Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. Really excited to catch up
Speaker 1: with our next guest, talking about Rick Stallmeyer, founder and
Speaker 1: executive chair of Mind Body. He founded that company. As
Speaker 1: I mentioned, I met him when I was working in
Speaker 1: my books What Equity All about the fitness industry? Um
Speaker 1: So he's a longtime practitioner of this. He has seen
Speaker 1: the rise, the growth, and now really the stress that
Speaker 1: the fitness industry is under. But at a time when
Speaker 1: we need to be talking about wellness more than ever. Rick,
Speaker 1: really nice to have you with us. How are you?
Speaker 1: Jason is great to be back, Carol, great to be back.
Speaker 1: I'm doing well and uh and thank you for having
Speaker 1: me on. So tell us about kind of the state
Speaker 1: of fitness right now. I want to talk to you
Speaker 1: about some of the things that are going on with
Speaker 1: your company. But but give us the sort of the
Speaker 1: big picture because you know, here we are in the
Speaker 1: Tri state area, New York is about to basically kind
Speaker 1: of let people go back to the gym next week
Speaker 1: about a third of the people their capacity, you know,
Speaker 1: social distancing, all of that. This has got to be
Speaker 1: a very stressful time for the fitness world. It really is,
Speaker 1: and it's it's it's really a dichottic out there. I mean,
Speaker 1: what we're seeing right now is they supply constrained market.
Speaker 1: People want their fitness classes, they want their wellness services
Speaker 1: and experiences more than ever. And you know, one of
Speaker 1: the well I guess one of the unintended consequences of
Speaker 1: this mishmash of state and regional reactions or responses to
Speaker 1: COVID is that what we've seen around the country. As
Speaker 1: you know, some states never really closed down completely. Other
Speaker 1: states reopened very quickly. Um, we all know those stories.
Speaker 1: You know, you're in the Tristate area, which has been
Speaker 1: probably the model of how how discipline the approach has been. Um,
Speaker 1: what we've seen in every one of those cases is
Speaker 1: when the businesses are open or when they reopen, Uh,
Speaker 1: they get flooded with consumer interest because people's wellness has
Speaker 1: been severely impacted by this pandemic. Yeah. I do think
Speaker 1: it's interesting. So you talk about people flooding back, and
Speaker 1: I do think about what about new folks who may
Speaker 1: be thought, Okay, it's not that important. I've got work
Speaker 1: to do, or I've got you know X to do
Speaker 1: and now they're saying, wait a minute, this has got
Speaker 1: to be fitness. Wellness have to be a part of
Speaker 1: my regular living. Well, that's right. I mean we all know,
Speaker 1: of course, you know, the pretty existing conditions around obesity, hypertension,
Speaker 1: and heart disease, cardiovascual disease, type two diabetes, those things,
Speaker 1: of course have been shown to be major risk factors
Speaker 1: for COVID, and I think people, a lot of people
Speaker 1: have gotten that memo. I mean people that I talked to,
Speaker 1: people that I see UM. At the same time, being
Speaker 1: restricted to our homes for such an extended period of time,
Speaker 1: you know, for many people that they put on weight,
Speaker 1: for many people their their their fitness has struggled. UM.
Speaker 1: And then lastly, you know, wellness isn't just physical, is
Speaker 1: it right, It's also emotional wealth, It's a sense of
Speaker 1: social connection, it's community. And I think we're all suffering
Speaker 1: in this country, in fact in most of the world
Speaker 1: from the impact of having all of that so severely disrupted,
Speaker 1: and it's why we remain very bullish about the industry
Speaker 1: we serve for the long term. But of course this
Speaker 1: is a really challenging time on both the consumer side
Speaker 1: and the business owners. And so for those business owners, Rick,
Speaker 1: what can you do and what are they doing collectively
Speaker 1: to have their voices heard at the state and local level, because,
Speaker 1: as you said, it's been a little bit of a patchwork.
Speaker 1: And and I would imagine you know in part because
Speaker 1: and you know this much better than I do. You know,
Speaker 1: these are small businesses in many cases that are struggling.
Speaker 1: What's the message that you're helping get to public officials
Speaker 1: about the importance of these businesses. Well, what we have
Speaker 1: we have been doing what we can to advocate UM,
Speaker 1: both UH in Washington as well as at the state capitals.
Speaker 1: I planned personally to do a lot more of that,
Speaker 1: you know, as you alluded to at the beginning here. Um,
Speaker 1: I've just transitioned from being CEO, I mean, a role
Speaker 1: that I've had for twenty years, handed the baton to
Speaker 1: Josh McCarter. These our new CEO, and Senel Rogers Car
Speaker 1: who was our CTO, has been elevated to president and CTO.
Speaker 1: I mean, this is a dream team. These guys in
Speaker 1: the executive team around them by far the strongest you've
Speaker 1: ever had. So I can feel very confident in and
Speaker 1: the company's continue growth and innovation. And what I want
Speaker 1: to spend more of my time doing is that outwardly
Speaker 1: based and role um. These these businesses are almost all
Speaker 1: small business owners. Even if you owned an Orange Serial
Speaker 1: Fitness or an F forty five franchise for example, the
Speaker 1: classic franchise Z is a typically like two spouses um
Speaker 1: who invested in this business and are running at hands
Speaker 1: on every day. And of course so many these businesses
Speaker 1: are just independent Mama Papa shops, and no one has
Speaker 1: been advocating on their behalf even looking at how the
Speaker 1: states generally have have issued edicts around whether they could
Speaker 1: open and close as sort of a broad brush. You know,
Speaker 1: no gyms can open, so it doesn't matter if it's
Speaker 1: a eighty thousand square foot health club with hundreds of
Speaker 1: people streaming through the door, or small little yoga pilates
Speaker 1: or group exercise studio that maybe in normal times might
Speaker 1: have had twenty people in class and now with social
Speaker 1: distancing they have maybe eight people. I mean, these it's
Speaker 1: not high risk. They we have seen firsthand. If you
Speaker 1: take the proper precautions, the social distancing, the mask wearing,
Speaker 1: you can go in and have a great experience very safely.
Speaker 1: And I'm not sure. I don't think many people are
Speaker 1: telling that story to our government leaders who are making
Speaker 1: new decisions. So, Rick, you and I caught up a
Speaker 1: little earlier in the pandemic for the Bloomberg Business of
Speaker 1: Sports podcast, and you know, one of the things we're
Speaker 1: talking about is, and this goes back to where we
Speaker 1: left off in our conversation, these are small businesses. Many
Speaker 1: of these boutique studios, especially mom and pop type shops. Uh,
Speaker 1: a lot of them are just going to go out
Speaker 1: of business. I think you would even predicted maybe a
Speaker 1: quarter of them, uh, would just ultimately have to hang
Speaker 1: it up, fold up shop. What do you what do
Speaker 1: you make of that prediction? Now, well, it hasn't happened yet. Um,
Speaker 1: these businesses have proven far more resilient than we've hoped.
Speaker 1: And of course we've been rooting farm from the very
Speaker 1: beginning of the of the pandemic. And you know, immediately
Speaker 1: when the as the lockdown started in the late March,
Speaker 1: they started adapting. And of course the most obvious thing
Speaker 1: was delivering their classes and experiences via video and so
Speaker 1: live streaming video and then putting up libraries a video
Speaker 1: on demand. They started doing that spontaneously and my body
Speaker 1: has been innovating rapidly. We now have virtual wellness platform
Speaker 1: enables them to do that in a way that they
Speaker 1: can sustainable businesses and and I talked about that Jason.
Speaker 1: Now what you see, of course, is a lot more
Speaker 1: of these activities going on outside UM. And the science
Speaker 1: indicates it being outside is just simply safer than being
Speaker 1: in a room which we speculating air. And lastly, of
Speaker 1: course it's just immaculate cleanliness, a lot more distance between
Speaker 1: workout stations, UM, and everybody wearing masks. And you know,
Speaker 1: we've what we have seen UM, I think is a
Speaker 1: remarkable adaptation of an industry. That being said, you know
Speaker 1: this kind of brutal two steps forward, one step back,
Speaker 1: one step forward, two steps back. Uh. You know at
Speaker 1: some point it's going to start taking a pole. Uh.
Speaker 1: And UM, you know we were rooting for all of
Speaker 1: these businesses, UM, but I think we still are probably
Speaker 1: going to expect some some notable amounts of business failures
Speaker 1: in the months ahead, given what it just appears that
Speaker 1: the pandemic and how it's going to develop. And then
Speaker 1: we're not going to get out of this very challenging
Speaker 1: situation right for at least a few quarters away. It
Speaker 1: kind of breaks my heart about those who have, As
Speaker 1: you said, sometimes it's it's a couple who started a
Speaker 1: business and they're just not going to make it through. UM.
Speaker 1: You talk about live streaming, there's in studio, there's outdoor classes,
Speaker 1: depending on you know, kind of where you live. You know, Rick,
Speaker 1: what we love about talking with you is, you know,
Speaker 1: you guys do have the platform where you get inside
Speaker 1: into so many different businesses. What other data points are
Speaker 1: you able to kind of see that are revealing about
Speaker 1: what's going on right now and what might continue for
Speaker 1: for sometime or kind of stay with us as we
Speaker 1: all kind of pivot and and kind of embrace some
Speaker 1: of these change ways of doing things, including working out
Speaker 1: and staying well well. First of all, we're seeing you know,
Speaker 1: rising consumer demand for these activities of all types, of
Speaker 1: all categories, and of course fitnesses leading part of that. UM,
Speaker 1: we see high sensitivity in the consumer side. We've been
Speaker 1: serving you know, millions of consumers on our platform, uh,
Speaker 1: and we've been serving people in a scientific way and
Speaker 1: you know, more than consumer res indicate that yes, rigorous
Speaker 1: sanitis sanitization is important. About three fourths of them say
Speaker 1: the new layouts are really important and they like what
Speaker 1: they're seeing. If you haven't visited one of these studios
Speaker 1: in a long time or since the pandemic started, I
Speaker 1: encourage you to go look at him and understand it. UM.
Speaker 1: We can now leverage technology in ways that really just
Speaker 1: minimize the kind of contact, for example, contact with check
Speaker 1: in and contact with payments. UM. That's extremely important to
Speaker 1: consumers today and I think that it is going to
Speaker 1: be challenging for these businesses. But but the ones that
Speaker 1: do get through this to do that, whether there's are
Speaker 1: going to face a really remarkable market UM. And for
Speaker 1: some of the most forward leaning businesses, what they're doing
Speaker 1: is as they see UH. In downtown retail areas. Of course,
Speaker 1: businesses of all types have been failing. That's opening up
Speaker 1: space and you see the more well capitalized brands swooping
Speaker 1: in because it was really a shortage of prime retails
Speaker 1: space that was holding back the industry before COVID hit.
Speaker 1: And so I think you're going to see a real
Speaker 1: changeover UM. Lastly, the ability if I'm going to commit
Speaker 1: to a membership or a prepaid package at this particular studio. Well,
Speaker 1: I want to know that regardless of what happens, whatever
Speaker 1: the state of social distancingmustrictions or lockdowns in my region,
Speaker 1: that I'm gonna be able to keep engaging. So just
Speaker 1: being able to have hybrid memberships is very important to
Speaker 1: people today, and we see that happening already in the
Speaker 1: businesses that we're serving. If I can just follow them,
Speaker 1: I also do wonder by having such a platform as
Speaker 1: your own, it kind of creates, um a tracing platform
Speaker 1: that you know, if a case breaks out at a
Speaker 1: certain you know, studio or workout or gym in place,
Speaker 1: that immediately you can say, okay, these are the people
Speaker 1: that were there, and we can kind of be right
Speaker 1: on top of it from the get go. We haven't
Speaker 1: been asked to the vulge that data. I mean, we
Speaker 1: treat data confidentiality, both businesses confidential data and consumers confidential
Speaker 1: data very seriously. So um it's not something that that
Speaker 1: that we would just um easily offer up. But if
Speaker 1: there were some kind of organized process, uh, you know
Speaker 1: that that we could assist, and of course we'd have
Speaker 1: to get people's permission, I think, to allow us to
Speaker 1: share what you're talking about as geolocation. Um. You know,
Speaker 1: we we know it's where are you physically at certain
Speaker 1: times and if somebody came down with it, who was
Speaker 1: around them in the recent activities? You know, that would
Speaker 1: have to come from you know, we don't have to
Speaker 1: come from government say that, and I think consumers would
Speaker 1: have to explicitly uh approved that. Yes, you are allowed
Speaker 1: to use my information for the purpose of COVID contact tracing,
Speaker 1: you know, a very narrow specific thing because you know,
Speaker 1: remember what was happening before COVID was all this movement
Speaker 1: around data privacy. It is amazing how much we have changed.
Speaker 1: I think, all right, Rick, before we let you go,
Speaker 1: you got one minute to tell us about your book.
Speaker 1: When's it gonna be out? What's going to be about?
Speaker 1: So my book is called Building a Wellness Business That Lasts,
Speaker 1: and it's a definitive guide for the post COVID world,
Speaker 1: and it's all the things necessary for an entrepreneur to conceive, plan,
Speaker 1: build out, and open their own wellness business. Everything we've
Speaker 1: learned across the last twenty years, as well as really
Speaker 1: important insights in the first five months of the COVID pandemic.
Speaker 1: And it's coming out into October. All right, well we're
Speaker 1: looking forward to that. Ye tell us all about it.
Speaker 1: You have learned so much, I know, over the course
Speaker 1: of the last twenty years. And this was a business Carol,
Speaker 1: as I think you know that. Rick literally started in
Speaker 1: his garage back in two thousand months. So uh, really
Speaker 1: nice to catch up with him, such a thoughtful guy.
Speaker 1: Can't wait to read the book. Rick S. Tolmeyer the
Speaker 1: executive chairman and founder of Mind Body