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The Foundr Podcast with Nathan Chan
538: He Built a $2.9B Home Fitness Empire | Carl Daikeler [VIDEO]
00:58:58
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- [00:00]
A
You got to answer the question, why will this solve my problem when everything else I've tried hasn't worked? If that mission means something, don't fucking quit. It's the entrepreneurs who won't cut those corners, who will find a way to make this thing just that much better. You want them to go, now that I understand what's gone into developing this program, why would I go look for something else? We've been fighting this fight for the last three years. We've lost. I think it's 98% of our market value since we went public. Every day that I think, oh man, I can't take this anymore. I literally turn around on myself and just say, shut the hell up and keep going. Because the only way through this is through it. Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder podcast with Nathan Chan.
- [00:58]
B
Really excited to speak with you. So the first question that I have is, do you feel health and wellness is really an essential part to running a successful business?
- [01:10]
A
No, not, no. I mean that would be self serving to say yes, but, but you know, if you have a good idea, there's, there's. I can remember I had a meeting with the guys at Bowflex at one point. This was very early when we started the company. And I remember walking in and this guy was huge and out of shape and smelled like cigarettes and, and bowflex was doing $1.5 billion a year at the time. And so there was no correlation with that success and his health and fitness. In my case, honestly, it is my struggle to stay fit and to get myself to be consistent, which actually helps me create programs that get me off the couch, that get me to wake up at 5:30am to do this stuff or frankly to eat better or to drink a nutrition shake. So, you know, but, but in terms of overall and your listeners, hey man, the most important thing, you're starting a business. Focus like hell. And, and I don't believe in work life balance. You focus now. It'll be helpful to you and your energy if you don't burn things at both ends. And you know, you're not going to live on fast food. And if you let your weight go or you let your muscle deteriorate and atrophy, you're just, you're going to, you're not just going to be physically weak, you're going to be weak. So, so I suppose to the extent that you really want to make a go of it and be resilient, you probably should do something to maintain your overall health and well being. Otherwise you're going to be calling in zooms from your sick bed.
- [03:11]
B
So I've gone through phases where, you know, really focused on health and fitness, they're not focused on health and fitness. And it's, it is difficult to, to, to maintain that. And I'm a big form of having daily non negotiables, habit stacking and just having that kind of consistency and routine and then also accountability. But I'm curious, you've stated that you're not a big fan of fitness. How did you end up starting a health and fitness company?
- [03:42]
A
Yeah, well, I'm a, I'm a fan of marketing and solving problems. So it just sort of happened that I, my own desire or disgust with myself, my own disgust with my waistline turned out to be like, you know, if for me, like I can't put together like a full year of working out. You know how people, New Year's, hey, Happy New Year, make your resolution, join a gym. And like I can't, you know that. So I'm going to go to this gym four or five days a week for the rest of my life. Like I can't, I will not stay motivated with, without a goal and some sort of short term orientation. That's me. And so I figured, well, if that's me, that's gotta be a million other people. So if I can come up with something that solves my problem, I'm gonna help another million people solve their problem. So the first big program that we developed was called Power90 which was, look, I'm super busy, but I've got to find a way to help myself physically not feel like a pig and to feel like I'm strong in my own body. So power 90 is just 90 days. For 90 days I'm going to work out for about a half hour, six days a week and then day 91, I'll worry about that then. But for this goal I'm going to show up for myself. And like the first time I did that I lost like £20. And so I don't want to put it back on. So then I either do another round or do the next program. And that's really the structure that has helped Bodi become what it is with a catalog of 134 programs that people literally like, you have that background of these magazine covers that you've got there. That's the way many of our subscribers have a background or a wall covered with tiles from the programs that they've finished because they're goal oriented. These are people who would have never kept going to the gym. Just like I did my aerobics class. Now I'm going to lift tomorrow. Like, it just would not be rewarding for them, but the concept of finishing 30 days of a program or six weeks of a program and then printing out that tile and putting it on the wall. That artwork represents their consistency. And that consistency is a breakthrough for millions of people like me.
- [06:18]
B
So you started the company, what, around 20 years ago?
- [06:22]
A
26.
- [06:23]
B
And your first program was. Yeah, effectively P90X with Tony Horton. How'd you find Tony? How did that come about? Talk me through that. Because. Because. Because you guys are publisher, right?
- [06:35]
A
Yeah. So actually P90X was a follow up. So it started with a program 12. Tony was a friend of mine. Let me, let me answer your question. Tony was just a friend and that he. I moved to California. Mutual friend introduced us. And I had created another video for another company called 8 Minute Abs. And again was just for me because I needed. I like, if I. Maybe I'll do an ab routine for eight minutes a day and try to get this under control. So then when I moved to California and I met Tony, I said, look, I'd like to do something more holistic. And he gave me just basically a very easy to follow circuit training routine that took me about 25 minutes to do. And then he went off and shot a movie for three months. So I was left doing this, putting this program together, and I refined it because I've got a little background in athletics. And when he got back, that's when I'd lost the 20 pounds. He's like, what did you do? And I said, I just did what you told me to do for the last 90 days. And I said, I think this is a program. Let's tape a pilot for it and we'll see if we can get other people to do it. So we did a round of videos, put 100 people through a test group, and their results were outrageous again because they knew they just had to do it for 90 days. So, like they dive in, right? And it was like, all right, we gotta make this an infomercial. And the company was maybe two years old at that point, and we did $33 million, like that year. And it was just five of us sitting in an office. And we had so many strong stories from Power90 that I said to Tony, hey, I'm about to turn 40. I want to go to the next level. I've never been truly ripped. I want to be ripped. So I want to do something extreme. We'll do a sequel to Power 90. We'll call it Power 90 Extreme, P90X for short. And Tony said, nope, I don't want to do it. I want to do something that helps all these people who are overweight or obese. There's millions of them. And I said, well, we're going to do this with somebody, so you can do it with us, or I'm going to go find somebody else. He's like, all right, I'll do it. So. And we did this. Like, I remember when the producer and director did this design. It was all shiny and pretty, and we completely rejected it. I said, I want to feel like I'm going into Tony's basement, and I don't want people wearing spandex. I want them wearing cutoffs and. And work boots and just whatever they pull out of the hamper that's still dirty. And. And that. That's what led to a very different vibe. And. And on day one of shooting P90X with Tony, he was really uptight because there was a lot on the line. You know, an extreme program is going to be hard to shoot, hard workout. And. And I pulled him aside because Tony's a former comedian. And I said, look, man, just relax. We have control of this. We're not doing this for some big producer, production company. It's just us. So curse if you want. Say anything you want. You just be you. The main thing is you got your workout buddies on set. Have a blast. And that's when the magic happened. And P90X was our first billion dollar program.
- [10:17]
B
Billion dollar program.
- [10:19]
A
Yeah. I mean, over time, it didn't happen like it was interesting. We sold it, was successful. To the database of power 90 people. At first, this is 2005, when we originally released it, but the infomercial did not work at all. It was a dog. But we saw a glimmer of response from the marketing of that, so we kept at it and we kept doing focus groups and kept refining it, and then we'd learn a little something else, or we go too far and we have to pull it back. And we started to get more customer success stories from that original Power90 cohort. And after 22 different tests and basically two years, like, people in the company were quitting. They were like, this is stupid. The CEO is mad. Why does he continue to pursue this? The things of failure. But we always saw something extra. And then 2007, it all came together. Offer presentation, product configuration, and between. And 2007 and going into 2008 is when the economy was a disaster, right? That was the mortgage crisis. And it was like the steepest growth growth that we had as a company from 2007 to 2013. And I can remember our board like they couldn't believe what was happening because all other businesses, you know, banks were folding like it was terrible. The mortgage crisis. People were losing their homes and somehow P90X was just taken off. I can remember I was at a fundraiser for Obama and, and the lawyer that, that got us into this fundraiser said here, let's stand over here. He's about to walk in the room and I think this is the door he's going to come out. So that's our best chance to meet him. So we were standing there, sure enough, he comes through that door as Secret Service and we were the first ones. And my friend Lawyer says, says Mr. President, I want you to meet Carl Daikeler and John Congdon. These are the guys who started Beachbody now body and they, they're the ones that created P90X. And Obama goes P90X. My wife does P90X. All these Secret Service guys are doing P90X and I can't keep up with them. My jaw hit the floor like I had no idea. It was like I was at the center of the universe. And those were some crazy times. It's not often that you get lightning in a bottle like that, but p90x was that. And then that led to insanity with Shaun T. That led to a program called 21 Day Fix, a three week program that combined fitness and nutrition or portion control. Then 80 day obsession. Like we've had these, been lucky, blessed to have these just absolute home runs for in home fitness that redefined the whole, the whole space.
- [13:30]
B
Yeah, that's really crazy. Thank you for sharing. What a crazy story. So, yeah, it's insane that you know Michelle Obama like just kind of, you didn't even know that she was using the, the, the program. And then the whole Secret Service team. I'm curious, you said you love marketing. I love marketing too. Oftentimes, you know, you hear about this, this concept of a unique mechanism and people use P90X as an example of a fantastic example of a unique mechanism. Something that is different. Something that you know, shows a potential purchaser or potential buyer that you know your product or your service is different. There's a uniqueness about it. When you came up with the concept of P90X, were you looking at it from like a marketing standpoint that we need to have a unique mechanism or it just so happened that way.
- [14:29]
A
Yeah, it just so happens, like a part of the formula, like the question that you've got to answer. And this is good for any founder when you're trying to solve a problem. In our case, trying to help people start a fitness program where, you know, there's. It's not like there's a shortage of fitness programs or gyms or, or nutrition programs. Like, you just look it up online. But people don't trust that they're gonna get results. So you gotta answer the question with whatever product you market or are creating, you need to be able to communicate to people in a very efficient way. Why will this solve my problem when everything else I've tried hasn't worked? So it all comes back to what is the problem? So the problem with P90X for me was I'd never been able to see a program through to truly get ripped, which in this case means I didn't dial my nutrition in enough and it wasn't intense enough. So that's the problem that we solved. And the device or the category that got created was called muscle confusion. So why will P90X work for me where going to the gym has never worked for me? And that's because I would plateau and because I was doing the same thing over and over again. And P90X every 30 days or every 3 weeks mixes it up. So your body's like, wait, what the hell is this? And that. That breaks your plateau. So that's why P90X will get you more extreme results in 90 days than just being consistent with a lifting program that you make up off of YouTube or whatever, because it's designed to, to keep your body guessing. So that's, that's just an example with that specific program that is answering that question, why will this work for me when nothing else has?
- [16:24]
B
And so when it comes to kind of designing programs, making programs, what comes first? And this is a common thing that people always think about with any product or services, what comes first? Is it the product or the marketing?
- [16:38]
A
The first thing that comes is the problem. And so you assess the problem, is it going to be worth it to solve the problem? Is it a big enough problem? Do enough people have the problem? Or if there's not that many people have the problem, is it such an acute problem that people will spend enough money on it and I'll be able to make profitable sales on it? And then within the creation of solving the problem is where product development happens, and that's where vigilance and absolute grit to not allow the soft edges or the cut corners that most entrepreneurs will accept. And it's the entrepreneurs who won't cut those corners who will find a way to make this thing just that much better. Walt Disney used to call it plussing. He would. He would look at a movie and like the editors or the directors would always wait for Walt to come in because he would plus it up. He'd just make it a little bit better by refining that. And so. But that is also feeding the marketing machine because it's those differences that you're finding, like those little. That little nuance. Like, there's a program that we've got right now called Belvital that launches in December. It's a women's hormone health program as part of that program to help women's hormone improvement. That's basically cortisol response and insulin response. So stress is a big problem to hormones. So we needed a way to help them reduce stress. So we could have thrown in five breathing exercises to. To incorporate into the program, but we wanted to go another level so that it really, really reduces those hormone disruptions. So we found an app called the Breathwork app and incorporated 90 days free access of that app into the Belvatale program. That's plussing it up. And so now that's part of the marketing. But it's not just a bolt on to say, ooh, that's gonna make it really sell. It's to make it so that somebody learns about this program. And really what you want them to do when they're learning about it is you want them to go, well, I could probably put this together. I could probably figure out another place to get this product. But now that I understand what's gone into developing this program, why would I go look for something else that doesn't have that kind of discipline and vigilance and testing about it? I think that's the difference. So these things are all integrated and it never stops. It's a constant loop. You know, problem solution begets another problem and another solution, another problem, another solution. And that the output of that is your marketing plan.
- [19:47]
B
So you said you went through 22 different iterations with P90X for. For you guys to really, really get everything dialed in. Like you said, the offer, the, you know, the packaging or everything, the features, the benefits, the. All the. All of these things. Do you think that if you hadn't have kept going that you like, like what kept you going? Like 22 different iterations, most people would have given up and and that's the power of like, yeah, getting an offer really dull and getting a product really dialed in.
- [20:28]
A
Well, we were getting signal, so you got to get some signal. We, we have had products that were just duds right out of the gate. Like the trainer wasn't magic, the presentation, or the concept wasn't magic, or we didn't articulate it appropriately. So. So I'm not saying never quit or, you know, blow your brains out for something P90X. We would, we would test a show, a new version of the commercial and the advertising, and so we might tweak the offer. I remember one focus group because what people were fascinated about with P90X was this concept of intense training at home. And. But in a focus group, I remember one guy said, well, they're, you know, I'm not going to get results like that unless I change the way I eat. So we realized, even though it had a nutrition plan, that we hadn't gone into enough detail about. We're going to show you how to eat for these kind of results too, which was very different. Bowflex wasn't doing that. The gym wasn't doing that. So we were basically. And we do that with every one of our programs now is we provide access to a meal plan so that you can get the results that you want. So it was part of that iteration that we're like, oh, the customer is telling us what they want. That's the objection. So it's just a matter of we didn't solve that objection in the last advertisement, so we got to get to that. And that's, that's the process. And as long as you've got enough resources to stay alive while you're doing this testing, then there's no reason you can't create your own billion dollar success.
- [22:06]
B
Yeah, I love it. So cool. And obviously the, you know, you guys have gone through many different iterations. You've scaled out the portfolio, you're even listed. You're a listed company. Now I'm curious, when did you decide to list the business and why?
- [22:23]
A
Well, we had employees who had options in the business, so we owed it to them to take it to the next level. We had investors who expected an outcome. And coming out of the pandemic, things were so good that it looked like it was a good time to go public. And there was a company, a bike company that we could buy that had a similar model, but it was more cost effective than Peloton. So we like, ooh, let's roll that in here. That'll be a good company to take public. Anybody who watches the stock now it's traded under Bodi Bodi would see that it has not been a good ride. I mean we've lost, I think it's 98% of our market value since we went public. But that is a, that is a consequence of the, basically the bottom falling out of the. In home fitness market coming out of the pandemic and a, and a change in the business model. Not a drop off in the need for a company of what we do. So, so we've been you know, fighting this fight for the last three years to make this public company story valuable for people. And I think that we're, I think we've got that line of sight to that now. It's a real turnaround. But we've made some very aggressive, courageous decisions to amputate things that were dragging us down or were no longer a strong contributor to the business. Sales channel changes and, and just got way more disciplined. So you know, look, a 26 year old company is going to deal with like I, I think cycles coming about every six years. So you've gotta, you've gotta look for what is going to be the, the big change that you're gonna need to move away from in order to avoid a big downturn. And that's what these most recent three years have helped us identify. Now going forward, I think we're going to be, we're going to make the most out of being a public company. But it's, I'll tell you what it is, it is no easy, it is no easy job to run a turnaround as a public company.
- [25:01]
B
Yeah. Thank you for sharing. And can you tell us what some of those courageous things are that you've, you've done and that you're doing and your ambitious plans?
- [25:11]
A
Yeah, well the, the first thing is, I mean we peaked at $1.4 billion a year and it was very profitable. But that also mean our overhead chased that. So you know, as, as of I would say let's say three years ago, two years ago, our break even revenue, we had to, we had to generate $900 million of revenue to turn a profit. And as revenue declined, you got to, you cannot sustain that overhead, those operating operation expenses. So, so we've pulled that down now which is very painful. People that you love, people who are incredibly talented, but you got to right size the business. We've got it now to where the company, I believe it breaks even at around 220 million. So we're really in an Agile position, kind of like we were when we were a startup. That's, that's one painful but necessary move that we had to make. The other one was, I would say just as painful, maybe even more. For 17 years we operated a thing called a network, network marketing, if you're familiar with multilevel marketing like Herbalife or Amway, that model and it was super productive. It's part of how we grew to 1.4 billion because we had customers who were great proof that the product works. So they would just post on social media and they would build teams of people who wanted to do our programs. And that was just killing it up until the pandemic. And then the ftc, our Federal Trade Commission started to scrutinize multi level marketing. And it turns out we read some surveys. 90% of the population will not entertain a conversation if it's related to a network. A multi level marketing business. So we thought we had a huge total addressable market or tam, but it was being completely misrepresented by the fact that most people will not entertain working with a multi level marketing business. So about a month ago we had to make the tough choice to sunset that business model. And we're just getting there because my job is to run a business that our mission is to help people achieve their goals and lead healthy, fulfilling lives. It is not to sustain a business model of network marketing. So since now we've seen affiliate marketing and influencer marketing and the creator economy explode, that's where we've got to put our business model. So we are transitioning that whole network of amazing people who are proof the product works over to an affiliate model where now they're not sharing their commissions with an upline. Now they make a hundred percent of the commission. And we've got one of the most generous, aggressive commission programs in the entire affiliate marketing space. So I think that in 2025 that's going to be a game changer for us. Where the, the opportunity to scale this business by user generated proof is going to take off in 2025 because it's in a more agile business model of affiliate marketing.
- [28:58]
B
Got you. Yeah. Wow. And I assume when did you guys launch the subscription? Because obviously at the start you were selling one off programs. But as the market has started to and you've added on more and more authors and programs and creators or influencers, you've got now a portfolio which would, you know, and you've got new programs coming out. It kind of leans toward that subscription model. When did you start making that Transition.
- [29:28]
A
You know, it's a really interesting question. It was 2016, we launched Body, okay? And Bodi is an acronym for Beachbody On Demand Interactive. And, and it was so good. And we got a four letter URL, so we were like, we gotta name the company this. So. And, and it also made it the, the company approachable for partnerships because Beachbody was a little dated. So Bodies a little bit more benign for like a, you know, we have a partnership with the American Diabetes association, who, who's about health. Right. So anyway, I remember I was out at coffee with a guy who helped build Hulu, you know, that company, Hulu. So, so he helped build that. And we were, and I was telling him, you know, look, we sell these DVDs. Shouldn't we package this into a, into a service where people can buy the content like they do a dvd, but sort of own it, like you buy a record in itunes through Apple? And he said, no, the game is subscriptions. Like, I can remember that conversation. It was a watershed moment, as they say. And that. And so we launched Bodi in 2016 and it was great. And you know, we got to a million subscribers pretty fast.
- [30:51]
B
Million subscribers. Wow.
- [30:53]
A
Yeah. And, yeah, but what we've seen, frankly, since, you know, you got Paramount plus Disney plus Netflix, Hulu Max, like all these subscription services, everything's a subscription now. And we realized there's also subscription fatigue. So we added a parallel option for people that if they just want to buy one program like P90X, they can buy that program and they'll have permanent access to it on the app. They won't have access to everything else on the app, but they'll be able to access P90X wherever they go, on their phone, on any device, forever, for 60 bucks. And, and that has gotten. So we've got, I think we've got about 40 of our programs or so, maybe 30 of our programs available for what we call digital purchase. And that's been really strong for us for people who are just like, look, I don't, I don't need another subscription. I want to achieve a goal at a time, so I'll buy a program at a time. And that's been a super popular component that's unique to Bodi because all these other subscription fitness services, they can't achieve that because they don't have the program construct that we do. But we've got basically these 134 programs that people can buy the one they want.
- [32:17]
B
Mm, interesting. So talk to me around. I guess the infomercial Space because you know, you talked about, it was interesting, the network marketing MLM space, you know, sometimes there's some negative connotations and it was interesting that, that what you guys found sometimes or oftentimes in the infomercial space, you know, people are not as trustworthy of that particular space. Now it's funny, I have a mate, he has a very, very successful massage chair business. And one of the ways he grew it was he looked at his competitor and was like, oh, they're buying infomercials. And he blew up his business. And so people buy off them. Right? He blew up his business from doing it. And so it obviously works. But how do you work your way around that space to make it kind of protective of your brand? And then also when people are somewhat skeptical and you, I'm one of the people like, wow, I can't believe people buy off that. So talk us through that.
- [33:21]
A
Well, first off, you know, infomercial is a broad term. So let's, let's speak about it just in what we would call performance marketing. Because the long form infomercial is a bit of a relic. There's not that much media. So now it's, you know, it's performance marketing ads that might be as long as two minutes down to 15 seconds. But they, they need to do the same thing and that is generate a response. So the, the way you do it to not to, to protect your brand is solve a problem. That's really, it's, it's really that simple. People are not scrolling social media or watching TV thinking I need to find a product. I'm looking for a broom, I'm looking for a super sharp knife set that'll cut through a tin can. They're looking. What will stop the scroll is if they recognize something that sometimes in an exaggeration of what it can do, will help them solve a problem or enhance their life in some way. Could be a golf club that's going to drive the ball another 30 yards. That's what they're going to look for once you get their attention with a problem that they want to solve. In our case, you know, P90X I want to get ripped. I don't know how to get ripped. And so, oh, then I see a thing. Muscle confusion. That makes sense. Appeal to logic. And now they're along for the ride. Or they'll click through to investigate it more and see on a landing page, wait a minute, is this legit? Cause I would love to solve that problem. And then as long as you don't Hit any trip wires of credibility, like you don't want to doctor photos. Like it's all got to be legit, got to be logical, you got to have good testing, meaning you've proven that the, the thing works as advertised. Money back guarantee and then some sort of urgency to the offer. There's a reason to buy it now and then those things work. And, and I think that one of the reasons that I was comfortable and, and, and thought that infomercials would be super powerful for us was the marketing. The medium is incredibly powerful, right. But like you said, it can be filled with snake oil sales and just hucksters, right? Stuff that you'd be like, oh, who buys this crap? But if you do it with something legitimate, but you still use the same framework, you can dominate. And that's why Bodi dominated infomercials. Because everything we did was legit and tested and proven and, and, and it looked that way and we put care to make sure that we lived up to our promises, honored our 30 day money back guarantee and that's when the flywheel really started to spin. That's all it is. Same thing with network marketing. Network marketing can still work for people. It's just that so many people have been burnt by it that now you can't overcome it. Like nobody's believing network marketing anymore because so many people have been burned by it. So you gotta, you gotta let that one go.
- [36:51]
B
Yeah, no, I, I really respect that courageous decision that you guys have made. And I'm curious, like you guys, you talk about just how incredible the success is from your programs especially we talk about, you know, P90X is one example. But you've built a massive community, a massive community of raving fans and that love the Bodi brand, that super strong die hard community. I'm curious, what advice would you give? Because more than ever it's about community, right? Whatever business you're in, you want to be able, especially a consumer facing business. You want to be able to find a way to bring people together, make people feel a part of something, make people feel when they're purchasing this product or service. It's so much more than that. You're being, you're welcomed into a community of people like minded people just like you. How have you been able to build this community? What advice would you give to founders that are looking to build a movement, to build a community? And then also I know that you know, you're constantly reading negative and constructive feedback. Can you share a story where you've actually implemented that Feedback. But yeah, two part question. Yeah.
- [38:08]
A
I think, I think community builds by something that I learned from a guy named Eddie Yoon called super consumers. Like these are the people that will basically pay any price for your product because they love it so much. Like you see this, this is a dynamic that you see with Apple and Tesla and Nike. Just like that's my brand. Right. Um, and when, when people. So when you find out about super consumers, find out who your super consumers are by paying attention to message boards on Reddit or on Facebook, then you start to listen for what are they liking and what are they disliking. Because the stuff that your super consumers are saying that they dislike, the normal consumer really hates. And there's a group of super haters who. That is the thing that keeps them from buying from you. And we, it turns out we found out the multi level marketing business became a place for super haters to basically say I will never consider doing one of body programs even though they work. I just will not participate in that business model. So that, you know, that's listening for that is a really important. Was an important thing. Even though there was a big group of people who absolutely love it, who were making great money with it. We had to make a choice that was gonna scale the business to the next 10 million people. Right. So, so, but, but I think Tesla is a great example of a company that looked at product and was so vigilant about how good that product was that anytime Tesla does a product announcement there are people salivating and hanging on every word. Doesn't mean that Tesla's always going to get it right. But they're hanging on every word to see what that's going to be like. I think they see that with Apple as well. And that's what we try to do for fitness programs. When we put out a fitness program like this thing. I told you Belvital. I know like in 26 years I have never seen women get results like they have with this 12 week hormone health program. They all lost weight, they night sweats gone like these incredible, these incredible symptoms that they had which were an outcome of hormone imbalances for so many of them just went away. Like that is going to create super consumers and that thing is going to scale for the next three years and, and that's the way this flywheel turns.
- [41:00]
B
Yeah. And I'm curious, you talk about Apple and Tesla. Incredible products, incredible brands, incredible super fan communities. But there is one thing that is also common is they haven't a very, very strong leader who is the CEO and has a strong personal brand. Do you think that that is a critical part now in doing business when you are building a brand and building a movement?
- [41:29]
A
I don't think so. I don't think anybody knows who I am. I don't think anybody knows or care like some people do, but I don't think anybody cares about me. They care. The, the trainers matter, but it's really, it's the solution, man. Like it's, you know, just by the way, the fact that in Apple's case, to transition from such a charismatic and genius leader of Steve Jobs to an operational mastermind of Tim Cook and for Apple's best days to be after the charismatic leader is crazy. That like that's an amazing feat. In fact, I think if you've got an alpha leader whose identity is too strongly identified with the business, it can hold it back. I think that that's what you've seen maybe with a difficult transition for Nike, moving from Phil Knight or Starbucks from its founder or now, you know, it's very difficult. It was difficult for Disney to move on from Walt Disney's passing and then, you know, now they're trying to work their way out of Bob Iger, who's an icon. So ultimately, I think it's a CEO's job to not, you want to do whatever you can to be the chief evangelical officer, you want to evangelize what the company means. But really I don't want to shine. I want the company to shine and that's important to me. Otherwise I'm gonna have to be here forever. And I want this company to last 200 years.
- [43:21]
B
Yeah, no, I, yeah, I love, I love your take because it can work both ways. But I always, you know, right now in this kind of day and age, and you've, you've, you've been on this journey, been a founder for a long, long time. I'm seeing a massive, massive, massive push and movement of founder led brands and a lot of people wanting to put themselves forward or, and using that as a way to differentiate themselves in the marketplace. And more than ever, consumers want to follow that person and they're interested in what they have to say because that builds trust. But then at the same time, right, you know, I could interview the founder of Dropbox. Everyone knows that company, but no one really knows who the founder is. And that is a massive, massive, massive company. So it works both ways.
- [44:16]
A
Yeah, I don't think, I don't think Nvidia's achieved what it has because of a founder story. I Think it's incredible execution and timing with AI Jeff Bezos. Incredible. Total visionary and genius. But Amazon is what shines and the insight to expand into cloud computing is what drove free cash flow for the company. And I don't think that was a Jeff Bezos story. His, his execution did it. But I don't know, I think it's, it's very easy and it's fun. Certainly. I don't mean to undermine your podcast, but I do think that the founder stories are fascinating. It's my favorite kind of stuff to listen to, read because I want to know what struggles they've had. But, but I think for every big personality that, that you can highlight and we, we love personalities, but for every one of Those, there are 10 companies that do not have a big personality, who have been extremely successful and profitable, who didn't have a big personality. I, I just, I do not think especially boring industries, service industries or logistics industries. I don't think it matters how many followers the CEO has on Instagram, LinkedIn or Facebook or TikTok. I think what matters is his fucking company executes so well that nobody can compete. And he definitely find the category so in such a crisp way that anybody who would contemplate another option felt like they were buying what's second best. It can be helped that you can get fuel from that guy's image out there, but man, you know, we've all seen that the, the things that Elon might do from time to time undermines the whole thing. And now you got like, it's, it's kind of like having a, a driver in a Mack truck and you got the whole company in the back trying to react to these wild swings in the trailer. Really what you want is a great CEO that the company can count on is going to execute on a game plan that's just a good business that serves people well. I think that's, that's the way I run the business and if, if I have to be famous to make the company successful, I don't think we're going to be that, that successful.
- [47:06]
B
Yeah, great, great reflection, great experience. I love your honesty. That's what matters. So a couple ask questions. This is a great interview. I know we're going to wrap so I want to talk about look as a two part and then work towards wrapping Health and wellness space has changed a lot over the last 25 years. You've seen the ups, the downs, the digitization. You talked about the subscri piece and the amount of entrance that have moved into this Space like it is insane. And you can do everything, you know you can to make a great product with great marketing, but you can't go into someone's house and put them on a treadmill to actually hold them accountable and get them to do the work. How do you close that gap and where do you see things going?
- [47:59]
A
Obviously, accountability groups are a really big deal. People and, and understanding what people and, and helping people understand what their obstacles are going to be. So that's where, like we have these affiliates now, like I said, customers turned affiliates who run groups to help people get results. And, and they find out, all right, what is your problem? Is it emotional eating? Is it the holidays? Is it, you know, you quit on things after two weeks. So. So a person leading that group can help somebody. It's kind of like Alcoholics Anonymous. You're trying to find out what are the things that might derail somebody and help them either stay on the rails or if they have a lapse or a relapse, you want to have recovery mechanisms that help them get back on. So accountability partners are a really big deal facilitating that. And I think that AI can play a role, again, understanding what somebody's problem is and following up with them. It's also very easy to completely ignore a machine trying to contact you. But if the machine knows what your goal is and what your problem is to achieve that goal, the machine can communicate in terms that are very meaningful to you. So I think that's something that will eventually be really powerful in the fitness space. And finally, I think that, and this is the direction that we intend to go, experiences matter that it's not just about getting on the treadmill. It's not just about finishing P90X or BEL. It's also about how can I express this in an experience with a group of people? So regional workout events where everybody gets together and they'll work out for a couple hours together and talk about their experience. Coming together as a community and experiencing things offline as much as online is a really big part of what the body experience is going to be. And like, those are the, I would say those are the near term things. What I don't think it is I, other than the AI piece, I don't think it's that I need a shirt or a ring or a watch to tell me if I'm working out enough. My body tells me if I work out enough. I can tell if I worked out enough. The sweat pouring off of me tells me if I worked out enough. I think that the natural Inclination is to think, what's the new gadget that's going to break through, that's going to do this? And I think that's a red herring, as they say, you're chasing the wrong thing behavior. And helping people feel like the time they're spending doing this activity is worth it is where the magic is. And that's where accountability partners and, and, and frankly, content that makes you want to come out, come back tomorrow and the day after and the day after. That's really where things start to happen. And that's, that's why we're always reinventing ourselves with new programs that take advantage of what we're learning from people and what experience that they want to have, whether it's in their basement or at a regional fitness event.
- [51:16]
B
Yeah, look, I think, yeah, one thing even for us at Founder, we've realized the power digital first business, but we've realized the power of live events, getting people together. Especially in the post Covid, it's so powerful to build community. You've talked about how discomfort will always find you. What do you mean by that?
- [51:35]
A
That, that's a, that's just truth. I was at, I was visiting my parents who are late 80s, early 90s at a assisted living home and it was, it blew my mind because everybody, like the, the everybody that I saw, their goal was how can I sit down and watch some tv? How can I find a next place? Because they were scared to death of walking and tripping and breaking something. And my point is, with discomfort will find you is, you know, as people age, if you do not seek your own level of discomfort, if you get addicted to comfort, your body will morph or evolve to that level of comfort, which means your threshold of discomfort is going to be much lower because you haven't built a tolerance for pain by lifting, by running or creating cardiovascular challenge, by teaching yourself, by seeing what you can push yourself through to stay consistent. I do a cold plunge every morning and I fucking hate it. And like, as I'm walking up to that cold plunge, I'm trying to talk myself out of it. And that's when I'm like, I need to get in that thing and hate it and deal with the discomfort because it's triggering all these positive mechanisms in my body. And I'm teaching myself that I can do uncomfortable things, which means that I'm 60 years old. I'm intending to be cold, plunging and walking and running and active into my 90s, but I have to seek discomfort now to avoid complete loss of my mobility. And agility then. And long answer, probably, but that's what it means. You've got to. And it's only 20 minutes, 30 minutes, a few days a week, four or five days a week. But you gotta find the ability to get away from the tv, stop scrolling on your social media and do the hard thing. You gotta eat less of the pizza, more of the vegetables. You gotta find a way to figure it out or that discomfort is going to find its way down to your level, your comfort threshold, and it's going to squeeze and squeeze and squeeze and you're just going to end up brain watching tv. And that sucks.
- [54:14]
B
Yeah, I love it. I can, I can hear the passion. Two last questions and we'll wrap, you know, over 25 years of body under your belt. Love the focus. What's the most valuable lesson you've learned? And then what are you excited for next?
- [54:29]
A
Most important thing is. And you always hear it, but you hear don't quit all the time. But until you got a stock that has lost 98% of its value, you got lenders expecting performance, and you got a network marketing business that has fallen out of favor and is struggling to grow, you don't really know what the heat of don't quit means. But don't quit means don't fucking quit. And that's the big lesson. Like if you're going to do it, if it's meaningful to you, if that mission means something, you got to find a way. And that's going to make you unpopular. It's not going to make you popular at home with your family when you're moody, but you got to find a way. That's the big lesson for me. And every, every day that I think, oh man, I can't, I can't, I can't take this anymore. I literally turn around on myself and just say, shut the hell up and keep going. Because the only way through this is through it. So you just got to keep going. In terms of what I'm looking forward to, obviously it's the other side of that and it's the continuing ability to create and solve people's problems. And see, like every day I get emails and I get tagged on social media from people who have done things that they never thought they could do because of our programs. There's a guy, Jonathan, who like 560 pounds and wanted to do this lifting program, dig deeper. And so, all right, I said, I'll support you. And I saw today he tagged me. This guy's lost 40 pounds in 60 days. Now look, 40 pounds off of a 560 pound guy is not that noticeable. But imagine losing 40 pounds. Like if you think about like weights or dumbbells, like not carrying around an extra 40 pounds, that brings tears to my eyes. That's what gets me up every day. Creating something that could help somebody like that who's borderline hopeless, that's magic. That's just the way to live a healthy, fulfilling life. That's a fulfilling life for me. So, so iterating on that, expanding that, making sure I'm in a position to scale that so we reach 100 million people. That's what I love. And hopefully I'll get there before I can't do it anymore. But that's, that's what I look forward to every day.
- [57:13]
B
Incredible. Well, Carl, thank you so much for taking the time. Congratulations on all your success. Thank you for being vulnerable, open, honest, and really just showing your wealth of experience. So it was a fantastic interview. Thank you so much.
- [57:26]
A
Thank you, Nathan. I really enjoyed it.
- [57:28]
B
All right, so if you love this episode, make sure to check out my interview with Alex Hormozi on how he scales companies from zero straight to $2 million a month in less than a year.
- [57:40]
A
You were like, how do you achieve it? Like, there's five years of my life that disappeared. In fact, I lost all the money, which I talk about in the book. I had all the gyms, I did the turnarounds, and then I had $0 five years later because of mistakes that I made. But the things that I was gaining was not the money. It was the skills. It was the character traits and the beliefs.