This week I did something really regrettable. I knew better, but temptation and curiosity got the best of me.
I clicked on an Instagram ad.
This singular, innocent action set off a chain of algorithmic reactions, and now Instagram is convinced I’m the biggest meathead in the South. The perfect gym shorts, the miracle supplement, the one piece of workout equipment I desperately need but never knew about — I am inundated. Maybe you can relate?
But in addition to making me restrain my clickbait habits, this got me thinking about something bigger: That the fitness industry is ripe for disruption. Just not in the way you or they are likely thinking about.
Technology as Innovation?
Technology has been disrupting fitness for a while, and in the last few months, we’ve seen rapidly accelerated changes sweeping the industry, with leaders like Gold’s Gym filing for bankruptcy (a perfect example of what happens when you don’t have a Zero Revenue Plan), and at-home fitness devices like Peloton, Tempo, and Mirror filling the void left by shuttered gyms and workout studios.
But new technology and gadgets are not enough. Fitness needs to get irrational.
Everyone is currently focused on in-home fitness devices and streaming services, but that’s just more of the same. A truly irrational approach would look at the devices and streaming services not as an end in themselves, but as a bridge toward owning the entire health and wellness space. That’s far more valuable — to both brands and consumers — than any piece of equipment or subscription service.
Prediction: In the next three-to-five years, a company will create a new vertically-integrated, incentives-based health and fitness model and become one of the most valuable companies in the world.
It won’t just be a piece of technology, but an entire ecosystem. Tech plays a role, but it’s only part of the equation. The onus is still currently on the consumer. I have to be motivated to work out, to choose a routine, and to log on every day. And when I don’t, there’s a huge gap in existing and potential outcomes, as well as everything else I do or don’t purchase to enhance that experience.
There’s a missing piece, and that piece will change the entire fitness industry — and with it, our individual and collective health.
Hardware manufacturers are no longer building for the Gold’s Gyms of the world. Instead, they’re moving to a direct-to-consumer subscription model using perpetually updated software. That shift will lead to innovation we’ve never seen, offering 3D modeling, fitness and health tracking, and an entirely new outcomes-based paradigm.
It’s not just the location or the device or the style of gym shorts that needs disrupting with a hefty infusion of irrationality, it’s the entire business model.
A Results-Driven Wellness Ecosystem
Amazon and Lululemon are both leading the pack as top contenders to wear the crown in this space. Lululemon recently acquired Mirror, a $1,500 device that streams workout classes for a $39 per month subscription. Lululemon wants to go beyond clothing and become an experiential fitness brand. Fitness apparel brand Alo also launched its own branded subscription service for streaming classes, and T3 Ventures was an early investor in Atlas Wearables, one of the first companies to customize exercise recommendations.
But what none of these companies are doing (yet) is owning the space by creating a comprehensive, results-driven health and fitness ecosystem.
What if you set a goal — to lose 15 pounds, for instance — and you get a device, like Mirror, and the virtual training and classes for free, while the company makes its revenue selling you other products and experiences: workout clothes, a fitness tracking device, equipment like mats and weights, food, supplements, and more?
There are rumors that Amazon is getting in the health insurance business, and with the launch of their Halo health band, they’re well-positioned to dominate the health and fitness space. The band will cost $99 and require a $4 per month subscription fee. It can track your activity and sleep, measure your body composition and fat percentage, issue sedentary warnings, and make a 3D digital model of you. Perhaps most creepily, the device can also track your vocal tone to detect your “energy and positivity,” complete with capabilities to chastise you when you’re being too negative. (Because who doesn’t love criticism from inanimate objects?)
You don’t have to take a huge imaginative leap to see where all of this might lead. Eventually, Amazon may opt to give away the devices in exchange for all the data it’s collecting on you — adopting the “free stuff for data” Google model. With their logistics expertise, Amazon is then well-positioned to get you everything you need to optimize that data. They’ll know your body measurements better than you know yourself, so clothing recommendations become precisely irresistible, requiring no trying on and few returns. They won’t market you random vitamins, but exclusively focus on supplements you need for peak health and performance. They’ll know which food is right for you, then customize meals and snacks and deliver them straight to your door. And if (when) they launch their own health insurance, expect prescriptions to follow, making Amazon your one-stop-shop for everything health- and fitness-related.
I also predict Amazon will buy Tempo, the home fitness device that streams elite trainers who monitor your movement, track your form, and make customized recommendations using its 3D sensors. Many will find in-home cameras a bit dystopian and cringe at data collection in our private spaces, but just as many are motivated by the efficiency that technology offers — and the drive from vanity is even stronger, not to mention potential disease detection and extended longevity. Our desires for privacy and utility crisscross, and the more utility you get, the less privacy you demand.
The vertical integration of fitness is the model that will rock the industry and transform our bodies and health. It’s an innovation model of incremental growth that will encompass every facet of our well-being.
Who will own this lucrative long-game? Will it be Bezos or a yet-to-emerge leader that will rise from startup obscurity? Whomever it is, one of these companies will unlock more innovation in the fitness space in the next five years than we’ve seen in the last 500.
Ten years ago, to predict that most gyms would go out of business seemed nuts. Now, it seems inevitable, with an outcomes-based, “fitness as a service” model emerging as the Big, Crazy, Irrational Idea that no one’s doing yet, but which someone, inevitably, will do — and Instagram ad algorithms are no match for that.
What other features might this new fitness ecosystem include? What company do you think will lead it?
Until next time,
Ben