In this episode, Joe Vennare talked to Marco Crespo — Global Chief Commercial Officer at Gympass.
Last summer, the company raised $300M in funding to expand globally. Now, with 12,000 partner gyms and more recent partnerships with online/streaming options like NEOU and 8fit, they’re creating a platform to “defeat inactivity”.
The two discuss:
- We talked about Gympass’s three-sided marketplace — working with fitness partners, HR/corporations, and the exercise-seeker
- Why the company won’t pursue a direct-to-consumer model — because it devalues the fitness partners and isn’t sustainable in the long run
- How Gympass is innovating in response to COVID-19, launching streaming workouts to help fitness partners make money and keep users moving
Check out an overview of the conversation below or listen to the entire episode for more.
What’s the Gympass mission?
MC: Our mission is to defeat inactivity. We have an obligation to reach people who are not active and convince them to live an active lifestyle.
We believe everyone could be active if they find something they really connect with or are passionate about.
What makes the Gympass model unique?
MC: We serve three markets. We’re a corporate wellbeing platform that engages with corporations to make sure they’re investing in the physical and mental wellbeing of their employees. Then on the other end, we connect those employees with fitness providers. And we connect fitness providers to the end consumer.
How does a three-sided marketplace work?
MC: It’s important to understand what really matters to each party — then we can add value to all of them while creating a balanced ecosystem.
For fitness providers, we have to bring in new people. It’s critical and straightforward. We’re targeting the inactive people or the inactive population, so we have to get people in the door.
When you think about the employer, it’s a different game. They all know fitness is good and it benefits them in terms of lower health costs, lower absentees, lower turnover, more engagement. We provide a simple solution for all their employees, solving an HR struggle.
On the user side, they really want their employer to sponsor their gym membership. With Gympass, their company has sponsored it, and they have the ability or the flexibility to use multiple locations.
Will Gympass go direct-to-consumer like ClassPass?
MC: I don’t think so. We believe our target market—people who are inactive—and reaching them through corporations, is big enough. And it will keep us busy for many, many years. We believe we can be loyal to our value proposition and focus 100% on the corporate wellness sector. So we don’t see that coming in the future.
Can gyms continue to survive on breakage — or members who pay but don’t show up?
MC: I think the industry is moving away from breakage as the norm to a scenario where usage is the key.
The fitness sector will move towards the hospitality model where you want people to be more and more present in your facility, consuming your class, and offerings. Then, facilities can collect the auxiliary revenue.
Instead of having someone pay a membership, but never show up, gyms want people to pay a membership, come in every day, eat in the cafe, use all the services, get a personal trainer, and buy merchandise.
How will digital options impact the industry?
MC: We don’t know what the world will look like post-COVID, but we believe live classes will be part of the equation going forward.
Once we are back in the game, there will be a blend of digital experience and in-person experiences. That’s why we’re deploying new technology and solutions for our partners, so they can provide in-person and live classes.
In terms of a live class, providers can do one-to-many and have the flexibility with no restrictions. Now that there’s no geographical barrier, we believe people will be able to access many more classes and could be even more active by taking live classes at home.
How does Gympass continue to innovate for its end user?
MC: More than ever, we realized that our business model is what makes us unique. So we have to double down and keep growing.
We’re going to keep engaging with HR — which is difficult during work from home. But it’s really important because there’s a lot of discussions about the risk of depression. More than ever, physical activity or meditation and yoga could be really powerful tools for our clients to use to keep their employees engaged and motivated.
We need to focus on adding value to fitness partners, adding value to HR folks in corporations, and adding value to the employees of those corporations.
Our mission of defeating inactivity is not changing. And we believe we’ve found an interesting solution to really fulfill our mission.
**Note: Marco’s answers have been edited for brevity and cohesion.
About Marco Crespo:
Marco Crespo is the Global Chief Commercial Officer of Gympass, where he is responsible for overseeing strategic operations, partner relationships and sales in all markets. Prior to this role, Marco served as US CEO, where he was responsible for operations in the U.S. Marco has over 10 years of executive experience, having worked for companies such as The Boston Consulting Group, Procter & Gamble and Ayrton Senna Foundation. He has a degree in Electrical Engineering from UNICAMP and an MBA from Harvard Business School. Marco is an enthusiast for entrepreneurship and enjoys playing tennis and squash, spinning and running.