's such a lonely experience. But, you know, video games are one of the most social experiences. You're there with your friends, you know, people in these VR games, they're like, they're meeting so many other people. It's it's much better than almost anything else out there. And so, really, we wanted to, how can we get people to use that type of thing, come to our location, kind of be that third place for that group of people that they've never had a third place around sports and fitness. So, how can we give them that place where they can meet other people and create that kind of group atmosphere? And so that was a big part of it. But then the other part of it was we wanted to be able to scale as fast as we could, of course. And it's very slow to scale with location-based uh businesses, retail. So franchise is just a great way to, you know, once you've got a concept that works, then you can scale much more quickly than then almost any other type of retail model.

Yeah, you know, and there's uh, you know, the the world of VR and AR, I guess I'm trying to formulate this question correctly. The you get a lot of naysayers to it. You know, there's um there's always the argument to be made that, you know, people need the in real life experience, that people need that connection in person for community to be had and and you know, emotionally and you know, um you know they just need that that in person. And I think that's probably, I'm sure you've heard that before, right? So what how do you answer that? How do you respond to when people are telling you that that type of point of view?

Uh I think first is usually it's people that haven't really tried VR or the latest VR because we do all of our main company meetings. We have about 35 people in the company, and so we would do Horizon Workrooms meetings in VR. So every Wednesday, the entire company gets together inside of uh one of their big workrooms, and and we all have our avatars and we're wearing our headsets. And there's a lot of our team members because most people are working remotely, especially engineers, like I've never met in person, but I feel like I hang out with them every time we're in those meetings because there's something about like being embodied in like an avatar. Like it's always a joke, like you know, I have somebody sitting right here and I'll go reach for something, I'll be like, Oh, excuse me, sorry, like I didn't mean to bump into you. I'm like, oh, I forgot you're actually not there. You know, it's kind of this magical thing where it's like you you'd be surprised how much like when there's a person there, you can see their voice, you can see their mannerisms, or hear their voice, see their mannerisms, they're in a body, kind of looks like them. You can walk around them, they see you, is really not much different than in real life. And it creates a really close connection that's way better than obviously anything you could get from you know social media or or Zoom calls and things like that. It's not quite to the level of real life, but the convenience factor of being able to go and hang out with these people in these environments and have shared activities is so much better that makes it like you people don't really have places to go for things like that, you know. And so that's that's I think the people that have not tried VR in that way, I think they'd be surprised like how much of that real person connection you can get.

So describe that a little bit. Like uh what's what's the virtual room that you in? Are you guys like on the beach somewhere, or do you just change the settings so we get to choose?

Yeah, really? Yeah, yeah, yeah. You can change it, but there's like a bunch of different environments, of course. And um, you know, it is kind of like a a a workroom. So, you know, you're we're sitting at at uh tables and you can change the configuration, of course, and people can move around. There's even whiteboards and stuff, and I can stand up and and present to the group, or I can share my screen and things like that. I can see my computer actually in there, and I can see my keyboard, you know. So it's like I've got my computer, everybody's here. And then yeah, this morning we were like in a grease-looking beach location, and we can change, you know, just for fun if we want to. Uh, but it's so it's very convenient because we can just pop the headset on. I've got my headset here all the time, pop it on. I'm now together with you. We have a whiteboard, we can do our sticky notes, we can share our screen. And so it saves uh a lot, quite a bit of time. But like I said, it's it's zoom calls, like after a while, like there's just enough delay. There it people can't really talk over each other. They can be very tiring where like the VR calls just don't feel like that.

Have you ever done a podcast in a VR setting?

Not yet, but uh, we should do the next one. I'm gonna send you a headset.

Yeah, well let's uh let's let's talk about that offline. That we can kind of be cool, interesting. Uh, you know, for I mean you you mentioned some of the bigger players earlier um when you're describing what's been going on the last few years, but when when you look at currently, like who is your competition at this point? Do you see? And um, you know, who do you think the big players are going to be moving forward? I mean, as obviously as Apple comes in, right, that's that's a big dog, right? What but what's what's kind of the current state of the industry?

So we don't really have direct competitors yet, you know, which is a good and bad thing, of course. Uh there's a whole bunch of great fitness applications uh for MetaQuest, for the for the other uh platforms. You know, Zuckerberg basically every single time he's talking about VR in the future, like he talks about sports and fitness as being a major use case for it. So it's been very good for us from that standpoint. As you mentioned, like, you know, we're getting a lot more press when it comes to just people understanding that this is actually a thing. Like when we first started, it was like no one's ever gonna work out and VR headset. And it's like, well, just think a few iterations from now and the benefits that that brings, because the first time you can actually use your body as a controller inside of a video game and with other people and with trainers and all that, right? Um, Apple's definitely gonna have a big focus on fitness. They've been really focused on fitness over the last few years, obviously, with all their different platforms. And we're already hearing that that's gonna be a major use case for the first couple versions of the Apple reality headset. So I think as we see Apple jump in, it's gonna create a lot of awareness that's not maybe being seen today for people in VR. And of course, that's gonna get create a lot more investment. And uh we'll start to see more of these equipment manufacturers adding on VR headsets to those experiences or bring your own VR headset, you know, to those experiences. We're starting to hear about you know different gym chains that want to start at small parts of VR headsets, whether it's just a treadmill application. So, you know, their treadmills are set up with the VR headset so that people can actually use them there. And that's usually a great way to introduce people to these things. It's you know, the Apple stores will all have the trial areas that they're building for people to go in there and actually experience it without having the headset. And your friends, of course, will have it. But being able to go to a gym location and try it there, that's usually a great way to get people motivated to want to bring it home.

Yeah, interesting. And uh the franchise model, Ryan, like if if I'm someone who's you know interested in in franchising, like what tell me about it. Like, what's the footprint, the investment? Like, why would they do this over a you know, I don't know, um, an orange theory? Like what what are you how are you positioning this to them?

So the biggest difference, of course, is that today fitness franchising is you know, it's it's very successful. There's uh a million different brands. We all see like new ones every single day. It's becoming a pretty serious red ocean where it's like there's a million different boot camps and you know, cycling studios, and you know, there's different celebrities on certain different ones. And it's just becoming basically like it's really difficult to differentiate. And what we hear about fitness franchises, especially boutiques, is that usually they're just trading those customers. It's usually like this member goes to Orange Theory, they do it for a couple months, then they switch to a different one, then they switch to different ones. They're kind of just trading back and forth. The biggest thing that we're offering is that we're helping to go after that vast majority, the 87% that aren't currently on a fitness program. And once people start to realize that like this is this huge untapped market. You know, when you talk to these people, you know, and it's obviously 87%, it's not you know a single group in any way, but 98% of people want to be more fit and wish they could stick to it. So it's 98% want to be more fit. So basically everybody, 87% can't stick to a program over long term. And so there's this huge untapped market that we believe that once people realize how big that really is, it's gonna allow us to be able to grow those franchises in such a bigger way. Uh, from a concept standpoint, it's very similar to a typical boutique fitness franchise. It's uh, you know, like 3,000 square feet, you know, that's uh you're gonna have up, you know, from 250 up to 450 members. It's a typical membership program. The investment is very similar. It's like uh in between like an F-45 and an Orange Theory, around like $600,000,000, $700,000. And so and the good thing about our model also is that since it's focused less on the coaches and trainers, you know, people leading classes, since obviously the VR experience is doing that for us, it's more expensive a little bit to get the equipment up front, but then you're having way less expense over time because you're only gonna need like one basically front desk type of person that's gonna just be there to introduce new people to the experience.

Yeah, interesting. And so is it um I guess each workout station, right? Like how many people can be doing a workout at once, generally speaking?

Uh 14 is is what we're putting in that fits into that kind of that footprint. And so it's like 14, like, you know, nine by ten booths.

Okay. And I presume people set an appointment to come in to get their their booth, or do you just kind of show up and hope to get one or both?

Um, usually set it in advance. So it's uh we have a companion app on the smartphone app. So people can go in there and schedule their workout. That's where they can also see their friends, see all their stats, you know, set up their game environment, all the things that they need. And so yeah, you just schedule it, say I'm gonna be there at 3:30, you just show up, you don't even have to talk to me, but if you don't want to, you just check in on the app, go into booth three, put the headset on, says, Eric, is this you? Yep, it's me, and then you can get it done right on.

So here's the the big question, the existential question, right? That I anytime I have someone who's you know metaverse or VR related, I always like to get their input on it. But I mean, especially because you have a 16-month-old child, right? And you look at like the role of VR and AR uh moving forward, right? Like, what do you want it to be for them? Like, what do you want VR to be for them? And then what what are the potential downsides? I mean, I I go back and forth every day. I'm like, ah, this is so cool. I see all the benefits of it. And then I'm like, God, then I just go back to, you know, ready player one, right? I'm like, oh, this isn't good. Um, Matrix or whatever, right? This or any any sci-fi movie. Uh, you know, so where do you stand on that? I mean, what do is this something that, you know, I feel like we're as a species, we're just gonna do it either way, right? This this technology is moving forward, it's just in our DNA. Um, but what do you hope for and what are you worried about?

You know, it's uh it's a great way to actually put it uh with my 16-month-old. Um, you know, so I have older kids too, you know, a 19-year-old boy, and you know, and uh he's all into you know gaming and VR, of course, and a 16-year-old girl and a 14-year-old boy. And the, you know, the younger boy, the 14 year old, he's really into VR. And what I love seeing him in today's experiences is he's not sitting at a console and just mindlessly playing these games. Like he's in these experiences, like Rec Room is like a popular one, and he's creating all these experiences, like he's creating these environments, he's creating like a game show that he wants to do, and he invites people into that and he's like hosting this like game show. Like, it's so funny, just like listening to him, you know, when he's up there in VR. He's always standing up, he's moving. He usually comes out of it like a little bit sweaty, you know, because he's just been very active playing these different games. Thinking about from uh my younger daughter, it really is about bringing access. No, she will be able to have experiences with people all around the world that just would not be possible today. Like with we could be finishing up this podcast, and I might have a conference I'm going to in China, like in 10 minutes, and I could be there, right? And I can actually not have to travel and not have to, all the expense that it comes for people that most people aren't able to do those type of things. She'll be able to have the best teachers, you know, the best social environments. She'll be able to create any type of world or experience that she's going to want to be able to create. And all of it just being in these realistic moving, you're moving around one-to-one experiences. And, you know, there's obviously potentially some negatives. Like people for sure, if they're addicted to the internet, you know, if they're addicted to Instagram or video games, like this is going to be a level of addiction that's, you know, 10 times higher because, you know, when you put your headset on, you're going to be the king of a universe and have all these major exciting things going on. When you take it off, you know, you you work at uh a grocery store, you know, in your apartment. And so it's going to make it so that it's going to be so alluring in that way. But I think that the the real big picture really is that it's going to create just the access for people to be able to do things that you couldn't even possibly dream about with other real people around the world.

Yeah. And the way I look at it too is it's just nothing's that black and white. Like everything in life has trade-offs, right? It always has a benefit and a downside. And I guess, you know, we just won't, like I said earlier, my firm believes like this train is going. Like with the VR and AR is happening. Um, you know, unless there's some kind of cataclysmic event where technology just gets wiped out, like this is happening. You know, we just got to accept it.

AI takes over.

Yeah, right. Well, I mean, hey, man, like what a crazy February it's been. Chat GPT just like got unleashed on the world, and now everybody's talking about it. And I'm trying to put together a series right now on AI because I'm so curious about because I feel like everyone likes to talk about AI, but no one really knows what the heck they're talking about. Um, but anyway, I mean, to the to the point is like, you know, there's a lot going on technology wise. And uh, I think there's a lot of just a healthy mix of both excitement and fear for what it could be. I mean, if you how do you balance that? Because you're you're in it, right? Like you're you're part of it, you're you're building it. Like where does your mind go when you when you fluctuate between those two those two those two ends?

I think uh, I mean, there's for sure gonna be a balance, right? Like spending time out in nature is important, right? There's this you can't really replace it. But thinking just a few generations forward, you know, there's going to be very realistic, like realistic experiences where they already have done studies putting people in nature environments in VR, and that gives them about 80% of the value of actually going into nature when it comes to like, you know, overall well-being and a positive mood and and all the other things that, you know, we you say go out and take a walk. You're you're already getting that with today's technology. It's not gonna be, you know, that far from now where we'll have those brain computer interfaces that we'll be able to smell things, we'll be able to really feel things, and the fidelity of the experience will get basically no different than it in real life. You're moving around just like I said in real life, the same exact way. There's all sorts of haptic things that already you're able to wear where you can actually feel things and that you know those things are only gonna get better. So it won't be, you know, right now, like if I wanted to like, you know, finish this podcast and then go take a walk up a mountain, like you know, I have I have a mountain quite a ways away from here, where in VR, that's gonna make it so that the uh access I have to that type of experience is gonna be much easier. Like doesn't mean that we don't still want that experience, but I think it's just we got to think about the people that just don't have that opportunity to just go by a river today. They're in the middle of a big city in India and there's no just beautiful nature hike that they can go to, which obviously we would recommend that. But it would be more like, hey, now they actually have the opportunity to get uh uh something as close to that as possible.

Yeah, yeah, I get that. Well said. Um, so last question I always like to ask in these interviews, Ryan, is uh what do you what do you need right now? You know, if people are listening and you're looking to uh you know collaborate or work with certain people, what what's important to Black Box VR at this point? How can how can our audience help you?

Um I think the biggest thing is that uh you know, we we're getting ready to launch the franchise concept. Like we have a test location we're opening here in Boise, Idaho, uh, which will help us to build out the model and you know, treat it like that third-party relationship. So if there's people that are interested in working with us on opening franchise locations, um obviously could you know helping us to develop the concept, uh, that would be very helpful for us right now. Um, we also have a podcast, uh, VR Fitness Insiders, and that's where we talk about like all the different parts of what's going on in VR Fitness and who are creating these like sports experiences or fitness experiences for AR or VR. So anybody that's interested in learning more about that or wants to be a guest on that show, of course, that would be helpful. But I think the number one thing is I would just ask uh you, especially Eric, like we need to get a headset and go try these experiences because once you know, people are shocked. They buy these headsets for their kids for some reason, they want it, and then they put it on. They're like, I'm gonna play this like lightsaber game where I'm dancing around, and their calorie tracker goes off and said, good workout. And like they didn't even realize they were working out. And that's what the studies are really showing is you the time goes by faster, you work out harder than you would outside of VR, you feel less pain, you feel less, you feel like you exerted yourself less. Like all those things make it so you actually want to come back and look forward to the experience. And so just getting a VR headset like the MetaQuest 2, you know, the most popular one that's out there today and relatively affordable, that's gonna help you to learn a lot more about it than anything you could do outside of VR.

Right on. Right. And and if Ryan, if people want to get a hold of you, if you want to send them somewhere online, where would you like them to go?

Uh you can go to my Twitter account. It's actually just at VR. Um so it makes it very simple. Um, or contact me at Ryan at blackbox dash VR.com.

Cool. Well, Ryan, thank you for coming on. I mean, this is uh to me, it's a super interesting topic, right? It it's it's this technology and it's so futuristic, it's hard to believe that it's happening in my lifetime. And it and it's it's about to, I have a feeling it's just about to take off, you know, even more than than it ever has. So it's it's fascinating stuff, and um, it's cool that you found yourself in the middle of it, kind of reinventing yourself after bodybuilding.com, or maybe this is just the next iteration. It's really it's really great. So appreciate your time, really great insights. Uh yeah, Ryan, ladies and gentlemen, Ryan DeLuca.

Yeah, thanks for having me. It's a great combo.

Hey, wait, don't leave yet. This was your host, Eric Malzone, and I hope you enjoyed this episode of Future of Minutes. 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, Catbox, 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 or get in touch with me, simply go to the feature of fitness.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.