How I Built This with Guy Raz - Concept2 Rowing Machines: Dick and Peter Dreissigacker

Episode Date: May 27, 2024

Brothers Dick and Peter Dreissigacker used their experience as Olympic-level rowers to build a rowing machine that captured the sensation of being on the water. Initially made of bicycle parts in a Vermont barn, the machines had a limited market at first: mostly rowing clubs and schools that competed in the sport. But in the 2000’s, business began to take off when Greg Glassman, the founder of Crossfit, began putting the machines into his gyms. Today Concept2 sells rowing machines to thousands of gyms and teams around the world, plus rowers, stationary bikes and skiing machines for people who train at home.This episode was produced by J.C. Howard, with music by Ramtin ArabloueiEdited by Neva Grant, with research help from Katherine Sypher.You can follow HIBT on Twitter & Instagram, and email us at [e-mail] Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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inspiring, and most importantly, fun. It's 100% free, and to sign up, just visit gairoze.com. That's g-u-y-r-r-z.com. In the 90s, we were making some attempts to make it mainstream in clubs. And we said, we've got this great idea. You need at least 10 machines. We'll train your staff to instruct how to a row in a team kind of workout. And that was the same year that spinning started.

Which was a huge craze, yeah. Yeah, so all the space that we were thinking the health clubs could use for a rowing, they said, well, spinning is where it is at. That was a bad timing. It was kind of a flop. A flop. Yeah, yeah. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists,

and the stories behind the movements they built. I'm Guy Raz. Is it on the show today how two brothers helped bring a niche sport into the mainstream with a rowing machine that really felt like rowing and is now in fitness centers around the world? You can build a pretty good business off a niche product, something that a hardcore group of devotees will love and support, like a tongue scraper or a salt slab or a ringlight. The trick is how to turn that niche into something bigger with wider appeal. If you listen to the show, you've heard us tell stories about a bunch of brands that made the transition from niche to mainstream, like Simple Mills Snacks or Strava, which started out as a website for hardcore cyclists. But probably the best example we featured is Burton Snowboards. Back when Jake Burton Carpenter offered up snowboards, very, very few people had even heard of the sport.

Today's guests also launched their business, Concept 2, in the first. far reaches of the niche Netherworld. Back in the late 1970s, brothers Dick and Peter Dreisagger were Olympic level rowers who were looking for a way to get an edge on the competition. They started by making

something that was totally new at the time. Ors made from carbon fiber instead of wood. These oars were lighter and faster and more durable. But after a few years, the brothers realized the market for selling oars to competitive rowers.

is decidedly limited. So they eventually move towards the product that they're now best known for. Stationary rowing machines. Machines that capture the sensation of being on the water. Now, at the time, the product was still very niche. But today, you'll find Concept 2 rowers and fitness centers all around the world. And how did they do that? Well, as regular fans of this show may have guessed, it was a mixture of luck and skill.

The skill came from Peter and Dick's deep knowledge of the sport and their engineering know-how. The luck came from the CrossFit movement, which embraced the rowing machine and helped to popularize it. The machines are still assembled in Vermont, where the brothers first began putting them together. Peter and Dick were trained as engineers, and their dad was an engineer, too. They grew up in the 1950s and 60s near New Haven, Connecticut. That was a little bit in Norman Rockwell, I guess. Bike riding, you know, zooming through the neighborhoods, playing with their kids. We did the things that people did.

We went to visit grandparents and cousins and did plenty of stuff. And then, of course, in school, we did sports all the time in school. Would you call your kind of upbringing more like a stoic New England type of upbringing? Like, you know, not in a bad way, just like in a sort of very, we don't talk about emotion. or we don't talk about feelings, we just move forward. I'm going to say yes on that. Okay. Yeah, definitely yes.

And there's some benefits to that. I'm not saying that's a bad thing. But I think that's very much correct. Yeah. I'm not sure we saw parents fight much. You know, they had some arguments, but really was not visible among the family. Yeah. All right.

Well, Dick, you're the older brother. So we're going to start with you. And then we'll bring you in Pete. I know, I know, Dick, that you ended up, because you're older, you ended up going to Brown. Right. And I guess while you were at Brown, you played football on the football team. Yep. I played football for two years.

Yeah. But I started rowing freshman year. I had seen it in New Haven. I watched the Yale crew row at least once or twice on Hoosthen. And I said, well, you know, that's kind of an interesting sport that looks at least. looks like it would be good for me. You know, it looks like I'd be built for it. And, you know, it's always one of these things that if you're so inclined, it's very easy to get hooked on. It's a different, different than most sports because it's very team-oriented, yet it's a race.

You know, there aren't too many sports that's both a race and a team, and a team where you have to work together totally. Synchronously. It's not like, I mean, even on a basketball team or soccer team, you're working together, but rowing is different. You are literally doing the same movement, motion, exactly in time in order to win. Right. I think it is the team aspect of it that draws you in because you're doing it with, in the case of the college eights, you're doing it with these seven other guys. So there's a real kind of bonding effect there and you know that you're not in it alone and these other guys are relying on you to do your best.

Yeah. So, Dick, I guess you graduate from Brown with an engineering degree. And I read that at that point, you moved to Philadelphia. And I guess you start rowing with a pretty famous rowing club there called the Vespa Rowing Club. Yes. But I'm kind of bearing the lead here, which is you were really good at this. Like you would eventually be part of five U.S. champion teams between 1970. in 1972, and in 72, you made the U.S. Olympic team. You went to Munich to row for the United States. Yep. I've been on the national team for a couple of years. Went back to Vesper. There were a couple of other guys that were there, and we started to row and continued to improve over the summer, and we started winning smaller races,

and we wound up winning the trials. But it was kind of an uphill battle. I think we peaked at the trials, and then very shortly after we were over on the course in Munich. I think we were quite ready to make the jump from trials to the Olympics, and we didn't do as well as we thought. You didn't come back with like seven medals like Mark Spitz. No, no, no. No. But still, it's pretty cool.

You were at the same. Yeah, no, it was still a great experience. Yeah. All right. Meantime, Pete, you were, you went to Stanford also studying engineering. Yep. Right. And tell me a little bit about, I mean, you did not do any kind of rowing, right?

I mean, you actually, your sport was tracking. Discus. Yes. Yes. Yes. Yes. Yes. Yes.

I mean, I was sort of in high school, I ended up getting fairly good at discus. Part of it, Tim, Dick also was through the discus in high school. He and his buddies would practice out in the field, and I'd be the little brother out in the field throwing it back to them. And so as they got better and better, I got better and better too to get it back all the way to them. And so by the time Dick graduated from high school, I was basically throwing as far as he was when I just got into high school.

Nice. And so as kids were you playmates, or also was the age gap so big that you didn't really play that much? We didn't really play. There were like two separate, totally separate crowds that we hung out. Yeah. But clearly, I mean, clearly you were close, right? I mean, even though Pete, you were at Stanford, Dick, you were on the East Coast.

I know that, Pete, you went and visited your brother in Philadelphia at a certain point, which is I think the first time you actually tried rowing, right? Absolutely, yeah. Of course, I was, you know, athletic. And so he said, why don't you try rowing? And I said, okay, great. So he put me in a single, which is, it's got to be about 10 inches wide, I think, the single. And pushed me off the dock.

And in Philadelphia, there's a dam just downstream from the boathouses. I sort of drifted around out there trying not to flip over. I really thought I was petrified. I really couldn't move. and boats were coming right at me and I had to shout out to say, stop! I can't move. And finally I sort of picked my way around

and got back to the dock, but it was probably half an hour later before I got back to the dock. That was my first experience. Terrible. You hated it. Even though you're a strong guy, you were doing shot put and discus,

which I mean... That doesn't do any good when you can't move. By the way, you're one of the very few people I've ever encountered who did shot putting discus. I don't think enough people do those sports anymore. We need to revive those. Yeah. You know?

Yeah. You know, discus actually is in a way similar to rowing in that it is you practice and practice the same move trying to get it perfect. When it's perfect, it just flows beautifully. Yeah. Just very similar to rowing. All right. So the first time that you try rowing, you're not that into it. But I guess while you're at Stanford, your brother Dick also comes out to California to be a coach for Stanford's rowing team.

And eventually the two of you end up pursuing master's degrees in engineering at Stanford. And so during that time, like did you guys ever talk about, hey, maybe after this we'll do something together? or was there any, do you recall any kind of conversations like that at the time? Yeah, it wasn't right away. It wasn't really until we got into doing a couple of classes together that had to do with starting a business and writing a business plan. Right. And oddly enough, our business plan was called Concept 2. The product design program that I was in, there was a final year-long project. and I had chosen to work with North Face company on a backpack project,

and we used that as the subject of our business plan. You designed a backpack? Yes, yep. And they did actually produce it for a while, and they licensed some of the components that we were getting royalties from them. Wow. That tough a little bit. We figured the royalties, when all was said, amounted to about 35,

a cent an hour for our work. Not bad. Not bad. Not bad. This is something I'm curious about because you hated rowing when you first tried it in 1972 or something. When you first tried it in Philadelphia, you didn't like it. But eventually something clicked with you and rowing because you then got into it. Certainly when your brother was the coach at Stanford, you got more involved. Tell me how that happened? How did you go from hating it to all of a sudden, not maybe all of a sudden, but to liking it? I guess when you jump into a boat, you say, well, I can do this. You know,

this is nothing. Like all these people out there. And you get in there and you realize you have no clue of what to do. And that puts you at very disadvantage for the first time you go out there. Then what happened is that after my sort of disc of throwing was done with, Dick said, well, why don't you come down and we can roll a pair together? Well, get in the boat, teach how to row. And I think I picked it up pretty quickly. We got into some races and we beat some people in pairs. And, you know, when you beat people, you feel good about the sport all of a sudden when you start doing well.

Yeah. And clearly, like your brother, you had some talent for it. I mean, you guys were good enough where you decided to try out for the 76 Summer Olympics team. Yeah, I think the few. Pair races we got into out west. We typically won the race. The two of you guys were a pair. Yeah, yeah. So you guys were a brother rowing team. Brother rowing team, yeah.

The Driesigacher brothers were like the Winklevosh brothers from Harvard, you know, the guys who tried to start Facebook. They were also rowers. That's a different story. And so tell me, you know, not to give away the ending, but you did not make the Summer Olympic team. What happened? Well, we had an interesting plan, I guess I should say. Our plan was to drive across country and do altitude training. We would camp and row and it was great conditioning. Some of the lakes we found were like two miles high in Leadville, Colorado.

But you wanted to train at altitude because obviously that would require more. aerobic exertion, and you figured that would help you. Yeah, I think we had a great idea for altitude training, but we didn't really understand it or know how to do it. So we got quite fit, but not fast. And there were a lot of good pair of rowers. Yeah, I'd like to point out that most people don't win trials. Got it.

During that training period, when you were training for the Olympic trials, which would be for the 76 Montreal Games, You started to experiment by kind of modifying your rowing ores a little bit and kind of playing around with them. What were you doing? Because the oars, I'm assuming, were just big wooden oars at the time? We had a plan to create this modified ore as our secret weapon. Okay. What was the modification?

Well, we cut off the last like four feet of the ore, blade and shaft. and then created in our apartment a lightweight blade. So we had these sort of hybrid, I guess you'd call it nowadays, but there were pretty ugly kind of contraptions that were half wood, half carbon. And that's what we came to the trials with. Yeah, I mean, I would add here, at this point in time, the plan, we had a plan to try to start a business together. And these new ores that we had was going to be our first product.

and it was changing from wood to where the whole ore would be composite material, fiberglass, carbon fiber, etc. So that was our real plan. First, making these prototypes, which were real Frankenstein ores, going to trials, and then going on and starting a company where we would do kind of product design, not necessarily a manufacturing company, but we were saying, well, you know, the ore market's not that big. We could make a few ores just to make ends meet. And in the meantime, come up with other product designs like the backpack or something that other companies might want to manufacture. I got you.

Okay. Let's kind of break this down a little bit. First, let's talk about the oars, right? Oars, I'm assuming, in the mid-70s, if you were a rower, were entirely wood. So the innovation that you guys came up with was to add things like carbon. fiber. Why was this so revolutionary at the time? Why would somebody who was a rower be like, wait, what are you doing? Boat builders were using carbon and synthetics for boats. And typically a boat builder would have some guy in the corner making wooden oars because

they needed them for the boats. But it was really a boat-oriented industry. So we came along and say, well, you know, the ores are important too. And by utilizing the synthetics, we could make them lighter, more durable, easier to maintain. How heavy was the average ore at that time? Nine pounds. And then what did the synthetics do in terms of reducing the weight? About seven and a half. Okay.

But even that reduction would be significant if you're competing, like to get a lighter ore. How would that give you an advantage in the trials? there's two advantages. First, when you're rowing at a high stroke rate, you're having to move, swing this, rotate this oar back and forth through this wide arc. And because there's weight, particularly the weight out at the end where the blade is,

it takes effort to accelerate that back to get to the next stroke. So that takes a little bit of effort. And races are won and lost on a little bit. bits of effort. Now, the other element is when we started manufacturing the oars, they were round shafts, smaller diameter than the wooden ones. So there was a lot of wind resistance. And again, that may not seem like much, but every little increment gives you an edge. You know, I mean, races are won and lost by a couple of feet, you know, so. Yeah. All right. So you do not, you do not make the Olympic team, but you have this idea to

build a design studio. You might make backpack. You might make other products. Right. We'd make prototypes. You know, like we did the backpack with North Face, that gave us some confidence that we could operate in that mode. I guess the problem was when we started making oars, the oars kind of took off and it kept us busy full time.

All right. So you, I guess both of you were still kind of in California, but you decided that you needed to find a place to build your business. Tell me about the decision. Like, why didn't you just stay in California and keep making wars there? I think our decision to move out of California was really a lifestyle kind of decision. Usually it's the other way around. People come to California for lifestyle.

Well, but we'd already tried that. Right. I think we had a very clear vision of the place. We had a clearer vision of the place that we wanted to move to, to live to do this business, than we had of what the business was going to be. The vision was to be more rural than we could find in California, to have a place where we would live, get up in the morning, have a shop right there, walk over to the shop, do our thing.

And if it was a beautiful day, we could stop early and go for a ski, or work in our garden. It was definitely a mid-70s kind of vision. I'm curious for a moment because you would end up in Vermont, in northern Vermont, in a rural part of Vermont. And I want to ask you about that in a moment. But did your parents think that was a little weird, given that both of you had these like, you know,

Stanford master's degrees in engineering and that your dad had been an engineer's whole career and that this is still a time where people were like, like doing these traditional, you know, kind of career past. Did your dad or mom or anybody say, wait, what are you doing? Yes, that's correct. Yeah, they were wondering what we were doing. And I think there was a gradually, they came around when things started to happen.

But in the beginning, I mean, I think they were probably worried of what we were doing. But, Guy, I'd like to come back to one thing that you would ask a question about, did our family hide? emotions or express emotions. I think this was one case where we benefited by the fact that they probably hid their actual feelings about what they. They might have been like, what are they doing? Yeah, but I think, unfortunately, probably because of the family dynamic, that we don't have any good stories about that.

You don't even know. Yeah. Yeah. When we come back in just a moment, how Dick and Pete expand the business. by building a stationary rowing machine, come up with a plan for getting it into health clubs, and fail. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1976, and Pete and Dick have moved to Vermont to set up shop in the barn of an old dairy farm. The idea is to start a design firm

and make all kinds of things. But at this point, they start out by building a lot of building a new lighter weight ore for competitive rowing. Remember, the oars were kind of an interim thing, though. They were to get us going. Yeah. And we were hoping that we didn't have to make too many, so we'd have time to do other stuff. I think the reason we picked oars is because we knew a lot of the coaches that were at the colleges, you know,

so we could take oars to them and say, here these oars were making, try them. And, you know, I mean, people like that. them and they started buying them. And you had the legitimacy because you were a coach, Stanford, and you probably had the connections, and both of you guys had been in the rowing community. So you knew some of these coaches. Yeah, we knew most of them. Yeah. Let's talk for a moment about the name, concept two, because it's an unusual name. You called your firm. It wasn't that you were calling the product concept two. Your firm was called concept two, right? Your design firm. Right. Right. We're looking

for a name that was rather generic so we could, in fact, work with other products and other companies. And the other thing, at that time, and this is a product of taking the master's courses and the product design at Stanford. We did a lot of almost studying or learning about the design process. The whole idea of Concept II came out of the idea that you don't just consider one idea. You look at at least more than one idea, preferably many ideas. This initially was supposed to be kind of a side project for the design firm, but at what point, and I think pretty quickly within a year or so, it really became what you were doing. You were making oars. I think our breakthrough came probably when Yale bought some oars because we knew

the coach really well. And they end up beating Harvard for their big Harvard Yale race. And a lot of people took notice on that. And a lot of people attributed it to the quality of the ores that the Yale team was using, the carbon, the fiber glass and carbon fiber ores. Well, let's put it this way. I think a lot of people attributed it to that, whether or not that was the case or not. Whether, Yale might have just had a better crew that year and we locked out. But I would say that after After Yale beat Harvard, we got an order from Harvard for the oars. Got it. And tell me about the process in the barn.

Like how long did it take to build one ore, for example? Oh, boy. I think in the beginning we could make two a day. That was with us, just us. But in the end, we were making one set a day, eight oars a day. Probably with the two of us and two or three other people. In the early 70s, the federal government, there was a ruling Title IX that essentially required publicly, I think publicly funded institutions to equally fund sports for boys and girls, men and women at high school and college level. How did that affect?

I mean, it must have had a huge impact on your business, right? Because all of a sudden, you've got girls and women getting into rowing. I'm assuming it just doubles your potential, you know, market. Yes, I think right in the beginning, it wasn't as big a factor because it took Title IX a few years to really gear up. But very shortly after we started making the oars, it really was noticeable that there was more women's crews at a much bigger pool of universities across the whole country. All right, so you guys are, I think by 1979, three years in, you have built your 1,000th ore, okay? But this is still a very small business, right? Like, how much was each ore were you selling each ore for at the time?

I think they started out at like $160, maybe, less expensive than the wooden oars that were available. And I think that was one reason why we helped anybody to kind of infiltrate the market. Yeah. We tried to price it at what we thought we could eventually make it for. So we were projecting ahead that we could, you know, eventually get to the point where it was more profitable. And, you know, we use that philosophy all the time with other products now, too. The business in 1980, which was basically making oars, this was a seasonal business. Can you explain why? I guess seasonal because nobody was buying oars in the middle of winter? Yeah, the teams that buy the oars, the college teams, they're on sort of a budget schedule, you know, that they have money to spend during certain times a year. So they would typically, you know, they would buy oars early. I mean, it would be kind of winter, really, because they're buying them for the spring. Yeah.

So you had to come up with another product that could basically, you know, help sustain your business. Otherwise, you're just making a seasonal product that sells seasonally. That's right. So I guess the idea that came up was, all right, if we're going to have a business that we can sell a product year round, let's sell an indoor rowing machine. Let's make an indoor rowing machine. Was that that was the thinking? Yes. Most of the products that we've worked on and been successful with are products that we want to use ourselves, you know. And the theory is that if we, you know, like the idea of having some way to train specifically for rowing without having to get to the water or have a water available, then there's going to be other people like us that are out there. So, all right.

So you decide to create an indoor rowing machine. Now, let me actually clarify something because in 1980, indoor rowing machines existed. Oh, yeah. Right? This was not an invention that wasn't out there. There were, probably you guys had used them before. Yeah. In 1880, there were rowing machines.

Yeah. And were they widely used? Would you find rowing machines at fitness centers in 1980? Yeah, there was, you know, fitness studios, gyms would use them. And, you know, there was a pretty good market for those at one point, but that kind, I don't think people really like to use them that much. It wasn't that exciting to use them. It was more of a drudgery. But the whole idea of indoor rowing was kind of,

nobody was out there beating the indoor rowing drum when we made our early rowing machines. I'm looking at a photograph of the first prototype that you guys built, which essentially, it looks like you took a bicycle, turned it upside down. I guess you nailed it to the ground and then attached some kind of chain to the rear wheel and then some kind of seat.

And that's what you basically would just pull and pull and pull. And that would, you know, feel like you were rowing. Yes. And it felt quite good, actually, surprisingly. Just in that crude form, we could see the potential. We had these little fan blades, paddles. It's almost like putting baseball cards on your bike, you know, on your bike spokes.

and putting the right amount of weight on the wheel, on the bike wheel. Which would create resistance? Yeah, the weight would create this sort of momentum, and then the paddles would create the resistance, and you get the right blend of momentum and resistance, and it can feel like rowing on water. So as you started to kind of refine this concept, because it wouldn't take you very long.

I think it took you about a year before you actually had a product. in your mind was the market still rowers, like students and professional rowers who wanted to train the offseason? Yeah, at one point when we were first selling these, thinking a lot of them were to individuals, we were visited by a benefactor of one of the schools, and he saw them and he said, you know, I think I'm going to get 10 for my school. And that was the first kind of mass school training sale that we had. Did you do any research at the time looking at, you know, the potential market for the product? I mean, did you, and did you have any data or insights that led you to believe that this could be actually a really big product?

I think we figured that, that. the rowing machine could branch out into the non-rowing market if we did it right. But I'm interested by guys' question. One issue is we don't really have a good answer to your question about market research and that kind of stuff. I mean, we didn't go into this from the idea of a business major might go into it in a different way and say, well, let's look at the market size. What percentage of market can we get? And this kind of thing, we didn't do that. Because had you done that, you would have discovered that the potential, at least at that time, was small.

Right. We might not have done it. Yeah. All right. Your first indoor rower comes out in 1981. Help me understand how you, 1981, pre-internet, pre-fax machine. I mean, it's like you got to sell one of these things at a time. I mean, did you take it to a trade show? How did you, how did you even start to make people aware that these were available? The first thing we did was there was a national master's rowing race in Boston that year. This was on the Charles River. On the Charles River, yeah. And we took probably the one machine we had down there and set it up in front of the boathouse that was where the registration was.

I mean, it was a pretty rickety thing. You have to laugh at it at this point. And I would say almost every one of these people who registered for their race came out the door, looked at it, tried it, said, oh, man, I'm going to get one of these. Huh. It was just an instant. Yeah. Well, at that point, we were doing our first batch, I think it was like 50. And I think we sold most of those, if not all of them, at that Masters Championships Regatta.

How did you make these machines that had you get the component parts for them? Were there factories that could make what you needed nearby? Well, one of the beauties of the design was that a lot of the parts were bicycle parts, just off-the-shelf bicycle parts. And the metal framework, there was a machine shop in town that probably most of their work was fixing tractors and farm implements, but they were able to cut and weld and drill and poke. And so they took our pencil drawings and created the framework.

So, all right. So I'm thinking like these initial, like from today's perspective, these first models looked kind of janky. Like they probably had like, you know, uneven welding, not uneven, but sort of they weren't machine-tooled, right? It was like hand-welded. So each one was probably a little bit of. different. Right, it wasn't robotic welding like you know. Yeah. And how much did they go for at the time?

$400. And was that a good deal in 1981? Well, these rowing machines that the colleges would use, that they couldn't really afford to have a whole bunch of them in their gym, but they maybe have one or two. They were over 3,000 at that point, maybe 3,500. And they were big, clunky kind of machines. they took a lot of space, whereas for that same amount, they could get eight of our machines and have the whole team of eight rowing at the same time and training at the same time. And the difference between yours and the earlier versions was this air resistance, right? That basically you could ratchet up, make it harder or easier using air resistance, and it would adjust how easy or hard it was to use the rower.

Right. And it felt more like rowing in a boat. And by February of 82, we had the first indoor race down in Boston. We got a call from a friend who was rowing down in Boston who said, we're going to put together a little race at the boathouse. What kind of race? An indoor rowing race. An indoor row.

What is an indoor rowing race? Explain this. Well, you get a couple of machines, in this case. I think they were five or six. Yep. You set people in a starting line, and you have a starter, and you say, okay, everybody go, and they go for a distance on the speedometer. Okay, and how do you measure it? Oh, I see you, because it was a mechanic, an analog speedometer, right?

A little cheapo bike speedometer. Yeah, and so, and then you would time it, and then at the end, whoever had the highest number on that speedometer wins. Well, yeah, or they have a stopwatch. Time it with the stopwatch, do the distance. Right. If we were a marketing group from the beginning, we probably would have come up with the idea ourselves, but we weren't. Yeah, and after the race was over, they tapped a keg a beer and everyone had a good time. I'm trying to remember.

We had, we've done a bunch of fitness stories in the show. We did the story of jazzercise. But in 1982, 83, right, we're, I mean, I don't think fitness studios were quite like what they are today. Right. It wasn't, I mean, people went, but it wasn't as widespread and ubiquitous as it is today, right? I would say that's correct, yeah. Yeah. But it was shortly after we were doing the rowing machine, there were other pieces of fitness equipment like the stair climber type one. Right, stairmaster. And the stairmaster, they became a whole class of machines that were, you know, people just would kind of stride on. And if they had a rowing machine at all in those gyms, it'd be stuck in a corner and no one was using it. I think by 83 you had sold a thousand rowing machine.

So, you know, you'd done about $450,000 in revenue by that point, you know, a couple years in, which, you know, not horrible, but not, you know, gangbusters. There's an advertisement that I'm looking at from that time. And it's an awesome ad, actually, that you guys put out. And it's a series of photographs of a man doing different exercises with like different weight exercises, but holding up the actual rower. So like trying to lift it, trying to bench press it, trying to squat it. And then the last window is the guy just rowing on it. And it says, you know, you can do all of these exercises and work out. Or you could just do this one exercise and be in great shape.

So was it hard to make that case to people like, hey, this. This rowing thing is great. It's low impact. It's full body. Did people not quite get that concept in 1983, 84? Yeah. Well, that was me with the doing the exercise. Oh, that's you in the picture.

Yeah. All right. It was somewhat of a take on machines that were meant to do all these exercises on and thinking that rowing does all these things for you. So that is definitely what we're trying to convey there. I think we were one of the few voices trying to say that for quite a while in those days. But still not a whole lot of interest because you'd go to a gym. They'd have a rolling machine and nobody would use it.

Nobody'd be on it. Right. Right. Right. All right. 1986, you're 10 years into the business. And I would assume that at this point, your overall revenue is in the hundreds of thousands of dollars. So it's still a very small company. Is that, is that fair to say around that time?

Yeah, I mean, we were growing slowly. Were you concerned about the slow growth or was that sustainable? Was that, you know, even though you didn't have a lot of revenue, you were still able to make a profit? Yeah, we're profitable. And we had money to be able to sort of start putting into research going away from the, bike wheel to more custom components that were able to refine the machine.

Because I think you changed the design in that year. Yeah. Which was it was no longer just an, it was, the wheel was enclosed and like a looks like a big fan, like a, yeah, like how a fan blades are enclosed. I think that was an effort to make it more suitable for

more general public. I think the health club market for us with the original Model A, as we call it, was very limited because you had this open flywheel spinning around that people could walk up to and stick the fingers in. Although nobody ever did that that I know of. It seems, you know, you see this spinning thing and you know you shouldn't touch it. But having it in a cage was a big, broke that barrier for us, really. I wonder by the late 90s when they actually were stores selling fitness equipment,

were you still resistant to the idea of doing it that way? did you still want to focus on? No, you got to buy it from us. I mean, I think when we first started out, you know, stores or retailers were demanding very large margins. You know, they had to have a 40% margin or whatnot. And we didn't want to raise our price so that we could give them a 40% margin. We were looking after the end user. We thought the end user was really our person. Our customer, yeah.

But in the 90s, we were making some attempts to make it mainstream in clubs. And we said we have got this great idea similar to what the boathouses have now, where the boathouses will have 20 machines for their team and they'll work out together. So we've created this package. And we said, okay, this is how much space you need. You need at least 10 machines. We'll train your staff to instruct and coach how to row in a team kind of workout. And we had the whole thing sort of packaged.

And we had a couple of pilot health clubs that we inserted these into. And that was the same year that spinning started. Spinning, yeah. Which was a huge craze, yeah. So, yeah, so all the space that we were thinking the health clubs could use for a rowing, style class that spinning is where it is at. That was

a bad timing. It was kind of a flop. A flop. Yeah. Yeah. And so it just kind of blew rowing out of the water, so speak. When we come back in just a moment, after rowing gets run over by spinning, it finds a new home

in another fitness craze. Stay with us. I'm Guy Raz, and you're listening to how I built this. Hi, my name is Diane, and I'm from Paris, France. I've been listening to how I built this for four years now, and I even listened to some episodes while I was running my first marathon. My favorite episode is the one about Ben and Jerry's. I love how these two outcasts who knew each other from high school came together to create one of the most successful ice cream brand. They were also very disruptive

in terms of company values and were one of the first company to be vocal about social issues. I think it's a very inspiring company that has had a strong influence on many brands that we consume today. Thank you so much, Guy, and how I built this team for bringing us such an inspiring content. If you want to share your favorite episode of How I Built This, record a short voice memo on your phone telling us your name, where you're from, what your favorite episode is and why? A lot like the voice memo you just heard. And email it to us at hibt at ID.wondery.com. and we'll share your favorites right here in the ad breaks in future episodes. And thanks so much. We love you guys. You're the best.

And now, back to the show. Hey, welcome back to how I built this. I'm Guy Raz. So it's 2007, 30 years into the business. And Concept 2 is selling pretty well. But the rowing machine is mostly being used by competitive rowers, so still pretty niche. But then Dick and Pete go to a trade show and meet a game. guy named Greg Glassman, the founder of another fitness community, CrossFit.

The way I understand it, Greg, had always been a fan of the rowing machine. I mean, he's into that hardcore stuff. And he said he liked the machine because it'd make people puke, basically. And so that was one of the pieces of equipment he started his gym with. He told me a story at one time that he actually found. felt a little self-conscious when he would contact Concept 2 to buy more rowing machines because he wasn't in the rowing community. And he was concerned that we wouldn't sell them to him because he wasn't a rowing team. So at this point, they started, and CrossFit, crossfitters are a tribe, you know, and they are very loyal.

And that's a different audience because it's not rowers. All of a sudden you've got. And did you see a shift starting in 2007? with your rowers becoming more mainstream? Yeah, absolutely. You know, we saw our planned 5% or 10% growth year over year increase to more. I don't know exactly what, but it was like, you know, higher growth than we expected. We call it the crossfit bubble.

It'll pop soon. But it lasted a number of years. I mean, I think there's something like 13,000 CrossFit gyms out there now. many of them with these rowers with the concept probably 90% or more wow when did you I mean were you still able to manufacture most of the the rowers in vermont or at a certain point imagine as you started to scale you had to move some of the manufacturing overseas or some of the at least some of the components had to come from overseas yeah our first step was moving from the farm production shop, but also we happen to find a good one in Vermont that was very progressive in terms of efficient metal work. But we do make components. I mean, now it's a world product. We get components from everywhere. But you, but you continue, you were able to and you continue to assemble them in Vermont. We assemble here, yeah. Yeah. So everything is assemble at Vermont, right?

Okay. So what I'm trying to figure out is, as these kind of grew, I mean, the, was the growth just kind of organic. I mean, I imagine you didn't have a huge marketing budget ever, really, to get the word out about what you were making. I think most of, yeah, we tried. But I also think our best marketing was really taking care of customers, making sure that people have access to the parts they need to maintain their machine. and make sure that the parts aren't obsolete, and then the word of mouth tends to follow. And the customer service folks we have here have a lot of pride.

I think they consider themselves part of the product. We sometimes try to embarrass them when we get these glowing letters from people, and we read them at staff meetings. And you've got how many employees now do you have? Total? It's like 130? 130, which includes about 40 overseas at subsidiaries.

And I guess eventually you would branch out into things like ski machines and even a bike. You now make a bike as well, all based on the similar concept of the air resistance wheel. And the technology for accurately monitoring that output, I think has been a technology. that we've transferred to each of the products quite well. So one of the things that really intrigued me about this story when it came to me was, you know, your Vermont-based is still mainly assembled there. And it's a decidedly, you know, lower tech machine than some of its competitors. Not to say there's no tech, there is.

I mean, but and you can attach an iPad and get to that and use wherever you want. But, you know, the competitor machines out there, there's like the hydro or the peloton, and they've got these immersive screens where you can, you know, attach to them where, you know, you're like on a, or any river you want. And you're, you know, they have sound effects and things like that. As those competing machines start to come out, did you worry? Did you think we better get on this and try to do something like this? Well, it's interesting. Years ago, we made the decision to have the data from the monitor be able to be used by other apps. We have like 40 other third-party apps that connect with that monitor.

But your monitor, just to be clear, is not a graphics monitor. It's just just numbers. Right. It's just a digital LED screen with numbers. Right. Yeah. We made that decision to not create content. and not be, you know, an entertainment company.

A media company. Media company. Media company. Like Peloton or. Yes, yes, yeah. And to basically allow creative people in the world to do that stuff that connects with our machine. So basically, you have a holder for like an iPad or a tablet, and there are apparently, I guess, a bunch of apps that are rowing apps that integrate, that can integrate with your machines. Yeah. Yeah. And you can have the scenes of any river in the world or have guided workouts with a coach.

And that's a customer's choice if they want to do that or not. Right, right, right. I think one of the things is we have such a diverse customer base. Some people like to throw the machine in the back of their car and take it with them everywhere. Right. And you can do that. You can just fold it up. Yeah, yeah, yeah. And then some customers are going to like the more media-based, media-driven kind of workout experience, too. It's interesting because I think that there is a lot of membership fatigue going on. We pay constantly are paying subscription fees for these things.

So you buy a concept, too, and it's a lot cheaper, but that's it. You buy it and you don't have to pay anything anymore. Yeah, well, last year for a long time. It's so good that you have your rower and now you're going to buy a ski org or a bike. Yeah. That's the hope. Right. And it happens a lot.

One of the things that I'm curious about is community. Because my brother-in-law has a concept two-roar. You know, there definitely is a type of person who loves these things, machines, right? How have you cultivated the community? You know, we did Strava on the show years ago, and those guys, they've really cultivated. a community of hardcore Strava users, people who, you know, are in a community and a social network. How have you guys been able to harness the concept to community? One of the things that comes to mind are all the little events and challenges we would have, you know, like the holiday challenge.

How many meters can you row between Thanksgiving and Christmas? You know, it all gets posted online. You get this big list of people. and you know, you see what you stand in that. There's the ranking system, and people look and to see where they are and who's ahead and behind them in the ranking system. Right. I had a UPS driver come by, drop off a package, and you looked at it and said, oh, I'm right behind you in the ranking. Did either of you ever worry about money over the course of lifetime of the business?

We haven't had to. I mean, we haven't ever, well, I tell you, to go back to the very beginning, an interesting story, you know, our father was kind of worried at some point when we were making and selling the product, but when you start making product, you have to buy materials and you have to pay bills. So in general, the cash flow goes down in the beginning. He goes, he was worried, so he said, here's a check for $5,000 because I think you're going to need it before. you start going up. So we kept that check and didn't cash it. We watched the bank account go down and just as it was getting close to being ready to cash, we got some more payments coming in

or more sales and from then on it's gone up. So we tore up the check. And I know you're privately owned company. You guys don't never took on any outside investment. investors. Is that right? Correct. Yeah. And so your, you know, your revenue numbers are not public, but from what I gather, you're, you know, you would be considered to be still a small business by U.S. standards. I think a small business is anything under $100 million. We'd be a little bigger than that. Medium of business. Right. So, so pretty efficient. I mean, it's such a small number of employees and you've got, you know, pretty healthy, pretty healthy revenue. But I'm. I think it's, would it be fair to sort of assume that, how do I put this? It sounds like neither of you really care that all that much about getting rich. Is that, is that fair to say? I think that's fair to say.

Yeah. I don't think it mattered to make a lot of money. I mean, in the beginning, it mattered to make enough money. The bigger issues are how to keep the thing going once we're not. around. Yeah. And how do you do that? Do either of your, do both of you have children? Yep. And any of your kids interested in taking it over? No. They both, they all have different things, different directions. Different going on. Yeah. So looking ahead, I mean, has, have you been approached by, I don't know, private equity groups or other, you know, companies that have said, hey, we want to

maybe buy you. You know, we've been approached for the last 30 years. Well, we're working on how we can assure that the company continues on more or less in the way it is now. And it just hasn't seemed like from experience that the sort of buyout thing is not necessarily the way to do that. You know, yeah, we had a guy on the show many years ago, Bob Moore, and some people listening will recognize his name because he passed away. Not that long ago. He found a Bob's Red Mill.

Oh, yeah. And which became one of the most successful, you know, flour and, you know, baking goods brands in the United States. And essentially, he gave the company to his employees. We're studying that right now, actually. And, you know, we've looked at things like what Patagoni has done. And, you know, they become kind of this. poster child a little bit for this idea of the purpose trust where the company was given to a trust and yeah so that's all um all being looked at right now um what do you what do you guys

it doesn't sound like the two of you have had many disagreements have you not many i'm sure we have but in general you know i think this stems back to our kind of the concept two thing, you know, where the problem solving or decision-making process, it's more of a mechanical decision-making process of trying to figure out what the best option is, what's going to give us the best outcome. And I think some of its temperament. I just think the both of you are just just, neither of you seem like you have massive egos. Well, you know, it kind of you wouldn't know about rowing a pair unless you've rode a pair that it's a boat that has no stability whatsoever

and all of the stability is based on how you're holding the oars and each person only has one oar. So you have to sort of have this mental connection and physical intuitive connection as to what is the other person going to do with his oar and when's he going to do it Because if it doesn't happen simultaneously in a total flow, it just messes up entirely. And you guys rode together. Yeah.

So naturally, you knew how to work in tandem. Yeah. There is a thing there to it, yeah. What's your favorite place you ever wrote on at? For me, it's got to be someplace in Vermont. It's either Crasbury or Lake Champlain on a calm day. Yeah, yeah. Grass Bay was where we did all of our ore testing.

Yeah. And we'd always go on the perfect mornings. And I mean, just be able to the water, be calm and just black. And you can see the bubbles from your last round still sitting on top of the water. It just, that's pretty nice. One question I'm curious about this. Rowing, right, you've got to do it really early in the morning. But it's cold.

It's so cold. I've done it before. It's freezing cold. But do you like, do you, how do you do the cold? Do you wear a wetsuit or do you just like, I don't know, do you just have like walrus blood or something? They stay out of the water. Fair enough. That's Pete and Dick Trisagher, co-founders of Concept 2.

By the way, both of them still row regularly and both still compete indoors and out. They even compete at the famous head of the Charles Regatta in Boston, where they row with other over-70s in a boat called The Motley Crew. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free.

And don't forget to sign up for my newsletter at guyraz.com. It's free and full of incredible insights from some of the world's greatest entrepreneurs. This episode was produced by J.C. Howard with music composed by Rumtin ander Blewe. It was edited by Neva Grant with research help from Catherine Seifer. Our audio engineers are James Willits and Patrick Murray. Our production staff also includes Casey Herman, Alex Chung, John Isabella, Elaine Coates, Carrie Thompson, Chris Messini, Carla Estevez, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.