Randy Hetrick is a former Special Forces Commander and the founder of the hyper-successful TRX fitness brand. TRX is a $50 million business with products that are used by celebrities such as Jennifer Lopez, Drew Brees, Michael Phelps, or Gisele Bündchen to name a few.
In this episode you will learn:
- How to apply the Navy SEAL mentality in business
- Executing on your idea while everyone is telling you no
- Bootstrapping your business with success
- How to deal with bad actors
- Going from offline to online
- The process of reducing the learning curve
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Randy Hetrick:
Randy Hetrick is the creator of the Suspension Trainer®–perhaps the most prolific piece of exercise equipment in history–and the founder of TRX, one of the world’s leading training brands.
Over the past three decades Randy built a record of unique accomplishments including: collegiate athlete, 14-year Navy SEAL Officer, bootstrap entrepreneur, multi-patented inventor, and growth company CEO whose company earned multiple placements on the rosters of the Inc. 500 Fastest Growing Companies and Outside Magazine Best Places to Work.
He earned a bachelor’s from the University of Southern California; a master’s from the Naval Postgraduate School, Monterey; and an MBA from Stanford University’s Graduate School of Business, where he is a contributing lecturer on entrepreneurship, branding and leadership.
Randy has recently added television to his resume as host of Spike TV’s reality series “Sweat Inc.”
Connect with Randy Hetrick:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Hey, guys. So, just a quick overview here on Panthera Advisors as I think it might be of value to you. Panthera Advisors exists in order to help founders that are in the process of raising capital or get their company acquired.
I actually started the company out of incredible frustration because during my entrepreneurial journey, which involved building, financing, scaling, and exiting companies. I could not find research that was founder-friendly, and I could not get the type of support that I was seeking. So, as a result, I made a ton of mistakes along the way.
If you’re looking to raise capital, or you’re looking to get your company acquired, or just need some sound financial planning, and you’re looking to get the best possible outcome in the shortest period of time, feel free to learn more by visiting us at pantheraadvisors.com/ or just reach out directly and shoot me a note at [email protected]
Alrighty. Hello, everyone, and welcome to the DealMakers Show. Today, we have someone that I think we’re going to be able to learn a ton from, and not the typical founder that you would see on the hyper-growth path. Someone that has taken the tough part which is really the bootstrapping part, which is the toughest one. I think that we will be able to learn a lot. So, without further ado, Randy Hetrick from TRX Training. Welcome onboard here today.
Randy Hetrick: Nice to be with you. Thanks for having me.
Alejandro: Before your entrepreneurial journey kickoff, Randy, you were a Navy Seal Officer for 14 years, which is really unbelievable. What were some of your biggest learnings during this experience?
Randy Hetrick: Oh, man. Well, just about everything that I have learned about business leadership and a lot of what I know about entrepreneurship, I really learned in uniform. I didn’t realize it at the time, but in the military, you come in, and from the day you start, however young, and however junior you may be, you’re in charge of things.
You get assigned things that you have to figure out how to accomplish the mission that you’ve been tasked with, and there’s not really any place to hide because the military is very big on accountability. So, those lessons start really early, and then as you progress to a career in the military, and in my case, in Special Operations and specifically in the Seal teams, the challenges just get bigger and more complex. You get more resources to manage and logistics to manage, but the one thing that never changes is the level of accountability.
It turns out that, man, was that useful in bootstrapping a company as was the lessons that—anybody who goes into the Seal Selection Program with the idea that they have a way out or they have an alternative that’s also willing to be considered, they generally fail because the pressure mounts so quickly.
The Selection process is so Darwinian and so harsh that if you’ve given yourself a backdoor or a bridge to retreat over, a lot of times you’ll do that. It’s turned out that that applies to entrepreneurship too, especially bootstrapping where you’re starting a venture in an undercapitalized fashion as a lot of entrepreneurs do. Certainly, I did. Then you’ve just got to go forward.
Every day you wake up, you move your feet, and you get going forward, and you never think about retreat because if you start thinking about it, chances are you might decide, “Geez. That respectable salary position at a steady company sounds awful good in the depths of your despair as a bootstrapper.”
Alejandro: Right. I remember I heard the same, this episode, that it was all about the warrior gene. I think you were mentioning there how you were able to really channel the anger, sort of speaking, to focus. Could you walk us a little bit more through this?
Randy Hetrick: Yeah, well, I don’t think anger has ever particularly applied to me, but yeah, it’s funny. There is a thing that they call the warrior gene which I don’t remember the exact gene set number, but basically, the thesis goes that certain people have a predisposition to be comfortable with risk. It boils down to that.
There was a show on National Geographic that I was part of where they actually did blood tests and determined—took a bunch of people that you would think would have warrior gene and did this test to identify it. It turned out I did have it, but ironically, a bunch of the folks that were on the show—if I remember, they had MMA fighters. They had Buddhist monks. They had a lot of different kinds of characters.
It was hosted by Henry Rollins who was a big punk rock musician. A bunch of the folks didn’t have it. Ironically, the monks all had it, which was a little bit of a brain-twister. I certainly did. I don’t know if it’s real or not, but it speaks to one’s comfort with risk.
In my case, where I’ve, obviously done some pretty risky ventures both in terms of real risk survival and also just probability of success. I went from being a collegiate athlete to being a Navy Seal, to progressing through that career and ending up at the Special Missions Unit.
Then tried to get into Stanford Business School as a guy who had no math skills. Somehow managed to make that come together, and then survived barely through that experience, only to then go launch a bootstrap and start a fitness startup out of my garage.
Anybody with much sense would not have done any of those things. And yet, for me, it was cool. It was a life well lived. What I learned about myself is that man, well, I have a very high tolerance for managed risk, meaning risk that I can sort of impact the outcome of. But I have a zero tolerance for blind risk.
I will not go to Las Vegas, sit down at a table and put my money down because I can’t control it. I know poker players would say, “Well, you can at some level.” But I can’t. I don’t have the skills to do that. So, I have zero interest in gambling because it’s blind risk, and I hate blind risk.
Alejandro: Yeah. Makes sense. You went from Navy Seal to Stanford Business School as you were saying. At this time, you were about 36 years old. Is that right?
Randy Hetrick: Yeah. I started at 35 or right as I was about to turn 35. Then I graduated when I was about to turn 37. Yeah.
Alejandro: Got it. How did this transition come about from Navy Seal to MBA at Stanford?
Randy Hetrick: Well, all I ever wanted to do in the Seal teams was be an operator in the field, being part of operational units, and getting the opportunity to lead operational commandos in the field. That was what drove me.
I originally thought because I had not been ROTC. I was just a regular college kid and wanted to volunteer and serve my country. I thought I was going to do four years and then go back to Stanford. That was my plan back in 1987 when I first signed up.
It turned out, after four years, I realized, man, I would have done that last four years for nothing but food and a place to sleep. I had such an incredible time. Then I got presented with another opportunity to go to get a Master’s Degree in National Security Affairs International Relations at the Monterey Naval Post Graduate School in Monterey, California. So, I said, “That sounds fun.” So, I did that. While I was there, I got picked up to the Elite Special Missions Unit. I went out there as a Troop Commander and spent four years there.
At each stop, I kept thinking I’m going to go back to business school, but I kept getting more meaningful employment opportunities on behalf of the country, so I did it until the point at which I had completed what was my greatest dream ever, which was to be a Squadron Commander at that unit.
As I was promoting out of the field, it just seemed like a pretty good opportunity to take a look at making a transition. I never really wanted to be a Navy bureaucrat because I was always a bit of a pain-in-the-butt for the bureaucrats, which you can get away with when—
It’s like being the quarterback of an NFL team. You can get away with being demanding then, but the day that you step off the field and go into administration, you’d better be toeing the line, and talking the party talk, and become part of the machine, or it’s going to spit you out. So, I decided at that point that it made sense to try to see if I could get into Stanford, and to my everlasting astonishment, they decided they wanted a Seal on the recruiting poster, and they admitted me.
Alejandro: That’s amazing! To shift gears a little bit, and I’m sure that for the people that are listening if they go to the gym, they probably bump against one of your products. The one that I use the most these days is the one to do pull-ups. For the ones that are listening if they see the yellow and black straps that they may be using at the gym, that’s TRX. That’s the stuff that you guys do. So, what was the spark of inspiration behind TRX?
Randy Hetrick: I never viewed this crazy device that I had created as a business. In my first tour at the Special Missions Unit was deployed overseas on a mission profile looking at piracy, and basically, recapturing the giant tankers and big-merchant vessels that were getting hijacked around the world.
We ended up in a place with no gear to train. This was a common problem. We’d deploy and then not have any—you know, you’re not taking any big, heavy gym equipment with you. So, you end up basically, doing pushups, sit-ups, and star jumps, and the kind of stuff that was being done back in the Roman Legion.
That’s all you had access to. In our case, we needed to train to climb. If you don’t have a pull-up bar or a pull-down machine in the gym, that can be a bit of a challenge. I just happened to of accidentally deployed with my Jiu-Jitsu belt stuffed in my bag.
I took it out, and thought, “Wait a minute. What if I tied a knot in the end of this an threw it over a door inside this little warehouse where we’re stashed away.” I used gravity; my body working against gravity, and lift myself up, and lower myself back down, and repeat.
Initially, guys that were with me on the deployment did what seals do, which is they mock you. But then quickly thereafter, they’re over saying, “Wait a minute. What if we did this? What if we did this? Couldn’t you perform this exercise and this exercise.” I started fiddling around with it.
When I got back to the states, I went up to the parachute loft and started tinkering with redesigning this thing; making it a little better. Then I had a buddy out in the parachute loft that would make these for guys in exchange for a case of beer. He would call me and say, “Hey, boss. Smith wants me to make him one of these; make him one of your gizmos. Is that cool?” We’d laugh and say, “Yeah. Sure, man. Do it.”
That was it until I got to business school. When I was at business school, another buddy of mine would go out and train in the athlete training center. Over the course of the first few months that I was doing that, nearly every coach that coached a team at Stanford would come walking up and say, “All right. You’ve got to tell me what this thing is.” Ten minutes later, they’d be asking me if I could make some for their squad.
When you put a string between the female tennis coach and the men’s football lineman’s coach, you’ve got a pretty broad swath of humanity. So, I say, “Maybe there’s a business in this.” I used the second year at Stanford as an incubator to kind of really try to validate some of these beliefs that seem to be valid, but I wasn’t really sure.
Then, I decided if I’m ever going to take a plunge, time to do it is now. When I graduated, I took about a year, and got some inventory built, and hired some part-time helpers, and went after it.
Alejandro: Nice. How much capital did you put together initially to get this thing up and running?
Randy Hetrick: Well, I mean, I took my entire life’s savings, which personally was not much as a government servant. I think I had about 50,000 bucks to my name, not counting the $150,000 in MBA debt that I’d taken on. I got some inventory made, and I filed some initial intellectual property filings around the patents and the trademarks.
Then I went about doing, fairly quickly thereafter, my first angel round. I didn’t take any family money early-on because first, my family didn’t have a lot of money, and secondly, I wanted to have a place to go home if this whole thing cratered. But I went to friends who knew me well and friends of friends who were interested in making small angel investments.
In my first round was a few hundred thousand dollars. Then a couple of years later, I did another round for about a million-and-a-half. Then I did a third round a couple of years after that for about the same. I initially capitalized the business over a period of three or four years with about four or five million buck’s worth of angel money.
Alejandro: Got it. But this was mainly friends and family, so you’ve never really gotten the sophisticated big institutions to finance. Is that right?
Randy Hetrick: Well, I wish that were the case. No, it’s not. That was how I got started. Then about year eight, I decided we’re ready to start making some bigger investments in growth than I can make with the little tiny amount of money that I had raised and largely deployed by that point.
So, we went, and we did a private equity round. That sort of changes the game. You don’t really realize it at the time, but when you decide to take institutional capital, it really fundamentally and—I won’t say permanently, but for a very long time, it changes the game in ways that you may or may not have anticipated.
Alejandro: Got it. So, over the lifecycle of the business, is it the public, the amount that has been raised?
Randy Hetrick: No, it’s not. We raised north of 20 million in total. In retrospect, I advise a lot of early-stage folks now, and a lot of them coming out of Stanford because the Business School is just down the road from where our headquarters is.
I think that one of the things that I learned is that yeah, it’s relatively easy to go raise large pots of money. What’s much harder is to deploy those pots of money in a way that generates a disproportional return in terms of growth and profitability because what happens a lot of time is you think everything is constrained by your access to capital.
So, you go find somebody to give you the capital, but the institutional guys, it’s their job to financially engineer the risk completely off of their plate, or as closely completely as they can manage, and onto your plate.
I think it’s a really big decision to go take institutional capital. I don’t think a lot of entrepreneurs give it the full diligence that they should because once you take it, it’s a lot like getting married. You can get out of it if you made a mistake, but it’s going to be painful.
Alejandro: Yeah, I hear you, and I always say that it is very important to know who you’re getting into bed with. So, that’s for sure. Just going a little bit earlier in the story of TRX, I understand that you started selling out of the trunk of your car in San Francisco. So, how were some of these early days for you guys?
Randy Hetrick: Yeah. I’ve actually called this venturing Boot-Scrape Startup which is like a level below bootstrap because you couldn’t get more of a garage startup story than ours. It literally, did start in my garage. Initially, when I got out of school, I didn’t have an office. I had nothing, but I had an old sewing machine out in the garage and all the tools that I needed to modify gear. So, we started there.
Once I found a supplier overseas who could start making the inventory for me in small lots, I then had to go convince people that this mousetrap was worth considering because there’s an awful lot of competing alternatives out there for exercise from push-ups and pull-ups to the gym-full of equipment: cardio equipment, selectorized plate strength machines, all kinds of stuff.
I’m going out there trying to convince people that “Really, what you ought to do is hang from these straps.” So, the only way that I could do it was to actually put people’s hands on the equipment and have them experience it. People would initially if I was trying to describe it, they would say, “Does it have weights?” “No, it doesn’t have weights?” “Does it stretch. Is it elastic?” “No, it’s not that either.” “Then how does it work?”
I would be really struggling if I couldn’t get in front of them, but if I got in front of them, I had 100% close rate, essentially. So, I decided that the best way to do this is to get out there with a backpack full of straps, and I decided that I would target trainers because trainers have the benefit of several characteristics.
One, they have a credit card, and early stage, cash is king. If you don’t have some sales to demonstrate—1) you have no income coming in to offset your expenses. 2) You’re not going to get any investor to give you any money until you have proven there’s a demand for your product.
So, trainers were a really early way for me to validate that they’re valuing this product, and they’re experts in physical training. So, if they like it, and they want to use it for their clients, chances are it’s valid. That was the line of logic. Then once I started being able to partner with trainers and make them money in the form of giving them great new tools to use with their clients, then they became ambassadors. They did some of the evangelist work for me.
But, yeah, to your point, I started in San Francisco driving around, making appointments with the fitness managers at every single gym that would take a meeting with me. I would go in there, and I would get 10 to 30 trainers corralled into an area, and I’d hang up a dozen straps or however many I could hang.
I’d have about a half hour to either win them or lose them. I must have done—if I did anything less than 400 of those pitches around the country over the first couple of years, I’d be surprised.
Alejandro: Wow! It’s an amazing story. At what point do you realize, Randy, things are starting to take off?
Randy Hetrick: Well, we went down to a trainer trade show called The Idea World Fitness Convention about a year after I graduated. I had a little bit of inventory. Took it down there. We sold out everything we had, first day. So, I had this part-time office assistant come, take all of the rest of the inventory that we had, put it on a pallet, and overnight it took me—fortunately, the tradeshow was a three-day event.
The second day, I was basically selling futures. The third day, I was able to fulfill those futures when the product arrived. That was a big moment where I said, “All right. I found at least, I believe, and I always did, that this was a B2B2C business model over the long term.
But, the challenge early on is finding who is the epicenter, the center of your target zone, and you’ve got to go validate with those people.” So, I found that I had hit a very fertile viable segment of consumers in focusing on trainers. That was one of the—
I’m not a guy who believes in “the tipping point.” I think most businesses have a series of tipping points. Every now and then there’s a big event that moves you way forward, and we refer to that as a tipping point. But I think that most businesses that survive longer than a few years will find that you have tipping points every few years that change the game and put you in a much better place than you were. That’s sort of how I experienced it.
Alejandro: Got it, and I guess saying with success there’s always other challenges and nightmares that I guess an operator needs to deal with. I understand that. In your guys’ case, that actually was fake counterfeit. So, how did you guys deal with this challenge, and I assume that it was always putting a lot of pressure on your business model?
Randy Hetrick: Yeah. Given that your audience is very—Alejandro, I’ll answer this sort of broadly rather than specifically because I think that I could talk for hours about the anti-fraud strategies and the impacts of that. But the big point I think that folks need to understand is at every level of a business you’re going to encounter new challenges.
Hopefully, you’re going to encounter new opportunities as well, but business is hard. It is hard to win out there, and it’s made doubly hard by the fact that you may—initially, the challenge is getting anybody to think your idea is good. Okay, then you conquer that, and you start to get some demand.
Well, then you need capital. The pendulum swings over to “Man, I’ve got to raise some money” because it’s a very rare startup that has more cash than they do expenses. So, then your next problem is “All right. Now, I’ve got to get investors.” Then you get the investors.
Now, I’ve got to put that money to good use, and I’ve got to build a team. Well, then you get a team and man, anytime you get more than ten people involved in an organization, you introduce the human factor, which is communication, alignment, everybody’s sort of individual challenges in their life. Getting that team to gel together to embrace a common vision, and then to really place the mission above every individual’s prerogative. That’s a challenge.
Then you accomplish that. Then about that time if your idea was good, you’ve got a team together, and you’ve got financing, and you start to scale, well then, the world supply of Me-Too competitors wants to come out of the woodwork and start to—because it looks like it’s such easy money, they want to come in.
So, they start trying to knock you off, and they confuse the market because the market doesn’t yet really know about maybe even the product, much less who the originator is. Then you start struggling with competitors. What do you do with your pricing?
Then in our case, to your point, Alejandro, we had the extreme competitor. We had half of southern China decide that they wanted to knock-off this product, and it started with counterfeits. Actually, just like the back-alley fake Rolexes and Louis Vuitton.
Suddenly, TRX had fake TRXs springing up all over the world at a tiny fraction of the price that we were charging because we’re out there spending all this money on education and marketing. Our products are made like best-in-class, bullet-proof. These guys come out with—they want to use the cheapest materials that you could ever imagine.
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The products fail routinely and catastrophically. But, sometimes, the customers don’t know. They think they bought your product. The next thing you know, they’re calling your tiny customer service group, and screaming and yelling because “their suspension trainer exploded, and they fell down and broke their arm or hit their head.”
Fortunately, we had had the foresight to have unique serial numbers on every single unit that we’ve ever made that can’t be duplicated. So, we were able to protect ourselves from the liability, but it still is incredibly distracting. You know, the competition of these low-priced fakes undermines all of your partners.
So, if you have salespeople, you have distributors, you’ve got your website, you may have an Amazon channel. All of that comes under pressure from not only legitimate competitors but then this sea of illegitimate knock-offs. It almost put an end to us.
Alejandro: Wow! That’s incredible. You know, it happens all the time. The copycats, if you are doing something good, they’re going to come. So, it’s just keeping the focus, and keeping at it, and just executing, and moving forward. In your case, the growth has been remarkable. I understand now you guys are north of 50 million in revenues a year. Is that right?
Randy Hetrick: Yeah, that’s correct. We didn’t realize how much of our sales were being stolen by these fakes. You kind of try—the initial advice that I had gotten from some of my mentors in the business world was, “No, Randy. Just ignore those. Stay focused, and just execute.”
On one hand, that’s good advice, but on the other, I think it’s a little bit of old school advice because the challenge with the digital consumer economy is that just about anybody can have a shop set up on Amazon in 15 minutes. Right? If what they’re selling if fake stuff that leverages your brand, your images, your designs, walks right over the top of your patents and trademarks.
What ends up happening is the online marketplace has search algorithms that these fraudsters then bid on your trademarks. They pay just enough to pop up right next to you when somebody searches for your own trademark. Now, it’s very confusing because the customer’s looking and it’s like these are all TRXs. Except this one from this third-party vendor is a quarter of the price of the one from the brand. I’ll just buy it from this person.”
So, the advice to just sort of stick to your knitting and execute on one hand is good, but it’s not really sufficient anymore because, in today’s economy, you will just be bled to death by an ever-increasing number of fraudulent vendors if you don’t address protecting your actual property.
Alejandro: Got it. It makes total sense. So, that’s a very fair point actually, Randy. I wanted to ask you now, just to follow up on the growth. How many employees do you guys have now?
Randy Hetrick: We’re around 100 full-time, plus or minus. But then we have about 350 outside contractors who we employ regularly on a weekly basis, teaching our education courses to all different kinds of training professionals, from strength-conditioning coaches to physical therapists. Obviously, the personal trainers are a good fit, military fitness instructors.
We became the biggest education company in the training world. Didn’t intend to do that, but when you have a product that nobody understands how to use, you have to either educate quick or die. So, we became an education company, and that’s ended up being really part of the TRX armor is that we make trainers.
We equip them to make great livings. We help them make more money. We make them more marketable, and we help them deliver great results to their clients so they can charge more and their clients never leave them. That’s now a core part of our business.
Alejandro: Got it. I believe that as the leader of a business, and obviously in this case, we were discussing the incredible growth that you guys have experienced. The person that you are today or the leader that you are today obviously has transformed or evolved over the years in order to really be effective with your current organization. So, in your case, Randy, how, for example, did you have your level of communication evolve as the leader of a company, now with all these employees?
Randy Hetrick: Yeah, look. I’ve learned a lot of lessons, and I made a lot of mistakes. I really think that if you’re not making mistakes, you’re unlikely to succeed because you start out very, very directive. You know, my style has changed too because remember, Alejandro, I came out of a pretty Darwinian pack of Alpha males where I had learned my leadership style and approach.
I would say the folks that were at TRX early-on probably experienced more commando-style leadership than they maybe wanted. Over time, I realized, “Hey, I’m dealing with different kinds of people.” Leading Navy Seals, you’ve got a pretty rare group of incredibly driven, capable, and resourceful people who are just steeped in accountability.
Well, you know, you come to the civilian world, and you find that the level of commitment, the level of accountability, and frankly, the level of drive and resourcefulness is not always anywhere near the level that I had been used to.
So, you’ve got to—on one hand, you have to adapt your expectations. You have to adapt your style to realize people in the commercial economy are not going to put their lives on the line. They’ve got a job they want to go to. They want to do well while they’re there, and they want to go home.
So, I’ve had to learn not to project my same level of care and intensity about the company and the opportunities with quite the same aggressiveness that I used to because it’s not a realistic expectation that’s going to be met. Similarly, I’ve learned over time that—
I learned this in the Seal teams, but I’ve come to peace with it over time, which is there’s a reason why they say it’s lonely at the top. It’s not lonely because you’ve got to be a jack ass. It’s lonely because, over time, you have to get to the point where just like in the Seal teams, hey, it’s all about the mission.
At the end of the day, as long as you’re doing what’s right for the company, you’re being fair to people, and you’re holding people accountable because that’s right for the company. You can’t get too wound up about if you’re not Mr. Popular. The reality is you can’t be everybody’s best friend in life, and actually get anything done.
Someone has to establish the direction, the rules of the road, and then the tasks and deliverables that the team’s getting paid to execute and hold teammates accountable. I’ve gotten thicker skin, I guess, Alejandro, over time that look, as long as what I’m doing is the right thing for the company. I’m adhering to my principles of being fair, being clear, and communicating fully, then I don’t lose sleep anymore over—
it’s the easiest thing in the world to be a critic. That is the reality. Anybody can be a critic. I just sort of say, “Hey, when you get out in the field, go after it, and build your own business. Then you come back and tell me what your opinion is of whatever this thing we’re discussing right now. But until then, if you don’t like it, I’m sorry. You can go—”
Alejandro: I hear you.
Randy Hetrick: Pursue your [36:37] elsewhere.
Alejandro: I hear you there, Randy. So, now that people are using your product, like, let’s say, Jennifer Lopez, Lou Breeze, Michael Phelps, Gisele Bündchen. Where do you see TRX in the future?
Randy Hetrick: The big initiatives for us right now, we’ve been a B2B business for three-quarters of our existence. I guess if we count the very first year of me driving around in my jeep with my dog in the passenger seat and a backpack full of straps, then we just completed our 14th year in the market.
For 12 of those years, we were B2B. Our first customer was the training professional, and our second customer was the facility in which that professional worked. But the plan was always to extend to the true consumer as well. In the United States, 80% of the population does not belong to a gym.
While I absolutely love and will always be dedicated to the 300,000+ trainers that we put through our qualification courses, and the 50,000+ gyms that we’re partnered with, I also want to go out there and get the 80% of the population that is at home, many of whom are afraid to go to a gym.
I actually want to get them up off their butts, get them moving with our gear and our programs and our apps, start to generate success to them, and then I want to push them to either one of our trainers or one of our partnered gyms so they can continue their journey.
That’s creating really an ecosystem that all reinforces each other. Right? I can reach out and get somebody out of their house, deliver them some results, make them feel better, successful to the point to where they’re like, “I’m ready to go to a gym.” Then I can show them to a gym that we partner within their area. That’s a great public service in my view. That’s what we’re working on. The big new frontier for us is going to serve the consumers in their homes.
Alejandro: I love it. So, if you could go back to the past, and I know that you can never do this, and give yourself advice, just be able to have that chance to sit down with yourself before you were launching TRX, what would be that piece of advice that you would give yourself? That one piece of advice?
Randy Hetrick: Wow! One. I’d give myself so many pieces of advice that it’s hard to distill it down to one. You know, I think the very first one that I would say goes back to this issue of capital. One, remember that cash is king. You could go out of business in your most profitable month ever. People say, “How could that be?”
It’s simple. It’s like managing your checkbook. You may know that you’ve got your paycheck coming, but if you go and write a bunch of checks before that paycheck hits, and those checks don’t return money, then you may have all kinds of great things that are headed your way in terms of customers, but you’re going to run out of cash. It takes cash to pay the electricity, the salaries of your team.
So, you’ve always got to remember that I think as an entrepreneur, first make sure that your inflows exceed your outflows, period. Then secondly, the corollary to that is raising money is one of these things that it sounds good at the time, but the people who give you money expect returns. Those returns are going to come due.
So, one of the things that I learned the hard way is that more money doesn’t necessarily equate to better decisions. You know, you end up with money, you end up having a tendency to do more things than you should, take on more things because suddenly you’ve got more money to hire more people, and every person you hire has his or her own ideas about what he or she wants to do when they come to work every day.
So, you can take money and actually create, not only a long-term liability for yourself, but you can move faster. You can get further down blind allies than you should or could if you didn’t have that extra money. So, I would be very, very diligent about investing behind growth opportunities.
What I mean by that is you bootstrap your way to a Proof of Concept, and if it works, okay, then raise a little bit of money to invest behind that, and make it bigger. I try to minimize the number of long-term, what I call “Spin-casting.” These long-term casts out into the pond of the future that are very expensive that require people to support, but that may never bring a fish back in. That money’s just gone to the bottom of the ocean.
But guess what’s not gone? The fact that you owe a return on that money. So, I would say try to live within your means and grow organically rather than go leverage yourself, whether it’s equity money or whether it’s debt, doesn’t really matter on speculative growth because it’s riskier than you could ever imagine.
Alejandro: Got it. So, Randy, what is the best way for folks that are listening to reach out and say hi?
Randy Hetrick: I’d love it if all your folks went and checked us out at trxtraining.com because we are all about helping you make your body your machine. Then if they want to follow me, all my handles are @randyhetrick. The company’s social is @trxtraining. We would love to make some new friends and bring you into the black and yellow universe.
Alejandro: Amazing! Well, Randy, thank you so much for being on The DealMakers Show.
Randy Hetrick: My pleasure. Thanks for having me, and best of luck to any and all of your folks that are either thinking about starting a business or neck-deep in the joy of it already. I wish them all great luck.
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