Gym Rat: Crowdsourcing Personal Trainers

Problem: Gym memberships are underutilized

The U.S. has had record high enrollments in health club memberships and boasts the largest health club industry in the world. 55 million Americans were enrolled in a health club in 2015, a 67% increase from 33 million in 2000 (1). However, according to some statistics, over 60% of gym memberships go unused in the U.S. and only one in four Americans with a college degree meet the CDCs guidelines for exercise requirements (2,3).

So why are so many gym memberships underutilized?

• Gyms are intimidating. Once a new member or “newbie” joins a gym, he/she often doesn’t know how to use the machines or what exercise routines to follow. Moreover, newbies often feel awkward, out of place and self-conscious to ask for help.
• Motivation is hard to kick start: It is challenging to motivate oneself to travel to the gym alone, in particular when the you need to drive there and make time outside of an already demanding schedule.
• Personal trainers are expensive: Only 13% of gym members hire personal trainers to combat the first two issues mentioned, as these are costly over an already expensive monthly cost of a membership fee (4)

On the other hand, most health clubs also have a core user base of “gym rats”. In 2013, over 23 million Americans reported visiting their health club over 100 times in a year (4). Gym rats tend to be extremely enthusiastic about exercise, and are often asked to share their knowledge and expertise with their social circles.

 

Vision: Newbies can leverage gym-rats for personal training and motivation

Imagine a world where gym newbies could leverage the crowd-based knowledge and enthusiasm of local fitness experts, who would motivate and train them at their neighborhood health clubs.

Enter Gym Rat: an online crowd-based platform that connects gym newbies with gym rats to build communities of health-freaks that train together and share fitness knowledge to make exercise more accessible to everyone.

Business Model

Summary:

Gym Rat would be a two sided marketplace where new gym member (“newbies”) pay a monthly fee to access a network of gym-rats who go to the same health-club regularly and are willing to exercise together, train, share workout tips, and be your accountability buddy in the gym. In return, gym rats get their gym membership subsidized by $20 a month, in addition to several perks from our 3rd party partners (e.g., Nike discounts). Gym rats simply need to indicate at what times they’ll be available at their gym each week and a newbie may match with them for a 60 minute time slot.

The model is crowdsourcing (and not just matching) gym rats to newbies because newbies will always have access to an array of gym rats and can always choose among different trainers based on their exercise interests, expertise, reviews, or the times they indicate they’ll be in the gym that week. Therefore, a newbie may choose a different trainer for a weights workout than a cardio workout based on their desire for that day, for example.

Value Creation:

Newbies can connect with a gym rat via the platform, and thereby have a social and knowledgeable exercising experience that day. The two can chat over the platform before meeting at the gym, and thereby the gym rat can motivate the newbie to go work out that day. Newbies get access a host of gym rats and therefore build a community in their local gym.

Gym rats have an opportunity to share their knowledge and experience with others and encourage others to get fit too. They also receive health-club related subsidies and discounts from our partners depending on their usage of the platform. Lastly, gym rats are implicitly incentivized to win virtual rewards like badges, and every interaction will be reviewed so they will be incented to do their best work.

Value Capture:

My current idea is a monthly all-access membership fee of $30/month but this would need to be tested. This is based on the fact that the average monthly fee for a gym in the U.S. is $58 but the average cost of a personal trainer is $60-70/hour, so perhaps motivated newbies would be willing to pay half that much for access to a community of experts for the month (2,5). If the monthly fee were higher, it may start to feel like a second gym membership which could preclude a number of users. The model may evolve to allow select advertisers to target communities of fitness experts on the platform, which would bring down the newbie fee (potentially to zero), or raise the payout for our gym rats. Over time, I imagine we can upsell newbies to buy add-on services (e.g., access to “premium” gym rats who may be certified trainers), access to special workout videos and training materials, etc.

Value will be created if we can build a strong localized fitness community by investing in intangibles.

 

Why Now?

The primary reason to pursue this idea is that the personal training and gym space haven’t evolved much in decades and are ripe for changes to the model. This is especially due to the huge mismatch between people who underutilize their gym membership, and those who “over utilize” it. Moreover, the social component to exercise is an extremely important predictor of engagement, which has been proven through group fitness classes, in particular the recent success of social fitness companies Soul Cycle, CrossFit and Class Pass.

 

Risks

There are risks to implementing this idea however. Firstly, people may not pay for it at all and we may need to use an advertising based revenue model to make it work. Moreover, like any two-sided marketplace, we will need a critical mass of gym-rats and newbies on the platform for this to work well. There is also legal risk as the gym-rats are not certified personal trainers and cannot be liable for any advice they provide. Lastly, this business model implicitly requires that gyms will participate (although it does not technically need their consent to operate). However, gyms have no incentives to approve of this model as they make their margins off of members that are underutilizing the membership. However, if the platform successfully builds communities in local gyms, this may be net beneficial for the gyms themselves, in which case we may be able to charge for their participation as well.

 

Sources:

1. https://www.statista.com/statistics/236123/us-fitness-center–health-club-memberships/
2. http://www.statisticbrain.com/gym-membership-statistics/
3. http://www.vocativ.com/culture/science/at-least-three-quarters-of-americans-dont-exercise-regularly/
4. http://www.ihrsa.org/consumer-research/
5. http://fitness.costhelper.com/personal-trainer.html