The Sevan Podcast - Chris Cooper | CrossFit Affilate Owner Show - MUST LISTEN

Episode Date: August 25, 2024

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Oh, damn it. Van, we're live. Matt Sousa on the right, Sevan on the left, matching apparel, of course. Dead Center, founder, Chris Cooper. What's up, dude? Thanks for doing this. Yeah. You know, I have CEO printed on stuff, but it's baby onesies that we sent to Jim owners.

You'll be very into my lawyers. You'll be very into my lawyers. You'll be hearing from my lawyers. Baby onesie. Yeah, baby onesies. I can drape them over my shoulder maybe and something like that. Before we get started, I want you guys to know that the state of the industry report, this is the one from last year. Yeah.

The surveys that make up this great indispensable book for all gym owners. I would say even business owners if you just want to see just what a state of the industry report looks like but absolutely a must have for all gym owners. It's free. It's put out by two brain. It's beautiful. It's easily. What's that called when you can eat something, process something? Consume. Consume, consume, palatable, palatable. Easily palatable with big pictures, big,

the numbers are big, the prints big, and tons of information. So the survey is for all gym owners to take. A link for the survey will be in all of our show notes moving forward until the survey closes. How long is the survey open? Tell me September 13th, I think. Okay. There's a do it today. Yeah, do it today. Why do I do on tomorrow? What you can do today? Why is it important for affiliate owners to and gym owners to participate in the survey?

That's a big question. But the bottom line is like, this is how we help gyms grow. And we don't just do this for people who are in the two brain mentorship program. We publish this and give it to way to anybody who wants it. And, um, you know, every micro gym owner is kind of like an island unto themself out there, they're trying to figure things out. They're doing little experiments, but that takes way too long and it's way too expensive. And if you screw something up, like it really hurts your business. So what we started doing back in 2018, first I pitched this to CrossFit HQ and they didn't want to do it. So we just

started doing it. We started collecting data from as many gyms as we could through the survey and then through partnerships like Spotify, PushPress, Kilo, and figuring out like what exactly are gyms doing? I mean, if you're a gym owner out there, and you want to know how much should I charge, like the best thing to do is not go into a Facebook group and say, how much does everybody charge? The best thing to do is say, well, looking at the data from 15,000 gyms around the world, here's the average price of a CrossFit class, you know, and like, that's in here. How many gym? How many clients does the average gym have? Like that Yeah, everything like you want to know that stuff so you can make decisions. And, you know, the reason that gyms fail is not

because the founders run out of passion, they just hate the job. It's like they run out of money, because they don't know how to make business decisions. And they can't make business decisions without data. So we just collect the data, invest in publishing it and analyzing it, and then just give it out for free. And we ship thousands of copies of this every year on my dime. And we give it out in digital format to thousands more. Just just a quick personal training, how much the average gyms charge nutrition coaching,

how much money, how many gyms do it? How much money does that bring into gyms, how much does it cost them, how many people use it, gyms that sell supplements, what part of their revenue is that, online coaching statistics, is that valuable, how much do people charge, how many gyms do that, how long the retention for people in gyms, what's the average, it goes on and on with every question you could want. Cost for a coach to run a class, as I mentioned. How much are you paying? How much are you paying? Number of full-time coaches versus part-time coaches.

You see all the ratios for all the gyms and what they do there. New member retention. I mean, it's all in here. A running ads, who runs ads? What value do you get from ads? And this is all, these aren't Chris's words. These are from 15,000 gyms around the world of which about 50% of them are

a CrossFit gyms. Yep, exactly. Yep. And this year we'll segregate them out a little bit more too, so that you can see like, what is the average price for a CrossFit membership versus what is the average price for, you know, strength conditioning gym membership. And, you know, we do want people to be making the best decisions they can. And so we'll just continue to collect a bigger and bigger data set and then, you know, make it clearer and clearer for them.

And as like Chris said, he started this in 2018. This is I've started my collection. I have the 2022 and 2023, but they all know as these grow, they're start you can start comparing them from year to year. And there's all sorts of charts and graphs on that. So there's even things in there, the mood of the community, the happening gyms, how long has your gym been open? What would you like to see from leadership? There's some there's some things that are building from survey to survey that are fascinating also. Yeah, it's really fun to see the trends change over time. The pricing is going up, which is good. Some of the messaging about pricing is starting to reach people and people are focusing their attention on things that will actually make a difference in their business now, which is great. And this is just how science is done. You start with here's everything that you could possibly do in your business and let's cut out the things that don't work and focus on the things

that do. And you know this is what's helped TwoBrain. It took us like seven years to produce the first 26 millionaires in TwoBrain in seven months to produce the next 26. And it's not that they're doing things dramatically different. It's just that they're not wasting time doing the stuff that wastes time. They're not doing more things. They're not doing different things. They're just not spending time on things that don't work. And to me, this was the process of developing CrossFit too. You start with a blank whiteboard of let's write down everything that might improve fitness, and then slowly discard the things that don't improve fitness so that we can focus just on the things that do. And that's how science works. And that's what we're doing here.

Chris, I got a question. To your knowledge, is there a- Oh, you sound like a professional business, Chris. is that, did you just push a button to make that kind of thing? Yeah. Somebody online one for you, Chris. That's how old school I am. I've got a, a purple notepad here and I've got an actual telephone in my office.

Okay. Sorry. Is there, to your knowledge, is there another data set, um, uh, you know, more robust or equal to what the state of the industry puts out for micro gyms? Nothing even close to the side. I mean, uh, micro gyms, no, not even close. Um, there are people who do surveys out there of a couple of hundred people.

Um, you know, Ursa they're gone now, but they used to be like the biggest lobby, I guess, in fitness and they did something like this, but they used to be like the biggest lobby, I guess, in fitness. And they did something like this, but they would, their best year, they might have got 10,000 gyms to participate. Ours is just micro gyms and we had 15,000 last year and it gets bigger every year too. So that just, it makes us the most relevant data set out there. And what's happened is that all of these other people who used to do a smaller collection are now just turning to ours and either using ours, you know, for free and giving us credit

or using it for free, claiming that it's their own. And, uh, you know, it's funny to go on YouTube and watch these guys like rip the cover off and then read from our dataset as if it's something revolutionary, you know, it's amazing. Yeah. But it feels good. I know we're excited as a HQs data set to if it's something revolutionary, you know, it's amazing. Yeah. But it feels good. I know we're excited as a HQ's data set

to look at what was happening as well. So that's a pretty big deal right there. Yeah, exactly. Yeah, exactly. So we like to be independent, you know, so that we can be objective about what's happening at HQ and in all the gyms and, you know, in 2018, when HQ declined the opportunity to do this, I was pretty,

you know, beat down for a couple of hours, but eventually just realized like, the data can be better when it comes from somebody outside because it's objective. Also, not only are there other people out there doing it who aren't doing it, but then they're now pushing people to do to two brain. Yeah, not a competition. It's become a let's push gyms to two brain. It's widely accepted as the place to hey, let's just give all our numbers to Chris and make him print this shit out.

Yeah, I mean, it's, it's not cheap. Like if I'm Ursa, for example, I mean, it's going to cost a quarter million to collect this stuff, publish it, lay it out, ship it. Why not just let coop do it? You know, and that's, that seems to be the sentiment. And what do you get out of it? I got on a personal level. Well, personal level is just, you know, the mission continues.

Like the biggest tragedy I think in our industry is we have, we have the solution to the world's biggest problem. That solution is coaching. It's not knowledge. And every year 10,000 new fitness coaches sign up to continue the mission. But every year 9,000 of them go bankrupt. And like they're not quitting because they're unhappy. They're quitting because they're broke. They're not quitting because like they've changed their mind about fitness. They're quitting because they're broke. They're not quitting because like they've changed their mind about fitness, they're quitting because they're broke. And the biggest thing that we can do to enable these people to stay in business and keep changing, you know,

a hundred lives a year for 30 years is just arm them with the knowledge that they need to make money. And you know, when I was in their shoes, I didn't have any of this. I was treating my gym like a Petri dish, testing one thing after another, and it was really hurting me. So this is just our way of kind of like empowering

the industry to move forward. And it's working, you can see it. Like the average revenue in gyms is climbing every year, and the average lifespan of a gym owner is lengthening, and coaches are actually making a living now. And that comes from knowledge and the knowledge comes from data instead of the same old myths. If I could take a stab at that answering that question too, Sousa asked, you know, what's the value to two brain business doing it?

Well, you've heard nine out of 10 people who want to become coaches end up quitting because they can't make it work, not because they hate coaching. Well, the service that you provide is the inverse of that. 90% of the people who do become clients of Two-brain Business have an uptick in financial success to prolong their life in the business. And part of that is you guys being the experts on the knowledge that you collect. As we're really stars. Yeah, thank you.

Just another thing, just so those of you who don't know, Chris, so obviously I profess myself to be the most knowledgeable person on all things CrossFit in the CrossFit space. Behind the, I know, what an arrogant douche behind CrossFit in the community inside CrossFit outside of CrossFit. And while my tenure at CrossFit, we would throw affiliate gatherings. And it's not easy to get affiliates to come because they have to take time of work and they have to pay money and all this stuff. Well, Chris this year, again through an affiliate gathering in Chicago, I talked to him on the phone and he's like, Oh, man, he's, he's like, we had 1000 people show up. And, and we only had 1000 seats. And he's like, Man, I should have

made it bigger. I should have done this. And he's like, I can't believe how great it is. Well, yesterday, an affiliate called me and told me, I haven't told you this, he's a, I said, Hey, you should listen to the show tomorrow. We're gonna have Cooper on. And he's like, Oh, dude, he's like, I'm not even a two brain business member. And I snuck into their Chicago affiliate. He said it was the greatest few days ever. I'm like, you snuck in. He goes, Yeah, I'm like, yes, Susan, he used to do stuff. That's the greatest compliment

ever, right? People trying to break into your into your summit. I mean, oh, yeah. I mean, people trying to steal our stuff is I love it so much because it's unstealable. We'll just give it to you. Right. You know, but like, you know, if this person had called me and by the way, you don't have to be a tube ran to come to our summit, but I think it's awesome that this person snuck in. So yeah, he knew the value of it. He snuck in. Yeah, me too. And he said it was absolutely fantastic.

He said he met tons of great people. Summit crashers is a thing. Yes. See, that's all. Next year, I'm standing Kalipa at the door instead of on the stage. So earn your way in. Get a little muscle out there. Yeah. Last year, there was a huge uptick,

I believe you can get into more specifics if this resonates with you, Chris. Last year, there was a huge uptick in the survey of people who were happy with the direction of the leadership of CrossFit Inc. So we went from basically the short story is we went from Greg to Eric Rosa to Dawn Fall. And as Dawn came in, the survey came out

and there was a huge uptick. I wanna say from 30% approval to 70 or 80% approval. 71% I think, it might've been 73. Do you have any, where do you see that going from there? Do you see it leveling out or do you see it still keep going up? Do you have any, where do you see that going from there? Do you see it leveling out or do you see it still keep going up? Do you have any predictions on that? Well, I mean, empirically, and we are going to collect data on that again this year, but empirically, if you look at like look at affiliate size, for example, right?

Like you don't have to, you don't have to ask me how many affiliates there are. The affiliate number is shrinking and all you have to do is go to CrossFit.com, click on the affiliate map and look at the number of affiliates listed. It's 10,000 and change. And if you look back over the last several quarters, you'll see that that number is steadily declining. And while those numbers are buoyed a little bit by new affiliates opening, mostly Eastern Europe, Spain, Portugal, France, Germany. Those numbers are declining more so in the US and that's enough to outweigh the growth right now. That's one hallmark. There's other ways that you can look at this. If you look at pictures from the L01

certs, you look at a picture from 2009, 2010 through 2014, you'd have 25 pictures of 25 L1 certs with 50 people in them. And you just don't see that anymore. You might see a half a dozen pictures. And so these are all kind of indications that there's still kind of like a, I think a missing link. And, you know, it's interesting because last year when this was published, the news of the the affiliate rate increase hadn't gone out anywhere. Nobody knew. We were first talking about that in November at the Rogue Invitational. And so it will be interesting to see what happens now. I think even with 10,000 affiliates, everybody's affiliation fee has gone up significantly. They're probably making more money, but I'm not sure that like the mission is expanding anymore.

And you know, we can, we can dive deeper into that if you want to. Uh, just really quick, uh, uh, good morning, Brandon. What's up, dude. Good to see you buddy. Hey, Brandon. And an important distinction is you're not claiming that these gyms are closing. Well, the only fact we know for sure right now, just by a quick look at the affiliate map until the survey comes out is that the actual affiliation being, uh, paying the dues to HQ are dropping or are dropping. That's all we can say for sure because data didn't exist in the old days. And so, you know, there was a time when I was hired by HQ and for my first week of employment

2014, they're like, you're going to find stories. So the first thing we're going to do is we're going to set you up with the affiliate team's email address so that when new people are applying to be an affiliate, you'll see their applications come in and you'll see these stories. Well, there were so many applications that after a week I was like, shut it off. I can't keep up. And what was happening back then was like, shut it off. I can't keep up. And what was

happening back then was that affiliates were failing. Nobody was talking about it. And the new affiliates joining, we're joining so fast that the growth was still continuing at a really fast rate. But nobody needed to think it was like one every two hours somewhere in the world. It was great. I believe it. It was like a year. Yeah. I believe it, man. I mean, you know, you were you were

with me in Seattle and like that. When I got linked up to the affiliate emails, you'd see these things come in. And every single one was amazing. You know, and even I can remember this, we're sitting at a table, Greg's right across from me. And he's like, I'll tell you this, when people apply and they say, I want to make money, automatic no. When they say, I want to make a difference, I believe in the mission, automatic yes. I don't care if they've got a bachelor's degree. I don't care if they've got a drug problem in their history. They just get out of prison. They want to make a difference. They're an affiliate. And that's the kind of applications that you used to see coming in. Well, those people didn't suddenly like change their mind

about the mission. They've just changed their mind about poverty and like, oh, I don't know if I wanna sign another three year lease, right? And it's really always money that ends, that ends their tenure as affiliates. Some are deaffiliating now. And that's more a question of like value than cost. You know, okay, my affiliation fee just quadrupled

and the L2 requirements. And so most people out there are going to say, am I still receiving value that exceeds what I'm paying and the hurdles that I'm jumping for it? And so they might keep their gym open, but deaffiliate, we just can't see that in the data. The price did go up a thousand dollars and then the application fee also went up very quickly,

I think from zero to 500 to 10,000. It's a $500 increase too, by the way, not a thousand. It went from 3,000 to 4,500. Oh, sorry, thank you. Okay, thank you. Important distinction to this. So the the increase went up, then the application price went from five hundred to a thousand to then not even being applicable towards your first year's affiliate fees. And just anecdotally speaking, I'm hearing on a regular basis now, probably weekly, affiliates actually entertaining the

conversation of deaffiliating. When before I felt like people didn't want to spend time thinking about it, because it was whatever the price was $3,000. It was like, you know, I don't like that was kind of Susan's thing. Like, hey, the business is so busy. I don't have time to think about a $3,000 problem. It's just like, you know, the bathroom or it's just like your gym got flooded for, you know, one day on a rainy day. But at $4,500, all of a sudden, I'm hearing people say, hey, maybe Facebook ads will make me...

They start looking at Facebook ads and they're like, oh, that'll actually make me $15,000 a year. Yeah. And so people are now taking the time to postulate. You know what I mean? To, okay, what's going on here? Well, are you hearing that too with the price increase? People are like, starting to think, okay. So newer newish affiliates tend to bring up

the price increase, but it seems like they're just willing to kind of swallow the difference. Older affiliates are more likely to bring up the price increase, but it seems like they're just willing to kind of swallow the difference. Older affiliates are more likely to bring up the L2 requirement. And for a lot of us, that felt kind of weird. Like I have people on my team who have their L2. Wonderful. It's a great cert.

I guess I think it's CrossFit's best, honestly. That said, I would have to turn my affiliate over to that staff person. I would no longer be the Affiliate of Record unless I wanted to go with the L2 myself. And so I'm going to weigh that against like, does this actually improve my business? Personally, I didn't know that it's not enough just to have an L2 there. It has to be the owner. Mm hmm. Yeah, yeah. It's if so for me, I had to shift our affiliate to one of my coaches, they're the affiliate of record. Now it's

not even me because they have the L two and I don't. So, you know, a lot of affiliate owners were weighing that. But personally, you know, I interviewed Greg at his kitchen table in Portland and said, Greg, like, why should I still be an affiliate? And at that point, I was a 10 year affiliate already. And he's like, well, like, why should I still be an affiliate? And at that point I was a 10 year affiliate already. And he's like, well, Chris, you know, if I was using something that somebody else had built, I'd want to pay him for it.

Good enough. You know, absolutely fair. But in my mind now, Greg has been paid for it, right? Like that's what Berkshire partners paid him for was the development and the creation of this product. And if I want to continue to use the name, we're starting from square one again, and I'm gonna measure differently.

Before I was paying Greg as like a, as tribute, thank you for developing this amazing thing, this tool that's changing so many lives. Now what I'm paying for has to be measured differently. And so I'm gonna measure that value against a few different things. I'm gonna measure that value against a few different things. I'm gonna measure that against search terms. Are people looking for CrossFit in my city?

Maybe, yeah. Is CrossFit actually driving traffic in my door? Is it the traffic that I want in my door? You know, and some other things too. Like there's metrics that you can use to make this decision. But everybody can look at the same metrics and if the decision was just a logical one, they can make their mind up off that.

But for most of us, the decision is an emotional one because CrossFit still feels like our religion, not just our business. Susa's created this group on this website called schoolskoll.com. And then from there you can search media launch I always just type in SUSE and it takes me there. So this affiliate has been around a long time. And it is a very successful affiliate and it's big and it's beautiful and it's

a it's it's a hub in his community. So and then obviously he's forward-facing on the show every Tuesday with his show where they talk about the business matters. And the other day, so he's been speaking to a lot of affiliates, probably more than he should be. He should be spending more time

with his own clients or with me. He's trying to be with me. But the other day he called me and he said, Oh man, affiliate called me and told me that they don't want to reaffiliate but they're gonna reaffiliate. And I said, Oh, what's the deal with that? And they said, they're a nine year affiliate and they want to make it to 10 years. I get that. Yeah. And so Susan's like, and then Susan broke down. I don't know if you want to talk about Susan, but Susan broke down, like he started going off like, Hey, I was like that too.

And that's that you want to talk about that Susan? That's the emotion that's like, Hey, what's the logic there? Well, my, my whole thing was like, I just felt number one, I wanted to reach that milestone and 10 year CrossFit affiliate was always just something huge for me, so that was a personal kind of thing, like you said, an emotional. And the other thing too, was like, I just feel that. Like we have strength in numbers. So for unified underneath this one name CrossFit, right? Like then therefore we're more effective as a total in what we do. And the thing that I just kept running to is like this, this wait and hold

pattern for year after year after year, like, okay, well I'm going to hold onto this year and let's see, things will turn around. Maybe the new will come up, maybe we'll get more mission, more direction, they're going to invest in more education. You know, these things that I'm hoping that will happen. And, um, year after year, you just don't see it. And so at some point, you know, you got to make the call of like, Hey, what value am I receiving for this? And what am I learning from the leadership?

And the problem is, is that if I can't learn something from that leadership, if I can't be inspired by that leadership, if I can't be driven to get up out of my bed and cheerfully run down to the gym at 5 a.m. to open up that bay door, because I know I'm making a difference and I know the mothership's got my back and continuing to push the message of that mission, then it's real tough to pay the $4,500 because we're also not talking about the real cost, Chris, because like you said, you would have to become an L2. So if that's like a thousand or 1200, really it's not a $1,500 difference that I could

potentially be paying. It's a $2,700 difference. Not in the hotel and the time off and the extra step. And that doesn't include, yeah, all those extra costs that have come with it. So you just kind of ask yourself like, Hey, am I emotionally just invested into this or is there actual real value proposition here? Well, that's this, I think this actually happens with a lot of

companies that totally disrupt their market is they're usually led by this kind of inspirational leader. And, uh, you know, you can look at Steve jobs, but of course, Greg Glassman is that person for us to he totally turned the fitness industry on its head. You know, I was in the fitness industry for a decade before I even found CrossFit. And it's all changed. You know, people use terms like WOD and AMRAP programming, like those terms didn't exist before,

Greg. Right. But then what happens when that kind of inspirational and motivational leader go away is the company kind of doesn't have a head anymore. And so what if you look at like, Richard Feynman called this cargo cult science, have you guys heard that term before? This is cargo cults. Yeah. Amazing story, right? But what typically happens is that the business turns inward and they say, okay, we've bought this thing, this CrossFit asset, and we want it, it's in our best interest for it to remain the same.

So now you have nobody going out and doing science. And instead of doing science, they'll say, well, we're doing it this way because we've always done it this way. And that's the seat that Greg sat in. Nobody moved that seat. And it becomes dogmatic instead of scientific. And the world begins to shrink and shrink and shrink. And so when you're a private equity firm and you're buying this company that's been led by this disruptor, you don't want to keep changing the company. Greg has said in interviews that he's a

product guy, which means he's going to test things and bring new things in. You don't want to keep changing the company. Greg has said in interviews that he's a product guy, which means he's going to test things and bring new things in. You don't want that as private equity. So the first standard private equity play is like grow the market, right? Expand CrossFit to more people. That's great because it benefits affiliate owners,

but it didn't really work. And then a couple of years then you're kind of like, oh, I got to make more money because the investors need to see a couple of years then you're kind of like, oh, I gotta make more money because the investors need to see a return. So now you look inward and you say, how do I make more money from the audience that we have? Well, let's start our own software and sell that to affiliates.

Let's raise the affiliation rate. Let's find somebody on staff that really wants to make t-shirts. We've had like three different CrossFit stores in the last two years. Cooper's over there doing business coaching. Let's start our own business mentorship thing. And that happened. And, oh, let's, hey, here's Muscle, what's the monster energy drink? They want to pay us. Wonderful. Let's take their money. And so you start to like lose the inspiration that came from the values and the brains and

the passion of the leader. And if that doesn't turn around, you know, there's a lot of examples where the company just kept shrinking down. So I think like that's maybe a big challenge that CrossFit has right now is it needs inspirational leadership and it needs somebody doing science if it's going to return to growth. You know what's interesting is when you, you know, Greg's whole thing was chase excellence, don't chase the money. And then it says them was, hey, CrossFit's not giving any business advice and that opened up our best practices advice and that opened the door for companies like to Greg was like, yeah, I'm not interested in that. Let Chris do that. Right. Like I'm staying focused on what I'm focused on. Well, when so Greg's whole thing was just reinventing, like a lot of guys, like you'll see the a lot of these Indian gurus or religious people, all they do, you know, they find the truth, they find the Bible, or they find the Bhagavad Gita, and they just keep trying to repackage the truth, which is cool, right? They keep repackaging the truth, so that it that they're kind of like coaching cues so that more and more people, they point to the truth in a way

that more and more people can understand it with whatever mind they have, right? So you have CrossFit and Greg says in 2018, the cat's out of the bag. I have nothing else to offer. And so that's when he starts the litigation, education, and legislation. And then he's even honest with you, Hey, I'm not really offering you anything. Just pay me because I invented it. And you're like, all right, cool. I mean, it's a really fucking weird thing. I wonder if the people who bought it, if they knew that was the business model, if they would have bought it. But here's what let me ask you this. They buy the company and they have this figurehead when he used to address the company, he always addressed it with vision. Now they have a CEO in Don Fall, who's a business guy.

And when he presents to the community or to the affiliate owners, he doesn't give his vision. He doesn't talk about the world's most vaccine problem or those things. He's more business minded, right? He's more like, hey, we need to, we're going to increase prices here. We need more members and affiliates. We need more affiliates These are things that we never heard from Greg Why wouldn't they was it just because of the Floyd 19 thing? Why when they sold the company when Greg sold the company didn't they require him to stay on?

Because they thought he was that toxic because isn't that kind of a normal practice if you're gonna buy a startup you make the Founder stay on Well, sometimes I mean, it's yeah yeah, I mean, usually when you buy a startup that's really disruptive, you're going to have like an earn out period of two years where there's going to be this transition. And, you know, for example, like Steve Jobs gets fired, oh shit, bring them back. And he saves Apple, right? Right. And I think like what actually happened in CrossFit, and this is just my own personal view through the keyhole is Greg's gone. The first call I got was the next day from Dave Castro.

And he was like, Hey man, I'm going to be here in the transition to ease the transition as much as I can. Like don't deaffiliate, just give us a year. And I said, okay, great. And then 48 hours later, I think he introduced me to Eric Rosa, and I was on calls with him in the first week. And, you know, I mean, there was grow the program again, you have to have an inspirational leader, maybe with even their own vision that might even be a little bit different from Greg's, but it's enough to inspire people to stay on the bus and new people to get on. Yeah. Are you following any of the, what happened at the games this year with the death of Lazar Jukic?

Um, I'm following it. Yeah. Because I'm always interested in, you know, where can we help? And so as luck would have it, if there was any like silver lining in this tragedy is that we had paid to put a mentor on stage in the affiliate area. And the mentor that we had sent was Trace Kennedy, who's also a pastor. At Passy Games this year, you sent someone there.

You paid. Yeah. Can you explain it to me? You paid CrossFit for like 30 minutes to talk on a stage or something? Yeah, exactly. Yeah. In the affiliate lounge?

Yeah, exactly. Yeah. And then, you know, there's other options too. I mean, you know, we could have sponsored the mechanical bullet at the whiskey ranch or whatever, but like, I would rather do something that's actually going to help affiliates. You know, luckily Trace was there. Trace is a pastor. And I said, look Trace, like if you want to get off the marketing message, let's just ask people what they need to kind of process this tragedy on Saturday. And so, you know, he and I stayed in touch

with what was happening there. Yeah, I mean, it's a hard conversation. My question to you is, what effect does something like that? So there's this sort of, you know, really easy, I'm aware that it's a really cheap analysis, not to say that it doesn't lack validity. But there's this event, it's the games. And the New York Times quoted Adrian Bosman saying that the games were initially created

as a marketing event, which is just completely not and I don't think Adrian even said it's completely not true at all. Like, yeah, like zero they like they didn't even allow cameras in there the first two years other than finally letting me come in in 2008 for a little bit to make every second counts. But it was really just because Greg wanted to throw a party. I mean, it's really that simple. That's all it was. And you know Greg, I mean, it's just par for the course. And he just wanted to throw a party for the affiliates. But now I think it's fair to say is that it's this huge marketing tool, right? It's

four, it's the most forward facing thing with the most media with the most beautiful bodies with the brightest lights. And now the 50 cent analysis would be this marketing campaign went on, it's the climax of the year. And the marketing message this year is CrossFit kills, right? I'm not agreeing with that, but that's I think that's how like outside media has taken it. Look at We've been right all along CrossFit's dangerous. It killed the guy Does is that sending a ripple through like do the affiliates even know like I can't because i'm in my in sort of my own

Echo chamber here. Do the affiliate? Yeah, I said it Uh, do the affiliates know does this affect them? my in sort of my own echo chamber here. Do the affiliate Yeah, I said it. Do the does this affect them? Like are there are there affiliates all over the world? Like is this sending a ripple through them? Like holy shit. There's no leadership money to fuck this marketing campaign up and instead of it helping us it hurt us. Is there any of that going on or no? It's well so the affiliates are are feeling it. And they're, you know, telling us that they're feeling it every single

day. And so it is it is coming through your emails. You're getting emails. Oh, yeah. Yeah. Facebook messages. Yeah, quite often. Now that said, you know, we can't we won't know for sure until there's an inquest and there's findings and it's tragic But the message is out there like like the messages out there You're on the message is out there the people who are just reading the headlines already see it They don't care about the investigation or do you know what I mean? Yeah, it's true and where where I think affiliates really need to be concerned is

You know, how does this affect the public perception of CrossFit? Maybe like future clients coming in are going to think it's risky, possibly, but also they also don't see a swimming pool at their local affiliate, right? And, you know, for context, I don't know if it's like six or seven deaths every single year in Ironman events, let alone like the neighborhood triathlons that you see. Where affiliates have to stay vigilant though is the periphery, right? So there's this industry of businesses that support CrossFit affiliates. Insurance is one good example. And we had a call last week, this week actually, from an affiliate who said, my insurance company just notified me that they're not going to renew our insurance because they have quote, no appetite for CrossFit related activities. That wasn't a big insurance company

like Affiliate Guard, you know, Affiliate Guard is like going to fight to the death for affiliates. And RRG, I'm sure is on board to fight for affiliates. It's just kind of like a bellwether that like, Hey, people are doing the swim. You think that had to do with that? You think it's there's no coincidence? I mean, we affiliated our gym back in 2007. My insurance company dropped me that day. And they said that they, they did not aim. You saw they saw the name. They saw the name. Yeah. And I mean, I thought that the world had kind of gotten over this, but the insurance industry has a very long memory. And now I think, you know, back then they were scared of risk.

Now they've got a reason to say, okay, there is some risk here. And so if I'm an affiliate, I want to be watching my insurance premiums when they come up for renewal. And if they've gone up a dollar, I'd be calling the insurance company and saying, why? And if it's well, you've got the word CrossFit in your name, you know, now again, like we're balancing the value of affiliation. And that goes into ledger, doesn't it? I remember being at some gym in it was on the East Coast somewhere, there was like a Planet Fitness or some global gym. And I was doing wall balls. And. There was like a Planet Fitness or some Globo Gym

and I was doing wall balls and they came over and they told me, sorry, our insurance doesn't cover throwing objects. Mine dropped me and when I pushed them on it, this was 2007, they were like, well, we can't insure truck pulls. I said, what the hell is a truck pull? And like, how does that relate to CrossFit?

And then we started doing truck pulls because like, that's Bill Henniger's fault for having that the deuce out there. Hey, that was like when, uh, the, uh, NC fit crew pulled that track, that race car on the track with a rope one time. Don't watch that video and you'll know exactly why insurance, they don't want to help them out. Well, one thing I just want to throw my hat in the ring with that is the fact that when you have public perception, it doesn't matter what the actual truth is.

And we know this very well with how society runs this day, day and age. If we just have a message that's out there enough and it gets repeated enough, that just becomes the truth. And the sad part is, is that we don't often hear anything from CrossFit. CrossFit doesn't, uh, curate or craft its own narrative because it has no voice. It has no media. So then when something like this happens and I get sent the NY Times article from my friends who don't do CrossFit at all in my text saying, look at this, look at

this, that is literally the only narrative and perception that is coming out of CrossFit. And we have no tools and no ammo to fight against that. And so now we're going to have 10 of their high school buddies. You're right. Everyone had 10 of their high school buddies who they haven't heard from in five years, text them and be like, dude, is everything okay over there? And they send you links to the New York times. Yes. This is my experience of literally today in the last two days of, Hey, isn't what is happening here?

Isn't this happening? And there is zero. And this is why I say that media is the most important part. And if you were to say like, what is the value proposition of something that I would want to affiliate with it's a media machine that is pumping every single day at 7 AM live here to talk about anything we want to and bringing on the best people in the health and fitness space and then saying, by the way, if you want a piece of what we have going on here, go to your local affiliate. This is how you do boots on the ground of what we're talking about. And to me, that was the biggest value proposition that happened.

And we saw that shake up a little bit in 2018. But since I was also able to sneak into a DDC, I saw the light of where it could go and where the media was going to go. And that re-inspired me because for me, that was a, that was the mission I wanted to be attached to. So the biggest thing that came out of this is the fact that it's very obvious. We have no voice, we have no narrative, we have no leadership. And essentially the affiliates are now off to fend for themselves with all their friends sending them the New York Times article.

That to me was the yeah, I mean, I was fired in 2018 from the media team, but I should have been that. Well, the rest of the team, everybody above me should have stayed. And unfortunately, you're right. In a vacuum, any news just kind of fills that vacuum. So when I was hired, my first media summit was like 2013. And I'm all starstruck by the people around me.

And that was a big room, probably 120 people there. Greg gets up in front of everybody and says CrossFit's a media company. And I just, it was like, you know, the hallelujah chorus in my brain. Like I, oh my God, I get it. In that vacuum, when you're not hearing from a brand, you're left to fill in the gaps yourself. And unfortunately, outside media is filling that gap with negative sentiment. is filling that gap with negative sentiment. What do you think, and this is a loaded question, I wanna lead you down this path. What do you think the relevance is to the,

of the games, to the success of gyms, just everyday gyms? Well, I mean, I'm not a marketing that HQ has for affiliates right now, because it's largely like the only marketing, you know, I know that there are some some Facebook ad campaigns going on. I think these are largely atrogeant or split like that. That's a different topic. Right now, the best way that we have of spreading the message of CrossFit is to get it on TV is to partner with big brands and let them spreading the message of CrossFit is to get it on TV, is to partner with big brands

and let them spread the message. But if you look at like where the sponsors are coming from now, it's more and more internal sponsors, sponsors that came from the CrossFit brand paying money to be on the stage like to Brain, right? We're going to sponsor the mechanical bowl. It's stuff like that. It's not like a bigger and bigger TV stations are calling to get the CrossFit games on. That said, and you know, that's reflected also in like the audience, right? It's more and more people watching, it's CrossFit fans watching the games, they're watching the behind the scenes more than they're watching the actual live stream. And until you get that in front of a bigger,

bigger audience, a bigger mainstream audience, I think it's gonna like struggle to grow. But I'm not even worried about it growing. Let me, let me more specific. No, no, it's good. Because it was a broad question. Do you think that if the games went away, or were significantly reduced in their size, right? Let's say it was put back next to a lake outside and it was just a two day event. Like more like a party than a than a sport that people are trying to really claim that it is. Do you think

that it would affect the affiliates negatively? Like you think students who loses attracts fewer people or loses people if the games goes away? Let's just say, let's just go there. Let's just drop the axe. Let's say the games. It does affect the affiliates negatively because there's nothing else to replace it that is of interest to broad media. So if you can come up with something else that gets media attention and spreads the mission of CrossFit. Wonderful. Take the games away.

But right now it's just like, you know, nobody can figure out anything better to do to get that message out there. Oh, you think it's successful because it's the only game in town. Exactly. Yeah, exactly. Yeah. It's like, I'm just voting for the best option of the options given. Right.

They've got options suck. One thing just to throw just, uh, just to talk about that for a minute. I honestly think that nobody gives a shit about an athlete doing a thruster or a pull up when they're staring at them in the arena. The only reason I care about that athlete is because I know their story, I know their background, I know their mom had just passed away and they're still out there on this event,

I know that they work at a fucking pig farm and they raise all this stuff and I'm invested in them as a human being. And that's the type of person that attracts an outside audience to actually make me care about them doing thrusters on the floor. When you remove the storytelling, when I don't hear the Valley of Overlord, you know, grading papers in between things, when we don't put the camera on Scott Panchaik's face and he

just talks about his members and coaching his members when you ask him what he's doing on his every day and we take away those stories and we just have the athletes in a fishbowl, you lose any of that attractiveness that would actually bring people in from the outside and then disseminate them to the affiliates. All as we're doing is this circle jerk of like, Hey, check us out. If you're already a part of CrossFit, now you're going to go ahead and watch these people do fast thrusters. My mom doesn't give a shit about UFC, but if we get the tail of the tape, next thing

you know, she's like, Oh, I want Nick Diaz to win. Didn't just see his mom. You know what I mean? And so she's now invested into that. She doesn't want to watch two people roll around on the ground and punch each other in the face, but she's completely invested in the story. And that's why when you were saying that behind the scenes is the most important part, this is why every second counts was so powerful because it didn't show the competition as heat one, heat two.

Here's the bell to go away. It showed the story of the games, the individual athletes and the drama that was happening on the floor. That's what people care about. And we don't even have that at all anymore. So the fact that like the games, I could now make the argument that the games is more harmful to affiliates, even in light, like before this tragedy, especially now than it was ever

before, because they've taken away the storytelling, they've taken away that connection between the gym and the people out on that floor. Chris, let me draw this comparison. When we were talking about people staying on to be, to, to stay on to be an affiliate from their ninth year to their 10th year, just as some sort of abstract goal or some emotional appeal or something that maybe doesn't have validity to the business, because they'd still be a gym for 10 years. I wonder if the games is that to the community in HQ. It's an emotional attachment that people aren't thinking about clearly, because it's always been there. that people aren't thinking about clearly because it's always been there. It could be.

I mean, I'll tell you a story from Summit. So on Friday night, I was getting ready to go to dinner and I had a few of our staff with me in the lobby of the hotel. And through the doors walks Ben Bergeron. And Ben's got his hat pulled down. And he's incognito a little bit. People don't recognize him right away.

By the time he checks in and stands beside me and we're going to walk to dinner, there's 25 of us. Everybody wants to have dinner with Ben Bergeron, right? It's not like, wow, Coop might pay for a barbecue here. It's like, there's Ben. You really know us workers well. Yeah. And I mean, that is the draw. And so why are people so

attracted to Ben? And, you know, that same thing would have happened if if like the current CrossFit champion walked in the door, people would have flocked to Ben, because we know all about his story. We know that he's the coach of this, and

he's got this affiliate, and he was on the staff, and now he's this and he's got, you know, and that's the thing. And people lined up for two hours to have Jason Kalipa sign his book. Why is that? Right? And like, would that happen with the current CrossFit champ? Maybe with Dia, but it's because we know so much about her story. And I mean, it's not just true in CrossFit, this happened in Formula One two years ago. They produced this kind of behind the scenes documentary about Formula One. Now I've got a kid that's a massive Formula One fan.

She's traveling to races and they doubled their TV viewership. The second largest viewed sport in the world doubled its viewership by telling the backstory of their drivers in a year. And then so Tour de France, third biggest watched sporting events in the world, doubled its viewership the next year because they did the same thing that F1 had done. They created a behind the scenes storytelling journey of some of the lesser known riders.

And now we're all captivated. Like my wife will watch Tour de France with me for three hours in the morning it's it's amazing and it's just dudes in spandex going up a hill. Yeah that's that doubling of the f1 thing is is fascinating because that is a really boring sport. What's the most valuable thing in the world? Well, obviously, never missing a coaching or training session while in the gym. And the second most valuable thing? Time.

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dangers and they start contextualizing everything, it gets pretty well. The same thing is true with the UFC. They spent they spent, they went into deficit. And they did, you they did 30 years ago or whenever they did their first reality show they spent every last dime they had with Spike TV and it saved the company. They were basically going to go out of business the next year. The story is the funnel that brings everybody in. And, you know, if we continue telling the story of CrossFit, tell Greg's story. For some reason, we stopped talking about Greg.

That makes no sense. There's nobody there to replace Greg. Talk about the games. You have to talk about the games because there's nothing to replace the games. But more than anything, tell the story of CrossFitters. And don't shy away from the competitive athletes. Tell their story too.

Now we've gone to this, we're trying to completely change the brand where it was forging elite fitness. Let's tell the story of these animals doing these two minute workouts that are killing them to now. It's like, don't be scared. You know, this is for grandma, bring her in. She's going to lose 200 pounds. Like you got to tell that story, but you got to tell the whole story and you have to be telling it every day. And you know, to Matt's point, like you got to tell that story, but you got to tell the whole story. And you have to be telling it every day. And you know, to Matt's point, like if you're not telling a story every day, you create a vacuum where other people are going to fill

in the story for you. And it might not be the story you want to tell. You brought up Steve Jobs. And I think like one of the things that he did was he cut the skews right by 75%. So Apple was offering all of these products. You know what I mean? They were focused on one computer and then they focused to all these products. And then when he came back, he's like, Nope, forget that. And they just destroyed the website and they reduced it. And I see a parallel there to what you're saying is, is like, and I, I'm going to add some words to your mouth, but I think that the message should be just always speaking to the base I think I speak to the base who is the base the base happens to be people whose lives depend on their fitness So ambulance truck for all first responders military guys

And then we all know that anyone who's afraid of that if they can get past that and walk into an affiliate They'll see oh wait. There's grandma's in there. Oh wait, if they scratch the surface, they'll talk, they'll see Greg Latham says it's infinitely scalable. And of course you still tell those other stories, but they should have never, we should have never abandoned the base. It should always be, you should stick to what, to the base. Yeah. So if, if you want to like go the other direction and you want to look at companies who have had an inspirational, transformational, disruptive leader, and then they've grown beyond that leader. What the next person does is he takes, or she takes the lessons from the

leader and makes them easier to understand, more consumable, more sticky. And this happens in business books all the time where you take this really complicated concept, and you make it very simple for other people to understand. And this happens in business books all the time where you take this really complicated concept and you make it very simple for other people to understand and now you're a hero. And I think that that's the big opportunity with Greg. It's not to repeat dogmatically fitness in a hundred words. It's let's explain that in common language

so that people understand it, right? Off the couch, off the carbs. Greg said that later on, but that's something that's sticky that everybody can remember. Like get moving and get off the sugar. That's what he was so good at. Every couple of years, he got on with it, right? And that's the mark of genius,

making the complex simple, right? Like average people like me can't do that, like Greg can do it. And now, like the way that you spread the message even further is you take Greg's language, like constantly varied functional movement, can't do that like Greg can do it. And now like the way that you spread the message even further is you take Greg's language, like constantly varied functional movement performed at high intensity,

and you make that even simpler for people to understand. So that I at the affiliate, when somebody's calling me up and being like, what's CrossFit? I'm no longer saying constantly varied functional movement performed at high intensity. I'm saying a different workout every day that will get you to your goals faster than you ever thought possible or whatever that mantra is that's going to stick. Like that's the kind of message that HQ should be doing is evolving, simplifying,

making sticky Greg's genius. Do you think that the question, I think this, I think that the question the question I think this I think that the question around the game should should be single singular singularly how does it how would the games best help the affiliates I don't think it's like how to grow the sport how to make like I think just the question should be like I don't see it as a vital as a vital it's like someone said to me the other day it's just a rich watch wristwatch on. You know what I mean? It's not the heart. It's not the lungs. It's not the kidney. It's not the brain. It's just a wristwatch. You can take it or leave it. It doesn't matter what kind of wristwatch it is. You know what

I mean? It doesn't matter who the athletes are. It's just it's an accoutrement. You know what I mean? Or a garnish, whatever. Do you think that that's a fair, do you see, I'm open to you punching holes in that. Do you see that? No, it should be its own thing. It should be, because there's always been this thing like make it its own thing, make it bigger,

grow the sport. And I'm like, I'm starting to like see the light, I think. Nope, it should just be, if you can't answer the question, if whatever you're doing with the games doesn't help the affiliates, then don't do it. That should be just the flat outlet mistest. Yeah, it's hard to say like how that would help the affiliates though. Like the way that I think the games helps the affiliates right now is it should be spreading attention,

which will increase hopefully interest, which will drive people into the affiliates. But like that funnel has a lot of broken pieces right now and it's not clear how that works. I think, you know, years ago, I was asked to explore the connection between Spartan Race, Tough Mudder and CrossFit. And I did it the wrong way. I tried to figure out who was like the best Spartan racer, the toughest mudder guy.

And I found this guy, Hunter McIntyre and like, oh yeah, he does CrossFit, you know? And so to me, that was the article. But what it should actually have been was like, how the hell does Spartan race get 30,000 people to show up and run through the mud every weekend? And like, that's what the game should be. Yes, you want to crown the fittest

because they're the ones going up Everest and we're all mountain climbers. But more than anything else, you want to get 50,000 people at the base of Everest at the same time and like all do something together. You know, you go to like the average marathon in any city in the world and you've got 300 people of every shape, color, creed, you know, and they're all running together. And you ask them at the end of the marathon, like who won? And most of them are like, I have no idea. I don't care. Right. Really what the game should be is a growing gathering. And when you said like, this is how

the game started, you know, my programming for my gym, I'll be honest, I go back to Greg's programming from main site. Like, and just yesterday, I was going through the archives of 2007. I was trying to find when the first like Cindy was posted so I could share a video of it. And what I found was an introduction or like an invitation to the first CrossFit Games. It was this graphic first ever CrossFit Games, Aromas, California, you know, and like that's it. It was not a media marketing event. It was a picnic. So, yeah, I believe what you're saying.

But like if you really want to make the games benefit affiliates, it should be like everybody do the open. Now, everybody come with me to this city an hour away, and we're going to do the next round with them. And then if you want to go to like the biggest party of the year, that's when we're all going to go down to Fort Worth and we're all going to do this massive thing together through his events. That's how a Tough Mudder Spartan Race became this billion dollar company.

It's not singling out the best. It's including the most. And the part that sticks with me that you said right there is like the open needs to be an affiliate event and that's it. It needs to be an affiliate event. And if it's, if it, if it's not solely that then, and if people want to participate in the games, then they're going to have to figure out what an affiliate is and come in.

Chris, when people, when people open a gym, do they, what percentage of your clients, if you don't mind sharing this, come to you when they first open the gym versus after they've been open? It's, it's 10% come to us before they've opened. And those are, man, I am just so excited for them because every mistake that you make on opening takes at least six months to fix. And what happens, unfortunately, is like you open up and you make a mistake and it's around

pricing. Oh boy. Well, okay. And it's because, you know, we're all first time entrepreneurs. I think Greg's biggest gift was he launched 30,000 small businesses, but we're all first time entrepreneurs. I think Greg's biggest gift was he launched 30,000 small businesses, but we're all first timers. And so how do we price? I don't know, like what's Matt's gym doing?

Geez, we don't have this kind of data. So we look at what the last gym is doing. And I just quit that gym, I'm gonna start my own, I'm gonna price it $5 cheaper. And so the value goes down, down, down. It takes years to fix that. And we work really hard with gyms to fix that. But some of them, they go out of business before they can fix it. So the new gyms coming in with with to two brain before they open, they don't make those

mistakes. And what's bananas is that like within two years, they're making $100,000 take home and they've got like a full time coach. I mean, it took me 10 years to get to that point. And it's because I had to make every mistake myself. I didn't have anybody to point to that said, here's the actual average, you know, I, I believed a lot of the stuff that was coming from the CrossFit message board. And some of that was wrong or some was fake. And, you know, there was no like guiding light of truth. And so when new gyms come into our program, I have massive optimism for them.

Gym ownership is like, it's a hard business, but it's one of the easiest to start. You can start a gym for $5,000, right? You print up your A-frame, you put a QR code on it. You buy three barbells and three cowbells and three wall balls from Rogue. And you go to the park. And that is how you start a gym and a gym. We all know is it's a community more than it is a physical space. You start to build that community in the park and in church basements

and in public school gymnasiums. And eventually you move into a facility and you grow from there. You don't have to do it the way that you see on main site. If you go to HQ right now and you click on the open and affiliate, they're going to tell you it costs $160,000 to start across with affiliate. Really that true it says that on there. Yeah, go ahead and look at it. It's a filter. They're just trying to pick their customer even more. Wow. And I get it. Rather than garage gym, a pamphlet where it's like, Hey,

you could start with just this, go make some of these stuff from Home Depot. Now it's you need, you know, you need a lot of money. That's right. Yeah. You brain made me a millionaire. That's awesome. And I knew you guys have the millionaire club, which is really cool. Ah, G yeah. I mean, we just certified our 58th millionaire this week. So we actually audit, we make sure like, hey, and the reality is that like, none of these people go interview Jason, right? He doesn't care about the money. He cares that his gym is successful enough to be

sustainable and that, Hey, man, okay, sigh of relief. My gym's doing great. It's going to be here for 30 years. Mission accomplished. Like that's the mission. The millionaire status, it's like, it's a signal. It's not the goal. It's a signal that you're being successful and changing lives. If you look at Candace Wagner, and I hope you have her on the show, she owns CrossFit Iron Horse. It's a massive affiliate. It's the closest one to the games this year. She has full-time staff who are making meaningful living.

She's helping hundreds of people, and she can do that because she's successful. It's not that having 400 clients made her successful. It's not that having the biggest space and the most equipment or being the closest to the games venue made her successful. It's not that having the biggest space or the most equipment or being the closest to the games venue made her successful. She has all those things because she's successful and she can expand out.

So yeah, man, I really belabored that question, sorry. No, no, no, it's all, it's so good, right? And you've known plenty of gyms that are losing money that have 400 members. Oh yeah, a hundred percent. I mean, so I was on this, this other podcast on Wednesday and it's called fitness business insider. Please don't do that. Please don't do that.

Exclusive on Chris Cooper at the 7-1 podcast. I'm going to need a t-shirt then. So it's hosted by Chris and Steve Christini and these guys opened up affiliates. I think it was 2008 CrossFit Markham was their first. And at the games this year, they went around and they were trying to find the 10-year affiliates. And what they found, they were surprised by it. It was a real eye opener to me is that every time they would find somebody who said, yeah, we're a 10-year affiliate, they were like the third or the fourth owner. So really what you have are these gyms that have

been around for 10 years, but they're owned by people who've only been in business for two or three years, and they haven't learned the lessons that you would hope they'd have learned. So when we're looking at like, what are the most successful gyms in the world, you can't look at tenure, you can't look at head count,

you have to look at like, who's the most profitable, because those are the ones who are still gonna be here in another 10 years. And that's why you want to talk to people like Candice. You want to talk to Oscar and Carl at CrossFit Medicine Stockholm. You want to talk to Rune who's got this like 500 member gym in Europe. You want to find these people and you want to interview them and say, what are you doing? You don't want to host a roundtable where the guy who's going to be bankrupt next month is giving advice on marketing. And that's, you know, that's another place that data helps. Hey, I mean, does, does crossfit has put their foot in the, in the water a few times with

doing affiliate mentorships. And then they pulled out and then they were in and they were out. Are they in now? Do they have anything internally that is a mentorship? Because I heard Don say on one of those interviews, what Chris is doing is very, very successful, but it needs to be scaled or we need to scale it. And I was thinking to myself, well, shit, he had a thousand gyms go up in Chicago. And I already know that you guys are at the 50 yard line of selling out for the conference next year, which is still a year away. Are they in that space? And what is the kind of a conflict of interest for them to be in?

They're not in that space? Well, they're trying to collect data. I mean, they tried to do something with Zen Planner in Canada. Sometimes companies use Canada as the testing ground for their real market America, because we look like Americans. That's our news up there. Yeah, 1000%. Right? Like, like, we get McDonald's hamburgers

before you guys do. You know, in this case, around Christmas, before you guys do. You know, in this case around Christmas, CrossFit was working with Zen Planner to collect data. And so, you know, you get this email and it's like, please fill in this form. It's going to be the CrossFit, whatever they're calling it, state of the industry. And so the first thing that you sign is like a release

of all of your information to Zen Planner. Well, why in hell would I want Zen Planner to have all my information? Like, no, thank you. So I backed out and I asked our affiliate rep, like, why are we signing this? And she's like, well, you don't have to, but it would help affiliates if you did. So I just said, you know, no thanks. And, you know, the reality is that, no thank you, HQ. Like, we don't need your help to scale our state of the industry data. But in 2018, my first pitch was like CrossFit should have this and make this available to affiliates.

They said, no, we started doing it on our own. And now I see that it's actually better to come from an objective source instead of within, which would just kind of like perpetuate the whole cargo culture again, you know, you can't trust when you're inside the cult, you can't trust the data that comes from inside the cult, because it's that echo chamber. If we see this as a two headed beast, right? There's the the lifestyle protocol that is CrossFit. Yeah, then over here on the other side we have

the business, the affiliates. And CrossFit's over here in charge of the lifestyle protocol and disseminating the information. What to eat, how often to move, best practices for movement, recovery, all that stuff. And then they're trying to also come to this side, which I don't necessarily blame them, to best practices for to run the business and make money. Have you ever thought about coming on to their side? Have you ever thought, Oh, maybe I'll start my own affiliate program and come on to their side and have my own programming and my own? I mean, I mean, you're an accomplished coach yourself. You're surrounded by thousands. Have you ever thought about your business out of

your lane onto their side? I'm an old coach. I don't think I'm an accomplished coach. With high level and kids with autism. I know, I know your story. You have the whole game and people you've coached. Yeah. Um, well, I'll share something that the founders of Beyond the Whiteboard shared with me at the games, which I thought was really brilliant. Mo is such a smart guy, you know, and he said, like, at that they had been in the game, helping affiliates for a decade. And he's like, up until now, we've never done the billing side. Because we always knew that it would be way easier for us to build that later to do their thing later,

than for them to do our thing later, if we focus on what makes us the best. And like, there's a reason that I don't build software. And I don't go out and create a coaching certification. That's because I can't be the best in the world at it. Okay. CrossFit is the best coaching certification in the world. They are the best methodology in the world. They are not the best at business coaching in the world. And you guys are. I mean clearly. I think we are I mean yep The dad goes it the the return customers show it the respect you get in the community shows it um, I

wonder um this is a personal question do you get if if Let's say you were the kid that fed my fed my kids lunch in the afternoon right at school I would be really nice to you because I would want you to give them good portions and the best food, right? Do you get a lot of love and support from HQ since you are helping their affiliates pay their affiliate fees? Like I would think like I would be nurturing the shit out of that. Yeah, I mean, publicly.

Number one is the athletes. I mean, publicly, priority number one is the athletes. I mean, like, if I'm a fan of HQ, I'm like, Hey, this dude, this dude keeps gyms open so they can pay our bills. Yeah. But if you're a private equity company that owns HQ, you're, you're going to say like, who can we partner with who will increase the return on investment to our partners. And so when we had, we've been having partnership talks for over a decade. At different times CrossFit HQ has said, can you come out here and bring your staff and run a seminar because all the affiliates around Santa Cruz are in trouble? Yes. And since then it's always been like, can you pay for lunch at this affiliate gathering? And the answer is always yes. The where the affiliate like the actual partnership talks came to a head was a couple years ago, Gary Gaines was in charge of the partnership. And they

were launching the APN. And the the conversation was like, what are you willing to get the website where affiliates can go and get deals like this discount, like Marbells and shit, okay. Yeah, and you know, the pitch was like, how much are you willing to pay CrossFit for us to like give you leads? The interesting thing was that like, we have a daily email list of 40,000. We already talked to a lot of CrossFit affiliates.

And so I said, well, you know, how does this increase value to affiliates if I'm just paying you? And they I said, Well, you know, how does this increase value to affiliates if I'm just paying you? And they're like, Well, you know, you can raise the price, charge them more, and just give us like, you know, an extra 1200 bucks. And I said, that just doesn't feel right to me. Like, it actually kind of feels like rent seeking. And they were like, Well, you're the best, we want to work with you. But they had actually made the identical offer to about five people like on the same week. And yeah, for me, baby, you're the only girl for me. All right. Which is, I mean, they were honest about it. So we didn't jump on on that deal. We said, you know what, we're doing well, being the outsider. You know, I enjoy kind of being the black sheep

because I can say, hey, the emperor's not wearing any clothes better than, you know, like somebody inside the church. So while we do, we work for affiliates, we don't work for HQ. While we do travel along parallel lines, like the way that we can help people best is by being the best business mentorship practice in the world, not by being HQ's business mentorship practice.

Hope that makes sense. Call or hi? Hi, how are you doing? Good. There's a caller, huh? Good, good. Say, you know, I'd like to participate with the actual conversation.

You guys are kind of on a run, but you know, everything to like to participate with the actual conversation. You guys are kind of on a run, but, uh, you know, everything to, to the comments you just made with the, uh, HQ. So I don't know if they were doing some SEO or what they were doing, but they wanted to provide the leads, et cetera. You can charge a little bit more to wash out the expense, but you know, if that's the case as the gym user, the question is, what is the end user getting out of it? Right. So if they're getting, you know, it's a paid lead to come to your gym.

But what's the gym offer? Because I think that's the problem with, you know, a lot of affiliates across the board where you'll see, uh, there's several that are just disengaged. So there are, you know, air quotes, CrossFit gyms, but they don't necessarily drink the Kool-Aid. They're not, they don't necessarily program CrossFit. They're not excited about the events, et cetera. And I think any of these business problems, I mean, it's any business really, it just, it comes down to people.

So I mean, even if you have the golden blueprint, the ticket, the print money for sure. And if you follow this spreadsheet and do these things, all your financials are going to work out. Your marketing is going to be on spot and you're going to have a successful gym. But if you have shitty people, it's not going to matter. So if you don't have people that are excited about the actual product, then you know, they're going to, they're going to watch the games kind of when I tuned in to the call what you guys were talking about They're gonna get excited about you know seeing them guys. They're gonna come to the gym, and it's not gonna be

Not gonna be the same vibe. It's not gonna be the same culture community. You know all that stuff rolls into it Well, you know what I do like about what you're saying is is you're putting at the end of the day you're putting the Responsibility on the gym owner. It's like about what you're saying is you're putting at the end of the day, you're putting the responsibility on the gym owner. It's like, hey, whatever you do, as much as you want to blame HQ, you're still in control, which is your gym. I really like what you're saying. HQ has absolutely nothing to do with it. They're the brainchild behind the methodology that everybody was once so excited for. Now, you're either going to carry the torch or Now you're either gonna carry the torch or you're not gonna carry the torch.

But if you're not gonna carry the torch, why fly the banner? Why not just be Orange Theory? Or just be a local whatever. Do you think you can carry the torch and not pay the 4,500 bucks? Like, do you think you can be like, fuck, I love CrossFit so much.

I'm just, I'm gonna use this $4,500 to do some stuff for my community, increase interest in my gym, paint the walls, but I'm still gonna be the best crossfit gym out there I just can't call myself that you think that's legit So here's the two sides of that coin. So if it could be a financial thing getting off the ground or etc You know could be whatever but if you believe in the Methodology and you you love the excitement and you can turn on the TV and watch CrossFit or

Games or semis or whatever just like anybody else can that's an exclusive to affiliates They're not the only people that can see that of course you can do that But the you know, here's the the 180 to that Why if you have a tool and I'll call CrossFit a tool Let's say I own a car dealership, right? And I'm going to sell a Chevy, whether I like Chevy or Dodge or whatever. But what you're getting from Chevy besides the inventory is the brand that some people love and trust.

And they'll be dung-ho and die-hard for it. They're all about it. Why not double down on that? Because now you know your clients. So if you're not doubling down on CrossFit, well, you're just a gym. Why pay the, you know, you don't, you don't need to pay it if you're not going to be drinking the Kool-Aid per se, right? Well, the flip side to that would be, well, what, what's the brand doing for you? And, you know, I think that's a lot of what you guys are talking about. And if the answer is, well, we're providing you these leads. No, no, no,

you're missing the point. I, the leads are not what we're after here. Like I'm in real estate, right? I get, I get calls from, uh, I get calls from, from loan officers that are hundreds of miles away from me and they want to do business with me and they're the best loan processor there can be. And, and, and to me it's like, well, great. You're good at your job. I mean, you want a cookie or what?

Like you're not local to me. How are you going to help me in any way? So if CrossFit spending the money on the ads or whatever, and they're trying to trickle that down to the affiliates by bringing you leads, if somebody lives in your city organically, you you're gonna get the lead. That's a waste of money, waste of money. Why would you spend that money from HQ standpoint to target leads where in any one given town,

besides the big cities like Phoenix and huge cities, I have a hundred thousand people in my city, there's three CrossFit gyms. There's one of three of us that's gonna get the business and the the client which one has the best people which one has the best facility so you're saying HQ should just focus on making sure that the Chevy brand is fucking is spot on like and don't worry about getting leads in just to keep that fucking sign polished and beautiful and represent like so Chevy represents America and hardworking people

And blah blah and whatever the brand is is CrossFit. You're saying hey, just keep the brand shiny We'll worry about getting people in our gym by the service we provide in there and the reputation we build For them to spend whatever money it would have to be a substantial amount of money for them to capture enough money, it would have to be a substantial amount of money for them to capture enough SEO to, to, you know, hit every little pocket of the country. Right. Why would you not take that money and stick it on YouTube ads, stick it on, I would say commercials, but TV, right. But you know, did it in front of people on your smartphone, et cetera, a bunch of little clips of Did it in front of people on your smartphone, etc a bunch of little clips of Annie from the documentary saying hey the doctor said six months ago that I was not going to come back

I would never be the same again, but look at me now bullshit. I'm better. Why would you not do that? Right, you know what all year long not just build a little bit of excitement. Sorry. I'm outside. I'm sorry driving by here It's okay Hey, even matt frazier said that the new do the The nutrition protocol for CrossFit saved his dad's life. He said that on the Matt, Semon and Josh broadcast Why not grab that clip too? You're right In the stuff with the games talking about that, you know, there is some relevancy to it I I don't think he can wash it away. So I bring the call when you were talking about You know back at the ranch versus today and things are a little different.

So now, no, they're not snatching 135 or Annie's not doing one ring muscle up. She's doing 20. So, you know, obviously the athletes of all, I do think there is a very large portion of the population that like the spectacular. Is that as relatable to the everyday person? Well, no. You're not going to get those people like that. So you don't necessarily lean into one direction or the other, but you do need both because there's, I would say largely, CrossFit athletes across the board are highly competitive, but you probably do have a 40% split. That's just kind of the person that either wandered

in the door, a friend, you know, talked them into it. They like the community, but they don't necessarily need to get crazy and get all competitive. Like Tough Mudder, for example. Like you said, fun challenge. Everybody show up and get your turkey leg at the end. That's all good, but some people do want to show up and want to get the medal. Some people do want to chase those big gold swipes. I think you need all of it. You really do. But you're not saying anything if you don't actually

talk to the public besides when the game comes around. I mean, what are you doing? This is why they catch so much slack. Let me ask you this. One of the people in the comments wanted to know if you're currently using the Exerciser as we talked to you on the phone. We're using that's right now Absolutely, I'm in between sex. Okay. Hey, thank you for your call. Love you 20% off CrossFit 20 The exercises are one inch length one inch girth. Check it out. No. Thank you, buddy All right, yeah, you got 10 minutes, dude. You had 10 minutes.

We got fucking super on here and then we got tight. She's so he's all right. Hey, Chris, can I ask you one, uh, one more question real quick? Yeah, please do. It might be a hard question for you to, uh, answer. Um, I hope it's super hard. Fuck them up. Get them, Susan.

So Berkshire partners, their, their initial, their whole entire deal here was growth capital. In your opinion, how much growth capital is there to continue to invest in? Because what we've been talking about is different ways that the company could fundamentally shift its direction to therefore help the affiliates. Realistically, how many shifts can it possibly still make before Berkshire partner says we're done dumping resources into this. Can you define what, I don't know what that means. It's a capital say that explain. If we have, if we have, if we have $10 and you have an idea and I put

$2 to your idea and it doesn't work. Chris has had an idea. He needs $3. We put $3 into his idea. It doesn't work. We now have $5 left. Uh-huh We know that CrossFit is running enthusiastically in the wrong direction For me as an affiliate owner How much more can they change ideas and take the leftover $5 that they have and put to those ideas? Before birth tire says our 10 bucks are gone.

You guys had a good run. We're out. Well, I mean, that's the calculus behind every acquisition that they make. It's not like, what is the upfront price, but also what is the burn rate? Like how, how long can we keep putting money into this? And I would guess that CrossFit is profitable, but I would also guess that they dramatically overpaid based on like passion for the brand. And so, you know, at some point,

the goal of every private equity firm is to build this thing for sale. So how can I get at least a 20% return on my investment? And then the next buyer is gonna come in and try to make another 20 percent return. You think the 200 million was overpaid? I mean, just back in the napkin cash flow. Yeah. I mean, that's a very high multiple

on what CrossFit was bringing in profit wise. I'm sure. They know that they're they're lying to themselves because I heard stories about Rosa in board meetings laughing that they stole it from Greg. I mean, Greg's laughing now, but. Yeah, I mean, it should be a billion dollar company, right? What they bought for 200 million was the opportunity to make a return of at least an extra 40 million on top of that. And so I think like what Matt's saying is like, they haven't achieved that yet.

How much longer are they willing to fund? And again, like this is all just castles in the sky. We don't know. But I would imagine that the patients is probably there right now for a couple of reasons. Number one, they do seem to be doing better. You know, they've just done a year of touring around saying, we're sorry, we'll do better at their affiliate gatherings.

You know, we sponsored those. Then you do have some growth in Europe that is like promising. And the growth that's happening over there is exactly what happened in North America years ago, where you just opened your doors and you've got 300 people and you say, I'm good at business. And then three years later, you're like, Oh, but that is happening. Right. And so that's, that's a positive sign. The other thing too, right now is that money is very expensive.

When CrossFit was sold years ago, there wasn't a high interest rate. It didn't take a lot of money to buy $200 million worth. Now it is pretty expensive. And so there's probably some impetus to sell and there might even be like an acceptable loss possible. So, you know, if you look at like the average time that a private equity company owns something like this, they're not buying it as a cashflow asset. They're buying it to build, gain 20 to 40% on their investment and sell. You know, usually that's about four years. And so I wouldn't be surprised if there were suitors for CrossFit right now, like serious ones. I wouldn't be surprised if there were conversations

happening. The same way you think it's like, you think we're having a Floyd 19 moment, you can people try the headlines in New York Times and some guys like, all right, now is my time to make an offer. The Mazda is no longer a popular car and they've got 200 on the lot, I'm going to go pick one up at half price. Not yet. Because, you know, with Greg, like you've got a soul founder, right? Like he bought out his, his ex wife years before that he was the sole shareholder, I believe. And so

when you catch somebody when you catch a founder in a down moment, you know, I work with a therapist and she says, we all have $13 days when you would just sell the whole thing for 13 bucks. He probably caught Greg at a moment of peak frustration when he was like, OK, you know, I've I've achieved this. I've made an impact. I don't need this. I'm done, right? Like that would be me. That's not going to happen with a private equity firm, because now

you've got like boards and you've got bureaucracies and you've got, you know, like shareholder money involved and reports that have to come out every quarter to shareholders. They're not going to make a decision like that. You can't just look for a low point. So the, my guess would be that right now Don's conversations with his boards are, keep it a little bit longer and we will see this much return from it. And so there's probably a plan to increase like that return to shareholders and investors. that plan is going to either increase, include growth or it's going to include more money from the current ecosystem and probably both. So that's probably what we can do. It's just saying that, hey, sooner or later, they got to cut the cord.

Yeah, maybe, but- Like you just can't hold on to, or can you? I mean- Well, I mean- Cut the cord on the whole thing, but just initiatives that we hope to see. Like to think- Oh, you're not, you weren't suggesting that they oh, yeah They will at some point but for me

It's just like okay if we're talking about if they were to do what I want to see out of the company Which is turn it to a media company that's pushing the message of saving lives and curing chronic disease, right? Right, that's gonna take a shitload of human resources and money to be able to fundamentally shift Everything in the company's direction to that way. And my, my thing is, is like, you don't have that many big shifts left in the wallet. Successful at that too, to be really successful. You have to be an employment brand, right?

Yeah. So once a week, I hear someone say, are you on a fucking droid? I'm not texting with you. That's, that's like a huge, that's off. That's a huge, that's's an employment like we're all excited You know, I mean when someone says they work at Apple you're like, oh, you're you know I mean maybe not as much as before to do a media blitz today in the current system of how many fucking Creators the content creators are you you better be an employment parent brand. You're not gonna get it done by taking applications

Do you know what I mean? You're not gonna you won't you don't have the money. It would cost billions to do what if you had an employment brand would cost less than a million to do. And I really mean that because you would just have fucking thousands of people making content for you. National fucking like like the buttery bros or I used to do for CrossFit. Like you're just crazy about it. You're just screaming from the treetops. Yeah, and it would take a while to build that backup. I mean, when I got my job offer to work for HQ, you know, Greg says, give me a number that inspires you as a wage. And the first thing that I asked for was the email address, chris at crossfit.com.

Like that was the most important thing. Right. I remember getting that and I was like, holy shit. Yeah. Seven across it. Yeah. Yeah. It was a huge deal. Yeah. And, and I was like, Holy shit. Yeah. Seven on the CrossFit. Yeah. Yeah. It was a huge deal. Yeah. And, and, uh, I was Chris at CrossFit.com for like three years. Um, and, you know, the money was secondary because I had a successful gym by that point and I didn't really need it. Um, but yeah, you, you do have to do that. And unfortunately, now you've kind of lost those, those people who are so passionate about the brand that are going to create media that promotes the brand itself instead of their thing that they benefit from.

Hmm. Uh, Chris Cooper, uh, you have the state of the industry report, uh, survey out now, everyone, it will be in the notes to take the survey. Please take the survey. If you are a gym owner of any kind, it's just for gym owners, right? Yeah. Yeah. 15,000 plus. And then the closing will be September 13th. So don't do it. Do it. Don't do it later. Right now. Yeah. And before Tyson Bajig comes on. And then also, when will you release the 2024 status industry? December-ish, we send out like, so the first thing we do is everybody who put their data in, they get a copy of it. And we send it

to an independent analyst. So it's not just me, you know, waxing about, oh, here's what I think. It doesn't matter. Like we're doing science here, right? So we send it to an independent analyst. Here's what the data looks like. And then I write a little bit about it later. But the most important thing is we identify like one of the best gyms doing this is like our CrossFit games. Right? Wow. I can remember what Greg was saying about the games is like, let's find the best deadlifter in the world and copy their program to make everybody better at deadlifts. That's what we're doing with Legion ARM staff. Yeah, so December ish, we'll get everybody like their copy of it digitally. And then we start mailing these out, we send out seven or 8000 of them through, you know, the US mail. And that happens, most people get them

December, January. All right. Hey, thank you very much. We will have Chris back, Cooper back on soon. Chris, you demand thanks for coming on to thank you guys. All right. Hey, thank you very much. We will have Chris back, Cooper back on soon. Chris, you demand. Thanks for coming on to thank you guys. Appreciate your minutes. Thank you. Take care. I think it's pretty obvious Chris Cooper to brain business. If you're an affiliate owner, get over there. I'll leave you with these final words from Sophia Loren and then we'll be back in three minutes with on a new link with Tyson Bader. My nose was too long. They said my nose was too long. My nose is still long, but I succeeded. And my husband said, if you want to make a career, I think you should cut your nose. If you want to make a career, I think you should cut your nose. I said, I should cut my nose to make a career in movies? I don't think so. I think that I like to stick to my nose because I like the way I look.

To become an actress, I should cut my nose? Why? Because you don't photograph well. You're not photogenic. And I think you have to change cameraman man and if you do change camera man maybe I have a chance in the movies and I said well then I think I'll go back to Potswally and be a little teacher in Potswally and I'm going to be very happy because I like the way I look I'm not complex about my nose nothing though this happens if you see I still have a very long nose I don't know what's better, watching the video or watching Suze's reaction.

I know you guys love my nose. I'll see you guys in two minutes, one minute on the new link. Love you guys. Bye bye.