Two Guaranteed Ways To Go Out Of Business
How speed in business can turn sloppy.
So what Super Bowl commercial was your fav?
I enjoy a good SB party.
I love the prop bets, over-hyped halftime shows, and until my Cleveland Browns make it to the big dance, it's nice not to care who wins or losses but enjoy a solid competitive effort from both teams.
But the marketing + branding side of my brain is obsessed with the multi-million dollar advertisements that have gained arguably more popular than the game itself.
Remember the Budweiser frogs?
Or how about the cat herding commercial for a technology information services company?
While microgyms can't be dropping $6.5MM on a 30-second ad at the SB, we can sure as hell take inspiration from the insane amount of creativity we see and use it for our membership growth plan.
The rise of TikTok, IG Reels, and YouTube Shorts have proven that anyone with a phone can create :30 skits that can gather thousands or millions of views.
So stop bitching about how you can't afford to market. It's been proven millions of times over that anyone can create attention for their thing.
You're either not trying, or you don't have the know-how.
If you're not trying because everything you've seen in your IG Reel feed has been "garbage," then create something worthwhile.
Create something you haven't seen.
Breakthrough the noise.
If you simply don't know how there's an amazing website that provides complete tutorials and walkthroughs to create content for any social media platform - and it's free.
Get after it, champ.
But if you're like me, you watched the SB and jotted notes down during commercials.
And if you roll like that, dedicate time this week to sit with that inspiration, bring your coaches into the conversation or hire someone who is pretty fucking creative - regardless, commit to creating something by the end of the quarter.
Make sure to tag me when you drop it. I love seeing creativity take life.
xoxo
Stu
Want To Go Out Of Business? Grow Too Fast or Too Slow.
And what you can learn from Peleton's recent fumble…
Peloton announced last Tuesday that it was firing 2,800 people and its outgoing CEO, John Foley, outlined in a memo what the company is calling a "meaningful" severance package for those who are losing their jobs.
Which includes a complimentary Peloton membership for the next year - because while you are stressed + sweating it out looking for a new job, what will surely ease the sting is getting a shoutout from Alex, Ally, or Ben on your 100th group ride.
Peloton states the massive cuts are the fallout of "unprecedented demand" during the pandemic, but the company's "post-COVID demand picture looks different than anticipated."
Not shocking to anyone but Peloton, apparently.
In the memo, Foley reassures the team that the lengthy list of now-former employees included "making changes at every level of the organization, including within our leadership team." (but reportedly doesn't include any of its class instructors).
John Foley, William Lynch, and Jill Foley (yes, you have that right, John's wife, which should have made for a super fun dinner conversation) are of the leadership roles affected.
In addition to firing 2,800 people, other reported changes include:
"Winding down" the Peloton Output Park - the first dedicated Peloton factory in the U.S. in Troy Township, Ohio, which was announced back on May 24, 2021.
"Realignment and reduction of our North American warehousing and first-party logistics operations" - a fancy way of saying they will reduce their owned and operated warehousing and delivery footprint.
"Taking a clear-eyed look at our culture." Culture- aka the #1 reason an employee leaves a company, so best to get that shit right...
The rumor mill is spinning as Peloton attempts to create a sustainable future for the company. After reporting a net loss of $439.4 million in its fourth quarter, there are speculations that Amazon, Nike, or another large company may buy Peloton. Still, it is debatable whether that's based in reality.
MY TAKE
As the headline states, there are two signature moves you can perform if you want to go out of business:
1. Grow Too Fast
2. Grow Too Slow
In Peleton's case, I don't really blame them for falling prey to the former.
None of us knew the pandy was coming, and when you see a once-in-a-lifetime business opportunity, it's easy to decide to go all-in - especially when you don't know when the party will end.
Many microgym owners blindly put too many eggs in one basket, only to realize that they should have spent more time in R&D, investigating the potential up + downside and walking instead of sprinting.
Here are some classic examples I've heard in my seven years as a microgym consultant:
Growing too fast...
A. New equipment hits the market, and you think, "I can increase my retention and attract new members if I had this shiny, new thing!". But, you quickly learn nobody cares, equipment is not a differentiator, and your checking account is now looking thin.
B. "I sold out three classes this week. Time for a bigger facility!" Ah, this one is my favorite—owners who don't fully understand utilization rates and mistake a fleeting moment for a consistent trend.
And it is my favorite because it is easy to fix! I have good news for you if you don't understand utilization rates (the percentage of spots in class utilized in any given class) and how to interpret and improve them. It is going one of the new courses dropping inside of Microgym University. You're welcome.
Or how about this knee-slapper...
C. A handful of members have REALLY taken a liking to when you program kettlebell movements. That means you should invest in sending all your coaches to a weekend kettlebell certification course and then add your revolutionary Kettlebell Gangbang class to the schedule because that will undoubtedly bring new members rushing in the door.
Now, on the other end, we have instances where owners have been too slow to pull the trigger and suffered due to their inaction.
A. You landed on a Facebook ad campaign that is actually bringing in qualified, new leads. You finally believe that paid marketing can work, but your fear of putting more money into the machine eventually comes back to bite you. You commit a measly $10/day to your ad, and after a month, ad fatigue has kicked in, and POOF you're ROI has come to a screeching halt. (When you stroke a quality fire in paid ads, pour gasoline on that shit).
B. Coach Johnnie is a fantastic employee. He's "full-time," making $30,000/year, and he's content because he's young, single, no kids, or significant responsibilities. So you don't see any reason to further his career and compensation just yet. But in a blink of an eye, two years have passed, he's engaged and looking to buy a new home. And then guess what happens...Yup, you guessed it. He resigns from his position to take a job with a company that won't be as fulfilling but can provide him the compensation he needs. Your lack of speed investing in him as an employee will cost you far more than the additional $20,000 a year you could have spent to keep him.
C. Or how about when an owner is scared to sign a longer lease term, so they go with a 2-year option. They play it safe with a decision that shows they don't have faith in their business chops. Two years go by fast, and now you've got a landlord who wants a significant amount more for the lease renewal due to the neighborhood appreciation. Had you bet on yourself and gone all-in on your tenacity and work ethic, you could have locked in a 7+ year lease and had nearly a decade to grow your empire without having to move due to increased lease rates.
Your Takeaway | When To Walk + When To Sprint
Now those examples are all well and good, but here's the problem...there are no guarantees when making those decisions.
And we all know that hindsight has Lasik.
So how does an owner know when to walk or when to sprint in business?
This is the checklist I coach. Hopefully, it can help you in your next big decision.
If I make this move, and I'm wrong, will it take me to zero? Will it ultimately bankrupt me, or will it punch me in the dick financially? Is this death or a fracture that will heal in time?
Do I have the resources to make this move? Do I have to borrow money for this to happen? If so, can my business tolerate the debt?
Is there proof that this move will produce the result I'm anticipating? Are there data points in my industry or others that show this move will provide an ROI?
How will I determine if this move was successful? Is there a specific KPI that I can calculate at some point after I make this move that will indicate my success or failure?
And finally, the common PROS vs. CONS list of moving fast or slow with this decision. A tried and true method that doesn't always lend to an easy decision but can allow you to evaluate the decision with less bias.
Knowing when to put your foot on the pedal vs. slow rolling is crucial to your microgym.
Understanding the difference between running your business with the energy of Bawitdaba vs. Slow Ride is imperative if you want to be around for a significant amount of time.
And formulating a team of people or mentors who can guide you through the decision-making process is highly advisable.
Because business is hard.
But we already know that.
Because if it were easy, we'd call it your mom.
