How I Built This with Guy Raz - Orangetheory Fitness: Ellen Latham

Episode Date: April 10, 2023

Ellen Latham would probably have been happy teaching classes at her popular fitness studio in south Florida until she turned ninety. After being fired from her dream job as a spa director, she’d found stability with her own small business, and began developing a workout program that incorporated strength and cardio for all fitness levels. But then, well into her fifties, Ellen was offered an unexpected opportunity for a second act beyond anything she had imagined. With two partners, she grew her workout concept into Orangetheory Fitness, a franchise that today has over 1,500 locations around the world. This episode was produced by Alex Cheng, with music by Ramtin ArabloueiEdited by Neva Grant, with research help from Sam Paulson.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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This is how we work now. Visit Upwork.com to get hiring talented professionals today. Hey, it's Guy here, and before we start the show, a question, do you ever get nervous when performing or speaking in front of an audience? I definitely do, and I have to stand in front of a lot of audiences. Well, I recently interviewed Zoe de Chappelle, and she had a great tip. I hadn't heard before, a tip that's allowed her to get out of her head and into the moment. You can find out all about it and hear my conversation with Zoe on my other. podcast, The Great Creators. Just search for the great creators with Guy Raz wherever you listen to podcasts.

And now, on to today's show. So how many treadmills on rowing machines did you initially buy? 10. 10 rowers, 10 treadmills. Okay. Right. So when I opened up that studio, I spent every penny on the treadmills. I wanted to pay everything all out. And even more insane is that I had not piloted that actual program. And I'm like, oh my goodness, what if this doesn't work? I just signed a five-year lease. I have all this equipment in there. And I just, again, we get back to intuition. We get back to what's in your gut that you feel. I just feel that there is no way people aren't going to exit there without results. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories

behind the movements they built. I'm Guy Raz. on the show today how Ellen Latham went from being fired from her dream job to a second act as the creator of Orange Theory, a fitness franchise with more than 1,500 studios around the world. The startup game is for young people, right? This is a common belief and a frustration I hear from older folks who think you have to be in your 20s and eat ramen out of a bag to build a company. Except it's simply untrue. In fact, in 2018, 2018, Harvard Business Review published a study by four academics about this very topic. They crunched numbers from the Bureau of Labor Statistics, and they came to a counterintuitive conclusion about startups, which is this.

The average age of a successful startup founder in the United States is 45. 45. And we've had a bunch of these older founders on this show. Roxanne Quimby was 40 when she founded Bert Spees with her partner Bert Chavitz. Pete Warhurst was 46 when he started the national storage business pods. Pat Brown was 57 when he left his job as a professor at Stanford and started Impossible Foods. Bob Moore was also in his late 50s when he left seminary school and created Bob's Redmill, one of the biggest natural food brands in America.

The thing about starting a company later in life is that you usually come to the table with a lot of experience and credibility. So for anyone listening to this today, feeling like you missed the boat somehow, well, just wait until you learn about Ellen Latham. Because Ellen was well into her 50s when, with two partners, she started Orange Theory, a fitness brand that today has over 1,500 studios around the world. Now, if you haven't heard of Orange Theory, it's a fitness program that combines cardio, strength training, and core exercises into one workout. Orange Theory Studios usually have a row of treadmill,

and rowing machines, and the idea is to keep your heart rate elevated throughout the exercise period. And what's amazing is that the brand, which seems like it's everywhere, was only started in 2010. Now, at the time, Ellen was running her own small exercise studio in South Florida, where she developed a workout that would become known as Orange Theory. For most of her life, Ellen was a fitness instructor and a manager of fitness centers. She worked at YMCA's and later at a few high-end spas in Florida. But after she was fired from one of those jobs after a conflict with the owner, Ellen had to figure out how to make ends meet. And that was how she started her own business,

first by running fitness classes out of her home and eventually renting a small studio. Ellen first learned about fitness from her dad. He was a high school coach in Niagara Falls, New York, where Ellen grew up in the 60s and 70. There were four kids in the family, but Ellen's extended family was much bigger than that. A huge Italian family with lots of uncles, aunts, and cousins all around. The whole caboodle.

Yes, I was born to the youngest of eight children from an Italian immigrant family. My father was the youngest of the eight brothers and sisters. All of the relatives lived in Niagara Falls. So just the eight brothers and sisters and the first and second cousins were 140 calendrellys in Niagara Falls, New York. Wow. And there was always a cousin in a class that I was in or a teacher. And we had every holiday together at my grandmother's house.

It was very tight. My grandmother spoke very little English, all Italian. And it was all that you see on TV was exactly how I grew up. Wow. Your dad was a P.E. coach. My father was a phys ed teacher and football and track coach. And he was, people in the city didn't even call him by his name. Again, it's like one of those lifetime TV movies.

It would just be, hey, coach, hey coach. You're in the grocery store and someone's screaming across the tomatoes. Hey, coach, see at the game this weekend. And then everyone would come out to the football games, the whole city. Yeah. And how would you describe yourself as a kid? I mean, your dad was the coach. Were you, I mean, 50s, 60s, I know you grew up in the 60s.

girls started to play more sports or to, you know, that started to become more common, but still not until really the 70s. Yeah. Did you play sports as a kid? Yeah, very, very little. I played softball intramural leagues. I played some volleyball. And then, you know, being a cheerleader was kind of as physical as you kind of got in the 50s and 60s. But I truly was my father's daughter.

There's not a doubt out of all four of us. I just took to him in every which way. You know, they say, I guess, your first love is your father. that's no joke. He was bigger than life to me and just influenced me growing up and to this day at 67 years of age immensely. Yeah. Very disciplined. I was that kid who was extra early like getting projects done at school. I was kind of that stay within the lines kind of kid. You know, discipline was big to me. And my father, you know, that was big to him. I guess you were probably, I don't know, 15 or 16 years old when 72 was the year Title IX was passed, which really started even the playing field literally for boys and girls, men and women in high schools and colleges, that there had to be equal access. And that really began an explosion in women's girls and women's sports. Do you remember being 15, 16? You know, because I think you were already like into fitness, physical fitness at that. time. Yeah, my first job was at 17 and my job was working at the YWCA and it was to put women and I don't know

if you even know what I'm talking about, but in fat jiggly machines. Yeah, you've seen, I've seen those old newsreels of that. Do they work? Those machines you'd stand in there. There'd be like a strap around you to just vibrate, right? People would stand in those things. Absolutely not. Okay, I would go. I'd strap that around the woman's hip thighs and butt. She'd grab a magazine. She jiggled for about 15 minutes. I'd go and turn off the switch and I'd send her on her way. Unbelievable. Like, there must have been somebody who said, well, the science shows that this will make you lose weight.

There was no science to fitness for many, many decades. But women, they came in, they joined that membership, and it gave me my first job in the fitness industry. This is what your first job was. And I don't know, what was the YWCA in 1973? Three, were there classes? Were there, because this is sort of pre-erobics era. Yes, that was, we used to call them slimnastic classes. Slimnastic.

Yes, you wore your tights in those like very unattractive body suits, and you would circle your arms about a thousand times in one direction, shoulder width height, a thousand in the other direction, and that was supposed to tone the arms. So I started teaching those classes. Oh, yes. Gosh, I wish I had this all at a reel. Yeah. But yeah, that was, you know, what was going on then.

Then aerobics hit. And the leg warmers came out, and Jane Fonda, you know, made a big hit with aerobics at that time. And I was then teaching kind of choreographed. I've taught about everything you could teach as far as group fitness. And I guess you stayed in the area. You went to for college. You went to SUNY Buffalo. And then you went on to get your master's degree in exercise physiology.

And I guess while you were at SUNY Buffalo, you were also teaching at the YMC, I think dance aerobics, which was like sort of early kind of aerobics class. Yes. How did you learn how to become a teacher for that? I mean, was there like a certification or was just like, oh, yeah, Ellen, you know, she could do it. Like, you know, Ellen, you know how to do this, right? Like, why don't, why did you just teach this class? Yeah, in the early days, that's exactly what you did.

And then it started where there were tapes and, oh, my gosh, I remember we had to, like, I had albums at home and had to design my own music and put it on one of those little, you know, cassette tapes. He really kind of did a lot of winging it. And then they started to get a little bit more organized when Jazzercise started pulling together kind of dance aerobics and more of a structured format. But nothing ever based on science. You know, it really was this kind of trendy fad type of stuff, particularly for women. Yeah. And how would you describe your physical fitness level at that time? You're teaching dance aerobics and you were in your probably late 20s at that point. Were you in pretty good shape? Yeah. And working at the YMCA, it was very interesting because working there full time, you know, I was in the weight room with the men. And there were no at that time in the late 70s, early 80s, women lifting weights. But being I knew all these guys and I worked there full time, I'd go down in this basement weight room and I was lifting weights with them. I was doing some triathlons. I was definitely, you know, into the fitness part of things.

And I guess eventually you worked your way up to become the director of the YMCA in Niagara Falls, right? Yes. I became the first female director. There was only men before me. So you had a pretty good life. I mean, you, and I think you got married and eventually had a kid. Was your expectation to stay, you know, because you had a big family, mom and dad and siblings and aunts and uncles all there? did you expect that you would make a life in Niagara Falls? So I married my high school sweetheart. My sister moved to Fort Lauderdale, and I would come here and I would just want to go to all of the fitness studios and gyms and see what was going on here and could not believe such a difference between the small town of Niagara Falls. And there was just, wow, a real desire to, you know, I was a big fish in a small pond in Niagara Falls as I kept pushing through.

you know, managing the Y and all of this, but there was this great desire to come here. And I knew I had to start to be a small fish in a big pond, but my husband at that time, and I moved here to Florida. We did not hear our son at that time. And then we had him here in Florida. But you moved to Florida without a plan? Well, we didn't have jobs. Nope, we did not. And, but, you know, spas were great, were huge in Florida at that time. So I applied for a job. It was called Bonaventure. spa and that's where the movie stars would come like Dallas was big then and Linda Evans would come and stay a week. You know, this is where you would come. You'd stay a week. You'd get fit. You'd take a thousand classes. And I went and tried out for a job there, got that and said,

wow, I like living in this, working in this kind of environment. And you were hired as the exercise physiologist. You had a master's degree. So you were, I mean, obviously you had serious qualifications. And what do that mean? You were you were hired to oversee their exercise programs? So I did a lot of the testing. So when the clangents came in, I would do like submax cardio testing, that type of thing on a bike usually to see where they're at. I then gave them some information of what they should train at heart rate wise. So I was doing this way back and then give them actually a written program to go home with. Now this is before, you know, it's a lot of computer kind of things going on. So I literally remember like handwriting all of this out with

sometimes stick figures, which is absolutely insane. Yeah. Tell me what was happening in the world of fitness in 1988, you know, when you started. Because I think you would end up being there for about five years at Bonaventure. Yeah. So that was like aerobics. And, you know, it was all about fat burning for these women. That's what they were interested in. Yeah. So there was a ton of classes I taught water aerobics. I taught stretch. I saw relaxation. I did morning walks with them in the morning. We had a dietitian there, so there was a lot of nutrition. And it was very high end. And the owners at that time were very willing to put a lot of money into it, which, you know, I had never been around whatsoever in my life. So I just thought that this was like the best.

Take me back to an Ellen Latham class in 1990. You know, your dad was the coach. So he was the guy with the whistle and he was like, let's go, guy, hustle, let's go. Was that your style as a fitness instructor? Totally. There are people today who are like, do you remember when you were, and I had very curly, thick Italian hair down my back. It was of huge volume with those headbands on, a very scary, some of the photos. And yeah, I was like overzealous and over inspiring. And yeah, I was my father. Would you like, come on, let's go, you know, don't be whims like that kind of stuff, like tough love? I wasn't that. I wasn't that. And it's so funny you say that because when we created Orange Theory, I told the guys, please, let's not have boot camp in our name.

Because I did not like that. Ten is enough. Give me more. I wanted that. Ten is more than enough. You look great. And you tell me when you're ready to push a little more. I'm here to support that.

Yeah. There's a photo of you. you and you're got to be in your late 30s, early 40s, and you're just ripped. You are just like really strong. You think you're doing rows with weights. Yeah. And so, I mean, did you have women who saw you and say, I want to look like you and show me how to do that? Yeah. I mean, women like my arms. They definitely did. You got a lot of cotton arms and legs. And that was, you know, because I was working out with the guys. And, you know, definitely women. who started to be more comfortable with that. But it was a very slow integration because women were

very panicked that they were going to become too muscular. There was that for many years, the fear of, oh, I don't want to get bulky. I don't want to get big. I liked what was going on, you know, in my body because you were strong. I just really liked it. I like all aspects of it. So, but, you know, a lot of women weren't quite ready for that. You, in your first like a few years there, you and the man you moved out with, a husband, at the time, you divorced when I think your son was little, maybe a year or too old. Right. How did you deal with that at the time?

I mean, I can't imagine. I kept to imagine that was a really hard time for you. Yeah, he was two and definitely, you know, definitely one of the major hurdles when you look down the hurdles of your life and the challenges of your life. Listen, we were together since we were 14, 15, small town. Falls and nothing majorly happened up and beyond. We've kind of, you know, grew into two different people. You were so young. Yeah, you didn't, yeah. It really was that. But he was a fantastic father to my son. He is like a part of our family now. Nick, my existing partner in him. We've all

go and spend time at my home in Nashville, literally under the same roof, visiting my son and the grandkids. We have the healthiest type of divorce that could be. That's awesome. All right. So meantime, you're building this reputation in Florida. And then in like, I guess around 1993, you have an opportunity to jump over to another spa in Miami Beach. This one called the Williams Island Spa. And you end up spending several years there, like I think like six years. And pretty early on, you became the spa director. Yes. And what was that like? I mean, this is 1993. It was, I guess, a luxury spa? It was a luxury spa. This was my dream job. I absolutely love working with the clients. You know, fitness and exercise isn't something that people skip through the tulips and want to do, at least not the masses. You know, you got some that are innately love exercise, but it's not like a massage. Oh, I can't wait to go get a massage, you know? Right.

So it's how do you change that way of thinking for people? How do you really give them hope when they really feel I'm not going to be able to do it? It's too hard. I won't stick with it. All of these doubts, it was that kind of challenge that I loved. And then even more doors started opening where I wrote a fitness column for the Miami Herald. I did fitness tips on Fox News in Channel 7 and Miami. And then I started doing celebrity boot camp.

So soap opera stars from New York would come down for a week. I gave them the idea because I used to do this at Bonaventure Spa. So they'd come down for a week and I'd have a group of my trainers and myself, and we would put them up and we would feed them, and we'd do everything from rollerblading on the beach to fitness classes. And it was really for the facility all about this great publicity they would get, and they got a lot. Yeah.

It was truly the dream job. Ellen, you, I think, have the kind of personality that you've just got a million ideas. And I have to imagine that while you were there, you were just inundating the owners with ideas like, let's do this, let's do that, let's do this and that. And probably some of those, or many of those ideas brought in more customers. Absolutely. I literally brought spinning to Florida. So I was at a convention and it was great. They'd send me to every convention and I'd want to go. and I saw Johnny G. in the corner who, Johnny G. invented spinning, and he's in the corner with two bikes, and I go over, and I'm talking to him, and he's from South Africa. He's got this accent, and he says, you know, this is great workout classes on bikes in a group. And, you know, I'm kind of looking a little sideways going, oh, gee, I don't know. He put me on a bike. He put me through, like, I think a half hour, and I was like, oh, yes, yes, and yes. I went back to the owners, and I said, please, let me.

bring in 10 bikes, you will get ridiculous publicity from this. And this is like 98, 99? Well, yeah, way before it was out there. Yeah. Because I remember when I was a kid, we had like an exercise bike. Those existed, but spinning was different. Yeah. This was new. Absolutely. So they were like, okay, Ellen, I said, listen, don't worry about it. I just intuitively felt there was something to it. Yeah. Well, we brought it in. And- You brought 10 spin bikes in. 10 spin bikes. Okay.

People, I mean, there were wait lists beyond wait list, the Miami Herald, the sunset, and all the newspapers, the TV stations. What is this weird class? Because it wasn't. It wasn't out there. But you're absolutely right. I was just always excited about innovation, about, you know, what's next. Yes, you're spot on. All right.

So you start spinning classes there at the gym. And everything's going great. and you get fired. I did. 1999. You're 43 years old, I think, around that time. What's going on? So, you know, these were private owners, and I'm me.

And I was always into continually wanting to do more and grow. And I think I was feeling that the four walls were maybe, you know, a little tight. And I wanted to do some things on the outside more. You were entrepreneurial. Exactly. But you were an employee. of the Williams Island Spa, and they wanted you to focus on their business, understandably. Exactly. Yeah. And I probably pursued a few things that, you know.

What did you do? So Fort Lauderdale didn't have spinning. So my friend owned a gym. And I had conversations with him of, you know, want to partner up. We put 15 bikes in. Now I had this kind of down to a science. And, you know, he was like, yeah. And so. So let's bring those. And so you bought some bikes or you bought them together? So we got them together and we were going to do this little, which I had discussions with, you know, my owners about this. Wait, they found out about this. Did you try to, did you keep the gym quiet? I had conversations with them in the early stages about it. Then, yeah, kind of silent. Then they brought me into kind of, is this something you're doing? And I said, yeah, I really want to do this type of thing. And they said, well, then we need to part ways. Wow. And it was like quite scary because again, I'm like out of a very good paying job. And, you know, I've got a nine-year-old son and I'm single parenting. And but again, it was just this like, there was obviously an itch that I had to scratch. Yeah. But at that moment, of course, you're sitting in, wow, what did I do now?

Yeah. So basically get up the next day with that ache. in the pit of your stomach, and, you know, really decided, you know, and this is where, you know, my father, he was still alive then. He was such a great influence. He was one that focused on, so there's a sports psychologist theory called momentum shifting, and you can momentum shift up positively or down negatively. So, you know, your team's losing, your players are not performing. Instead of focusing on what's not going right, focus on what they do well, have discussions about that, put energy into that, and that's how you will close.

I'm out of that. And he was lived by this whole momentum shift up theory. We actually had discussions about that at that time. And you called him and you said, Dad, I've got to leave this job or they're basically asking me to leave. Yeah. And I don't know what to do. And do you remember what he said to you? You know, he made me start to think about, well, what do I do well? What can I start building off of? So I did get that little concession, spinning concession going. And that brought a nice supply. Not a lot, but at least some finances in. And then I started doing Pilates because I went and got a Pilates certification. I just kept certifying and everything.

And I bought one machine. I put it in a spare room next to my son's bedroom. And I had solicited the women in my spinning classes to come and do private Pilates with me in my home. And that's how I started my entrepreneurial hanging of a shingle. It's a spare room next to my son's bedroom. When we come back in just a moment, how Ellen moves from that spare room in her house to her own studio and how an unexpected windfall from Cole's department store

helps her grow even bigger. 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 around 1999, 2000, and Ellen is teaching Pilates out of a spare room in her house. house. She'd love to open her own studio, but she has no money to do it. And then one day, when she's literally getting her nails done, she stumbles on an opportunity. I did my nails at a spa that had two floors. The second floor, the woman who owned it, had kind of a storage room,

1100 square feet, that she just stored stuff in. The girl who did my nails, I was telling her all about, and I said, you know, I don't know. I just feel like there's something to this Pilates. I think if I did it in a group setting, no one was doing Pilates with 10 machines. Absolutely not at that time. No one. As a matter of fact, when I went for certification, they kind of poo-poed doing in a group.

There's no way you can do this in a group. You've got to correct people too much. But my brain just works differently of how I saw it. And so I just felt there was something to it. And so I, she said, talk to the owner. I'm going to set you up with a meeting with her. I talked to her. She said, I'll take the boxes out.

Let's figure out a year-to-year lease, so I didn't have to go hang a shingle anywhere. And Nick, my partner, who now were 22 years being together at that time, we had been together a couple years. And he basically said, I will loan you the money to buy the machines. And I bought 10 Pilate machines. How much did each one cost, do you remember? Oh, they were pretty expensive. I think the whole thing cost about $38,000 that he loaned me. And I bought him right out.

and I put them in there. I figured out how to do it in a group. I was only doing one-on-ones before, but how would I teach? But now you had 10 clients. A group, that's right. But that's right up my alley as kind of figuring out group fitness, a little out of typical lane. Yeah. And it exploded.

And I paid Nick back in four months. Wow. And were you leading all the classes? Was just you in the studio and you teaching all the classes? were you able to hire somebody else? There was me and one other person, but I was absolutely teaching morning, night, and Danielle. Wow.

Yeah. So you were there all the time running this thing. And what was the studio called? So it was called Ellen Studio Fit. And it was just Pilates. Just Pilates. Okay. Tell me a little bit about, because Pilates is a lot of core exercise, right?

But there's not a lot of resistance or impact, right? So Pilates is about your stabilizer muscles. So you have muscles at your joints, at your spine. They stabilize your bones, muscle to muscle. They are your inside muscles. That's how I look at them. You have outside muscles. You work out in the gym.

These are your inside muscles. So, yeah, they're going to make you from the inside out strong. This is going to prevent injury. This is going to give you better posture. This is going to give you more flexibility. And many of the women saw differences in their trunk because the trunk is the main stabilizing, you know, muscular for your arms and legs to work off of. So they started seeing all this reshaping.

And that's what they absolutely loved about it. And it was all women, your customers. Very few men. Very few men. All women, although a funny, exciting story. One of my women clients was Matt Damon's wife now, Lucy. She was a bartender and Miami, and he is still married to her, a matter of fact. And so she's coming, taking classes when she was just started dating him.

And I don't forget her telling me one day. So I'm going to bring my boyfriend to class, do you mind? And I said, absolutely not. Of course, bring him. And he goes, well, he's kind of like a movie star. And so it was right out of the gate like Matt Damon's taking a Pilates class. Yeah. So the Pilates Gym, as a standalone Pilates Gym, lasted for about four years.

Is that right? Yes. Okay. And you, because of a variety of things, you have to move the location and you were getting feedback from clients that they wanted something more, you started to think about like a new fat-burning workout. Correct. So they were looking for a workout that would burn fat. They would be of a cardio workout.

And Pilates didn't do that. And then it just so happened that, you know, talk about timing. I guess I've had a lot of fortunate timing. A Coles department store wanted to build right on top of me. Well, my lease wasn't done, so they had to buy me out. So now I had like some money to move to a bigger space and I said, okay, I'll build another room and I'm going to create the ultimate metabolic workout for you guys. So I ended up finding this cheap space, which was bigger and built it out. A friend of mine husband was a builder, so he helped me out.

And I built the first phase of what now is the Orange Theory Fitness workout. All right, let me step out for the story in a second. Ask about the science of weight loss because, of course, this is elusive, right? I mean, it's like the fountain of youth or the Holy Grail. Everybody's been searching for it. But my understanding is that weights and resistance training actually has a bigger impact on weight loss than cardio alone. It's a combination of both. But when you do cardio like we do it, which is interval training, you are asking the human heart, which is the most important muscle, in your body to exert itself over 80% to 85% and you create what it's called an oxygen debt. So you know when you're puffing air, when you're like really pushing hard? If you do at least 12 to 20 minutes of that in your workout, your body has to repay that debt. So over the next 12, 24 hours, the human cells, your body is working harder to bring it back to that homeostatic state.

So that is what is changing your metabolism, hormonally, all of those good things. Lifting weights is absolutely a great compliment. You want that to it, but you would not not want to have a cardio component. Yeah. And so how did you start to think about how you could answer the sort of the demand from your clients? How did you start to think about a new kind of exercise regimen? Yeah. So that's where I went back on all those years in exercise fizz.

understanding how the human body responds to exercise. And that's when I said heart rate interval training. That is the key. Because what you can do in 12 to 20 minutes of getting your heart rate over 80%, you would have to go jog at just a steady state pace for an hour and a half. So 12 to 20 minutes to an hour and a half pick one. Most people would pick the 12 to 20. So when you want to challenge yourself, especially in intervals, the muscle cells that you want to hit are all in your lower body. You know, that's where the large muscle is of our body. That's where you start to get real. Your heart rate goes up, like squatting, for example.

Correct. Correct. So treadmill's the best way to do that. That's the best piece of equipment. And then we did put strider and bike in there for people with orthopedic issues. Got it. And then the rowers was non-impact power. So think of power as like a light bulb.

So a 100 watt light bulb has more wattage to it than a 40-watt light bulb. As you age, you lose wattage. That's that energy. I need another cup of coffee. You're losing this energy cellularly. So I need to find something that, so for example, CrossFit uses box jumps. So you know how they explosively jump? Well, I knew my knees weren't going to be interested in that. And my women weren't going to be interested in that. So I had to figure out what could I find that would give the same physiologic response, but non-impact to the joints. And I found these rowers that no one was using in the corner of gyms. And so I said, perfect. I'm going to use rowers for my power wattage. I'm going to use treadmills for my interval training. And I'm going to use dumbbells and body weights and weighted balls and bowsus for what's called usable functional strength. And by the way, this was not a new theory. Like, this was the basis of a lot of exercise routines, right? Yeah, I absolutely did not create interval training. It was created in the 1940s. And basically, all I did is put terms. We have

base pushing all out. Base is your aerobic zone. Push is your anaerobic. And all out is you kind of just finish off with piling some lactic acid in the system where you have to walk it off. Right. Basically, the idea was you'd have three different intensity levels during the exercise. The base level, I guess, just your sort of... Arrobin. Moderate heart rate. Yeah. Arobic. And then push, like really getting your heart rate going and then all out getting you to the maximum heart rate, right? Yes. Correct. And so it's really this dance between base and push that you become extremely metabolically charged, and that's how I was training. So that's a part of it, too. Don't forget, I was now at that time, 51. So it was like, there was also an aspect of, what am I, you know, want to do in the next

couple decades without damaging myself? There was this great, varied fitness levels in a class. I mean, I would have a 65-year-old with a, you know, who had heart issues next to a Miami dolphin in my class, and they're all taking the same class. But this is, This is interesting because you're coming up with a new way of exercising this treadmill. There's going to be the rower. And the roer's low impact. That's great. Yeah.

But, I mean, it seems very counterintuitive because if you had to move to a new space. And like from a, you'd already invested all this money in Pilates gear. Like, from a cost effective perspective, like, the best thing to do would have been to, like, just put mirrors all around the walls and a couple of ballet bars. And then done. You got a class, right? Like you don't have to buy any equipment. Now you're talking about treadmills and rowing machines. I mean, that's like...

Insane. Yeah, that's insane. It is absolutely. And even more insane is that I had not piloted that actual program. So I'm running my women around parks doing base pushing all out. I've got bowsos in the parking lot doing... Those bowsu balls are like a half yoga ball with a rigid back. And you can stand on it and use it for push-ups.

And you were using Bosu balls and things like that to experiment to figure out what worked? In parking lots. In parking lots. With whoever would sign up. Exactly. Well, I had this group that was, you know, very committed to me. My Pilates women. So when I opened up that studio, I spent every penny on the treadmills.

I wanted to pay everything all out. You know, that comes from my father, a family thing. Not a lot of things you got on credit. You're paying stuff out. And I did that and I'm like, oh my goodness, what if this doesn't work? I just signed a five-year lease. I have all this equipment in there. And I just, again, we get back to intuition.

We get back to what's in your gut that you feel. I just feel that there is no way people aren't going to exit there without results. So how many treadmills and rowing machines did you initially buy? Ten, ten treadmills, ten rowers. Ten rowers, ten treadmills. And when you start it, like when you bring people, People in, you're like, okay, we've got the rowers and the treadmills and the bowshoe balls and just like list in the weights and just follow my instructions. Like, that must have been weird to like go into a room with like 10 treadmills, 10 rowers behind it, boosie balls and weights.

And like, how do people react initially? Oh, my gosh. Again, I wish I had like video on that in the early days because it was literally a three ring circus. And there was a lot of trial and error. let's face it, you know, and the fact of figuring out like I had people running into the bathroom throwing up because they over-exerted, and I had to really figure out like how to bring them back with language, with, you know, the design of the template. So there was absolutely a learning curve. Thank goodness. Many of those early members are still working out in that original studio doing this workout because they found such success with it, but they stuck with it even through the learning process. So initially this was called the ultimate workout, right? That's what you called it. Ellen's ultimate workout.

Ellen's ultimate workout. And it was an hour, right? Roughly an hour. What did, I mean, just from a business standpoint, right, how did you make sure that this was going to be sustainable? Because you had invested a lot of money in all this equipment. Walk me through the math. Like you had to charge people for the classes and you needed the classes to be full. Yeah. You know what's really crazy then? I didn't even sell membership set. I only sold it by the class. By the class. That's really crazy. So you have to really be performing if you're talking about, you know, you're only getting paid for people showing up in that class, not just a membership turning over every year. So, you know, it really forced me to not only be a great performer with

this kind of workout myself, but start to train other coaches to coach this workout as well. Yeah. You know, listen, in the beginning, it was a crawl. It wasn't like I was packed out of the gate. People were a little like, whoa, what is this? Oh my God, it's too hard, but it had some sustainability. And I think that comes from the performance end of things, of me getting on that floor, Vinnie getting on that floor, who was my coach at that time, and just really making sure that people left there feeling noticed, making sure you did a great job, you know, really things that are more important than just going in there and killing a workout. Yeah. And Who were your customers at that time? I mean, who were your typical? Was it like a super fit woman between 25 and 40?

It was probably women 25 to 50. It wasn't super fit because, again, I wanted to really appeal to, you know, like I said, my Pilates women, I had a variety of fitness levels. And that's where, you know, we really worked from the front of the house, the front desk, to the coaches, making the first workout, the first workout, the first. five workouts, you know, really down. Just walk. No jogging. Don't jog. I know you can jog. Just walk it today. Walk on the treadmill. Don't run. Don't, yeah. Because the key was making them successful. I knew that if they exited the front door going, oh, I can do that. They'll come back. Our oldest member is 95 years old in Colorado. And, you know, people can do the workout. And so that was, again, this was not yet Orange Theory. This was Ellen's ultimate workout. And how long do you think it took you before you were, you could kind of

breathe the sigh of relief and say, okay, this is working, this gym is working. Good. We got it going. It was probably a good year, a good year that, you know, we figured out how to really design these templates that, you know, we weren't killing people, but we were really... And when you say we, it was just you and this guy, Vinnie? So there was Vinny, there was myself and there was Casey who actually now owns my Ellen's Ultimate Workout Studio. Oh, wow. Which still exists. Yes, absolutely. And the ultimate workout still exists and is very busy there. So there were the three of us that were coaching classes. All right.

So you've got this going. And it takes about a year before. But then now you're kind of in a stable position. You are not sitting back and thinking, okay, Ellen, now am I going to conquer the world? That was not what you were thinking. Absolutely not. I was thrilled. I was like, oh, my goodness, look what's happened.

I literally started working out of a spare room in my house. I did this like little build over time. And I have this great place that people love. I love going to. It's I was thrilled. All right. So you've got this gym that is pretty good, doing well and making a living. And I guess one of your clients, she mentions to you that her husband, a guy named Jerome Kern,

is like an expert in franchising and that you should meet him. What do you remember about that? Correct. So she came to the front desk one day and she said, Ellen. What's her name, by the way? Her name is April. April. And she, you know, said, look at this workout is crazy. It's waitlist only. There was a wait list to get on. Yes. And so she said, you know, listen, my husband and his partner are in franchising. They were big in the massage MV world. He owned, you know, a whole region of massage. M-B. Massage NV is like a massage. Massage franchise. And his partner worked for the company, Dave Long.

They partnered off and they created their own franchise company. And they're looking at concepts. And she said, I told them about you. I said, you've got to meet this woman that's got this thing going on over there. And guy, really funny how the story goes. I remember exactly that moment and looking up at her. And just the franchise word was very frightening to me. It was the unknown.

And I looked up at her and I said, April, you know, that's great, but I know nothing about franchising. You know, I don't think so. And she left. Yeah. So what had happened was I went home and I'm like telling Nick and my sister and, you know, this is so crazy. This one of my clients came in and she's, and they're like, uh, entertain it. Have a conversation. Have a conversation, of course.

You know, if anyone could pull this off, you probably. could like get in there and give it a good run. And so she came in like the next day and we're talking. And I said, you know what? Why don't we connect? And Jerome ended up coming over with Dave. They took a class. We sat down, had a conversation.

And I got to tell you, I don't know much about partners and business because this was my first. But we decided to give it a shot. When we come back in just a moment, why Ellen decides to trust two strangers with her business and how it grows from one gym to over a thousand in only nine years. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to how I built this. So it's 2009, 2010-ish, and to expand her business,

Ellen has joined up with two franchising experts, Jerome Kern and Dave Long. They plan to open a pilot studio in Fort Lauderdale with the same concept is Ellen's Ultimate Workout, but with different branding, starting with the colors. My room was red at Ellen's Ultimate Workout, so they said, you know, why are your walls all red and this? And they said, well, colors to me represent energy. And red is dramatic and intense. And so they said, well, we don't want to copy that exactly. You've got your studio there. They said, and so we talked about colors. And orange is another very dynamic color that's about energy and all of these great things. And orange was like a close.

sister to the red. Yeah. And then I don't know. I think it was Dave who came up with Orange Theory because, of course, the theory is you need to get your heart rate in that anaerobic zone 12 to 20 minutes. And that's how the name came about. So Orange Theory was going to be the new name and it was going to be. So Ellen's ultimate workout would remain.

Correct. But Orange Theory would be spun out of that as a new brand and you open the first location not too far from there in Fort Lauderdale. It was in Fort Lauderdale. It wasn't good like 25 minutes away. It wasn't right. Yeah. And how long did that take to build that out? Well, that was, you know, yeah, we had to figure out what does that mean. What does it look like? How big is it? What is the best footprint? So that was small. I think that might have been about, was that 2,900 or 3,000 square feet. We started identical, the 10 treadmills, 10 rowers, 10, you know, weight stations, that type of thing to my studio. You know, and then we had to start writing manuals. You know, basically the three of us are looking at each other. and going, okay, you know, how do we do this from the ground up? I mean, they knew franchising, but, you know, if you're going to duplicate this, you have to find ways that you're going to be able to do it and it not be about Ellen. So, interestingly enough, in the early days, they basically said, just so you know,

you can't coach here, you can't show up a lot here. We have to prove our concept that this can be duplicated and it not be about Ellen. Right. So that's what the challenge was. make them put cameras in the studio because I wanted to see how the coaches were coaching it. So I did negotiate that. I mean, they're right that to scale a business, you've got to depersonalize it, right? Yeah. But what I'm wondering is, I mean, here you had this concept without any desire to franchise it. But then you had two people who knew how to franchise and saw in your concept and opportunity to franchise it, rebranded it Orange Theory and said, let's try this, right? But how did you protect yourself?

Like, how did you guys figure out? Because I'm imagining they were putting in some investment in it and they were going to put in some money into it. How did you make sure that you could still control it or own most of it or all of it or I don't know? Oh, yeah. I definitely got great counsel. And luckily I had, I mean, these gentlemen are just so legit. It's not funny. I just was so fortunate to have men who respect me every step of the way.

who are, you know, supportive of me and my ideas. And, you know, look, this is different as a woman coming in because, like you say, you don't know what you're getting involved with with individuals that you don't know. And, yeah, I lucked out. You were 50. I'm sorry I keep repeating your age at the time. And I'm just saying it because it's awesome. Like, I want anyone to hear the story to understand that you can start a business at 55.

Yeah. You can start a massive business. at 55 or 60. Like, you can start a business that would become a billion dollar business. And at the time, did you have a patent on this? Could you patent it, this model? Or could any of it? I mean, in theory, Dave and Jerome could have just taken the class and taken some pictures and been like, let's just replicate this.

Yeah, possibly. I mean, actually, some people tried to do that. And it just didn't, like, take off. Yeah. When I had it at Ellen, some people flew in and heard about, you know, this woman who's doing this workout. and this and that. But, you know, gut-wise, I felt, you know, Jerome grew up in Buffalo, you know, right in my backyard, which was very, I felt there were these signs, you know what I mean, guys, there were these signs that said, I don't know, I think like we're good. All right. So the Orange Theory, Jim opens, and you're not really allowed to go there much because they want to see if it's going to work. But presumably, from day one, the idea was, let's franchise this concept of Orange Theory.

It was. And look, we felt, even if we have one of these, two of these, three of these, let's just do the best we can with. And if, you know, that's all we have, then we have three fitness studios we share together. I mean, I remember those kind of conversations amongst us, which I think are important as opposed to sitting around a conference table and going, you know, let's, you know, these kind of bizarre expectations and you're maybe not paying attention to the important things. All right. So you have this first gym. And the idea, and it's amazing to me that's just 2010. Here you are in 2023 at the time of this recording, and we're talking about something just 13 years ago.

But one of the ideas, I guess, is to bring in technology, right? Your concept exists. Your concept was there. It's like, get your heart rate to one of these three zones, right? Like, you want to be between 70 and 90% of your maximum heart rate for most of the exercise, for most of the hour, right? Yep. And so the concept was there, but there was no, you weren't like giving people heart rate monitors or measuring them. But these guys, your partners, they suggested let's bring this technology into the studio and make that part of it.

They did. They said, you know, listen, Ellen, you always talk about what you do not measure. You cannot improve. Yeah. What if we did that, you know, legit with everyone having heart rate monitors? So at that time, the only company out there was Polar that really was doing it. Sure. Doing it.

You strap it to your belly, I think, right? Yeah. So we started with them, and the guys just really wanted to keep forging forward in this, that they felt that here's a real unique path and lane for us to not only the workout that you created, but having this valuable information that our members could have in regard to heart rate response. Yeah. And who is up there? Like with Peloton, right?

There's like leaderboards. and you're kind of competing against other cyclists. This is different, right? You're not competing necessarily against the other people in your class. No. Our emphasis is competing against your last best performance. You know, you're only going to have so many people that are always on that leaderboard. We offer that.

We put that on there for some people who like that. But our emphasis is working against yourself. And the model is not a membership model. Oh, it is. But it's not like a – you don't have to sign it for a year. It's like a month-to-month thing. Correct. Correct. You know, I'm curious because it's a very – and depending on where it is, an exercise gym can be very risky and isn't necessarily guaranteed to succeed. I mean, I think lots of people listening have been to empty gyms, right? You know, especially in areas where there's a lot of saturation.

I mean, did anybody say, you know, there are a lot of gym concepts out there like there's bar, there's this, there's that, you know, this is just risky. We were told constantly, don't do this. Don't put your own money in this. There's too much in fitness out there. Absolutely. We heard it over and over and over again. Yes. And that didn't scare you? You know what? Again, I think that they believed in me in regard to the workout and we just agreed to reinvest. You know, they still had business and massage envy. I still owned Ellen's Ultimate Workout. So basically, we agreed as partners to put every bit of money coming in, invested back into the company with heart rate monitoring and these types of things that would truly differentiate us. I think within 18 months, there were 12 Orange Theory studios. Were they all franchised? They were franchised?

Correct. And listen, in the beginning, they, you know, it was. It was a lot to work out. We had one in Arizona. We had, you know, most of them being built in Florida around us, which made it easier to control. Yeah. But from what I understand, the first few franchise units did not actually perform well. Like, this was not going well initially.

Right. What was the problem? Were they just not trained well? Yeah. I mean, you know, I think it was, you know, do we have the right partner who is the franchise And also, you know, some of our systems needed to be, you know, the three P's we say are really what create great success in franchising. You have to have the right people, the right processes, and the right program. Well, the right people is your franchisee, your staff, so and so forth.

The right program is like, again, the workout that I created. Well, the processes are the system. How are you checking people in? How are you following up with them? You know, those we needed to maybe tighten up a little. So we stopped franchising. We worked on our processes. We worked on the program, the training, this type of thing.

And then we reopened the franchising concept. And that really worked well for us. Ellen, how did you guys, I mean, you'd gone from running this one gym and teaching classes, and then, you know, you had some employees. And so you were kind of overseeing it. But now you've got a growing, you know, even with 10 or 15 or 20 franchises, it grew very quickly, your role changes. Now you are in a corporate setting. You're a part of the corporate executive team. Tell me how you guys divided up responsibilities. Did Dave and Jerome focus

on the business and operations end and you focused on the branding side and being a sort of a brand ambassador? So the three of us each have these great strength in our lanes. So I consider myself like the artist. So the artist is the one I created, right? art of the workout. Then we see like Dave Long as the manager. He manages the business. He's a CEO, and Jerome is without a doubt an entrepreneur a thousand percent. His concern is, how do we open up 10 more? Ten more, 10 more. But my intentions never changed from 50 years ago when I got in this business was I really had the desire to offer great fitness to people. And then the other half of that, was to allow a fitness environment that a fitness professional who wanted to work in it could make a decent living.

Those were two things that I often found lacked in the fitness industry, and that's why a lot of people got out of getting into fitness. It was like a side job. It wasn't like a career. So I love the fact there's more and more fitness professionals now I'm giving work to. Yeah. How did you, I mean, the growth of this business just, exploded. Like you open the first location in 2010, right? By 2014, so four years later, you've got almost 80 studios by 2016, you have 400 studios in six countries and 40 states.

I mean, that pace just seems totally nuts, just such a huge explosive growth. I think, you know, did you, up until this point, your whole life, you had. a very clear way of living. You were teaching classes. You were running gyms. It was one location. That's what you did. Now in your 50s, you completely change the way you live and work and structure your time and your life. So how did you cope with that? Yeah. It's a lot. And especially now, I'm 67 years old. So it's a type of thing where I guess because this came to me late guy in my 50s, I spent a many a decades living a certain way. So I'm not really living much different.

I have the same friends. I have the same circles, the same things that I do, this type of thing. If that makes any sense. Yeah. And it's interesting because a lot, I mean, there are some businesses where the people start them when they're very young. They don't have any kids or a mortgage. There's some businesses, of course, people start when they have kids and they make it work. And then you started this.

Your kid was already older. You didn't need you to like pack his lunches anymore. Exactly. He living on his own, he co-owns four Orange Theory studios. He lives in Tennessee. He's got three kids. He's, yeah. Let me ask you about COVID. Right before COVID, I think you guys had about 1,200 studios in 22 countries. What happened during COVID? Yeah, no, COVID was horrible. We have 1,500 studios open and 1,500 studios closed. That just was devastating. We pivoted as quickly as we can to go to Verde. But that didn't really cover it. No. We just needed to do what best we could for our members and for our franchisees. You know, that was of our greatest concern.

But what did you do during that time? How did you – I mean, you guys were probably in crisis mode. Was there ever a moment where you thought this is not going to – this is going to survive? I don't think that. Luckily, coming out of it, people – do want to be in a studio concept or in a group concept. They don't want to exercise in front of their TV. And we have found that since 2021, we've increased our member base by 51.

And we just feel by the end of this year, you know, we'll be back pre-COVID. Yeah. But it's very tough. It breaks our heart because, you know, our franchisees are our business partners. And there was a lot of struggle going on. Absolutely. Absolutely. This is, I mean, today I think you've got how many locations, about 1,300?

1,500. 1,500. Okay. 23 countries. I mean, it's just remarkable, right? And this was not your intention or your goal or your expectation, but it made you rich, like later in life, which is probably, I have to imagine, totally unexpected. Totally unexpected. Absolutely.

And I would even say that when I'm teaching classes. I'm like, okay, guys, let's make it through our 70s, 80s, and, you know, hopefully maybe even 90s. You're still going to see me here. But, you know, what really excites me is this huge platform to be able to do what I had intentions doing 50 years ago. And maybe then I was only doing it for, you know, the group of 30 women in my class or the spa that I managed who maybe had 300 members to have like a million individuals who have been touched by this workout and have made their life better.

Listen, does it get much better? Yeah. By the way, do you ever teach classes anymore? You know, I just stopped before COVID. I was coaching right up to before COVID, and then I just really haven't gone back to actually coaching. So, yeah. Yeah. And do you take the classes yourself regularly?

Oh, yeah. Absolutely. Unfortunately, right now with the knee, I've got some things going on, but once I get my new knees, I'll be ready to go. And so how do you adjust for that? Because I think that's a bit. big market. I think I think there's a huge untapped market of people who did run, did yoga, did pull out, did stuff and then had hip replacements in their 50s, 60s, 70s. And there's no one who's really like this physical therapy, but there's no classes that are geared towards people

like that. Yes, I was just talking about this. You know, I talk about that 95 year old woman in Colorado. Do you know that she joined mid-COVID, the Colorado studio? And she sent me a picture. with her mask on. She was taking class. I said, how are you doing this, Betty? Tell me, explain, what was your thinking? And she goes, I know all about what goes on with the heart and the lungs. And I've got to fight that now. So why would I not do this? So it's just, you know, an attitude. And I'd love to get out there more with people to say, give it a try. Yeah. I wonder, Ellen, when you think about what happened, because this is just one. last 13 years of your life, right? Before, it was like your life before, which is great. Like,

you really built a great reputation and then the life after. And what happened, the explosive growth of this concept and all the wealth that created and jobs and all these things. How much of that do you attribute to you, your hard work, your intelligence, and how much do you think has to do just how lucky you got? You know, look, I definitely have been described as relentless. and, you know, I grab out kind of a dog with a bone and, you know. You don't let go. I really don't. And that, you know, may come from way back by father.

So whatever I'm doing and it could be a menial thing, I'm going to do it at the best that I can do it. Yeah. I'm an intentional learner. I was just listening to a webinar on how heart rate response when you're on a bike, how response when you're on a treadmill, how response when you're on a rower. Just the other day, you know, my design team laughs at me at corporate. They're like, are you only...

never stop, will you? So intentional learning, I think absolutely being relentless was a big part of success. I think that, you know, many people are in jobs that they're miserable at. And what a thing that I'll contribute to my father as well. When I was in high school, I remember asking him, gee, dad, I don't know what to do. What do you think I should be? What should I take in college? And he looked at me and said, I don't care what you choose. I just want you to be passionate about it. He goes, because when you're passionate about something you do, you will always find work and you may find even a lot of money one day. Wasn't he brilliant with that advice way, way, way back then?

That's Ellen Latham, creator and co-founder of Orange Theory Fitness. By the way, a few years ago, Ellen had the opportunity to honor her dad, Art Calendrelli, on the very football field where he spent much of his life coaching. He probably never made more than $50,000 a year. It was the happiest man walking around day to day. And I was able to get the football field that he practiced years and years and played games on, named after my father. So it's now the Art Calendrelli Football Stadium.

And I give two scholarships every year to football players that would need it to go to college. And that's probably a major thing I'm a proud of. Hey, thanks so much for listening to the show this week. Please do follow this show so you don't miss any new episodes on Apple Podcasts. Just click the plus sign at the top of the app. And on Spotify, just click the follow button. If you want to contact our team, our email address is hibt at ID.wondery.com. If you want to follow us on Twitter, our account is at How I Built This and mine is at Guy Raz.

And on Instagram, we're at How I Built This, and I'm at Guy. Dot Raz. This episode was produced by Alex Chung with music composed by Rumtin Arablewee. It was edited by Neva Grant with research help from Sam Paulson and technical assistance from Patrick Murray. Our production staff also includes Casey Herman, J.C. Howard, Carrie Thompson, Kira Joaquin, Elaine Coates, John Isabella, Chris Messini, and Carla Estabez. I'm Guy Raz, and you've been listening to How I Built This.