UP064: Fitt // curating health and wellness recommendations for your city

Anthony Vennare 0:00
Even to this day, if you look at my LinkedIn box and email, I’m sending hundreds of emails to the marketing person, to the CEO, to the CFO, to the janitor, anyone that will listen to me. It’s funny, I had been pitching a client for a long time, and they’re like, I can’t believe we haven’t heard from you, because I finally got to the top and I said, Listen, I’ve been sending blimps, carrier pigeons, billboards, like I’ve been trying. It just takes time. So you, you just have to be persistent and not be afraid to get shut down.

Jay Clouse 0:00
The startup investment landscape is changing, and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them. Welcome to Upside.

Eric Hornung 0:00
Hello, hello, hello, and welcome to the Upside podcast, the first podcast finding upside outside of Silicon Valley. I’m Eric Hornung, and I’m accompanied by my co-host, Mr. Tech Award himself, Jay Clouse. Jay, how’s it going, man? How’s it feel to have an award that clearly denotes your age?

Jay Clouse 0:00
Actually, that is my biggest problem with a 30 under 30, because I don’t know, if you, dear listener, fight ageism very frequently, but when you are younger than a lot of the people you are working with or working around, that’s not necessarily always a good thing. And so to receive a 30 under 30 is kind of like a, a signal that I’m not always looking to send. But it feels good to be recognized, and, you know, external validation is always nice. Eric, you nominated me for that. So thank you.

Eric Hornung 0:00
Do you want to seem older than you are?

Jay Clouse 0:00
I want to let people tell themselves the story they want to tell themselves. Their assumptions, I don’t care what their assumptions are. I just don’t want to counter what, whatever narrative they’re telling themselves about my age if It’s inaccurate.

Eric Hornung 0:00
So you want to be age fluid. You want to feel you could be 23 but also like you could be 53.

Jay Clouse 0:00
I just don’t think that age really matters, but to people who what matters to it matters. And so like, whatever. If you want to think I’m older, and that makes it easier for you to work with me or trust me, or believe in me, awesome. If you want to think I’m younger, that’s fine, too. I don’t care. It just doesn’t really mean much to me.

Eric Hornung 0:00
I feel like it’s got to be pretty hard to be age fluid, because like, you can’t be too in shape, or like, have too full of a head of hair. But then you also like, can’t be like aggressively balding or be too out of shape, or any of the other kind of age stereotypes that go along with older age. So it’s got to be tough to be able to be someone who people can see as being young enough and also old enough.

Jay Clouse 0:00
That’s where a beard comes in.

Eric Hornung 0:00
You think beards are helpful to be young?

Jay Clouse 0:00
beards are helpful to look older or let people assume that you’re older, if that’s what they want to assume,

Eric Hornung 0:00
I think glasses help with the older thing, too.

Jay Clouse 0:00
That’s true. That’s also why I’m wearing glasses right now. I also think that, yea to your point about being in shape, the more in shape you are, the more age fluid you can be. Also, the more gracefully you will age. Eric, I know you used to be able to dunk a basketball. How’s your fitness going?

Eric Hornung 0:00
Rough. Very rough. Yeah, it’s like, man, I don’t even know if I can touch net anymore.

Jay Clouse 0:00
Where do you go to work out?

Eric Hornung 0:00
Well, fun little fact here. I go to the Y, which is here in Cincinnati, right across the park. But I just signed up for a yoga studio. So I’m going to be very zen pretty soon here.

Jay Clouse 0:00
How did you find out about that yoga studio?

Eric Hornung 0:00
My fiance and friend of the podcast Colleen goes to this yoga studio and said, Hey, if you want to start doing yoga, you should go to this yoga studio. What about you? Where do you work out?

Jay Clouse 0:00
I don’t. Well, speaking of fitness and finding places to work out. Today we’re talking with Anthony Vennare, the founder and CEO of Fitt. Fitt is a location based discovery platform that connects people to healthy experiences across fitness food, outdoors, and events with local contributors on the ground in more than 30 cities, they connect people to the best local fitness studios, healthy restaurants, outdoor adventures, and upcoming events nearby.

Eric Hornung 0:00
Kind of feels a little bit like a Yelp for fitness almost.

Jay Clouse 0:00
Fitt was founded in 2017, based in Pittsburgh, Pennsylvania. Eric, our first founder in Pittsburgh. And it’s been a while since we talked to the team over at Innovation Works and Alpha Lab Gear. Finally talking to a founder on the ground in Pittsburgh.

Eric Hornung 0:00
When I was doing some searching on Google just like, learn a little bit about this company, I found a Facebook page called Fittsburgh and I thought that was hilarious. I have no idea if it’s related.

Jay Clouse 0:00
Well, we’ll find out here in the interview, and as we go through that interview, you can tweet at us @upsidefm with what you’re thinking. You can also email us hello@upside.fm. And we’ll get Interview with Anthony right after this.

Eric Hornung 0:00
Jay, if we were going to give out executive titles for Upside, which one of us would get CEO?

Jay Clouse 0:00
I would.

Eric Hornung 0:00
That was so quick. You didn’t even like contemplate meeting CEO?

Jay Clouse 0:00
It’s obvious.

Eric Hornung 0:00
What would I get?

Jay Clouse 0:00
Not co-producer,

Eric Hornung 0:00
Not co-producer. I don’t think that’s in the executive category. So if I was hiring for an executive position, I probably wouldn’t look for co-producer in that bucket, huh?

Jay Clouse 0:00
How would you go about hiring for an executive position?

Eric Hornung 0:00
I mean, that’s easy. I go to our friends at Integrity Power Search. They’re the number one full stack, high growth startup recruiting firm based between the coasts. They partner with venture capitalists, private equity groups and CEOs to build amazing teams for the world’s most disruptive companies. I mean, since 2012, they’ve successfully executed over 600 searches and are on track for 200 more just in 2019. Their clients have raised collectively over 2.5 billion in venture capital and counting.

Jay Clouse 0:00
You’re not trying to replace me as a CEO, are you?

Eric Hornung 0:00
I didn’t know you actually got the title. I thought this was just a hypothetical.

Jay Clouse 0:00
No, it sounds like we’ve made a decision, we’ve come to a consensus. So if you guys are looking to talk to the CEO of Upside, you can talk to me. And if you’re looking to hire your own executive help, you can go to Integrity Power Search at upside.fm/integrity, to find out more about how they can help you.

Jay Clouse 0:00
Anthony, welcome to the show.

Anthony Vennare 0:00
How’s it going? Thanks for having me.

Eric Hornung 0:00
On Upside, we like to start with a background of the guest. So can you tell us about the history of Anthony?

Anthony Vennare 0:00
Oh, the history of Anthony. The quick pitch, which I always have–you know, you have to be good at giving now when you run a company. Grew up in Pittsburgh, where we’re still based, big Italian family. I enlisted in the Marine Corps right out of high school. And my goal was to spend, you know, 20 years in the Marines and that was it. But right after I enlisted, my father was diagnosed with terminal cancer. So like, pulled my whole life part. Kind of flipped eerything on its head. So I did my best to spend time with family and get out. And when I did, the only thing in the Marines I knew was fitness. So I, to support my family and kind of provide, I opened a gym. And that was kind of the kickoff to owning gyms, working with my brother, now running the company that we have called Fitt.

Eric Hornung 0:00
Why did you decide Marine Corps?

Anthony Vennare 0:00
I guess it was that time where I was in fifth grade, I think or sixth grade, maybe even in between that when 911 happened. And it was one of those things you remember and my family. My grandfathers were in the military, but it wasn’t really a family that was in the military. But for some reason it called me from that point on. So when I was younger, I always wanted to be that growing up, that was kind of always my goal through middle school all the way to high school.

Jay Clouse 0:00
Why Marines versus Air Force, Navy, Army.

Anthony Vennare 0:00
I mean, when you’re when you see them and you hear about them, they’re the coolest as a kid. And it’s like the most, from like a basic level, it’s looked at as like one of the more prestigious ones. So it was that. More importantly, I liked the fact that they did different things in the Marines. You can be more than just infantry. There’s a lot of different things that were there with, you know, the old, they are part of the Navy, but they’re their own thing, and they’re this great fighting force. So I wanted to go and be, you know, as all kids do, I guess I want to be special forces and, you know, be the best I could be in that version of myself. Didn’t work out that way. But that was the goal originally,

Jay Clouse 0:00
We haven’t had many folks with a military background on the show. And I remember talking about it much. So I’d love to hear psychologically, physically, emotionally, like what was training to be a marine like, and what has that, how has that carried forward to running a company today?

Anthony Vennare 0:00
Yeah, it was kind of, it’s funny. I think that I’ve always been kind of crazy in that extreme way. I was gonna jump off stuff, get in trouble because I was always doing the most extreme version. So a lot of people I know, when they say they go the Marines, it really changed them. But for me, I think it just centered me, pinpointed my ability to be a crazy person into a more better package I guess. So it really did that for me. But it also, I mean it shows you what you can do and what you can’t do iand really test your limits. Between that, and I always say like everyone asked me about running companies and different things involved in my life, but it, you know, 17, 18 years old with going through boot camp, doing stuff in the Marines and my father getting sick and like family stuff. I was like, after going through all of that, by before the time I was 20, everything has just been a cakewalk. Nothing has been even close to that, like, couple years of life that I had to go through.

Eric Hornung 0:00
Do you still do crazy stuff? Are you still in like extreme sports or anything?

Anthony Vennare 0:00
Not as much anymore. I don’t get to obviously with work, running a company takes up a ton of my time. But I mean, it’s definitely there. I love–and that’s why with Fitt, we’re into what we are. I love fitness outdoors activities, like the way that we work out, especially my brother and I and some of the people that work for us work out together. It’s a you know, the extreme version of everything, just because It’s, uh, I can get it there at least. But I’m a little bit safer now.

Eric Hornung 0:00
Tell me about starting a gym. What does that look like? And just like walk me through the process of, Hey, we should start a gym to Oh, we have a gym.

Anthony Vennare 0:00
I think this kind of plays as a method for my whole life. I don’t do the typical thing that people do. I was 21, I had no education whatsoever, besides the Marines were. In the Marines, I got to actually go through programming and training and at one point time, I was in charge of doing some workouts with other Marines and for them, so it was really cool to see that type of workouts. And then when I got out, this was before studio fitness and, you know, especially based in Pittsburgh, there was like one CrossFit gym, and that’s about it, and then LA Fitness. So, you know, when most people think about opening a gym, they have a business plan and a structure and an LLC. I did none of those things. I was training people in parks, putting up ads on Craigslist, and just growing this base. The YMCA up the street let me train out of there, and before I knew it, my classes had 60, 70, 80 people. And we were just crushing it. And my brother, who was a teacher at the time, was working with me. And then I went and started looking for space. And there was this old skatepark that was in Pittsburgh and it was abandoned. It was inside of an Ice Arena. And the skatepark itself, they just closed the doors one day because it was dangerous and kids were getting hurt. 12,000 square feet. And I went to the landlord, I was like, Listen, I want to open a gym. I need space. He’s like, well, we have this 1,500 square foot room down here. You can rent for, you know, not 500 bucks a month, or we have the skate park. And I was like, well, I’ll take the skatepark. And he said, Okay, well, you have a week to flip it if you want. If you can make it into a gym and clear it out a week. I think he was just tricking me to get the work done and clean it out. But me and a bunch of my buddies got sledgehammers and tore it down. We have the pictures. It’s awesome. Toured down an entire skatepark in a week and opened a gym. Ad we had a handshake lease and I was paying 1,500 dollars a month for 12,000 square feet of a gym because the guy I didn’t think I could do it. And that was how we had a gym. It was the most ridiculous scenario ever.

Jay Clouse 0:00
Did you say indoor or outdoor skatepark?

Anthony Vennare 0:00
Indoor skatepark.

Jay Clouse 0:00
Was there any point when he tried to renege on that agreement after you cleared out in a week?

Anthony Vennare 0:00
He was just super older rich guy, and he didn’t even, he wasn’t even around. Like he came back and I was like, cool, gym’s open, we have signs up, we’re having our opening party next week, and they’re like, Oh, crap, I guess. And stilted like, through the entire existence of that gym and all, like, we never had a lease.

Jay Clouse 0:00
Talk to me about when you were at the YMCA and you’re training people and suddenly had 60, 70, 80 people showing up. What was drawing them to you specifically versus the other things that they could have been doing?

Anthony Vennare 0:00
Yeah, it’s carried to today. The first thing was kind of community. I mean, going out after talking to them, making like actual connections and being…building relationships with them on a community level. Fitness, I think that’s the whole point of it. And that’s really what our business model Fitt is today, is just connecting people locally to Community of fitness. More importantly, though, I went door to door, I put up ads on Craigslist, I put up signs at different coffee shops, every person that I knew I would ask them to invite people, it was the most guerilla marketing that you could ever do. And this was, you know, Facebook was just getting big for people that weren’t in the tech scene and some of the other avenues that were out there. I was using that a little bit, but it was mostly just knocking on doors and, and handing out flyers and get people to turn around.

Eric Hornung 0:00
How did you come up with workouts? Did you just take things that you did in the Marines and say, you guys can do this too? Or did you study and figure out, I want to build this type of workout.

Anthony Vennare 0:00
I was lucky in that I grew up in western Pennsylvania, where football is king. So working out was always part of my life from an early age. And that led to in the Marines, I kind of knew I was talking about. Actually when I was in things, I got certified as a personal trainer and I started doing research, and there was this guy, he’s ran a program called Military Athlete. His name’s Rob Shawll. He’s only known in small categories. And he had these crazy concepts of working out that now is what everybody’s doing with you know the, the functional fitness and training. He had the methodology back in the day behind it all. So his programming what it in the Marines it was all bodyweight, kettlebell, bootcamp stuff. It was so simple that you know, we didn’t have much equipment. We had turf track that I got for free from someone who’s throwing it away. We had sandbags that we made out of military duffel bags, we had kettlebells, we actually manufacturer kettlebells overseas and bought them it for cents on the pound in China and had them shipped over. And that actually, our first gym ended up opening into. We had a lot of different locations because we built our own mini CrossFit franchise location type model, because, you know, it was simple, it was easy, it was scalable. And for the prices we were charging, we were making so much money and we had no idea what we were doing.

Eric Hornung 0:00
How long did you run a gym exclusively?

Anthony Vennare 0:00
One gym quickly turned into two and five, and we had little places here and there, rentingout small studios, running space in other facilities, partnering to license locations. It went from one to, we ended up having 40 total partner locations within two two and a half years, and we were certifying people and doing programming and selling things online and before I knew it, my brother and I, he had, after six months, he quit a job as a teacher which he worked his entire life to get. And we had our program, and it’s Hybrid Athlete was the gym, and then the program was called Kettlebell Cardio. And like said, we had the certification accredited, our equipment, we were selling packages, marketing. And it’s the only true mistake I say that I made as an entrepreneur was closing that business down because it just got so big. And, you know, I, I jumped right into it after my father passed away. So I didn’t really deal with much in terms of that. So we just kind of, we got too big that we tried to sell it off and get out of it. But if we would have kept that today, I would, it would be that, it would be orangetheory. We were in two years, we dominated before studio fitness was big anywhere else besides New York City.

Jay Clouse 0:00
What did shutting it down look like? How did you approach the decision and then what ultimately, you know, was the conclusion of it.

Anthony Vennare 0:00
Yeah, it was one day we looked an, you know, were making hundred thousand dollars a month. Hust printing money there, we were doing stuff online. And we just didn’t have the right insurance. We didn’t have the right employment hiring. We didn’t know what to, like, none of the actual operational infrastructure that was there, we knew how to do, we were learning. But as fast as it was growing, it was just so much for us to handle that we said, Oh, well, this one location that we’re working with this person on, let’s let them take it over and own it and do it. And then that the next one and the next one, and then eventually we started selling off equipment. And at the same time, we, my brother, who’s a phenomenal writer, was creating content online, and we were getting paid to do marketing online and campaigns. This was right when like, you could take workout programs and PDFs and sell them online. And we transitioned our brand online at the same time, and that was making $20,000 a month selling programs we had, even to this day, if you search body weight training plan were like the top two or three, we had that program. So all of that going on, we’re like just so much effort, I felt like I was dying under the burden of this like system. So we sold off everything that we could and close what we couldn’t and just pieced out.

Eric Hornung 0:00
What year was this transition happening?

Anthony Vennare 0:00
It was like ’13, ’14 was when we really got out of it. It started in ’12, though, like, right after we hit our success, we were already on the way out, because we, there’s too much going on.

Jay Clouse 0:00
So before we kind of close the book on this business, looking back now, if someone else listening to the show is in a similar position where they feel like they’re kind of growing outside of their own expertise, what would you have done differently at the close of that business?

Anthony Vennare 0:00
I wouldn’t have closed it. I would say the thing now that exists where back then one, it wasn’t cool to be a business owner entrepreneur. It was just starting to get cool. Like, I have a girlfriend I had, her dad made a breakup with me because he thought I needed to get a real job. So like it wasn’t a thing that people thought was awesome. So that burden of like my family’s like, when are you going to get a real job, and I’m like, I’m making more money than all of you. And I just, it’s just a lot going on. I don’t know what I’m doing. And then this whole like expert mentor, and like, I could have found someone easily. Now I’d say like, I do it now at my brother and I as business owners and what we’ve done over the years, we help other people. We get paid to come and help projects and do things. And if I could have found a few hiring processes, used gussto, you like, this systems, software’s and processes, you can figure it out fairly easily and look to experts, because I think one of the biggest strengths we have is we know what we don’t know. I don’t pretend to know about certain things. I either find experts, hire them. But within my category, I know those things. Outside of that I’m bringing people, I’ bringing way smarter people around me, because I’m still technically an uneducated marine. I never went to college or anything, but we’ve learned so much over the course of it. And I think the thing that we learned the most was there’s someone that’s going to know more in that category and let them do their job.

Jay Clouse 0:00
Technically uneducated. It’s crazy that we think that being technically educated is going through a university or something like that, because this sounds like the best education you could probably get.

Anthony Vennare 0:00
Oh man, I just turned 30. And I feel like I’m 70 because I’ve done so many different things in my life from such a young age. And when you can say, I actually have 20 years of experience doing this, or 15 years of experience doing this, it’s kind of crazy to think those things because since I was in my teens, I’ve been doing some type of physical fitness and training.

Eric Hornung 0:00
I’m about to turn 29, and I feel like I’m 70 but it’s mostly because I need to work out more, so…

Anthony Vennare 0:00
Well, I’ll tell you this the most unhealthy I’ve ever been was owning a gym. I never worked out or anything, it was always other people’s fitness. So between that and now coming online, it’s been a rough thing for me to, there was a point where I was super unhealthy. And I you know, just wasn’t taking care of myself raising fundraising or scaling and all that stuff. I remember one of my buddies was like, Listen, man, you go to conferences and stuff and your company’s called Fitt. He’s like, you need to lose some weight. I was like oh, harsh, but, alright, thanks.

Eric Hornung 0:00
You gotta but you gotta like that good criticism, right?

Anthony Vennare 0:00
That is the best friend, you need those people in your life.

Jay Clouse 0:00
So now that you’re doing Fitt, talk to us about when you got back into the ring of running a business at the end of this and how Fitt came to be.

Anthony Vennare 0:00
Yeah, after all of that happened, my brother and I were just living the freelance contractor life, lifestyle businesses, getting paid to create content, work with people, projects, and also attaching myself to very smart people. Living in Pittsburgh, but everything we did was online, and we got paid to do so much, like my brother had a fitness column in I think it was penthouse magazine. Awesome, getting paid a ton of money to write in Penthouse, the coolest thing in the world. Actually, for a while there, I pretended to be his agent. And I would call and get him writing gigs and contracting gigs and we would work on them together. We were a scrappy as you could be.

Jay Clouse 0:00
Did you use your same name? Or did you use a fake agent name? Because it seems like they would tie your names together pretty quickly.

Anthony Vennare 0:00
My name is Anthony Lewis Vennare. I use Tony Lewis as my agent name. Tony Lewis sounds like an agent.

Jay Clouse 0:00
It does.

Anthony Vennare 0:00
Yeah. So no, it’s just so many things in between. And that was just, again, a part of the true education I got was just how and, you know, we’ve we, we sold CSA food boxes, kind of like an early version of Sun Basket or Blue Apron from farms in Pittsburgh all over. We got paid to do corporate wellness, we helped other people run gyms, we train people in parks, we ran clothing things, we sold fitness clothing, we sold programs online, we did everything. And then what happened was, it’s continually making money, we realized that, you know, we’re sick of this. It’s not about the dollar. So I was like, okay, we now prove that we can make a living and make money and do this, but I want to build a team. I want to build something that’s big, and I asked startups and you know, listening to people’s books and podcasts like, okay, it’s 2016 going to be ’17, right to ’16, we launched a company called Fittsburgh, which is fitness in Pittsburgh. Was black and gold. I built it myself on WordPress, it was horrible, and it was like a list of like the gyms and wellness places in Pittsburgh and some stuff on Facebook. We launched that at the same time we launched something called Made In Pittsburgh. We actually launched Fittsburgh first really fast in Pittsburgh. We got a sponsor, a UPMC health plan. They’re a really big health point out here and hospital system. And we convinced them to pay us a pretty good amount of money for marketing and advertising to younger people. And then we launched Made In Pittsburgh and we wanted to sell that to the Pittsburgh Post Gazette because we wanted to do like Built In if you guys know who they are, it’s like a startup site and blog type thing now has like jobs and all this information. We did a version of that in Pittsburgh, we bought Made In Pittsburgh, Made In Cleveland, Made In Columbus, all of these areas and within six months of running that, the Post Gazette bought it off us for a decent amount of money. So, because they’re an old daily newspaper, they’re one of the biggest in the country still. And sold that off, took that money and rolled it into Fittsburgh. Within a few months, we dropped the ‘spurgh’ and just named it Fitt with two T’s and, you know, before you knew it, we were in Cleveland, Columbus, Boston, DC, and we had our first full year under our belt, finished with like $600,000 in revenue in 10 cities. And we’re like Wow, this is awesome. We have something here. And that was kind of the start of like, we actually have a company.

Eric Hornung 0:00
Maybe a little explicitly, how does Fitt make money?

Anthony Vennare 0:00
To date, a big part of that was advertising. The cool thing about what we do, if you think of like Infatuation, Eater. Thrillist, those like localized content brands, there’s some for food, there’s some for real estate. It doesn’t exist for fitness. There’s no Yelp, there’s no Eater, Thrillist, Infatuation fitness. That was what we started to be in local content advertising, a lot of it was health plan and like large companies in these markets, because health plans, CVSes, hospital systems, big brands want to reach local people, but they want them to be a certain type of people. So advertising has been a big part of that. We’re transitioning now with our most recent investment in partnership, but this is year three, I guess the first two and a half years of our lives has all been advertising.

Eric Hornung 0:00
Can you talk hypothetically about that partnership and what that looks like?

Anthony Vennare 0:00
Yeah, to kind of get to that point, we went from Fittsburgh to 10 cities under Fitt, and then Bob Nutting, the owner of the Pittsburgh Pirates, who not too many people like, unfortunately, because of the way he runs the Pirates, he invested in us. And that was end of ’17 going and ’18. So Bob Nutting invested in us, he put in 1.75 million total as one Angel, which is completely unheard of. You know, to do that you have to get to like in A typical fund, and he put in a million and then added another 750. And that helped us build a structure and a team and in a process and so all of ’18 was really trying to scale. We went from 10 to 28 cities. And in doing that we built the team of Pittsburgh, we have a massive contributor network, we were making photos, videos, we we started building that content system that we run on, we used to be on WordPress, now we were on our own CMS that we built from the ground up, and we started to realize that not just content but we can do so much more. And then you know ’18 rolling into ’19 is when we started to really build the brand of Fitt that it is today. Then this new partner that I mentioned is a company called Mindbody. They’re the largest company in the fitness space. So we got a few other local, I guess you’d call them, angels, some people that own sports teams and small, almost a fund, but they’re just two local guys here in Pittsburgh and West Virginia of all places. And then Mindbody came in and invested in signed a commercial deal. So now, you know, a company that was a public company that got taken private for 2 billion plus dollars based out in the West Coast is, we’re their first outside investment, they’ve only ever bought companies. And we’re hopefully going to help them really focus on the consumer product because they’re really b2b and software focused.

Jay Clouse 0:00
Talk to me about how you describe Fitt today and the product or you know, what you’re offering to the consumers.

Anthony Vennare 0:00
Yeah, there’s two pitches ones to like business and you know, investors and that’s a location based discovery platform that connects consumers to health, wellness, and fitness experiences. So that’s like the deck that we have. And then the consumer pitch is, Fitt is the best place to find sweat spots, healthy eats and outdoor adventures in any city.

Jay Clouse 0:00
And so you’ve, you’ve gotten some pretty big names with big firepower to invest in this vision. What are they seeing in Fitt being so deep in the fitness realm that is just so glaringly missing today?

Anthony Vennare 0:00
We always joke, half of them, half of the reason they invested was the company and other half is because they think I’m a lunatic, and their processes if we don’t work with him, he’ll somehow figure out a way to burn us to the ground. So the part of the business they appreciate is, you know, we’re company in Pittsburgh, consumer brands typically don’t exist here. We built pretty much bootstrapped for the first year to have, you know, end up over a million in revenue. Before that we got an investment. It was all done for nothing. Our burn still to this day is unheard of, let alone when we first started to spend $50,000-60,000 a month and scale something that was making that much and do it organically. And then we just were the first to really do it, you know, if you look at I mean, the easiest comparable is Yelp, Open Table, Eater, thrillist, Prezi, like I mentioned, infatuation, there is nothing in fitness. The only thing is ClassPass. And, you know, honestly, ClassPass is like Groupon and Groupon fit when I had gyms. Iit’s not good for business. Even more so, you know, the way they run just isn’t good for the fitness industry. I don’t like when they devalue a valuable product in valuable people’s time. So I think they saw that we were doing it and did it for nothing compared to what they were spending. A lot of different people who’ve talked to, they really appreciated the scrappy and hustle of just getting it done. And then on the other side, like I said, was when I would get in a room and tell them what we’re doing, and we’re going to get there and then talk to them three months later, and we would either have done it, done it better, or, you know, pivoted a little bit, but we’re on the same path, and they’re like, this guy does what he says he does, and, you know, he scares us. So let’s work with them.

Jay Clouse 0:00
You mentioned earlier that you’ve always made a point to surround yourself with or connect with really exceptional people, and some of these partners that you’re describing, it’s clear that you must proactively be finding these people. So how do you approach networking, building relationships, building partnerships, because there’s a million other things you could spend your time on as a CEO. But obviously, you must be investing a lot of time in these relationships.

Anthony Vennare 0:00
I’m the only salesman at the company still, which everyone wants to change, but, you know, I’m lucky that my brother, who is also my best friend and my co-founder, who is one of the most organized, structured and probably the most, I don’t know, he’s the most capable leader I’ve ever seen. He can lead a team of contributors, people in the office, everybody with ease that thing that would take me years to figure out he can do in his spare time. So I have him to rely on to run the company while I can be that guy out there hustling. So emails, phone calls, you know, it took me months and months and months to get to someone at Mindbody to work up the ladder to get somebody to get somebody get somebody and then eventually get to the top, and then get an option was like, hey, you can come pitch us in person. As well as my brother and I built something called Fit Insider. So if you think of a lot of different industries, there’s like a, and even in fitness, there’s a lot of business resources, business publications that are like what’s happening in this industry. Well, there’s some fitness called like Club Industry and so which are very old school like running a YMCA and and only fitness. Well fitness is changed. At home wellness, consumer, it’s so much. So we call it Fit Inside and launched a newsletter that I send out weekly with my brother. He he hosts a podcast, actually, we put out reports on LinkedIn. And now there’s thousands and thousands of industry leaders that subscribe to that. So we went from nobody’s in Pittsburgh to, you know, a resource where CEOs and executives and most of companies in our space that we would want to work with and talk to wait for our weekly email. So we just were lucky to hit it, the stars aligned and to put that out. So besides hustling and reaching out to people, we really put an effort into this information to make us thought leaders and also just put out content that people in industry want to read so that they want to engage with us. And that’s led to a ton of sales and growth.

Jay Clouse 0:00
One quick follow up. You know, you mentioned with Mindbody, you went from someone down the ladder to the next person, next person, next person. You say that and it sounds simple, but I know that often it’s not. So can you talk about just like the mentality or the way you have to approach it? Because I’m sure sometimes people are telling you like, no or ignoring you. How do you get through all of those levels?

Anthony Vennare 0:00
Absolutely. The, for them as an example, the people that own the company, there’s President Josh, and CEO, Rick, they’re probably some of the smartest people in the industry, they’ve been doing it the longest, and they just have a really good grasp on what’s going on. And they run a really good company. So I’m lucky there in that, you know, they they lead a very forward thinking company, and when I approached somebody lower level, and then they introduced me to a marketing person, they introduced me to a product person, and then I go up the line. So that was half of that, you know, my body runs a good company, and I was able to work my way through because they listen to people there. But I mean, I probably you know, even to this day, if you look at my LinkedIn inbox and email, I’m sending hundreds of emails, hundreds of emails of to the marketing person, to the CEO to the CFO, to the janitor anyone that will listen to me…It was funny, I had been pitching a client for a long time and they’re like, I can’t believe we haven’t heard from you, because I finally got to the top and I said, Listen, I’ve been sending blimps, carrier pigeons, billboards, like, I’ve been trying, it just takes time. So you, you just have to be persistent and not be afraid to get shut down or told no or blocked or whatever it is. It’s, it’s funny, even now to this day, whether it’s with investors or–because we went out and tried to raise money–or clients, I’ve had people that I know I’ve emailed cold email 50 times, you know, talk to me and be like, Oh, it’s nice to meet you. I’m like, oh, I’ve emailed you 50 times. I know you know who I am. I know you’ve seen those emails.

Eric Hornung 0:00
When did media become a strategy? Was that baked in at the beginning or when did you launch this newsletter and this podcast?

Anthony Vennare 0:00
Yeah, so our business has always been media. That, and that kind of plays into the raising money thing, like media was, has for a while went up. Everybody wants to do it, box and all those things and it’s like nobody wants to advertise and you know, it’s bad. And now podcasts and different newsletters and Morning Brew and Scam, it’s back up again. But I think content in engaging with an audience realistically qnd organically is so valuable. So our business was always that, but that was the thing. We sold the most because that whether it was creating content for our gyms or online, it was always media and brand, building this network and we have newsletters in each city and stuff for fit. We said, we have opinions on the on the industry, let’s put them out there started on on LinkedIn randomly that kind of started LinkedIn is one of the most underrated platforms for marketing right now. There was ever original content. So it was going on that and then we said people are responding, you know, people at high level positions at companies like Equinox and investment firms in the industry and things like that will respond like this is super cool. And I’m like, oh, man, they’re real people. Let’s get going. So put out a newsletter and we knew that we had to overcome not being in New York and LA and San Francisco for fitness. And it wasn’t going to be with flying. There wasn’t going to be with tising it wasn’t gonna be with speaking at events it was. We know certain things about the industry. Like I said, when I know what I know, I’m running down that lane and, and especially with my brother being a phenomenal writer and editor together, we can put out content we knew and reach certain people. It’s made it so much more accessible to talk to be involved in the industry, because we’re in Pittsburgh, but when people across the country and overseas and everywhere else is reading your newsletter, that you personally send out on a regular basis and looking to you for insights and hitting you up for ideas. It really transformed our business in made us look at being a Pittsburgh because we always had this like oh man, we’re in Pittsburgh, it’s hard. But now I’m like, I’m glad I am. I call it cost 10 times less and I love where I live and I love Pittsburgh because I’m from here and it’s awesome to still be able to fly those places every once in a while and meet with people now that they know who I am

Eric Hornung 0:00
Jumping back into the business, how do you decide to launch a city? I was kind of clicking through, I don’t think you have Cincinnati as a city, but you do have Cleveland and Columbus. So how do you decide when you launch a city versus not launch a city?

Anthony Vennare 0:00
Yeah, it, it’s a lot of different factors now. Originally it was, can we get writers? I knew people in Cleveland, I actually when we first started, I would drive to all the different cities and meet people, and just go and grow organically, like work out, hang out, talk to people. So Cleveland was easy. Columbus was kind of easy. Boston was easy. And they were a little bit bigger, so we knew that the those would be accessible. But now it’s you know, we get who applies to write, what kind of industry they have, you know, Cleveland has a really big health care industry, what kind of fitness into they have, not just from like, standard, all the nonsense that comes from census data and all these different brands that put out these these touch points. It’s like, what brands are there? What gyms are there, what’s the trails like, like Minneapolis has an amazing outdoor experience when it’s not negative 50 degrees. So being there was important with the bike trails and everything else. So it’s a lot of different factors that–we have a massive team of editors and marketers here that are really smart. And we leave it completely up to them to think where we need to go.

Jay Clouse 0:00
What makes your most successful cities more successful than others?

Anthony Vennare 0:00
It’s partly access. So like Cleveland and Pittsburgh, and Columbus, Minneapolis and others do really, really well. You wouldn’t think they would, but no one talks to them. There’s and New York, it’s noisy, in LA is noisy, it’s San Francisco, it’s noisy, but in Phoenix and Boston and all these like somewhat smaller markets, it’s a lot easier. So that’s an important factor. And the other part is, search is a massive driver for us. If you look up a lot of the terms, run routes, yoga studios, juice bars, all those things, we dominate a lot of different cities. So searches the other thing is, was our site launched early enough to be in those markets. And then the last part’s community, really socially engaging, commenting, reaching out, calling like doing everything we can to make sure that the gym owners event organizers…so we really typically don’t charge these local businesses to be on Fitt. It’s all organic content, we work, we try to work with bigger brands, because the local communities are important. I used to be a gym owner in the heart of this. And if we can drive 10 people to your door, it’s amazing, let alone having a brand in a city like Pittsburgh that has 200,000 people that come to it every month. And you know, 20,000 that open a newsletter, which is really high. So we want to be on the community side. And so working with these local businesses and featuring their events for free in putting information out there and just being this kind of like fitness media source on the ground, our product long term, we want to be way more than what we are now with Mindbody opportunity and other stuff. But getting in that city, showing up in search, and making sure that we engage with community is really the secret sauce to, now, originally, like some cities were better than others, and now they’re all just kind of growing at the same hockey stick level.

Eric Hornung 0:00
What are the metrics you look at to say how your business is doing and how healthy it is?

Anthony Vennare 0:00
Honestly, probably a lot different than most people. Revenue’s obviously super important, but we’re not monthly recurring revenue or not planning breakdown of, you know, churn of clients and things like that. It’s, we’re lucky that fitness is still early. And like I said, there’s no, besides Mindbody and the people that play in the b2b space, there’s very limited people in the consumer facing side. So our goal was always build the best brand, best content and focus on long term product viability, like building the CMS from the ground up versus using a system, working on the backend, now where, you know, with Fitts soon, you’ll be able to book classes, you’ll be able to sign up for events, you’ll be able to leave reviews, so doing what Yelps done and other people done, but in a better way. That’s our measures of success, is that, because an acquisition or a partnership long term, selling another, even another million dollars in revenue for advertising isn’t going to change anyone’s mind. It’s having a product that truly will exist beyond us. So that’s how we really look at and then from there, its users and engagement and search and all the factors that show people that are using our content and finding it valuable. And then the last parts revenue, are we actually selling things.

Jay Clouse 0:00
When you sell advertisements or sponsorship, or these long term sponsorships? Like what are the length of sponsorship so someone wants to come on and be a part of the content?

Anthony Vennare 0:00
It used to be super long term and like high level, you know, a couple hundred thousand dollars. We, we have this plan where we sell exclusive rights to a city, like UPMC is in Pittsburgh and Kaiser Permanente is in some cities out west and, you know, trying to get Cleveland Clinic on some cities, things like that. That was the old plan. It still exists in some extent. But now you can come in and sponsor the newsletters for a week. You can do native content, you can do social, we have, we produce photo and video contents, we work on production for some people, we really have made it more accessible. So the range is there. And we’re still testing that out. Long term our goal is to truly either sell the company to someone like Mindbody, or…which will let us be an add on. If we built if we truly build a two sided marketplace, it’s not about revenue now from advertising; it’s about like having this like, you know, two sided transactional marketplace where people are discovering and buying. So the long term revenue is completely different than where we’re at now. So that’s, that’s a really hard thing to do, is where you’re selling and growing and investing and things now–which is why I’m still the only one really doing it–I don’t want to distract everybody with the current model when I can handle it, when long term, we have to essentially build something that makes what we’re doing now obsolete.

Eric Hornung 0:00
How do people discover fitness now?

Anthony Vennare 0:00
It’s the worst thing in the world. You look at, especially for consumers that aren’t already fit and already, you know, working out, that’s the thing that gets me is if you go to a gym and you have a friend that goes to gym, and you know this and that, like, it’s easy to be in the network. But if you’re someone that’s out of shape, or doesn’t work out or is new to a city are doing this and…fitness is not just going to the gym, it’s trails and taking, it’s eating healthy, it’s events, it’s meetup, it’s, it’s social, it’s, it’s your life for most people if you think about it. So there is no real way you’re on Google, you’re looking on Instagram, you follow a trainer, you, you search here and there some random local magazine puts out a post. There is no…when you think when you ask someone how they find restaurants, there’s 10 things you could say that make ton of sense. But for fitness, besides ClassPass and the Mindbody app, which you know, I have my opinions on both, and I don’t think they’re the best either way, there is no other resource at scale, which is the craziest thing to me, which how big fitness it is and how big everybody talks about it. That’s what we want to b. And we know like I said, we’re not going to be a media advertising network forever. We’re focused on building that truly functional, user-first discovery platform for health, wellness, fitness, eating healthy, working out, going to events, going outside, all of that bundled into one.

Jay Clouse 0:00
Why do you want to make obsolete the media and advertising side of the business?

Anthony Vennare 0:00
I think it can be, it can still exist. I think advertising has its way, once you have a system and a product that exists beyond it. Being solely focused on advertising, I think it distracts from the overall goal, which is building the best user centric product. So they’re kind of at odds at sometime. Put ads here, do this, sell this or create the best content in the best newsletter, or the best piece of information. So it’s not that we might want to make it obsolete, but it needs to be, you know, far down on the line of important things, because you can make a better product and make revenue and generate revenue from transactional b2b offerings, kind of an advanced SAS advertising model down the road.

Jay Clouse 0:00
The advertisers that you’ve brought on to this point, what do they need to hear to say, this is where we want to put our advertising dollars, or what do they need to see to continue to put advertising dollars there.

Anthony Vennare 0:00
And that’s another thing I don’t want to sound–I don’t want to say anything that comes off as as mean or rude, but a lot of the times we talk to businesses, and their metrics and goals are just completely unimportant, total number of impressions or how many clicks you’re gonna go this page or what’s this or that when, you know, there’s a bigger opportunity at hand here for a lot of these businesses. So it’s hard, you have to have everybody’s opinion on what matters is different right now, especially if you’re going direct to brand. And then the other side, if you go to agencies–I have a lot of friends that work in agencies and or own the–but I hate every single person that works at a media agency. Seventy-five emails later, you get something done so many cooks in the kitchen, so many young people hustling and getting paid no money while the executives come in and blow up a project for no reason because they have no idea. It is the most infuriating thing ever. So at some ends, we want to work with them, because they at least understand certain things. But on the other side, they’re just miserable to work with. So not only is important to build a better product and better revenue model that is supplemented by advertising but it’s not the focus. It’s also saves me just a ton of agony dealing with some of these people.

Eric Hornung 0:00
Is this a billion dollar business? And does it matter if it is or isn’t?

Anthony Vennare 0:00
Absolutely not. It’s kind of funny. I got caught up in startup hustle entrepreneur culture and I’m like, Oh, I need to build the next Stripe or Airbnb or whatever. But my brother and I, coming from we came from, looking at what we have realized, one, what’s the point? Raising money half the time, like, we went and talked to investors, we had options on the table from really big name investors. Everything they said or did just did not feel right to me. I didn’t like what they’re saying. At one point time, I had investors say like, hey, come back with like higher metrics, show us like what you’re really thinking. I’m like, so you want me to lie? Cool. I’ll make up numbers. Like the industry itself is just a weird drink your own Kool Aid thing that I just can’t stand. And chasing that dream just made no sense. We could have built a model in business that let us raise 10 million and then–5 million then 10 million then 20 million, and had bringing investors. But we own more than a majority of the company. We control our own destiny, we hire people, we have no one forcing us to do things to meet certain unimportant metrics. And, you know, to sell a company for even 10, even $5 million, or 10 million, or 20, or 50, or hundred, and you own a lot of it, you make a ton of money. And not only that, you get to build something and control it yourself. It’s not about living this, you know, the things you read about in TechCrunch other places, it’s like point .0001% of all the all the companies out there, a lot of them fail or you know, half the time you hear about founders that sold a company for x and made zero dollars. You know, it’s just not what people chasing that dream, I think, is, is not what it, is not what it is perceived to be. And that’s why, for us, not only do we not want to build a billion dollar company, I want to build a company that scales and grows and hopefully exits to a company like Mindbody where I can go there and change the product at that company and, you know, be a leader there one day, and be a part of a, you know, I could be a part of a $2 billion company tomorrow, that’s the very important part of it. Why do I have to raise, you know all this money and do all this stuff to get there when it’s just a different way of looking at it.

Jay Clouse 0:00
I’m still fascinated by the investment from the owner of the Pirates at, you know, almost $2 million of his own money. What is the conversation like with an individual where you ask for $2 million? So you know, you mentioned, you just turned 30. Not many people under 30 have asked for $2 million with somebody’s money. What’s that like?

Anthony Vennare 0:00
The the joke around the offices that I am never prepared, but I always deliver. So I didn’t come in with some massive pitch or process or system. It was like, hey, I want the opportunity to meet, I know you invest in companies, can I get in front of you, and whether it’s Mindbody or them or others, I get in there and I tell my honest, probably too matter of fact…I don’t pitch crazy pie in the sky things I don’t you know, say some crazy, we’re going to build the next next, you know, Yelp or whatever, it’s very Matter of fact. Here’s I want to build, here’s what I want to do. Do you want to support us, like this is it, and we’re asking for half a million dollars or a million dollars, whatever the number we had in mind. And it wasn’t that it went from, Who are you to yes, in in one meeting. Same thing was even a company like Mindbody. Within the first real meeting that we had with them, the partnership option was on the table because they just saw what you’re trying to do something real and we weren’t, we weren’t playing games. We weren’t hiding behind it, you know, some idea it was this is what we’re doing, this is what we’re going to do. Would love to have you on board. Let’s go. And I think a lot of that was people refreshed from, you know, not giving them a deck with, our industry is total of $2 trillion, and we get 1% market share. I didn’t even know that was a thing until I met other investors later down the road.

Jay Clouse 0:00
Anthony, can you tell us about your team?

Anthony Vennare 0:00
Yes. I love our team. We have an amazing team. And I love that we’re based in Pittsburg. To say you know a kid they grew up in Mount Washington, which is you know, the city of Pittsburgh, and from a poor, Italian family, and to say now that I employee, you know, 20 people, or whatever the number is now is probably my favorite thing of all. And our team is made up of, we actually only have two engineers, one product guy, and then myself, my brother, and then a lot of editors, marketing, content, photo, management, and that full time team is all here in Pittsburgh. Outside of that we have a massive contributor base of contractors, freelancers, people live on the ground, all the content that’s made is made from people that know and live in that city. And obviously, they’re not our full time team, but they’re obviously team members as well.

Eric Hornung 0:00
Well, this has been awesome. If people want to find out more about you or Fitt, where should they go?

Anthony Vennare 0:00
Yeah, I really appreciate it, it’s been fun. My brother is usually the one who gets to talk to people. So it’s nice. I’d say, first thing would be Fitt.co, F-I-T-T.C-O. Go there, find your city. Check out the content. We’re really focused on improving the product. We have new designs and launches coming over the next few weeks. Let us know we thin. Sign up to contribute. And outside of that, on LinkedIn, I put out a ton of content. And it’s all about the fitness industry, what’s happening, wellness, consumer. And on that side, it’s insider.fit.co, so Fitt Insider. And that’s the industry publication I mentioned where my brother and I are putting out content left and right on what’s happening, and he is the host of our new Fitt Insider podcast.

Jay Clouse 0:00
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Jay Clouse 0:00
All right, Eric, we just spoke with Anthony Vennare of Fitt. Where do you want to start this exercise?

Eric Hornung 0:00
Oh, man, that’s pretty good. Did you have that one saved up?

Jay Clouse 49:14
Nope. I just came up with it on the fly.

Eric Hornung 49:19
I don’t know how we work out. I’m not gonna lie. Anyway, so here on our deal memo, we like to answer a few questions, mostly around founder and the market and the opportunity and the business model. So I think, Jay, let’s start with the founder. I think this is an easy one. I think we both kind of feel the same way. Anthony aka Tony Lewis is a hustler. He seems to be the kind of person who will get something done when he has a vision and a plan. And I think the miriad of stories that he told about ways that he contrived to make money demonstrate that he has a wide range of abilities to sell. I also think it’s telling that he is the only salesman at the company still. So he’s obviously very effective at what he does. What do you think about the founder?

Jay Clouse 50:18
I agree, total hustler. I love having conversations like this every couple of months where somebody reminds me that money is abundant. And sometimes we think it’s harder to make money than it actually is. Now, that being said, it’s definitely difficult to build the size of company that Anthony did with his gym business, but hustle and doing untraditional things and things that don’t scale go a long way. And a lot of, a lot of the real traits about Anthony that I liked as a founder were very understated in his interview, you know, from…I tried to dig in a little bit into even the experience of basic training and training to become a Marine, and he kind of put that aside as something that wasn’t much to fixate on or too difficul. And yet, I’m sure that is one of the most extreme and difficult processes and experiences someone can go through. But he said, you know, at the age of 20, to I’ve already gone through that experience with the military and his father’s illness, everything else has seemed like a cakewalk, he says, this point, and you just see it in his hustle, like nothing stands in his way, he’s not–he’s not pausing to think well, is this email written the right way? What if they don’t like what I have to say? He’s just hammering through brute force getting the reps in, to get in front of people, to get the conversations he needs to have and to sell his vision, which I really like. The quote that he said, the joke around the office being that he’s never prepared but always delivers. I believe it because, you know, it seems like his style is I’m going to be real, I’m going to tell you my story, I’m gonna tell you what I care about, I’m gonna be genuine and it’s something that I’m sure the listeners can feel in the interview just how genuine and maybe you can call it non traditional, but in a refreshingly good way, Anthony presents himself.

Eric Hornung 52:08
So an area I had a little bit of a shadow pop up was in the business model itself. It’s currently all ad supported. And they’re looking at this partnership model. And then there’s this newsletter, and there’s this podcast, and there’s just kind of a lot of different things going on. And I didn’t feel like there was one clear, alright, this is how we’re going to scale our business model. This is the business model that’s going to wor. And there are a lot of great businesses that are ad supported, but I don’t know that I felt super comfortable with how they were going to make money going forward, not to say that they won’t make money. Just, I was uncomfortable with how.

Jay Clouse 52:51
It sounded to me like, and he only alluded to this, and so I may be wrong, but the way that I read it was ad supported now, which sounds fairly lucrative at this point, but also sounds like he’s trying to move away from it. And you know, the shadow to me was, well, maybe it’s just not a sustainable model, because big budget ad spends go trend to trend, or it’s hard to quantify the ROI. And so it’s just not going to be there forever. We talked about, he talked about a two sided marketplace. And so I think the idea is getting even more to that Yelp style of showing and recommending fitness providers and locations and things based on ratings of users, but helping those users then to book sessions or pay for sessions and going through the app that way. It sounds like there’s going to be transaction fees happening,

Eric Hornung 53:42
Like Open Table, for instance.

Jay Clouse 53:44
Like Open Table or, I don’t know, just something that’s booking and paying through the app or purchasing through the app. But you’re right. I also didn’t get any sense of what that opportunity looks like at scale. I mean, you asked him on the nose, is this a billion dollar company, and he said absolutely not. And that’s okay; but how far south of billion are we talking? And you know, that question only matters depending on who the investor is, what the fund size is, and what your expectation of return is for this business.

Eric Hornung 54:14
One of the things I’m I really like about the company is just the market in general. I think we’ve been on like a 20 or 30 year run of things getting and trending towards healthier and better for you, and all of this kind of like healthy lifestyle living. Whereas like, I don’t know about you, but and I grew up in the 90s there was a lot of fast food, which was the normal way of life for people. And I think a lot of that has kind of trended away over the last 25 or so years. There’s probably a lot of good studies on that as well. But I don’t think that’s a trend that’s going to stop or at least doesn’t feel like it because our generation cares so much about those things. So we probably have a good runway on this healthy living hell lifestyle kind of market and environment. And the reason that’s important is because, within that, there’s always these trends that like, shoot up and shoot down. There’s keto, and then there’s the Atkins diet and then there’s swimming upside down or whatever like the trend of the day is…

Jay Clouse 55:20
What?

Eric Hornung 55:20
I don’t know, dude, it was something I made up.

Jay Clouse 55:21
What?

Eric Hornung 55:23
Just wait until swimming upside down and comes in, in vogue and you’re like, oh, Eric’s a genius. He knew about this back in 2019, 2020. So I think that investing in those micro trends are, is very scary, because yeah, you might hit a peloton that takes off, but you might just hit the back end of a trend and invest in something that’s dying. But in the long run, if you have exposure to all of the health trends, I think that’s a good thing. And I think they’re in a good position to talk about what the new things are over time.

Jay Clouse 55:58
People who fall into this fitness minded category seem to be just exceptional consumers, because being health conscious is not the easy decision to make. And so they’re already showing some level of willpower and willingness to pay for premium offerings. And they are prone to communities, like these people thrive within tribes of each other. So I think Fitt is really well positioned to have sort of the ear of this, this premium consumer who is prone to identify with movements and identify with brands. I mean, in last decade, we’ve seen things like Lululemon, like, really take off, groups on college campuses, like, Charge from Ohio State, really taking of. And you see that brands find a lot of value in getting in front of those targeted consumers. So even though we didn’t quite get a quantification of the opportunity, I err on the side of believing there’s something very positive there and can be monetize, even if it’s from thinking about the asset class of a community of premium consumers. I just think having raving fans of a brand is going to be one of the most valuable assets 10 years from now. It seems like Fitt’s going down that path but little bit of a shadow that we didn’t have any more clear numbers in that.

Eric Hornung 57:20
One of the things about targeting premium consumers is you get hit a lot harder in a downturn. So I’ll be interested to see what Fitt’s business model looks like if, you know, people aren’t going to $45 SoulCycle sessions anymore, or they have to kind of dial back on their fitness budget, or they can’t go to–what do they call Whole Foods, whole paycheck? They can’t go to like the premium style grocery stores anymore because of some macroeconomic shift or some sort of consumer downturn, consumer spending downturn in the United States. That being said, I do think the macro trend is in the positive, is in a positive direction for fitness in this country, I think it will stay around. I just don’t know how resilient it’ll be in the downturn. And I think that it’s really good that he’s not taking on excessive amounts of funding. Because if there is a downturn, companies that are not growth-at-all-costs are going to be able to weather that, figure it out, pivot, and potentially survive.

Jay Clouse 58:27
He talked about the best cities on fit being those where there are fewer people talking to the consumers you’re trying to get to the coastal cities, Los Angeles, New York, San Francisco being noisier and harder to get in front of those customers, but places like Pittsburgh and Cleveland being easier to reach. And I wonder if this company can be built purely on the back of those second tier cities, or if it needs to get into the New York, the Los Angeles to really hit it big. And I’m thinking it’s more like the former. But I just had kind of an open question in mind of, okay, those cities do really well, can you just crush all of those cities and be happy there? Or do you need to penetrate those noisier markets? Is that easier once you’ve gotten all the smaller markets? Is it kind of like a bubbling up that you get t? Just an open question that I had that I’m not sure how to reconcile.

Eric Hornung 59:18
I think you’d ask the same question about upside. Because this is essentially a media company, as he says, so can you bubble up and then get into the national media spotlight, where you are in front of all of those big cities and all the big media syndicates, or is that not a viable strategy? So self critique, Jay.

Jay Clouse 59:37
Mmhm. Really positive signs to me are this partnership with Mindbody, one of the biggest players in the space saying we’re going to put our own investment and money where our mouth is here.

Eric Hornung 59:48
My new yoga studio uses Mindbody as their b2b system.

Jay Clouse 59:51
Seems like most systems do. That’s a really positive sign to me, because they have their ear to the ground, they’re seeing trends, they’re seeing where the puck is going. And if they’re saying, this guy gets it, he’s going the same place. You know, he talked pretty openly in that interview about, you know, potentially exiting to Mindbody. And that’s a really good, you know, starting point to do that. And so as an investor, I’d be looking at that like, Okay, I understand the exit strategy and who the potential acquirers are. And it seems like they have proven vested interest as it is.

Eric Hornung 1:00:21
Yeah, partnership is usually the first step to acquisition, so I could definitely see that becoming something. How big or what it is, I’m not sure. And whether or not that’s the path they go. I have no idea. So Jay, what are you looking for from fit in the next 6 to 18 months?

Jay Clouse 1:00:39
Well, I’m looking more at what is this next evolution of the business that’s changing the revenue model, and how are they positioning themselves or beginning down that path? You know, Anthony said, revenue is great, but it wasn’t the main KPI he pays attention t. If they’re going to make their advertising and sponsorship revenue arm either obsolete or a small part of their strategy, then I want to see what the new strategy looks like and how that is going. He mentioned that search is a huge driver for their business. And a huge part of their team is dedicated to marketing, photo content management and extensively setting themselves up to capture search traffic well. So I want to see how that is growing and the markets are already in, how quickly they’re expanding into other markets. There you go, Eric, there’s three or four things.

Eric Hornung 1:01:27
And very few of them are revenue.

Jay Clouse 1:01:30
The minority.

Eric Hornung 1:01:32
I want to see traction on what’s happening with this newsletter in this podcast. They have the site, which creates a lot of content, but now they’re putting out this newsletter too, because they think that they have opinions that are valuable in the fitness space, not just these are the 15 best coffee shops in Columbus, of which Roosevelt coffeehouse is number one, just FYI in case anyone shows up there…little plu. But also talking about industry trends. And I want to, I want to follow closely with that newsletter and with that podcast and see those spaces are extremely lucrative if you can become a top newsletter, or a top podcast. So can they become the strict tacori or 2pm or something like that in terms of the newsletter? And can they become a great industry focused podcast? Because those are going to be potentially very big revenue drivers in somewhere that they can move that advertising reliance to. Yeah, so I want to learn more about those.

Jay Clouse 1:02:32
Love Roosevelt Coffeehouse, specifically the one in the new gravity development downtown or just west of downtown. If you’re in Columbus, come by, check it out. I’ll probably be working there and you can say hi. In the meantime, if you have any thoughts on this episode, you can tweet me…you can tweet at us @upsidefm or you can email us Hello@upside.fm, and we’ll talk to you next week.