CrossFit: C-Suite with Jeffrey Hayzlett (10/22)

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Oct. 22 (Bloomberg) – Bloomberg’s Jeffrey Hayzlett visits the C-Suite at CrossFit to discover how this movement is redefining the fitness industry. (Source: Bloomberg)

And you knew me both was stupid.

All is well in the house of crossfit.

I can't stop and no one else can.

I see this.

We have been asked, is this a cold?

-- a cult.

This is a disruption in the traditional distribution channel of fitness training.

I'm jeffrey hayzlett.

I'm on a journey inside one of the biggest brands in america.

I have been a ceo and board room cowboy.

Now i'm visiting the executives in charge of the most powerful companies in the world to see how they tackle the challenges.

The challenges of the "c-suite." we are going to look at a movement that is changing the fitness industry, crossfit.

At $100 million company.

It looks like a gym that i use in elementary school.

They have jump ropes, a polar bar.

They have developed this one-of- a-kind regimen.

They have 6000 trainers and 8000 affiliate jams.

Over 100 countries.

They make money from the affiliates themselves, and the certification of the trainers.

They have a growth rate of 70%. 61 countries.

50 new affiliates a week.

This is hot.

It looks like one of their biggest opportunities is this crossfit gains.

This could be huge.

It is a whole new sport.

It fills up stadiums.

They have key partnerships with brands like reebok.

How do they maintain that committed the identity that sparked a movement while attempting to expand my water market -- wider market?

I am curious about greg glassman . he is the sole owner of the company and runs the business his own way.

He writes nothing downgrade no rules.

No offices of any kind.

There doesn't seem to be a structured row graham.

Anything goes.

It is a working and working well.

Every successful business has passion.

It takes more than passion to run a business.

It takes revenues.

I want to see if crossfit has what it takes.

Its top affiliates are in san diego.

It's at meetings like this that coach glassman spreads the message.

The honor here is not that i started this revolution, it is that i am standing in front of the best trainers on the planet.

The best.

The revolution and wellness, and the businesses are a part of it.

Health and wellness cannot be separated.

This crazy fitness that you are the global purveyors of, it is coming from you, you are the wealth spring.

It is a revolution.

A juggernaut.

I cannot stop it.

Nobody else can.

The affiliates represent the trainers and gym owners who are paying for certification.

A recruiting new people into crossfit.

They are the folks being the bottom line.

Glassman has to make sure they are committed.

It is visually unique.

It is a brand.

It is a business of visual identity.

It does something that makes people look different.

This has unique -- an enormous potential.

We are serially successful.

Our growth with this spread of the word is growing as fast as the fitness store.

Tommy the story of crossfit.

How did you get started?

I knew the way people working out was stupid.

I opened my own gym for the first time.

I convinced local friends that the way they were working at was the correct.

-- the way they were working out weren't correct.

$3000 with secure your licensing fee.

What's $1000 to be a. and you need the space and the gear.

People start this in alleys, public parts.

Abandon walks.

-- lots.

Is a multibillion dollar business in a multibillion dollar industry.

That is right.

We are increasingly profitable.

We are holding a diminishing share of the total crossfit system.

That is actually by plan.

Dimensioning -- diminishing share?

Anybody can do it and get it for free?

The point is that our revenue is not tied to what we do in the community.

As the community grows, we scale nicely and comfortably.

We are increasingly profitable.

The community is growing at an even grow their -- greater rate.

Their top lieutenants, they're not your typical executives.

Both are devotees that embody the brand and ensure that glassman's vision is executed throughout crossfit.

It is absolutely loose.

That is its brilliance.

We speak frequently with greg and know the vision back and forth of positive interaction, and open lines of communication allow us to function.

The executive and the company recognize the informality of the way things work.

We are going to get the guidance that we need an very informal settings.

There is a core of us that operate around greg.

As that grows, there are structure.

What comes below us is more structured than what is above us.

There is not a lot above us.

Small companies can afford to have a name -- an unconventional c-suite, but will that lack of structure hurt them?

Do you think you can scale it as you grow?

We are going to continue to scale in this fashion.

Six trainers will train 60 trainers, and 20 or 30 of them will go open up a crossfit.

Each one of those will have anywhere from 100 to 500 clients.

Is it -- is it a mission?

Definitely.

All is well in the house of crossfit.

You can be proud of all of it.

I am standing in front of the best trainers on earth.

It makes me proud.

I am out of here.

We hit 5000 affiliates last november.

We are likely to hit 10,000 this year.

Approaching 80,000 trainers.

Those numbers were 45,000 a year ago.

We have a growing growth rate.

This is a disruption in the tradition of fitness training.

Our structure and decision- making may look like a church or a biker gang.

Will more towards the church or the biker gang?

The biker game.

You do not get this camaraderie in a board room.

Moneys how we keep score.

Fun is more important than money.

We had regular meetings that we had to participate in as a management team.

How do you pull that meeting together?

Virtual offices.

We had no locations.

We were working out of homes.

We are a web company.

We have our website.

The staff is scattered throughout the world.

Pretty strong high density in california.

I have been in canada and the east coast.

We had to find ways to do this, to get together.

What are the other ways you get together?

We have several homes were we hang.

We might stay there weeks or six months.

We have meetings at 3:00 a.m., we have meetings in africa.

Tonight, we are going to go to the course again.

That is a fan favorite.

Then we are going to head up the beach.

We have food and football.

We have volleyball.

I said all this, and chuck goes you know we have work to do.

We are going to get the work done.

Our structure and decision- making may look more like a church or a biker gang than it does to corporate america.

I think it works with efficiency than what is happening.

At church or a biker gang question the the biker gang.

I'm headed to the navy seal obstacle course.

It is intercooled to the business.

Another day at the crossfit office.

Why do you tie this into the business of crossfit?

These guys are bonding.

This is the ultimate teambuilding exercise.

How many businesses do this?

Not many.

How many would pay thousands of dollars to have seals training?

To be the best warrior like these guys are trying to be?

It makes sense.

How much business is getting done here today?

You are out working.

How much business gets done in this apartment question or the best business.

You do not get these moments of shared suffering in an office environment.

This is necessary.

This is more important.

[applause] we're going to start jogging back to the area where we have food waiting.

It has been a bit thing in the media about you own a 100%. why is it important for you to do that?

Wax it is not important at iona.

It is important that the ownership be capped with those that are running the company.

We will put this thing into trust when i am gone.

It will never be on the market.

I think it is too important to be sold.

We have a runaway business spawning 10 is new businesses a day.

They have a 90% survival rate at the five-year point.

I'm a former fortune 100 officer.

When i walked into a boardroom, it was a boardroom.

The way we did business was a certain way.

That is the way you see most business being done today.

When i look at your c-suite, and your boardroom, i see this.

What is it that you see when you think about the c-suite and your leadership, and how you do this?

The c-suite is me.

What i say goes.

For good or ill.

That is how it is.

We have an office.

We come in there and get on laptops.

We do our programming meeting once a month.

Off you go.

There is a lot of times in a franchise operation, this is different.

Sometimes you see more than one location they get territorial.

In terms of this guy is encroaching greed are there multiple ones where you are at?

My nearest competitor is 800 meters away.

We run 800 meters.

It doesn't matter.

You refer to other people?

On the book on the on the phone, one of the questions i ask is where do you live?

If you are close, do you know there is a gym closer?

I tell him.

It is a tommy what to do it my business.

Anything that i feel like, if i painted the walls green, it is up to me.

I can do whatever i want.

You need to do the certain things -- i might have thoughts about i want to change it.

Because i can do what i want, i thought i can do whatever i want whenever i want to do it.

The only control from up top is the use of the actual crossfit name.

There is no structure at all as to how we run our gems.

Build a place he would want to work out, and people he would want to work out with will show out to work out with you.

That is what everybody does.

It works.

You're making money though.

Yes.

Moneys how we keep score.

Fun is more important than money.

Everyone across fred -- everyone at crossfit shies away from finances.

But with new affiliates joining every day, this company is bringing in the box.

It is time to hear some tangible numbers get to the bottom of this.

? enough to pay for.

How do you make money?

Every time i bring up the question of money, everyone moves me to the community.

Lex will be committed to was delivering the right message for the right meanings.

Crossfit exists in nt gems.

But with the crossfit games, the brand has thrust itself into the global spotlight.

The contest is both a showcase for the brand training methods, and to create new sport.

I visited with the gm of the crossfit games to see how it drives the bottom line.

Women look at the games, how are you making money from the games?

The games -- it works because of our training department.

It works because of our affiliation.

The game is a celebration of the community.

It is the definitive test of what we declared.

To have to play for.

How do you make money?

By selling tickets.

We have strategic partnerships.

Most of it is funded from crossfit.

It is subsidized by the affiliate program.

He of two forms of revenue.

On the affiliate feed, and the instructor fees on being certified.

Where become the other revenue sources?

Three box feel.

Doesn't the games become a way to make money question or possibly.

Greg has been clear we are not running the games in order to be a third financial engine.

Right now this is designed to support the affiliates.

It supports the other main engines of our company.

It is not designed to be a standalone.

Is anyone adding zeros?

Does anyone say let's go from 6000 to 60,000? who was thinking of that, or is anyone?

I don't think anyone thinks about how do we add another zero?

Everyone wakes up thinking how do we make it better?

Most other sees -- cc quite as -- most other c-suite guys are saying -- we never found that chasing money will make things better.

We are in a unique position that the core engines of our company are doing well.

That supports our affiliate community.

The finances take care of themselves.

The entire operation today, how many people do you reach?

And terms of these live media?

Millions.

We had 16 or 20 million page views the week of the games.

600,000 people clicked on the view espn the day of the games.

How do you capitalize on that?

Once someone says i saw that, how do you and the business cap allies?

Everything we're doing is for the same thing.

We are trying to serve the community.

We are trying to educate people on proper movement and nutrition, proper activity.

Have they all come together in a repeatable way.

The games are one of the components of that.

We are real.

It is better fitness.

Lex everybody would say they are real.

Maybe you are right.

Does coke and pepsi really think they have a different product?

Do they really think there is a substantial difference in one soda versus another?

My guess is no.

They are a lifestyle.

They represent something.

It is image.

Their asthmatic -- they are as fanatic as you are.

They could be.

Every time bring that money, everybody in this company moves me to the community.

Everyone moves me to the real truth.

Is because you guys have so much money?

You have to pay the bills.

All of this training.

The bills are being paid.

When i started, we committed to was delivering the right message to the right people for the right reasons.

I met with your team, and nobody said we don't care whether or not we make money.

You still to pay the bills.

Absolutely.

Your site stand to on excellence.

It is a very with mood.

We know what our heart rate should be.

We have the same thing?

Don't spend more than you're taking in.

I have a dashboard, and i'm watching it all.

-- nobody is selling to close anything read you look at the pipeline.

I do not have a guide for growth.

I'm a process guy.

I'm not an endpoint guy.

He shies with talking about money.

Coach glassman will take on anyone who tax -- attacks the brand.

I was the guy that said you are doing it wrong.

The emperor has no clothing.

You can't be afraid of controversy.

I was born out of that.

But the controversy arises from questions about the safety of the company's workout program.

How important is safety to a participants?

Safety is paramount.

But we don't do is sugarcoat the message or the idea of it.

We are not telling the truth.

Anything that works, there is going to be risk.

We prefer the term risk event safety.

Then you layer on the intensity.

You guys are going to do it for each individual per your score is your team score.

She is giving me her boot strings.

We have been asked, is this a cult.

I started asking, are we a cult?

The worst kind of cult, to be leading one and not knowing it is one.

How is this not like a cult?

I know some of the things about cults, they usually come with a crazy belief system.

Here is what we believe -- we believe that there are salient changes you can make in your lifestyle in terms of exercise that make a profound difference in your life.

The bottom-line of success comes out of doing something important, significant.

I am more than ok with that not panning out.

At the end of the day, no regrets.

We will do the right things for the right people, that is profitable.

The people who find a higher purpose to business are the ones making all the money.

What i learned about crossfit, it is without walls.

It is unconventional.

A operate as a virtual teen home and it is successful.

In the business world, what works now may not work tomorrow.

The leadership is committed to maintaining the core principles of what is undeniably an organic movement.

As the brand expands, as he creates more jobs and adds partners, will is unconventional structure work?

?

This text has been automatically generated. It may not be 100% accurate.

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