How digital innovation made SWEAT into a fitness empire
Anyone who has searched for fitness content online knows Kayla Itsines. In 2018, TIME Magazine named her as among the ‘25 Most Influential People on the Internet.’ But to say that Itsines is a fitness trainer wouldn’t be doing justice to her achievements because she is also the face of and half the brains behind the world’s largest fitness community, SWEAT.
Working behind-the-scenes is SWEAT Founder and CEO Tobi Pearce, who also happens to be Itsines’s fiancé. The SWEAT app, which provides users with fitness content, meal plans, progress trackers, and a forum, has been downloaded over 30 million times since its 2015 launch. It’s the highest-grossing app in the App Store’s health and fitness category, and brought in US$77 million of revenue in 2018.
With the world in the grip of a wellness revolution, SWEAT epitomizes just how far digitization can go in transforming the user experience in the highly-competitive fitness industry. Pearce’s entrepreneurial journey is also one of the most inspirational to have come out of Australia in recent years, but as with every success story, what remains hidden are the struggles that the founder faced to get to where they are today.
How BBG came to be
Before SWEAT, Adelaide native Pearce was a classically-trained pianist who was playing at a university-level when he was just 13-years-old. Due to a difficult situation at home, Pearce set out on his own at 17, spending two years couch-surfing, sleeping in his car, and–at one point–living on the streets.
What remained stable during this challenging period in his life was his passion for fitness and entrepreneurialism. He became a certified personal trainer and went on to win the ‘Light-Heavyweight Division’ title at the 2011 World Natural Bodybuilding Competition. It was also at the gym that he met Itsines.
By this time, she was already well-known in the local fitness community for the success of her personal training business. On the advice of her cousin, she began sharing before-and-after photos of her clients on Instagram and soon gained a strong following. Recognizing the potential of the program, Pearce and Itsines released the Bikini Body Guide (BBG)–a 102-page ebook with a 12-week workout plan, dietary advice, and educational content.
BBG’s simple, goal-oriented structure set it apart from other workout plans of its kind, where a person who’s never stepped inside a gym can try and see results from the program. Each 28-minute workout consisted of four high-intensity exercises with seven-minute circuits, and users were encouraged to maintain the frequency at three times per week. Currently, over three million posts on Instagram have the #BBG hashtag.
Following BBG’s explosive success in 2014, Itsines and Pearce shifted their attention to developing an app. SWEAT, previously named ‘SWEAT with Kayla,’ further fuelled the phenomenon that Bloomberg writer Claire Suddath described as “the Cult of Kayla.” By 2016, it surpassed Nike+ and Under Armour’s MyFitnessPal as the most downloaded fitness app in the App Store.
Despite SWEAT’s remarkable growth, it has never received external funding. Pearce says the company’s growth strategy has always been informed by the commercial viability of its products, rather than fundraising.
“Since our inception, we have been self-sufficient in building the business from the ground up,” says Pearce. “We’ve grown from Kayla and I operating out of our spare bedrooms to a team of over a hundred.”
Working up a sweat
The fitness industry is evolving at a tremendous pace, where new trends are constantly emerging to keep up with millennials and Generation Z’s enthusiasm for health and wellness. Its growth has been primarily driven by technology, with the rise of hardware–namely wearables and equipment–and online fitness instruction. The latter has enabled a surge in e-gymming, or working out from the comfort of one’s home.
The decline of the big-box gym model and high costs associated with boutique gym classes have made at-home fitness all the more attractive. According to the 2019 Les Mills Global Consumer Fitness Survey, 85% of all gym-goers also enjoy e-gymming. While the practice isn’t new (Jane Fonda’s workout videos from the 80s come to mind), technology has allowed it to become more targeted and, as a result, more effective.
Frequently referred to as the ‘Netflix of fitness’ for its expansive content offerings, SWEAT has invested heavily in data analysis to personalize user experience. After members create an account, they’re asked to select a fitness goal, such as gaining muscle, regaining strength post-pregnancy, or nurturing the mind-body connection. They can then elect to commence their fitness plan based on their goals and preferences.
“The core of SWEAT’s innovation lies within our in-house data science and software development teams. They iterate our product based on what our audience wants and needs, and bring the workouts that specifically meet their demands to life,” says Pearce.
The same approach is applied to the app’s other tools and content offerings. Meal plans are based on the members’ dietary requirements and weight, and the ‘Planner’ can be synced to their calendar and health tracker. A community-focus sits front and center, allowing members to see which workouts are the most popular and use the forum to engage with and seek advice from other users. These features serve to increase stickiness, which is crucial for staying competitive in an industry with notably high churn, especially when a paid subscription comes into the mix.
Since consumers can’t gain immediate value from fitness products, as it takes time to see results, a deep understanding of what impacts their performance and motivation is required to overcome this ‘usage barrier.’ Pearce shares that a member’s propensity to continue to train with SWEAT is 90% or higher once they complete four to six workouts on the platform, which the company encourages by “manifesting engagement early on in the member’s journey” and “maintaining engagement.”
“A good way of thinking about it is that you are trying to sell the member the same service every 30 days [for monthly subscriptions], which means they are regularly making a purchasing decision. Therefore, value has to be present on an ongoing basis,” adds Pearce.
He notes that the benefit of the subscription model is allowing SWEAT to observe real-time data about members’ behavior. Information drawn from purchasing data and traffic is used to move a higher ratio of people in the addressable market through the company’s marketing funnel. Much of these efforts are carried out on the social engagement side, where SWEAT excels–if Itsines’s almost 12 million followers are anything to go by.
“Our content management system helps us to ensure that all content across our social channels is checked–whether by our in-house exercise scientists, nutritionists, or communications team–to make sure it aligns with our brand strategy,” says Pearce.
While social media is a critical aspect of any marketing plan, Pearce warns that it can distract from a company’s core business. This view has led him to take a contrarian stance on a widely-adopted practice: engaging in brand collaborations. He says that SWEAT’s vision is to empower women through fitness, so promoting activewear labels or health retreats does little to benefit the end-user.
“This concept is relevant to many businesses in this day and age, where they try to use social media platforms as another revenue stream, which may negatively impact brand quality and trust,” says Pearce.
He describes valuable social content as credible, authentic, and educational, which may seem “counterintuitive” on the surface because it doesn’t try to sell the product or gain more followers. It does, however, seek the long-term reward of gaining trust through engagement. Rather than sharing polished studio shots of trainers, SWEAT’s Instagram feed is filled with photos of real women, where the emphasis is on progress and confidence, rather than achieving the ‘perfect’ body.
“Unfortunately, many brands make the simple mistake of failing to understand the social media content their customers or fans want to see,” Pearce adds. “If a brand fails to deliver this value proposition, customers will leave and seek an alternative social media account which is delivering what they are seeking.”
The future of SWEAT and the industry
International expansion happened quickly for SWEAT, as the app has already been translated into eight languages. But Pearce says that it’s only the beginning, as the company works to identify what motivates women to pursue fitness in every new market they enter.
“Something that became apparent to us early on was that translation is not localization,” says Pearce. “Cultural relevance is not based on convention, so we conduct market research that informs the way we present our product across various markets.”
Scaling a content platform also poses significant technical challenges. Pearce says that managing tech debt is an ongoing task for the company, as it aims to strike a balance between deploying code at a rate that accommodates the volume of users, while ensuring the product is commercially viable down the line.
“We’ve experienced first hand the tug-of-war between getting content and software to market quickly, versus building well-thought-out technology, which takes time,” he adds. “In the long-run, we hope to build code effectively and efficiently to ensure we meet quality, volume, and velocity demands.”
Looking ahead, Pearce says that “increased collaboration between companies” will “bring the collective fitness community the best products and experiences possible.” One major trend in the industry is the intersection of fitness content and equipment, where leading players have achieved considerable success. Peloton, a company that builds bikes and treadmills with touch screens that stream workout classes, raised $994 million before going public at the end of September; and Mirror, a developer of LCD screens that display fitness content and information like the user’s heart rate, is valued at just under $300 million (TechCrunch).
While we will have to wait for SWEAT’s next product launch, Pearce says that consumers’ taste for “all-access, at all times, to all things lifestyle” will define the fitness industry’s transition in the coming years. He’s also excited by the ways that such products will elevate the accessibility of knowledge around health and wellness.
“When it comes to the digitization of fitness, it’s clear that technology is continuing to reduce the barriers to entry and provide more people around the world–particularly lower socioeconomic demographics–with access to health and fitness tools and education,” says Pearce. “If you go back 20 or 30 years, only the wealthy had access to a personal trainer, and now it’s accessible for anyone who wants to change their life.”
He adds that one downside of the fitness industry’s rapid growth is its lack of maturity, which has allowed smaller actors who peddle pseudoscience to taint its overall reputation. Consequently, it’s difficult for users to discern the value they can gain from content providers.
“The industry is producing more fitness content, but it also doesn’t mean that more people trust the content or are willing to pay for more content,” says Pearce. The solution, he proposes, is to educate consumers about the importance of science-backed content by industry professionals, so they can identify the hobbyists or those looking to score a quick sale.
In a booming and dynamic industry, SWEAT has managed to break new ground by opening up professional fitness instruction in an unprecedented way. Much of its success can be credited to the serendipitous combination of Itsines and Pearce’s skill sets; Itsines, for her client-centric fitness instruction and down-to-earth approach to engaging with the community; and Pearce, for his focus on business fundamentals in scaling the company.
Together, their approach has led to high levels of brand loyalty and impressive user acquisition rates, propelling the fitness industry forward as a result. More integral, perhaps, is the SWEAT community itself and its ability to draw in women who felt too insecure about their abilities to think that change was possible–until now.
Min is Jumpstart’s Editor in Chief.
Tobi’s Advice for Entrepreneurs
Starting a business from the ground up doesn’t come without a lot of hard work. Like everyone, I’ve made mistakes along the way. But for every mistake, there’s always an important underlying lesson. Whether you’re just starting your entrepreneurial journey, or running a larger business, it’s essential to never view your mistakes as regrets but as learnings and opportunities.
Ultimately, if you’ve chosen this life (and to be clear, no one forces you to be an entrepreneur), then be prepared to work hard every day and exercise discipline in your approach.
Lead from the front
A successful leader is one whose motivation, passion, and enthusiasm for their vision is contagious and can inspire their team to get on board with the mission at hand. They need to be passionate, results-oriented, and a strong communicator with sound knowledge of the roles within their business to enable valuable communication with each business function.
I’m also a firm believer in rewarding your team based on their skills and contributions, rather than their position within the business. It’s not about what their title says; it’s about the value they add and the attitude with which they deliver value.
Lastly and most importantly, leaders should make time for their employees and be approachable. I believe in an open-door leadership style which fosters an environment of collaboration and productivity.
Be an ‘infinite learner’
LinkedIn Founder Reid Hoffman said that “as an entrepreneur, you must be an infinite learner.” I couldn’t agree with this more. It means learning everything that you need to learn in the exact moment in time or before the moment in time that you need it. You should learn about every single function of your business. It’s not enough to be great at one thing; it’s about knowing enough about all the different functions to bring it all together.
Being a founder often has similarities to being a conductor of an orchestra. You may not be able to play all the instruments, but you need to understand how they all achieve harmony.
As of October, Tether, the largest stablecoin in the world, is the fifth largest cryptocurrency in the world. As of October 18, Tether has a market capitalization of over US$69 billion. However, to make sense of this development, let’s break down what a stablecoin is, and then look at the various kinds of stablecoins and what the future holds for them.