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On Thursday, April 23, 2015, Workbar in Cambridge, Massachusetts hosted the 17th installment of Startup Stir: “Startups Hacking Fitness.” Photos from this event are at Startup Stir’s Facebook page.
Who were the panelists?
Founders of Boston fitness startups:
- Nicholas Warren of Perfect Fuel (chocolate energy)
- Jessica Bashelor of The Handle Bar (cycling studio)
- Lance Pinn of Brooklyn Boulders (climbing gym)
- Patrick Campbell of Price Intelligently (Not a fitness founder, but not a mistake. Read on, you’ll find out why!)
Because Boston loves fitness, the 119th running of the Boston Marathon was the Monday before, and because Startup Stir founder Aaron Radez wanted to have conversations with these athletic entrepreneurs, but it would “be too creepy to just like ask them to lunch or something”, so he made an event out of it.
Were there treats?
Yup! Snacks and beverages were provided by:
- Angels Envy Bourbon Whiskey
- Perfect Fuel Chocolate
- Prizes for best tweets, including a two-person learn the ropes class at Brooklyn Boulders, and 5-day pass at coworking space Workbar.
What topics were covered?
- Pricing stuff, like the cost of real estate and factors in pricing.
- Practical stuff, like the importance of location and the pros and cons of franchising.
- Personal stuff, like founding stories, fears, dreams, and new kittens.
What are these founders’ stories?
- Lance caught the climbing bug, but there was nowhere to go that wouldn’t require a day trip (and therefore a rental car); or that wouldn’t cost an arm and a leg (which you kind of need for climbing).
- Nicholas was at an out-of-state triathalon, and upon realizing he had forgotten his ginseng at home, drove around all night on a frantic yet unsuccessful search. Sleep-deprived and ginseng-less, his performance the next day suffered. It was time to make ginseng more readily available, and what better vehicle for it than cocoa, the quintessential superfood?
- Jessica, on the other hand, just knew she wanted to start a business–not necessarily spinning. While working for a 4-person fitness startup, her observations revealed to her that “Hey, this isn’t impossible”, so she went for it.
What’s the deal with franchising?
Franchising allows you to increase your number of business locations without investing your own capital, but presents the challenge of maintaining quality across locations. Jessica has considered franchising, but not until she has her processes organized such that they can be replicated.
So what’s Pat from Price Intelligently doing here?
Pat was the key facilitator of conversation about pricing–whether for a bar of chocolate, an hour of climbing lessons, or a month of spinning. One concept he discussed was segmentation, whereby the price of a product is adjusted according to its location of sale. For example, a month of climbing will cost differently in Chicago versus Brooklyn, due to differences in average income and transportation availability in those areas.
Another concept Pat discussed was value-based pricing, which considers the customer’s perception of the value of the product. I.e. at what point would this product be so expensive that you would never consider purchasing it? And conversely, at what point would it be so cheap that you’d question the quality of it?”
Identifying this price sensitivity point can make a huge difference. For example, if spinning class members are willing to pay $28 per month instead of $26, and you run six 40-person classes a day, this could be the difference of $1500 per month, which could be alleviating your rent.
Do you ever get concerned that your products are just fitness trends?
(The actual question asked was, “Do you ever worry that, like, tai bo is going to come back in 8 years?”)
Jessica: “If I was scared I would never have started it. You have to kind of flow with what’s in the market. You don’t know what the business will look like in 10 years, but you can continue to evolve.”
Lance agreed that while it is important to focus on market trends and opportunities for growth, it’s most important to focus on making your current product the best it can be. “Right now, there’s room for growth in many areas…but we don’t worry about that so much as about maintaining the quality of our product.”
As entrepreneurs, what are your thoughts on dreaming big?
Jessica: “I don’t really spend a lot of time dreaming big. It’s more about ‘What’s next…What do I have to do today. I had a vision, but so much has changed from where it started, so it’s just about hustling. Sticking to the brand and seeing where it takes us.”
Nick: “I try and dream big every day. I wake up with a huge smile, not just because I just got a new kitten, but because I’m asking myself ‘How much more value can I add to the company today by each action I do’”. But on the other hand, he cautioned that “You have to stay absolutely laser focused on the step you need to take today. If you bite off more than you can chew, you will run yourself into the ground.”
Pat agreed, saying “You have to be mindful of where you are on the spectrum.” (Aaron then accused Pat of “always having to make it that quantitative.”) “Dreaming big helps you to keep going, but when you’re at a high point you have to recognize that there’s still all these other problems that need focus. So when you’re thinking too highly, you need that laser focus to keep you level.”