Starting Strength Gyms: Performance Update by Ray Gillenwater, SSC | October 14, 2020 One of the most appealing aspects of Starting Strength is its quantifiable nature. Performance can be tracked and measured. Business functions in exactly the same way, which has made the business of Starting Strength a satisfying endeavor for all of us who enjoy watching numbers grow. The following is an update on how well the gyms are performing, both in terms of growth for our members and growth for the franchise owners. Member Performance One of the highest risk decisions we made when starting this company was to develop our own software. Building software is an expensive, time consuming, never-ending process that adds a significant amount of financial and psychological overhead to a new business. We decided to make this early investment because if we got it right, we would have a rare opportunity to quantify our members’ progress. We are not aware of any other fitness brand that can do this. Every member that signs up gets access to the Starting Strength Gyms digital logbook app. The mobile app integrates with our membership management software and our TV app. When a member finishes a workout, their coach tells them how much weight to add to the bar for their next workout, which they then enter into their digital logbook. When the member arrives at the gym for the next training session, their workout for the day is automatically displayed on one of the 65” flatscreens in the lobby. The other 65” screen displays Personal Records, split per sex and per lift. That screen rotates between gym-wide PRs and franchise-wide PRs. This was designed to enhance the member experience by making programming simple and by recognizing members for the progress they’ve made. When you’re three months into the program and it’s time to deadlift 300lbs for the first time, the other 11 people that you’ve been training with will see it on the screen as they walk into the gym. The moral support is an excellent motivator. It makes the event more meaningful when your peers share in the anticipation before the set and join you in the feeling of accomplishment once it’s been completed. Our system tracks each member’s digital logbook data in a consistent format, so that we can collate and measure progress over time. The following is a snapshot of how our members have progressed in their first three months of training, per age group, per sex, and per lift: Average Weight on the Bar (pounds) Men 18-44 Day 1 Day 30 Day 90 Squat 134 196 246 Press 73 98 120 Bench 120 147 177 Deadlift 172 251 297 Men 45-64 Day 1 Day 30 Day 90 Squat 118 176 229 Press 69 94 121 Bench 112 140 171 Deadlift 153 228 283 Men 65+ Day 1 Day 30 Day 90 Squat 66 114 143 Press 54 73 83 Bench 82 104 114 Deadlift 120 174 213 Women 18-44 Day 1 Day 30 Day 90 Squat 74 117 149 Press 39 55 64 Bench 57 74 88 Deadlift 111 157 168 Women 45-64 Day 1 Day 30 Day 90 Squat 54 92 115 Press 32 50 64 Bench 48 61 72 Deadlift 92 139 162 Women 65+ Day 1 Day 30 Day 90 Squat 27 74 98 Press 25 39 60 Bench 33 49 68 Deadlift 72 126 157 We know that the program works every time it’s applied correctly, but this is the first time that we have been able to demonstrate this at scale, with supporting data. Within three months of training at a Starting Strength Gym, on average: Men under age 65 squat 225lbs+, press 120lbs+, bench 170lbs+, & deadlift 280lbs+Women under age 45 squat 145lbs+, press 60lbs+, bench 85lbs+, & deadlift 165lbs+65+ year old trainees are stronger than the average 18-44 year-old trainee was on their first day of training (both sexes)65+ year old trainees add 70lbs+ to their squat and 85lbs+ to their deadlift (both sexes)Women of all ages can press 60lbs+ overheadWomen of all ages can deadlift 150lbs+ If you’re curious about what proportion of trainees continue after the Novice Linear Progression, Austin, our longest running gym (since April 2019), currently has 61% of their members on intermediate programming. Franchise Owner Performance Franchise owners risk their careers, reputations, creditworthiness, and their savings to open these gyms. Financial performance is the most important metric since it indicates whether or not we’re solving an important enough problem for an adequate number of people to spend $300+/month on a membership. If we were wrong in our assumptions about the commercial viability of Starting Strength Gyms, our franchise owners would fail and so would we. Fortunately, especially considering that gym chains all over the world are going bankrupt due to their governments’ reaction to the pandemic, Starting Strength Gyms are delivering strong performance: Austin Dallas Houston Denver Open for 76 weeks Open for 65 weeks Open for 58 weeks Open for 38 weeks Net Memberships Sold 112 129 92 102 Average Membership Price (Per Month) [3] $268.75 $289.48 $321.31 $258.6 —Lowest Priced Membership $95 $185 $95 $135 —Median Priced Membership $315 $315 $365 $275 —Highest Price Membership $365 $365 $365 $365 Gross Monthly Recurring Revenue [1] $30,780 $38,045 $28,880 $26,280 COVID-19 Member Loan Payback -$2,747.79 -$4,887.68 -$2,493.8 -$2,483.7 Memberships on Hold -$11,150 -$2,285 0 -$3,560 Net Monthly Recurring Revenue [2] $16,882.21 $30,872.32 $26,386.2 $20,236.3 2020 Year-to-Date Revenue $189,966.62 $274,366.16 $272,311.56 $159,683.12 Note 1: “Monthly Recurring Revenue” means the total revenue derived from subscription services. Non-recurring revenue items, such as a-la-carte semi-private coaching sessions or squat workshops (for example), are not included in this calculation. Note 2: During the ~2 month COVID-19 shutdown, the gyms continued to collect membership fees. Those fees are now being paid back to members in the form of ten equal monthly discounts off of their current membership price. For example, in Dallas, with a $365 membership price, a member would have paid ~$730 during the shutdown. To pay them the back, the gym would then discount the member's next ten months by $73. The "Gross Monthly Recurring Revenue" figure indicates the amount that the gyms would be making if they were not paying back members for the COVID-19 loans. Note 3: Average, low, median, and high membership prices are calculated based on gross memberships sold. When each of these gym owners purchased a franchise, they built their “best case” financial assumptions on 96 memberships, which means that everyone has exceeded their best-case scenario. The strength of the gyms’ financial performance has prompted every existing gym owner to plan for multiple locations. Most notably of which is the Dallas team’s plan to open 20 gyms across the country since their first location, Starting Strength Dallas, is full with a waiting list. Planned Growth The quality of the coaching, the performance of our members, and the financial results of the gyms has resulted in several new franchise owners joining the team. We have now sold a total of 16 franchises in the following markets: Austin - 1Dallas - 3Houston - 2Denver - 2Boston - 1Chicago - 1Los Angeles - 1Vancouver - 2Boise - 2San Antonio - 1 And at time of writing, the following areas are pending Franchise Agreement execution: Oklahoma City - 2Tennessee - 3Cincinnati - 1 That’s 22 gyms in 13 cities, not including the 16 gyms additional that the Dallas team is planning to open, for a total of 38 total gyms. It may not be a surprise, but we’ve also changed our target city list. We are open to exploratory conversations about most cities, but we prefer to focus on cities that generate a significant number of hits to StartingStrength.com, have a high ranking in terms of prospective members requesting a gym in their city, and where local governments are less authoritarian than places like New York City or San Francisco. The highest-potential cities that we’d approve without much deliberation are: AtlantaNashvilleCharlotteRaleighOrlandoTampaMiamiPhoenixLas VegasColumbusOmahaKansas CityLouisvilleIndianapolisVirginia BeachArlingtonAnn ArborCincinnatiPittsburghMadisonJacksonville Now that the business model has been proven, we’re more open to approving gyms in smaller markets and in mixed-use or industrial spaces as well. With our updated design standards and real estate selection guidelines, the total cost of opening a gym and running it for the first three months is now as low as: 4-platforms 6-platforms 8-platforms 7-platforms Industrial or Mixed-Use Space Retail Space Starting Cost $73,970 $83,605 $98,000 $147,040 To request a gym in your city, go to: locations.ssgyms.com To inquire about gym ownership, familiarize yourself with our requirements and go to: own.ssgyms.com To pursue a coaching job or apprenticeship at one of the gyms, sign up for the Coach Prep Course and email info@startingstrengthgyms.com with your background and professional goals. Discuss in Forums
