A Product Market Fit Show | Startup Podcast for Founders
00:33:46 · Rob Woodbridge, Lee Silverstone
[00:33:46] S2: No, the story with that is that it wasn't ready, right? I came in to do marketing and lead that and then – I mean, the product wasn't ready. [00:33:56] S1: Yeah, that was the first time. That was the first time you came to Gym Track. Then you were like, hey guys, you don't need a marketing team. Yeah, don't waste your money on me. You guys got to go find product market fit. We're like, okay, cool. We did that for a while. Then we were like, oh, my God, our backs are up against the wall. We're burning too much cash. We had done this pilot with Anytime Fitness in the US, which is a whole other story that we should totally talk about, but then we came back and we were like, we've got to cut board. Then we did that and the board was like, what are you guys doing? It's like, hey, I think we should bring in a new CEO. I'm not the right person for this turnaround thing. Then you came in as the CEO and then you and I had a similar conversation with [0:00:34:35], you're the CEO. I don't know what I'm going to do here. Pablo was running the product side. I was like, I don't know how to add value anymore. We were like, you know what, man? Maybe you're right. Then that was when I was like, okay, I think we…
00:34:47 · Pablo Srugo, Rob Woodbridge, Lee Silverstone
[00:34:47] S0: Just for context, at this point, we had gone through the near acquisition that failed. We then laid off – we went from 30 to 8 people. Obviously, the board was just super upset in general, which is why we brought – and we start – I don't even remember, but legally we're like, man, we can fight this. We could just push through. Then it was like, you know what? This is going to be so terrible to say let's bring someone else in. Rob was the only person we could think of that just made sense, knew the business, we knew him. I'm like, this could really smooth things over. We did that. Then we had some money in the bank, but we didn't have an idea, right? [00:35:23] S2: No, you did a small round, right? You did a small round, $1 million came in from existing investors. [00:35:28] S1: We had done a round I think actually before doing layoffs. We had done this Anytime Fitness pilot and then we were like, hey, there's some user engagement, people are using it, but we need to build a… [00:35:41] S0: Let's go through, let's dive in because – so Anytime Fitness, just a background story even because it was a big deal.
00:35:41 · Pablo Srugo, Lee Silverstone
[00:35:41] S0: Let's go through, let's dive in because – so Anytime Fitness, just a background story even because it was a big deal. [00:35:49] S1: Yeah, huge. Man, this is another one of those, I don't know, just being overly confident for no reason working in our favor sometimes. We had gone to this – we were in 500 startups. We had gone to this conference where basically it was speed dating. You would meet these – you would basically sit at a table and then the VP of innovation or whatever from all these different big gym companies around the world come sit with you and you'd pitch them on your idea. We pitched Anytime Fitness and they were like, this is super cool. We're going to run it up to the CEO. Just so happened, I don't know why, again, another serendipitous thing. The CEO and CTO of Anytime Fitness, which is the largest gym chain in the world. I actually was just looking the other day, they're double the number of locations that we were doing. [00:36:38] S0: Thousands, it’s 5,000 now. [00:36:39] S1: Yeah, 5,000 or 6,000 locations. They're a massive company. They met us, whatever, we're excited. We sent them a deck, we sent them some materials, some of this promo video we had done that was amazing that everyone loved. [00:36:56] S0: It was a great video. [00:36:56] S1: Yeah, it was a great video. It was cool. It's the power of storytelling. [00:36:56] S0: That might actually be the best product that we made.
00:36:56 · Pablo Srugo, Lee Silverstone
[00:36:56] S0: That might actually be the best product that we made. [00:36:58] S1: Someone one time made this joke to me, it might've been my brother, and he was like, dude, you guys should have just made a video production company instead of this Gym Track. You guys were great at it. Just this other serendipitous thing, we were at 500 startups working out of their office. It was the CEO and CTO of Anytime Fitness were coming to San Francisco for this technology tour. They were going to meet – I think it was the Fitbit people or whatever or some other startups that were there. They came to the office and they were blown away by this 500 startups office, thought it was the coolest thing. Literally in that meeting, the CEO was like, let's do a pilot, let's go. We were like, cool, I'll send you the paperwork. That was it. [00:37:36] S0: Where was their product at the time? [00:37:38] S1: I think it was still a 3D printed pen in my pocket. I think I was do – I think I still had the pen? I don't think there was much more than that honestly. He was like, cool, this is the future. I totally get it. Let's run a pilot. We're like, okay, cool. We got to go do that now. The problem was the pilot, to go do the pilot, was going to cost us hundreds of thousands of dollars. We didn't even properly think about what a pilot to run with it was going to cost. We had to produce all this hardware at super small scale. It was incredibly expensive. We had to move an install team down there. We had to…. [00:38:12] S0: To Minnesota.
00:38:12 · Pablo Srugo, Lee Silverstone
[00:38:12] S0: To Minnesota. [00:38:12] S1: To Minnesota, sorry, to Minnesota, to Minnesota where they had their innovation center. We had to spend months there updating and firmware physically. It was the worst idea. It was so stupid. We hadn't even done a real pilot in Ottawa where our whole team was and we could actually learn how people use the product. We were like, no, we're going to go from a 3D printed pieces of plastic to the literally the biggest customer in the entire industry without doing anything in between. It was destined to fall flat. [00:38:49] S0: To our credit, and I remember we negotiated, we had a year to deliver on this pilot. That was obviously a big clause that we gave ourselves, but yeah, the challenge I think was, if you actually think about a gym, it's the worst place for tech. All it is is metal being moved around and things we hadn't even thought about. For us it was, okay, the hard thing is AI. It's machine learning tracking reps. The hard thing is putting a thing that actually doesn't fall off a barbell. That was the mechanical engineering of it. With this pilot, I remember we were totally not ready. We pushed it three more months and at one point it was just almost embarrassing. I think you were like, dude, we have to do it. I just can't push it anymore.
00:38:49 · Pablo Srugo, Lee Silverstone
[00:38:49] S0: To our credit, and I remember we negotiated, we had a year to deliver on this pilot. That was obviously a big clause that we gave ourselves, but yeah, the challenge I think was, if you actually think about a gym, it's the worst place for tech. All it is is metal being moved around and things we hadn't even thought about. For us it was, okay, the hard thing is AI. It's machine learning tracking reps. The hard thing is putting a thing that actually doesn't fall off a barbell. That was the mechanical engineering of it. With this pilot, I remember we were totally not ready. We pushed it three more months and at one point it was just almost embarrassing. I think you were like, dude, we have to do it. I just can't push it anymore. [00:39:29] S1: We were also burning so much money a month that it was like, we have to – because if you think back, the plan was raise this seed round, okay, use the money from the seed round to go launch to Anytime fitness pilot, sign a bunch more pilots and get Anytime Fitness to convert from a pilot to full paid customer and then start to roll it to the rest of the gyms. Raise a series A to go fund that growth. It was, again, this all or nothing, either this converts to a full customer or just your SOL. Back to how we got on this tangent was that was around the time we had to raise additional money because we were like, the pilot's taking longer than we wanted to and whatever. We kind of went back to…