Got a personal story today with some takeaways for your training gym…

As a lot of you know, MFF was shot out of a cannon from the moment we hit the ground running. We hit $1m in our very first year in business. And by year four, we broke $4m in a single location. 

We were bursting at the seams at our flagship location in Hell’s Kitchen. And we were bumping into opportunity ceilings for our team.

After years of looking, we found a viable second location on one of NYC’s most iconic streets, the Bowery.

Cut to years of challenges and difficult lessons....

First off, right out of the gate, we got screwed by our contractors. I’ll spare you the details, but the mishaps went beyond the inevitable cost and time overruns. And yes, we sued. And yes we won. But you can’t get blood from a stone. 

When we finally opened up months and months behind schedule, we had one usable room. The rest of the 5,000 foot space was a construction nightmare. We didn’t even have a bathroom on the day we opened in December of 2016. And we didn’t have a working HVAC till April.

As you can imagine, this was all less than ideal. Furthermore, we were running into the inherent challenges of having two spaces. The Bowery front desk and training team (understandably) bristled at feeling left alone in an unfinished space without heat. 

In retrospect, it’s obvious there should have been an owner or the COO in the new space from opening to close, if for no other reason than morale. But with the lion’s share of the MFF team at HK and no finished office space, that didn’t happen. And for better or worse, while the team would have felt more supported during this six month period, it wouldn’t have solved the real issues that Bowery ultimately faced.

You see, we DID get Bowery up and running. And by the summer of 2017, it was in pretty good shape. Sure, it lacked our original home’s hobbled together charm. But it was a legit pretty-ass NYC fitness studio space; and sprinkled with enough weirdness to keep it feeling on brand. 

It has its own vibe, while still feeling like the Lower East Side flavoring of MFF. And we loved our home there.

But ultimately, there were some headwinds that were going to be tough to solve. 

First off, the expenses made it hard for our model to work. Not only was the rent at the top of our acceptable budget, but virtually every expense wound being much, much higher than our HK location. Everything from cleaning to towel service to electricity cost way more. And from our current vantage point, we can see the front desk was inefficiently staffed (through no fault of the individuals involved, this was on Keeler and me).

But expenses aside, the biggest issue was this…

For all of our unprecedented success at Hell’s Kitchen, we didn’t really understand how to use marketing and sales to predictably grow the business.

We succeeded in our first location by being amazing at fulfillment. We had tons of word of mouth because we were damn good at delivering. And while we lacked some of the component skills of marketing, we were definitely what Seth Godin calls a “Purple Cow”; our brand was unique and memorable, even by NYC standards. 

Another element that’s hard to precisely quantify: we had a great location. 

We were on one of the least pedestrian- trafficked streets in Manhattan. But we WERE in a neighborhood without lots of boutique facilities. We were also a stone’s throw from most Broadway stage doors. And perhaps most important of all, we were a reasonable walk from Times Square and almost all of NYC’s major train lines. So Ninjas that saw us (correctly) as a unique solution had a relatively easy time getting to us, even if they weren’t in the neighborhood. 

Now here’s where a small part of me will be forever sad…

As of 2020 Q1, we finally cracked the nut of finding Future Ninjas.

We were making them attractive offers and scooping them up into our loving fitness arms. While we were only a few months into implementing our new system, we were on path to our strongest ever March.

And while HK was still getting the lion’s share, it finally looked like Bowery was on a path to real, sustainable growth.

And then, well… you know. Stuff happened.

We saw the writing on the wall a few weeks into the lockdown. Unlike many operators, we bet that we were looking at solid 18 months or more before NYC inched back to normal. 

Our Bowery landlords turned down our initial asks for rent relief. By the time they were willing to work with us, it was too late. We had decided it was best to not carry two spaces during the choppy roads ahead.

Bowery’s expenses were always going to be a big haul. And it probably wasn’t the ideal location for our model. But obviously a part of me feels bummed.

We never got the chance to see our growth supported by marketing and sales strategies that actually worked.

Furthermore, there were many magical Ninjas we only met because we were in lower Manhattan. There were also team members for whom the Bowery Clubhouse was their primary MFF home. So this call was very emotional for a lot of humans.

But business is the art of making tough calls. 

And particularly in the pandemic environment, our willingness to make tough calls fast has set us up to build back bigger — and most importantly better — than before.

So here are some takeaways for your training gym...

  • Get the right contractors. - This was the original sin of Bowery. While I’m not sure you can completely avoid bad luck here, we could have done more due diligence on who was going to do the job. We also could have sucked it up and paid more money for a more “known quantity.” (To be fair, our architects, who were SUPER legit, signed off on trying this GC, but still, it was our call to make.)
  • When the market is hot, just wait. - We came in at the top of our budget in a not-so-great neighborhood. Until this past year, NYC real estate had been on fire. As a little guy, you’re in a tough spot. National brands were happy to pay massive rent and lose tens of thousands every month to have flagships in NYC. This raises prices for everyone, and it makes it tough if you’re trying to be profitable with your brick and mortar. For better or worse, things look to be cooled off for this next bit.
  • For the love of all that’s holy, learn how marketing & sales works.  To our defense, it wasn’t that we didn’t know anything. In a lot of other markets, we probably would have been ok. We didn’t balance out our (appropriate) obsession with our existing Ninjas and our team morale with focusing on actually selling shit. Many businesses have the opposite problem, so you can also go too far the other way. But looking back, it’s clear  this didn’t get nearly enough energy or financial investment to set us up for success.
  • You’re going to mess up, that’s ok. Find the lessons. - You can and should commit to your own continuing education. Try to solve problems before they develop, and learn from the mistakes of others. But accept that you WILL make mistakes. It’s what makes business interesting. Just make sure to think critically about what went wrong, so you don’t make the same mistakes over and over again.

We’re now better positioned than we’ve ever been to grow past the old version of MFF. We’re using the skills learned to grow the hell out of our virtual business AND make headway in the most challenging environment ever seen for NYC brick-and-mortar fitness.

I’ll always be a bit sentimental about our first attempt at a second location. But I’ll be forever grateful to Bowery for important lessons we learned.

And my hope is you’ll read this email and take action to save yourself time, energy, and money in your own entrepreneurial journey.

Love love love always,

Mark

PS Did you know Keeler and I have created an online learning platform that offers ALL our Business for Unicorns courses in the comfort of your own home? Course topics include:

  • Time Management
  • Marketing
  • Sales
  • Customer Service
  • Coaching Conversations
  • Building a Team
  • And more!

Right now the only ones with access are the Unicorn Society. But we’ll be launching it for the whole wide world in the very near future!

To be notified when Unicorn University is live, go HERE.