Sevan and Coop: “This Is How We Help Gyms Grow”

Mike Warkentin (00:00:02):
Chris Cooper was on “The Sevan Podcast” on August 23rd to discuss our annual State of the Industry report. To be part of it, fill out our survey via the link in the show notes. Now, here are Coop, Sevan and Matthew Souza in a special presentation of “The Sevan Podcast.”

Sevan Matossian (00:00:16):
And we’re live. Matthew Souza on the right, Sevan the left. Matching apparel, of course. Dead Center, Two-Brain Business founder Chris Cooper. What’s up dude? Thanks for doing this.

Chris Cooper (00:00:28):
Yeah, I have CEO printed on stuff, but it’s baby onesies that we sent to gym owners who—

Sevan Matossian (00:00:34):
You’ll be hearing from my lawyers. You’ll be hearing from my lawyers

Matthew Souza (00:00:38):
Baby onesie.

Chris Cooper (00:00:38):
Yeah, baby onesies. I can drape them over my shoulder maybe, and something like that.

Sevan Matossian (00:00:43):
Before we get started, I want you guys to know that the State of the Industry report—this is the one from last year—the surveys that make up this great indispensable book for all gym owners; I would say even business owners, if you just want to see just what a State of the Industry report looks like, but absolutely a must have for all gym owners. It’s free, it’s put out by Two-Brain. It’s beautiful. It’s easily—what’s that called when you can eat something, process something, consume, palatable, easily palatable with big pictures. Big, the numbers are big, the print’s big, and tons of information. So, the survey is for all gym owners to take a link for the survey will be in all of our show notes moving forward until the survey closes. How long is the survey open?

Chris Cooper (00:01:34):
Thank you. Until mid-September. 13th, I think. But do it today.

Sevan Matossian (00:01:36):
Yeah, yeah. Do it today. Why do tomorrow what you can do today? Why is it important for affiliate owners to, and gym owners, to participate in the survey?

Chris Cooper (00:01:46):
That’s a big question, but the bottom line is this is how we help gyms grow. And we don’t just do this for people who are in the Two-Brain mentorship program. We publish this and give it away to anybody who wants it. And you know, every microgym owner is kind of like an island unto themself out there. They’re trying to figure things out. They’re doing little experiments, but that takes way too long, and it’s way too expensive. And if you screw something up, it really hurts your business. So, what we started doing back in 2018, first, I pitched this to CrossFit HQ, and they didn’t want to do it, so we just started doing it. We started collecting data from as many gyms as we could through the survey and then through partnerships, like Wodify, PushPress, Kilo, and figuring out: What exactly are gyms doing? I mean, if you’re a gym owner out there and you want to know, “How much should I charge?” like, the best thing to do is not go into a Facebook group and say, “How much does everybody charge?” The best thing to do is say, “Well, looking at the data from 15,000 gyms around the world, here’s the average price of a CrossFit class,” that’s in here. “How many clients does the average gym have? That’s in here, right? And then that will help you build a business model.

Sevan Matossian (00:02:57):
What does the average trainer make? What are the best hours? When do clients show up to the gym? During which hours are the busiest class? Yeah. Everything.

Chris Cooper (00:03:04):
Yeah, everything. Like, you want to know that stuff so you can make decisions. And, you know, the reason that gyms fail is not because the founders run out of passion, or they just hate the job. It’s like they run out of money because they don’t know how to make business decisions, and they can’t make business decisions without data. So, we just collect the data, invest in publishing it and analyzing it, and then just give it out for free. And we ship thousands of copies of this every year on my dime, and we give it out in digital format to thousands more.

Sevan Matossian (00:03:35):
Just a quick—personal training, how much do the average gyms charge? Nutrition coaching, how much money, how many gyms do it? How much money does that bring into gyms? How much does it cost them? How many people use it? Gyms that sell supplements, what part of their revenue is that? Online coaching statistics, is that valuable? How much do people charge? How many gyms do that? How long the retention for people in gyms, what’s the average? It goes on and on with every question you could want. Cost for a coach to run a class, as I mentioned.

Chris Cooper (00:04:07):
How much are you paying?

Sevan Matossian (00:04:08):
How much are you paying? Number of full-time coaches versus part-time coaches. You see all the ratios for all the gyms on what they do there. New member retention. I mean, it’s all in here. Running ads, who runs ads? What value do you get from ads? What—and this is all this, these aren’t Chris’s words. These are from 15,000 gym around the world, of which about 50% of them are CrossFit gyms.

Chris Cooper (00:04:32):
Yep. Exactly. Yep. And this year, we’ll segregate them out a little bit more too, so you can see “What is the average price for a CrossFit membership?” versus, “What is the average price for strength and conditioning gym membership?” And we do want people to be making the best decisions they can. And so, we’ll just continue to collect a bigger and bigger data set and then make it clearer and clearer for them.

Sevan Matossian (00:04:54):
And as Chris said, he started this in 2018. I’ve started my collection. I have the 2022 and 2023. But they also, as these grow, you can start comparing them from year to year. And there’s all sorts of charts and graphs on that. So, there’s even things in there, the mood of the community, the gyms. How long has your gym been open? What would you like to see from leadership? There’s some things that are building from survey to survey that are fascinating also.

Chris Cooper (00:05:24):
Yeah, it’s really fun to see the trends change over time. Like, the pricing is going up, which is good. You know, some of the messaging about pricing is starting to reach people. And people are focusing their attention on things that will actually make a difference in their business now, which is great. And this is just how science has done. You start with, “Here’s everything that you could possibly do in your business,” and, “Let’s cut out the things that don’t work and focus on the things that do,” and this is what’s helped Two-Brain—it took us like seven years to produce the first 26 millionaires in Two-Brain and seven months to produce the next 26. And it’s not that they’re doing things dramatically different, it’s just that they’re not wasting time doing the stuff that wastes time. They’re not doing more things. They’re not doing different things. They’re just not spending time on things that don’t work. And to me, this was the process of developing CrossFit too. You start with a blank whiteboard of, “Let’s write down everything that might improve fitness,” and then slowly discard the things that don’t improve fitness so that we can focus just on the things that do. And that’s how science works, and that’s what we’re doing here.

Matthew Souza (00:06:30):
Chris, I got a question. Is there, to your knowledge, is there a—

Sevan Matossian (00:06:34):
You sound like a professional business, Chris. Did you just push a button to make that sound effect?

Chris Cooper (00:06:38):
Yeah.

Matthew Souza (00:06:38):
Yeah. Somebody on line one for you, Chris.

Chris Cooper (00:06:44):
That’s how old school I am. I’ve got a purple notepad here, and I’ve got an actual telephone in my office.

Sevan Matossian (00:06:50):
Landline. Crazy. OK, sorry, go ahead.

Matthew Souza (00:06:52):
Is there, to your knowledge, is there another data set more robust or equal to what the State of the Industry puts out for microgyms?

Chris Cooper (00:07:00):
Nothing even close to the side. I mean microgyms, no, not even close. There are people who do surveys out there of a couple of hundred people. IHRSA, they’re gone now, but they used to be like the biggest lobby, I guess, in fitness. And they did something like this, but they would—their best year, they might’ve got 10,000 gyms to participate. Ours is just microgyms, and we had 15,000 last year, and it gets bigger every year too. So, that makes us the most relevant data set out there, and what’s happened is that all of these other people who used to do a smaller collection are now just turning to ours and either using ours for free and giving us credit or using it for free, claiming that it’s their own. And it’s funny to go on YouTube and watch these guys rip the cover off and then read from our dataset as if it’s something revolutionary, you know? It’s amazing. But it feels good.

Matthew Souza (00:07:53):
Yeah. I know it was cited as HQ’s dataset to look at what was happening as well, so that’s a pretty big deal right there.

Chris Cooper (00:08:01):
Yeah, exactly. Yeah, exactly. So, we like to be independent, so that we can be objective about what’s happening at HQ and in all the gyms. And in 2018 when HQ declined the opportunity to do this, I was pretty beat down for a couple of hours, but eventually just realized the data can be better when it comes from somebody outside because it’s objective.

Sevan Matossian (00:08:23):
Also, not only were there other people out there doing it who aren’t doing it, but then they’re now pushing people to do Two-Brain. It’s not a competition. It’s become a, “Let’s push gyms to Two-Brain.” It’s widely accepted as the place to, “Hey, let’s just give all our numbers to Chris and make him print this shit out.”

Chris Cooper (00:08:45):
Yeah. I mean, it’s not cheap. Like if I’m IHRSA, for example, I mean, it’s going to cost a quarter million to collect this stuff, publish it, lay it out, ship it. Why not just let Coop do it, you know? And that seems to be the sentiment.

Matthew Souza (00:08:59):
And what do you get out of it on personal level?

Chris Cooper (00:09:02):
Well, personal level is just the mission continues. Like the biggest tragedy I think in our industry is we have the solution to the world’s biggest problem. That solution is coaching. It’s not knowledge. And every year, 10,000 new fitness coaches sign up to continue the mission, but every year, 9,000 of them go bankrupt. And they’re not quitting because they’re unhappy; they’re quitting because they’re broke. They’re not quitting because they’ve changed their mind about fitness. They’re quitting because they’re broke. And the biggest thing that we can do to enable these people to stay in business and keep changing 100 lives a year for 30 years is just arm them with the knowledge that they need to make money. And when I was in their shoes, I didn’t have any of this. I was treating my gym like a Petri dish, testing one thing after another. And it was really hurting me. So, this is just our way of kind of empowering the industry to move forward, and it’s working. You can see it. The average revenue in gyms is climbing every year, and the average lifespan of a gym owner is lengthening, and coaches are actually making a living now, and that comes from knowledge, and the knowledge comes from data instead of the same old myths.

Sevan Matossian (00:10:12):
If I could take a stab at that, answering that question too. Souza asked, “What’s the value to Two-Brain business doing it?” Well, you said nine out of 10 people who want to become coaches end up quitting because they can’t make it work, not because they hate coaching. Well, the service that you provide is the inverse of that: 90% of the people who do become clients of Two-Brain business have an uptick in financial success to prolong their life in the business. And part of that is you guys being the experts on the knowledge that you collect.

Chris Cooper (00:10:44):
Yeah, that’s where it really starts. Yeah. Thank you.

Sevan Matossian (00:10:47):
Just another thing, just so those of you who don’t know Chris, so obviously, I profess myself to be the most knowledgeable person on all things CrossFit in the CrossFit space, behind—I know, what an arrogant douche—behind CrossFit in the community, inside CrossFit, outside of CrossFit, and while my tenure at CrossFit, we would throw affiliate gatherings, and it’s not easy to get affiliates to come because they have to take time off work, and they have to pay money and all this stuff. Well, Chris, this year again, threw an affiliate gathering in Chicago, I talked to him on the phone and he’s like, “Oh man.” He’s like, “We had 1,000 people show up, and we only had 1,000 seats.” And he’s like, “Man, I should have made it bigger. I should have done this.” And he’s like, “I can’t believe how great it is.” Well, yesterday, an affiliate called me and told me—I haven’t told you this, Souza, I said, “Hey, you should listen to the show tomorrow. We’re going to have Cooper on.” And he’s like, “Oh dude.” He’s like, “I’m not even a Two-Brain business member, and I snuck into their Chicago affiliate gathering.” He said, “It was the greatest two days ever.” I’m like, “You snuck in?” He goes, “Yeah.” I’m like, yes, Souza used to do stuff like that. That’s awesome. Greatest compliment ever. Right? People trying to break into into your Summit. I mean—

Chris Cooper (00:12:04):
Oh yeah, I mean, people trying to steal our stuff is—I love it so much because it’s unstealable; we’ll just give it to you. Right. But if this person had had called me—and by the way, you don’t have to be in Two-Brain to come to our summit—but I think it’s awesome that this person snuck in.

Sevan Matossian (00:12:19):
He knew the value of it. He snuck in. Yeah, me too. And he said it was absolutely fantastic. He said he met tons of great people. Summit crashers is a thing. Yeah. See, that’s awesome.

Chris Cooper (00:12:30):
Next year, I’m standing Khalipa at the door instead of on the stage, so, I mean, earn your way in.

Sevan Matossian (00:12:37):
There you go. Get a little muscle out there.

Chris Cooper (00:12:38):
Yeah.

Sevan Matossian (00:12:39):
Last year there was a huge uptick—I believe you can get into more specifics if this resonates with you, Chris—last year, there was a huge uptick in the survey of people who were happy with the direction of the leadership of CrossFit Inc. So, we went from—basically, the short story is we went from Greg to Eric Roza to Don Faul, and as Don came in, the survey came out and there was a huge uptick. I want to say from 30% approval to 70% or 80% approval.

Chris Cooper (00:13:08):
71%, I think. Yeah, it might have been 73%.

Sevan Matossian (00:13:10):
Do you have any—where do you see that going from there? Do you see it leveling out, or do you see it still keep going up? Do you have any predictions on that?

Chris Cooper (00:13:19):
Well, I mean, empirically, and we are going to collect data on that again this year, but empirically if you look at affiliate size for example, right? Like, you don’t have to ask me how many affiliates there are. The affiliate number is shrinking, and all you have to do is go to crossfit.com, click on the affiliate map, and look at the number of affiliates listed. It’s 10,000 and change. And if you look back over the last several quarters, you’ll see that that number is steadily declining. And while those numbers are buoyed a little bit by new affiliates opening mostly in Eastern Europe, Spain, Portugal, France, Germany, those numbers are declining more so in the U.S. And that’s enough to outweigh the growth right now. And so, that’s kind of one hallmark.

Chris Cooper (00:14:05):
There’s other ways that you can look at this. Like if you look at pictures from the L1 certs, you look at a picture from 2009, 2010 through 2014, you’d have 25 pictures of 25 L1 certs with 50 people in them, and you just don’t see that anymore. You might see a half a dozen pictures. And so, these are all kind of indications that there’s still kind of like, I think, a missing link. And it’s interesting because last year when this was published, the news of the affiliate rate increase hadn’t gone out anywhere. Nobody knew. We were first talking about that in November at the Rogue Invitational. And so, it’ll be interesting to see what happens now. I think even with 10,000 affiliates, everybody’s affiliation fee has gone up significantly. They’re probably making more money, but I’m not sure that the mission is expanding anymore. And we can dive deeper into that if you want to.

Sevan Matossian (00:14:55):
Just really quick—good morning, Brandon. What’s up dude? Good to see you buddy. And an important distinction is you’re not claiming that these gyms are closing. The only exactly know for sure right now, just by a quick look at the affiliate map until the survey comes out, is the actual affiliation being paying the dues to HQ are dropping.

Chris Cooper (00:15:19):
That’s all we can say for sure because data didn’t exist in the old days. And so, there was a time when I was hired by HQ, and for my first week of employment, 2014, they’re like, “You’re going to find stories. So, the first thing we’re going to do is we’re going to set you up with the affiliate team’s email address so that when new people are applying to be an affiliate, you’ll see their applications come in, and you’ll see these stories.” Well, there were so many applications that after a week I was like, “Shut it off. I can’t keep up.” And what was happening back then was that affiliates were failing. Nobody was talking about it. And the new affiliates joining were joining so fast that the growth was still continuing at a really fast rate.

Sevan Matossian (00:15:59):
But nobody needed … It was like one every two hours somewhere in the world. It was crazy.

Chris Cooper (00:16:04):
I believe it, man. I mean, you were with me in Seattle, and when I got linked up to the affiliate emails, you’d see these things come in, and every single one was amazing. And even—I can remember this: We’re sitting at a table, Greg’s right across from me, and he’s like, “I’ll tell you this. When people apply and they say, ‘I want to make money,’ automatic, no. When they say, ‘I want to make a difference; I believe in the mission,’ automatic, yes. I don’t care if they’ve got a bachelor’s degree. I don’t care if they’ve got a drug problem in their history; they just got out of prison. They want to make a difference. They’re an affiliate.” And that’s the kind of applications that you used to see coming in. Well, those people didn’t suddenly change their mind about the mission.

Chris Cooper (00:16:47):
They’ve just changed their mind about poverty, and “Oh, I don’t know if I want to sign another three-year lease.” Right? And it’s really always money that ends their tenure as affiliates. Some are de-affiliating now. And that’s more a question of value than cost. You know? OK. My affiliation fee just quadrupled, and the L2 requirements. And so most people out there are going to say, “Am I still receiving value that exceeds what I’m paying and the hurdles that I’m jumping for it?” And so, they might keep their gym open, but de-affiliate; we just can’t see that in the data.

Sevan Matossian (00:17:26):
The price did go up $1,000. And then the application fee also went up a very quickly. I think from zero to 500 to 1,000.

Matthew Souza (00:17:36):
$1,500 increase too, by the way. Not 1,000. It went from 3,000 to 4,500.

Sevan Matossian (00:17:38):
Oh, sorry. Thank you. OK, thank you. Important distinction, so the increase went up. Then the application price went from 500 to 1,000 to then not even being applicable toward your first year’s affiliate fees. And just anecdotally speaking, I’m hearing on a regular basis now, probably weekly, affiliates actually entertaining the conversation of de-affiliating. When before, I felt like people didn’t want to spend time thinking about it because it was whatever the price was, $3,000. It was like, “Ah, I don’t,” like, that was kind of Souza’s thing. Like, “Hey, the business is so busy, I don’t have time to think about a $3,000 problem.” It’s just like your gym got flooded for one day on a rainy day. But at 4,500, all of a sudden, I’m hearing people say, “Hey, maybe Facebook ads will make me,” they start looking at Facebook ads, and they’re like, “Oh, that’ll actually make me 15,000 a year.”

Chris Cooper (00:18:34):
Yeah.

Sevan Matossian (00:18:35):
And so people are now taking the time to postulate, you know what I mean? To, “OK, what’s going on here? Well, are you hearing that too with the price increase? People are like, “Oh, yeah.” And starting to think, “OK.”

Chris Cooper (00:18:47):
So, newer, new-ish affiliates tend to bring up the price increase, but it seems like they’re just willing to kind of swallow the difference. Older affiliates are more likely to bring up the L2 requirement. And for a lot of us, that felt kind of weird. I have people on my team who have their L2. Wonderful. It’s a great cert. I think it’s CrossFit’s best, honestly. That said, I would have to turn my affiliate over to that staff person. I would no longer be the affiliate record unless I wanted to go get the L2 myself. And so, I’m going to weigh that against like, “Does this actually improve my business?” personally.

Sevan Matossian (00:19:23):
So, it’s not enough. I didn’t know that It’s not enough just to have an L2 there. It has to be the owner.

Chris Cooper (00:19:28):
Yeah, so for me, I had to shift our affiliate to one of my coaches. They’re the affiliate of record, now. It’s not even me because they have the L2, and I don’t, so a lot of affiliate owners were weighing that. But personally, I interviewed Greg at his kitchen table in Portland and said, “Greg, why should I still be an affiliate?” And at that point, I was a 10-year affiliate already. And he’s like, “Well, Chris, if I was using something that somebody else had built, I’d want to pay him for it.” Good enough. You know, absolutely fair. But in my mind now, Greg has been paid for it, right? Like, that’s what Berkshire Partners paid him for, was the development and the creation of this product. And if I want to continue to use the name, we’re starting from square one again, and I’m going to measure differently.

Chris Cooper (00:20:14):
Before I was paying Greg as a tribute: “Thank you for developing this amazing thing, this tool that’s changing so many lives.” Now what I’m paying for has to be measured differently. And so, I’m going to measure that value against a few different things: I’m going to measure that against search terms. Are people looking for CrossFit in my city? Maybe? Yeah. Is CrossFit actually driving traffic in my door? Is it the traffic that I want in my door? You know and some other things too. Like there’s metrics that you can use to make this decision, but everybody can look at the same metrics, and if the decision was just a logical one, they could make their mind up off that. But for most of us, the decision is an emotional one, because CrossFit still feels like our religion not just our business.

Sevan Matossian (00:21:03):
Souza’s created this group on this website called Skool, skool.com. And then from there you can search “media launch.” I always just type in “Souza,” and it takes me there. And so, Souza’s affiliate has been around a long time, and it is a very successful affiliate. And it’s big, and it’s beautiful. And it’s a hub in his community. And then obviously, he’s forward facing on this show every Tuesday with his show where they talk about the business matters, and the other day, so he’s been speaking to a lot of affiliates—probably more than he should be; he should be spending more time with his own clients or with me, on the beach with me. But the other day he called me, and he said, “Oh man, an affiliate called me and told me that they don’t want to re-affiliate, but they’re going to re-affiliate.” And I said, “Oh, what’s the deal with that?” And they said, “They’re a nine-year affiliate, and they want to make it to 10 years.”

Chris Cooper (00:21:55):
I get that.

Sevan Matossian (00:21:56):
Yeah. And so, Souza’s like—and then Souza broke down. I don’t know if you want to talk about that, Souza, but Souza broke down. Like he started going off like, “Hey, I was like that too.” And that’s—you want to talk about that, Souza? That’s the emotional piece. What’s the logic there?

Matthew Souza (00:22:11):
Well, my whole thing was like, I just felt, number one, I wanted to reach that milestone. A 10-year CrossFit affiliate was always just something huge for me. So, that was a personal kind of thing, like you said, and emotional. And the other thing too is I just feel that we have strength in numbers. So, if we’re unified underneath this one name, “CrossFit,” right? Like, then therefore, we’re more effective as a total in what we do. And the thing that I just kept running to is like this wait and hold pattern year after year after year. Like, “OK, well, I’m going to hold on this year, and let’s see if things will turn around. Maybe the media will come up. Maybe we’ll get more mission, more direction. They’re going to invest in more education.” You know, these things that I’m hoping that will happen.

Matthew Souza (00:22:47):
And year after year, you just don’t see it. And so, at some point, you’ve got to make the call of like, “Hey, what value am I receiving for this?” and, “What am I learning from the leadership?” And the problem is that if I can’t learn something from that leadership, if I can’t be inspired by that leadership, if I can’t be driven to get up out of my bed and cheerfully run down to the gym at 5 a.m. to open up that bay door because I know I’m making a difference, and I know the mothership’s got my back and continuing to push the message of that mission, then it’s real tough to pay the $4,500. Because we’re also not talking about the real cost, Chris, because like you said, you would’ve had to become an L2, so if that’s like 1,000 or 1,200, really, it’s not a $1,500 difference that I could potentially be paying. It’s a $2,700 difference.

Sevan Matossian (00:23:31):
Not including hotel and the time off and the extra—

Matthew Souza (00:23:34):
Doesn’t include, yeah, all those extra costs that have come with it. So, you just kind of ask yourself like, “Hey, am I emotionally just invested into this? Or is there actual real value proposition here?”

Chris Cooper (00:23:44):
Well, I think this actually happens with a lot of companies that totally disrupt their market, is they’re usually led by this kind of inspirational leader. And you can look at Steve Jobs, but of course Greg Glassman is that person for us too. He totally turned the fitness industry on its head. I was in the fitness industry for a decade before I even found CrossFit. And it’s all changed. People use terms like WOD and AMRAP, programming, like those terms didn’t exist before Greg. Right? But then what happens when that kind of inspirational and motivational leader goes away is the company kind of doesn’t have a head anymore. And so, if you look at like Richard Feynman called this Cargo Cult Science. Have you guys heard that term before? This is Cargo Cults.

Chris Cooper (00:24:32):
Yeah. Amazing story, right? But what typically happens is that the business turns inward, and they say, “OK, we’ve bought this thing, this CrossFit asset, and we want it—it’s in our best interest for it to remain the same.” So, now you have nobody going out and doing science, and instead of doing science, they’ll say, “Well, we’re doing it this way because we’ve always done it this way.” And that’s the seat that Greg sat in; nobody moved that seat. And it becomes dogmatic instead of scientific. And the world begins to shrink and shrink and shrink. And so, when you’re a private equity firm and you’re buying this company that’s been led by this disruptor, you don’t want to keep changing the company. Greg has said in interviews that he’s a product guy, which means he’s going to test things and bring new things in.

Chris Cooper (00:25:19):
You don’t want that as private equity. So, the first standard private equity play is grow the market, right? Expand CrossFit to more people. That’s great because it benefits affiliate owners, but it didn’t really work. And then a couple years in, you’re kind of like, “Oh, I’ve got to make more money because the investors need to see a return.” So, now you look inward. and you say, “How do I make more money from the audience that we have? Well, let’s start our own software and sell that to affiliates. Let’s raise the affiliation rate. Let’s find somebody on staff who really wants to make T-shirts.” You know, we’ve had like three different CrossFit stores in the last two years. “Let’s, you know—Cooper’s over there doing business coaching; let’s start our own business mentorship thing.” And that happened, and “Oh, hey here’s Monster energy drink. They want to pay us. Wonderful. Let’s take their money.” And so, you start to like lose the inspiration that came from the values and the brains and the passion of the leader. And if that doesn’t turn around, there’s a lot of examples where the company just kept shrinking down. So, I think that’s maybe a big challenge that CrossFit has right now, is it needs inspirational leadership, and it needs somebody doing science if it’s going to return to growth.

Sevan Matossian (00:26:33):
What’s interesting is when—Greg’s whole thing was, “Chase excellence, don’t chase the money.” And then criticism was, “Hey, CrossFit’s not giving any business advice.” And that opened—or best practices advice. And that opened the door for companies like Two-Brain, which Greg was like, “Yeah, I’m not interested in that. Let Chris do that.” Right? “Like, I’m staying focused on what I’m focused on.” So, Greg’s whole thing was just reinventing—like a lot of guys, like you’ll see a lot of these Indian gurus or religious people, all they do, they find the truth, they find the Bible, or they find the Bhagavad Gita, and they just keep trying to repackage the truth, which is cool, right? They keep repackaging the truth so that they’re kind of like coaching cues so that more and more people—they point to the truth in a way that more and more people can understand it with whatever mind they have, right?

Sevan Matossian (00:27:21):
So, you have CrossFit, and Greg says in 2018, “The cat’s out of the bag. I have nothing else to offer.” And so that’s when he starts the litigation, education and legislation. And then he is even honest with you, “Hey, I’m not really offering you anything; just pay me because I invented it.” And you’re like, “Alright, cool.” I mean, it’s a really fucking weird thing. I wonder if the people who bought it, if they knew that was the business model, if they would’ve bought it. But here’s what—let me ask you this. They buy the company, and they have this figurehead—when he used to address the company, he always addressed it with vision. Now they have a CEO and Don Faul who’s a business guy, and when he presents to the community or to the affiliate owners, he doesn’t give his vision.

Sevan Matossian (00:28:01):
He doesn’t talk about the world’s most vexing problem or those things. He’s more business minded, right? Yeah. He’s more like, “Hey, we need to—we’re going to increase prices here. We need more members and affiliates. We need more affiliates.” These are things that we never heard from Greg. Why wouldn’t they? Was it just because of the FLOYD-19 thing? Why when they sold the .com, when Greg sold the company, didn’t they require him to stay on because they thought he was that toxic? Because isn’t that kind of a normal practice? If you’re going to buy a startup, you make the founder stay on?

Chris Cooper (00:28:28):
Well, sometimes. I mean, usually when you buy a startup that’s really disruptive, you’re going to have an earnout period of two years where there’s going to be this transition, and for example, like, Steve Jobs gets fired. Oh shit. Bring him back, and he saves Apple. Right? And I think like what actually happened in CrossFit, and this is just my own personal view through the keyhole, is Greg’s gone. The first call I got was the next day from Dave Castro, and he was like, “Hey man, I’m going to be here in the transition to ease the transition as much as I can. Like, don’t de-affiliate, just give us a year.” And I said, “OK, great.” And then, you know, 48 hours later, I think he introduced me to Eric Roza, and I was on calls with him in the first week. And I mean, there was kind of like a sequence there. It was definitely kind of an “in case of emergency, break glass” handoff. But yeah, I mean, really to grow the program, again, you have to have an inspirational leader, maybe with even their own vision, that might even be a little bit different from Greg’s, but it’s enough to inspire people to stay on the bus and new people to get on.

Sevan Matossian (00:29:39):
Yeah. Are you following any of what happened at the Games this year with the death of Lazar Dukic?

Chris Cooper (00:29:44):
I’m following it. Yeah. Because I’m always interested in, “Where can we help?” So, as luck would have it, if there was any silver lining in this tragedy, is that we had paid to put a mentor on stage in the affiliate area. And the mentor that we had sent was Tres Kennedy, who’s also a pastor.

Sevan Matossian (00:30:04):
At the Games this year? You sent someone there, you paid—can you explain it to me? You pay CrossFit for like 30 minutes to talk on a stage or something?

Chris Cooper (00:30:11):
Yeah, exactly. Yeah. I mean, that’s—

Sevan Matossian (00:30:13):
In the affiliate lounge?

Chris Cooper (00:30:14):
Yeah, exactly. Yeah. And there’s other options too. I mean, we could have sponsored the mechanical bull at the whiskey ranch or whatever, but I would rather do something that’s actually going to help affiliate. So, luckily Tres was there; Tres is a pastor, and I said, “Look, Tres, if you want to get off the marketing message, let’s just ask people what they need to kind of process this tragedy on Saturday.” And so, he and I stayed in touch with what was happening there. Yeah. I mean, it’s a hard conversation.

Sevan Matossian (00:30:46):
My question to you is: What effect does something like that …? So, there’s this sort of, really easy—I’m aware that it’s a really cheap analysis, not to say that it doesn’t lack validity—but there’s this event; it’s the Games. Yeah. And the New York Times quoted Adrian Bozman saying that the games were initially created as a marketing event, which is just completely—and I don’t think Adrian even said that—it’s completely not true at all. Like zero. They didn’t even allow cameras in there the first two years, other than finally letting me come in in 2008 for a little bit, but to make every second count. But it was really just because Greg wanted to throw a party. I mean, it’s really that simple. That’s all it was.

Sevan Matossian (00:31:29):
And you know, Greg; I mean, it’s just par for the course, and he just wanted to throw a party for the affiliates. But now, I think it’s fair to say that it’s this huge marketing tool, right? It’s the most forward-facing thing with the most media, with the most beautiful bodies, with the brightest lights. And now the 50-cent analysis would be: This marketing campaign went on. It’s the climax of the year, and the marketing message this year is “CrossFit kills.” I’m not agreeing with that, but that’s, I think that’s how outside media has taken it.” Look, we’ve been right all along. CrossFit’s dangerous. It killed a guy.” Is that sending a ripple through? Like, do the affiliates even know? Like, I can’t because I’m in sort of my own echo chamber here. Do the affiliates—yeah, I said it. Do the affiliates know, does this affect them? Are there affiliates all over the world? Like, is this sending a ripple through them? Like, “Holy shit, there’s no … money to fuck this marketing campaign up, and instead of it helping us, it hurt us.” Like, is there any of that going on, or no?

Chris Cooper (00:32:30):
Well, so, the affiliates are feeling it, and they’re telling us that they’re feeling it every single day.

Sevan Matossian (00:32:38):
So, it is coming through your emails; you’re getting emails.

Chris Cooper (00:32:41):
Oh, yeah, yeah. Facebook messages. Yeah. Quite often. Now that said, we can’t—we won’t know for sure until there’s an inquest and there’s findings, and it’s tragic.

Sevan Matossian (00:32:55):
But the message is out there like, like—

Chris Cooper (00:32:57):
Yeah, the message is out there. You’re right.

Sevan Matossian (00:32:58):
You know what I mean? Like, the message is out there. The people who are just reading the headlines already see it. Yeah. They don’t care about the investigation, or do you know what I mean?

Chris Cooper (00:33:06):
Yeah, it’s true. And where I think affiliates really need to be concerned is, “How does this affect the public perception of CrossFit?” Maybe future clients coming in are going to think it’s risky—possibly, but also, they also don’t see a swimming pool at their local affiliate. Right? And for context, I don’t know if it’s like six or seven deaths every single year in Ironman events, let alone the neighborhood triathlons that you see. Where affiliates have to stay vigilant though, is the periphery, right? So, there’s this industry of businesses that support CrossFit affiliates. Insurance is one good example. And we had a call last week this week actually from an affiliate who said, “My insurance company just notified me that they’re not going to renew our insurance because they have ‘No appetite for CrossFi-related activities,’” and that wasn’t a big insurance company like Affiliate Guard. Affiliate Guard is going to fight to the death for affiliates. And RRG I’m sure is on board to fight for affiliates. It’s just kind of a bellwether that like, hey, people are—

Sevan Matossian (00:34:11):
You think that had to do with the swim? You think that had to do with that? You think there’s no coincidence there?

Chris Cooper (00:34:16):
I mean, when we affiliated our gym back in 2007, my insurance company dropped me that day, and they said that they do not—

Sevan Matossian (00:34:23):
Because of the name. They saw the name.

Chris Cooper (00:34:25):
They saw the name. Yeah. And I mean, I thought that the world had kind of gotten over this, but the insurance industry has a very long memory. And now, I think—back then, they were scared of risk—now, they’ve got a reason to say, “OK, there is some risk here.” And so, if I’m an affiliate, I want to be watching my insurance premiums when they come up for renewal, and if they’ve gone up a dollar, I’d be calling the insurance company and saying, “Why?” And if it’s, “Well, you’ve got the word CrossFit in your name,” you know? Now again, we’re balancing the value of affiliation. And that goes into your ledger, doesn’t it?

Sevan Matossian (00:34:58):
I remember being at some gym in—it was on the East Coast somewhere. It was like a Planet Fitness or some globo gym, and I was doing wall balls, and they came over and they told me, “Sorry, our insurance doesn’t cover throwing objects.”

Chris Cooper (00:35:11):
Mine dropped me, and when I pushed them on it, this was 2007, they were like, “Well, we can’t insure truck pulls.” And I said, “What the hell is a truck pull? And how does that relate to CrossFit?” And then we started doing truck pulls because like—

Sevan Matossian (00:35:27):
That’s Bill Henniger’s fault for having The Deuce out there.

Matthew Souza (00:35:31):
Hey, that was like when the NCFIT crew pulled that race car on the track with a rope one time. Don’t watch that video, and you’ll know exactly why insurance didn’t want to help them out. Well, one thing I just want to throw my hat in the ring with that is the fact that when you have public perception, it doesn’t matter what the actual truth is. And we know this very well with how society runs this day and age. If we just have a message that’s out there enough, and it gets repeated enough, that just becomes the truth. And the sad part is, is that we don’t often hear anything from CrossFit. CrossFit doesn’t curate or craft its own narrative because it has no voice; it has no media. So, then when something like this happens, and I get sent NY Times article from my friends who don’t do CrossFit at all in my text saying, “Look at this; look at this.” That is literally the only narrative and perception that is coming out of CrossFit. And we have no tools and no ammo to fight against that. And so now—

Sevan Matossian (00:36:26):
Everyone had 10 of their high school buddies—you’re right, everyone had 10 of their high school buddies who they haven’t heard from in five years, text them and be like, “Dude, is everything OK over there?” And they send you links to the New York Times article.

Matthew Souza (00:36:36):
This is my experience. Yes, this is my experience of literally today in the last two days of, “Hey, what is happening here? Isn’t this happening?” And there is zero—and this is why I say that media is the most important part. And if you were to say like, “What is the value proposition of something that I would want to affiliate with?” it’s a media machine that is pumping every single day at 7 a.m. live here to talk about anything we want to and bringing on the best people in the health and fitness space. And then saying, “By the way, if you want a piece of what we have going on here, go to your local affiliate. This is how you do boots on the ground of what we’re talking about.” And to me, that was the biggest value proposition that happened, and we saw that shake up a little bit in 2018, but since I was also able to sneak into a DDC, I saw the light of where it could go and where the media was going to go. And that re-inspired me, because for me, that was the mission I wanted to be attached to. So, the biggest thing that came out of this is the fact that it’s very obvious we have no voice, we have no narrative, we have no leadership, and essentially the affiliates are now off to fend for themselves with all their friends sending them the New York Times article.

Chris Cooper (00:37:41):
That to me was the—yeah, I mean, I was fired in 2018 from the media team, but I should have been. The rest of the media team shouldn’t have. Yeah. The rest of the team, everybody above me should have stayed, and unfortunately, you’re right. Like in a vacuum, any news just kind of fills that vacuum. So, when I was hired, my first media summit was like 2013, and I’m all starstruck by the people around me. And that was a big room, probably 120 people there. Greg gets up in front of everybody and says, “CrossFit is a media company.” And I just, it was like the hallelujah chorus in my brain, “Oh my God, I get it.” In that vacuum, when you’re not hearing from a brand, you’re left to fill in the gaps yourself, and unfortunately, outside media is filling that gap with negative sentiment.

Sevan Matossian (00:38:38):
What do you think, and this is a loaded question; I want to lead you down this path—what do you think the relevance is of the Games to the success of gyms, just everyday gyms?

Chris Cooper (00:38:51):
Well, I mean.

Sevan Matossian (00:38:52):
CrossFit gyms.

Chris Cooper (00:38:53):
Marketing that HQ has for affiliates right now, because it’s largely like the only marketing. You know, I know that there are some Facebook ad campaigns going on. I think those are largely a Trojan horse, but that’s a different topic. Right now, the best way that we have of spreading the message of CrossFit is to get it on TV, is to partner with big brands and let them spread the message. But if you look at like, “Where the sponsors are coming from now?” it’s more and more internal sponsors. Sponsors that came from the CrossFit brand, paying money to be on the stage, like Two-Brain, right? We’re going to sponsor the mechanical bull. It’s stuff like that. It’s not like a bigger and bigger TV stations are calling to get the CrossFit Games on. That said, and that’s reflected also in the audience, right? It’s more and more people watching; it’s CrossFit fans watching the Games. They’re watching the behind the scenes more than they’re watching the actual live stream. And until you get that in front of a bigger, bigger audience, a bigger mainstream audience, I think it’s going to struggle to grow.

Sevan Matossian (00:39:56):
But I’m not even worried about it growing. Let me be more specific. No, no, it’s good because it was a broad question. Do you think that if the Games went away or were significantly reduced in their size, right? Let’s say it was put back next to a lake outside, and it was just a two-day event, more like a party than a sport that people are trying to really claim that it is, do you think that it would affect the affiliates negatively? Like do you think Souza loses, attracts fewer people or loses people if the Games goes away? Let’s just say. Let’s just go there; let’s just drop the ax. Let’s say the Games goes away.

Chris Cooper (00:40:37):
Well, it does affect the affiliates negatively because there’s nothing else to replace it that is of interest to broad media. So, if you can come up with something else that gets media attention and spreads the mission of CrossFit, wonderful. Take the Games away. But right now, it’s just like nobody can figure out anything better to do to get that message out there.

Sevan Matossian (00:40:59):
So by default you think it’s successful because it’s the only game in town.

Chris Cooper (00:41:02):
Exaclty. Yeah, exactly. Yeah.

Matthew Souza (00:41:03):
It’s like I’m just voting for the best option of the options given.

Sevan Matossian (00:41:07):
Right?

Matthew Souza (00:41:09):
Both options suck. One thing, just to throw, just to talk about that for a minute, I honestly think that nobody gives a shit about an athlete doing a thruster or a pull up when they’re staring at them in the arena. The only reason I care about that athlete is because I know their story. I know their background. I know their mom had just passed away, and they’re still out there on this event. I know that they work at a pig farm, and they raise all this stuff, and I’m invested in them as a human being. And that’s the type of person who attracts an outside audience to actually make me care about them doing thrusters on the floor. When you remove the storytelling, when I don’t hear Val Voboril grading papers in between things, when we don’t put the camera in Scott Panchik’s face, and he just talks about his members and coaching his members when you ask him what he’s doing on his every day, and we take away those stories, and we just have the athletes in a fishbowl, you lose any of that attractiveness that would actually bring people in from the outside and then disseminate them to the affiliates.

Matthew Souza (00:42:09):
All is we’re doing is this circle jerk of like, “Hey, check us out. If you’re already a part of CrossFit, now you’re going to go ahead and watch these people do fast thrusters.” My mom doesn’t give a about UFC, but if we get the tell of the tape, next thing you know, she’s like, “Oh, I want Nick Diaz to win. Didn’t just see his mom?” You know what I mean? And so, she’s now invested into that. She doesn’t want to watch two people roll around on the ground and punch each other in the face, but she’s completely invested in the story. And that’s why when you were saying the behind the scenes is the most important part, this is why “Every Second Counts” was so powerful because it didn’t show the competition as, “Heat 1, heat 2, here’s the bell to go away.” It showed the story of the Games, the individual athletes, and the drama that was happening on the floor. That’s what people care about. And we don’t even have that at all anymore. So, the fact that the Games—I could now make the argument that the Games is more harmful to affiliates, even in light, like before this tragedy, especially now, than it was ever before, because they’ve taken away the storytelling; they’ve taken away that connection between the gym and the people out on that floor.

Sevan Matossian (00:43:13):
Chris let me draw this comparison. When we were talking about people staying on to be an affiliate from their ninth year to their 10th year, just as some sort of abstract goal or some emotional appeal or something that maybe doesn’t have validity to the business because they’d still be a gym for 10 years. I wonder if the Games is that to the community and HQ. It’s an emotional attachment that people aren’t thinking about clearly because it just always been there.

Chris Cooper (00:43:42):
It could be. I mean, I’ll tell you guys a story from Summit. So, on Friday night I was getting ready to go to dinner, and I had a few of our staff with me in the lobby of the hotel, and through the doors walks Ben Bergeron, and Ben’s got his hat pulled down. So, and he is incognito a little bit. People don’t recognize him right away. By the time he checks in and stands beside me, and we’re going to walk to dinner, there’s 25 of us. Everybody wants to have dinner with Ben Bergeron. Right? It’s not like, “Wow, Coop might pay for a barbecue here.” It’s like, “There’s Ben.”

Matthew Souza (00:44:19):
You really know us workers well.

Chris Cooper (00:44:21):
Yeah. And I mean, that is the draw. And so, why are people so attracted to Ben? And you know, that same thing would’ve happened if like the current CrossFit champ had walked in the door; people would’ve flocked to Ben because we know all about his story. We know that he’s the coach of this, and he’s got this affiliate, and he was on the staff, and now he’s this, and he’s got, and that’s the thing. And people lined up for two hours to have Jason Khalipa sign his book. Why is that? Right? And would that happen with the current CrossFit Champ? Maybe with Tia? But it’s because we know so much about her story. And I mean, it’s not just true in CrossFit. This happened in Formula 1, two years ago. They produced this kind of “behind the scenes” documentary about Formula 1.

Chris Cooper (00:45:07):
Now I’ve got a kid who’s a massive Formula 1 fan. She’s traveling to races, and they doubled their TV viewership. The second largest viewed sport in the world, doubled its viewership by telling the backstory of their drivers, in a year. And then, so Tour de Franc, third biggest watched sporting event in the world, doubled its viewership the next year because they did the same thing that F1 had done. They created a behind the scenes storytelling journey of some of the lesser known riders. And now we’re all captivated. Like my wife will watch Tour de France with me for three hours in the morning. It’s amazing. And it’s just dudes in spandex going up a hill.

Sevan Matossian (00:45:46):
Yeah. That’s that doubling of the F1 thing is fascinating because that is a really boring sport.

Chris Cooper (00:45:54):
For some people, yeah.

Sevan Matossian (00:45:55):
It’s … around the track. But if you get them to invest in the people who are in there hard, and also, it’s boring superficially, but once you realize how much goes into it, right? Yeah. And how fast the cars are actually going and the dangers, and they start contextualizing everything, it gets pretty—well, the same thing is true with the UFC. They spent, they went into deficit, and they did—30 years ago or whenever they did their first reality show, they spent every last dime they had with Spike TV, and it saved the company. They were basically going to go out of business the next year.

Chris Cooper (00:46:23):
Yeah. The story is the funnel that brings everybody in. And if we continue telling the story of CrossFit, tell Greg’s story—for some reason we stopped talking about Greg. That makes no sense. Like there’s nobody there to replace Greg. Talk about the Games. You have to talk about the Games because there’s nothing to replace the Games. But more than anything, tell the story of CrossFitters, and don’t shy away from the competitive athletes. Like tell their story too. You know, now we’ve gone to this—we’re trying to completely change the brand where it was, “Forging elite fitness. Let’s tell the story of these animals doing these two-minute workouts that are killing them,” to now it’s like, “Don’t be scared, this is for grandma. Bring her in. She’s going to lose 200 pounds.” Like, you’ve got to tell that story, but you’ve got to tell the whole story, and you have to be telling it every day. And to Matt’s point, if you’re not telling a story every day, you create a vacuum where other people are going to fill in the story for you, and it might not be the story you want to tell.

Sevan Matossian (00:47:23):
You brought up Steve Jobs, and I think one of the things that he did was he cut the skews right by 75%. So, Apple was offering all of these products, you know what I mean? They were focused on one computer, and then they focused on all these products. And then when he came back, he’s like, “Nope, forget that.” And they just destroyed the website, and they reduced it. And I see a parallel there to what you’re saying is—I’m going to add some words to your mouth, but I think that the message should be just always speaking to the base. I think you should speak to the base. Who is the base? The base happens to be people whose lives depend on their fitness. So, ambulance, for all first responders, military guys, and then we all know that anyone who’s afraid of that, if they can get past that and walk into an affiliate, they’ll see, “Oh, wait, there’s grandmas in there. Oh wait,”—if they scratch the surface, they’ll see— Greg Glasman says, “It’s infinitely scalable.” And of course, you still tell those other stories, but they should have—we should have never abandoned the base. It should always be—you should stick to what? To the base.

Chris Cooper (00:48:24):
So, if you want to go the other direction, and you want to look at companies who have had an inspirational, transformational, disruptive leader, and then they’ve grown beyond that leader, what the next person does is he takes or she takes the lessons from the leader and makes them easier to understand, more consumable, more sticky. And this happens in business books all the time, where you take this really complicated concept, and you make it very simple for other people to understand, and now you’re a hero. And I think that that’s the big opportunity with Greg. It is not to repeat dogmatically fitness in 100 words; it’s let’s explain that in common language so that people understand it. Right? “Off the couch, off the carbs,” Greg said that later on, but that’s something that’s sticky that everybody can remember. Like, “Get moving, and get off the sugar.”

Sevan Matossian (00:49:15):
That’s what he was so good at. He, every couple years, he got a new mantra, right?

Chris Cooper (00:49:19):
And that’s it. That’s the mark of genius—making the complex simple, right? Like average people like me can’t do that. Like Greg can do it. And now, the way that you spread the message even further is you take Greg’s language, like, “Constantly very functional movement, perform at high intensity,” and you make that even simpler for people to understand. So, that I, at the affiliate, when somebody’s calling me up and being like, “What’s CrossFit?” I’m no longer saying, “Constantly very functional movement, high intensity,” I’m saying, “A different workout every day that will get you to your goals faster than you ever thought possible,” or whatever that mantra is that’s going to stick. Like, that’s the kind of message that HQ should be doing is evolving, simplifying, making sticky Greg’s genius.

Sevan Matossian (00:50:02):
Do you think that the question—I think the question around the Games should be singularly: How would the Games best help the affiliates? I don’t think it’s how to grow the sport, how to make—I think just the question should be like—I don’t see it as a vital … It’s like someone said to me the other day, “It’s just a rich wristwatch on the organism.” You know what I mean? It’s not the heart, it’s not the lungs, it’s not the kidney, it’s not the brain. It’s just a wristwatch. You can take it or leave it. It doesn’t matter what kind of wristwatch it is. You know what I mean? It doesn’t matter who the athletes are; it’s just an accoutrement, you know what I mean? Or a garnish, whatever.

Sevan Matossian (00:50:43):
Do you think that that’s a fair—do you see—I’m open to you punching holes in that. Do you see that, no, it should be its own thing. It should be—because there’s always been this thing, like make it its own thing, make it bigger, grow the sport. And I’m like, nah, I don’t—I’m starting to see the light. I think nope, it should just be—if you can’t answer the question, if whatever you’re doing with the Games doesn’t help the affiliates, then don’t do it. That should be just a flat-out litmus test.

Chris Cooper (00:51:07):
Yeah. It’s hard to say how that would help the affiliates though. Like the way that I think the Games helps the affiliates right now is it should be spreading attention, which will increase hopefully interest, which will drive people into the affiliates. But that funnel has a lot of broken pieces right now, and it’s not clear how that works. I think—years ago I was asked to explore the connection between Spartan Race, Tough Mudder and CrossFit, and I did it the wrong way. I tried to figure out who was the best Spartan racer, the toughest Mudder guy, and I found this guy Hunter McIntyre and like, “Oh yeah, he does CrossFit,” you know? And so, to me, that was the article, but what it should actually have been was, “How the hell does Spartan race get 30,000 people to show up and run through the mud every weekend?”

Chris Cooper (00:51:54):
And like, that’s what the Games should be. Yes, you want to crown the fittest because they’re the ones going up Everest, and we’re all mountain climbers, but more than anything else, you want to get 50,000 people at the base of Everest at the same time and all do something together. You go to the average marathon in any city in the world, and you’ve got 300 people of every shape, color, creed, you know, and they’re all running together and you ask them at the end of the marathon, “Who won?” And most of them are like, “I have no idea. I don’t care.”

Sevan Matossian (00:52:26):
Right.

Chris Cooper (00:52:26):
Really what the Games should be is a growing gathering. Yeah. And when you said this is how the Games started, my programming for my gym, I’ll be honest, I go back to Greg’s programming from the main site, and just yesterday, I was going through the archives of 2007. I was trying to find when the first Cindy was posted so I could share a video of it. And what I found was an introduction or an invitation to the first CrossFit games. And it was this graphic, first ever CrossFit Games, Aromas, California, and that’s it. It was not a meteor marketing event; it was a picnic. So, yeah, I believe what you’re saying, but if you really want to make the Games benefit affiliates, it should be like, “Everybody do the Open now. Everybody come with me to this city an hour away, and we’re going to do the next round with them.” And then if you want to go to the biggest party of the year, that’s when we’re all going to go down to Fort Worth, and we’re all going to do this massive thing. … events. That’s how Tough Mudder, Spartan Race became this billion dollar company. It’s not singling out the best; it’s including the most.

Sevan Matossian (00:53:35):
And the part that sticks with me that you said right there is the Open needs to be an affiliate event, and that’s it. Yeah. It needs to be an affiliate event. And if it’s not solely that, and if people want to participate in the Games, then they’re going to have to figure out what an affiliate is and come in. Chris, when people open a gym, what percentage of your clients, if you don’t mind sharing this, come to you when they first open the gym versus after they’ve been opened?

Chris Cooper (00:53:58):
10% come to us before they’ve opened, and those are, man, I am just so excited for them because every mistake that you make on opening takes at least six months to fix. And what happens unfortunately is you open up, and you make a mistake, and it’s around pricing. Oh boy. Well, OK. And it’s because we’re all first-time entrepreneurs. I think Greg’s biggest gift was he launched 30,000 small businesses, but we’re all first timers. And so how do we price? I don’t know, like what’s Matt’s gym doing? Geez, we don’t have this kind of data. So, we look at what the last gym is doing, and “I just quit that gym. I’m going to start my own. I’m going to price it $5 cheaper.” And so, the value goes down, down, down. It takes years to fix that. And we work really hard with gyms to fix that, but some of them, they go out of business before they can fix it.

Chris Cooper (00:54:51):
So, the new gyms coming in with Two-Brain before they open, they don’t make those mistakes. And what’s bananas is that within two years, they’re making $100,000 take home, and they’ve got a full-time coach. I mean, it took me 10 years to get to that point, and it’s because I had to make every mistake myself. I didn’t have anybody to point to who said, “Here’s the actual average.” I believed a lot of the stuff that was coming from the CrossFit message board, and some of that was wrong or some was fake. And there was no guiding light of truth. And so, when new gyms come into our program, I have massive optimism for them. Gym ownership is—it’s a hard business, but it’s one of the easiest to start.

Chris Cooper (00:55:36):
You can start a gym for $5,000, right? You print up your A-frame, you put a QR code on it, you buy three barbells and three kettlebells and three wall balls from Rogue, and you go to the park. And that is how you start a gym. And a gym, we all know, is a community more than it is a physical space. You start to build that community in the park and in church basements and in public school gymnasiums, and eventually you move into a facility, and you grow from there. You don’t have to do it the way that you see on the main site. If you go to HQ right now, and you click on the “open an affiliate,” they’re going to tell you it costs $160,000 to start a CrossFit affiliate.

Sevan Matossian (00:56:13):
Really? Is that true? It says that on there.

Chris Cooper (00:56:15):
Yeah. Go ahead and look at it.

Matthew Souza (00:56:17):
It’s a filter. They’re just trying to pick their customer even more.

Sevan Matossian (00:56:20):
Wow.

Chris Cooper (00:56:20):
And I get it.

Matthew Souza (00:56:21):
Rather than the garage gym pamphlet, where it’s like, “Hey, you could start with just this. Go make some of these stuff from Home Depot.” Now it’s, “You need a lot of money.”

Chris Cooper (00:56:29):
That’s right. Yeah.

Sevan Matossian (00:56:30):
“Two-Brain made me a millionaire.” That’s awesome. And I knew, I know you guys have the Millionaire Club, which is really cool.

Chris Cooper (00:56:36):
Yeah, I mean, we just certified our 58th millionaire this week. So, we actually audit, we make sure like, hey, and the reality is that none of these people—go interview Jason, right? He doesn’t care about the money. He cares that his gym is successful enough to be sustainable and that, “Hey man, OK, sigh of relief. My gym’s doing great. It’s going to be here for 30 years. Mission accomplished.” Like, that’s the mission. The millionaire status, it’s a signal. It’s not the goal. It’s a signal that you’re being successful in changing lives. If you look at Candice Wagner, and I hope you have her on the show, she owns CrossFit, Iron Horse. It’s a massive affiliate. It’s the closest one to the Games this year. She has full-time staff who are making meaningful living. She’s helping hundreds of people, and she can do that because she’s successful. It’s not that having 400 clients made her successful. It’s not that having the biggest space or the most equipment or being the closest to the games venue made her successful. She has all those things because she’s successful, and she can expand out. So, yeah, man, I really belabored that question. Sorry.

Sevan Matossian (00:57:44):
No, no, no. It’s all—it’s so good, right? And you’ve known plenty of gyms that are losing money that have 400 members.

Chris Cooper (00:57:50):
Oh, yeah, 100%. I mean, so I was on this other podcast on Wednesday, and it’s called “Fitness Business Insider.”

Sevan Matossian (00:57:57):
Please don’t do that. Please don’t do that. … Chris Cooper at “The Sevan Podcast.”

Chris Cooper (00:58:02):
I’m going to need a T-shirt, then.

Matthew Souza (00:58:05):
We’ll definitely get you a T-shirt.

Chris Cooper (00:58:05):
So, it’s hosted by Chris and Steve Cristini, and these guys opened up affiliates, I think it was 2008. CrossFit Markham was their first. And at the Games this year, they went around, and they were trying to find the 10-year affiliates. And what they found, they were surprised by it. It was a real eye opener to me is that every time they would find somebody who said, “Yeah, we’re a 10-year affiliate,” they were like the third or the fourth owner. So, really what you have are these gyms that have been around for 10 years, but they’re owned by people who’ve only been in business for two or three years, and they haven’t learned the lessons that you would hope they’d have learned. So, when we’re looking at like, “What are the most successful gyms in the world?”

Chris Cooper (00:58:43):
You can’t look at tenure. You can’t look at headcount. You have to look at like, “Who’s the most profitable?” because those are the ones who are still going to be here in another 10 years. And that’s why you want to talk to people like Candice. You want to talk to Oskar and Karl at CrossFit Medis in Stockholm. You want talk to Rune who’s got this like 500-member gym in Europe. You want to find these people, and you want to interview them and say, “What are you doing?” You don’t want to host a round table where the guy who’s going to be bankrupt next month is giving advice on marketing. And that’s another place that data helps.

Sevan Matossian (00:59:17):
I know CrossFit has put their foot in the water a few times with doing affiliate mentorships, and then they pulled out, and then they were in and they were out. Are they in now? Do they have anything internally that is a mentorship? Because I heard Don say on one of those interviews, what Chris is doing is very, very successful, but it needs to be scaled, or we need to scale it. And I was thinking to myself, “Well, he had 1,000 gyms show up in Chicago, and I already know that you guys are at the 50-yard line of selling out for the conference next year, which is still a year away.” Are they in that space? And kind of a conflict of interest for them to be in. They’re not in that space.

Chris Cooper (00:59:57):
Well, they’re trying to collect data. I mean, they tried to do something with Zen Planner in Canada, and sometimes companies use Canada as the testing ground for their real market America because we look like Americans.

Sevan Matossian (01:00:08):
We test our nukes up there.

Chris Cooper (01:00:10):
Yeah, 1,000%, right? Like, we get McDonald’s hamburgers before you guys do. In this case, around Christmas, CrossFit was working with Zen Planner to collect data. And so, you get this email and it’s like, “Please fill in this form.” It’s going to be the CrossFit, whatever they’re calling it, State of the Industry. And so, the first thing that you sign is a release of all of your information to Zen Planner. Well, why in hell would I want Zen Planner to have all my information? Like, no, thank you. So, I backed out, and I asked our affiliate rep, like, “Why are we signing this?” And she’s like, “Well, you don’t have to, but it would help affiliates if you did.” So, I just said, “No thanks.” And you know, the reality is that, “No thank you HQ. Like we don’t need your help to scale our State of the Industry data.” But in 2018, my first pitch was like, “CrossFit should have this and make this available to affiliates.” They said, “No, we started doing it on our own.” And now I see that it’s actually better to come from an objective source instead of within, which would just kind of perpetuate the whole Cargo Cult again. You know, you can’t trust when you’re inside the cult. You can’t trust the data that comes from inside the cult because it’s that echo chamber.

Sevan Matossian (01:01:23):
Hey, if we see this as a two-headed beast, right? There’s the lifestyle protocol that is CrossFit. Yeah. And then over here on the other side, we have the business, the affiliates. And CrossFit’s over here in charge of the lifestyle protocol and disseminating the information, what to eat, how often to move best practices for movement, recovery, all that stuff. And then they’re trying to also come to this side, which I don’t necessarily blame them—best practices to run the business and make money. Have you ever thought about coming onto their side? Have you ever thought, “Oh, maybe I’ll start my own affiliate program and come onto their side and have my own programming and my own—“? I mean, you’re an accomplished coach yourself. You’re surrounded by thousands of accomplished coaches. Have you ever thought about extending your business out of your lane onto their side?

Chris Cooper (01:02:16):
I’m an old coach. I don’t think I’m an accomplished coach.

Sevan Matossian (01:02:20):
You’re accomplished coach with eye level and kids with autism. I know your story. You have the whole thing, and people you’ve coached.

Chris Cooper (01:02:27):
Well, I’ll share something that the founders of Beyond the Whiteboard shared with me at the Games, which I thought was really brilliant. Moe was such a smart guy, and he said that they had been in the game helping affiliates for a decade, and he’s like, “Up until now, we’ve never done the billing side because we always knew that it would be way easier for us to build that later, to do their thing later than for them to do our thing later if we focus on what makes us the best.” And there’s a reason that I don’t build software, and I don’t go out and create a coaching certification. Right. That’s because I can’t be the best in the world at it.

Sevan Matossian (01:03:07):
OK.

Chris Cooper (01:03:08):
CrossFit is the best coaching certification in the world. They are the best methodology in the world. They are not the best at business coaching in the world.

Sevan Matossian (01:03:19):
And you guys are, I mean, clearly.

Chris Cooper (01:03:21):
I think we are. I mean, yeah.

Sevan Matossian (01:03:22):
The data shows it. The return customers show it; the respect you get in the community shows it. I wonder, this is a personal question. Let’s say you were the kid who fed my kids lunch in the afternoon right at school. I would be really nice to you because I would want you to give them good portions and the best food. Right? Do you get a lot of love and support from HQ since you are helping their affiliates pay their affiliate fees? Like I would think I would be nurturing the shit out of that.

Chris Cooper (01:03:49):
Publicly, yeah. I mean, publicly.

Sevan Matossian (01:03:53):
Priority number one is the athletes. I mean affiliates. Yeah. Like if I’m HQ, I’m like, “Hey, this dude keeps gyms open so they can pay our bills.”

Chris Cooper (01:04:04):
Yeah. But if you’re a private equity company that owns HQ, you’re going to say like, “Who can we partner with who will increase the return on investment to our partners?” Right? And so, when we had—and we’ve been having partnership talks for over a decade. At different times CrossFit HQ has said, “Can you come out here and bring your staff and run a seminar because all the affiliates around Santa Cruz are in trouble?” “Yes.” You know, and since then, it’s always been like, “Can you pay for lunch at this affiliate gathering?” And the answer is always yes. Where the affiliate, like the actual partnership talks, came to a head was a couple years ago, Gary Gaines was in charge of the partnership and they were launching the APN, and the conversation was like, “What are you willing to pay—?”

Sevan Matossian (01:04:49):
Like a website where affiliates can go and get deals? Like discounts? Like barbells and shit? OK.

Chris Cooper (01:04:55):
Yep. And the pitch was like, “How much are you willing to pay CrossFit for us to give you leads?” The interesting thing was that we have a daily email list of 40,000. We already talked to a lot of CrossFit affiliates. And so, I said, “Well, how does this increase value to affiliates if I’m just paying you?” And they’re like, “Well, you can raise the price, charge them more and just give us an extra 1,200 bucks.” And I said, “That just doesn’t feel right to me. Like, it actually kind of feels like rent seeking.” And they were like, “Well, you’re the best. We want to work with you.” But they had actually made the identical offer to about five people in the same week.

Matthew Souza (01:05:36):
You’re the only girl me baby. You’re the only girl for me.

Chris Cooper (01:05:40):
Which is, I mean, they were honest about it. So, we didn’t jump on that deal. We said, “You know what? We we’re doing well being the outsider.” I enjoy kind of being the black sheep who can say, “Hey, the emperor’s not wearing any clothes better than somebody inside the church.” So, while we do work for affiliates, we don’t work for HQ. And while we do travel along parallel lines, like the way that we can help people best is by being the best business mentorship practice in the world, not by being HQ’s business mentorship practice. Hope that makes sense.

Matthew Souza (01:06:20):
Hey Chris, can I ask you one more question real quick? It might be a hard question for you to answer.

Sevan Matossian (01:06:26):
I hope it’s super hard. Fuck him up. Get him, Souza

Matthew Souza (01:06:29):
So, Berkshire Partners, their growth, their whole entire deal here was growth capital. In your opinion, how much growth capital is there to continue to invest in? Because what we have been talking about is different ways that the company could fundamentally shift its direction to therefore help the affiliates. Realistically, how many shifts can it possibly still make before Berkshire Partners says, “We’re done dumping resources into this”?

Sevan Matossian (01:06:59):
Can you define what—I don’t know what that means. It’s capital. Say that—explain what that means.

Matthew Souza (01:07:02):
OK. So, if we have $10, and you have an idea, and I put $2 to your idea, and it doesn’t work; Chris has got an idea, he needs $3, we put $3 into his idea, it doesn’t work. We now have $5 left. We know that CrossFit is running enthusiastically in the wrong direction For me as an affiliate owner, how much more can they change ideas and take the leftover $5 that they have and put to those ideas before Berkshire says, “Our 10 bucks are gone. You guys had a good run. We’re out.”

Chris Cooper (01:07:31):
Well, I mean that’s the calculus behind every acquisition that they make. It is not like, “What is the upfront price?” but also, “What is the burn rate?” Like how, how long can we keep putting money into this? And I would guess that CrossFit is profitable, but I would also guess that they dramatically overpaid based on passion for the brand. And so, at some point, the goal of every private equity firm is to build this thing for sale. So, how can I get at least a 20% return on my investment, and then the next buyer is going to come in and try to make another 20% return.

Sevan Matossian (01:08:08):
So, you think the 200 million was overpaid?

Chris Cooper (01:08:10):
I mean, just back in the napkin cash flow. Yeah, I mean that’s a very high multiple on what CrossFit was bringing in profit wise. I’m sure.

Sevan Matossian (01:08:18):
They know that they’re lying to themselves because I heard stories about Roza in board meetings laughing that they stole it from Greg. I mean, and Greg’s laughing now, but—

Chris Cooper (01:08:27):
Yeah, I mean, it should be a billion-dollar company, right? OK. What they bought for 200 million was the opportunity to make a return of at least an extra 40 million on top of that. And so, I think like what Matt’s saying is they haven’t achieved that yet. How much longer are they willing to fund? And again, this is all just castles in the sky; we don’t know. But I would imagine that the patience is probably there right now for a couple reasons. Number one, they do seem to be doing better. You know, they’ve just done a year of touring around saying, “We’re sorry; we’ll do better,” at their affiliate gatherings. We sponsored those. Then you do have some growth in Europe that is like promising. And the growth that’s happening over there is exactly what happened in North America years ago where you just open your doors, and you’ve got 300 people, and you say, “I’m good at business.”

Chris Cooper (01:09:18):
“Woohoo.” And then three years later you’re like, “Uh oh.” But that is happening, right? And so that’s a positive sign. The other thing too right now is that money is very expensive. When CrossFit was sold years ago, there wasn’t a high interest rate. It didn’t take a lot of money to buy $200 million worth. Now it is pretty expensive. And so, there’s probably some impetus to sell, and there might even be an acceptable loss possible. So, if you look at the average time their private equity company owns something like this, they’re not buying it as a cashflow asset. They’re buying it to build, gain, 20 to 40% on their investment and sell—usually that’s about four years. And so, I wouldn’t be surprised if there were suitors for CrossFit right now, like serious ones. I wouldn’t be surprised if there were conversations happening.

Sevan Matossian (01:10:09):
Flood the water, Chris. Te same way you think—it’s like you think we’re having a FLOYD-19 moment. You think people saw the headlines in New York Times, and some guy’s like, “Alright, now’s my time to make an offer. The Mazda is no longer a popular car, and they’ve got 200 on the lot. I’m going to go pick one up at half price.”

Chris Cooper (01:10:24):
Not yet. Because with Greg, like you’ve got a sole founder, right? Right. Like he bought out his ex-wife years before that. He was the sole shareholder, I believe. And so, when you catch somebody—when you catch a founder in a down moment. I work with a therapist, and she says, “We all have $13 days when you would just sell the whole thing for 13 bucks.” He probably caught Greg at a moment of peak frustration when he was like, “OK, I’ve achieved this. I’ve made an impact. I don’t need this. I’m done.” Right? Like, that would be me. That’s not going to happen with a private equity firm because now you’ve got boards, and you’ve got bureaucracies, and you’ve got shareholder money involved and reports that have to come out every corner to shareholders. They’re not going to make a decision like that. You can’t just look for a low point. So, my guess would be that right now Don’s conversations with his boards are, “Keep it a little bit longer, and we will see this much return from it.” And so, there’s probably a plan to increase that return to shareholders and investors. That plan is going to either increase include growth, or it’s going to include more money from the current ecosystem. And probably both. So, that’s probably what we do.

Sevan Matossian (01:11:40):
Who was saying that, “Hey, sooner or later, they’ve got to cut the cord.” Yeah. Maybe you just can’t hold onto—or can you? I mean, well, I mean—

Matthew Souza (01:11:48):
Cut the cord on the whole thing, but just initiatives that we hope to see, like to think—

Sevan Matossian (01:11:52):
Oh, you’re not—you weren’t suggesting that they just—

Chris Cooper (01:11:54):
Yeah. Well.

Matthew Souza (01:11:55):
They will at some point, but for me it’s just like, OK, if we’re talking about—if they were to do what I want to see out of the company, which is turn it to a media company that’s pushing the message of saving lives and curing chronic disease, right? Right. That’s going to take a shitload of human resources and money to be able to fundamentally shift everything in the company’s direction to that way. And my thing is you don’t have that many big shifts left in the wallet.

Sevan Matossian (01:12:18):
It could be, “Hey, are you successful at that too?” To be really successful, you have to be an employment brand, right? Yeah. So, once a week, I hear someone say, “Are you on Android? I’m not texting with you.” That’s like a huge, that’s an employment. Like, we’re all excited, you know what I mean? When someone says they work at Apple, you’re like, “Oh, you’re—” I mean maybe not as much as before to do a media blitz today in the current system of how many content creators there are. You better be an employment brand. You’re not going to get it done by taking applications. Do you know what I mean? It’s going to—you’re not going to—you don’t have the money. It would cost billions to do what if you had an employment brand would cost less than a million to do. And I really mean that. Because you would just have thousands of people making content for you. Cash like, like the Buttery Bros. Or I used to do for CrossFit. Like you’re just crazy about it. You’re just screaming from the treetops.

Chris Cooper (01:13:10):
Yeah. And it would take a while to build that back up. I mean, when I got my job offer to work for HQ, Greg says, “Give me a number that inspires you as a wage.” And the first thing that I asked for was the email address, chris@crossfit.com. Like that was the most important thing.

Sevan Matossian (01:13:26):
Right. I remember getting that, and I was like, holy shit. Yeah, sevan@crossfit.

Chris Cooper (01:13:31):
Yeah. It was a huge deal, and I was chris@crossfit.com for like three years, and the money was secondary because I had a successful gym by that point, and I didn’t really need it. But yeah, you do have to do that. And unfortunately, now you’ve kind of lost those people who are so passionate about the brand that are going to create media that promotes the brand itself instead of their thing that they benefit from.

Sevan Matossian (01:13:57):
Chris Cooper, you have the State of the Industry report survey out now. Everyone, it will be in the notes to take the survey. Please take the survey if you are a gym owner of any kind. It’s just for gym owners, right?

Chris Cooper (01:14:10):
Yeah, yeah. 15,000 plus.

Sevan Matossian (01:14:12):
And then the closing will be September 13th. So, don’t do it later. Do it right now. Right now. Before Tyson Bay comes on. And then also, when will you release the 2024 State of Industry?

Chris Cooper (01:14:26):
December-ish. We send out—so the first thing we do is everybody who put their data in, they get a copy of it, and we send it to an independent analyst. So, it’s not just me waxing about, “Oh, here’s what I think.” It doesn’t matter, right? Like we’re doing science here, right. So, we send it to an independent analyst, “Here’s what the data looks like,” and then I write a little bit about it later. But the most important thing is we identify, “What are the best gyms doing?” This is like our CrossFit Games. Right? I can remember what Greg was saying about the Games is like, “Let’s find the best deadlifter in the world and copy their program to make everybody better at deadlifts.” That’s what we’re doing with lead gen, ARM, staff. Yeah. So, December-ish, we’ll get everybody like their copy of it digitally, and then we start mailing these out. We send out 7,000 or 8,000 of them through U.S. mail, and that happens—most people get them December, January.

Sevan Matossian (01:15:20):
Hey, thank you very much. We will have Chris back Cooper back on soon. Chris, you the man. Thanks for coming on, dude.

Chris Cooper (01:15:20):
Thanks guys. Appreciate you.

Matthew Souza (01:15:20):
Thanks Chris.

Sevan Matossian (01:15:21):
About 90 minutes. Thank you. Take care. I think it’s pretty obvious. Chris Cooper, Two-Brain Business. If you are an affiliate owner, get over there.

Mike Warkentin (01:15:32):
Thanks for listening. Fill out our survey via the link in the show notes, and we’ll send you our 2024 State of the Industry report before anyone else gets it. You’ll also get access to a collection of our very best gym-growing resources. Click the link in the show notes to be part of the report that defines the gym business every year.