The 02 Story: Dave Colina on Helping Gyms

Dave Colina

Chris (00:02):

Hey, it’s Chris from Two-Brain Business. And my guest today is Dave Colina from Drink O2. Dave’s story is a great one. He started off by identifying something that would help the other members of his gym. And when he started coaching, he found that more and more gyms wanted to get on board with this. And eventually he founded Drink O2, but the real story started when COVID hit, because Dave saw an opportunity to take some action, to help out gyms. And he did it. He pulled together a bunch of different companies and together they took some action that helped out some gyms in the short term, and then learn from that experience and started helping more and expanded that help. And now today on the show, he’s going to reveal an amazing new initiative that you can all benefit from.

Chris (00:48):

I’ll give you some specifics on how exactly it’s going to help your gym, but more than anything, I just want you to have this story of somebody who’s getting rewarded for doing the right thing. And I don’t think we hear these stories enough. So, Dave Colina from Drink O2, enjoy.

Chris (01:03):

Back to Two-Brain Radio in just a minute. Your gym members will love O2’s hydrating, non-carbonated beverages after a tough workout. Even better, O2 is a community-based brand that wants to give back to gyms. If you sell O2 at your gym, you get a free sponsored event every year. Gym owners who wholesale O2 also get their first order for a dollar. Visit wholesale.drinko2.com to apply for an account today.

Chris (01:28):

Dave Colina, welcome to Two-Brain Radio.

Dave (01:31):

Thanks man.

Chris (01:34):

Yeah, we’ve been trying to do this for a while and you have such an interesting story to tell. Maybe we could start with the founding of Drink O2. What led you to that?

Dave (01:43):

Yeah, so I’ll actually work my way backwards here. So, for people who don’t know what O2 is, so we are the official one-liner on the company here is O2 is an Inc 5,000 carbon neutral company that makes clean hydration and recovery drinks that are packaged in sustainable cans. And so that’s been a journey to get to that point, you know, with the Inc 5,000 thing and the carbon neutral thing, which we’re super excited about. And that journey started out of the back of my car about seven years ago. And unfortunately it’s not an overstatement to say that O2 launched out of the back of my car. And I still have that car. I was a one man show for the first year and a half of the business. And I didn’t come from a beverage or a startup background.

Dave (02:34):

I worked in corporate strategy for about five years at a fortune 100 insurance company. But I did have a little bit of an entrepreneurial experience. I actually cut my entrepreneurial teeth founding a private nonprofit charter high school in Columbus. And so it was through that process that kind of became my night job. And then I had this demanding day job. And so it was through that process where I became hooked on, you know, pretty unhealthy, sports and energy drinks. So that’s the founding story around O2 revolves around this nasty habit of Gatorade and Red Bull that I had. And so I set out to make something better and I partnered with a physician friend of mine, who was and still is a medical doctor at Ohio State on the formulation. And he and I developed O2, you know, with a lot of trial and error, over the course of a couple of years. And then we finally launched it out of the back of that car. And so we we’ve always been rooted in the fitness community because after I left my day job, I started coaching CrossFit. And so that’s how we kind of got our footing in the CrossFit market. I managed to convince a bunch of friends of mine who owned gyms to carry my product as a favor initially. And then it did really well from there.

Chris (03:50):

That’s amazing. Where were you coaching CrossFit, Dave?

Dave (03:53):

It’s a gym in Columbus called Buckeye CrossFit.

Chris (03:55):

Buckeye. Yeah. Great one. And how long ago was that, you said was that seven years?

Dave (04:00):

So, O2 launched seven years ago, I started coaching, let’s see, first it was martial arts and then that led me into CrossFit. And so I started coaching CrossFit I think in 2012. Yeah, 2012. And then coached for a couple of years and then O2 launched.

Chris (04:18):

Beautiful. OK. But the story really starts to like grow to its crescendo during COVID. Right. So, what happened then?

Dave (04:29):

Yeah, so we’ve been growing pretty steadily from inception and granted we were starting with a small base, but you know, we were growing at a hundred percent year over year, each year. And, over the course of time, you know, we got to a point where the majority of O2’s revenue was coming from gyms carrying our product, you know, so mostly CrossFit gyms, some, you know, smaller boutique fitness studios, but it was all independently owned gyms. And so, you know, one of the two things that I think I got right with the business at the outset is that we’ve always been very oriented around doing the right thing, especially when it’s hard. Like we’re very much a values driven company. And so when COVID crept up, you know, I am sure like you and a lot of listeners had had my eyes on what was going on with COVID well before March.

Dave (05:24):

And so were just ready for it as we probably could be, but we still didn’t know what the hell the deal, you know. But we did see, let’s see, I think we had 70% of our revenue was tied up in the gym channel and that effectively shut down within the week, you know? And so it was that weekend of March 15th and I think back cause that’s when shit really hit the fan. And so like I said, I wasn’t sure what to do, but I did know that the other thing that I think I got right at the outset, everything else has changed. But the other thing that I think I got it right at the outset was the liquid formulation of the product. People who drink O2 drink a ton of it.

Dave (06:05):

And it’s always been really, really well received. And so we knew that gym members were going to continue buying O2 when gyms shut down, they were just going to shift their purchasing from their gym to drinko2.com. You know, and we were fortunate in that. I mean, it sucked that so much of our revenue shut down, but man, we were fortunate that we had another channel that was fully functional and that was our website. So, we decided that the right thing to do was not to just sit back and let that happen. The right thing to do was to do what we could to share some of the upside with gyms that would have been otherwise capturing that revenue, from gym members purchasing O2. So on March 18th, we announced that we were going to split the profits from every case of O2 that was sold to a gym member online. We were going to split the profits directly 50/50 with that gym member’s local gym owner. And when we announced that, we saw our online sales, I mean it 10x’ed, literally, you know, the community showed up in a really big way. We did not expect that at all. We just thought it was the right thing to do. And within three days we had done more sales of O2 online than our best month ever.

Chris (07:30):

Doing the right thing paid off.

Dave (07:32):

And I think that that’s a testament to the community too. You know, people really appreciated that and it wasn’t so much about O2 as it was, Hey, this is a great sort of non-awkward way to support my gym owner instead of Venmoing 20 bucks. I can, you know, buy a few cases of O2 online and everybody wins, you know.

Chris (07:53):

So it seems obvious to me that the next step would have been, you know, what else can we do for this community? Because it just been such a win for everybody.

Dave (08:01):

Totally. So I knew within a few days that there was something there. And so I reached out to a few other friends of mine who have brands that are popular in the CrossFit community. Bear Handlon is one of them from Born Primitive. And he was my first phone call and I told him, you know, look, we’re doing this thing. We’re sharing our profits with gym owners and people are being really, really responsive. Do you guys want to get on board with Born Primitive and you know, honor that same profit sharing commitment and, you know, in typical fashion he was like, hell yeah, let’s do it. And so, those guys came on board the following week. And then we managed to get a few other brands on board over the course of the next few weeks.

Dave (08:46):

And over the course of March, the last two weeks in March and the last three weeks or the first three weeks in April, our brands combined, we got about five brands in this coalition. We generated almost a quarter of a million dollars in cash to give back to about 2000 gyms that were participating. That was impactful, man. I mean, you know, quarter of a million dollars, isn’t an insignificant amount of money. And I think that what we did best was we were the first domino to fall that really rallied the community around the gym support, you know, and we knew that, we knew that that spread out among 2000 gyms, $250,000 is gonna come out to about a thousand bucks or a hundred bucks a gym. So it’s not life-changing right. But it was more the, yeah, the spirit behind it, you know.

Chris (09:48):

So just for people who don’t know, Dave, like when you say that you came together and you did this thing, like what did the community coalition look like at that point?

Dave (09:57):

It was we were flying by the seat of our pants at that point. I mean, we we did brand it. So we branded it, the Community Coalition, which we thought was fitting to, you know, a group of brands that are all devoted to this community, coming together to do something impactful for that community. And it was O2, Born Primitive, Puori, and another brand called Chomps and then Bear Complex came on towards the end. So we had a powerful consortium of brands. And so each group kind of told each other’s audience what they were up to. And there was some cross-pollination there as far as marketing goes and the whole idea was rooted in the, you know, that principle that, you know, the sum of the parts can be greater than the whole sort of thing, you know? So it was a powerful initiative.

Chris (10:48):

And how did it work? I’m sure some people here just aren’t familiar with it. So you would go to community coalition.fitness and sign up and then what happened?

Dave (10:57):

Yeah. So, so we actually, I don’t think we stood up that website, at that point, but what we did was we basically created, you know, 2000 or 2,500 coupon codes that were unique that gym owners could share with their members and each one of those unique codes would tie back to the gym and it would also get their members, , you know, a special offer on our website and Primitive’s website, Bear Complex;s website. So it was just a great way to, you know, great way to get a deal that on the member side, but at the same time support, you know, what I think is the hub of community and CrossFit, which is the affiliate. And we saw people be really, really responsive to that. So it was a simple.

Chris (11:47):

So Dave, this all happened really, really fast, like between mid-March and the end of March, you were really getting the gears going. Yeah. Was anybody else doing anything at this time too, to kind of rally the community together?

Dave (11:58):

I think so. I,you know, as I mentioned, I think we were the first to move, and that’s one of the benefits of being, you know, small and agile. Like we pulled this together really, really quickly. I mean, it was March 18th when we made this, you know, the first initiative come to fruition. But I think, you know, I like to think that we inspired some action among some larger companies and larger organizations. But I know that, you know, CrossFit was doing something, Loud N Live was super supportive. They pulled something together, I think NOBULL did as well. So there were a good handful of brands that were taking meaningful action.I thought, and there were some that were taking kind of less than meaningful action, so maybe paying some lip service to the community. But for the most part, you know, we saw people really show up n a big way,

Chris (12:53):

You know, three months into that. You’re still going strong and CrossFit changes ownership.

Dave (12:59):

Oh, well, I haven’t even touched on the most impactful thing that we did. If you don’t mind, if we touch on that for a second. All right. So let’s go three weeks in. March 18th goes by, and then, you know, we get towards the end of March and then we kind of come in early to mid April and you remember this, I mean, nobody still really knew what was going on. We were all kind of holding out hope for May to bring kind of a return to normalcy, but that hope started to diminish pretty quickly as time progressed in April. And so, I had several conversations with a number of friends and I believe you were one of them. I can’t remember the time distortion is just a mess from COVID times. But, uyou know, I’m fortunate to have a good group of friends who own gyms and kind of provide a sounding board sometimes.

Dave (13:55):

And, you know, everybody really appreciated what we were doing with the community coalition profit sharing piece. But it wasn’t, you know, like I said, that wasn’t keeping anybody in business, you know, that wasn’t going to be super impactful for anyone really. That was just more of a meaningful gesture. And many of the gym owners that I talked about were growing increasingly concerned about what May would, would bring because, you know, what we saw was a lot of people at that time, you know, nobody canceled their membership in March because nobody knew what the hell was happening. Right. And then April came along and for the most part, you know, everybody stuck around and decided to, you know, take some equipment from the gym or try these at-home zoom workouts or whatever. But it was getting kind of tough for a lot of people to justify, continuing to pay, you know, 150 $200 gym membership when they couldn’t go to the gym.

Dave (14:50):

Couldn’t work out with friends, couldn’t get hands on coaching. And so, gym owners recognized it, and, you know, quite frankly, I think that everybody was kind of at a loss for what to do. And so that was the common problem that everybody shared. And I remember a conversation I had with Jason Khalipa in particular. And he was like, dude, what you’re doing with the community coalition is great. Is there something you can do to encourage my members to keep their memberships active in May, because that’s really what I’m worried about. And so we went back to the drawing board and there was an idea that I had that I remember at the time thinking this could go either really, really well or really, really poorly. It’s probably not going to be anywhere in between.

Dave (15:33):

And that idea was rooted in the notion that O2, and some of our brand partners, we could all kick in a $25 gift card to our websites to encourage a member to keep their gym membership active in the month of May. So if O2 did it, it would just be $25, but wouldn’t it be cool if O2 and Born Primitive and, you know, a few other brand partners, wouldn’t it be great if we each did? And we each said, OK, we’re going to give a $25 gift card to our websites combined among four brands, a hundred dollars total. And that was the idea. We would come together to offer that to really every gym member in America who’s working out in a CrossFit gym. And as long as they kept their memberships active in the month of May. And so we announced that at the end of April, I think it was April 28th.

Dave (16:23):

We announced this program that we branded stay for May. And we said, you know, every gym member who keeps their membership active for May gets a hundred dollar gift card to O2, Born Primitive, Puori, Bear Complex, as long as they keep that membership active. And we had more inbound in two or three days from gym members wanting to make sure their gym qualified, gym owners telling us it was, you know, the most that any brand or any organization ever done to help them at a time like this, we had more inbound in two days than we had the proceeding two years combined easily. And so that program was super successful because it was a win for everybody. You know, the gym owner got something at no cost of value to offer to their gym members for keeping their memberships active, and the gym members got something at no cost, as long as they kept their gym memberships active, you know, a hundred dollars gift card to some brands they already liked. And the brands involved got a tremendous amount of trial. Granted, it was subsidized like nobody was making money from these sales, but the trial was super impactful because O2 got, you know, 10,000 new customers in a matter of a couple of weeks. And that was pretty impactful for us and the other brands. So it was one of those rare win-win situations. We ended up having about 60,000 CrossFitters participate in that initiative in one month.

Chris (17:41):

That’s really amazing, man.

Chris (17:43):

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Chris (18:16):

So you’re going through all that, all these CrossFitters are participating, but meanwhile, CrossFit HQ itself is kind of going through some turmoil. And, how did the community coalition interact or dance around that whole month of June?

Dave (18:32):

It felt like the world was on fire. And you know, I don’t know if any business owner or member of the community for that matter, really knew how to react to that. You know, with everything else going on, it just seemed like, oh my God, here’s another thing. But you know, we took a pretty firm stance early on to clarify what we stood for as a brand at O2. And we saw our partners do something similar. And I was, I remember being really, really, really skeptical that any sort of transaction was going to occur, from, you know, from Glassman to another party in any sort of time frame that would really mitigate the damage that was being done to the brand. And it was really unfortunate, I thought, because just another thing, you know, because now every, every CrossFit gym owner across the globe had to, you know, further justify their value to their members and further, it was just like kicking a man when he’s down, you know, it was just another thing.

Dave (19:49):

And I remember having a conversation with a good friend of mine who has been working at CrossFit forever. And, you know, he and I were both like, this is terrible. There’s no way that Glassman is going to sell any time soon. And there’s no way that this damage can be undone anytime soon. And there’s just going to be, you know, it’s going to be a steady decline of people leaving CrossFit. And so I was shocked when the announcement came through that the Glassman had sold, you know, sold CrossFit to somebody else. I didn’t know the new guy, did some light Googling, seemed like a good thing, but I was just floored that it happened in the time frame that it happened, and really excited, too.

Chris (20:35):

You actually met with some people at HQ. I’m not sure if Roza was among them at first, because they saw, I think, what you were doing with the community coalition and they thought, OK, maybe this is something we can get behind.

Dave (20:48):

I did. When he joined, you know, I reached out to him as I’m sure a lot of people did. And we had just gotten some really great coverage from that initiative. We landed the cover of entrepreneur startups magazine with an article on how we managed through COVID and, and how we managed to grow pretty significantly while at the same time benefiting our core community. And so I sent him that article. I was like, Hey, just, you know, thought you’d want to see what some members of your community been up to. And he responded right away. He was like, this is awesome, man. Let’s, hop on the phone and get to know each other a little bit. And so we did,and I can’t imagine how many of those calls he was having at the time, but to his credit, you know, we talked for a good half hour within a few weeks of his assuming ownership of CrossFit. And I felt pretty, pretty strongly after that conversation that, you know, that the future of CrossFit was in really good hands.

Chris (21:53):

So now, this podcast is coming out on kind of the day after a big announcement with CrossFit. And I’ve got to assume that all this goodwill really led up to this point, right.

Dave (22:08):

I mean, we’ve, I don’t think that the actions that O2 and others have taken, over the past 18 months have gone unnoticed by that many folks. And I’m really proud of that, you know, it was a moment where we got to show off our values that we’ve been living for a long time, honesty, humility, and hustle, to the world. And I’m proud of my team. And I’m proud of the initiatives and I’m proud of the impact and what we’ve seen unfold, since, you know, the new CrossFit administration, uis that there’s a lot of folks who are attached to CrossFit who were parts of those initiatives and were really supporters of O2 and the community coalition and what we’re doing from the outset.

Dave (23:05):

And we’ve been in a fortunate position such that we’ve gotten to know a lot of those folks, at, you know, the senior leadership levels of CrossFit and have entertained various partnership campaigns and partnership activities, and partnerships structures. And by the time that this podcast airs, we will be one of two drink brands that are offered on CrossFit’s brand new affiliate partner network, which I think is a brilliant idea. And that’s something that we’re super, super bullish on both from O2’s perspective, but also, even more so from the value that this is going to provide to CrossFit affiliates, it’s basically pulling together some best in class vendors to provide really, really strong offers to the CrossFit community, better than they can get anywhere else. And O2 is proud to be a part of that.

Chris (23:57):

Well, hey, tell us about the program. Like what can CrossFit affiliates expect from this?

Dave (24:02):

I mean, we’re weeks away from this and it’s still unfolding as we speak. It’s a very new program for everybody, but at its core, the idea is rooted in the principle of CrossFit finding new and unique ways to make the $3,000 affiliate fee a no brainer for people. And when CrossFit went out to affiliates at various points over the course of the last 12 months or so, and asked them what they could do to help it was all about, you know, help me get more members and help me cut costs. So drive sales and lower costs and to CrossFit’s credit, they’ve really focused on bringing some programs to fruition that do exactly that. The CrossFit affiliate partner network being the first. at least that I’m a part of and aware of. People can log into crossfit.com and as long as you’re an affiliate, you’ll be presented with a landing page, basically that will have, I’m not sure how many partners at launch, I want to say around 10.

Dave (25:10):

But you know, everything from drink partners to supplement partners and you know, various equipment providers. And you’ll be able to access special deals as an affiliate from those partners. And I can say definitively that O2’s deal that we’re offering CrossFit affiliates through the CrossFit APN network is the best that we’ve ever done. And it’s the best that we’ll ever do because it’s incredibly impactful. At least that’s my intention, for affiliates who want to drive some really meaningful, profitable retail sales at their gyms. And so we’re offering 55% margins on our product, which is really high, standard best in class is about 40% in the CPG industry. And we will be also offering a mini fridge, branded mini fridge, which I haven’t done before. And I”m excited to get off the ground too. And then last but not least, we have a program that was rooted in the stay for May concept where we’re offering affiliates who buy O2 through the APN unlimited a hundred dollar O2, Borm Primitive, RPM, Puori gift cards that they can award to every new member who walks through their gym over the course of the rest of this year and next year. And that’s been a really, really well-received program so far as it’s been in beta mode.

Chris (26:43):

That’s amazing. And so if you’re a gym owner and you’re listening to this, here’s how you can picture yourself using these cards. When a new member comes in right now, many gym owners are tempted to give a discount to incentivize the member to sign up. Instead of doing that. And you should never do that. But instead of doing that, you can give a bonus. And what Dave has done here is given you the bonus that you can give to the client. So it’s basically a a hundred dollar gift card. And if the client signs up today, they start going through your on-ramp program. You can choose when to give them the gift card, but it’s a great incentive if you want to help them decide to sign up that day, or it’s just a great new member bonus for somebody as a reward for signing up. So I think it checks a lot of boxes for CrossFit affiliates and the beautiful part is that it’s brands that a lot of people would want to go after anyway. Right?

Dave (27:33):

Yeah, totally. And we designed it to be kind of like a new member fitness starter package. Hydration from O2. You’ve got your, get a jump rope from RPM. You get your protein from Puori, and some gear and apparel from Born Primitive. So it’s, you know, the gyms that have had the most success with it have positioned it like a fitness starter pack.

Chris (27:54):

It’s amazing. I mean, I remember last year at the at the Games, so many people saying like, what are you doing for gift boxes for new members? How are you rewarding them? And they would ask me because we shipped gift boxes to every gym owner at Two-Brain, but it was tricky because they’d have to hold inventory or they would have to like put out money to buy the skipping ropes or whatever. And so finally the idea just kind of died, but this is a much better way to revitalize the idea and reward your members and give them a bonus and give them some equipment. You know, it’s just amazing for retention and conversion.

Dave (28:27):

Thanks, man. I haven’t been a that part of that many things in my career that are such a win-win for everybody involved. And so we’re really, really pumped about this program. It’s going to be free for anyone who becomes an O2 wholesale partner through the APN, and we’re going to continue to build on it and refine it in the future. So this is one of the many things that we feel we can bring to the table. In addition to just a great tasting hydration drink, for gyms, is we feel we can help them not only drive retail sales, but also, you know, do some positive impact on the retention side as well.

Chris (29:03):

Great man. So CrossFit affiliates can find out about this by just logging into the CrossFit website. What about non CrossFit affiliates? Because you do work with other gyms, like where can they get more information on this offer from, Dave?

Dave (29:16):

So, so the best way to do that would probably be just to send us an email at gyms@drinko2.com, and ask about the new member gift card program. And we’re offering that, you know, I believe it’s the first pack of 25 are free, for everybody. And we can make sure that’s the case for Two-Brain listeners. And then for every pack of 25 that follows, we’re just asking you to pay cost, which is 15 bucks, basically for materials and shipping. It’s a tangible, like it’s a real life gift card. It comes in a beautiful branded box, you know, it’s got within the box. There’s a thing. There’s a very nice thing that you can hand people when they join. So that’s probably the easiest way, gyms@drinko2.com. That’s the letter O the number two. And then we also have a webpage that folks can find out more on, it’s communitycoalition.fitness/twobrain.

Chris (30:18):

We’ll link that. Thanks so much, Dave, this is great. And you’re right. We don’t always get to see these win-win wins scenarios, but when we do, I love it when they come from a help first initiative, like you guys have going so strongly right from the start of COVID. So thank you for that.

Dave (30:34):

Oh, it’s our pleasure, man. It’s been an honor of my career to be in a position to do some good and grow O2, it’s just been a blast.

Chris (30:42):

That’s great.

Chris (30:42):

Thanks for listening to Two-Brain Radio. If you aren’t in the Gym Owners United group on Facebook, this is my personal invitation to join. It’s the only public Facebook group that I participate in. And I’m there all the time with tips, tactics, and free resources. I’d love to network with you and help you grow your business. Join Gym Owners United on Facebook.

 

Thanks for listening!

On Monday, Two-Brain Radio presents marketing tips and success stories. Chris Cooper delivers the best of the business world on Two-Brain Radio every Thursday. 

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