Well friends, it seems Quarantimes™ may finally be coming to an end.
Gyms here in Virginia are starting to re-open and other parts of the country are either already open or not far off from beginning the process.
Unless there’s a seismic shift in new cases of the virus, we’re on an upward trajectory towards some form of normalcy.
The real question now is how will the fitness industry adapt to our new reality?
Coronavirus isn’t miraculously vanished, of course, and it’s going to leave a lasting impact. Some businesses that couldn’t stay afloat have closed their doors permanently, and even corporate giants like Starbucks just announced they’re closing 400 stores in the US as a result of decreased sales due to the pandemic.
So how will gyms fare? And what effects will this have on the other areas of the fitness industry? If you’re a coach or personal trainer, is it time to pivot to a new career path?
To help make some Nostradamus-Esque predictions, I invited Adam Schafer on the podcast.
If you’re not familiar with Adam, he’s a host of Mind Pump, one of the biggest health and fitness podcasts, which garners over 1 millions listens every month. He’s also a coach who’s worked with over 1,000 people, and taught other coaches how to be better leaders and sell their services. So, Adam knows a thing or two about business and recognizing trends in the industry.
In fact, that’s one reason why I started advertising Legion supplements on the Mind Pump podcast.
Anyhoo, in this episode, Adam and I talk about …
- The joys of texting
- “Micro-influencers” and podcast advertising
- How coronavirus will affect the fitness space including commercial gyms, home workout equipment, and country clubs
- Why the fitness industry isn’t likely to disappear and will continue to grow
- And more …
So, if you want to hear our thoughts on where the fitness industry is headed, get out your crystal ball and hit play!
4:24 – Adam and Mike’s thoughts on texting
7:27 – Mike’s thoughts on Mind Pump’s coaching program
8:37 – Adam’s thoughts on effective advertising
22:33 – What is the future of fitness after COVID-19?
1:11:51 – How do you think COVID-19 is going to affect the macro trend?
Mentioned on the show:
What did you think of this episode? Have anything else to share? Let me know in the comments below!
Mike: Hello, fellow Travelers. Welcome to another episode of Multiple Life. I’m your host, Mike Matthews. Thank you for being here with me and today’s guest, Adam Shafer, to talk about the future of the fitness industry because it would appear that the quarantine times are finally coming to an end. Gyms here in Virginia are reopening as well as in other places of the country, and unless there is some major seismic shift in terms of.
New cases of the virus, we are on an upward trajectory toward something that might feel like normalcy again, I think, and the question though that Adam and I ponder in today’s episode is how will the fitness industry adapt to the new reality that we are going to be dealing with? Because the virus has not miraculously vanished, and it will leave a lasting impact on many aspects of our lives and of our economy.
Some businesses couldn’t stay afloat and they have closed their doors permanently, and even corporate giants like Starbucks just announced that they’re closing hundreds of stores in the US as a result of decreased sales due to the. So in this chat, Adam and I first talk about gyms, right? Cause those are the nexus of the fitness industry.
That’s where we all go to do our fitness thing. And a lot of the peripheral products, services, even information revolves around. Being able to work out, right? So how will Jim’s fair, and then what effects will that have on the other areas of the fitness industry? If you’re a coach or a personal trainer and you’re wondering if it’s time to move on to pivot to a new career path, I think you’re gonna find this interview helpful and enlightening.
And in case you are not familiar with Mr. Shafer, Adam is one of the co-hosts of the Wildly Popular Fitness podcast, Mind Pump, usually in the number one spot on the US chart. At least I don’t pay attention to the other charts, but they’re probably number one there as well. And Adam’s also a highly experienced coach and weightlifter.
He’s worked with over a thousand people and he’s taught many coaches how to be better leaders and how to better sell their services. And Adam, Knows a thing or two about the business of fitness and recognizing and capitalizing on trends, and that’s why I wanted to talk to Adam specifically for this episode.
I thought he’d be a great guest and my opinion, he delivered the goods. So if you want to hear his thoughts and my thoughts as well on where the fitness industry is likely headed, get out your crystal ball and give this episode a. Now before we get to the show, if you like what I’m doing here on the podcast and elsewhere, and if you wanna help me help more people get into the best shape of their lives, please consider checking out my v i p one on one coaching service.
My team and I have helped people of all ages, circumstances, and needs. So no matter how complicated or hopeless you might think your situation is, don’t worry. We will figure out how to get you the results. You want. Every diet and training program we create is 100% custom. We provide daily workout logs, we do weekly accountability calls.
Our clients get priority email service, as well as discounts on supplements. And the list goes on and on. We basically do everything we can to help you lose fat, gain muscle, and get healthy as quickly and enjoyably. That’s an important point as possible. So to learn more, head over to legion athletics.com/coaching and schedule your free consultation call.
Now, there is usually a wait list and new slots do fill up quickly, so don’t wait. Just head over to legion athletics.com/coaching. Lock in your free consultation call and let’s see if there’s a good. Adam, What’s up brother? How you doing man? Oh, busy. It’s nice to hear your voice. We’ve been texting a bit, but it just occurred to me, I was like, I haven’t spoken to, actually spoken to Adam A.
Adam: Little bit. . Isn’t that weird how that’s changed? Like I know guys our age were on both sides, right? We were here long before the texting generation And we’ve been here now after probably the first few years. I was reluctant to adopt it and then now it’s just like the main form of communication for me.
I’m curious to what you think about it, because I have two thoughts or two opposing views on it, right? There’s the one very impersonal part of it that you just don’t get when you’re talking to somebody or you’re seeing in person somebody. We tend to, we do now, but then there’s also the other side of it that I really appreciate, especially being a busy.
Business owner is, I can have a conversation with you. I could be texting two employees. I could be responding to Katrina and what’s going on at home with Max and I could be managing five conversations. With people nearly at the same time without stopping whatever it is I’m currently doing too. So there’s those perks.
Mike: I prefer texting and emailing even more actually for, if it’s just utilitarian conversation, if it’s work related stuff or if it’s just transactional stuff, then yeah, absolutely. The efficiency makes it so much better than. I don’t like being on the phone or having voice conversations Unless it’s necessary.
If we’re talking about those types of, again, where it’s just we’re sharing information back and forth, we’re just trying to come to some resolution. Again, it’s in my end, like you, it’s mostly work related stuff. But then of course if we’re talking about a social relationship of some kind and strengthening a connection or just getting the joy out of having a connection, like what?
Okay. One of the reasons why we have friends, right? Then texting doesn’t have the same effect as talking on the phone. Or even better if you can see the person, whether it’s over video and then of course best is in person. Yeah. No, I agree. I think that for me, the different modes of communication just have their clear uses.
Adam: Right? So I was asking you before we, we started, if you had seen the episode and of, Of course I didn’t expect you to, I know how busy you are. On your end. It’s our more viral quote unquote viral episodes that we’ve released in the last, month or so. And what did it have a Legion ad? ? I don’t know.
Doug, did that one have Legion ? Yeah. I don’t know. , you would know actually on your end if you see this random spike right now, right? Yeah. That’s one of the great things right about the way advertising works with the podcast is that, it’s evergreen. And I always try to communicate that to advertisers that, We see downloads on episodes that are four years old.
Mike: Yeah. Still, sure. It’s not in the thousands every day like it was when it first gets released, but doesn’t matter.
Adam: Hundreds a day. Hundreds a day. Yeah. And you never know.
Mike: And you guys do a good job. I’ve actually used you as a model in speaking with other people who have been interested in working with, Go check out what the mind pump guys are doing because I don’t share rates cuz I, I wouldn’t wanna do that.
But I say, Look, do they charge a premium? And they make very good money and they deliver though. They produce results. And what I like is that you guys have the right. Mentality about it. It’s not surprising anybody who listens to your stuff knows that you guys don’t take yourselves very seriously.
You still have your feet on the ground. And that though is reflected in how, at least in my experience, our relationship outside of personal friendship, but more on the business side of things where you care about producing results. You understand that the reason why advertisers are paying you is because they want to get a return.
Even in my case, we’re like, Yes, personally I like you guys. And there, that is an element of it, but that of course needs to be separated from there’s a business transaction here and you guys care. Enough about producing results and being persuasive salesman. That’s clear. You put importance on that.
You don’t just go we’re gonna create really good content. We’re gonna build a really big following and we’re gonna pitch things cuz we have to, don’t like it. Oh. And how are people gonna perceive us? And okay, we’re just, it’s gonna be like a really soft sell. No you guys. Partner with companies you like and that you really stand behind and that you can really endorse and not quote unquote hard sell, but that you can sell confidently, as a way of putting it.
Adam: And there’s a reason for that too that I think why Good conversation for any of your listeners that are trying to model a business similar to yours or ours where they trying to scale a business in the fitness space. And quite frankly, I think this is something that’s wrong or done poorly in our space.
And we saw it at the very beginning when we first got in and that was just, it’s funny that you want to build this network of people following right and to a point where it’s large enough where companies now want to advertise with you now. What a lot of people may not understand is that there’s companies that are really smart that go after what are called micro influencers.
They haven’t quite reached that fandom or stardom of millions of people tuning into them, but they’ve got enough. Eyes on them that a smart business comes in. And if they’re one of the first companies to approach this young entrepreneur, they can convince them that, Hey, we’ll sponsor your podcast, or we’ll sponsor your Instagram, or, pay you for advertising.
And many kids are so excited to get their first advertising deal or sponsorship that they just take it. And a lot of times the companies are, supplement companies, t-shirt companies, whatever, and they do like a commission deal or a very low paid deal and doesn’t matter because this kid is so excited to get their first bit of money for the work they’re put in.
So I totally understand how they get in this predicament. But we saw that early on. We knew that we didn’t start the podcast to build it to be an advertising machine. Oh, we’re gonna build this thing so we could sell other people’s stuff. It was never like that. The vision always came from can we provide a tremendous amount of value that we build a massive network and then we know eventually the money will come.
And we agreed that when we first would start getting approached by any company, no matter what it was, that we would more, most likely pass on it. Just because, if and when the time came that we were gonna start advertising, we were more interested in going after companies. Companies that we thought were, that we wanted to introduce our audience to, or we get to know CEOs and we would court them for months and say, Okay, I really what this guy or this girl is doing and I really love the product.
I love their messaging, their synergy there, and then working out some sort of a partnership. And then that makes it so much easier when we advertise for them because we truly do love the brand. And I know a lot of people try and present whatever they’re pushing like that. Oh, I would never push anything that I don’t use too.
Oh, okay. That’s great. Yeah, we use all the products that we advertise, but more importantly, like we’re in love with the company and what they’re doing or the people behind it. And we waited until we were in a position where we had some leverage to say, No, we don’t want to do business with you. Or, This is what we think we deserve for that.
Because we will approach it with, I know as a company you need to get your roi. We like what you’re doing. The podcast is the main medium, which we will probably get that. But we also knew that we would support the business with the email marketing, with the Facebook and Instagram and YouTube. And so we really like when I sell advertising, the numbers that I predict for the business that I’m doing business with is based off of what I think we can convert from just the podcast alone.
But because of our relationships that we care about and partnerships, we know that we can use the other platforms to make sure that we make good on that. And it served us very well. It was a slow process. We had to say no. We probably could have been making money. You said no to the poop tee. Yeah. Yeah. We said no to all the, Exactly.
No. And those are the companies are, they come, they prey on these young kids right away. The fit tees and the all the random supplement brands that start every single day and t-shirt companies. And what a lot of these kids don’t realize is they, before they’ve even built a real solid business for themselves, they’re already promoting somebody else’s company that they probably know very little about, and they’re getting paid very little for.
It just doesn’t serve you very well as an operator if you are, if you truly have a vision that you want to grow your own thing and you want to get really good at this. And that was a big thing that we also noticed too that, there was this even or this weird, CPM that I don’t, I wish I could get to the root of where it started.
Somebody decided to put out what a standard for what every podcast should get paid for advertising. And to me, advertising is sales, right? And I’m sure in your lifetime, I know in my lifetime I’ve met a ton of incredible sales people and some really bad ones and everything in between. So how are we all held to the same standard of being paid when there’s definitely a huge discrepancy on those ends of those spectrum.
The difference between a horrible or a below average salesperson and an extremely good one is a way big difference in results. So why would we all get paid the same? And that was just something that, you know, Sal, Justin, and myself, we all prided ourselves on from previous businesses that we’d done is that we were effective communicators.
None of us had thought that we should get paid the same as what everybody else did. And because we held out, it definitely paid off. And it’s become a big part of the business. And
Mike: I would say though, that you guys, maybe you don’t. That you’re, Yeah. You do realize, if we look at this in terms of a bell curve, right?
Just a normal distribution the 66% in the middle, if we’re talking about influencers of any kind, even though you, and I probably don’t think of ourselves as quote influencers, I’m talking about whether it’s a podcast whether that’s like people who just have podcasts or whether they’re doing social media stuff.
Most, in my experience, are not great sales people. I would say that it runs the, the gamut from. You have on the left end of this distribution, People who are really bad really just phoned in. They don’t even really try, you can tell they’re just reading a script that is poorly written and they just move on and you can sense the, there’s almost like a distaste, Oh God, I have to do this to get my $50 pulled little objection.
Adam: That’s the same thing it was for me, as so for most of my career I was only a trainer. A lot of people don’t know this even on my show, cause we don’t talk this much about this. I was only a private trainer, that’s all I was doing for a couple years. Very early in my career I was moved up into management where I was teaching and coaching other fitness leaders.
Most times I had anywhere between 15 to 30 different trainers that were always working for me. And that same percentage that you’re rattling off right now was true to that group. I would have, 20 trainers and most all trainers get into fitness mostly because they want to help people or fitness has changed their life and it sounds like an incredible career that they could do.
And they get into it and they realize, oh wow, a lot of this is selling. I gotta sell myself, I gotta sell training packages. And depending if you work for certain big companies, supplements and whatever else, and they instantly get turned off. Yep. Oh, I don’t like selling. And it makes me uncomfortable.
And so I, I had to learn how to teach people who didn’t like to sell how to sell and something. And this is something that was really bonded ize. We both communicate this very similarly, that, all sales really is effective communication. And when you’re selling something that you believe in, which that would be the first thing I I’d tell the, all the trainers like, Listen, you got in this because you believe in the value.
You believe in that, how it’s changed your own life and other peoples around you. So I don’t need to convince you on the value of this and that you believe in this. And oh, they would all agree with that. Oh, but I hate selling. I said listen then it’s just learning to communicate that effectively.
And you gotta take that. This idea that you’re pushing or you’re selling something. In fact, I used to say that the difference between a good closer and a great closer is this a good closer can push anybody into a sale. And we’ve seen those people that can overcome objections and they’ve read all the sales books and they can wear you down and they could be so aggressive that you buy and that’s a good, could be a good salesman, but a great salesman will pull you into a sale.
And the difference is when you leave buying from the two different people, a lot of times you get buyers remorse from somebody who like pushed you. And we’ve all probably experienced this, right? You bought something and then you went home and you’re like, Oh my God, I shouldn’t have done that, but I just wanted to get outta that conversation or whatever.
Or, you were, you’re regretting it versus if I pulled you into the sale really well and did a good job of that, you leave and you’re excited you made this investment or this purchase, you.
Mike: Totally agree. And so that’s something that, that you guys do very well and it’s reflected in the results.
Coming back to cpm, your CPM is much higher than some of the other podcasts that I’m advertising with, but I would never pay them that because the results are in line with what I’m paying for. So if I look really at the roi, yes, I’m paying you guys a lot more than I pay others, but you’re producing the results and I’m happy to pay for the results.
And we’re transparent both ways in terms of how well is it working and I, I wouldn’t take offense if it were working so extremely well. I guess with the rate being where it’s at, then you guys you’re saying, Look, we’re happy with this rate and we hope it does as well as it possibly can for you.
But of course there’d be a point where if you get to a point where you’re seeing that you’re producing now way above average returns, even with the higher rate, of course it makes sense to be like, We should raise our price . And so it works well also because you do care about your advertisers. You care that there’s an ROI there, and you care about, you own a business.
So you understand that just hearing, for example, a sales number, Yeah, that’s neat. Top of the line. Revenue is nice, but it’s a vanity metric, right? You have to start taking out costs. When it all comes down to it, that matters more. And so anyway, I’m just admiring how you guys manage. Promotional relationships because it’s unusual and you know that, and so I’m just saying this for people listening who might be interested in, if anybody has a business that might make any sense to work with you guys.
Adam: For me, I don’t, I hope we’re not boring your audience right now, but for me it’s a very fascinating and cool conversation because I’m big on when I get into a space looking for the opportunity or the blue ocean and I just, I saw that when we came into podcasting that there was just this kind of old way of doing things and nobody had really evolved.
How it was done. Even your biggest podcast all kind of follow the same protocol of, Oh, based off these CPMs, you charge this much and you do this pre-roll commercial that’s a read. Yep. This
Mike: episode is sponsored by Legion Athletics that produces 100. Okay. It’s skip, skip,
Adam: skip. And I feel and I feel like it, I mean it gets the people that were just, if you were listening and I’m talking about your product, I’m talking about Legion and I’m talking about Pulse or something.
And you just happen to be on the market for looking for a great pre-workout, and you hear us give the commercial that might sell you just mentioning it and because you trust the voice that it’s coming from. But that’s only those people versus, hey if we can go in and elaborate on why we use it or why we like it or how we use it and we can have that in a normal conversation that’s not pre-thought of or recorded or scripted, I think that transparency comes through and then because of that it, it converts extremely well and.
Mike: And it’s a good segue to what else? So that, that was something that you guys, just being forward looking, you were saying, Hey, I think there’s an opportunity here, and I think that this is gonna be more and more of a thing where as we have more and more people producing podcasts and becoming influencers, starting off as micro influencers, but growing, there’s an opportunity here to improve this aspect of the ecosystem that is that grows around these people.
And so what other things, what other prognostications do you have for the future of fitness, which was really the idea of this conver what would, When we were going back and forth, this was the one that stuck out to me because people love predictions. And I had made a note like a week or so ago that I should produce some content.
Probably on a regular, semi-regular basis along these lines of saying, Hey, here are the current trends and here’s where I see things going and here’s how you Mr. Or Mrs. Listener could get ahead of the curve, so to speak. And that could be on the business side of things or just on the personal fitness side of things,
Adam: yeah. We did this episode and I was alluding to it before we got on that, with Covid going on, how is this going to shift and change or will it shift and change the fitness industry? And I think we title it something like, Will the fitness industry die? Obviously some catchy title to get people’s attention.
And none of us think that the fitness industry is truly going to die. But I do think. That it’s gonna be forever changed from covid 19. I really do. What we wanted to do to prove that or share that was we brought on, so we selected what we think are like, an example of, some of the core.
Types of fitness gym businesses right now. And what I mean by that is so we interviewed Scott, who is in our area in the Bay Area. He’s one of the more successful private studios for trainers. Very small 4,000 square foot facility centered around just trainers that are training clients. They operate very well, and I know Scott personally, and I’ve known him for quite some time, and we thought, Oh, this will be really great.
Let’s interview him and talk to him about how he’s dealing with Covid and how much has it affected his business, and what is he doing to solve whatever potential problems they’re having right now with c. So we had him and then we did, the boutique gyms, like the orange theories, right? So Orange Theory, F 45, these boutique studios for the last, I’d say five to eight years have been what’s been dominating as far as profit margins.
They’ve done a really good job of utilizing square foot and operating with a low overhead and very pro fact, Don’t know if you know this or not, there’s over a thousand orange theory locations. Every single one of them’s profitable. So that’s how successful this model. So then we interviewed a good friend of mine, t aio, who is, he owns 50 of these, so figured he would be a great person to and I was with him when he bought his very first one.
I helped open his very first one, and then I’ve watched him scale from one to. . And then we interviewed Jason Kapa, who CrossFit guy, if you don’t know who that is, Big CrossFit champion. He’s, he owns over 30 different CrossFit locations worldwide. And then we interviewed Mark Maro, who we would consider the, OG or King of the commercial type gyms, like the 20 fours LA Fitness.
He owns Crunch in ufc, now started 24, has a massive fitness company, hundreds of millions of dollars, and, sold 24 for 2 billion. So we thought, okay, this would be a great person to talk to about that size or space. And then we talked to Bree, who was a VP of fitness in Bay clubs. Bay clubs are what we figured would represent the massive.
Luxury type of facilities that are, hundred, 200 square foot or on acres. And they have 10 tennis courts and four swimming pools. And it’s like a country club. Yeah. Country club. They cater to the very high end. It’s thousands of dollars to get in. It’s hundreds and hundreds of dollars monthly to be a part of it.
And so we went through all these people and we in, and the way we did it was the, we’ve never done an episode like this. We had Sal. Do a very kind of formal interview of all four of these operators individually, and then we, Doug spliced all the interviews together and then the three of us get on afterwards and we talk about our predictions, what they had said and dissect all of it.
Mike: Yeah. Sal mentioned that you guys were starting to try that format. He sent me, I think the first one, I forget exactly what it was about, but it’s smart. It’s a higher production value. It’s more mainstream, more like a, like an NPR type of interview.
Adam: That’s exactly where we model it after was like an NPR type of episode D.
Very different from how we do it now. Right now it’s a very free flowing conversation. Like this. Yeah, like this. But the intention of this episode was exactly that, was to can we reach more mainstream? And we did. We really were hoping that maybe we get picked up by an article somewhere. Who knows?
Maybe it’s still will. No,
Mike: it’s smart. That’s something. Talking about just future opportunities, I think that is one of them in the, at least in the fitness podcasting space. I don’t pay attention to podcasting too much, to be honest. Essentially just a time thing. I have a certain amount of time that I give to my podcast and to two podcasting in general, but that’s something that I’ve even seen is that the most popular podcasts are.
Still like this, and that’s fine, but there is an opportunity there to create shorter, more highly produced, which also works as a strategic moat of sorts, because highly produced means money, time, access to experts. Anybody can just start a podcast and have a conversation like this. Now, whether they can do it well or not is another thing, but anybody can theoretically do that.
Not anybody can do what you’re talking, Not anybody can line up the experts, do all the interviews, splice it all together nicely. Make it a really polished, And also, I don’t know how long yours was, but I think npr, one of the things is they’re shooting for that commute time, which is irrelevant at the moment, but that 20 to 30 minutes with a lot of really good soundbite, basically.
Adam: Yeah, no, that was exactly the goal was we kept that one under an hour. I think it was about an hour, maybe an hour, a little over, because we talk afterwards and each interview was individually like 30, 45 minutes. And then we cut and splice out the meat of it and the gist of what each person talks about.
And then when we wrapped it all together and talked about it, it was a fun episode. It was a lot of fun for all of us. And the takeaway was this was all these people that we chose were very successful in their space. And so one of the things that I’d said afterwards was, I love all these people. And of course, talking to successful operators about hard times right now, they’re gonna be optimistic.
Just if you’ve built to millions of dollars, you’ve probably learned to reframe any scary, bad situation for opportunity, right? And so that was the common theme that you would hear from all of them. But then we cut through all of that and said, Now listen, let me explain how most of these types of facilities have operated and had success and why we think a lot of ’em are gonna crumble.
So the fitness model, especially in small box, let’s say Orange Theory and CrossFits, the model is built off of low square footage. As much people as you can get in there for that tiny little space. So our prediction was that these gyms would be hurt the most, So your orange theories and your CrossFits would hurt the most.
Now, CrossFits already have like this space thing that they, because they’re using barbells. So because of that, they would be maybe a little less hurt than orange theory. But there’s also I think a lot more. Poor operators, right? So I think right away, because of covid 19, you’re going to automatically weed out any bad operators.
Operators that were having some sort of success just because they timed the space. They got into,
Mike: or they’re not really, they’re just running a failing business and this is just going to accelerate their demise,
Adam: right? Yeah. This is the Kuda gra, right? This was the, this COVID 19 was just the pin that pricked the balloon or whatever, right?
Absolutely. So that our prediction was, you’re gonna see a large percentage, and by large, probably 20% of operators just fail because of that. They were already failing and then there just completely exposed them. So I think that was something that everybody agreed on that we interviewed that, if you were not prepared for hard times, this is, how many businesses can go?
Three months of no revenue? Very few. So we were gonna see that, but which.
Mike: It should not be the case. I don’t want to get off on a complete tangent. No,
Adam: you’re right. That’s a good point. It’s it
Mike: says Finance 1 0 1 have an emergency fund. It applies personally, but businesses should have an emergency fund as well.
It’s the same concept. It’s three, four, maybe five months, maybe as much as six months of expenses if you have a very volatile seasonal business. But like I keep three to four months of expenses, cash, and yeah, that’s hundreds of thousands of dollars that just sit there and quote unquote do nothing.
But they do something . That’s the whole point of an emergency fund. It’s a safety net, and that’s it. Just it’s in the business. Then of course, I have an emergency fund personally as well, and somebody might say Oh yeah, that’s easy to do if Oh, if you’re a millionaire or something, okay, fine.
But that’s something that I’ve done now for a very long time, and I did it when I was making less money and my expenses were lower. It’s just a. A rudimentary element of business finance and personal finance.
Adam: 100%. No, it’s business 1 0 1. And we’ve operated the same way. And you’re right. Oh, it’s easy to save your that’s stupid.
Like we operated that way when we made 10 grand. You know what I’m saying? And I made
Mike: the mistake too. I not, it was not always case When I was younger, I was stupid with money. I had a bunch of credit card debt from just traveling and buying knickknacks. And so I know what it’s like to be dumb with money.
I learned my lesson, but at least I learned it and I didn’t make the same mistake
Adam: again. And what happens in business I had this talk just recently on some mastermind group I was speaking for. And I Mastermind, mastermind, master the irony of that, right? Yeah. I talked so much shit about Mastermind, but yet all of them call me up to speak for ’em.
I think that’s hilarious. And I was talking about you get what you
Mike: resist, man. I
Adam: know, right? Universe 1 0 1 isn’t that funny, or I think it’s hilarious, and I try to do my best to give them real value. And one of the things that I see right now is that, because so many businesses have operated this way.
Many of them are doing things at a desperation, and that is a very bad place to be In business where you are free falling, you don’t have a safety net because you didn’t do your due diligence by putting a nest egg away in case of whatever, Not that anybody could have predicted Covid 19, but doesn’t matter, right?
You should have that and because you maybe don’t have that, you begin doing things to drum up revenue and you’re doing it at a desperation. And the consumer, especially today, is hypersensitive very aware of all these things and it ends up hurting you even more and it turns people off. And in fact, and this was the advice that I was.
It’s one of the hardest things to do when you see your own money going down or your business struggling cuz of a time like this is to find ways to give more and to provide value or give free. And that is a really tough place to be mentally when you’re wondering, Oh my God, how am I gonna pay my bills next month?
The last thing most people are thinking in that position is, How can I give more free content or more free stuff away? Or how do I add more value to the consumer who’s not really buying right now?
Mike: Or get creative in how you can make more sales, but in a way that is in keeping with your brand, and that is high integrity, like you said, not getting to that desperation and then starting to do things that are unethical that you know you shouldn’t be doing.
But justification, rationalization, and it’s fine. We’ve all done it. We’ve all made that mistake. But like you said, consumers are aware. They’re very sensitive, particularly right now. I even made a couple missteps in that regard. For example, when it was in March, I think February or March, I had a, I mean I have, but I had an immunity product that was coming out that it was like 10 months in the making and it was actually delayed.
It was supposed to come out. I wanted to come out in November, December, going into winter just to say, Hey guys, winter is when people tend to get more sick. Getting sick is not only annoying, but it also gets in the way of your progress. Here’s an immunity formulation. I understand most of these products are garbage.
I, I agree. But check out this formulation. It’s pretty unique as always. Every ingredient’s backed by good science, it’s all cited. I personally am excited about it here, check it out, kind of thing. And it just happened to be that it came out in February slash march, that’s when it was available. And that’s okay in and of itself if I would’ve communicated it in the right way.
But instead, and this was just a lack of perspective and this more reflects on my personality and that I don’t take very many things seriously, honestly. And so my email was very flippant. I’ll write these kind of just I have fun with them, honestly, and make jokes and it’s a very insufficient type of tone.
And usually people find that interesting and funny. But this is right when the. Coronavirus scare was starting to peak, and so it was just tone deaf and it upset some people, and I ate Crow and I apologized, said, Hey, I understand. I look back on it and I definitely could have done a better job there, but let me explain that This product has been in the works for 10 months.
This was not like some cash grab where it’s like, Oh shit, quick. Throw together a product in two weeks. Even that’s not even possible. People don’t understand that. It takes a couple of months minimally from like placing an order to receiving a product is like couple months. But anyway, so my point is that I do.
Have some sympathy for people who have tried to do what they thought was the right thing and gotten a lot of backlash for it, simply because their execution was a little bit
Adam: off. We were so aware of that. We have a couple brands including yours, that have great immunity type products. And of course during this time they all sent us emails like, Hey, this is a great time to talk about this.
And we said no, actually it’s not. We love your product. We love that about your business, but we’re gonna choose not to promote that right now. A couple companies understood right away. Some of them were pushed back a little bit, Why, this is doing so well for us right now. And I said That’s just not how, I think it’s smart for us to build messaging around your products.
You have so many of ’em right now. There’s no doubt in my mind that, sure, some people will be like, Oh, great. I was looking for something like this at this time. But then there’s gonna be a large portion of those people that are turned off by it because they’re gonna feel like you’re taking advantage of a situation regardless if you are or not.
Doesn’t matter. Perception is reality and some people are going to perceive it that way. And so we avoided actually talking about products like that during this time just because that, even if we believe that the product was great, And you do, you have an incredible immunity. Product. Afis got a great one.
We have another company for Sigmatic that has one they rolled out, and I know there’s another company I’m not thinking about that has one too. And all of them did that and we turned everybody down and said, No, trust us to represent your company. I don’t think that’s the smart thing to do, and I think it was the right play on our part.
But getting back to the businesses and these conversations that we had, something that is interesting, I think for people that may not know this, many fitness boxes are built on the model that they are making profit off of the consumer that isn’t really using the product. And what I mean by that is, and Planet Fitness is the extreme example of this.
So before Planet Fitness, the, and this has been done for many years, the research on this. And so it’s very clear that gyms are very profitable because of the people that pay for memberships and don’t show up. 24 Fitness, LA Fitness Crunch, name, any of the main ones. If all the members decided that they were gonna be motivated the same month and they were all gonna show up, the business would have to close down.
It doesn’t operate that way. It doesn’t have the capacity to fit all of its members in the gym at all. Not even close. And statistics show that the average consumer gets a gym membership. They use it in the first three months. And then completely fall off or use it infrequently after that, but yet keep paying for seven months beyond them ever using it.
And the gym people that are like, Oh, I don’t think you guys are crazy gyms aren’t gonna be affected. As soon as they open back up, I’m going right back. And I’m like, You’re not even the person that I’m talking about. You’re the person that is probably figured a way out to work out at home.
You’re the person who, you are the 1% bro . You’re the, you are not what these gyms built their empires off of. They built it off of the person. Like I said, Planet Fitness is an extreme example of this. They’re so extreme that they went and targeted like, Okay, we’re not even gonna worry about the serious Jim goer.
In fact, we’re gonna put a lung alarm on there and we’re going to serve pizza every Friday and we’re gonna make the entry left so low and it’s only $10 a month that we’re gonna appeal to the person who’s just maybe one day thought about working out and they’re like, Oh my God, $10 and I get free pizza on Fridays.
That’s a no brainer. And it’s so smart because you know that all of those members that are only paying $10 a month, they not only do they justify like what you were alluding to that, Oh I don’t, it’s so cheap. I don’t wanna stop it. I may go back and use. Oh shit. I also get pizza. So if I really want to get my money, all I have to do is show up once a month and go get a couple slices of pizza and I’ve paid for my $10.
So they’ve built their entire empire off of not the real serious Jim goer who’s trying to change their life. It’s off of the people who had an emotional feeling one day to get a membership and then locking them in at such a low rate and offering something that justifies them, keeping it forever. So and I think those models are gonna get shook up.
Right now, because even somebody who’s only paying $10 a month, I don’t know anybody, even people who kept their jobs, I think everybody is evaluating their finances right now
Mike: and $10 a month. Let’s look at what that is in terms of a benchmark. That’s is Netflix. It’s around Netflix, right? So $10 a month, maybe even a little bit less.
And but just look at, just, it’s a totally different thing. But what do we pay a bit less than probably about $10 a month at most for Amazon Prime. So yes, it’s a different thing, but look at how much utility and in the case of Netflix and Prime, how much entertainment And maybe even for some people it could be joy and pleasure, how much they get out of just $10 a month.
So the bar of what you need to provide for $10 a month, I think is a bit higher than some people that I’ve spoken to. Some business people and marketers in particular understand where over the last probably year or two, I can think of a number of conversations I’ve had where people were thinking about, okay, they want continuity in their business, A subscription model think in 30 to $50 a month for basically just information usually.
And I’m like maybe 30 or $50 a month doesn’t mean very much to you, but that’s a lot of money to a lot of people in an absolute sense. And then in a relative sense, it’s a lot. You’re saying that you’re gonna give them. Three to five times the value, just however you wanna define value as Netflix.
And that’s where, how they’re comparing it,
Adam: no 100%. And then you gotta factor in unemployment right Now, you gotta factor in that, a lot of these gyms either froze or cancel those memberships for the time being until they reopen. And so how many of these people a, are going to want to expose themselves in a closed, hot, sweaty box where people are touching weights and are close to each other and going in and out, thousands of workouts a day.
So how many one people are gonna even want to expose themselves so that, two, how many people are in dire straits just financially because they’ve potentially lost their job and are gonna justify paying a monthly fee every single month? I think that we’re gonna see a lot of things shake up and what we see already happening, right?
At home equipment has risen by 670% in the last two months. Yeah. Everyone’s sold out of everything. Yeah. You can’t get a plate, you can’t get a dumbbell, you can’t get a piece of gym equipment anywhere. And if you do it’s marked up five X right now. So there’s people profiting like crazy up. So everybody is finding an alternative way to work out.
Mike: gotten unsolicited offers on Instagram for my boflex, dumbbells, , like people asking how much do you want for
Adam: those dumbbells? Oh yeah. No, we’ve had people bidding for the stuff that we have at the gym. It’s crazy. So then let’s say somebody who bit the bullet and they did get, maybe they were some of the first wave that got some dumbbells in a barbell or figured out how to do body weight stuff or is using a suspension trainer, whatever.
And they’ve now invested in that and they’ve been figuring it out for the last couple months. And even if they love going the gym, I love going the gym. I just invested in a couple thousand dollars worth of equipment. I’m gonna want to use it. Yeah. That’s it.
Mike: I don’t think for a lot of those people there is no more going to a gym.
That’s why they just spent thousands of dollars. Now my question back, like when I was thinking about this myself, the question I had posed to myself is, I wonder though, again if, are we just seeing like the 1%, maybe the three, maybe 5% of hardcore fitness people who were unwilling to give up their routine and were spending thousands of dollars, Let’s say they, they saw the problem coming like back in February and they’re like, Oh, it meant enough to them to stock up.
And once we’ve worked through, once those people have finished building out their home gyms, I would assume though that still the vast majority of people who are interested in fitness, the gen fit crowd, most of them probably are not gonna have a home gym set up. I might be wrong with that, but.
Adam: I don’t know.
Statistics show 600 something percent increase. That’s a massive increase. So there’s a
Mike: Yeah, but that’s relative. We don’t know what those numbers looked like in an absolute sense, where they weren’t selling very many home gym setups really. It was a rare ish thing compared to now.
Adam: It’s very apparent to me when I go to two different towns, right? In the last couple months I’ve been into, Monterey is one of my favorite places in California to go in the beach area, and it’s a very liberal town. And then I’ve gone up somewhere like Trucky, which is a very conservative type of town.
Both are in California, but in these pockets. And you go to Trucky area and I, you don’t see a single person wearing a mask and businesses are still operating under the radar and just everybody’s still kind, acting almost as if nothing’s going on. Then you go somewhere like Monterey and you can’t go outside anywhere and not see someone wearing a mask.
And if someone isn’t wearing a mask, they get immediately shamed by people. I’ve got, I see cops ticketing, business operators that are trying to keep their coffee shops open, just. There’s gonna be all these little pockets that, yeah, there’s gonna be a local gym that opens up and everybody’s gonna go right back to their normal thing, and that’s fine.
But then there’s gonna be these other pockets of the people that are still very afraid to even put themselves in a very public situation. And you’ve gotta think. That gyms are up there with some of the, probably the worst areas. You’re hot, you’re sweaty. Yeah. You’re breathing heavy with your mouth wide open.
You’re on the floor and on the, You’re touching weights that for sure. Somebody else just touched. And and of course these, and a lot of these operators said, Oh, we’re gonna do one hour blocks and people sign up for it. We’re only gonna allow so many people in, and then we’re going to clean for 30 minutes and shut the gym down, then reopen it again.
Which is maybe better than
Mike: nothing, but Right. Better than nothing. But you’re gonna be swapping bacteria and viruses, .
Adam: Not only that, but then it, the math doesn’t add up. There’s prime hours in the gym space too. So you know, 90% of your traffic comes between 5:00 AM and 8:00 AM and 5:00 PM and 8:00 PM.
And so if you’re gonna separate these blocks, everybody’s gonna want those blocks. And so you’re gonna have to fill, you sign up, months in advance and only a small percentage of people be able to do it. And then if you miss your window to get in your time, working out is already hard to convince people to go And stay consistent.
Now you’re gonna tell them they can only come in this little time and then they have to book it in advance. And if they don’t make it, they can’t come a half hour later. They can’t come the next day. Cuz they didn’t book it.
Mike: Yeah. Like it’s a tee time for a congressional or something.
Adam: And you know what, that’s a good example.
And if it was a tee time where you’re paying every time you go a hundred and something dollars, then they can get, And so that’s what we’re going to see. So we’re going to see. Either massive increase in price because it’s the only way these boxes are gonna be able to survive. Orange Theory predicts one third of attendance.
The model was built off of packing it completely tight with as many people as you can, and then you’re gonna take two thirds of the traffic and think that the revenue is going to sustain and then claim you’re not gonna increase rates.
Mike: Yeah, it’s an interesting strategic conundrum because if you’re looking at it, if you’re the, let’s say you’re the VC money behind one of these big brands, or if you’re just the CFO or if you’re on the board or whatever, and you’re looking at weighing, Okay, how do we make an evidence based, a data based.
Prediction as to a probability of things returning to normal in the next, Let’s say it was we could do this for a year and we’re gonna burn through cash but we don’t have to raise our rates and we can work at half mass here for year or so, and then we think there’s a good chance that all of this will have blown over.
We can go back to our old model. But then of course there’s the risk of what if that doesn’t happen though? Okay, A year goes by and nothing has really changed significantly. You’re still having to run it one third capacity, and now you’ve just burned through a couple hundred million dollars , and you try to make the change then.
And that also then of course, gives the opportunity for your competitors that might get a head start on you because they saw the situation differently and they were predicting no return to normal. So they already made the hard changes and so forth. It’s gonna be a tough spot.
Adam: Oh yeah. Then you have the other side of this spectrum.
The companies that are surging right now and chopping at the bit for this opportunity. The mirrors. The Tonals. The Pelotons. These are monster businesses that have been quietly growing under the radar for the most part, and are just exploding right now. What timing
Mike: for Peloton too, because their revenue of course has been very impressive, but they have been losing an absurd amount of money.
I don’t know what their finances look like now, but I’m sure it’s a lot better. I was just reading about it earlier this year and they were looking back on Pelotons performance last year and it was, 800 and something million in sales and there definitely is a lot of potential in the concept clearly.
But they also had lost, I don’t remember the number, but I wanna say it was in the hundreds of millions in the red to get there. So there’s that joke of Yeah, gimme a billion dollars and I can build a billion dollar company. Just let me spend enough money and I’ll figure it out. .
Adam: They’re positioning themselves.
I love this conversation too, and I do know quite a bit about it cuz I read up on all of them. They’re all like that, right? So tonal and mirror, same thing. Making hundreds of millions of dollars but still not profitable. And that’s because they’re positioning themself just like a tech company, just like a Facebook company would.
If you talk to the CEOs or the people that are scaling these things, they actually don’t even concern themselves with the fact that it’s not profitable, cuz they look at to those models as examples because they’re in the business of collecting data and collecting people and that’s all they care about.
They are just like the Netflix, they are just like Facebook and the, these businesses, the tech companies that have built these businesses off of, just gathering as much people and getting as much information from ’em because that where the real profits are gonna come in is when they can sell off a lot of this data down the road.
And so mirror tonal Peloton, all very similar. Yeah, no, they’re surging right now. A lot of people are jumping on it now. The question is, will that just be a trend in a wave right now and will it fall off? Or will this become the way that a large portion of people do fitness in the future?
And I think that it’s not going to eliminate gyms. I don’t think there, I don’t think all of a sudden everybody’s gonna work out at home and use this, these weird. Computer trainers with on a cable machine or a bike, and that’s all there. But I do think that it’s going to appeal to a lot bigger population than I think a lot of people thought before.
Mike: The cost is still the issue though. You probably read the marketing docs from Peloton that were leaked, that went over their target demo and it’s what you would expect. It’s middle class, upper middle slash upper middle class women. That’s who they’re going after. And because I think the Peloton bikes, what they’re like two grand, maybe even more now, and it’s 30 to 40 or $50 a month.
Adam: that’s what makes ’em so dangerous too. Another thing that many people don’t know about, the gyms like 20 fours and crunches. A lot of their profits made off of the people that never show up. The other portion of their profits are made up of majority of women that show up for the free classes.
that they love Zumba and Group X and the free yoga, and they don’t mind paying this gym membership. They rarely go over the freeway area, but they love their classes. That demo is getting plucked right now by Peloton and Mirror and Tonal. I don’t know
Mike: about Mirror and Tonal, but I was reading about Peloton and they’re clearly doing a good job recreating that social experience.
The community, even though you’re not there with people like you are in the class, but physically. But you are virtually and you feel like you’re a part of something when you’re doing the I. I don’t have a bike. I’ve never done the classes, but I’ve seen some videos and they do a good job, highly produced, and they have good instructors who are high energy and they really recreate that spinning experience.
And then you have all the community that goes along with it and people who are into it and up meeting each other offline as well. And I’m not surprised it’s doing well given how well they’ve executed. When I first saw Peloton hit the market, I was like, Ooh, that’s gonna be tough. And I was wrong. Maybe I wasn’t.
Maybe it was tough, but I was like, if I would’ve had the opportunity to invest in Peloton with the no information that I had, just outside looking in, right in the beginning, I probably wouldn’t have done it because of the price alone. I was like, really? People are gonna spend two grand for a bike plus 30 to $50 a month instead of just $20 a month?
No, two grand. Just go to the gym and do it. I don’t know, but hey, I
Adam: was wrong. I agree with you. I was on the same side, although we did invest in Peloton, when this Covid thing was certain, it really hit because we did see that for sure, and it did. But I did like you early on. I thought, this is crazy.
$2,000 and a month, so I got four people that are like very close friends and family of mine. So that actually just that have bought Peloton in the last three months. The common theme speaks to your point you just made is I see them all sharing on Instagram and posting in their stories, their bike rides and the meetups with their friends.
They all join classes with their friends. So it’s giving that commun and we know that. This is one of the main reasons why CrossFit was so successful is they did a better job of community building than almost any other gym business did before it. They really maximized that whole community feel and because of that, it’s what exploded.
And then all these boutiques, like Orange Theory and F 45, really have built their models off of the CrossFit model and the community model and have had a lot of success. And now we’re seeing a virtual, There’s a lot of people that you know are using Zoom. I did some things with my family. I said that I think won’t change now.
Like I thought it was really cool. We started to do this thing with our family where once a month, we get all my cousins and aunts and uncles and Katrina’s family and we get on this massive 30 person zoom call once a month and have a glass of wine. We have two family members that are talented musicians, and so they’ll play like live music for all of us and it’s actually really cool.
Now, does it replace all of us being in person together? No, but those 30 people maybe get together once every five years like that group. So how cool is it that, we found this way to connect with each other and bond on a more regular basis where no one has to leave their house.
Like it was really cool. It was something that I probably would’ve never even thought to do until this all happens. So I think we’re gonna see. A lot of this happening in the fitness space is if you really care about staying consistent with working out, you’ve had to find alternatives in this last three months and the people, And there’s definitely a percentage of people that are doing it just to buy time until they’re gym opens up and they can’t wait to get back.
And that there will be that percentage, but there is still a, I think, a large percentage that has found alternatives that is working for them. And it’s gonna be hard to convince that person who has found another alternative, even if it’s not superior, it’s working for them. And with the risk that a gym has, especially smaller, tight ones, I think a lot of people are just gonna be like, Nah, I’ll wait.
I would, that’s where I’m at, The three of us, I’ve always said, Sal and Justin are like at home workout guys. That’s their thing. Like they love to workout at home. I just don’t, I don’t, I like to go to the gym. I like hearing, someone, two people down from me slamming 400 pounds deadlifting when I am, I love seeing other really fit people training in there.
I love the fact that I have to drive to the gym cause then it forces me to get a good workout. Cause I drove across town. Like I’m that 1% that really, But even me, with what’s going on, it’s like I could wait another six. I’ve already gone three months of figuring it out without going to my gyms.
And I have three memberships. So I’m a guy who has three gym memberships plus his own at home or studio gym. I’m not gonna pay those anymore. I won’t pay those three gym memberships for quite some time. Probably not till all of this really starts to settle down completely. Because I’ve found another way to keep my fitness up and it’s working for me right now.
And the way I look at, it’s like shit, I have one membership cost me one 20. Another one cost me 49, and another one cost me 29. It’s man I’m gonna save me a couple hundred bucks a month by just continuing to do what I’m doing right now. And maybe I’ll go back six months a year from now. I don’t know.
So I gotta think that I’m not the only person who thinks this way. Yeah, no,
Mike: I, I totally understand and I’m gonna put together, when I can get my hands on some equipment, I’m gonna put together a little, I have a little space in my house where that is for a gym, and we just have a couple of things in there.
Right now I have some bole on bells. I have an upright bike and some bands, and that’s what I’ve been doing my workouts with. And it’s fine. I’ve been able to more than maintain my physique and have good workouts and whatever, but I do miss my normal style of training, which is more intense and some more barbell stuff.
And, but I, I’m thinking about really, it’s just the time. It saves me, I don’t know, at least 30 minutes a day. And I have so many things that I’m always. Wanting to give time to that. I like the convenience of it, so I’m gonna put together a home gym, even though that means that I won’t have access to some of the machines.
Like I like the leg press machine. I like the pec deck, which I use for mostly just for rear delta, but there are some machines that I like that I won’t have kine, whatever. But I don’t see any reason to go to the gym anymore. I do like the social experience to some degree, and I have, obviously my people there that I would talk to and you form your little click.
But again, it’s that convenience. I love being able to do my workout whenever, not having to drive. And as far as the virus goes now, I’m not personally concerned about it. For me, if we look at the data by demographics, both of us really have nothing to worry about. Actually went and looked at the actuarial data, walking around Washington, DC walking around a city where there’s a lot of traffic, for example, is probably about as dangerous to me. Someone in my demographic, 35, no health issues as this virus. Of course it could knock me on my ass. It could kill me. But so can anything almost . And so you gotta go by data.
You gotta look at actual data probabilities, statistics. We take calculated risks every time we get out of bed every day. That’s life. And so I’m not concerned about it. I wouldn’t even eat my words if I got it and it fucked me up. Cause I still would say it doesn’t matter. I got very unlucky . And that sucks.
It sucks that I got very unlucky. But it doesn’t change the fact that the chances of this happening were so low that they don’t even warrant consideration. And it’s interesting actually, when I’ve said that to a number of people and that’s I’ve just been met with a blank stare.
They’re like hyperventilating over this thing. And I try to explain to them, look at the data. You have nothing to worry about. Actually, you have nothing to worry about. If you’re gonna lose hair over this, then you better also worry about driving your car around, because that’s not as dangerous as this, but it’s dangerous enough to, It’s comparable.
Adam: Technically it is statistically it’s more dangerous, right? There’s more deaths that happen from car accidents daily than covid for sure. So I
Mike: actually looked at the data, and if you include writing as a passenger as well, then it’s about comparable. So driving or riding in a car. So being in a car, driving around, if you do it consistently, yeah, it’s comparable.
If you are in the very low risk demos, which is a lot of people, there is data that just came out that showed that 46% of the COVID deaths here in the United States come from about 0.6% of the population people in nursing homes. And that sucks. And that’s not Oh, who cares about that? No.
I’m just saying that to give some perspective to people who are trying to weigh the risk for them personally and weigh what are they willing. To sacrifice and not willing to sacrifice in terms of lifestyle to reduce a very minimal risk to, I guess very minimal .
Adam: I agree with you that, I’m in the same boat, but I also think that we are the minority in this conversation.
I really do. I think that, and I’m gonna make some bold predictions cuz we danced around the theories and ideas and how Jims make money. I think that we are gonna see close to a 50%. reduction in CrossFit boxes over the next year. So I think half are gonna get cut in half. And the reason why I think they’re gonna be one of the worst is because the average CrossFit gym is making less than $80,000 a year.
So many of them are already like struggling. It’s tough and they’re very expensive. So this is just gonna be the Kuda GRA for sure. For me, I think for them. So I think that they’re gonna be one of the most hurt from this. Then I think orange theories, I think we’re going to finally see a company that was winning for every operator.
I personally know many of the gym owners that own these things, many of them have no fitness background or experience whatsoever. They were investors that saw an opportunity on something that was exploding, like for example, like Curves did when it first came onboard. If you bought a Curves during the first 1000 curves that were ever built, you probably got pretty rich.
Regardless of how well you operated your gym, you just time the market very well. So I think that’s going to be exposed. So I think we’re gonna see probably 20 to 30% of those right off the top, close down, because they’re not gonna be as profitable or profitable at all. I think that you’re gonna see a dramatic increase in rates for your, crunch and 20 fours and La Fitnesses, your kind of commercial boxes.
They’re gonna have to, most of them are too big to fail. They’re massive. They’re a hundred million dollar billion dollar companies, and so I would imagine that they have plenty of room to, to bleed for a while. Before they would just completely go out of business. But I do think that you are gonna see a percentage of those closed down or shut down.
They’ll keep open. The most profitable ones, the most profitable ones will probably see a, I don’t know, 10 to 30% increase in monthly fees and rates. Maybe the gyms that I think that will survive the best out of this. The two extremes, which is funny, the two op, the two ends of the spectrum I think will do the best.
Your country club type gyms that are massive, a lot of these are. Disguised as fitness businesses, but are really like real estate companies, most of them buy their land. So they buy the, all the acres and so they’ve positioned themselves really well. They probably have a lot of equity. I know the ones all here, they’ve got ’em in the most desirable places in the Bay Area and they bought them decades ago.
And so just the amount of equity they probably have in the real estate, I think buys them time. Plus they’re big and they’re open and they’re not trafficked the same way that like a 24 or Planet Fitness is. So I think,
Mike: and catering to higher income up upward into the wealthy is becoming more and more profitable as a strategy.
Adam: If you hit those people up who are used to paying, 3000 entry level and $200 a month, and you say, Hey, we need 20 more bucks a month from you guys cuz of Covid and we’re gonna offer the, doesn’t even register, they probably wouldn’t even notice it on their bill. Those people I think are going to be okay and they’re gonna probably feel this the least.
Mike: Those are also the people who are getting least impacted financially by what’s going on. Those are generally not the people losing their jobs or getting laid off or getting pay cuts even. They’re just working from
Adam: home. Okay? If you’re below the middle class poverty or even middle class line, you’re probably not spending thousands of dollars on gym memberships if you’re.
Upper class and have a probably a good, information
Mike: work of some kind. Yeah. You can do it from home. It doesn’t matter.
Adam: Yeah. So I think they’re going to, and I don’t think anyone’s thriving during this time, these categories we’re talking about, but I think that they will survive the best of all of them.
And then the other one is like Scott, the guy who had the 4,000 square foot facility private gym. And the reason why I think he will do okay or boxes like him now, even though I think that like the CrossFits, there’s gonna be a lot of the less talented operators or, subpar operators, that this is enough to even cripple them.
And so we will see a percentage of those private boxes closed down too. But I think those private gyms that are just open for trainers and their clients, they have a much stronger community built bond. I remember being a private trainer and my clients would follow me. To whatever gym I went to. If I was on vacation for a month, they would pause their life for me and then get restart with me.
So they do such a good job of the community and the one on one touch that I think that they will be able to pivot into things like at Home Zoom right now and provide, maybe nutritional virtual coaching and do other things to give value to those people that are paying, or maybe even the trainers going to their house and training them, whatever.
I think that those operators, because it’s a smaller ship they can pivot quicker they’re more agile and so I think. The ones that are, were on top of getting their loans and we’re on top of already pivoting and like Scott and he, in the interview, he talks about this, I think they’re gonna be okay.
I think they’re gonna be able to weather the storm and figure things out. So those two ends, but the all the middle is gonna be the planet fitnesses, the LA fitness’ 20 fours, the crunches, the orange theories, the F 40 fives. Boy, this is gonna really shake the market up and it’s gonna be very interesting what we see in the next six months to a year.
I think we’re gonna see a lot of, I don’t know if you guys have this going on in your area, we’re seeing a lot of insurance fraud right now. A lot of fires all of a sudden, conveniently happening in businesses. You’re starting to see people get really de when you start seeing shit like that, people are getting very desperate.
They’re finding themselves backed in a corner and knowing that they’re gonna, their business is gonna go under, and so they’re taking extreme measures like this. I think that the worst has yet to come. And we are gonna see a lot of these businesses fall out or have to dramatically increase rates, and then we’ll see what that does to the consumer.
Mike: Hey, before we continue, if you like what I’m doing here on the podcast and elsewhere, and if you want to help me help more people get into the best shape of their lives, please consider checking out my v i p one-on-one coaching service. Now, my team and I have helped thousands of people of all ages, circumstances, and needs.
So no matter how complicated or maybe even hopeless you might think your situation is. We will figure out how to get you the results you want. Every diet and training program we create is 100% custom. We provide daily workout logs and we do weekly accountability calls. Our clients get priority email service, as well as discounts on supplements, and the list goes on and on.
To learn more, just head over to legion athletics.com/coaching, and if you like what schedule your free consultation call. Now. There’s normally a wait list to work with our coaches and new slots do fill up very quickly. So if this sounds even remotely interesting to you, head over to legion athletics.com/coaching now and schedule your free consultation call and let’s see if our program is a good fit for.
How do you think it’s gonna affect the macro trend of health and fitness, which has been growing? Maybe you can just go, for anybody listening, head over to Google Trends. I think it goes back to 2002 or 2004 and search for, you could start with fitness as a topic, right? But you start looking at any subtopic of any popularity, and you’ll see the same trend.
It’s just an upward graph that there’s a seasonality to it. It spikes q1 and then it keeps going into q2, and then it plateaus, and then it drops q3, q4, and then spikes even higher. But it’s just a clear upward trend. And before Covid 19, I’ve said many times that I don’t think this wave has even begun to crest yet.
I think that this trend is gonna keep growing. Indefinitely as far as I can see if through the rest of my lifetime. I think it’s gonna become more and more of a thing to care about your health and to care about exercising. And you have many options, but strength training in particular, at least resistance training is getting more and more popular because of several factors.
But what do you think is gonna happen? There. Now none of us know where the world could possibly be. Honestly, in my opinion, five years from now, 10 years from now, we could be in a dystopian hell hole, honestly, or maybe not. But for example, one thing I’ve seen and what has been impacted on my end the most has been book sales.
And they’re back up to about normal now, but they dropped precipitously back in like March and then came back upward as, I guess the initial shock wore off of what’s going on. And the reason why I bring that up though is my books cater to people who are new. They’re in the beginning of their fitness journey.
If we look at it from a weightlifting perspective, they’re gonna be novices, maybe intermediates. That’s gonna be most of the people in my orbit. I do have one book for advanced weightlifters that I’m actually wrapping. Updating, but most of my content caters to people who are new, at least in terms of results.
Maybe they’ve been dabbling in fitness for a while, they’ve been struggling to lose that 10 pounds, 20 pounds, gain that 10 pounds, 20 pounds. So I wasn’t surprised to see book sales drop off because you have a lot of people who normally would’ve said, Okay, today’s the day I’m gonna get a book. I’m gonna make a real committed push to getting fit.
And so fewer people we’re getting to that place just because of what’s going on. What are your thoughts about that in, in terms of where things
Adam: could go? What’s you’re alluding to right now I think is what may be the saving grace for the space. And Mark Maro, creator of 24, owner of UFC and Crunch Fitness talked about back in, what year was it when SARS hit 2008 or nine?
Around 2008 or nine whenever SARS hit, and it was shorter period of time. It wasn’t as, as long and devastating economically as the what’s happening with Covid. But he did talk about what happened with behaviorally speaking afterwards, and he said they actually had a huge surge. And so this was part of why he was so optimistic about what’s going
2003, Sorry, I looked it up. 2003. There was something else. Maybe it was
Adam: Mers, but regardless he was a big gym operator. He was running 20 fours back in that time. It was a couple months where they were shut down, especially over in overseas. And he said when they opened up, they actually broke records and had massive sa it just exploded.
And he alludes to. People became more aware of the importance of their immune system and being healthy and why they need to be exercising and training, which is a lot of what I’m starting to hear more of that messaging now, which probably should have been the messaging from day one. Is that, Yeah, no shit.
You know what I’m saying? So I do think that this will create more awareness for the people that weren’t even training or even thinking about training. So there is gonna be those wave of people that come in and maybe that wave is big enough to make up, This is what will be true if I’m wrong. So if my predictions are off and the 50% of CrossFits don’t close down and 20 to 30% of orange theories don’t, and Jim’s prices don’t.
If I’m wrong on all my predictions, this will be the reason why. Is because that growing trend that you’re talking about is, and I believe it’ll continue to grow through my lifetime too, is more and more average, just people that aren’t really even into exercise or even have thought about that much are continuing to recognize the importance of it.
And this is a lot of what Sal’s book that he’s writing is gonna be geared towards is exactly that. It’s like we’re not targeting the people that are into fitness already. We’re trying to convince the person who didn’t think fitness was for them, that how beneficial it is for just getting them to exercise two days a week.
How much that impacts their personal relationships, their business and their work, and their energy levels, their sleep, their hormone levels. I think as more and more people that are becoming aware of all the other benefits, because for many, for the first couple decades of fitness really exploding, it was marketed to everybody as like the look where that only appeals to, a very small demographic of people that you know, and people that maybe are a little more vain or insecure about how they look.
And so you attract a limb, but what about everybody else that’s confident in who they are and they don’t really care that they’re, 25% body fat doesn’t bother them and whatever, but. , if you can reach those people, I
Mike: have no shame in admitting at least half of the reason why I do what I do is because I wanna look a certain way.
If I’m being
Adam: perfectly honest. That, that’s why most of us got into this in the first place. We admit that all the time too. And that we always try and remind ourselves that when we create content, that we want to be careful not to constantly be speaking to ourselves. Because there’s a much larger population of people that still think that fitness isn’t for them because they’re turned off by it because of it can be superficial and it’s a bunch of vein young people that just care about how they look.
And we’re trying to convince people that, No, what this could do for your relationship, what this could do for your energy, your work production, your hormone levels, your sex, all these things that strength training. Greatly benefits.
Mike: It really should be viewed along the lines of sleep hygiene. Of oral hygiene.
It, it really is. It should be just a chapter in the manual of the
Adam: human body. I believe it’s going to, By the time you and I leave this earth, I do believe that exercise in particular, hopefully strength training, will be looked at brushing your teeth or taking a shower. Yeah. Where it’s
Mike: gonna be odd if somebody, It’d be like, if somebody, I never brush my teeth.
You’re like, Oh, really? Oh, I, yeah, I, Oh no, I never exercise. I never train my muscles. And you’ll be like, Wow, that’s probably not a good idea.
Adam: You’re right. It’ll be like, just like that. And it’ll be more like how you do it or how often you do it. Is what, where the variants will be. Are you doing it just to optimize all aspects of your life or are you, do you care so much about transforming your body?
I think in the future, Everybody will be exercising, at least in hopefully resistance training. And that’s Sal’s book is a lot about, this is, hopefully it’s strength training at least one day or two days out of the week. And you would be blown away by how many of the just average people, just that alone would dramatically improve their life and all these other things that they think is so much more important.
As that message continues to get out and we hope to be one of the people or peoples that are pushing that message, that new wave of people coming in may offset the dropoff that we may see right now because of Covid 19. So that’s my theory. Either I’m sticking to my predictions that this is what we’re going to see in the near future.
If I’m wrong, it’s because of that, it’s because this woke up enough people that, holy shit, I know someone really close to me that was hit with Covid, that it really knocked them down. Either they died from it or they almost died from it. And it’s quite obvious that it’s because they had all these underlying issues.
They had diabetes, they were obese. They had their cardiovascular endurance was terrible and then they get hit with this virus and it almost killed them or did kill them. Holy shit, I don’t want that to happen to me. And then I began researching what do I need to do to not allow that? And by the way, the research will be like this.
Like what’s the least I can do to make sure that I don’t end up like that. That’ll be the motivation for a large
Mike: part, which is okay, minimal effective dose. Hey, you gotta start somewhere. There’s nothing wrong
Adam: with that 100%. In fact, that was a big shift in my training career early on as a young trainer would get a client that would sit down and tell me how busy they were.
And they were like, I don’t know if I could commit to more than one or two days a week. And then I would sit there as a trainer and try and convince them that they need to make more time and it’s important. And if you do this, you can do that. And like it was such the wrong approach. Work
Mike: with what they give you, right?
Be like, Great, that’s exactly where
Adam: we’ll start. Or I even take away, right? Someone would come into me now and if I was still training in a gym and then say, Adam, I’m motivated. I’ve got this coming up. I’m decided I’m gonna change my life. I’ve, I’m gonna dedicate five, six days a week to the gym.
I’d talk ’em out of it. I’d say, You know what? Let’s start something a little bit slower right now. Something that you know, you’re for sure gonna do for the rest of your life that, you can commit to. The
Mike: mini habits approach, which I think is a great concept to start with. Something that is so simple that you can’t say no to it, where you don’t feel the resistance welling up in you.
When you just think about it, when you think about it. It just is already done in your mind. That’s a good indication that you’re gonna be able to follow through.
Adam: And what I’ve learned is like, man, if I can just convince someone to lift one day, a one day a week, full body routine, consistently, and they weren’t doing anything before that I know I can already dramatically start to improve their life.
Now, is it the most optimal amount of time to lift to, to turn in your body into this awesome cover of a magazine? No, but it’s enough to see energy levels go up, sleep, probably improve hormone levels, improve strength, go up. Maybe a little bit of an aesthetic change from that confidence going, all the aches and pains possibly going away, like so many other things that I can show in just one day.
And then if I can get you to fall in love with that wow, this is just one day a week and I’m feeling and seeing all this improvement. Hey, Let’s do another day. That is a much better approach to getting someone to make behavioral changes for the rest of their life. And I think that is a lot of the motivation behind Mind Pump, behind the book that Sal’s writing right now.
It’s really, I don’t want to fight over. The 10% of the population that’s going to the gym right now, I’ll let all the other fitness gurus fight over with their studies and try and prove that their modalities better and they’ve got the next diet answer for them. I’m interested in the 80 to 90% that is turned off by fitness because they don’t think it’s for them and they think it’s too much of a commitment, and I think it’s too vain, and I wanna reach those people and convince them that, Hey, let’s just start you off with this.
And you give me the feedback on how it’s improving your life, and then we could talk about getting in the gym and working out more often. So I do think that we’re gonna see that continue to incre. It’s why I’m in this space and why I love this space. I think it’s a great time. I still think it, even with Covid, right?
And everyone’s freaking out to get this question all the time from trainers, Oh my God, it’s, is it time to move on from this industry? I’m like, No, this is a great time still to be involved in this. It’s just forcing a lot of people to really look inward on their business and or get creative on how they monetize.
But, Health and fitness is not going away. It’s barely reaching the masses. And like you said, like this will be looked at like hygiene, I think, in the future. And so I think that’s our messaging as fitness professionals just needs to change. We need to stop. Focusing, and when I say finish, I’m not lumping you into that category cause I know you were much more like we are where you, and you already said it, your books appeal to the beginner that’s the right person to be going after.
Mike: Now one of the books I’m working on is a book specifically for the 40 plus Crowd. And everything you’re talking about is very much reflected in the messaging of that book, which is different than my existing books, which do cater. And that was intentional. Like I chose a demographic for bigger, leaner, stronger.
I intentionally went after I said, I’m gonna go after the dude who’s 20 to 45 or maybe 50 and I’m gonna speak to him in a way that’s gonna make him wanna read this book. But that message does not resonate nearly as much with the dude who is 50 and completely out of shape. And I should also add that where a lot of the people who.
Have found their way to bigger, leaner, stronger, had tried other things already, like they were into working out. Maybe they didn’t look like they really were, but again, it’s a very specific person. Whereas this new book that I’m writing, which is gonna be for men and Women, it’s gonna be my most user friendly, most accessible, gen fit book.
And everything you’re talking about is the really encapsulates the tone of this book where it’s less about the aesthetics and it’s more about the experience of having a body that looks good, feels good, performs about long longevity and really fitness and strength training in particular is like the ultimate antiaging hack that you could, that probably like fitness.
I’ll throw a cardiovascular in there as well, and I talk about that in the book. So strength training, mostly strength training with some cardiovascular and getting enough sleep and managing your stress if you want to. Age. We’re all gonna get older. We can’t do anything about that. But how it impacts our body and the toll that it takes on us physically and mentally and emotionally, that is very much under our control and strength training, cardiovascular, getting enough sleep and managing stress.
And I guess we might as well throw in eating nutritious foods. There it is. There are the five things, and you’ll age very well, male or female. You’ll be the person who always gets guessed as 10, 20, who knows, 10, 15 years maybe younger than you are. And you’re not gonna feel the drag, the incredible amount of resistance that you feel as you get older.
Just trying to do the things that you once were able to do very
Adam: easily. 100%. I had a trainer ask me this the other day that, what is my drive and motivation to continue exercising? And I said, That’s actually not a complicated answer at all. It’s very simple. It’s because it literally, Makes everything else in my life that much better.
Mike: ultimate force.
Adam: More multiplier. It is. And every time I’ve fallen off the wagon or not been inconsistent, And allowed other things to occupy most of my time. I always say the things like, Oh, I’m so busy right now. It’s cuz I’m so busy. When I get back in the groove and I’m consistent, somehow I find the time.
I’ve got more energy, I get more things done. Like my relationship, I’m such a happier person. When I’m feeling good, I sleep better, it kicks up my sex. Everything else gets better because of that. And so I’m always trying to communicate that message to people that I understand. We all want six pack abs.
All understand. It’s awesome to look awesome. That trust me, I love that too. It feels great. But more importantly, what keeps me going every single day and just saying that, hey, this is gonna be a part of my life forever, is that it? Every other aspect of my life better right now, even more so than the longevity and the anti-aging angle.
I think of it as just like improving your current situation. If you’re happy and you love what you’re doing right now and you fitness is not part of your life, try it. Add it into your life and all those things that you’re already in love with, watch get enhanced. If that’s not enough motivation for somebody, I don’t know what is, because that’s how, that’s what keeps me going is that it improves every other aspect of my life.
And I think if more normal, average day people understood that and grasped that, I think we would see a much larger wave of them coming in and maybe this C thing is what will change a lot of the communication that’s happening from our peers. Cuz right now it’s still. The way we look, and we’ve been targeting that for marketing purposes for a very long time, cuz we know it’s a pain point for many people in their insecurities.
But the truth is there’s a much bigger opportunity out there to reach the other people who, yeah, they don’t give a shit about the before and after picture of that guy and girl. Like they care more about just their current life and making sure that they can improve that. And if I can sell them. I know you don’t care to look like a cover of a magazine or that doesn’t appeal to you, but what if I told you that everything you already love in your life right now, I can make it better?
, by just teaching you some fundamentals about, like you said, eating correctly, getting better, sleep training, strength training, and not a ridiculous amount. Just understanding the importance of integr.
Mike: Love it. And as far as Covid goes, a study came out of the University of Virginia just recently that showed that regular exercise and cardiovascular exercise in particular can prevent or at least reduce the severity of one of the deadliest symptoms of Covid 19, the acute respiratory distress syndrome, the A R D S.
And so if we want to give ourselves the best chances of not getting knocked on our ass by this thing, Cause when it’s all said and done, there’s a fair chance that many of us are going to get it if we haven’t already had it. Increasing our fitness is one of those things, and reducing comorbidities, like you had mentioned, obesity and diabetes, doing everything we can to get and stay as healthy and as fit as possible is going to give us our best chances of not having any issues, regardless of where the outbreak goes.
This was a fun discussion as always, man I appreciate you taking the time, last minute to make it work. And why don’t we wrap up with where everyone can find you and the boys if this is their first encounter with one of the Mr. Mind pump crew. And then if there’s anything new and exciting, anything interesting you wanna tell people about that you have out there right now, let’s let.
Adam: so you can find a, and I always tell people to check out all the free content that we provide first. That’s first and foremost before ever investing in any programs or anything that we sell or monetize, go in and consume the free content. We’ve got a free app, Mind Pump Media, which allows you to go there and search topics.
And we have, we’ve now, I think we’ve moved past 1300 episodes that we’ve done. I don’t think there is a fitness topic we haven’t covered, at least. Twice on there. So you could go on there and you could put in a topic you want to learn about or hear us talk about many times we talk to other professionals in the field that are far more talented and smarter than any of us related to those topics.
So you can hear us interview guests that way, or talk ourselves about our experiences with things. Go there to the free app and check that out first. Then hop over to the YouTube channel, Mind Pump TV and Mind Pump podcast. We have two YouTube channels. The Mind Pump Podcast one allows you to listen and watch the episode.
So we record every episode that we do on the podcast. We also break up the questions that we answer so people can share them. This isn’t something that we’ve recently done. We find that. People share YouTubes way more than they share. We have somebody that’s their entire job is to edit that podcast and to break it up on each question.
So every question that we answer on the podcast, it’s broken up one by the Quest. So there are like five, 10 minute clips on topic. So makes it very good for sharing with, family and friends that you’re trying to introduce.
Mike: And also for skimming for people who don’t have the time or the inclination, if they just want to quickly you go, that’s in me.
I wanna listen to that. Oh, I’m gonna skip to this other episode cause I wanna
Adam: listen to that 100%. So check that out. Check those on YouTube, iTunes, you and every place you can re listen to a podcast. You can find mine pump on that. And then last, I would say to go over to mind pump free.com. There’s tons of free guides for all kinds of different topics that you could potentially wanna learn about the incredible resources to have.
So check out all the free resources and then if you want to interact with any of us from the show, Best way to interact with us is on Instagram. That’s where we’re the most active and all of our Instagram handles are very easy. Mine, Pump Adam. You can find cohost mine, Pump Sal, and Mine Pump, Justin and even Doug.
Those that are listening that are aspiring podcasters. Doug’s really picked up his cadence and what he does is share all the behind the scenes, so What software we’re using, what tech we’re using like cameras, like lighting, you name it. He just unveils all the different things that he utilizes to produce the show.
So if you’re interested in those types of things, he’s got, he’s a great follow. So you can follow Doug at Mind Pump Doug and communicate with him
Mike: there. Awesome man. Thanks again for taking the time to look forward to the next one. We’ll have to brainstorm what should we talk about next?
Adam: Maybe we’ll put something out on Instagram and see cuz I know you and I, we do go all over the place. I love talking business with you. You’re one of my favorite people to talk business to. Maybe we’ll put something next time out on Instagram and just see what everybody would like to hear us chat about and dive a little deeper on a single topic than going everywhere.
Yeah, let’s do it. All right. Always good time, Mikey. Yes.
Mike: All right. That’s it for today’s episode. I hope you found it interesting and helpful. And if you did, and you don’t mind doing me a favor, could you please leave a quick review for the podcast on iTunes or wherever you are listening from?
Because those reviews not only convince people that they should check out the show, they also increase the search visibility and help more people find their way to me and to the podcast and learn how to build their best body ever as well. And of course, if you wanna be notified when the next episode goes live, then simply subscribe to the podcast and whatever app you’re.
To listen and you will not miss out on any of the new stuff that I have coming. And last, If you didn’t like something about the show, then definitely shoot me an email at mike muscle for life.com and share your thoughts. Let me know how you think I could do this better. I read every email myself and I’m always looking for constructive feedback.
All right, Thanks again for listening to this episode, and I hope to hear from you soon.