Chris (00:01):
Hey, it’s Chris Cooper from Two-Brain Radio. Today my guest is Eric Roza, the owner and CEO of CrossFit. Stay tuned for a great show. Before I welcome Eric, I’d like to thank you for listening to Two-Brain Radio. Please subscribe for more episodes. And if you want to hear more about how mentorship can help your business book a free call with a member of my team twobrainbusiness.com.
Chris (00:23):
So Eric, welcome to Two-Brain Radio.
Eric (00:25):
Thanks for having me, Chris.
Chris (00:26):
It’s a real pleasure. To jump right into it, you took over the company in kind of a turbulent period. You know, how difficult has it been for you as a new owner and a CEO to rebuild trust while you’re doing all these other things?
Eric (00:40):
You know, it’s a lot to take on and the way that we’ve tried to approach it is just keeping communication lines open in both directions. And, talking to, frankly, to a ton of people through a variety of channels, everything from small group sessions and one-on-ones to this, you know, to setting up the email boxes, you know, right. We got started last June before the transaction closed. Eric@crossfit.com where we’ve heard from thousands of people, literally. And so it was extremely helpful to get a lot of input. And then as we kind of coalesced to able to share out what we were thinking about the future, and as much as possible, that dovetailed with the efforts that we were actually doing, the actions we were taking. So it didn’t seem like a separate effort.
Chris (01:29):
Is it hard to take over a company where you’ve kind of got this figurehead icon and it’s about them and now you’ve got the opportunity to move toward like this broader vision, but you’re on stage with the camera on the whole time. Is that tough for you?
Eric (01:46):
Yeah, that’s an interesting question. It was really important, I think for people to understand that there was someone here, not be the man behind the curtain, if you will, but by the same token, by no means have this be kind of all about me. And frankly, I get a little uncomfortable when things that I had very little to do with personally get attributed to me. You know, for example, there was, you know, there’s been a lot of nice commentary around this year’s Games, which I thought were fantastic, but it’d be hard to understate my role in pulling off the Games this year. And so I don’t feel, you know, we’ll be willing to own leading the ship at this point, but most of what’s getting done, you know, it’s not so much attributable to me as it is to the team.
Chris (02:41):
And that right there, I think is a new perspective that those who have been around, you know, CrossFit HQ in the past are not used to hearing. So that’s great, Eric, thank you. By that token, like up until now, it’s been a very laissez-faire approach to affiliate management to the least, right? Like Greg’s position was that he could help affiliates most by letting them operate and do whatever they wanted. And that meant avoiding best practices and fighting larger battles to defend the name and attack bad science, but you’ve shown a lot of interest in helping affiliates. So, you know, now that you’re the owner, where can home office help affiliates most?
Eric (03:21):
You know, we thought a lot about this and I think, you know, Chris just, I mean, your business with Two-Brain, right, has been born on the fact that there are common needs that affiliates have that can be addressed in a systematic way. The biggest thing for me, I was informed a lot by my own affiliate ownership over the last almost nine years and feeling like I would never have done an affiliate if I had detailed, mandatory instructions of what I needed to do. But boy, once we got started, it was challenging and frustrating at times that there weren’t best practices codified and it didn’t have, you know, I didn’t have a mentorship network of other affiliates to talk to about things. And, you know, so those are the kinds of things that we’re trying to address.
Eric (04:13):
As well as putting in infrastructure around, you know, around things where we think it’ll be helpful to have people all on the same page. And one example is CrossFit Affiliate Programming, where we say, you know, wouldn’t it be great if everyone who wants to can have a single source of great programming, which has daily coach development included, and now all your members are part of this global network of people doing the same workouts, which is really cool. And it’s never been the case of CrossFit. But what’s key here is not mandating it. And we know the animal we’re dealing with and I am that animal, right? None of us. And you’re that animal too Chris, right? None of us want to be told what to do. So if we can provide really compelling products and services and opportunities that are not mandated, we feel like we’re in good shape.
Eric (05:08):
And we have this credo now, right. Tools over rules. Which isn’t to say there’ll be no rules. There have always been some rules for CrossFit gym owners, and there may be more over time. But really what we’re trying to do is provide tools to people who want them. And one of them is quite simply making it easier for folks to talk to each other. And this roundtables effort we have is a key part of that where we, I don’t know if you track this at all, but we had over 400 affiliate owners in a pilot program we ran and this fall we’re launching much more broadly these, these forums, these roundtables of about eight folks. And we have I think about 1200 affiliates currently on the waitlist for this, which I’m thrilled about, but I frankly think success here will be almost everyone joining this.
Eric (05:58):
And the beauty of it is it’s not a top-down kind of thing where we’re saying, oh, this week you must talk about X, and this is a way to promote what the agenda items we want. The whole point of it is that each group kind of self-organizes and has a real, an atmosphere of trust and vulnerability where they can in a confidential environment, get help and support from each other, which includes emotional support, which sounds, you know, wow. You know, do CrossFit, gym owners really want emotional support? Well, it turns out they’re human too. And when you make things confidential and get the right moderator in and all the moderators by the way are affiliate owners as well. So it’s pretty cool.
Chris (06:39):
How does that tie into the country managers, Eric, just so that I have a really clear picture of what is coming up?
Eric (06:45):
Well, I think, the country managers, who are affiliate owners are also going to, a lot of them will be leading these roundtables as will the US representatives. But, those will be in the minority. I mean, I think if we have, let’s just say, we end up with, I’ll round upward. If we end up with 1600 affiliates in this next phase, and I don’t know that we will, you’ll have 200 groups and so roughly 200 moderators, so it’s going to scale much more. And that’s daunting when I say that out loud, I’m like, wow, we’ve got to train 200 moderators, but that’s part of the cool thing is as an affiliate owner, you’re going to get moderator training at no cost to you, certainly plenty of cost to us, but no cost to you. That’s going to make you better at facilitating conversations in general. And you know, it counts as CEUs for your CrossFit credentials and all that too. So it’s kind of a cool benefit and it’s a way to give back and get more engaged. And it’s not for everybody, but we have a lot of interest in people holding those roles too.
Chris (07:50):
That’s great. So it seems like the theme here is like if you’re investing in the affiliate owners, that’s what’s going to grow the brand and the platform.
Eric (07:59):
That’s what we think. And I certainly think this again as an affiliate owner, not as a, you know, not just as a Johnny come lately to the CEO role in the last year, but as a nine-year affiliate owner and, you know, CrossFit Sanitas has, we’ve done pretty well. You know, pre-COVID, we’ve been close to 400 members and so on, but there’s still so much that we didn’t know about how to operate a gym and had to learn for ourselves. And didn’t really have the net—you know, I came from the tech world, so I didn’t really have the network of other gym owners to go to. So we think that everyone will do better. We think everyone can, you know, do a better job for their members, get their members more fit, have them you know, reduce churn, increase lead generation and make their members happier and their staffs healthier and all that provides, you know, great opportunities. And frankly, I’m sure, you know a lot of these people too, Chris, people who have been around as long as I have, or you’ve been around even longer, what year are you in gym ownership?
Chris (09:01):
Gym ownership 15, CrossFit affiliate, 13.
Eric (09:03):
13 years in the CrossFit affiliate, which is awesome. Thank you. But you know, there could be some fatigue that sets in too, and so we think we can reinstill the fire and passion in folks who have been around a while and, you know, are still grinding it out. And even with affiliate programming, you know, what we heard over and over is, you know, every Sunday, I’m bringing out the pencil for four hours to kind of figure this stuff out. And if we give people their Sundays back and then give them this support network, they’re going to be better at running their businesses. You’d have to try really hard to not be more satisfied and more effective at running your business. I think.
Chris (09:43):
Was affiliate programming, kind of a low hanging fruit first opportunity to give gym owners some time back and some value, or is this part of like a series of things that you plan to do to help gym owners build a better lifestyle, increased revenue, whatever.
Eric (09:59):
I think it’s part of a series, but it was, to your point, it was pretty low hanging fruit. Cause I, you know, we just kind of thought about it and said, wouldn’t it be great if you didn’t have to spend your Sunday doing this? I think one of the things, one of the insights with the affiliate programming was who the heck has time to do, you know, weekly, let alone daily coach development and who does the best job with coach development? It’s seminar staff. So why not have seminar staff delivering daily coach development to every coach at one of the gyms who’s implementing this. So that was part of the thinking. And to your point, I do think that we absolutely will have a Growth ToolKit where other things come in. We try to think about who are our stakeholders, right?
Eric (10:43):
So we’ve got affiliate owners, we’ve got coaches, we’ve got the members of gyms. We’ve got people who aren’t members, but still identify as CrossFitters. That’s just to name some. And we want to really think about for each of those groups, what really matters to them. And the best way we can learn that is actually by either having been talking to people who are, or have been one in one of those groups and getting their input. And in fact, we’re going into a strategy off-site with our board in a few weeks where we’re going to be really thinking about it that way, instead of saying, Hey, we’re in this business or that business, we’re actually going to start with an organizing principle of who are our key stakeholders and what does a coach want from us over the next five years? And how do we incorporate that into what we’re doing? So try to really break it down into almost the personas of the folks who are, uyou know, making the CrossFit magic come alive.
Chris (11:38):
That’s great, man. So, you know, to support that, obviously like some data would be helpful. Do you have any idea of how affiliates are doing financially or plans to figure that out?
Eric (11:50):
I love that. Be helpful to have some data.
Chris (11:55):
Two-Brain Business, that’s all it is.
Eric (11:58):
It’s a fair question. The answer is we’re getting more data all the time and still have less data than we would like. So we’ve been, you know, pretty frequently now surveying different elements of the population. And you know, a lot of it’s qualitative, but some’s quantitative, and we’re learning more and more all the time, but we still have a lot of room to improve on our data capture. And so on. There was, you know, we had very little data when we came in in terms of even knowing the basics about our affiliates.
Chris (12:34):
- Well, I mean, that’s a great answer, man. Thank you. So we all as affiliates, I mean, we know that the program works, so how do we solve the real problem of like getting people in the gyms to do it and staying long enough to get the result that we know that we can create?
Eric (12:50):
Yeah. You know, I think of it in, to oversimplify, you know, you’ve got two steps, which is to get people in the door and you obviously there’s a whole funnel around that happening with referrals and other kinds of lead gen and then converting those people. So, but let’s just talk about one is getting people in the door and then two is keeping them and keeping them engaged. Those are, if we break down those two and even the keeping them engaged, you have to look at different steps because you have the first hundred days of the journey when attachment rate’s a little bit lower. And then after a hundred days, somebody, you know, you’re in pretty good shape keeping ’em, for the most part. And I think we’re still learning and we have a lot of work to do to kind of codified best practices around both of those things.
Eric (13:36):
But I can tell you that those are key priorities. We just hired a chief marketing officer who we’ll be announcing, in September by name and so on. They’re still finishing up their prior role. And a big part of that is partnering with the gyms on lead generation. How do you, you know, how do you get new people in the door? And I think we have both, we have the specific tool that we announced on ramp that we’re just finishing product testing on. And we should have that in market by the end of the year, and then, more broadly, building the brand of CrossFit so that it feels more accessible to people. And we know for a lot of people, it feels unattainable still. They’re not ready for it. They’re worried they’re going to get hurt.
Eric (14:22):
They’re worried they’re too old. They’re worried their ego’s going to get in the way. I hear that so much too, that my ego is going to get in the way. I have friends who do this, it’s changed their lives, but like, I don’t know if I can handle this and I’m probably going to push too hard and hurt myself and it’ll be my fault, but I don’t want to deal with that. So how do you get over all that stuff that I need to get in shape before CrossFit or it’s passed me by? And a lot of that is actually the, just, you know, kind of classic brand building of getting word out about what CrossFit is and what it isn’t. And I always, you know, what I always tell people is assume that all your perceptions of what CrossFit is are only semi informed at best.
Eric (15:02):
So the only thing you really need to do is come in and try it once and see what you think. And that’s the best. I think that’s the best sales tool we have is to have somebody come into the gym once and have a really great experience. But getting them into the gym is part of it and then ensuring great experiences is the other. And I think there’s a lot that the home office can do to support especially that first person is getting people to try CrossFit and letting that magic sell itself. And as you know, it’s not an area where CrossFit has really played historically, but it’s one you’ll see us increasingly playing in.
Chris (15:41):
Oh, that’s going to be great news to a lot of people listening to this. So thanks Eric. Any, just empirical observation on how the on-ramp trial is going so far that you want to share.
Eric (15:52):
You know, we’ve had people like it quite a bit who have done it. It’s still a small group, you know, it’s a hundred ish people who have been playing around with it. We have, you know, some of the things we’ve learned is the tension between being thorough and having too many, too much, frankly, too many classes before we say, OK, go into the gym now. And what’s interesting about that is it it mirrors the experience people have with their own foundations and on-ramp classes. And I can tell you, I don’t know what you guys do, Chris, but like at CrossFit Sanitas, we’ve gone from six sessions to three to two to, you know, one-on-one versus group and so on. And to be clear, the intention that, you know, the name on-ramp, I think is maybe a little misleading because we’re not intending this to replace an on-ramp.
Eric (16:43):
This is really for people who don’t feel comfortable coming in the gym yet to say, you can do these movements, going to the gym and then have the gym take them on their journey to wherever they’re going. I talked to an affiliate owner recently who doesn’t believe in any kind of on-ramp program. And they’re like, you know, we and our coaches need to be ready to take anybody into a standard class and basically bring them along for the ride without any on-ramp. There are others that won’t let you work out even on a trial basis without it. And then there’s some who say, you can do a trial, but then you’ve got to do the on-ramp. And so we’re not trying to replace all of these. We’re just saying, Hey, this is going to get you into the gym. And yes, you’ll know what a squat is. And you’ll, you know, you’ll know what a lunge is and a few, you’ll know how to do a push-up well, but ultimately, this is really just a tool to drive people into gyms. And I think it’s going to do a really good job of that.
Chris (17:37):
Thank you. More from Eric Roza in just a moment. 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. I’m in there all the time to offer tips and tactics. Join Gym Owners United on Facebook. And now back to Eric Roza. So, you know, like a lot of affiliates last year, we really kind of had to worry about retention before we could think about expansion. And from the outside, looking in, it appeared that home office had that same challenge. How did you meet that challenge of keeping people affiliated, keeping people engaged and keeping people excited about the future?
Eric (18:18):
Well, it’s been a process and a journey. We realized last fall that there were, you know, frankly, thousands of affiliates that we hadn’t heard from in a long time. And as you mentioned, there was more, a little bit more of a laissez-faire approach. So there wasn’t a lot of outreach. So what we started to do was outreach really proactively to folks we hadn’t heard from in a while, and this was irrespective of what country they were in or how big we thought they were or anything else. It was just like, it was just a touch point. And you know, frankly, thousands of phone calls, not just emails and a lot of it was, it started with just compassion and allowing people the opportunity to talk to us, there were, this sounds like I’m making it up, but I’m not.
Eric (19:05):
There were a lot of tears on those calls, right? With people literally had poured their heart and soul into their affiliates. And weren’t sure if they were going to survive or at some level, maybe in some cases had already given up. And we were just there for them, you know, and sometimes it wasn’t as much what we did as just letting them know how much we cared and then they would see examples of what we’re doing. We’ve seen a lot with the roundtables, a lot of cases where affiliates have been motivated to hang in there and stay in business and stay affiliated based not on things we said to them because we’re not sitting in the meetings based on what other affiliates in the groups kind of support them with. So it’s been, you know, the one-on-one and group support and outreach and just a feeling that we really care and that we’re on the field with them because it’s, I mean, it was brutal for the team to make these thousands of phone calls and the process goes on.
Eric (20:06):
It’s just, we were way in the hole. You know, I think there were, you know, probably over a thousand gyms that hadn’t signed their renewal agreement. We hadn’t heard from them. We didn’t know, are they gonna sign? Are they not going to sign? And every one of those was a conversation. And the good news is we’ve consistently seen affiliates coming back and we’ve had over 2000 that were kind of, I would say, you know, let’s just call them out of touch, come back since then.
Chris (20:34):
Great. So are you saying like the new growth is coming from previous affiliates or are new people affiliating right now? Like starting new gyms?
Eric (20:42):
It’s both. We’re seeing about in a typical week. It obviously varies, we’re seeing about 20 new affiliates open up each week around the world, more, a little bit more outside the US than in the US. Now we actually have more affiliates outside the US than in the US. We’re starting to look because Europe is such a big market for us. We’re really starting to think about the affiliate groups as you’ve got the U which has about 300 million residents. You’ve got Europe, not just the EU, but all of Europe, including the UK and other countries that aren’t in the EU, that’s about 700 million. So a little more than twice as big, but still fewer gyms than the US but has the potential to grow dramatically. And then you have the rest of the world where we have a few thousand gyms and 6 billion people.
Eric (21:30):
And so, you know, if you said, where could the growth be over the next five to 10 years? You take markets like China, India, South Korea, Japan, and they all have, you know, a lot of people in a financial position to do CrossFit. There’s an increasing interest in countries like China in working out, cause I think 20 years ago that wasn’t really a thing in China as I understand it. But we still have fewer than a hundred affiliates in each of those markets. And so those are massive opportunity. I mean, there could be many thousands of affiliates in each of the markets I mentioned, but we’ve got to meet people where they are culturally. And in other ways, even economic in Brazil, we’ve lowered the price point. And so on. Coming back to your point about the laissez-faire nature historically, it worked in developing markets.
Eric (22:23):
It’s very much the same as it worked in the US is somebody would, you know, they’d find their way to CrossFit. They’d take a Level 1 and then they they’d come to the website and say, Hey, I want to open a gym. What we’re trying to do now, you mentioned the country managers earlier, and now we have regional leaders of multiple countries now as well, in addition to the country managers and the same in the US actually, where we now have east and west leaders, as well as the US reps underneath them, we’re really trying to be more actively engaged in people’s journey as affiliate owners, we talked about the customer journey. Well, here’s the affiliate journey, right? And one of the things we’ve done is we found that 30 or 40% of people who take an L1 have a stated desire to open a gym at some point. Well, we never followed up with them before.
Eric (23:14):
It was kind of like, well, that’s nice to know, you know, good luck. Well now, when we hear that from someone, we actually follow up with them and say, Hey, what does your timing look like? What are the key issues that you’re working on? And we increasingly will have mentorship with them to help them get through the process and figure out if they don’t know, you know, there’s a certain thing that’s a sticking point. Maybe they don’t have the financing and they need to get a silent partner, who knows. We’re going to be there to help them, both encourage them, but give them data as well.
Chris (23:45):
That’s great. I do think that the biggest gift that CrossFit ever gave the world was the ability to be an entrepreneur. And even though it wasn’t a really clear path, such an easy entry point.
Eric (24:01):
Sorry, Chris. It’s so cool again, that there weren’t all these rules, because I don’t know about you, but I just, I had no interest in doing something that was cookie cutter. I just wanted some best practices in the community around me. Right. We have, you know, one thing we haven’t talked about at all, and I don’t know if you track this, but we recently announced the new playbook. Have you heard about that? And it’s, you know, it’s a start, but we basically brought in a couple dozen affiliate owners to help us and just say, Hey, here’s why a mission statement’s important. Here’s what that should look like. Here’s how you should think about real estate. Should you have full or part-time coaches? What happens if you have a financial partner? How do I think about lead gen?
Eric (24:46):
How do I think about social media? And it’s, I would say this is, you know, this is version one, but it’s pretty revolutionary in terms of giving people a toolkit, because none of this is you must do. It’s all here are ideas, and it’s all. We were actually at the Games, we were busy filming affiliate owners talking about each of the sections. So in their own words, what’s been their experience. And so this is, you know, the more we can be in the by affiliates for affiliates mode versus here’s some, you know, corporate person who has a point of view who hasn’t owned an affiliate. I think the better off we are and the better off the affiliates.
Chris (25:27):
- So even though it’s tools, not rules, which is great. The value proposition of being an affiliate is definitely going up a lot. And so for right now, you know, the price is the same. I can still pay my, I think I pay a thousand a year, but even newer people can pay like three grand a year and they’re getting more and more value for that. Is there a point where the affiliate rates go up?
Eric (25:49):
You know, the way we’re trying to do it is actually structure things as options. So as an example, the affiliate program, we’ve already stated, will probably be around $150 a month starting in January, but we told everybody, Hey, you know, try it now for free and see what you think of it. We now give people the ability to pay their affiliate fees monthly rather than annually. And right now that’s about the same price, but it’ll be a little bit more expensive. Cause obviously we’re, you know, we’re taking the risk and the time value of money out of there. So I think you’ll see things like that. That’s the plan right now is to add more value in optional areas. And try to include what we can in the base fee.
Chris (26:36):
Do you have a sense that more of the original affiliates are eager to take on these additional options? Or are they more reluctant?
Eric (26:46):
So it’s early to tell, but we’ve been actually surprised by the uptake from, and I don’t, you know, Chris, you’re in a pretty select group, right. Cause you were there before the price went up to 3,000, how many affiliates are around that have been around as long as you or longer, a few hundred, maybe? Not a thousand. Right.
Chris (27:09):
It’d be tough to guess. I mean, honestly,
Eric (27:12):
I should know that, I shouldn’t be asking you, but we don’t know, you know? Yeah. I would guess it’s hundreds. Cause if you started in 2008, I would guess it’s probably hundreds. Right? So we’re actually seeing a good number. Given how small the population was a good number, for example, with the roundtables, we’ve actually structured them so that you have both older and newer affiliates and bigger and smaller affiliates and no one competitive. Cause what we found is, when we were planning these, the affiliates who had been around longer, said, look, I’m not going to be interested if I’m in a roundtable, that’s me and seven people who have been around for a year or two. But what they said is, Hey, I’d love to do some mentoring and even learn from one or two in my group. I just don’t want to have eight in my group. So we’re seeing kind of a balance across the spectrum from an age perspective, but obviously the new affiliates as they come in are, you know, a lot of these things are going to be, I think kind of must haves from their perspective, getting the peer mentorship, having the playbook, having the programming, et cetera.
Chris (28:26):
Yeah. That’ll be especially valuable and leverageable for new affiliates, but that’s great that veteran affiliates are open to that too. So, you know, my primary reason to talk to you, Eric, is about affiliation, but there are a lot of kind of peripheral things happening at the same time. And I’m just kind of wondering, how you’re keeping all these balls in the air. My buddy, Josh Murphy called me and he’s like, oh yeah, we’re doing something amazing with the CrossFit Foundation again. And so, I actually brought my piece of a desk that I made when we were working in Kenya to ask you this question, but what’s happening with the CrossFit Foundation now?
Eric (29:01):
I am so glad you asked that because I’ve been, the last few business days, I’ve been really focused on the foundation more than usual. So on Thursday, I couldn’t have teed that question up better for timing wise. On Thursday, I went out with the deputy director of corrections for the state of Colorado and Sergeant Erin Brill, who’s been instrumental in this program to visit one of the prisons in Colorado that has a CrossFit gym inside it. And we now have four correctional facilities in Colorado that have CrossFit gyms already. We have three on the docket that are starting to put it in place. And I was on a call earlier today. I was with them on Thursday and I was on a call a couple hours ago. And the head of kind of recreation for the Colorado prisons wants to see this everywhere now in Colorado.
Eric (29:59):
And so I estimate that close to 5% of Colorado’s inmate population is doing CrossFit already. And so what I asked the team is what would it take to get this to 20%? And I’ll give you one amazing anecdote around this. We have about 23 people in Colorado prisons who have taken their L1 and about eight who have taken their L2. And we currently have a demand of 60 people ready to take the Ld who are current inmates. And what they’re seeing is incredible results in terms of recidivism, right? People getting released and coming back into prison, we’re seeing a huge reduction there. We’re seeing a 25% at prison Lyman that I visited. They’ve seen a 25% reduction in violence there and a 20% reduction in kind of infractions by prisoners that they attribute directly to CrossFit.
Eric (31:01):
So, and you’re seeing, I could talk about other foundation focuses too, but this one, I have so much recent data on. You also see a couple amazing things. One is the staff is now allowed to work out with the prisoners at Lyman, like pause for a second and, you know, think about the Shawshank Redemption, whatever movies we’ve seen, right? I mean, so you have almost as many staff members as prisoners working out at Lyman and they’re working out together, and that is game-changing in terms of we, but we see it right as CrossFitters, this recognition of common humanity. And it just, it changes everything. The other thing they’re seeing is these incredible, two of the big divides in prisons, and I’m new to all this information. One is along racial lines. And so they basically said, you know, traditionally at prisons, at least at this prison, because I can’t speak to others.
Eric (31:56):
I haven’t been to them. Is, you know, you have the Black prisoners, you have the Latinx prisoners, you have the white prisoners and they, if they’re intermingling, it’s not in a positive way. Right. And then you have another interesting divide, which is young versus old. And again, there’s no intermingling there. And I was, I worked out with the guys on Thursday. We had several meetings. We worked out together and in my little, in my pod, which was two teams, the other team was a 20-year-old African-American guy with a guy who was probably about 65. He was a little guy with a white beard. And they were working out together as a team. And someone pulled me aside and said, you have no idea that this just doesn’t happen on both the dimensions of race and age. It’s inconceivable without CrossFit. And probably for all of us who are CrossFitters, we just nod and say, of course, but imagine if you’re the warden, if you’re Terry the warden of this prison and you see this going on, you’re like, oh my gosh, this could be game changing. So that’s one of a number of things we’re doing with the foundation. Really, really exciting. And I’m spending a lot of time personally there.
Chris (33:05):
That was great, Eric. I actually, had the same experience at a prison and I think it was 09. We used to go in and do powerlifting needs with the inmates twice a year. And I wore a CrossFit hoodie and this guy comes back from lunch with this here’s my CrossFit workout today. So I can say, Michigan is probably on board too.
Eric (33:27):
Chris they’ve actually created basically a network of affiliates now and they’re called Redemption Road CrossFit. They feel like they’ve created, they started to codify a formula. You need a core team that’s really devoted. And then you can start to drop the, you know, drop the seeds of CrossFit to these different prisons. So it looks like it looks like this could be, you know, nationally and ultimately globally scalable approach to doing this. I don’t want to get too excited about it this early, but it’s really, it’s really cool.
Chris (34:03):
Yeah. This to me is the most exciting thing that HQ can do. You know, building schools in Kenya and helping inmates. It’s amazing. What about things like the RRG Eric? Like, I haven’t heard anything about the RRG in years.
Eric (34:18):
You know, I haven’t spent much time with the RRG to be honest. So, I am aware that the that the levels of insurance required, especially outside the US and developing countries can still be a real barrier for some people. But to be honest, I haven’t spent time there to have a point of view at all.
Chris (34:39):
That’s fine. I’ve got two questions from other affiliate owners. One was from somebody in Minnesota and he says, since the members of the CrossFit diversity and inclusion board were announced last year, I haven’t heard much about it. What are they working on and what are their priorities?
Eric (34:56):
We’ve just hired a head of, a full-time head of diversity, equity and inclusion for CrossFit. And so I think we’ll be, I’m going to make myself a note I’m actually meeting with her boss. Who’s our head of people, later today. And I’ll make myself a note around when we’re going to get, you know, get a little more visibility. I can tell you, the group has met three times. They’ve established some key priorities and we’ll be sharing those in the near future. And I just don’t know when we’re going to be sharing them because I need to get an update from Trish. It was very important that we get someone full-time focused on this. Trish spends a lot of her time on this, but she has other responsibilities as well. And our full-time head of DEI literally started the week of the Games.
Chris (35:45):
And that actually leads me to my last question. And this is one that I know Greg struggled with. Everybody has always struggled with, which is how do you balance the larger mission with the need for revenue, like, you know, Monster sponsors drinks at the Games, OK. The Games are the primary marketing vehicle for affiliates right now. We need to do the Games. We need to pay for the Games; they’re willing to pay for the Games. How do you balance that, Eric?
Eric (36:12):
Well, one way that you balance it is making sure that you have a long-term perspective on things. And, I was very fortunate that I was able to bring in some investors with a very long-term time horizon. So, we’ve been, I’m happy to say that we’ve been meeting our financial goals. So, but in that environment, the first year, we’ve had a really productive dialogue. And when we said, you know, Hey, we’re gonna, you know, we’re going to spend a couple million dollars launching CrossFit Affiliate Programming, and we’re not even going to charge for it in the first year. Some investors would not have been thrilled with that approach, but we’ve largely had support for that. We were just talking about the foundation, we’ve kind of funded that with over $7 million now. And most of that is actually coming from our balance sheet.
Eric (37:05):
So, I think we’re going to continue to make investments in core areas that we think are really important, but, you know, we still do have financial goals and we’ll continue to honor them and hopefully, you know, achieve and beat them. So there’s always a balance there, but the nice thing is we are not, we are not running this ship to maximize profitability in the coming years, by any stretch. What we’re really trying to do is build CrossFit to be, you know, as big and impactful as it can be.
Chris (37:38):
That’s great. OK. Well maybe I’ll ask you one more thing, and this is what a reporter asked JFK after his first year, you know, is it what you thought it would be a year in? Are there any big surprises?
Eric (37:51):
It’s always interesting when people ask me that, because I don’t know that I had a granular view of what it would be. It turns out that leading CrossFit, you still have to answer emails and texts and have meetings and hire people and give people tough feedback and all the rest of it. So from that standpoint, it’s, I get asked sometimes for the parallels, I was speaking with a youth group yesterday, and they were asking me for the parallels and differences between leading a tech company and leading CrossFit. And I said, well, in some ways it’s completely different, but in terms of what you do day to day, there’s a lot of overlap. You just might not work out as much or whatever, but there’s so much, I think there is every bit. So the day-to-day work, I didn’t really have a great sense of what that was going to look like.
Eric (38:41):
But I would say that meaning that I’m deriving from doing this and this feeling that I’m aligned with what is most important to me and what I’m, you know, not to get to a highfalutin about this, but what I’m kinda meant to be doing, you know, in this one life I have now that I’m over 50 and all that, I couldn’t be more, I couldn’t have higher conviction that this is the right choice for me. And that the opportunities for CrossFit are kind of endless, right? They’re only limited by our imagination and our execution, which are, those are big potential limiters, but I think we’re trying to, as much as we can, to kind of, you know, explore the balance of those things and continue not just to grow CrossFit as it is now, but envision what adjacencies CrossFit can have in the future as well.
Chris (39:30):
You sound just like an affiliate owner, when you say that, Eric, and I’m glad that you stayed an affiliate owner. I mean, I’m sure that’s challenging.
Eric (39:37):
Yeah. Awesome. And yeah, I was in there this morning. I love it.
Chris (39:45):
That’s great. Well, hey, thanks for coming on and giving us so much time and answering so many questions that are, you know, I know top of mind for a lot of affiliates right now.
Eric (39:54):
It’s, a pleasure to be here, Chris. I love what you’re doing. I think you’ve been you and Two-Brain have played a very important role in helping your affiliates become more successful as well. And so I’m grateful to you for doing that.
Chris (40:07):
Thank you.
Chris (40:07):
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