Gyms vs. Connected Fitness
3 minute read · Issue Number 102 · January 7th, 2022
I hope you enjoyed your time off and fully recharged your energy for 2022. I’m back and more fired up than ever to deliver value to you every week.
We are only two weeks away from the second anniversary of this newsletter; it’s crazy how fast time flies! I’ll be tweaking the format and composition of the newsletters a bit, so let me know if any change resonates with you – I highly value your feedback!
Gyms vs. Connected Fitness
A few weeks ago, I wrote about Fitness technology and predicted that traditional gyms would have to get creative with their business models to stay in business with the rise of connected fitness.
Ever since I sat down with the CEO of i-BrainTech on The Halftime Snacks (you can listen to the episode here) – I’ve been thinking a lot about what gyms are and how or why their business works.
What’s interesting to me about gyms is how exactly they were formed. In ancient Greece, it (kinda) started with gymnasiums to practice wrestling in groups.
However, gyms today are just a collection of tools and machines gathered in the same space to provide humans the opportunity to isolate and train specific muscles per repetition.
Gym memberships are business models that rent out this equipment monthly.
It may be obvious for you now, but I think it’s quite a creative solution that started around 1840 in Europe. Here’s why:
Say you’re the founder and creator of the famous kettlebells. You have a great product. And now you want to sell it.
Your first thought would be to adopt a B2C model and sell the kettlebells direct to the consumer.
It’s a great market, but is it an efficient solution? Maybe not – costs of goods sold (COGS) would go through the roof, not everyone needs/uses a kettlebell, AND those who do, could share its usage!
Therefore, instead of going straight out to consumers and selling a kettlebell to every person that works out in the world, you could sell 99% of your inventory to gyms and retail the rest online.
Cool strategy, right? Then why aren’t Peloton, Mirror, and all these connected fitness companies following the same strategy?
Because they figured out how to rent out this equipment while you have it at home!
They basically distribute gyms without actually owning one – just like Uber distributes rides without owning cars, or Airbnb provides accommodation without owning a house.
So what will happen with gyms?
I see two ways they stay in business and compete with connected fitness.
Partially distribute themselves by offering at-home workouts and renting out specific equipment.
Triple tap on their differentiated experiences that distributed gyms cannot offer (i.e., group classes, world-class facilities, in-person training, tools that connected fitness cannot physically distribute, etc.).
It’s an exciting competition that I think will carry fantastic innovation. What do you think will happen? Hit the reply button.
🎙 Halftime Snacks Podcast
This Halftime Snack features an expert in software and product development from India who's passionate about building solutions for people.
Today, he's the co-founder of HomeGround – a platform that helps grassroots cricket players and coaches with instant analytics, recommendations, and expert feedback on their training sessions.
We talked about the power of code and software, the technology, value, business model, roadmap, projects, and vision of HomeGround.
Apply to be on the Halftime Snacks Podcast here.