Six key factors behind the explosive growth of connected fitness
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On an edition of the Design Museum Everywhere podcast with Liz Pawlak and Sam Aquilano, I had the opportunity to interview Hydrow CEO and Founder Bruce Smith about the Connected Fitness boom. Here are a few key learnings from our conversation.
“Connected Fitness” is the application of digital technology to sports, fitness and wellness activities using a “smart” mix of hardware, software, and content. Think fitness trackers, workout apps, wearables, and smart exercise equipment like Apple Watch, Peloton, Brrrn, Tonal, Hydrow, ClassPass, Tempo, Fitbit, Strava, Garmin, Lightboxer, Zwift and Whoop, among many others. The rapidly growing industry became red hot during COVID-19, as people sought alternatives to their gyms during quarantine, and with major funding and deal announcements, such as Lululemon’s $500m acquisition of Mirror and Tempo’s recent $60m raise.
1. Fitness + Sports have always been about connection – even before we had smart products and interfaces… now, digital connectivity has made new experiences and business opportunities possible
“Connection” has always been a core part of fitness – first and foremost, connecting better with one’s own self to improve personal health, fitness, and wellbeing. In a gym or sports team environment, the powerful connections that people build with instructors, trainers, teammates and the community of members create motivation and accountability, as well as vibes, camaraderie, and being a part of something bigger. High growth boutique gyms like SoulCycle, Orangetheory Fitness, CorePower Yoga, EverybodyFights, Rumble Boxing and CrossFit have all leveraged the power of human connection to fuel their growth and retention.
Connected Fitness adds a digital layer to the entire user experience that amplifies these personal and social connections, creating new opportunities and experiences in a way that brings the gym experience home. Peloton has replicated the studio cycling experience; Mirror delivers group fitness classes. Brrrn, a boutique fitness studio specializing in cold temperature fitness, has established a new category of at-home fitness with their original slide board and subscription model. Sports teams are able to stay connected and find performance advantages by using technology. Apps like Hudl enable coaches to review game footage, DRIVN improves team communication, Zwift allows at-home cyclists to train in virtual group rides, and Strava encourages runners and cyclists to track, share and celebrate activity with their network. Hydrow has focused on bringing the experience of rowing on water to the wide audience who has never rowed before.
Our plan is to give everybody in the world, not just United States, but around the world, a clear picture of the values and the aesthetic and the human connection that comes with doing that kind of sport.”
2. Like triathletes, Connected Fitness companies need to be great at three different businesses – hardware, software and content – all while delivering an exceptional, addictive user experience
It is difficult to be great at one business model, but Connected Fitness companies - many of which are start-ups – must quickly master three different ones. First, they have to design, develop, commercialize, manufacture, and deliver hardware. It is often said that “hardware is hard”– because of its high complexity and cost. Second, as software companies, they must design and develop intuitive digital products that are continually updated. Third, they must produce exceptional content that is delivered to their customers at a high level of quality and frequency. All three of these businesses are cost and labor intensive on their own, but must also be seamlessly connected as one best-in-class brand experience. This means not only executing flawlessly with fundamentals like on-time delivery, reliability and customer service, but also delivering an “addictive” workout experience that keeps members coming back for more every day.
Hydrow’s challenge was not to do the same thing that everyone else had done with rowing machines but to bring the experience of rowing to life in a completely new way. This meant leveraging design and technology to mimic the feeling of rowing on the water and bringing as much of the outdoor environment as possible indoors.
We try to put you there. It's not putting a Go-Pro on a boat... we have many cameras and a whole lot of technology. You're not just seeing the athletes' body movements, you're looking into their eyes, and you're seeing their soul. Hearing dogs barking, fish flying...”
3. Success comes from building communities – and welcoming first-timers
Building and sustaining a community that supports and motivates its members is key to the success of both boutique gyms and connected fitness companies.
Hydrow’s product is not only the experience delivered from company to each individual customer; It’s also the experience shared between the customers themselves, and the company’s ability to be a catalyst for these customer-to-customer experiences.
We deliver a great experience with great athletes… but then there's a whole other kind of product [that] exists between our customers, and it's something you can't buy. It's recognition. It's accountability. It's care. It's props. It's really using your sweat equity to be a part of a tribe - of a community… we run things internally around that idea of making sure customers can give each other that recognition and love.”
Hydrow has also expanded its member community by bringing new users to a sport perceived by many as elitist and inaccessible.
Rowing is one of the most effective ways to make people feel better and make people feel more connected. And people are just so alienated from their friends, their family... Rowing is the definition of doing something together. And so, we thought, ‘Let's try and get this to scale. Let's get it to a million people or 10 million people.’ And that's why we made Hydrow.”
4. Connected Fitness was booming before COVID-19; quarantine brought it to new customer groups and new businesses
Connected fitness had already gone mainstream before COVID-19; quarantine only accelerated the adoption of Peloton, Mirror and others with new consumers. Hydrow’s sales exploded during quarantine:
We set a record July 13th for most sales ever in a single day…And we're on track to 7x our volume from January... And it turns out that 96% of our customers have never owned a rowing machine, 78% of them have never used a rowing machine with any level of consistency, and 27% have actually never touched a rowing machine.”
In the connected fitness space, much of the conversation is about apps, wearables and equipment, but brick-and-mortar gyms have also been forced to go digital-first. They've had to pivot their business model entirely, and quickly figure out how to take their programming and classes online without losing their unique brand experiences.
We are actively selling into gyms now, and the gyms who are planning on winning post pandemic are still spending on capital equipment in a big way. We expected commercial sales to drop to zero, [but] in fact, they've accelerated. They're ahead of target.”
5. Connected Fitness has the potential – and obligation – to create major societal change
By definition, Connected Fitness can reach many more people than a traditional gym, but for broader mainstream adoption it is important to think about how access to the benefits of connected fitness and community can be democratised to drive social change. Right now, the cost of a Peloton bike or an Apple watch, along with the connected apps and the associated monthly subscriptions are not affordable by the mass market.
I think one of the bigger opportunities is going to be bringing this to the larger population in a way that can affect and help people optimize their habits. Challenges will be bringing this to the masses and allowing people to manage their wellness.... elderly who can influence their care... I think the social health thing is really about improving overall wellness.”
And in a time where the world’s population is suffering from the coronavirus pandemic, Smith is having a hard time reconciling his company’s success with the losses of the coronavirus:
The pandemic is so hard on so many people, and [at the same time] we are thriving as a business, so there is this cognitive dissonance. We have people that have family members on the front lines.... but also we have this tool that can improve your overall health, and a by extension improve your chances of surviving.”
6. Boston is – and will continue to be – a global hub of the Connected Fitness industry
Boston is the second largest center of VC investment in the country, and with many of the world’s most renowned tech companies and universities based here, the region has long been a global center of the science and technology industry. Many influential sports, lifestyle and fitness brands also have their headquarters in the area, including New Balance, Reebok, PUMA, Spartan Race, EverybodyFights, Asics, Converse, RueLaLa, Polartec, TB12 Sports, Saucony and NOBULL. With the large and growing talent pool in the area, it is no wonder that a significant number of Connected Fitness companies are Boston-based, including Hydrow, Runkeeper, Whoop, CoachUp, Hudl, NIX Biosensors, Lightboxer, DRIVN Coaching, InsideTracker, Prezence – and many others.
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