Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well. Obey
Speaker 1: is a twenty seven dollar a month fitness platform that
Speaker 1: counts Drew Barrymore and Kate Hudson as members, and it
Speaker 1: just raised fifteen million dollars in funding from investors including Samsung,
Speaker 1: Next and Athleta from Gap. That value is the startup
Speaker 1: at about one hundred and ninety million dollars that according
Speaker 1: to people familiar with knowledge of the matter. Joining us
Speaker 1: now are the co founders and co chief executive officers
Speaker 1: of Obey, Mark Millette and Ashley Mills. They're joining us
Speaker 1: on the phone from Brooklyn, Mark, Ashley, Thanks for taking
Speaker 1: the time. How are you doing this afternoon. We're doing great.
Speaker 1: Much for having us, Tim, Yeah, thanks for joining me. Well, actually,
Speaker 1: I want to start with you and talk a little
Speaker 1: bit about the fundraising process here. How difficult was it
Speaker 1: to raise this money from these companies Samsung, Athleta. Other
Speaker 1: participating investors include ww International that's formerly known as Wait Watchers,
Speaker 1: Cabo Venture Partners, Well Use Entertainment, and more. How difficult
Speaker 1: was that to do? During the pandemic. Yeah, it's a
Speaker 1: great question. So we've been very careful UM in the
Speaker 1: history of our company now to sort of over capitalize,
Speaker 1: and so it was a it was a big decision
Speaker 1: for us to go out and raise our Series A. Obviously,
Speaker 1: you know with the pandemic, UM we were growing at
Speaker 1: a very nice clip free pandemic, but the pandemic was
Speaker 1: merely grew four. Yeah, it was. It was a pretty
Speaker 1: wild year to day the least UM and a lot
Speaker 1: of folks have been coming to us for quite some
Speaker 1: time asking its raise and we just we weren't ready.
Speaker 1: And we were obviously super hands down building the business
Speaker 1: that that essentially skilled overnight. UM. So from a fundraising perspective,
Speaker 1: UM that you know, that piece of it was not challenging.
Speaker 1: I think, UM, what was like most exciting for us
Speaker 1: is being able to find the right partner. We really
Speaker 1: believe that you are the company that you keep, and
Speaker 1: so to be able to UM you know, have common
Speaker 1: ventures lead around. They focus on a lot of a
Speaker 1: lot in the health and wellness space UM, and I
Speaker 1: think all of our our new partners really see the
Speaker 1: future of fitness lifestyle in an important way. And then
Speaker 1: to the strategics who joined around so um ww Athleta
Speaker 1: and Samsung. All of those partners we've had relationships with
Speaker 1: for quite some time, for years actually, and in terms
Speaker 1: of various partnerships that we've worked on with that, and
Speaker 1: so it was it was a natural call when we
Speaker 1: when we started to think about fundraising to include them
Speaker 1: in those conversations. And we're absolutely thrilled um with with
Speaker 1: how the rays sort of turned out. We believe that
Speaker 1: Obeys as at the center of the good decisions business
Speaker 1: to right and the good decisions ecosystem, and so we're
Speaker 1: excited um for them to all be involved as we
Speaker 1: build the first of this kind of entertainment network and
Speaker 1: really take on this category that we're calling fitness lives
Speaker 1: out well. So it's so interesting actually you describe it
Speaker 1: as a first of its kind of entertainment network because
Speaker 1: both you and Mark have a background in being talent agents, right,
Speaker 1: having clients and and and being in the talent entertainment business.
Speaker 1: So so Mark, what does mean to have a talent
Speaker 1: entertainment network rather than than having a fitness platform. Yeah,
Speaker 1: you know, absolutely, Tim. When we when we first started Obey,
Speaker 1: our vision was to reinvent um, what what daily movements
Speaker 1: felt like, what it looks like, and what it could
Speaker 1: really provide people at home. So, you know, in our
Speaker 1: old job as as talent agents, with our jobs to
Speaker 1: nurture great talent um and to bring you know, pop
Speaker 1: culture to people everywhere, right, to really create these incredible
Speaker 1: uh mutual experiences around content and get people excited to
Speaker 1: pay depending on their their their niche, tastes and preferences. Um,
Speaker 1: So we started obeying. We thought, wait a minute, fitness
Speaker 1: hasn't been reinvented in a while, right, It's still sort
Speaker 1: of looks the same, it feels the same. It doesn't
Speaker 1: feel topical, it doesn't feel variety, field doesn't feel fun um.
Speaker 1: And so that entertainment pieces really adding that fun factor,
Speaker 1: that topicality. Um Our instructors are the best in the business.
Speaker 1: They're incredible. They are the superhero best friends who motivate
Speaker 1: throughout the workout and hopefully throughout the day. Um, you know,
Speaker 1: transcending screen and jumping right into your living room, your hotel,
Speaker 1: your basement, your office, wherever you're working out with us.
Speaker 1: And so we've also taken it to another level. We've
Speaker 1: partnered with some of the biggest Um, you know, stalwarts
Speaker 1: of the entertainment business such as Disney Plus, NBC, Peacocks, CBS,
Speaker 1: Paramount Um. The list goes on to bring really fun
Speaker 1: pop culture center classes to our audience as well. We've
Speaker 1: had classes with Game of Thrones themes, uh, Sex in
Speaker 1: the City themes, Cruella from from from Disney Plus themes Right.
Speaker 1: So it's really about taking fitness and making sure it's
Speaker 1: not boring, that we can keep you having fun, getting
Speaker 1: the results you want, and hopefully putting a smile on
Speaker 1: your face in the process. Hey, actually, just in the
Speaker 1: last twenty seconds that we have here, and then sit
Speaker 1: tight because we're gonna come back to you, both of
Speaker 1: you after we do some news here. How would you
Speaker 1: describe these classes for people who may be hearing this
Speaker 1: and saying saying, wait a second, this sounds like it's
Speaker 1: it's just watching someone work out on TV and and
Speaker 1: not different from a typical class. Just fifteen seconds here. Yeah,
Speaker 1: it's a great question. So we offer twenty two live
Speaker 1: classes a day so you can work out with with
Speaker 1: all of our members across across the country and across
Speaker 1: the North America. Here needs shouted out in class. You
Speaker 1: can also take one of our twenty different modalities on
Speaker 1: demand across all levels of duration. From a content perfective. Again,
Speaker 1: we have the best in class talent um. It's a
Speaker 1: really fun experience. We think of it as kind of
Speaker 1: a high broccoli approach to fitness. Um. You're going to
Speaker 1: get a really effective workout, but you're also going to
Speaker 1: have a great time during the class. Mark Ashley, I
Speaker 1: I just got a question during the last break from
Speaker 1: somebody who's listening right now in the Bloomberg Network who asks,
Speaker 1: why would I subscribe to this if I have a
Speaker 1: Peloton subscription? Do they have enough content to get people
Speaker 1: to switch? Who wants to take it? Uh? Yeah, I'll
Speaker 1: jump in here, Tim. The answer is we have. We
Speaker 1: have plenty of content, uh for anyone and everyone you
Speaker 1: know for that twenty seven dollars a month or annually.
Speaker 1: We have so much content to save all of your
Speaker 1: fitness needs at any level in the game. Right if
Speaker 1: you're a beginner or if you're a triathlete, we are
Speaker 1: here to to help you to find the results you're
Speaker 1: looking for and hopefully help you make some friends in
Speaker 1: the process. Our community is off the charts, but we
Speaker 1: have over twenty modalities over twenty instructors, again the best
Speaker 1: in the business, and class links from ten minutes all
Speaker 1: the way up to one hour long. So whether you're
Speaker 1: working out for ten minutes, uh, you know, in your
Speaker 1: office with the door closed, or a full hour at home,
Speaker 1: UM with the kids asleep, we really have something for everyone.
Speaker 1: But if Peloton does offer that monthly subscription that you
Speaker 1: can get on the app or you can use on
Speaker 1: an iPad or a computer without actually having one of
Speaker 1: the pieces of equipment, UM, how do you get someone
Speaker 1: to switch Mark? Yeah, you know, I think I think
Speaker 1: the reason that people love Obey in addition to the community,
Speaker 1: in addition to our incredible talent, is the premium nature
Speaker 1: of what we deliver every day. Right Our our content
Speaker 1: is gorgeous, It is so personalized, it is colorful. Our
Speaker 1: signature light box really you know, provides like a music
Speaker 1: video in your own living room when you're working out
Speaker 1: with us. And I think that the premium nature of
Speaker 1: what we do in the variety they're in UM is
Speaker 1: really what our audience UH takes to. You know, We've
Speaker 1: learned from so many people over the years and specifically
Speaker 1: even as we head in this COVID Transition world. For
Speaker 1: over fifty percent of our audience, we are their fitness everything,
Speaker 1: and then for another substantial portion about you know, we
Speaker 1: are a main dish on their fitness buffet. In the
Speaker 1: same way that you don't want to, you know, eat
Speaker 1: the same foods every day, you might not want to
Speaker 1: move the same way every day. And certainly if we
Speaker 1: are your fitness everything, we will keep you moving in
Speaker 1: different ways every day. And if we are on your
Speaker 1: fitness buffet and you're going to the local bar studio
Speaker 1: or local yoga studio as well, uh, we're here to
Speaker 1: get you on those days where you're at home or
Speaker 1: on the go. Hey, Ashley, you mentioned earlier that there
Speaker 1: were four hundred increase in subscriptions. That's correct, right, and
Speaker 1: during the pandemic. Um, how did you how did you
Speaker 1: keep operating during the pandemic because you did also say
Speaker 1: that you were shooting live shows and live classes for
Speaker 1: for your network. Yeah, absolutely so. UM. You know, in
Speaker 1: the very very beginning of the pandemic, um when everything
Speaker 1: when everything hit we um, you know, we basically assembled
Speaker 1: production studios are in our instructors homes. Um. And that
Speaker 1: that went on for you know, obviously several weeks um
Speaker 1: as as the government was figuring out what was what
Speaker 1: the thing about our production is that we it allows
Speaker 1: for social distance. There's not a lot of people, a
Speaker 1: lot of crew members that are needed in the studio
Speaker 1: and some of it can be done remotely and so
Speaker 1: um we were deemed an essential service uh pretty early
Speaker 1: on in the pandemic, so we were able to continue
Speaker 1: to to bring people back into the studio again with
Speaker 1: you know, absolutely adhering to all of the safety precautions.
Speaker 1: Can you talk actually more about the entertainment nature of
Speaker 1: this if you are just joining us, Mark and actually
Speaker 1: our former talent agents who built Obey as an entertainment
Speaker 1: network rather than a fitness platforms. Actually I'm wondering about
Speaker 1: the entertainment aspect to this and the idea as you
Speaker 1: and Mark have been talking about that. There have been
Speaker 1: themed classes in the past, um that have been uh
Speaker 1: you know, theme to Game of Thrones for example. Absolutely,
Speaker 1: so there's certainly those tenthole moments, but I would also, um,
Speaker 1: you know, in talking about our content, I would look
Speaker 1: at it outside of the tenthole moments as well, and
Speaker 1: sort of like our core offering, which are these you know,
Speaker 1: twenty different modalities across a number of different durations. So
Speaker 1: Mark and I we never took our talent agent hats off.
Speaker 1: We you know, when we left the agency business, we
Speaker 1: started looking immediately for who were the really incredible, bulliant personalities,
Speaker 1: who were great storytellers, who could lead our members through
Speaker 1: a class and what should be an emotional journey. And
Speaker 1: so they given for all of our classes that they're
Speaker 1: super effective and you're going to get a great workout.
Speaker 1: And the X factor is the talent in the personality
Speaker 1: and what we call entertainment right, we're entertainment in fitness meat.
Speaker 1: So that is, yes, the talent. It is the beautiful
Speaker 1: set inspired by contemporary artist James Terrell and dance Leaven.
Speaker 1: It is the music um, it is the storytelling. It
Speaker 1: is a topical nature. We do twenty two live class
Speaker 1: of the day and because of that we can address
Speaker 1: what's happening in the world and so in a lot
Speaker 1: of ways, taking a class at Obey um it's going
Speaker 1: to deliver on the same level of entertainment that you
Speaker 1: would get from a television show. But you're you know,
Speaker 1: you're getting a workout during the process. Yeah, what actually
Speaker 1: getting a workout while you're streaming whatever you're watching. That
Speaker 1: would be sounds kind of nice. Hey, Mark, wondering about
Speaker 1: the product pipeline here, are you thinking at all about
Speaker 1: hardware and and getting into the hardware business. I see
Speaker 1: Samsung as a as an investor, the company of course
Speaker 1: known for its hardware. Yeah. Absolutely, so you know the
Speaker 1: the year ahead, and again, one of the reasons that
Speaker 1: we raised was to build out our our good Decisions ecosystem,
Speaker 1: right we see, we see Obey as the center axle
Speaker 1: of that ecosystem. So it's not just about the push
Speaker 1: ups and the planks. It's about what you eat, what
Speaker 1: you wear, who you connect with, uh, your mindful level
Speaker 1: of mindfulness, tell you sleep, etcetera. On the hardware front,
Speaker 1: to date, we have required little to no equipment. When
Speaker 1: I say a little to know, I mean workouts that
Speaker 1: are body weight only all the way up to workouts
Speaker 1: that require maybe some you know, handweights or resistance bands.
Speaker 1: On the hardware front, we've heard from a lot of
Speaker 1: our members that they have purchased hardware during the pandemic,
Speaker 1: and frankly, they're not always feeling that inspired to use it.
Speaker 1: So we are beginning to explore you know, how our content,
Speaker 1: how our premium content and our specific point of view
Speaker 1: could translate into you know, heavier gym equipment and hardware
Speaker 1: related verticals. On the electronics front, our goal is to
Speaker 1: be the leader and fitness lifestyle for all people in
Speaker 1: all places, across all screens, and that includes wearables. So
Speaker 1: right now we're we're digging deep into our wearable strategy
Speaker 1: and we can't wait to uh to get that out
Speaker 1: to our audience as soon as possible. In a very
Speaker 1: obey way, of course, I actually want to give you
Speaker 1: the last word, give us a few more details on
Speaker 1: the wearable strategy just fifteen seconds. Absolutely so um you
Speaker 1: know where most people wear a wearable UM and we're
Speaker 1: excited to be able to track our members in class
Speaker 1: UM and also in their their daily life. Starting to
Speaker 1: make sense why Samsung is an investor in the company.
Speaker 1: Mark Mollette and Ashley Mills co founders of the fitness
Speaker 1: platform entertainment platform oh Bay. They're also co CEOs of
Speaker 1: the company. Joining me on the phone from Brooklyn, New York,