Plus: More funding for women founders, a must in your VC pitch deck & how to find your ideal tech co-founder.

Newsletter

May 16, 2023

Hi there,

Put this in your business school pipe and smoke it: In a bizarre move, this company (that shall not be named) is going to pay us to not use their product.

In this Open Letter:

The future of gyms is social programming at scale.
In your VC pitch, female founder funding & what your user is thinking.
The tech you need: Recruiting your tech co-founder.

TRENDING NOW

The Future of Fitness

Social programming, at scale

Your local gym might be dying. At least, most gyms are still struggling to get back to pre-Covid lockdown levels (4 years ago!), and they’re a little worried.

Virgin Active is by far South Africa’s best-known and biggest gym franchise with 138 gyms across South Africa (not to mention 105 in the UK, Italy and Asia-Pacific). So a good benchmark for gym franchise health.

After being forced to close down for 5.5 months during the first Covid lockdowns, they haven’t quite seen numbers return to pre-Covid (2019) numbers. Although they have 963k members in SA they are still 11% down from pre-Covid. Will it ever get back? Well, not even Virgin Active is sure and re-imagining what fitness will look like in the future. Their recent quarterly report leads with…

“Our gyms must become social spaces…they must be reimagined as social wellness clubs, where working out, wellness, recovery and social programming all get equal play”

Virgin Active

Wait… what is social programming? Classes that people do together and spaces where they can hang out. You know, socially.

So just hitting the gym to get ripped ain’t cutting it no more. Exercise – outside your house – has become largely a social and community-based activity. Cos’ it’s no fun when you’re in Cape Town and your gym boets are all in Boksburg…

‍

What is driving this change?

The online fitness scenes exploded during Covid lockdowns. According to the World Economic Forum, fitness app downloads grew by 46% globally in the first half of 2020 alone.
And so did the home fitness scene, for a while – personal training bike manufacturer Peloton is now struggling, as is Lulumelon’s home gym Mirror. It seems that, like some gyms, these personal fitness ventures fall short in the social game now that we can come and go as we please again.
Fitness influencers absolutely exploded during Covid. SA bodybuilder and model Noel Deyzel has over 3.8 million Instagram followers (almost 4x the amount of Virgin Active members) and sells fitness programs, products as well as some community aspects. Converting 1% of that audience into R3000 a year in ARPU results in a R100m+ a year business. Not bad at all, Noel.

But influencers need a tech stack and some local tech entrepreneurs are catching on. Local startup CoachElite offers fitness influencers an easy way to load, sell programs and maintain contact with customers. As this space grows, they are a startup to keep an eye on.
Find your niche. Whether it’s CrossFit, Yoga or boxing, SA startup Octiv provides the management software for any kind of social fitness play. Founded in 2014, the startup raised a seven-figure series A from among others Knife Capital, and this is powering its international expansion. If social fitness is indeed the future, they are well positioned to provide the management software for all of them.
But the next-gen gyms are already here. They focus on group-based training and use tech and big data to scale better than traditional gyms. Take F45. They offer group-based training and use screens and apps to not only scale the offering (2 trainers for 40-odd participants) but track customer performance and improvements through challenges and heart rate monitors in order to improve their globally managed programs.

Since going public, though, they have been going through all kinds of turmoil. But there is much to love about how they leverage tech. As such we can’t help but think that if a local fitness expert and a developer or two get together, they could easily develop a competing product (think CrossFit, EMS etc. but using tech to scale). In fact, this might just be the kind of gym franchise Virgin Active finds compelling in their bid to do more social exercising at scale – wink, wink.

Still recovering from the Covid shake-up, and with recent advancements in AI and big data, there might be some land up for grabs in the fitness space. We are watching this space.

Know a local fitness startup? Hit reply so we can tell the world.

IN SHORT

💃 All the startup ladies: Standard Chartered Bank group has launched its Women in Tech (WiT) initiative in South Africa, with the aim of providing seed funding to the best of local women-led tech startups.

🛡️ What we’re thinking: Wits professor Nicky Falkof recently published a book called Worrier State, which takes a unique look at just how big a part fear plays in our daily lives in SA – worth a look for people in tech trying to solve real problems and understanding where your user’s mind is really at.

😂 The AI craze is taking over and it’s no wonder startups are all making sure they include AI in their pitch deck. This short video edit of Google’s CEO shows exactly how you should do it – that’s a joke, please talk sense when pitching.

📱 Speaking of Google, it recently launched its ChatGPT competitor, Bard (now available in SA). And with internet connectivity and the ability to read websites, it could potentially have an edge in some cases – go play with it and let us know what you find.

📊 Halve your analytics: The latest report by cyber security firm Imperva found that 47% of 2022’s online traffic was bots. If true, that means only 53% of traffic is human – a number that apparently shrinks every year.

THE BUILDER’S CORNER

How to Recruit a Technical Co-Founder

Ok, so you’re a non-technical founder – you don’t write code – and you have The Gold Tech Startup Idea – how do you find a tech partner?

It’s way more common than you think. And it’s important to keep in mind that the best talent in tech is probably already working, so your proposition has to be very attractive. Here is some food for thought on the topic.

Find your ideal technical partner:

Activate your network – before you do anything else, package your ideas and jump over onto WhatsApp, LinkedIn etc. and start having conversations. “Hey, I’m working on this cool new thing, can I ask your input/feedback?” Chances are someone you know knows someone who’ll be a good fit.
Try a co-founder matching network – yes, it’s a thing, and it’s free to use. Check out Y Combinator’s co-founder matching tool. Or go to startup events, meet people and tell them what you are working on. Not only can they provide valuable feedback, they can also be your next co-founder.
Package your idea very well – like we said, tech talent is probably working already, so don’t pitch “I have a good idea, you build it and take 50%”. You’re asking someone to take on sleepless nights and a huge amount of risk, so you have to give them way more reason to believe in/with you. They want to see A) your huge influencer network or previous successful marketing track record, B) your own capital, and C) your golden-pedigree business development experience. (In short, they want to see why you are the person for this, not just the product.) D) Understand what an upside could be – i.e. are you building a lifestyle business or are we IPO’ing this thing?

Back yourself – are you investing more than the odd hour a day and minimum money? If you back your idea, you should be confident and put money behind it. If you don’t, don’t expect someone else to do it.
Keep going – don’t stop and wait for a miracle partner to swoop in. Build it low code/no code if you have to. Legend has it Kevin Systrom wasn’t known for his programming skills, but he built the very first version of Instagram himself and used it to convey the idea and get more technical employees and VCs interested. Build your website and social profiles, develop your marketing, create your community – act as if the product is already done/underway and get traction!

Or, you know, hit reply and tell us what you’re building… maybe we can help connect you with someone.

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THE CREDITS

This Open Letter is brought to you by Renier Kriel, Jason Mill, Elvorne Palmer and Bobby Sequeira.

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