Chapter 8: Data and Development – Alpha, Beta, Gamma

With a business license in hand, I was able to breathe again without thinking I might take a heart attack at any minute.

Somewhere along the way during my fight with the City, I was walking to Lisa Blewett’s house for a “get together” of some sort, when on the street a half block away from the front door I saw this girl with weird teeth and a world class strut coming at me. She was staring right at me and as I tried to give way she moved over to my side of the sidewalk essentially blocking me. I looked at her as if to say “what the fuck”? Nothing, no back down what so ever. Then I recognized her. It turns out Lisa showed me her photo on her phone a few weeks before. (“Lisa, I basically saved your whole life, got you off the bottle, rescued you from fatness and you met your husband at our school…What have you ever done for me? I know you have some hot, cool friends I have seen them, you never bring em around”) after the badgering she produced her phone and as I scrolled I settled on the girl now staring at me.

“I know you.” she says.   “Fuck a bad facebook hookup” I say to myself. “No you don’t.” I say to her as I try to deek around her”. “Yes you do” the weird girl decides to press her case.   “No you don’t.” I counter with disgust in my voice. Now angry, she says Louder than before “Yes you do, you used to go to the Regal Beagle”. With a high nose I retort, “I don’t go to that place, it’s a pick up joint”.   “Well you did, you came in with Curt Hillier after Friday night hockey.”

Fuck me, Curt is my financial planner and I did used to go there with him after Friday hockey.   “That was 3 years ago” I say dumbfounded.

“See, told you.” she offers proudly as she walks off.

 

The rest of the story is legend and might get released in the e-book if the censors allow it, but in short Audrey is the coolest girl in the world and I still have never beat her in a bet. I lost $123 on our second date. I told her I loved her within one week and proposed within six months.

 

The proposal was straight from a fairytale. We were in LA sleeping in my high school friend’s (Squid) spare bedroom after the CrossFit Games in 2011, and a particularly stressful meeting with Glassman. I woke up at 4 am and had to pee. As I was coming back from the bathroom, I had a thought. “You really needed her in that meeting, if she wasn’t there it really could have went all wrong, you have never met another girl like her and it will never get better for you than her.   I rolled her over and woke her up and proposed on the spot. “Yes. Will you marry me?” was her response. Then we went back to sleep.

Things were going well back in Vancouver at this point, too. T-Bear, Sheppy, and Andy’s businesses were rolling. All three of them were making professional wages, between $75,000 and $105,000 a year.

 

And our formal Apprentice Coach Diploma program was up and running. Eunice was our first coach to graduate through the entire apprentice program—Junior Apprentice, Senior Apprentice, Associate Coach—and she was now a self-sufficient coach. Off the tit. (Editor’s note: My graduation gift was a pair of kegel balls).

 

Bumpy, Billdo, Lumber and Lunger were rounding into excellent coaches and although long winded and selling flowers on the side, Chesty was working his way through the ranks at a decent clip. Charlie even had apprentices!! The all looks team staring Opie and Guido.   We also had a great crew of “Utility Infielders” led by Kermit, CJ (more on him in CH 9), Dan the Afghan, and Reto “Ginger Crotch” Corfu. Kermit was and continues to be the best money I spend every month, however the boys needed some work. Dan was loyal, strong and generous, but clearly a close talker and weird as a 16^th century dinner gown. On our first surf trip together Crotch told me a new law of the universe he had discovered, “Patterson, you can’t fall in love after the age of 26.”

 

A few struggles aside the community was flourishing. New people were coming through the doors all the time, and with classes getting busier and busier, it was great to be able to have an apprentice coach help out in each class. The vibe was great.

 

At this point, with Eunice in place as an associate coach and a handful of young apprentices coming through, I was able to reduce my hours on the floor to just a couple hours a week. We were sailing with a good strong wind at our back. The storm was over.

Until the world intervened again.

 

This time, it was Reebok who came on board. Greg had decided to shift the focus of CrossFit into the direction of the CrossFit Games, and now Reebok had become the main sponsor. There were rumours about Reebok opening 300 CrossFit gyms around the world.

 

If they plopped one of these things in Vancouver—with their unlimited marketing budget and Reebok brand—we were all screwed. Reebok knew how to sell shoes; they had no idea how to run a gym. But it wouldn’t matter. They could do it all wrong and there would be a few hundred more fools lined up at the door wanting to buy in.   As long as they were selling shoes and clothing in the process who cared?

 

One day, a Reebok rep came to Vancouver to talk to us. I got pretty agitated with her, explaining to her that I would raise all hell if Reebok opened a gym down the street. Why the hell was a shoe manufacturer wanting to get in to a grass roots gym business anyway? Just sell your shoes to us and our clients…..done.

 

Their plan was to pluck coaches from other gyms to open new Reebok gyms. The idea was to give the coach who would open a Reebok gym a low-interest or interest-free loan. She even suggested a coach like Eunice might want to open her own Reebok affiliate with Reebok’s help.

 

I called Eunice into the office.

“Eunice, how much money did you take home last month?”

“$8,000,” Eunice replied.

The Reebok reps eyes bugged out in surprise.

“How many hours a week did you work?”

“About 25,” Eunice replied.

The Reebok rep started to see where this was going.

“Would you want to take on a loan and the workload of running a gym by yourself, Eunice?

She laughed at the thought. “Not a chance.”

 

I looked at this woman and said point blank, “So let me get this straight, your plan is to come into this market, basically use my branding, steal my best people and you have no idea how to run a gym and then I promote your shoes to my members?”

 

The Reebok rep was freaked out pretty hard. Clearly we had something in Vancouver she hadn’t seen before as she traveled around visiting other established CrossFit gyms.

 

At other gyms, the situation was, and still is, always the same: Coaches barely make enough money to survive, so coach retention is generally poor (a negative for the clients and the business). Often times, coaches get lured in by the apparent prestige of owning their own gym, so they leave and start their own affiliate down the street. They aren’t making money anyway, so they might as well own their own gym, is their thinking. Other times, coaches lose faith in ever making a living coaching, so they leave the fitness industry all together.

 

Back to 2012: The Reebok rep became so visibly upset she drove her car into our loading bay as she was leaving. Four guys had to lift her car out and send her on her way. She was fired shortly after and I was on a plane to Boston the meet the Reebok guys.

 

After that meeting I knew I needed to move forward with my consulting business, which had been put on hold because of all my troubles with the City, and get a group of likeminded affiliate owners together to figure out Best Practices.

 

I knew we had a long road ahead of us: Ideas are cheap. Execution is expensive.

MadLab Group was officially incorporated in February of 2012 and its first hire was a scrappy little Kiwi who called me the C-Word the first day we met. Dashie, like most of us was done with the real world. She hated her job and didn’t much care for her boss either, (She loves her current Boss so much) so I said “Come help me, I have a job for ya, ya little scrapper!!” She quickly became know as “Dashie the rat catcher” and is now the GM of the school, but back in those days we were trying to figure out what to do with MadLab Group and she was my XO. She was Denzel Washington to my Gene Hackman.

 

We started recording the data we were collecting from mentoring other gym owners. I discovered exactly how much each affiliate was making, how much their coaches were making, how many hours they were working, how good their client and coach retention was, what their fundamentals program was like, what their coach compensation and coach development programs were like, and on and on. Their numbers were pretty desperate.

 

And more than anything, it became pretty clear to me that most affiliates relied heavily on bringing in new members, which was becoming increasingly more difficult as the market was becoming more saturated.

 

I originally started hosting weekend seminars in 2006—an executive business mentorship program—which attracted affiliate owners from all over North America and Europe. I dusted that program off and sent it over the boards for another shift.

 

While useful, we realized after the first year that you can only do so much in a weekend. What we needed was follow-up with our members and support systems. We needed an implementation process.

 

This was the start of what has become the MadLab Group today. Our members have access to an online school full of business and coach development resources, software systems to keep track of business data and billing, a workout tracker to monitor students’ performances, and a step-by-step implementation process with support staff.

 

In the early days it was rough and totally unscalable. It was basically me and Dashie, a 2 day course, email, and a few power points and word docs. I was on the phone or travelling to the alpha gyms to sort shit out all the time.   It evolved into a dropbox with word documents and power points. Today it’s a polished 2^nd generation online school with more than 100 different modules and written exams.

 

Once again, we made a ton of mistakes along the way. For those of you who were around for the ill-fated Pocket Coach (Dashie loved debugging that baby), you know what I’m talking about.

 

But with the help of many supporting characters—Dashie (XO), Big Red Asshole (COO), Dave Picardy (VP Sales), JJ (Manager of Professional Development Program) and GG (Implementation Manager)—we eventually got our ducks in a row. (More on each of them and “The Dood” in The MLG e-book version.)

 

In terms of discovering best practices, and the business model we teach today, we started out with an Alpha Team, which included seven gyms that had all been open for a minimum of 5 years and were currently flat on growth. We implemented our system best we could with what we had at the time. Each gym messed up something, but as a whole, their numbers instantly improved.

 

We did this again with a Beta group of 25 gyms, and then with a Gamma group. With each group, we learned something new. As a result of this, and our improved tools and implementation process, each group saw more and faster improvement than the previous.

 

Our newest baby is our Professional Coach Diploma Program headed by SFU kinesiology professor Tony Leyland. Tony has been a great friend and supporter since his first work out (painfully grotesque Grace with 115lbs) with me at 29 east 2^nd. He is the man as well as a pretty good skier, runner, tennis player, and amateur drinker. Without him we would just be a group of gym monkeys trying to sound smart. Thanks Prof!!

 

The numbers we looked at were revenue, profit, $/ coach hour, and coach pay as well as retention and life-time value of a client. The results have been dramatic as documented by Kapil Khimidas, MBA Harvard University (see attached study) who looked at how our gyms were performing. Kapil was studying in Boston when CF Boston went through the MadLab transformation. He loved it so much he reached out and offered to take an in-depth look at the numbers.

 

What he found…… increases in Revenue ($13k – $20k) profit ($1,700-$3,700) and coach pay ($2,250 – $4,000)

 

The keys continue to be 1) a sound fundamentals program, 2) coach for life 3) a good coach development program and 4) the right coach compensation model.

 

Today, I see others out there trying to sell consulting services and business services to gyms, but the moment I dig into what they’re doing, it’s instantly clear that they don’t have any of these things. They have never had a successful gym, have never had coaches make a professional wage because they are following the group X business model. They’re polishing up a bad business model and trying to sell it. It’s like polishing a turd. It will never shine.

 

Today, we have almost 150 members who have implemented our business model. We have done all of this without any marketing or advertising of any kind. We have attracted more and more gyms through word-of-mouth based solely on the results we are achieving.   You might not know it yet, but you are part of a great world wide community. If you are ever travelling, you should stop by one of our member gyms (map and links coming) and tell them you are with MadLab School and see what happens next. From what I have been told, it’s a little like travelling in the underground tourism community in Cuba. You are treated to an authentic experience and get the royal treatment.

 

Mad Lab metrics PDF

 

Warm Up: Coach Choice

Barbell Flow

1×20 Alternating Elbow Reach

1×10 Slow Tall Cleans

1×10 Slow Hang Cleans

1×10 Tall Cleans

1×10 Hang Cleans

 

Strength/Skill:

A1) 4×3 Power Clean from Blocks

Pair up with individuals of similar ability. Use stations that align “above knee” position.

Emphasis is on acceleration.

A2) 4×30-60 second Ring Flexed Arm Hang

Elevated Row (Feet on box)

Ground Row (As horizontal as possible)

 

Conditioning:

60 Calorie Row

5 Rounds:

10 Goblet Step Ups 55/35

20 Bent Hollow Rocks

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