Today’s guest says he burned through his savings with no end in sight. In this interview you’ll hear how it happened and how he turned things around.
This interview is sponsored by Walker Corporate Law, but I’ll tell you later why that’s the firm that entrepreneurs use.
Andrew: Hey there freedom fighters. I am Andrew Warner. I am the founder of Mixergy.com. I am the place where you come or Mixergy is, home of the ambitious and the place where you come to listen to entrepreneurs tell the stories of how they built their businesses. And you, if you’re listening, are probably an entrepreneur, and I’m wondering how close did you get to closing your company. I mean, really, just shutting the whole thing down?
Today’s guest has been through the time when he burned through his savings with no end in sight. In this interview we’re going to find out how that happened and how he turned things around. Brian Wang, who you see on the screen, is the co-founder of Fitocracy, a fitness site and mobile app that helps motivate you to reach your fitness goals.
And I should say before we start this interview is sponsored by Walker Corporate Law, but I’m going to tell you later on why that that’s the firm that startups prefer. For now I want to welcome Brian. Hi, Brian.
Brian: Hey, Andrew.
Andrew: You have a twin brother, right? And growing up you and your twin brother had different interests. What was the difference?
Brian: So just starting off, my brother, Andrew, and I growing up, I’d say, had always been more similar than not. But one thing that was interesting thinking back on our childhoods is he actually showed more signs of an entrepreneur than I did growing up. I can look back to the days when we were still in infancy and my brother, Andrew, generally became interested in how he could take certain items on eBay and sell them for a profit.
He went through a few different cycles and I observed in awe where there was Pokemon cards when we were kids. When you would a new pack you’d go to the game store for five or ten dollars and we got some rare cards and sell them on eBay. That was amazing. Same thing happened for Beanie Babies. That was all the rage. Same thing for [??]. They were coming out attached to memorabilia. That would get sold out and then I’d just sell it on eBay.
I still remember, this was way before [??], way before [??] so you had this whole thing where you would get the buyer to mail you a check, you’d cash it, and then you would spend it over by mail. We were eight or ten years old at the time. [??] We probably made a few hundred dollars. I don’t think I really did much, but I was always watching him. I was fascinated, but he was the one to do that.
Later on in life he went the “safe” route and [??].
Andrew: Did you feel growing up that, “Hey, this is not going to be my thing because Andrew, my twin brother, is so much better at it?
Brian: I don’t think I consciously thought of it that way. It was just a kind of fun thing to watch. When I was a child or adolescent I don’t think I new what I wanted to be. It’s not an uncommon thing. I just kind of did what I was told as a kid, grew up, got good grades, studied, just kind of coasted through. It went very well. And I had no real conception of what I wanted to do.
I was going to college. At that point it was what I could get into. It wasn’t like I knew I wanted to get into some amazing CS program or business school. None of that, I didn’t really think about. I don’t think I knew what my calling was until many years later, until three or four years ago, really.
Andrew: Three years ago, what happened then that turned you around?
Brian: It goes back four years ago. This was in 2009. And exactly around 2009 where I had just moved to Connecticut from Manhattan. I was starting a new job up there, and I kind of knew just really I didn’t want to be there. The place I was working was not really interesting to me, and I wasn’t really happy with how my career just got started out of school. I graduated from U Penn in 2008. I studied economics. I was kind of following the beaten path.
I was going into consulting or working in some capacity, [??] skills [??] and at the same time, this was in late 2009 I started noticing that there was a lot of interesting energy coming from New York when it came to the start up ecosystem. And today it’s way larger than it was in 2009 but I started keeping tabs on some of the interesting individuals that would be posting things on Twitter and blogs and so on and so forth. And so I got very interested in that.
And at the time I was also keeping in touch with my best friend from college who went on to become my co-founder. And I think it was a mix of two things: 1) I wasn’t satisfied with my job at the time – I didn’t know what I wanted to do, and 2) I’d always had this idea of starting something with my co-founder Richard. Later on it was kind of, “I’m going to push it off and that’s going to happen when I’m 30 when I’ve accrued a certain amount of experience and so on and so forth.”
But I think because I’d just moved into this new job and like I said I wasn’t happy, I figured, “Screw it! Why not do it now? You know, I don’t have a mortgage, I don’t have kids, I don’t have real crazy obligations.” And I see people who are not that much older than me doing really amazing things in New York and I had that going back in terms of the city so I figured let’s go and try something out.
Andrew: Isn’t that interesting that we tend to think that only people who were born with the entrepreneurial instinct, as we said before the interview started, people who had lemonade stands and were selling, that only they are meant to be entrepreneurs.
But I find that your experience might even be more common: people who see the possibilities by reading other entrepreneurs’ stories, seeing how they build their companies, seeing that it’s possible, maybe meeting them in person and being surrounded by them, are much more likely to say, “Hey! This is not one of these fantasies that only other people experience. It’s much realer. It’s much more attainable for me.” Before we hear what you did to start in business, I’m curious if there’s one person who stood out for you who was especially influential.
Brian: Yeah, you know I spent nights reading books like Founders At Work and things like that and that was always nice bedtime reading and took me away from where I was at the time. But the one individual I can really recall that had the larger influence on me back in 2009 was a guy named Spencer Fry. Spencer was running a company at the time called Carbonmade. It was an 100 percent bootstrapped company. [SS]
Brian: Carbonmade, yeah.
Brian: It’s an 100 percent bootstrapped company that was, basically they exist to help designers put their work online. And he had been blogging quite a bit and just chronicling his journey as he was building his company. And I remember cold emailing him, saying, “Hey . . . ,” I can’t remember what I said at the time but I said, you know, basically that I wanted to meet him.
I wanted to learn about his experience, figure out what the whole start-up thing meant and how you get started. Especially if you’re not technical, if you don’t know how to build applications and [??] your products. So I eventually got his attention. I remember meeting him ever so briefly at the time and I was just starstruck. This guy who was doing a million things at once was willing to take 30 minutes to meet with me.
And it’s funny because I think back then I didn’t really remember it afterward but today now we’re actually, you know, good friends and we’re hanging out. He’s working on a new company now and I’m in touch with him to go work out with him tomorrow. So kind of looking back four years ago and getting in touch with him as a complete stranger to where we are now, it’s been really, really fascinating.
And, hey, he did really, really well with that company as well. So it was nice to be able to watch him go from kind of mid-point to building to a really large success and then he goes on to the next thing.
Andrew: So, right around that time you were a product manager at a Connecticut agency and this idea came to you. Where did this idea that today is Photocracy [SP], where did that idea come from?
Brian: It really stems from the fact that my co-founder Richard and I grew up playing lots of video games. We were gamers at heart and later on in life we had become huge fitness nuts. So, you know as a teenager Richard was very overweight. He was 220 pounds as a teenager at 5’9, 5’8 and I was always kind of the skinny weak kid who wasn’t playing sports.
So we got really into the health and fitness side of things in college. We were entering college. And so we became really good friends over that. And the question really was in 2009, let’s start a company together. Let’s come up with some product ideas. Let’s figure out what we want to work on together and for the majority of, you know, late 2009 and early to mid 2010, we were working on something completely different.
It was actually a social gift recommendation service. Which you know, funnily enough, there was a million of those that popped up later on. So we scraped that idea and then we found ourselves hanging out Richard’s apartment, he was living in Washington DC at the time. This was around August. We visited the idea of working on something in the fitness space.
The reason that we always shied away from it was because we perceived it as very competitive. We thought, “Yeah, it’s going to be hard to make a dent here. There’s already a lot of applications out there, how are we going to build something that’s sufficiently different or interesting for the consumer base?” And somewhere along the way, we thought, “Well, what if we turned fitness into a video game?”
And I think Richard will tell you, he started thinking of that analogy and concept years ago. He had grown up playing Everquest, a whole bunch of role- playing games. And we figured, well, there’s actually a lot of parallels between progressing inside of a video game and progressing in a gym and your own physical fitness.
So if we could somehow cross those two experiences and mirror them on top of each other, that would be really interesting. That would be an interesting spin on workout logging. We just understood it intuitively. When that idea sprung up we said, “Hey, let’s give it a shot. Let’s create a workout tracker that involves a point system, leveling, achievements and quests. The whole nine yards.
And before you knew it, we just started working on that a couple months later. We told our employers, “Hey, we’re going to do this thing. We’re going to roll off by the end of the year. Just give us a little time.” And we were off to the races.
Andrew: What year was this?
Brian: This was late 2010.
Andrew: Yeah, I see that 2010 you launched a site that was just a landing page. It said, “Fitness is a game, play to win. We’re going to make fitness fun, motivational and give you awesome results. Leave your email address to get an invite, hit submit.” That’s as basic as it was, nothing coded at that point right?
Brian: That’s right. Yeah, we started our first code in October 1 of 2010. What was interesting about that is Richard knew how to program, he had grown up actually teaching himself how to program, it was primarily a background in desktop applications on Windows platforms, but he had never built a web app. He had never built something that had really focused a lot on certain applying actions and everything that’s involved with building an application online today.
So he had to teach himself all the ins and outs on that side. I had to teach myself web design, front end design and HTML, CSS. There’s a lot of learning by doing, a lot of just experimentation. It was this crazy Frankenstein of a product in the very early days. But we somehow managed to pull it off.
Andrew: Give me an example, what do you mean by Frankenstein of a product? What would make us feel that?
Brian: You can’t see it today because it’s quite different, but back then, for example, I was looking at how we should handle notifications for a user. Let’s say someone has a [inaudible] Fitocracy, about the conduct and activity, how do we want to let the user know about that and see it on the site? I would take a look at how Facebook would do it. I was taking a look at how Cora was doing.
At the time I was a huge Cora fan, I was obsessed with it. So I would spend a lot of time there. I remember just taking a look at their drop down menu and how the user would store through their notifications. I would not only look at the visual design but then I would take a look at the HTML structure and the CSS itself and figure out, how do I replicate that on Fitocracy’s end and make it look different, make it look the way we wanted it and our own design.
That was one panel, this upper right section of the site where we’re dealing with notifications. And then the navigation for the rest of the site was completely different. That was probably stolen from something else. We would piece these different little pieces of functionality together and hope that it would work. There was no cohesiveness to the design, we just were taking familiar patterns from other sites and applications and implementing them into Fitocracy at the time.
Andrew: I see. So you quit your job though to do this?
Brian: That’s right. So we went part time with our employers for the remainder of 2010 and then January first, 2011, I still remember it, we were just full time, completely.
Andrew: What do you mean, you remember telling your boss this is what you’re doing?
Brian: Right so I think in August or so 2010. I went to my bosses office and said, okay. I want to give you some pretty advanced notice that I’m intending on working on a start up and going (?) time until 11, but because I was dealing with the clients and accounts for my employer at the time I figured why don’t we negotiate some sort of part-time arrangement for the remainder of the year and then by the end of the year we’re fully transitioned and I’m off doing my own thing.
For October, November and December of 2010, I was living in Brooklyn, New York at the time. I was still driving up to Connecticut (?) times a week. That was actually great because I could still pay the bills at the time. Then in 2011 it was just you’re (?) and this is it, you’re working off savings. You better make it work.
Andrew: Why do that? I mean, I have people in my audience who are developers, who have ideas, who still won’t quit their jobs until they have enough money to live from their start up or until something else. Here, you can’t really code, you’re not really prepared with the site, you don’t have customers, you don’t know where you’re going yet, but you do have a vision. Why quit?
Brian: Well, it’s that whole saying of burning of ships, right? I knew that at the time being 24, 22, 24, I didn’t have much to lose. Yeah, we could have gone and maybe worked on it like some weekends, but there was so much passion and enthusiasm driving us at that point. All we wanted to do was work on it full-time and . . .
Andrew: So, burning of ships means you didn’t want to have any other options because . . .
Brian: Because we wanted to be in a sink or swim situation. We knew that was going to be a forcing function for us to make it work. We knew that we were going to have to pull in 12, 14,16 hour days and that was going to be impossible working a full-time job. Also keep in mind at the time I was living in Connecticut. My (?) was living in Washington, D.C.
If we were going to be working on this nights and weekends, it would have been completely remote and it just would have been hard to build the momentum that we really thought we needed to get us off the ground.
Andrew: All right. How long did it take you to launch?
Brian: We launched a really rough (?) back in November 2010, so only a month and a half or so. Don’t get me wrong, it was supremely ugly and very (?) but it worked. That was just a few users, friends and family to kick the tires and what not and we released this slightly more refined version around November of 2010. That’s when we first went to Reddit and went to the fitness section of Reddit. We said, hey. This is the new (?) we would love testers, please (?) up to try.
That was when we first got a few hundred users. That was exciting at the time because there was a pretty pronounced response back then and we (?) initial interests back then. Well, I’d say a lot and in proportionately to about zero.
So, yeah. About a month to get our basic (?) out and that (?) went along for a bit and we kind of went into an official private Beta in February of 2011. So, we spent about two, two and a half months kind of rebuilding what we had at that time, redesigning it, (?) functionality and then we said, okay cool. It’s February . . .
Andrew: What did you redesign based on the feedback that you were getting from people from Reddit?
Brian: A lot of it was building new features or features that users wanted to see. A lot of it was creating a more coherent design language so to speak in the application overall. So, you were inside the application. You knew it was (?). You know what to expect and a lot of it was just you know, we made every effort to respond and interact with every user that contacted us.
Everything that we know (?) we responded to immediately and we were just collecting feedback on hey, I want to see this particular exercise in your database so I can track it.
A lot of the early feedback actually was on how we were scoring exercises, right? So, there was this whole point system and anytime you attach numbers to a user action is going to be some contention on if it’s higher or lower than what they think it should be and there’s some kind of subtle feeling of getting judged in some way. So, there was actually a lot of feedback (?) point system at that point and kind of have a game we can exploit.
Andrew: I’m on Reddit right now and I see something. Let me see if I can show you. Actually, let’s see if I can show it in real time.
Brian: Here’s an interesting discussion that’s going on right now…
Andrew: You know what, let’s talk about overall. Why are people talking about you so much on Reddit? How did you get that to happen?
Brian: So, for the year of 2011, we were in private data for an entire year. What that meant was that you need to have an invite code to access Fitocracy. You know, I don’t really know what it was, because I’ve seen the same mechanic with plenty of other services and products out there and not done that well. For us, that was a huge driver for acquisition. We ended up finding people ravenously going after any of our links and any of our codes.
Andrew: It was the invite process. That’s what got people on Reddit to care so much. What was the invite process?
Brian: At the time there was this kind of exclusivity to it. You needed to use someone else’s invite to be able to sign up, and each invite was only good for ten spots. So, every time that link was used up, you kind of had this loop where people would go back to Reddit or a dashboard or any sort of forum or social discussion to say, ‘Hey, that code is no longer working.’ Now there are ten other people that say, ‘You can use my code.’
Andrew: So, if I sign up, I’m good. I’m a member no matter what.
Andrew: But, I also get to invite ten other people to join. Once my ten people join, that’s it. I can’t invite an 11th person. I just have to hope that one of those ten people shares their code on Reddit.
Brian: That’s right.
Andrew: And it was that process. Why do they care so much about fitness on Reddit?
Brian: In this specific section, it was the fitness section of Reddit.
Andrew: It was the Reddit/R/fitness.
Brian: That’s right.
Andrew: And then you guys created your own sub-Reddit.
Brian: We didn’t create that, someone else did.
Andrew: Oh, Okay.
Brian: There’s a sub-Reddit for Fitocracy. It was interesting, because it almost kind of became a customer support channel in some ways. People would post things such as new features, or ‘can we change this?’ and so forth. I don’t think it’s actually a well-trafficked area of Reddit. Fitocracy was a very largely discussed topic on R/fitness for a long, long time.
Now, it’s interesting, when you look back in the story arc, is that in 2011, we were kind of the heroes of the day. I say that with as much humility as possible. I think if you look at it objectively, Fitocracy was this fixture on R/fitness for a long, long time. As we were going into 2012, I think it was still very much the case. We were doing something very interesting.
It was game-ification idea that appealed naturally to the Reddit crowd, and you didn’t really even need to explain what it was. I think as we got into late 2012, going into 2013, Fitocracy started to fall out of favor on Reddit. That’s probably just a discussion for another time, but there are a number of reasons for that.
Brian: I think largely because of the sort of crowd that our R/fitness attracts tends to be a more autodidact individual who is willing to go and research all this stuff around fitness. They tend to be more serious about it. They tend to take it more seriously, and in many cases shun or denounce folks aren’t willing to go to that trouble.
So, there is this tendency to kind of make fun of new users who ask a silly question. The point is, with Fitocracy, as we’ve grown and as we’ve evolved, obviously the strategy has needed to change as well. I think a lot of the feature developments and the product shifts have tended to focus more on how we bring in the more uneducated user. How do we provide an experience that lets them get started easier, and gives them instruction and contact?
Something that they can get started with assuming they don’t know the names of certain exercises, or how to get started in the first place? So, I think as the tone started to become less about the serious weight lifter and the serious gym goer, there was this kind of movement in the Reddit community.
You started to see people say, “Well, you know, I’m not a big fan of Fitocracy anymore, and they haven’t really improved their workout tracking experience.” Or, “It’s gotten worse and watered down.” That’s been tough for us to watch, but honestly, because that was a big part of our origin story.
Andrew: Reddit was?
Andrew: And still, though, to this day, I see that it’s not as important a traffic driver for you, but to this day, they send you a lot of traffic. You get a lot of traffic from Reddit. More traffic I would probably say than Twitter. More traffic than Pinterest, even though you guys are active on Pinterest, right?
Brian: That’s right.
Andrew: And we’re going to talk about that in a moment, or at some point, I want to talk about where you’re getting traffic. I told you before we started, I checked up on something and it was true. Let me do a quick plug here, and I’m only doing it at this point because I want to use the tool to show people this thing that I talked about a moment ago.
Let me do this. Quickly, I’ll tell everyone that this man right here, my sponsor, Scott Edward Walker of Walker Corporate Law, is a startups lawyer. At what point, Brian, did you get a lawyer for your company?
Brian: Early 2011.
Andrew: 2011. Soon after you started.
Brian: That’s right.
Andrew: And what’s the first thing you had your lawyer do?
Brian: I guess, incorporation. We figured it needs to be official, so we shopped around a little bit. We talked a few different firms in New York, and tried to figure out what we were supposed to do.
Brian: How are we covering our bases?
Andrew: What are you supposed to do? What’s the most important thing to do at that stage?
Brian: I think just getting an incorporation trademark. I think, with the founders, is that we talked about equity and shares. You have to have that conversation to figure out if you are equal partners.
Andrew: How did you and Richard break things up?
Brian: It was just a 50/50 split. We knew that going in.
Andrew: There was no earn-out, no vesting, no nothing.
Brian: Sure, we had vesting, and you should always have vesting for your stock. In terms of the actual split, we did things 50/50.
Andrew: Alright, let me say this, walkercorporatelaw.com, if you are looking for a lawyer. Frankly, I think setting up a start-up, when they are getting started is not ‘bread and butter’ for them. That’s not what they built their business was built for. The reason Scott does it is that he figures that he sets you up right in the beginning.
Later on when you have those big issues that you really need him for, such as raising money or selling the company, or frankly, just advice from someone who has experience and has connections to other entrepreneurs, it will come in handy to have that connection to him. He’ll be able to help you there too. For Scott Edward Walker, go to walkercorporatelaw.com.
Alright, here’s the thing that I wanted to use that for. How do you get this, where is this tool that I use…image overlay, and let’s clear that image out, because I want to bring this one over. Do you see that? Here, I’m even going to memorize this myself, because I think this is such an important image.
Brian: Yeah, it is. It holds a very, very important place in the history of hypocrisy.
Andrew: Do you remember the day you saw that? This I should say for people who are listening, that’s an XKCD comic. Do you remember the day you saw it?
Brian: I do. I remember it very, very well. And the reason I remember it very well is because the app was just this incredible turning point for us in this company. It was a Friday in August. So, for a little backstory, this was the summer of 2011. By this point we had been about eight months of working out savings and trying to get this company.
At that point, we had maybe 20,000 or 30,000 users on the platform at the time. There was a user base, but we been trying to raise some money from investors at the time. This was my very first time doing it and I had no clue what I was doing. I was falling flat on my face quite a bit. At that point, we were talking to an investor, inside of the Bay area.
It was an institutional fund, and they were talking about investing $500k into the company. That was the amount that we were seeking at the time, so they were basically going to give us the entire round. We were even negotiating a term sheet at the time, so it was getting serious. We were talking about that over the course of a few weeks.
Now, the Monday that week in early August, although I can’t remember the exact date now, although I should, we had a late night Skype call. The managing partner at that fund said that we actually can’t do that deal anymore. I won’t get into [??], but we’re pulling out. It was this awful moment where we were counting on this. It was a likely event that’s going to happen, or at least we thought was likely. I guess the lesson there is don’t count your chicks until they hatch. We thought, ‘Oh my god, we’re doomed. We’re going to run out of money. What are we going to do?’
So, that was a pretty bad week. And we were going into work each day thinking, “What are we going to do. And then on Friday, I remember waking up Friday morning and I checked my phone, I looked at Twitter as I normally did and I saw my co-founder Richard just absolutely flipping out! He was saying, “Oh, my God! Fitocracy’s on XPCD!” And, you know I was a long- time XPCD/Reedit advertiser so I was like, “That can’t be right. There’s no way that’s true.”
So I went immediately to XPCD and low and behold there’s our comic! And my jaw just hit the floor. I was just, I was baffled! I couldn’t possibly fathom how this happened, how the author knew who we were, the fact that he was a user. I said, “Oh, my God! That’s Amazing!” And then over the next two weeks we were exploding in our user base. We went from 30- to 50,000 users in the course of two weeks. We were struggling to keep the servers up.
We were struggling to make sure everyone was able to actually use the service properly. It was exhilarating! And what that enabled us to do was we could point to our metrics and say, “Hey, our user base is growing at this amazing [??] and we could go back to investors that we had already been talking to. And a lot of those conversations had gotten cold. Anyhow, as investors are wont to do they hadn’t said, “No,” they just stopped talking to us.
But we were able to reignite those conversations and say, “Check out what’s happening right now,” you know, “Are you interested?” And, you know, finally we were able to capture the attention of the [??] start-ups, Dave McClure’s fund out in Mountain View. And he said, “Hey, we’d like to invite you to become one of the companies in our upcoming accelerator class, our accelerator batch. Would you like to come out to Mountain View for four months?” And we said, “Hell, yes! Let’s do it!”
And that was what was able to also reinvigorate a lot of conversations from our other investors, angels and the like to start closing money. And by that fall we were able to close some money into our bank account and we were able to fight another day. And it was all because of this crazy XPCD comic that . . .
Andrew: So, how’d it happen . . . And I should read for people who are reading in or not watching and listening instead . . . It’s stick figures are having sex and it’s wild crazy fun sex. Then they come to Fitocracy and he actually even recreated the photography logo . . . Fitocracy logo and so on. And they try to type in so they can get credit for having sex for that workout for the day.
And instead of celebrating this great sex that they had they’re disappointed that it’s not an activity that they could log in and they’re looking for alternative ways to keep track of it. That’s how much they care about logging into your site, Brian, and making sure that it’s recorded. So, how did it happen? Was it just being a part of the Reddit community?
Brian: You know, Richard, my co-founder, explained this to me at some point. He was able to trace back how, you know, Randall [SP], the author, that comic found out about us at some point. You know the details escape me right now but I think somehow maybe his brother found out about us from a message board [??] on Reddit. And eventually an in button made it’s way to Randall and he signed up and used it because he understood the concept behind what we were doing.
And, you know, it’s funny because the entire premise of the comic is centered on a flaw in the user experience, which is users complain they want to get credit for everything that they do and sometimes they can’t find an activity in our database. And to this day that’s still something that users complain about.
And we try to add new activities as much as we can but they couldn’t log sex. Maybe . . . to this day you still can’t log sex. And they said, “Well, sex is a workout.” And so users would have to go and approximate it or say, “We’re going to create a euphemism for this.” And so nowadays you can even [??] a euphemism for what sex is, quote unquote I did a “cartwheel.”
So it’s funny because people will see that in their activity feeds and they’ll say, “[??] sex” or someone just doesn’t know that’s what the euphemism is and then all of sudden they’re in the middle of a joke that [??].
Brian: So it’s funny that this kind of [??] experience and then it becoming the central problem of this comic’s script.
Andrew: So as you were telling this story you said that you guys hit a low point. You were running out of money and you asked an investor for money and he said yes, the firm said yes, you were almost ready to go and then they pulled out. Why were you running out of money?
Brian: Oh, wow, that’s a good question! You know, it was just simple math. We were all in the negative cash flow each month on a personal basis. And we had saved enough money to run for close to a year, assuming no income on our sides. We have been monetizing the site call. There’s no way to generate revenue at the time, and we hadn’t really tied into that.
And it’s just a simple matter of the clock counting down and I think we went into it assuming that at a certain point we would start raising money and start talking to investors. Of course we had no idea what we were walking into at the time. But it was like six months in, we both looked at each other and said, “Well, I guess it’s time to start raising money. That was another whole chapter, another set of lessons to learn.
Andrew: Where did your money go? Was it in advertising, was it for other developers or did you just need it to live?
Brian: Just purely living expenses. And they were quite low, especially for New York. My co-founder Richard and I moved into an apartment together in Brooklyn along with his girlfriend at the time. The rent was very low across the three of us. We were paying for three desks at a co-working space. We had another employee join us midway through. He was also working off of savings.
It was all just living expenses and some server costs, but those were not that high because our traffic wasn’t that high at the time. It was just the cost of living, breathing and eating, really. And even then, we hadn’t been working prior to that for very long so we didn’t have that many savings at the time.
Andrew When I log into your site, you recommend a few people for me to follow. One of them is Arnold Schwarzenegger. What’s the connection to Arnold?
Brian: When you think about anyone, any sort of star or celebrity in their world of health and fitness, it doesn’t really get bigger than Arnold Schwarzenegger, right? Just so iconic, just the name itself, you don’t need to say his last name, just say Arnold and everybody knows who you’re talking about.
We eventually got in touch with him and his office, the people who handle all of his affairs, in late 2012. We said, “Hey, we’d love to find a way to work with you guys somehow.” And it was good timing, because Arnold had finished up his time as governor of California and he was starting to focus a lot of his time and energy on increasing awareness for better health and fitness. He wanted to stretch a lot of his time on getting people more active, improving the health and so on, so forth.
So it was quite good timing and we figured, “Well, if Fitocracy is a social network of people who are all about that, they want to be more active, they want to be people who are living better lives and want to inspire one another to get motivated. And so what we eventually were able to do, and all the credit goes to my co-founder, he was able to organize a campaign with Arnold to run these monthly challenges.
We said, “Arnold’s going to run or sponsor these monthly challenges for you all, we’re going to have a new workout for you each month, and you can join these challenges. If you participate in [??] workouts regularly, enough, then you can earn these Arnold points. On your meter, if you can do enough you can earn a signed copy of his new book.
Andrew: If you get enough points, you get a signed copy of his new book.
Brian: That’s right.
Andrew: Are you paying him for this, by the way?
Andrew: There’s no money ever going to Arnold Schwarzenegger?
Brian: That’s right.
Andrew: Any share of your business going to him?
Andrew: Any options in the business?
Brian: Zero. Although we’d love to have him as an adviser, don’t get me wrong. No, there’s no partnership.
Andrew: But he does give, I see. And it’s all because you guys emailed or contacted him.
Brian: Yeah, you know, Richard, my co-founder, he’s just very strong at building relationships and making connections. He was eventually able to work his way into Arnold’s office enough to get in contact.
Andrew: What did he do? Let me learn from that. Here’s another thing I noticed, Arnold Schwarzenegger’s website, what does he have, Schwarzenegger.com is one of your major sources of traffic. It’s not just that he’s on it and that’s credibility, he send you traffic. It’s not just that he sends you traffic, he’s on it and now it’s credibility.
But I see things like how has my, top ten, whatever it is that he says, my painful ten, my destroy your arms. Here it is. I have two questions. How is the terrible ten, when I dreamt it up I wasn’t sure if anyone would actually do it, and who wants the next video? So he’s posting things on there. Tell me what Dick, your co-founder, did.
Brian: It may have been hard for me to accurately trace it back, but ultimately what it came down to was he found (?) Henry Arnold’s social media presence across Twitter, Facebook, Reddit. Actually they’re very active on Reddit now.
I think it was just about having the conversations late 2012, early 2013 explaining what Fitocracy was all about and how it aligned with Arnold’s focus and his growing focus on better health and fitness and just coming up with ways that we could not only get better (?) for Arnold.
That’s kind of a sorry statement to make because everyone knows who he is, but getting his message out there I should say. It’s a great platform for his mission to kind of (?) there. It took several months of discussion quite honestly and it was all being led by Dick. He did a fantastic job. I don’t think it took that long to sing him onto the idea. It was really just about conceptualizing what that partnership would look like.
Andrew: I see and now he’s stopped really being active some point in the middle of this year.
Brian: Arnold’s a busy guy. He’s traveling a lot. He’s . . .
Andrew: The idea is probably it seems. You tell me if I’m wrong. It seems like, he and his team said let’s be out there in social networks. The more active we are the more people feel that we’re connected, we’re engaged, we’re in their world. This is what we need to do and it won’t take that long. We’ll put out a few challenges, we’ll interact with people a little bit, but what are we talking about. Tops half an hour a week, half an hour a month.
Andrew: That’s what it is and what you guys did was you recognized that you need to just ask.
Brian: That’s right.
Andrew: I would have thought you’d need to give shares or make a deal that way. All right, so that’s the number. Still sending you traffic, still doing so much. The second thing that I noticed when I look at where you’re getting your traffic is just delete that me sends you a lot of traffic. Why are people having such a hard time removing themselves?
Brian: That’s an interesting question. I think a lot of it was just (?) we never built in a mechanism for that. We had so many things that we wanted to handle in our (?) road map that a (?) for whatever reason the user (?) under (?). It doesn’t have a priority.
We figured okay, well. It’s not so big that we’re going to worry about building an automated process. We can handle it on kind of the manual customer service side.
Andrew: Okay. I see how you guys got your traffic. I see where the idea came from. I see how you built your business. I’m curious now with all of the stuff that we’ve talked about and others, how many users do you have?
Brian: As of these days it’s a bit over 1.4 million.
Andrew: 1.4 million users? How many of them are active?
Brian: We don’t publicly share this.
Andrew: You don’t publish active numbers. How do you get to 1.4 million people. It’s not enough to be on Reddit. Reddit kick starts you. It’s not enough to be associated with Arnold Schwarzenegger. He sends you traffic, but he’s not sending you a million users. What’s the most effective thing for you for getting traffic.
Brian: It’s a great question. I think a lot of it has shifted in the past couple of years. As we were going in 2012 we were in the hundreds of thousands of users at the time, but what really started rocking the user base was the introduction of our mobile apps.
So, we launched our iPhone app in March of 2012. That went very well. It was a very successful launch. We had a ton of downloads on day one and that helped a lot in terms of growing a user base.
I think as we got into 2013, the introduction of the Android application to cover that (?) user base was quite significant. Then also the Arnold Schwarzenegger partnership was quite significant for us as well early in 2013. It got us a lot of press. It wasn’t just Arnold, but it was also other publications that were talking about it. We actually were quite adept at getting positive press for ourselves.
This was pure luck or chance that Dick ended up being a personal trainer for a woman who ended up winning Miss Marathon in January 2013 and we had no idea that was going to happen. (?) at the time you’re saying hey, by the way I’m spending some time training. It’s for a woman who’s competing for Miss New York. She hasn’t won it yet, but you know, we’ll see what happens and she did that.
I remember in January of this year, I was watching the Miss America pageant. I (?) wouldn’t do that, but she just kept going through the rounds and staying alive and then she became Miss America. We were like holy crap. We could use this, you know?
So we could go and make a big deal of how Miss American uses Fitocracy. She was trained by one of the Fitocracy founders. She’s got an active account. She’s posting her workouts. So that was another example. So we’ve actually historically been very good to get press.
Andrew: What else did you do to score press? I see Arnold Schwarzenegger, bigger than just him being on the site. Yes, when I’m looking at your co- founders profile, Dick Talon’s profile, there are two things that stand out. He is the nutritional coach on Miss America 2013 and the before and after photo of him when he was a chubby guy and now today ripped.
Andrew: What else? What else did you do for press that we can learn from?
Brian: That’s a good question. There’s always going to be the standard, hey, let’s reach out to a publication because we’re introducing something new that marks a relationship without strategy. We’ve done that a few times. I think the ones that are more noteworthy are things like, for example, Dick wrote an article in the fall of 2012, or maybe it was 2011, I can’t recall now, where it was about how they got ripped at 500 start-ups. Right.
So we were doing the 500 start-ups accelerator and that article was really all about kind of fighting us on myth where a startup founder your health is going to go the crap and you’re not going to take care of yourself because you’re working 18 hour days and so on. And so look, I’m in those shoes and I actually got really good fitness results. And a lot of that was, I would probably categorize it in content marketing because the idea was let’s educate this audience.
There’s this kind of popular notion that you can’t take care of yourself, you can’t get positive results when you’re working long hours or they might have the strong idea when it comes to the most effective way of getting particular results or desired results.
And Dick’s entire intent, was, well there is a better way, there are actually more efficient ways to do this and we can kind of spread that gospel and not not only will help Fitocracy get more visibility but it will also help change the conversation in a lot of people’s minds as well. So I think that was one example. And there are a few others I can point to as well.
Andrew: Here is one we can talk about, Red Bull. What happened with Red Bull? That helps you.
Brian: Sure. So the Red Bull partnership was in 2012 and that was our very first time partnering with a brand and so we had a lot to learn, we didn’t know what we were doing and the idea was minding the interests between Red Bull and Fitocracy. At the time, Red Bull was running this new creative campaign where they were saying, ‘Hey, let’s motivate you to reach your New Year’s resolution goals and use Red Bull for it.’
And for us, of course, being in the fitness industry, January 1 and the New Year’s resolution season in very, very important to us so we came up with a campaign where we said, ‘OK. Red Bull’s is going to sponsor a challenge.’ Not unlike how [??] works. We’re going to sponsor a challenge. People are going to compete in these challenges and earn points and free stuff from Red Bull. And this was across Fitocracy, across e-mails, social, so on and so forth.
And for Red Bull it was just, hey, let’s get in front of this very relevant audience and for the users, let’s them get the chance to win some things. So that was able to garner us some press as well. So the press as well as the exposure from Red Bull, because Red Bull would talk about it as well in their social media sites, was quite . . . [??] . . .
Andrew: How did you get press for it? I can see other people getting that partnership and feeling like that’s it, they won and then maybe getting a little bit of traffic but not enough to build a business on. You guys did get more from it. I see Matchable. On Matchable alone was 12.6 thousand shares. Is that you guys contacting Matchable?
Andrew: That is you. Internally, you say, Okay, now it’s time for us to get to work and promote this new partnership that we have and let people talk about it?
Brian: That’s right.
Andrew: I see. Where else did you reach out?
Brian: So Matchable, I think Lightpacker, we have a contacted a relationship with most of the major publications and with any major move that we make we try to have a P.R. strategy. It’s important there as well because we know that a significant releaser or announcement is going to create waves and move in a lot of user base and anyone that directly works with us might also get residual benefits by getting [??] onto [??] as well.
Andrew: I see. And then even on deals.woot.com, there are people talking about the Red Bull partnership, and check out one of these posts from 2012. Four pack of sugar-free Red Bull for $0.00 and free shipping. Fill out the information to get a coupon via mail for a four-pack sugar-free Red Bull. The fourth page asks to share on Twitter or Facebook, however, if you just click the button, you don’t actually have to do it. The site is getting a lot of traffic and so on. And then somehow, that is connected to Fitocracy. I guess people in the comments are talking about it. But, now you’re weaved into this conversation. Even with this guy who is trying to get free Red Bull, who won’t even tweet to get that free Red Bull.
Brian: Yes. It’s interesting, because there this is secondary, secondary effects that happen. It”s the way of the universe. It’s amazing. It’s this wonderful effect that bring in results that you might not have ever expected.
Andrew: All right. I can’t believe I’m going so long here. Let’s talk money before we end.
Brian: Okay. Sure.
Andrew: Where is money coming from? From the business, not just the funding. From the business itself.
Brian: Sure. So, we’ve had a premium account available to our users to upgrade to for quite a while, about two years now. It’s called Fitocracy Hero. And with Hero, there are a number of actual benefits and features that you can unlock things like private messaging on Fitocracy.
There are these things like these one-on-one challenges called Duels. So, I can go to you Andrew on Fitocracy, and say, hey, let’s see who can do the most push-ups this week. You know, this kind of whole public spectacle around that. There are titles that people can unlock and then attach to profiles and so, it can be like, [??] or whatever. There are a number of other benefits to it.
What’s fascinating about that is that the vast majority of users who upgrade, are people who are so strongly aligned with Fitocracy and believe in the community, and so, they want to give back. Because, I will be the first to admit that the feature set for Fitocracy has always been quite light. Nothing terribly compelling on that side. We are now starting to develop some interesting features that I think are going to move the needle on that.
But historically, most people have been upgrading because they believe in Fitocracy so much, they want to give back to it – just one of the main revenue streams. And the second revenue stream, and I will argue now is becoming our primary one, is this concept of online coaching. Now, online coaching in practice, has been a very new concept, both for Fitocracy, as well as in the macro sense.
But it’s a concept that Dick and I have talked about for years, quite frankly. We have always been interested in the idea of how do we connect people online, in a way that people who would never otherwise meet, and create an environment where the more experienced person in that relationship can coach the other to help them get results.
And we have always been interested in this model. We never knew how we could make it work. We never knew, well, how are we going to make it affordable, yet worth the [??]. So what we are now starting to experiment with is this idea of group [??]. And the idea about that is, what if a team of around 30 or 40 people in a group, and give them a coach.
Rather than pay a personal trainer somewhere like $400, $500 a month to get you in shape, you’re only paying $50, $75 a month where you’re going to be taken through a 12-week course, and that coach gives you your training program, your nutrition program and daily motivation and social support, and so on and so forth to help you get results. And do it all online.
You never, ever have to leave if you don’t want to, or let’s say you’re not able to. And, what we’ve now found, we’ve only been doing this for a couple months now, but this is very, very much aligned with the long term vision behind Fitocracy – which is, how do we build a platform that helps anyone get their shape? How do we help them reach the next level for their fitness?
Andrew: What kind of revenue are you doing from all this? From the premium and the coaching?
Brian: So, [??] we’re in the five figures.
Andrew: Five figures a year?
Brian: No. Monthly, sorry.
Andrew: Five figures monthly. Is it over $40,000 a month?
Brian: In aggregate, well, let me [??] but it’s [??]
Brian: What’s been interesting, is that with the [??] side, as we introduce more coaches to the platform, it’s only going to continue to grow. It’s only been live for a couple months now, but it’s already reached levels similar to or at times more than we get from Fitocracy Hero.
Brian: So, what’s been interesting about that is there is a very scalable, very natural business model behind that. There’s still plenty to learn there. There’s still plenty to build. We’re going to have to refine it quite a bit; but that’s where we see the business going as a scalable platform.
What if this becomes away for any coach to provide their services and their knowledge to people across the world, in a way that’s affordable, and helps those coaches and trainers monetize their time that they otherwise wouldn’t be able to monetize on that scale.
Andrew: Great, I wanted as to one more question the first let me say this: if you are listening to this and, #1: You like my interview style and #2: You want more actionable information in addition to the 800+ interviews I have at Mixergy.com, I also have over 100 courses taught by proven entrepreneurs at MixergyPremium.com.
Go sign up for that, and I’ll give you one idea for the kind of course you can get there. You heard me talk about my premium membership, Brian’s got a membership, if you want yours, who would you turn to to ask for some feedback and say, “hey, will kind of feedback I get, how do I do this right?”
For me, it is someone who builds software that does this for other sites, because that person get to see how multiple sites of running their membership programs and what multiple sites that are doing it right are doing, and the ones that are not working, what’s not working for them? And then I’d want to learn from them.
And so at MixergyPremium, I went to Stu Mclaren, the guy who created the Wishlist Member, a plugin that goes into WordPress and turns it into a membership site, and I said “first of all, I am looking to build a membership site, would you teach me?”, And he did, and I use that to build my site. And I said, “now that I have my site, with all these members who want to learn how to build their businesses, would you spend an hour teaching them how to build a membership site right, what elements to keep it? Don’t promote your own software, just teach what you’ve learned.
And some people end up using software, others do not, but we will all end up getting to learn and build our business is because of you.” He said “Yes”, and he did it, and that’s kind of course we had at MixergyPremium.com; it relies a lot of my friends, it relies lot on the relationship that built up and what I’ve learned the interviews, and it helps you by opening you up to people who do this well, who are experts at this, because that’s their business.
They’re not in the business of teaching, they’re in the business of doing what I’ve invited them to teach and then we help them teach. It’s all at MixergyPremium.com, I guarantee you’ll love it, and if you’re not happy, ask for a refund, and I’ll give it to you. In fact, Brian would never do this interview here if I wasn’t the kind of person who give you a refund.
All these other people on the site whenever want to have anything to do with me if I took your monthly fee and didn’t refund if you weren’t happy. I know you’re going to be happy because thousands of the people are, but if you happen not to be, you get a refund. Go to MixergyPremium.com right now. Brian, we talked at the top of the interview about how you came this close to really being over. The how close this close is, but you get close. Something you learned about turning things around that’s one thing someone who’s this close to the end can use?
Brian: Ultimately it’s going to come down to managing your own psychology. By that I mean, when you’re facing a really tough time and things look hopeless, there’s zero shot of success, zero shot of pulling yourself out of it, if you resign yourself to defeat. Had we decided that week that Fitocracy was going to get shut down, and we were going to move on and get jobs elsewhere, we wouldn’t be here today.
I think this is something that applies to pretty much any start up. Any company. Any endeavor that looks like it might not be viable. You know, Fitocracy I still considered a very early stage company. Our success story still hasn’t been written yet. There are still plenty of things that could go wrong. Plenty of things have gone wrong! And when you’re facing those rough times have to be able to stay focused. You have to be irrationally optimistic about it, because there’s no other way are going to win.
There’s no other way you’re going to succeed. If you start thinking, “I’m going to write my postmortem now”, you’re screwed. Nothing positive is going to come out of that. There’s no good outcome. But if you persist, and you believe there is a way out and you will find it come hell or high water, and ignore the noise, ignore all the things that are telling you that it is not going to work, then I think you shut.
Andrew: That’s an inspiring place to leave it. The website is Fitocracy.com. If you go there, don’t just check out Brian’s site; check out also Dick Talens’ profile on there, I think the photo before and after is pretty cool. And I always say to you guys at the end of an interview, if you got anything out of it you should find a way to say thanks to the guest and I know many of you have.
But if you’ve listened this far I know you understand the power of doing that. Remember the top of the interview with Brian said, specifically, you met Spencer, right Brian, of Carbonmade? Because you admired his work, and you weren’t just the type of person who is going to sit back and go, “that’s an interesting website!”… You’re participating in the world, you’re participating in the business world, you’re participating in the creative world, and he said “I’m going to reach out to this guy”.
Not only did he inspire you and you got to know many how to lead you in this direction you are today, but now you guys are friends. I’ve seen this happen dozens, if not hundreds, of times, with people who I have interviewed, and it never happens if the person who is listening just sits back and goes, “You know what? I’m not going to say thank you. I’m not going to reach out.”
If you have an opportunity, take it. If you don’t have an opportunity to say thank you to Brian, or hi, or whatever, then make your opportunity. Find his email address, send him a note, and say thank you right now. I am going to do it right here, right now, because if I am going to ask everyone else do it, I should to. Brian, thank you for taking this time out of your day and doing this interview.
Brian: Andrew, it’s been my pleasure. Thank you so much for having me.
Andrew: Thank you all for being part of it. Bye, guys!