Gym Rat: Crowdsourcing Personal Trainers

Why pay for expensive personal trainers when you can leverage gym rats in your neighborhood? Here's a business idea to use crowdsourcing in the gym industry.

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

 

Previous:

DeNA Case: Failure of HBS Alumna

Next:

Solving Crime the Crowdsourced Way

6 thoughts on “Gym Rat: Crowdsourcing Personal Trainers

  1. Interesting post! Upon reading this idea, I was immediately concerned about “gym rats” without formal training giving advice to new gym-goers (as you aptly pointed out). However, I think this idea is really interesting (and this risk surmountable) given the emergence of social media “gym rat” stars with little to no health credentials. People across the world have taken up online guides to get fit, the most prominent one coming to mind being ‘The Bikini Body Guide’, and this model actually seems to be a clear extension of this phenomenon. Why pay for a training when you can download a PDF for free … and why pay for an expensive trainer when you can find a cheaper version on your block? I think this will be very attractive for people who can not find the motivation to do these moves on their own and therefore need the human interaction of a trainer, at a fraction of the price.

  2. Great post, Ravneet! This business is an interesting idea. I had the same concerns about it that you did. Specifically, how do you maintain quality-control on the trainers themselves (beyond just crowd-sourced ratings) – e.g. keep them from inadvertently hurting someone. Also – a big challenge for coaching / one-on-one client services platforms is – once the client establishes a relationship with a trainer they like – why would they keep using the platform? At some point, you have to imagine they just have each other’s phone numbers and do it “off the grid.”

  3. Great post Ravneet! The idea definitely seems great, but as with all good ideas, they count only if they can be executed. I wonder how successful is the company right now? I am really curious to see how they tackle the (very critical) problems you mentioned.

  4. Hey Ravneet- Great post, as usual! Did you design the logo? Clever, and well done. 🙂 As someone who finds himself shy to use the weights at the gym, I can definitely relate to a lot of the pain points that you had mentioned. I do wonder, though, if I would pay to find a stranger come with me to the gym over muster up the courage to ask one of my friends myself.

    I also wonder how easy this model would be for competitors to enter. Don’t get me wrong, I think it’s a wonderful idea! I can just see someone creating a similar product/app and not charging anything for it. I guess then it would depend on how awesome your gym rats are. 🙂

    It’s great your reimagining the gym-space and addressing one of the biggest pain points for gym newbies. For some reason, I have in mind a Tinder-like app whereby gym newbies can view profile information on a gym rat and then swipe left or right. Sounds like fun. Ha!

  5. Interesting thoughts Ravneet – I agree with the points you made above regarding risks. To add to that I feel there are a lot of gyms now that offer group classes for various routines which can be a great starting point for new comers since they are much cheaper (sometimes including in the membership) than personal trainers and are also more inclusive which can be a motivating factor. Other than that do you think individual gyms could also set up their own portals to connect their users who can coordinate with one another to form work out buddies based on time and level?

  6. Great post, Ravneet

    I really like the idea. Personally, I found that a lot of people whom one can describe as “gym rats” are highly internally motivated to exercise but also time constraint and might therefore not have the capacity to provide extensive in person coaching. Perhaps a platform that virtually connects two sides of the market with very limited (initial) in-person interaction could reduce the time commitment required to address “newbies” needs while capturing interest and participation of a large pool of “gym rats”. It is important to reduce any tractions preventing potential providers of the service to engage with the platform and a move to virtual environment could be one way of doing it.

Leave a comment