He’s Winning In Home Fitness Wars: $3+ Million Monthly Revenue, $45 Million Raised

Eric Min

In Episode #659, Nathan interviews Eric Min. He’s the CEO and founder of a company called Zwift.com. Eric is a tech entrepreneur, a lifelong cyclist and is now spreading fitness through virtualization and gamification.

Famous Five:

  • Favorite Book? – Crossing the Chasm
  • What CEO do you follow? – Max Levchin
  • Favorite online tool? — Slack
  • How many hours of sleep do you get?— 6
  • If you could let your 20-year old self, know one thing, what would it be? – “Taking risks earlier”

Time Stamped Show Notes:

  • 01:47 – Nathan introduces Eric to the show
  • 02:11 – Zwift is creating a virtual space where cyclists can interact with each other in real time
    • 02:31 – Eric is trying to solve one of the most common problems of cyclists
  • 03:26 – Zwift is a pure SaaS company
    • 03:29 – Zwift charges $10 a month
    • 03:36 – “We’re an asset-like company”
    • 03:38 – Zwift works with partners who have all the different equipment available in the market
  • 04:08 – The most basic setup to use Zwift is an iPad; a trainer that can be attached to your traditional bike to make it stationary
    • 04:32 – Based on your weight and how you’re pedaling, Zwift can put you in the game
  • 05:08 – Zwift was launched in January 2014
  • 05:18 – Eric and his co-founder committed a couple of million dollars to build Zwift
    • 05:36 – Their friends and families had raised around $7M
  • 05:47 – Zwift just closed their series A and they have a total of $45M raised
  • 06:07 – Prior to Zwift, Eric and his co-founder built a trading platform
    • 06:28 – Eric and co-founders wanted to build something out of their comfort zones
    • 06:41 – Eric was 30 when he launched the trading company
    • 07:08 – “Enterprise business is tough”
    • 07:45 – Eric and his co-founder had a $100M contract and spent 5 years extracting the contract
    • 08:18 – Initial capital was $3M
  • 09:17 – Eric and his co-founder are set out to be category leaders, so they made a new category
  • 09:51 – Zwift currently has over 300K accounts created
  • 10:07 – Zwift has 5M rides and 5M hours of pedaling
    • 10:16 – The average ride is 1 hour
  • 10:28 – Zwift also has 88M miles recorded
    • 10:36 – The engagement is fairly high
  • 10:38 – People log in to Zwift to watch other people
    • 10:44 – 202 hours of people logging in just to watch
  • 11:07 – People are also broadcasting their experience with Zwift
  • 11:42 – Zwift doesn’t have free users and what they have is a trial period
  • 12:00 – Zwift doesn’t have year-long contracts at the moment
  • 12:02 – Eric wants to understand the behavior of the customers
    • 12:10 – Most of the customers are outdoor cyclists
    • 12:33 – Eric believes that over time, Zwift will be a year-round overtime preposition for not just cyclist but fitness enthusiast too
  • 13:11 – Almost all consumer businesses are seasonal, like gaming
    • 13:20 – People spend less time playing games in the summer
  • 13:34 – Zwift makes it easy for people to consume fitness
  • 13:42 – “Our belief is that everyone is chasing fitness and everyone would like to consume fitness in the most efficient way”
    • 13:53 – The solution enables you to be at home and it’s cost-effective
  • 14:55 – Zwift has 70% of the people stay with them every year
    • 15:10 – Eric calls them “pause” and not churn
  • 15:27 – As the social network expands, it’s gaining more interest
  • 15:40 – Zwift also crowdsources content
  • 15:54 – Zwift has a community of users who want to volunteer their services
  • 16:17 – 97% of Zwift’s user acquisition is organic
  • 16:54 – Zwift targets cyclists and most cyclists belong to a tribe or a team
  • 17:29 – Zwift does a little on the digital advertising side
  • 18:00 – Eric has invested in Zwift Academy which is modeled after GTA Academy
    • 18:11 – GTA Academy is a marketing advertising program between Gran Turismo and Nissan
    • 18:50 – Zwift took GT Academy’s model and made Zwift Academy
    • 18:55 – Zwift Academy called out ladies around the world to join and 1200 ladies joined the program
    • 19:03 – Zwift had a public PR in different media channels to announce Zwift Academy
    • 19:15 – There were 3 finalists and they had to go through numbers of different tests
    • 19:29 – The 3 finalists were taken to Majorca, Spain where they trained for 10 days with a professional team
    • 19:37 – The professional team tested the finalists and offered a professional contract to one of them
    • 19:45 – One of them is now a professional rider who was a former series marathoner
  • 21:12 – Eric doesn’t worry about the valuation
  • 23:07 – The Famous Five

3 Key Points:

  1. Get out of your comfort zone – you’ll never know what’s in store for you until you get there.
  2. A large, initial fund that was raised should NOT affect your valuation if your company is doing well.
  3. Take risks…the earlier the better.

Resources Mentioned:

  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • Organifi – The juice was Nathan’s life saver during his trip in Southeast Asia
  • Klipfolio – Track your business performance across all departments for FREE
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
  • Show Notes provided by Mallard Creatives