659: He's Winning In Home Fitness Wars: $3+ Million Monthly Revenue, $45 Million Raised
Eric Min. He\u2019s the CEO and founder of a company called Zwift.com. Eric is a tech entrepreneur, a lifelong cyclist and is now spreading fitness through virtualization and gamification.
Famous Five:
- Favorite Book? \u2013 Crossing the Chasm
- What CEO do you follow? \u2013 Max Levchin
- Favorite online tool? \u2014 Slack
- How many hours of sleep do you get?\u2014 6
- If you could let your 20-year old self, know one thing, what would it be? \u2013 \u201cTaking risks earlier\u201d
\xa0
Time Stamped Show Notes:
- 01:47 \u2013 Nathan introduces Eric to the show
- 02:11 \u2013 Zwift is creating a virtual space where cyclists can interact with each other in real time
- 02:31 \u2013 Eric is trying to solve one of the most common problems of cyclists
- 03:26 \u2013 Zwift is a pure SaaS company
- 03:29 \u2013 Zwift charges $10 a month
- 03:36 \u2013 \u201cWe\u2019re an asset-like company\u201d
- 03:38 \u2013 Zwift works with partners who have all the different equipment available in the market
- 04:08 \u2013 The most basic setup to use Zwift is an iPad; a trainer that can be attached to your traditional bike to make it stationary
- 04:32 \u2013 Based on your weight and how you\u2019re pedaling, Zwift can put you in the game
- 05:08 \u2013 Zwift was launched in January 2014
- 05:18 \u2013 Eric and his co-founder committed a couple of million dollars to build Zwift
- 05:36 \u2013 Their friends and families had raised around $7M
- 05:47 \u2013 Zwift just closed their series A and they have a total of $45M raised
- 06:07 \u2013 Prior to Zwift, Eric and his co-founder built a trading platform
- 06:28 \u2013 Eric and co-founders wanted to build something out of their comfort zones
- 06:41 \u2013 Eric was 30 when he launched the trading company
- 07:08 \u2013 \u201cEnterprise business is tough\u201d
- 07:45 \u2013 Eric and his co-founder had a $100M contract and spent 5 years extracting the contract
- 08:18 \u2013 Initial capital was $3M
- 09:17 \u2013 Eric and his co-founder are set out to be category leaders, so they made a new category
- 09:51 \u2013 Zwift currently has over 300K accounts created
- 10:07 \u2013 Zwift has 5M rides and 5M hours of pedaling
- 10:16 \u2013 The average ride is 1 hour
- 10:28 \u2013 Zwift also has 88M miles recorded
- 10:36 \u2013 The engagement is fairly high
- 10:38 \u2013 People log in to Zwift to watch other people
- 10:44 \u2013 202 hours of people logging in just to watch
- 11:07 \u2013 People are also broadcasting their experience with Zwift
- 11:42 \u2013 Zwift doesn\u2019t have free users and what they have is a trial period
- 12:00 \u2013 Zwift doesn\u2019t have year-long contracts at the moment
- 12:02 \u2013 Eric wants to understand the behavior of the customers
- 12:10 \u2013 Most of the customers are outdoor cyclists
- 12:33 \u2013 Eric believes that over time, Zwift will be a year-round overtime preposition for not just cyclist but fitness enthusiast too
- 13:11 \u2013 Almost all consumer businesses are seasonal, like gaming
- 13:20 \u2013 People spend less time playing games in the summer
- 13:34 \u2013 Zwift makes it easy for people to consume fitness
- 13:42 \u2013 \u201cOur belief is that everyone is chasing fitness and everyone would like to consume fitness in the most efficient way\u201d
- 13:53 \u2013 The solution enables you to be at home and it\u2019s cost-effective
- 14:55 \u2013 Zwift has 70% of the people stay with them every year
- 15:10 \u2013 Eric calls them \u201cpause\u201d and not churn
- 15:27 \u2013 As the social network expands, it\u2019s gaining more interest
- 15:40 \u2013 Zwift also crowdsources content
- 15:54 \u2013 Zwift has a community of users who want to volunteer their services
- 16:17 \u2013 97% of Zwift\u2019s user acquisition is organic
- 16:54 \u2013 Zwift targets cyclists and most cyclists belong to a tribe or a team
- 17:29 \u2013 Zwift does a little on the digital advertising side
- 18:00 \u2013 Eric has invested in Zwift Academy which is modeled after GTA Academy
- 18:11 \u2013 GTA Academy is a marketing advertising program between Gran Turismo and Nissan
- 18:50 \u2013 Zwift took GT Academy\u2019s model and made Zwift Academy
- 18:55 \u2013 Zwift Academy called out ladies around the world to join and 1200 ladies joined the program
- 19:03 \u2013 Zwift had a public PR in different media channels to announce Zwift Academy
- 19:15 \u2013 There were 3 finalists and they had to go through numbers of different tests
- 19:29 \u2013 The 3 finalists were taken to Majorca, Spain where they trained for 10 days with a professional team
- 19:37 \u2013 The professional team tested the finalists and offered a professional contract to one of them
- 19:45 \u2013 One of them is now a professional rider who was a former series marathoner
- 21:12 \u2013 Eric doesn\u2019t worry about the valuation
- 23:07 \u2013 The Famous Five
\xa0
3 Key Points:
- Get out of your comfort zone \u2013 you\u2019ll never know what\u2019s in store for you until you get there.
- A large, initial fund that was raised should NOT affect your valuation if your company is doing well.
- Take risks...the earlier the better.
\xa0
Resources Mentioned:
- The Top Inbox \u2013 The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
- Organifi \u2013 The juice was Nathan\u2019s life saver during his trip in Southeast Asia
- Klipfolio \u2013 Track your business performance across all departments for FREE
- Acuity Scheduling \u2013 Nathan uses Acuity to schedule his podcast interviews and appointments
- Host Gator\u2013 The site Nathan uses to buy his domain names and hosting for the cheapest price possible
- Audible\u2013 Nathan uses Audible when he\u2019s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
- Freshbooks \u2013 Nathan doesn\u2019t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
Show Notes provided by Mallard Creatives