In the latest episode of the Fitt Insider podcast, Joe Vennare sat down with Rick Stollmeyer, CEO of MINDBODY.
I’m excited to share this wide-ranging conversation, covering:
- The 20-year history of MINDBODY
- Rick’s take on the evolution of the wellness industry
- The growing fitness and wellness opportunity in India
- The future of boutique studios
- Rick’s advice for entrepreneurs raising capital
Check out an overview of the conversation below or listen to the entire episode for more.
The Scale of Mindbody
RS: We came up with the idea in 1999 and officially launched in 2000. We’re about 20 years in. And the business has grown rapidly throughout its history.
We started in my garage and today we have more than 2,000 team members serving 60,000 businesses, and we process more than $13B of transactions, classes, and appointments. As a business, we’ll do about $300M in revenue in 2019.
We have 14 offices around the world. And we recently opened an office in India.
The opportunity in India
RS: India is a really exciting opportunity.
India’s middle-class is about 300M people — almost as big as the entire United States. And there’s a rising wellness economy there. You see the same kind of boutique fitness and wellness businesses that you see here in the States and in Europe.
In India, the wellness business is still in an early stage — where the US was 10 years ago. But the economy is just gigantic and it’s one of the fastest-growing economies in the world.
The Impact of On-demand Fitness
RS: I think new technologies like connected fitness and on-demand content—like Peloton and Mirror—are extremely exciting because it engages people.
But, does that mean bricks and mortar studios are doomed? Absolutely not.
Case in point, how much did we pay to go to a concert or to see live theater? How much do we pay for face-to-face experiences? Being with people matters. As human beings, we crave connection. And that’s what these boutique studios and spas and wellness centers have done. They’ve created little tribes, they’re places of connection.
What we see in the data backs this up… when you introduce these streaming media, it actually accelerates the growth on the brick and mortar side. The two feed each other. I think we’re about to enter a third wave of massive growth.
Rick’s Fundraising Advice
RS: In 2005, when we launched our cloud system, MindBody Online, I had to get really good at raising capital.
When you start thinking about investors, the quality of the investor is more important than things like who is going to pay the highest multiple on revenue. Because good companies have been ruined by bad investors and bad relationships.
It’s also very important to engage a really smart attorney who has done [fundraising] transactions before. Be careful not to get an attorney who thinks success is optimizing the deal. Success is getting the deal done.
A mentor of mine told me that nobody ever went broke diluting themselves. Ultimately, the objective is to own a little bit of a much bigger pie. When you’re building tech and there’s an economy of scale and a network effect, speed matters.
I’ve seen entrepreneurs who wait around to get a better valuation while other companies go rocketing by them — they missed the moment. If you study all the biggest names in tech, like Amazon, Google, and Salesforce, they all aggressively raise money. That’s how you do it.
Will Mindbody offer on-demand content?
RS: I can’t share everything, but I’ll tell you that we’ve been studying media streaming video, audio, and on-demand media. And we found that the customer really values local, authentic content.
The idea that every neighborhood studio could have their own inventory of video and their own streaming capability that extends their audience and reach is interesting.
So you can expect us to surface systems that allow the studio owners to more easily upload compelling content, sell access to that content, use that content to activate people, and hopefully bring them into the studio. And that’s what we’re working on right now.
**Note: Rick’s answers have been edited for brevity and cohesion.
About Rick Stollmeyer:
Rick Stollmeyer co-founded MINDBODY in his garage in 2001. He serves as the company’s CEO and principle visionary, ensuring that everything MINDBODY undertakes—from product line to business development to team member enrichment—serves the company’s purpose to help people lead healthier, happier lives by connecting the world to wellness.
In 2005, Rick transformed the industry when he migrated the company’s business management software to the cloud. Today, MINDBODY remains the leading software-as-a-service platform for the wellness services industry, streamlining business management for wellness practitioners and making it easier for them to do what they love—improve the lives of their customers. MINDBODY now powers fitness, wellness, and beauty businesses worldwide.
Rick lives with his wife, Jill, near the company headquarters in San Luis Obispo, California.