Tom Digan & Greg Stewart - Building the World’s Best Fitness App

Most software companies try to maximize your time on their app to juice engagement. Ramp does the exact opposite. Ramp understands that no one wants to spend hours chasing receipts, reviewing expense reports, and checking for policy violations. So they built their tools to give that time back, using AI to automate 85% of expense reviews with 99% accuracy. And since Ramp saves companies 5%, it's no wonder that Shopify runs on Ramp, Stripe runs on Ramp, and my business does too. To see what happens when you eliminate the busy work, check out ramp.com/invest. Every investor should know about rogo, because rogo AI's platform is not just another generic chatbot. Instead, it was designed to support how Wall Street bankers and investors actually work, from sourcing diligence and modeling to turning analysis into deliverables. For me, three key things differentiate rogo. First, it connects directly to your system, so it can work with your actual data. Second, it understands your workflows, how work really happens across a deal or an investment. And third, it runs end-to-end and produces real outputs the way the best people do. Auditable spreadsheets, investment memos, diligence materials, and slide decks that match your standards. This all comes from the fact that rogo is built by-finance professionals for finance professionals. And it's already being adopted by some of the most demanding institutions in the world. To learn more, visit rogo.ai/invest. Open AI, cursor, andthropic perplexity and versel all have something in common. They all use work OS. And here's why. To achieve enterprise adoption at scale, you have to deliver on core capabilities like SSO, SKIM, R-Back, and audit logs. That's where work OS comes in. Instead of spending months building these mission critical capabilities yourself, you can just use work OS APIs to gain all of them on day zero. That's why so many of the top AI teams you hear about already run on work OS. Work OS is the fastest way to become enterprise ready and stay focused on what matters most, your product. Visit workOS.com to get started. [MUSIC] Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like The Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus, our quarterly publication with in-depth profiles of the people shaping business and investing. You can find Colossus along with all of our podcasts at Colossus.com. [MUSIC] Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc. [MUSIC] Ladder was my first angel investment ever. It was made entirely untrust in Tom Deegan at a point when I had no idea what I was doing in venture capital. What followed over the next seven years is one of the most unlikely and dramatic business stories that I've been a part of. Today, Ladder is the number one strength training app. They're approaching $100 million in ARR and more than 300,000 paying members. But the path from near-death to dominant fitness app involved debt collectors, leadership changes, and a full reset during the pandemic pivot. At one point, Greg Stewart entered what he calls a cave process. We're a huge amount of effort and time when it's a cracking the TikTok algorithm, just to make sure from content work as a growth engine. Tom and Greg built Ladder by being relentlessly empirical about their customers. Rufless about prioritization, raising whatever amount of money they could from any investor, and willing to do whatever it took when most founders would have quit. In this conversation, we covered the messy early years when survival meant negotiating creditors at $20 cents on the dollar. How they figured out their customer by reading thousands of app store reviews, and how they built the TikTok growth engine without any performance marketing background. Tom and Greg share their long-term vision for becoming the system of record for health and fitness, their approach to AI, and where they still have no managers on a 30-person team. This is a conversation about how hard it is to really build something valuable told by two people who live through every part of it. Please enjoy. Ladder was the first-ever angel investment that I made, which effectively was a bet on Tom. This was before I had any idea what I was doing in private markets, and I've learned a lot. From watching you guys build over the years, the story is fairly amazing and unlikely and dramatic, which is why I'm excited to do this with you guys to tell the story of the business that you've built so far and where it might go. The idea, I think, for our conversation today is to show people how incredibly hard it is to build something that ends up being very valuable, and the twists and turns that happen along the way. It's amazing that you've ended where you are, but I find it all the more interesting how you got here. And of course, we'll also talk about where you're going. Maybe to begin, since not everyone will know what the business is, just literally describe what the actual product and business is, and then I want to tell the real dirty version of the story of how you got here. Ladder is the number one app for string training. We've built a system that's designed to make it as easy as possible to maintain a consistent routine. We spend a lot of time thinking about personal training, arguably the most reliable way to get to the results that you're looking for is highly coached, unattainable for most, inaccessible for most. But personal training, if you think about how it breaks down to programming, coaching and accountability, programming, you know exactly what to do. Someone's prepared for you. There's no guest workers, no thinking. Coaching, you have an expert there to guide you, answer your questions, and accountability of a coach standing in front of you. And you don't want to piss off your coach. It's a really powerful motivator. Then we took those three pillars and design experience from ground up to get as close as possible to that experience. How has it been so successful because I feel like this is almost a Silicon Valley meme. You have a fitness app like this, 4,000 million fitness apps. To what would you attribute the fact that this one is the one that seems to have come to dominate in the sea of competition? It sounds simple, but it's understanding your customers, being an engineering first business. If you look at most companies in our space, they're started by creators. And they're good products, they're good companies, but the creator is the face of that business. They make every decision and they don't have a DNA that's rooted in engineering and problem solving. And when you look at these apps, they're mostly just content libraries. And the motion is just constantly creating more and more content. But what we saw was nobody was paying time thinking about how to use these incredible levers to deliver an experience that actually increases the odds of you continuing on. We looked at apps like social networks and we looked at dualingo. All these apps that we're using, all these powerful motivational mechanics, and pointing them at an action for social media networks, it's selling your attention. For dualingo, it's learning a language. So we took that mentality of how do we use software to create an experience that's totally different than what exists today that isn't reliant on a never-ending content machine. And it's been guided by our members. We spend more time, you could imagine, just speaking to our members, dissecting exactly what we should focus on based on what they care about. And so I think it's just not looking at other companies for inspiration. We just don't look at fitness almost ever. Just to give people a sense of scale, roughly how many people use it, what sort of revenue does the business do, just to give people a sense of how big the business is. We're north of 300,000 paying members today. The beginning of 23, we were 9,000 paying members, so the growth is exciting. We're getting pretty close and knocking on the door at 100 million of RR. So I've been very excited from a revenue growth perspective. But it all boils down to we created a product that gets people the results that they want, and they say they will. Having laid that quick, simple groundwork for what the thing is, I would love to rewind time. And Tom, have you talked about actually we've literally recorded podcasts at this same table? Do you know what year that was? 2017, maybe. 2017. The beginning chapter of the business called 2017 to 2020 or so was a struggle to stay alive. And you personally put so much of your time, your reputation on the line to go do this thing. You left a really lucrative, successful hedge fund career to do it. Maybe you can just tell the story of those early years and what was going on. Again, I want to paint the story of Audemirin ARR is awesome. Congratulations. That's really fantastic. I'm very happy as an investor. But the more interesting part of this is what it takes to get there. So maybe set the stage for us. So a ladder started as a side hustle for me, I guess. A high school classmate that I went to school with up in Boston had pitched me on a fitness start-up. The product didn't exist yet. I think it was a pitch that I was just looking to swing at at the time. It was very interested in startups and technology. And he asked me to put some money into the business, which I did. I then raised the rest of the money, ended up joining him as co-founder and president of the business. And my condition for joining the business was to move the company to Austin, Texas. For me, that was less about warm weather and changing lifestyle. It was about separating myself from safety nets and putting distance between New York and my Bloomberg terminal on the easy way out, because I assumed it would get hard. I didn't know. It would get quite as hard as it did. But there's really two ladders or two different companies here. Same name, I would call latter 1.0 as everything pre-2020. And after 2020, the name's latter and we're in the fitness space, but it was a different team. It was a different product. You know, what we were originally building was more of a managed marketplace for personal training. There was heavy emphasis on personalization and a relationship with another human. We thought that was really the opportunity. What we'd come to find out is that business would be very operationally complex, difficult to scale. Ultimately, as you scale that business, it starts to look more like a call center. And you'd be inclined to start to automate a way that very human you were selling in order to build anything that had margins worthy of venture type economics and scale. So, But what we were seeing was that all of the innovation in the space was focused on the casual fitness consumer. We were noticing that it was all very cardio based and we saw that this fitness enthusiast customer was really being ignored, strength training in particular. There was no one selling strength training solutions and we got excited that there was this fitness enthusiast customer that was already working out that had a huge pain point around just planning their workouts daily. And we got excited that this is something that we can solve with software. So we find ourselves in Austin, Texas and by the time I get down there I realized startups are really hard and it didn't quite look like what I had been hearing on your podcast as far as the iterating and the learning and it was hard, it was messy. We were kind of out of money the whole time. We didn't have really any customers to speak of. There was no signs of product market fit at that point. Fortunately this is where Greg answers the picture. So Greg and I went to Notre Dame and she disclosed all three of us were classmates in Notre Dame. Greg and I reconnected in Austin, Texas. He had left banking and has now been building startups for a period of time. It was very obvious that he had this small team that believed in him very much and it was clear that he wanted to build something very meaningful and consumer. So I spent my time tricking him into joining us if you will and eventually I got him under the hood and excited about what we were building. Why I was so interested in startups myself is that I had this sense that you could will something to happen in the startup world. It just felt like if you were willing to not stop and you just keep going it seemed like sheer force determination you could build something. That was appealing because in the hedge fund space I can promise you in the finance world that's not possible. You can't just will hedge fund returns. I think Bernie made off tried to do that. Then it doesn't work. It was obvious to me that he shared that same belief. He was doing something messy like the debt collector, whatever it is, something hard. In that same next conversation he's talking as if our success is inevitable and we're going to build this in during business. I was attracted to that. I've always felt that way. I could just tell the Greg seemed like the type of guy you wanted to be in a flocks all with. It's now the end of 2019 and I'm realizing that we have this opportunity to reset and to really think about what can latter 2.0 be. In order to do that we need to refocus, restructure, what's thinking about what a leadership transition could look like. I found myself in a position where I was our largest financial shareholder in addition to being in the company as a co-founder on early days. It was all people like yourself that had put money in because they trusted me personally. I felt naturally this obligation and my role and mindset shifted from one of co-founder to trying to be a steward of the business. At that point, this is the day after Christmas 2019 came to the board and proposed that we needed to make some pretty significant leadership changes in order to really reset the business. As part of that, we had some changes at the executive level including name and Greg CEO. It felt like at that moment we had this sense of we can go build this thing now. Our problems were hardly solved but it felt like the problems were now worth solving. As your business scales up everything gets more complex, especially your compliance and security needs. With so many tools offering band-aids and patches, it's unfortunately far too easy for something to slip through the cracks. Fortunately, Vanta is a powerful tool designed to simplify and automate your security work and deliver a single source of truth for compliance and risk. There's a reason that ramp, cursor, and snowflake all use Vanta. It frees them to focus on building amazing differentiated products. Knowing that compliance and security are under control. Learn more at vanta.com/invest. I know firsthand how complex the tech stack is for asset management firms. And seemingly every new tool and data source makes the problem even worse, adding more complexity, more head count, and more risk. Ridgeline offers a better way forward. One unified platform that automates away the complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more all at scale. Ridgeline is revolutionizing investment management, helping ambitious firm scale faster, operate smarter, and stay ahead of the curve. See what Ridgeline can unlock for your firm. Scheduled demo at Ridgeline.ai. Your finance team isn't losing money on big mistakes. It's leaking through a thousand tiny decisions nobody's watching. Ramp puts guard rails on spending before it happens. Real-time limits, automatic rules, zero firefighting. Try it at ramp.com/invest. As your business grows, Vanta scales with you. Automating compliance and giving you a single source of truth for security and risk. Every investment firm is unique and generic AI doesn't understand your process. Rogo does. It's an AI platform built specifically for Wall Street connected to your data, understanding your process, and producing real outputs. Check them out at rogo.ai/invest. The best AI and software companies from open AI to cursor to perplexity use work OS to become enterprise-ready overnight, not in months. Visit workOS.com to skip the unglamorous infrastructure work and focus on your product. Rage line offers one unified platform that automates away the complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more all at scale. Schedule a demo at ridgeline.ai. Just to put like a finer point on the situation for you personally, you've left this job where you're making much money. You're in Austin. You've moved your family. You've gotten most of your good friends and your family, as far as I understand it. My family. So many people that you cared about, that cared about you too. Invest in this thing. What did that feel like? What was the darkest point and what did it feel like for you personally? Just felt like there was nothing we weren't willing to do to make it work. I think that's why it was appealing to meet someone else that felt that way that was going to be in that box. I should have learned that lesson and said I need to not raise money from friends and family. Instead, they were the only people at that moment that they could trouble down. You just had to go even further all in. Not sure I would do it again or recommend other people take that path. Why not? You have to just know deep down that you'd be willing to do whatever it takes, including some very difficult conversations with your wife and your building family and you'll leave in a lot on the table on a much easier, cushier, hedge-fond country club type existing here in the Northeast. And you want to go and do something hard. Turns out it's pretty fucking hard. I think that dynamic is why ladders here. Your motivation was delivering to everyone in your life. That's it to you every single day. I don't think there was a moment where we thought we weren't going to figure it out. I can't think of one day where it's not going to happen. We were going to figure it out. And at my side, I had on that same dynamic I'd do now, but it wasn't true when I first joined. Not everybody was invested in ladder. But I had a conversation with my wife where she said, "This is the last one." If you don't figure this one out, there are no more startups. It had been ten years of not a lot of success. Tied to a lot of work. And my wife married an investment banker who was a closet entrepreneur. She's been an investment banker for 18 years. And it's been a long time of, you know, I'm going to the clubhouse and I'm going to figure it out today. My promise is coming. It's coming. That's been an enormous motivator of like, "No, this is going to work." There's this no scenario where we can let this not get to the vision that we've set ourselves. Why did you decide to join it? If you think about the circumstance that you were opting into, he said it best. No money, no product market fit, media and whole new team. Why not start a new company or something? Why come into this specific situation? It was this perfect moment that was very unlikely to ever happen again. I was building a company inside of a big real estate private equity business, a consumer company, which had all kinds of complexities of trying to be an innovator inside of a really established company. But I had this amazing team of people. Some that have been with me for a couple of ventures some that I've worked with for two or five years. Really powerful team that could build anything. This is a product and engineering and marketing, but a core group that we wanted to just keep working together. And we wanted to be in consumer, we wanted to work on a hard problem. But we had a group of people that were not as the age of life where they could take zero salary and start something from a garage. People were starting to have kids. Life was starting to happen. We got spouses. And so just starting something from scratch and we thought about it, it just seemed like it was a hard task to keep the group together. That was my number one book. Because they keep this group together, it's special. And I want to hold onto it for dear life. So that's what I was solving for. Consumer and bring my most important people. And let's take another swing together. Talking about what a given day was like. And when you guys joined forces, there's still this mess to clean up. And then there's this thing you have to go build. And it's like two sides of the coin. What would a day look like in those early days? It's literally late March 2020 when we've zeroed in on the concept for this new product. And we're having to go fully remote to Teams new. So everyone's working from home other than Greg, myself, and Johnny. The mornings were for the messy stuff. It was figuring out how to untangle some of the situations we found ourselves in, deck collectors, and actually just trying to fix things so we can move forward. In the afternoons, we're actually building product and Greg's focused on winding the team up and iterating on what we're about to build and launch a few months later. We're raising money at any moment during that. I'm spending every moment re-dialing people that are already investors and reaching out to new people. What I remember most though about those days, because it was hard, but it was also so exciting. And I think about at night at 10 o'clock, we would finish the whole world to stop everyone's at home. We've been in the office grind since 6am. And at 10 o'clock, it would be like, all right, like whatever when we had that day let's celebrate. And it was like, you've seen that scene in Goodfellows when they're on prison. And when wise guys go to prison, it's not like everyone else, they got lobsters coming in. It's like in the garlic. It's like in the garlic with the little razor blade. For us, our version of that, we're cooking steaks on the grill. We're smoking cigars in the office because no one else is coming in. I'm shaking martinis up there. And we're high five and about raising $10,000 checks. That was exciting because frankly, it felt more like the startups that were removed. emphasized by the podcasts and books and all the fun stuff. It was survival. And when you're in a moment where it literally is survival, it's not hard to know what to work on. Where it wasn't hard for us to know what mattered. We needed to not run out of money. So, do you give us spending time trying to solve that problem? We were in debt and owed a lot of people a lot of money. And it's a startup. So, it's really hard to get a clear picture of the financials and where money is going. And it was the first thing I worked on was, where's the money going? We put that piece together and no one can really see this or is looking at it. You realize, like, money's going in different places that we're not totally aware of. And mission number one was figure out the cash flow. And we got visibility into that. And then we had some money that we owed to people. And we owed some of my cardboard creditors, like American Express, who doesn't really mess around. And I learned and you can learn all about how to go show creditors. And that was a new skill set for me. What's the key to that? Bagging. You have no money. When you get them to really believe, it was true, that there's a chance you get zero. There's a door. It's in the go-shade. We were negotiating with big creditors at $0.20 on the dollar. We knew the list of groups that we owed money to. And it was like sales. We're like, all right, we got to go one by one and figure out how to close the door on this and not let it overhang the business. And so, who raised money, get money back to the right people, clean up the house to survive. And then we had this moment, there on this time, where we have this existing business. It's not working. There's some insights that are coming out of it. But it's really not working. But we're still trying to maintain it. So we're living in this in-between moment of keep that thing alive so we can pitch something to folks on the outside. But also, what are we going to do? What are we going to build? Isn't this? There's no path in this thing that we've built. So there are really funny stories where Degan was pitching, I'm pitching, and you're basically trying to figure out what the investor likes. You're like, let me tell you about this one-to-one business we got. It's like, super exciting. You don't like that. We're thinking about this social concept. You just believe in this world of figuring out, how do I make it through? And there were enough wins. The micro wins on survival fell big to us. And there was enough to celebrate to keep going and wake up and go do it again. If you were to teach a class on fundraising for startups now, you're doing this as masterfully as anyone with the cards you were dealt. What would the lesson plan look like? One of the biggest lessons, particularly from that moment, is selling people on your conviction in that moment. We were selling both the product that we were about to shut down, but we didn't really even have visuals yet for the new product. So there was as much just selling the team in the conviction on what you were about to build. I think the best example of that is story about another friend of ours called him Bill in March of 2020, trying to kickstart around. But no one's going to lead this round naturally, because we would lead around in our business at that moment. And so I was about to lead another inside rounds where basically I'm pricing the round and passing the hats all the boys and whoever would listen. What happened there was now I need some more cash. I don't think Braden knows how many times I wrote check into the business. This was another example of being like, all right, the only way to get this going is to write the first check and lead with that conviction showing that you had skin in the gain here again. At this point, I'm trying to figure out how to sell anything that's not nailed down. And so it's 401K, put that in, done. What else can we do? This story here is funny because I'm looking at align items on the vouchee if you want. I'm like, oh permanent equity. That's Patrick's friend, Brent P. Shore. And Brent came and told his story on this podcast. He has an unbelievable strategy. And it's called permanent for a reason in that. He advised these family-owned, awesome businesses and then holding them forever. And so there isn't a liquidity profile here. But I read the documents and it said that if you found another LP, a cell two that you could sell. And so I called Brent and said, hey, I need your investor list. And he's like, S&P is down 35%. We're in a global pandemic. Of course, I'm not giving you my investor. They're my smallest investor. But he does me a solid and he's like, hey, you should call Bill. Bill's a friend, he's Patrick's friend, you know, Bill. Another nerd aim guy, so I call Bill. And Bill's a gamer. So he's just like, what are you looking to do? When do you need this buy? What are you thinking? How do we mark this? And I'm like, Markets down this. So what about down 10% and he's like, what about down 50? And we do the dance and we end up somewhere in the middle. And I'm like, you're done, but I need the money tomorrow. And he's like, I'll send you the money tomorrow. And I'm investing in whatever this is going into. He doesn't even really know what ladder is. But he's like, what I'm in. The point there is in particularly those early days, it's important to have skin in the game in whatever way you can. For us, it was about being able to show that level of conviction and urgency. Bill didn't need to see a deck. We didn't have a new product yet. He knew you were involved. And he was just like, if you're willing to do this, I need to be involved too. So he bought your stake and then also invested in the round. The year he invested in it. Yeah, I think he matched what he was sending me, which was awesome. And that kicked it off. Wow. We're glossing over a lot. Maybe we'll keep returning. I love that story. Let's get to the point now where things are starting to feel like, okay, now we have to build this next thing. Maybe this is a good opportunity to ask you what you now know about the world of fitness and people that want to get fit. What becomes your North Star for what product can we build here that's scalable that can get to what it's become? Yeah, it was no magic bullet that said, go do this and you'll win. But we spend a lot of time first two, three months out there trying to dissect the current business. And the current business was this one to one essentially marketplace connecting independent contractor coach with a consumer who is looking for personal training. We're studying the behavior and watching what's going on here. And what I noticed was that coaches could set their own price. And some people had crazy high prices. Some people have more approachable prices. And their building this is customizable program and building it for you based on your very specific goals. And that's why I'm charging you this amount. And on the back end, we can see that it really wasn't personalized. It was big bucket personas. The names were Sally Pilates. And that was being built as super personalized programming and charging like you would work with a coach. But we can see like these big bucket personas were like, okay, maybe a personalization is in the secret here, but it's having good programming that's relevant to you. And that same moment, I went through the list of coaches and there were a lot of coaches that were making a lot of money on this. But then we had a couple of that were making four or five grand a month. And I spent time with them and I asked them, what are you doing differently? How are you making this thing when everybody else is struggling with it? And we have one in particular. And I was like, all right, so you're making four grand a month. Your earnings are growing. How did you get there? Why isn't it growing anymore? And Lauren was a trainer in New York, a high ticket trainer in person. And she was filling up all of her downtime with online clients with a lot of her. And we had no idea how to grow. So she figured out, I have this Instagram profile. She had five or 10,000 people and she was telling a story to her audience and they were coming in. But she filled up all of her time and she couldn't take on any more clients. And we got to bad business. You've capped how big this can get. The constraint is human time. So there's two insights of calling bullshit on personalization, watching what Lauren was doing and seeing how she was growing and piecing those together into what became a trial test or an MVP of this vision. We didn't know what we would build, but we said, there's something in these concepts. And in February 2020, we said, you can't take on any more business, Lauren. What if we jimmy rig the existing app? And we created an experience where there could be more than one person in there. You're going to program for a group of women. You'll go out to your Instagram audience and you'll say, hey, this is for I'm a New York busy women in New York, kettlebell training. I'm an experienced coach. I make, give you new workouts every week. It's not customized, but very specific persona that she was talking to. And we're going to have this chat in the app where we all can talk to each other in the app looked like shit. The functionality barely worked. But the concept was clear. In the process of dying in this moment, she went out to her Instagram audience and we had like a hundred people sign up at a hundred bucks a month. Very fast. That was the most exciting thing I'd seen yet, other than getting wins against American Express in her critters. And that was awesome. We're like, okay, there's demand. Lauren's audience, they came in very clearly. There's interest in this concept. And so that first month, we were just watching what was happening because there was nothing else to look at from a product perspective. I think what the most amazing and impressional thing to me was these people had found each other in the app. They were similar personas. They lived in a similar place. Busy women, following the same workouts every day, interacting with the coach and each other. They'd never met each other. But they started posting on Instagram about Lauren and Ladder. And then we saw them meeting up in New York at the park together. They'd never met each other before. And that was like magical. There's community elements in social and they're happy. And we'd never seen anything like that. And the original version of the product. So all these little glimmers of hope on this concept of programming. It's not personalized, but it's high quality. It's meant for a specific persona. This social accountability element. All these things are like bubbling up as real tangible proof points of something that could be interesting to go work on. That group, the renewal rate, was 90% plus. People paid again. They're like, damn, like they're doing the workouts and they're staying with us. And if you'll get the app, you would go, this is garbage. The promise was being delivered on what we were proposing. We ran one more trial with another coach. It was the exact same outcome. I talked to almost all those women down the phone. They was like, who are you? How did you find Lauren? Why did you go into this app? What problem are you trying to solve? Then we talked to all of them in build the relationship. And like all those were inputs. Did anything surprise you in those conversations? It validated a lot of things we were learning in real time. It's like, why did you join? I'm tired of thinking about what worked out to do. I'm already into fitness, but I spend time actually planning this. The pain point for me, I don't want to go spend $1,000 on a coach. I need something more approachable, but I need help with the plan. I need to know that I'm doing the right thing. I want a coach that is helping me and have confidence that it's the right thing to do. And that was the real thing. And then we saw them meeting up and they would say, "Oh, I met someone just like me." And they had the same pain points and they'd become a friend and we work out together and that was magic. And so all these little curls, just speaking and forming a picture that got clear and clear and clear was the beginning of what that product would be. It was very fond of the Elon algorithm for company building now. That's been passed around as like one method for doing this. If you had to distill your algorithm for how you proceeded from that initial kernel of an insight of, "Okay, here's something that people are paying for and like." And we can do something with this all the way through to where the product is today. What's been your, as the CEO, algorithm for that iterative improvement to get from the original kernel to now? Well, I can tell you, number one is don't listen to investors on product feedback. That is by far number one. But for us, it's just two things. It's prioritization, ruthlessly prioritized. You have to prove to each other that this is going to be additive to the product. And additive to the product means we have a thesis that is going to increase workout completions. That's our North Star. We're solving, not forgetting you to pay one time, we're solving for you to actually complete workouts with ladder. And what can we go build to go improve the odds of you doing that and staying with us? And how we get to that is we don't guess. We absorb every piece of information that's coming in and it's all driven by our members. And if you ask the right questions and you have people that are talking to you, you can start forming a picture of what are the huge buckets that actually move the needle. You can do some work to figure out how complex is this to go build and go do it. And don't do 10 other things just because it's interesting or you can do it. Just do the one thing and do it really well. And then do it again. That's still the case today. We just launched nutrition. It's the biggest thing we built since the first version of the product. And people on the outside were like, that should be a separate app or like, that's a different business. And we're like, well, to our customers, not. We did this survey a year ago. We had 5,000 people spend in 50 minutes and it was qualitative and quiet. And we were trying to figure out what are the biggest bets that we could go make. We were ready for a big project and we didn't want to guess. And out of that work, it became very clear that it was nutrition. And what we learned was we have a third of our members who are tracking macros. Of that third, 90% are using an app. Of that 90% mostly using my fitness pal. And they hate it. And they're really tired of managing their problem set in two different spaces. And what we learned through that experience in talking to members was that for the consumer, it's one problem set. I want to lose weight. I want to gain muscle. There are inputs and outputs to that math equation. Outputs is activity and exercise input is what you're eating. And they're managing this in two places and they know that's not the right way to do it. Because if you worked with a coach, these things are all symbiotic together. But it all started with a kernel from our members and we had a really clear line of sight that this would move the needle. They were telling us, I want you to use all of these things. Motivational mechanics, streaks, badges, celebrations and help me with the other side of the equation which is going to dictate success or not. And then once we have that kernel, we do another survey. We go very deep on nutrition, extremely deep to understand. And we all review it, read everything. We set the size in. It gives us a blueprint. And when you do that, it becomes obvious. What's the build? What is very deep mean? The nutrition survey. That was probably a couple hundred questions. We read all of them. Now you can put them in chat, you be see in the beginning of this. I would copy and paste apps to are using to a word doc. I would read every single one of them and I'd organize the words by bucket sound. Color code them and I would do chat, you be see. And I have these documents that are a hundred pages long and it's all just deconstructed words from our members. And very similar to survey work in the beginning, we would do that with surveys. We dissect the themes. What do people care about? And now you can use chat to be see, just synthesize all this. What is the biggest bet that we can make on behalf of our members? And then we'll think about what are the building blocks of what this should do? Is this nutrition coaching? Is it macro tracking? What does the features that do? Are you aim questions at uncovering the pain point? And what they're looking for and that becomes the guide on the first version of the future. What did you learn there? What do people want on nutrition? There are two halves to this from my perspective. It's looking backwards and looking forwards. What they were doing is tracking looking backwards. Make it really easy to track macros. I want to know if I'm in a surplus or deficit. I want good visualizations. And I want it to be really easy in terms of how to log. It's very tedious. It's very hard with some of the existing legacy products. So give me an easy way to do this. And so the looking backwards to us was basically the table stakes. We needed to give a really easy path to tracking macros, logging your meals, logging your food and telling you what's happening as a result. And then if we do that and we do that really, really well, there's going to be a whole other opportunity to tell you what to do, not what you did but what to do. Members want to know what to eat specifically. Where should I get it? At a restaurant, here's the menu. What's the best choice right now based on my goals? They want prescriptive advice. But the looking backwards was what they were using for the apps that they were using at that moment. It was mostly my fitness pile. And there was no brand affinity or love. It was just the tool that existed that there was trust because they had the biggest database. They had done it for a long time. But there was just a lot of pain in these conversations on how they were doing this stuff. So we made a conscious decision not to charge for it. So we're going to give this part away. We want to go build trust with this group and win over tracking with ladder. We're not going to convince the whole new group to do this. We're going to go get the people who are already doing it. We're going to do it better. We're going to win their trust. So compiling this data. And there's a million products that we can now build. Like you think about what nutrition does for us. It's the clearest of any other potential product or service around this consumer. We know exactly what's happening on bullseye to the equation. And that's going to unlock a whole bunch of products and services to help our consumer. And this would be things like I could take a picture of my food. We already have that. That was table six. Take a picture. That's easy. But also tell you what's the level of confidence and accuracy because there are trade-offs. If you use take a picture versus scanning a barcode or entering very specifically an ingredient or a recipe. We had to nail that use case, make it super slick, make it very easy to use. And that was the beginning of building trust. Even in that process that you act like how do you figure out what to build. We built the first version. We have a group of 2,000 members who are beta members. And we give it to them. But first we do it to the team. That's the alpha. We're all giving feedback with a Slack channel. Everyone's communicating on what's happening. That helps the picture get clear. And then we release to our beta members. And it's in the wild. And they're using it. And you hear it right away. That's wrong. What's the gaps? What do you need? We would survey these users every week. We had a question, how likely are you to switch from your existing app that you're using? And when it started, the number was 20% pretty low. Not super exciting for us. And then we would go build and make the picture clear and help fill the gaps of what folks were experiencing. And it kept going up, kept going up, kept going up. And there's a point where you could just keep building the MVP forever. But it was 85% one day and it was like, we're ready. We're done. This is ready for the wild. And then we released it. And it's been a home run. We're in week six. We're almost 4 million meals logged, which is insane thinking about those early stories where we're literally, we knew all the people in the app. Real time limits, automatic rules, zero firefighting. Rogo does. It's an AI platform built specifically for Wall Street connected to your data, understanding your process and producing real outputs. You said before, don't listen to investors on products. Can you say more about that? Well, I don't want to do anything with person on product. One is a unique use case persona problems solutions that they're looking for. No one person is the source of truth. If you get one piece of feedback, that's just one piece of feedback. When we talk about investors, I remember earlier meetings, it would be like really prescriptive advice and you should go build this. It's like, maybe, I don't know, that's what you want. We would go test that with our user base and ask them and they would say, "I don't want that." That's extremely empirical way of building. It's just empirical and it doesn't have to be completely precise, but it becomes very clear what the big chunky buckets are and everything else on the fringe. That's not that important. What is important becomes very, very obvious even if it's in line with what investors are looking for enough. Various points to this business, you and I have had a call and it will be some period where you described him having gone into a cave-like process to go study some new topic. Some new thing has become the bottleneck for the business. I can think of several occasions when he was studying X, Y or Z. Even from your perspective, this cave-like process that you've seen him go through to unlock these bottlenecks. Probably four years ago, when we're trying to figure out growth, we've built a product, people love it, they're using it, they're telling us what we need to build and what features we need to evolve to improve it. We still haven't figured out how to grow. The way you get from zero to one million AARR is very different than the one to ten. For us, Greg's view was, "Let's go run some experiments." We're looking at some different ways to grow. Here are the different options right now. We're thinking about how to go and start to create content on search. We have a lot of assets in the app that we can leverage. there. We're looking at some different channels TikTok being the most obvious where it's just all the eyeballs are there But the brands aren't there yet. That was compelling to us. We understood that the consumer was Very interested in engaging with short-form video. Meta hadn't quite copied that with their reals product yet But it was obvious that that's where the consumer was going with their attention and yet the brands weren't there spending it We partnered with coaches these world-class coaches who were all creators. None of them knew TikTok yet. They were all Instagram native. In fact, I don't think any of them at this moment were even on TikTok And we were excited to go figure this out and it was hilarious because Greg I'm not if you've seen his Instagram It's not particularly cool. He's not a creator But he was like I'm gonna go and become the TikTok guy and I'm like all right, Mr. TikTok over here I was like you got to go hire somebody guy. I'm like I'm figured out So he goes all mad scientists on trying to just understand every aspect of TikTok to the point where fast forward two years later And the big dog engineers from China are in our office because Greg would be calling it being like the algorithm is broken and they'd be like No, it's not and then Greg would go get a bunch of information from Ryan mod and send it through and they go wait He's right. There's something wrong with ads manager because the ad tech was very new and so Greg was very much triaging and troubleshooting their ad tech in real time The other story that I just speak to Greg going into his cave It is winter 2021 probably March or February and I don't remember like the Texas freeze Like the entire state shut down. We have an ancient snow, but we lost the power grid So anyways Greg goes into a cave because there's nothing else to do and he's reading the book crossing the chasm Great book that I think all founders have read But Greg's output of reading the crossing the chasm was a hundred page slide deck that he sends me when the power comes on And we finally have internet again, and he's just like I figured out who our customer is Ultimately that was very important work because it set up what we were about to go do on TikTok that you couldn't have success without understanding who that customer is What did you find in the book? Not trying to be all things to all people Especially early on you can go after a big market problem, but you don't have to start there We were trying to tell a story to everyone the world was upside down consumers are up for grabs because your gym folks were at home Everything was a mess all these other companies are launching and we're saying we're awaits We're body weight. We're gym. We're home. It was all things to all people and it wasn't working Like we weren't getting to the right person and crossing the chasm just helped me zone in on who is the most important person that we're talking to right now and who's finding success And how do we speak specifically to that person and not go try to tell a story that's relevant to a pelton user? You have unlimited time right now to talk to us about solving this problem. How you cracked The code of growing through something like TikTok the more detail the better I just think obviously it was a or the critical moment for the business early on once you figured out the product Just riff on the experience literally what you did. Yeah, and what you learned How to wipe board meeting where like what are the growth loops that we think are available to us That we think we have your advantage on that we think we can do within our own team that we can learn fast enough to get Proof points and to dive in on goal and on and TikTok came out of that as the winner What we started to do was make content and we knew nothing. I had this breakfast meeting with that soul who leads branding creative And I was like uh, hey man. Do you want to work on TikTok with me? And he was like sure this guy is building all of our amazing campaigns like he's shooting for Nike's not all these things Need you to make TikToks with me and it's just gonna be me and you know He's got the creative mind Then we grabbed a coach and we said hey, we're gonna start an account from scratch. You're not on TikTok We want to go learn give us all your video that you have on your iPhone So you have this inventory of video you have a smart creative person We started handles in the coaches names then we started to create content and very very quickly We started to learn what was the content that worked and we were dissecting every inch of it What worked multiple times in a row? Why what are the commonalities? How is this product used? It's not Instagram It's like TV people are consuming content for entertainment And it's not a social platform. It's a media company And so you have to think about what is the right content that is educational provides value That gets to the right person because unlike Instagram where you have an audience that you're creating content for You have to create content that the algorithm knows who to put in front of the right person So it's all about the content But the advantage for us at that moment was it didn't matter how many followers you had you can start from scratch Nobody knew how to go do this But that first account that we started I remember being on the playground of my kids And that's also like dude once ripping and it was like a million views. We're like oh shit That's amazing that video took you two seconds to make and it was like do it again We did it again We took that account from 0 to 200,000 people in 45 days and we weren't thinking about paid at all We were thinking about what is the TikTok as a product? How is it being consumed? In what content wins? How do we create that content? So we got views We had proof points of traction and then we said all right. We have blink and bio Can we get somebody to the app and we did very quickly and we're getting the right people into the app And all these things were like starting to compound We started another account did the same things. We're like we can do this organically It was three months and then we said let's start putting some money behind this and see how it goes We had no performance marketing team. We had no agency. I was absolutely against hiring anybody outside the company And I just committed to learning how to be a performance marketer TikTok Because we didn't come from performance marketing or Facebook We had no preconceived notions of how things should go And when you talk to Facebook marketers who are moving to TikTok They were applying all these rules and heuristics of Facebook and Instagram to TikTok But these are two separate platforms. You have this Chinese app and a different algorithm Why would those roles matter over here? I spoke at a all hands for TikTok And I was talking about some of our strategy and I had conviction in what we were doing And I was like yeah, I make budget changes seven to ten times a day And if you talk to the TikTok group, they're like you shouldn't touch it for two weeks It's the learning phase and all these things Well, all those people came from Facebook and all their roles they were telling me were Facebook roles And at the end of the meeting this woman comes out to me and she was like that was really interesting because of things You had the most conviction in or the opposite of what we're telling our clients to do I realized pretty quickly that Everybody is taking this mental model over here and applying it and not trying to figure it out From scratch of like if it works do it again. Who cares would they tell me it work? Do it again That was an important piece of just thinking on our own on how this should go I launched my first ad okay, we could do this Very quickly it was getting people into the app and then it just became a drug addiction I mean, it's like trading I'm bad at mental math, but I'm also fascinated by traders Then when I was a goldman I would interact with traders If she's magic to me all the screens and the attention span just like how does this happen But it felt like that for me like I'm moving money around driving growth for the business and it became a video game It's like how do we beat the video game today and I had this amazing creative partner in Edsel I can figure out the ugly of how to be an as manager person as my job And those two things together unlocked that channel to just keep going keep pushing on it I feel like the rewards for doing this in a consumer business are extremely high And so lots of probably tried but not lots have succeeded What do you think it was that let you start to win the video game? Was it the knowledge of how to cut a video together? Was it topics? No, the creative side what we learned is the for you page is making a decision on your content If your content is for and then it's shoving it to that person So the first game on the creative side was can we create content that gets to the right person for this coach? This is a crossfit modality can we get to crossfit people using content And that was just iteration we would do something And so you'd say like what is a crossfit person care about? What do they care about? What's their problem solution statement? Well should a coach say to get you in and we learned about hooks What you say in the beginning the first resettance It matters what you to hook look like What do you say? It gets a billboard that I need to get your attention very quickly And we had a lot of back content that didn't work And then we had stuff that started to work And we have these whiteboards we dissect every inch So like what is she wearing? What word was first? What was the setting of the gym? What was the movement? What did we say? And all of the insights of that come from doing your customers Not hey we magically figured out TikTok we did But our edge was we knew our customer insight and out I had dissected these absurd reviews so deeply That we knew the words that were coming out of the mouth for people in crossfit coming into the app And we used that as our ammunition On how to speak to them and create component content hooks That got to that person and told the story very fast That got them to keep going to follow to come into the app And just to orient in the history of the business How much revenue or whatever was there at the start of this That's curve and how quickly did it accelerate For 5 million of error We were getting some success but like the beginning of the TikTok journey It started at 3 million but 5 when we started to put money into the machine And it sort of exploded since there It exploded but one of the things we learned that was critical to TikTok is You have to own the creative And this was like not typical for brands in our space They're hiring agency that agency would make creative But we're learning all this stuff on the organic And we're learning that the iterations cycles are so fast You can't just hand it off to an agency and hope that it comes back correctly So we started investing in creators full time We had JD's on the website in 2023 It said fulltimeticks.creator People were like what the hell is this job But it's no different than social media jobs 10 years ago That's not a job Well it is a job It just wasn't a job yet And it was the same dynamic So complete control over the creative We have these coaches on our team Give us this edge on compounding learnings This many agency that was figuring it out Across all these different creators that we controlled That we weren't just waiting and hoping that somebody on the other side of the fence Would throw us the right thing If that was the frontier then What is the frontier now? What we're thinking about now Now is the short form video strategy will always be a core part of our strategy that's not going away. But I think what we learned, it's expendable, be untouched, I can just say it's exactly. I think what we learned last year though is that we certainly don't have a product problem. We have a very special product. Our customers love us and they're asking us to go deeper with them. But most people still don't know who latter is. We're consistently top three or four in our category in the app store. And yet the awareness is very low. I think that's largely a function of the short form video strategy that we had that was speaking with creators in these winning formats to a specific persona that wasn't really leading with the latter brand. Now we're excited to go and think about celebrity partnerships and out of home and TV. And we're already making these campaigns. Now we're just going to go and put them in these other channels. So that's certainly a big focus of next year. It's just telling a wider story that frankly is just going to amplify what we're doing on short form video. How are you going to be empirical about that in the same way that you've been about product and marketing so far? Small controlled bets big on scale but limited on bets that we're making. So if it's a celebrity partner, we need to know exactly who that audience is. Is this someone that resonates with our user? Are they going to amplify the right message that represents latter? To date, we had no leeway to spend money that didn't turn into results. It was like, here's my and my turn into users. Keep doing it again. And this is a little bit different, but we've realized very quickly is we do have an awareness from people in her ladder. We're getting big where the number one grossing fitness app in the apps are where top hundred in the US of all US apps. It's big. So we need to go invest in really concentrated bets that speak very specifically to our user that leverages the creative horsepower in our team. We have really special people in our team that can create stuff that no one in the world kind of from a brand perspective. So it's not as perfect of a science and I kind of buck it in two different past, but my thesis over time is going to make the short for a mention a lot more efficient. If people are not aware of ladder, we have like one video we're trying to convert you. They're learning about ladder in that video. If you've seen and build trusts with someone who's endorsing it or you've conscious of nugget, yeah, there's a higher likelihood that that person is going to take the first step. So I think the two played together and you asked like what was the super charge over the last couple of years. We did deal with General Catalyst that changed the game for us and their customer value fund. Essentially, we realize as a couple of markets aren't funding CAC in consumer companies, we can't just go raise a bunch of money just to put it into TikTok. The appetite's not there no matter how good the product is. And General Catalyst has solved that where they're financing our investment of growth every month. So the payback happens over time. It's not as much of a cash hit, but it lets me think about half the houses is very performance, very controlled. You can underwrite it, which General Catalyst did. And now we're going to go invest in some squishy stuff that should be proven downstream that it has an impact and makes things more efficient, but it'll be iteration. Nothing else. It will be a game of figuring out what works, what doesn't. If you think about the experience of you said you'd built some enterprise companies before this versus consumer, it seems like in the last five years for a long time no one investing in consumer because actually really up until I guess very recently, I of course unlocking things in interesting ways. If you were to pitch a young entrepreneur, a teenager or a young college student on building a consumer business rather than that much more traditional B to B thing that's dominated the startup world for a long time, what would your pitch be? Why is it fun and different to build this kind of business? The fun part is you get to see it every day and it's impacting people. That's real. We're providing real value. We're changing lives. I read these stories every day coming in to our team of like what happened to this person because of ladder. What else could inspire you more than that? We're not selling their attention to advertisers. We're helping their lives. That's really fun. And the feedback loop is fast. You make something you know exactly what happened. That's exhilarating. That's exhilarating. You have a report card that's your users and no one user is the right answer, but collectively they are. I would say what people don't realize in consumer is how freaking hard it is. And there is no quick fixes. There is no growth. You have to be a real thing. You have to be a black belt at building products for the consumer and growth. You have to bold those things within your own team to survive. And then be able to raise money to go on that, which is its own mission. So in my mind, if you want to get into a consumer, you got to love talking to people. You got to love extracting information from human beings to create solutions for them. It's not like I think it should be. That's how consumer companies die because they just freaking guess. And it doesn't match with consumers looking for. So it's really hard. And you have to be excellent at both sides of the house. Half our team work on workout completion. Half of them works on trials. I'll take talk. That's the business. Very simple. But we are equal weight in black belt on both of those skills. And without either one of them, there would be no ladder at this stage. Great product. No growth. Doesn't work. Doesn't get funded. Great growth engine. No product. Leaky bucket. Doesn't become a big company. Both those things have to be true to be able to build a company that's durable and last. And just be ready for 10 years. It's not going to be six months or year. It's going to be a slog and constantly problem solving along the way. So it's flashy. It's fun. But it's really fucking hard to do. I'll probably say don't do it. It's probably easier things to get funded to do. But listen to the stories as Greg said, when you hear from one of your members about how ladder has changed their life in some way. And it's easy to when you're looking at the charts and everything that gets lost on you sometimes, but you're constantly pulled back by these stories. And we think our creative team does a great job of telling those member stories and that's something we'll continue to do. Our customers as Greg said they literally tell us what to do. I mean, we sent our annual survey out this year. We had 5,000 responses that take an hour on average is what people are spending. We already have 5,000 responses in the last two days. And they're answering 230 of our most burning questions about what to build from here, what companies to partner with. Would you be interested in supplements coming from ladder or everything or as relates to all the different surface area that we could explore. So that's really exciting to us is just continue to listen to them. There's huge advocates for us. So we're going to continue to do that. If you want to be by yourself with that one time working on consumer to losing strategy, I see that all the time where it's like you're just building shit. You got to be talking deeply to the user. If I think about the two big world things happening that probably most impact your business that are out of your control, it's AI and GLP wants. And I'm really curious how you think about both of those things as creators of opportunity as essentially risks. I'll mention GLP one fast and then AI is like a much bigger conversation on GLP one. It's interesting because all the science would support that you need a strength training plan alongside your GLP one. You're at risk of so much muscle loss. So we think that's actually a macro tailwind and something that will help us. It's not something that we've investigated date, but can totally see us working with some of the bigger GLP one providers at some point. The science backs that relationship. So that's not something that scares us. In fact, it's a question we asked in our survey, which we've never asked before. Are you on it or are you thinking about it? It's just about people who are fitness enthusiasts. It doesn't mean that they're not on GLP ones. And so we're going to continue to learn more there on the AI. I think what gets exciting for us is that it feels like we can have our cake and eat it to now. And that in the beginning, we felt like we need to focus on a venture scale business here and solving a problem that's solvable for a customer with software, which felt like one to many programming. Now with what's available to us and AI were able to deliver that personalization as well, which four years ago we couldn't have two years ago we couldn't have launched nutrition with our same team, you know, six months span like we did. Beyond that, what I get excited about is that in an age of a lot less differentiation and tacking commoditization of certain features because it's become so easy to people think you can just use chat to be tea to build an app. I would challenge someone to try to build the experience that we've built using AI. And I think we're going to continue to lean into the things that AI can't touch, which is we've built a compelling brand. We have a tremendous amount of trust from our members, which is really exciting. We deliver a human experience scale because of it. We've been thinking about it for four years. We've been using as a tool for three years. It is chapters for us in the beginning. It was a non coding tool. It was how do I synthesize information was amazing. I can take five thousand responses and really understand what's happening. So then it was everywhere. I can take it to think about how do I create compelling tick tock hooks based on all this survey data or user data. That's a tool saves time. But it happened at the exact right moment where our entire team is 50 people and that includes 24 time coaches. So 30 people excluding coaches. We started scaling the right moment where AI started to become a use case that made us not have to go higher, expand the team just to solve a problem that we were looking to solve. The team would have been a lot bigger this for four years ago. If we didn't have AI in every element of our business, the second chapter for us is using and incorporating the product, not replacing the human. We believe in humans as motivation. It's really important to feel like having a relationship with the coach, but I don't want to have coaches and reading chats all day and interacting one to one with users. I wanted to feel that way and use tools to expand the capabilities of our coach. So the team's with 60,000 people that are in it and now the chats are big and cumbersome and complex. And the coach's message isn't the only reason they're there, but it matters. And the magic moment for a coach is saying the right thing at the right moment that makes the most people satisfied with what they're saying. What isn't a grace of time, which was happening is scrolling the chat for an hour to go figure out what's happening here. So we built a product called ladder pulse that automatically come in reads every single chat that's come in tells you here are the three most burning questions. Here's the content you should create. Here's the member you should respond to because they've never been responded to by a coach sent done. So now we've removed all the cognitive overload of what to say. It's all powered by this tool that we built. purpose-lave for the business. We're building software now to go support a better experience. It's built on AI. Nutrition's a great example. We'd have never gone into nutrition if there was no AI. My fitness power had to build a database over time by hand that became the value of my fitness power. That's not the hard part anymore. The hard part is the consumer experience in knowing what to do with the data. So it opened up the capability that wouldn't have taken the business sideways for five years to go solve that problem. And then we're inventing products from scratch. I'll give you two examples. One, we have a toy in North 3000 paying members with one person that touches support. It's not a wonderful time job. We have tickets coming in every single day. We spend time trying to understand who's coming in. What are they asking? What are the buckets here? And we built a product. That person's name is Maeve. We built Maeve AI and AIVE. And we built a customer support tool from scratch. It's purpose-built for our company that manages now 90% of the flow coming in and the experience is as good or better. And it's faster than it was before. And we made it ourselves in our team. That was not impossible five years ago. That solved the huge problem. Now we don't have to expand that team and we can deliver a better experience through that. And we have a person on our team who only works in AI. That's the job. And he's been doing that for a long time. The best AI and software companies from OpenAI to cursor to perplexity use WorkOS to become enterprise-ready overnight, not in months. Rigline is redefining asset management technology as a true partner, not just a software vendor. They've helped firms 5X in scale, enabling faster growth, smarter operations, and a competitive edge. Visit ridgelineapps.com to see what they can unlock for your firm. How do you think about saying no to potentially juicy revenue opportunities that aren't core to the subscription and complete a workout, acquire customers? I can imagine a later dating service. I can imagine later being an origination platform for GLP1, or later coach tools. Or later shows the actual business. The Bentomson sense of aggregation theory. You're maybe a consumer aggregator. We've aggregated a lot of demand in this specific space. Historically, those companies have figured out how to monetize in lots of different ways. How do you think about the siren song of higher RPU and new sources of revenue? But a lot of those businesses have died too because of doing too much at the same time. We've had a multi-phase vision from the beginning of what this thing can become. Our goal is to be the de facto product in this category. We have stepping stones that we anchor to and they get moved around. But we have a vision for how to go do that. I think about new ventures, new business push versus pull. Are we being dragged into this area by our members? Is it so freaking clear that this is going to be really exciting and solve a really important problem for people that are relevant to us? Like nutrition. Nutrition is on the board as an investor deck that you have from five years ago. But it didn't make sense to be able to last year. We had critical mass. It was very, very clear for members if that was going to move the noodle. And that will build products on top of that. So we're ruthless in prioritizing. You have to make a clear, clear case of what this does to the business. We have no Android app. People think that's insane. But building an Android app requires basically pausing development on iOS, splitting the team's focus in time, playing this game of catch up for a user that has much lower revenue potential. And could absolutely take the business sideways for a year. Will we have an Android app? Yes. We'll have it this year. It's these levels in my mind. We have to go earn the next level. If we earn the next level, what should that be? Let's figure it out and then start the work on that. So I think all of these things that everyone talks about later will go do all of them. But I'm playing like a long game here. This is not go sell the business. This is go build the general business in consumer that solves the most problems for the most amount of people. In that big long term vision, fitness, working out and nutrition are two obvious major food groups of the vision. But what are the other big stepping stones that you think about? It's the system of record for health and fitness. I guess what Greg's talking about and how we've talked about it for a while. There's a category winner in every category transportation. It's Uber in short-term housing. It's Airbnb in Spotify and music. There's no clear winner in the health and fitness category. It clearly needs to be a mobile first company. It needs to be a product that has engagement that looks like social that we have. Nutrition was the next obvious step and it increases the surface area for us to really think about these other product extensions, a lot of them extensions. Some of what we talk about is there's so much commerce already happening in the app. We see it every day. We see, hey coach, what's that creatine you're having? Should I be having way or vegan protein and love those new shoes? Or do they come from? People are sharing links all day. There's different chats based on supplements or on food or on a peril for that matter. We're watching. We're learning. There's an opportunity for us to reduce friction there and start to think about. Is that a marketplace? Is it look more like an Amazon experience at first while we're learning and then we're building our own branded products? Our members want to tell us that they got a Dexascan and they would like this to be their system of record for their biomarkers. There's a lot of people building companies in the biomarker space. I think that would be a really cool maybe partnership to starter. It could be a feature of our business. We get excited about if we builds a compelling product and brand where people are opening this app 10, 15, 20 times a day, there's a lot of opportunity for us to insert other products and experiences into it. There's a long list that have been on the white board since the beginning. What I think about is product expansion and user expansion. Product expansion, there's no, oh man, that's brilliant. It becomes obvious when you look at it but we lost nutrition. Now we have inputs and we have outputs. Our members want us to tell them what supplement do I need to go take to make me whole. They want to buy that from us. Those will become businesses for a lot of when there's critical mass and it becomes very clear that this is a real problem that we can solve uniquely for in the business. So all of this things start to open up. I think there's user expansion too. We have a very specific user. It's a very big market but it's not everybody in fitness right now. So we think about a lot of it's how do I get a hundred million people to be working out later every day. There might be a different problem set than the current product right now. We spent time thinking about how do we get the people earlier in their finisher and into later because you can think about our product. It's progressive programming. So you need to know that programming is valuable. They got to be in a strain training. Okay, that's its own bucket. They need a way to pay for that. Use a phone during a workout. All these things are big market but they're inhibitors to broader fitness and we've got this content library that is not valuable to our members. Our members are paying us not to think. They don't want any choice. They want to know on Monday what exactly should I do. We asked this question in survey. We said, "What would you pay for the whole library?" It was like a dollar because it's not valuable to them. I already have my money to work out. I don't need 10,000 workouts which is every other fitness product. So I think it's going to get passed. It's not this year. It's not next year where we give the individual content away where we give away every other product which is just the library because the library isn't valuable and isn't what our members are paying for. But it starts to map to how consumers in the outer rings of fitness are consuming content. What we learned, you know, investor come and say, "Who's your biggest competitor?" Is it peloton? It's like, "No, it's YouTube." By far, it's not even close. It's people going to YouTube and typing, "Ford of five minute upper body dumbbell, give me a workout." And then consumer getting YouTube. YouTube's not built for fitness but the content lives there. We need an on-ramp to ladder that mirrors that consumption powder. There's amazing content. The best content you're getting it on YouTube. It all lives here. It's free. There's motivational mechanics that are important. It amplifies the importance of social and the power there. So I think there will be a freemium component that it will be the right moment to hit on it. But we've been talking about it thinking about it for a long time on how do we get to the wider rings. And then over time, you move those people just like we do on TikTok into this concept of a plant. Hey, now you've done 40 workouts. They're in seven different teams, but you're not really happy that your results aren't there. I got a different way. We can tell you exactly what it should be. The analogy I give to folks outside the business is you're working on a puzzle. Puzzle. You got the picture on the box and you got all the pieces. You got 10,000 pieces. And the picture is what you want to go build. Well, our members have the vision of themselves. That's the box that they're solving for. And we give them each piece in order one by one to construct the puzzle that they're trying to solve. No thinking at all. Well, most products and fitness is just a bunch of random pieces. And it's like pick up a piece that you feel like doing today. That's not a great strategy to getting to results. One more question is what it's like talking to investors now versus early on. This thing has changed quite a bit. Your sources of capital have gotten. We talk about push versus pull. Yeah, increasingly sophisticated over time. I was at the least sophisticated at the start. You've gotten to much smarter more institutional investors ever since the beginning. Say a little bit about that journey. What's exciting is just on the investor landscape in general is that there's not much innovation being funded in fitness right now. When we first started trying to tell the story and raise money to institutional investors, it was like how could you possibly compete with Peloton? There are a 50 billion dollar company in that moment. You should build AI weights. That's what I remember multiple times. I was like, that seems like a bad idea. Where's the hardware? And then Peloton has their post-COVID troubles. And they're like, oh, well, Peloton didn't make it or that story got very hard. How can you build a good business? It can't be done. So it's being a use against us twice now. But all that while we've been iterating on product and shipping product to every other day and listening to our customer and building something that our members are telling us is really, really valuable. And so we have this amazing head start where we feel like we just don't really have any competition. So that's been really exciting. It was hard for a moment. Now we find ourselves in a position where when you get to this growth stage, people can see the numbers. You can look at App Store metrics and see that our businesses and flexing and see that the growth rate has been really strong. And so there's a lot of investor interest. What's unique about conversation with investors now is we're in a strong position in that because of the general catalyst deal, we control the timeline on raising money, our business. now generates cash, it sustains itself. That doesn't mean we don't have huge ambitions we do, as Greg just talked about. We want to be the system of record in health and fitness. That's when I require raising additional capital, at least another round and continue to invest in particularly product and engineering. Fortunately, we have some great investors already around the table right now, and the way we've been approaching it is start to go and spend time with a small group of really high quality investors to get to know them outside of the context of a fundraising round, which is not something that we were used to. Now you have time to actually build rapport and get to know people when you're not raising money. - What I think is important there, four or five years ago, was it's cash, but we just need cash. I'm okay, who comes from? Tourms, shurms, sounds great, we need money, we're dying. There was no selectivity, and this GCDO is giving us a lot of leverage, where we have more money in the bank than we did when we closed our series a year ago. And it's giving us time to really think about who are the people that we want in the boardroom, who are the people that we want advice from in talking to companies that prefer you. Just even before we're thinking about it, just knowing who are the five human beings, forget firms, that's less important to me, who are the people that we're really excited with for the next leg of ladder. And we now have some cushion to go be smart, that was not possible. - This remarkable journey is completely crazy. I know it's hopefully chapter one or two, and it does the long story to still be written. What is the kindest thing anyone's ever done for you? And you can take that either personally or professionally, however you want to take it. - It has to be my wife through all of this. She married an investment banker in New York in San Francisco, and that has a path in vision for life that you can predict and study state. And then I turned into this entrepreneur, who's making no money, and we have three children, like she is also working very hard, but she has given me the room to make this possible. And if that dynamic wasn't true, there's just no way that I could do this. There would be no path. It's a huge burden that she took on. It's a huge component of how you got here. Greg just went with the wife. So I can't do that, even though that would be the obvious to get a thank my wife who been putting up with me since we were 19. What I'd say is, I would thank my dad actually, when I try and describe to my kids what it is I do or what my role is, I always say that I sell. That's what I do. And when I think about that, the quote that always got me excited was, what King Griffon would say, where they don't even think it was his line, but if we're all gonna eat, someone's gotta sell, and then it always pumped me up that selling was important. And it wasn't always something that was transactional, but I learned sales watching my dad. It's not something he told me. It was something that just being with him. So we commuted to school for years, two different private schools. Or it was like an hour commute and could be longer with traffic. And this is early '90s, mid '90s. You got those old Zach Morris cell phones. And my dad was a mortgage originator. So he was always on the phone. And he was basically a traveling salesman, but on the phone in the car the entire time. He's a lefty, so he would have his phone on his shoulder. And he would have his notebook on his left hand, taking notes and the map, and he'd be driving with his knees. And my brother and I would be listening to my dad selling, basically, every day, the three things that he taught me about sales are one, to be effective in sales, you need people to like you. Ideally, they want to root for you. And if you're really good, you can get them to potentially quit what they're doing and want to join you. That would be like the best thing. But then second thing is, they need to trust you, because that's kind of all you have. Integrity is everything when it comes to sales. And the third thing is you need to be relentless, but not in a knowing way, just deeply persistent. That's just carried me well through to very different careers to date. And he's just been an awesome role model. And someone I think about trying to teach my own kids lessons like that. - Amazing place to end. You are one of the best salespeople I've ever met. The car eyes works. - It was effective getting me into the ladder. - Yeah, thank you so much, guys. - You're welcome. - Thank you. - If you enjoyed this episode, visit joinclossus.com where you'll find every episode of this podcast complete with hand-edited transcripts. You can also subscribe to Colossus Review, our quarterly print, digital and private audio publication featuring in-depth profiles of the founders, investors, and companies that we admire most. Learn more at joinclossus.com/subscribe. (upbeat music) (upbeat music) - You know how small advantage is compound over time that's true in investing and just as true in how you run your company. Your spending system is your capital allocation strategy. Ramp makes it smarter by default that are data that are decisions better economics over time. See how at ramp.com/invest. As your business grows, Vanta scales with you, automating compliance and giving you a single source of truth for security and risk. - Rigline is redefining asset management technology as a true partner, not just a software vendor. They've helped firms five X in scale enabling faster growth, smarter operations and a competitive edge. The best AI and software companies from open AI to cursor to perplexity use work OS to become enterprise ready overnight, not in months. Rogo does. Check them out at rogo.ai/invest.