How I Built This with Guy Raz - How I Built Resilience: Alberto Perlman of Zumba

Episode Date: August 6, 2020

Within weeks after the pandemic lockdown, the fitness program Zumba rapidly shifted gears and launched its own online workout platform. Co-founder Alberto Perlman says it's helping keep the community connected, fit, and—for instructors—employed. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating turbulent times.See 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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during such a disruptive time. And today we're going to hear from Alberto Pearlman, co-founder of Zumba. Zumba is a fitness program that combines Latin dance and aerobics. It's popular all over the world, but now, of course, many gyms and fitness studios are closed, leaving Zumba instructors without a place to teach. So to keep people moving, Alberto's team got into action and built a virtual platform in just a few weeks. For people who don't know much about it, just how do you describe Zumba?

Well, Zumba is a, I think it's the largest branded fitness community in the world. We have pre-pandemic. Over 15 million people who take Zumba classes every week. And we're in 186 countries. And pre-pandemic, we were in 200,000 locations. We don't own the locations. We have instructors teaching those locations. Some instructors own their own location and some instructors work for somebody else.

but we are a fitness community, a cultural community, a musical community, a community of people that just come together and have fun and get healthy and happy. And basically you train instructors and then you license the brand and the program to instructors around the world and those instructors are like,

they're like the entrepreneurs. I mean, they run their own Zumba business. Yeah, we enable them to go out and create their business. or work for someone and generate income doing what they love. That is the most important thing. If people love dancing, people love interacting with other people, people love leading, then they get trained in this.

They can actually make money doing something that they really, really love. Alberto, you know, we had John Foley of Peloton on a couple weeks ago and Sadie Lincoln of VAR 3. Obviously, the industry as a whole has just been absolutely decimated, right? I mean, 24-hour fitness filed for bankruptcy. see gyms across the country are struggling. Many of them may not survive. At the same time, working out from home is really, you know, anybody who's tried to get dumbbells online knows it's impossible to find them right now, right? I heard there's a black market for dumbbells.

Yeah. How has the economic crisis affected Zumba? So we set out and said, let's base our response to the pandemic. And we started seeing this in January and February because we have instructors in China. And our instructors in China were telling us, hey, this is really bad. You guys have to prepare for this because if this gets out, this is not good. So we said we have to do three things. One, most important thing, how do we continue to help our instructors generate income? Two, how do we deliver education virtually for people, new people who want to become instructors or our existing instructors who need further education, especially if they're transitioning to virtual? And three, how do we keep our promise to make the world happy and healthy. The first thing we did was we allowed our

instructors to start teaching online. They started teaching on Zoom, but parallel to that, we started developing our own platform. And it's called Zinn Studio. Zin stands for Zoom Instructor Network. So Zin Studio. And Zin Studio allows instructors to live stream their classes. It allows them to upload pre-recorded classes with licensed music. It allows them to charge for their classes. It allows them to list their classes on a platform on Zuma.com. We really focused on this in-studio concept to help our instructors generate income during the lockdown. And at the same time, we said our instructors are not necessarily trained in using all this technology, so we better provide all the education that they need.

So we created all these courses that were done through Zoom and some are e-learning courses that are instructors could take to become what we call virtual fitness pros. And to our surprise, within a month and a half, we had about a million people a week taking Zumba classes virtually, which is amazing for a new virtual product. And it was really our instructors telling their students, hey, now I'm teaching online and come take my class virtually. And every week, we launch improvements to the platform. So we added chat to the platform so students can chat while they're taking the class. We added emojis. We added the things to the paywall.

that instructors could take payment. Every week we're launching new tech at a pace that our technology team had never done so before. And I'm so proud of them because they really took it to the next level. Yeah. I mean, you basically stood up a virtual platform within weeks. I mean, I'm imagining that if you had a plan, like let's say a year ago, you said, hey, we want to do a virtual platform. It would have taken you like a year to put together, right?

And you did this in like six weeks? Yeah, unbuilt people working nights, weekends. It felt like we were starting Zumba again. It felt like, you know how Jeff Pesso says day one? It really felt like they won. We felt unstoppable. We were going at it. We were talking to instructors to get feedback on how to make the platform perfect for them.

And at the same time, we said we need to also help our instructors and the world at large during the pandemic in other ways. So we created a community fund where we, gave funds out to instructors who were directly affected by COVID themselves, who were hospitalized, who had family members that passed away, or instructors that were, because our instructors sometimes are assumed as their side job. So we had a lot of instructors who are nurses, a lot, huge population of nurses who are also Zoom instructors. So we help them, their frontline workers, we helped them with child care services. So we created this community fund. And we also did something that we call the one class one meal program for every person who took a virtual class,

which we make no revenue on, all the revenue goes to the instructors. For every person who takes a virtual class, we donated a meal during the month of June, and we donated 1.1 million meals to food banks around the world. Wow. So, Alberto, so when somebody signs up for a virtual class on the Zumba platform, all that revenue and pays for it, it goes to the instructor? Yeah, everything goes to the instructor. Wow. So, so, I mean, how are you guys, I mean, you know, you're still a business. You still have employees. How are you kind of managing the business? And, I mean, have you had to have layoffs or furloughs, for example? Yeah. So we didn't do any layoffs. We didn't do any furloughs. Surprisingly, our clothing business is doing very well. People are buying fitness clothing to work out at home. And we were able to manage it. Obviously, it's not going to be a very profitable year because we made a lot of investments to make all these things happen. But that's not our objective this year. Objective this year is about the people. It's about the instructors. It's about their students. It's about our employees. It's always been that.

And this year, it's even more about just helping out others. And we'll be fine. So basically, if you are a Zumba instructor, obviously you, you know, you pay a monthly license fee. But if you want to have virtual classes, you can use this platform and all that money goes to you. Zumba doesn't take a cut. Yeah, I know instructors, this is amazing. I know instructors who are making $25 a class teaching at the YMCA or $30 a class teaching at the YMCA, suddenly when they switch to virtual, they're making $150 a class. So some of them are making more money than before the pandemic. Wow.

When you were originally on the show a couple years ago, you talked about the 2008 financial crisis. And all of a sudden, you started to see an uptick in people training to become Zuba instructors because people were losing their jobs. Here we are, once again, in an even worse financial economic crisis. Are you seeing an uptake in brand-new people joining, trying to learn how to become Zumba instructors? So we are seeing people coming in.

It's not as big as the 2008, and it's not as big as what we predicted was going to happen at the beginning of the year. But we are seeing every day a large group of people registering to become Zuma instructors. It's not the same as the 2008. 2008 was crazy, and I think it's partly because there were so many people that were hanging out at the gym in 2008, 2009. They were laid off. They were hanging out at the gym, and the fitness industry needed more instructors.

Yeah, of course. You know, I remember the other sort of shift for your business was when you made a huge PIP. Because originally, you guys made videos, like Zoom home videos that were sold through infomercials, and that's how you could learn how to become a Zuma instructor. and you realize that that wasn't actually a sustainable model. You made a huge pivot to support training and to create a network instead of just selling videos. This seems to me, what you're doing now with virtual courses and training, that seems to be the biggest pivot since your whole business model was established. Is that fair?

I think our pivot now, yes, I think it's more than just a virtual piece. It's how do we pivot into a place where our instructors are going to have to be, even more entrepreneurial than before. We don't know what's going to happen to the four walls, our great friends at 24-hour, at Golds, even a lot of the boutique gyms. It's tough, and we've been trying to help them. And one of the ways we've helped is we really push their instructors

and motivate our instructors to teach outdoors and tell our gym partners, hey, our instructors can teach in parking lots, in the parking lot at your gym, and you can partner with them and host these classes there. And so that could generate some income for you or some instructors would say I'm going to go to the park and I'm going to talk to the park ranger and I'm going to rent the park for an hour and I'm going to charge $10 a person and I'm going

to get 20 of my students to show up and I'll generate $200 in revenue for my classes at the park. And we're seeing every day, we're seeing more and more people teach outdoors. I saw a huge class happening in New York with, I think I had like 300 people outdoors in Central Park. And some instructors have even doubled up and said, well, I'm going to teach outside or I'm going to teach socially distant inside, but I'm also going to stream at the same time. And so I can generate revenue twice. I can generate revenue from my people who are live in person with me. And I can do it at the same time with people all over the world. So I can have some people from Korea and from Argentina and from Brazil taking my class.

And at the same time, I'm in my hometown in New York teaching an outdoor class. and generating revenue on both sides and making people happy. When we come back in just a moment, Alberto tells us about a new exercise program that helps you forget. You just did 20 burpees and encourages you to do a few more. Stay with us. I'm Guy Raz, and you're listening to How I Built This Resilience Edition from NPR. Hey, welcome back to how I built this Resilience Edition.

I'm talking with Alberto Perlman, co-founder of Zumba. And for Alberto, and really for the whole fitness industry, one of the big questions right now is, how do you replicate the experience of an in-person class online? You know, one of the things that I remember you talking about in the episode was this concept that you called FEJ, freeing electrifying joy, right? This idea that like 20 minutes into a Zumba class, you just like hit his own. You're just like liberated from the world outside, you know, this. And anyone's taken to Zumba class probably knows what I'm talking about. you get that feeling when you're doing this virtually? So we did a survey of people who have taken Zumba virtually,

and we interviewed over 100,000 people. And 50% of them said that they started doing Zumba virtually because they needed to stay in shape. But the main reason that they're doing it now is because of stress relief. It's like forced meditation a little bit. It's like you have to follow those dance moves. You're concentrated.

You're listening to this amazing music. all your other thoughts go away. It's just you, the music, the instructor, and the movement. And that's what's beautiful about Zumba is that moment that we call Fedge, which is like our Zen. What Zen is to yoga, Fedge is to Zumba, freeing, electrifying, joy. I'm going to go to some questions from our viewers. This is from Claire Murashima.

Hello, Claire. Claire asks, like, when you get tired of doing Zumba, what do you do? Because, you know, you probably don't do Zumba every day. I know you exercise. So what other things do you do? So Strong Nation is our new program, which is a high-intensity interval training program. It's non-dance where you're doing a push-up, a squat, a burpee, 10 jacks, and then you go into punching and kicking. And we synchronized music to it.

So we went to our favorite DJs, DJs like Steve Ioki or producers like Timbaland. And we said, can you score music to this workout? Instead of the music being in the background, let's score. score music, just like you would score music to a movie, like a training scene in a movie, or like the movie, a battle scene in the movie 300. And they created this very cool, epic music that matches the workout completely. So if you take a Strong Nation class, you can take virtual Strong Nation classes, or you can take them outdoors, or you can take them in gyms that are open. And you feel like one with the music. You feel like you are

completely immersed. Zumba was about Fedge. Strong Nation is about hacking motivation. So it's like, remember Pavlov's dogs? Yeah. The bell would ring and the dog would salivate. So we create a similar thing with music conditioning. So we're not counting how many burpees you're doing. It's every time that sound hits, you're doing a burpee. And suddenly you thought you could only do 20, and you just did 26.

And it's because you were just hearing that sound and you were getting conditioned. So I'm really excited about Strong Nation. We're getting a lot of people hiring Strong Nation instructors to come. teach in their backyards as almost like personal coaches, personal trainers, come teach me strong nation in my backyard because that's the work that I want to do while I'm at home. Yeah. Walk me through a little bit how you guys are successfully doing virtual training and virtual instruction because not only are you onboarding new people, but you're also updating

and offering continued instruction, but then like teaching people how to use the virtual platforms. I imagine that it was kind of a rocky period at the beginning, right, when you were trying to do this? Oh, it was crazy. So we started up with helping our instructors get on Zoom, right? And Zoom, Google Meet, Microsoft Teams, they were teaching on these platforms. And a lot of audio issues or video issues, as they were learning, right? There's a lot of different settings that you can use on these platforms. So there was a whole learning process and a lot of issues at the first few classes. Then we launched our own platform. And in our own platform, we had to work out all the

technical bugs and now the platform is incredible. Our platform has better video than I've ever seen in any other platform. That's what we wanted to focus on is video and audio being crystal clear HD come through amazing. And then we had to train our instructors, right? That was a big piece of it. So we created Zumba Virtual Facebook groups that people could join and learn how to teach virtually. We created courses, e-learning courses, and we created Zumba Virtual Pro, which would help them really, not only on their technical skills, but when you're speaking to a camera, when you're dancing to a camera,

your movements have to be a little different. How do you engage when you're not seeing the feedback, when you're not seeing what the other person's expression is? How do you engage? It's almost like acting classes, right? Yeah. And so we had a lot of fun doing it, and we learned a lot from our instructors,

from their experiences, and how do you take that to the next level? You know, are you guys strongly discouraging your instructors from doing indoor classes? We're not. We want nothing more than for people to be back at the gyms and for people to be teaching classes together because community is such a big deal. People are a lot more accountable to other people than they are to themselves, unfortunately. And so if you know your buddy is going to show up at your Zuma class or at your Strong Nation class,

you're more likely to go because there's someone waiting for you there. So we want the gyms to reopen. We want people to teach indoors again. We want to experiment with this hybrid model of teaching indoors and teaching virtually. We want people to be teaching outdoors. The more we can get people together, the happier we are. I want to ask you, this is an important question because a lot of people, as you know, Alberto, who listen to our program, are starting businesses and are also in marketing. How do you kind of market what you do and successfully.

reach people who may not know about Zumba. How do you get the word out? What are some of your strategies? Yeah, so the world has changed, right? Obviously, the world of marketing has gone through an innovation period that has created lots of opportunities, but it's also very different these days. Currently, we obviously use social media. We have over 10 million people that follow us on social media.

we spend hundreds of thousands of dollars advertising find the class. Even though we don't make any money from Find the Class, right? Because that money all goes to the instructors. We advertise it all the time. And it's one of our biggest line items in our cost structure is advertising Find the Class. So we create thousands of ads for people to come and find Zumba classes. And obviously the number one thing that drives people to Zuba is bring a friend. is when somebody tells you, hey, I'm taking this amazing class. I found this amazing instructor. Do you want to come with me? It's one of the best marketing tools we have. So we help our instructors and our gym partners encourage that as well.

Yeah. Aberto, before we let you go, what is something that you have learned about yourself as a leader or something that this crisis has forced you to be or become that you want to take with you into the future as you continue to lead this company? Wow. I think that focus has been so sharpened for me where because we're all working from home and because we are all trying to figure out what the next move is, having clear crystal focus for the organization and aligning everybody together has become so much more important. And I think I've learned how to communicate better because now you're communicating and this virtual world, you really need to have people understand what it is that you want to get done and what it is, where it is that you want to go. Right. Alberto Polman, co-founder of Zumba, thank you so much. Thank you, Guy. It's great seeing you again. That's an excerpt for my conversation

with Alberto Prulman, co-founder of Zumba. By the way, you should check out our episode on Zumba. We aired it back in January of 2017. It is hilarious and really interesting. To see my full interview, with Alberto, you can go to Facebook.com slash how I built this. And if you want to see all of our past live interviews, you can find them there or at YouTube.com slash NPR. If you want to find out more about

the How I Built This Resilience series or other virtual NPR events, you can go to nprpresents.org. This episode was produced by Candace Lim, with help from Will Mitchell, Tyra Lockhart, Matt Adams, Gianna Capadona, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers.

Thanks for listening. safe and I'll see you in a few days. I'm Guy Raz and you've been listening to how I built this.