The Rise of HX and Hiero: Revolutionizing Fitness Racing

HX aims to create a $200,000 fitness racing event that feels like a $2 million experience for participants, akin to Olympic athletes. The purchase of a ticket is likened to buying a car, emphasizing that athletes make a deliberate choice to participate rather than acting on impulse. The organization is focused on operational excellence and community building, rather than merely maximizing profits, which is why ticket prices in New York remain at $200 to keep the community engaged.

Mo shares his journey before founding Hiero, reflecting on his long history with field hockey, a sport that is not professional in Germany and primarily amateur. He played hockey for fun and also engaged in tennis until age 14, partnering with Misha Zverev in competitions. His mother encouraged him to choose between the two sports due to academic challenges, leading him to select hockey, primarily for the social aspect with friends. This decision proved beneficial as he later pursued a career in hockey, driven by opportunistic rather than visionary motivations.

Mo describes his career progression as step-by-step, emphasizing his opportunistic nature. He never initially aimed for the German national team but seized the opportunity when invited to a test camp. He evaluated his standing among other players and committed to improving his skills, ultimately making the team and achieving success. This approach of recognizing and acting on opportunities has been a consistent theme in both his athletic and business endeavors.

In discussing business, Mo acknowledges the abundance of opportunities in the fitness industry, such as gym chains and sports gear brands. He reflects on the challenge of discerning which opportunities to pursue versus maintaining focus on core competencies. This balance is crucial for sustainable growth and success in both his athletic and entrepreneurial ventures.

The speaker emphasizes the importance of evaluating opportunities with a blend of knowledge, experience, and rational decision-making. They acknowledge the challenge of filtering through numerous pitches received daily, highlighting the necessity of focus in building successful businesses.

In 2015, the speaker met their partner, Christian, while working part-time and preparing for the Rio Olympics. They express a desire to avoid a sudden transition from a sports career to retirement, likening the end of an athletic career to a form of death, where the athlete's purpose and public interest diminish significantly.

The speaker discusses the financial challenges faced by athletes in their sport, noting that many do not earn enough to sustain themselves post-career. They stress the importance of having a proactive plan, not just a backup, while still competing, which for them included working in advertising after obtaining degrees in Psychology and Business.

While working at an advertising agency, the speaker proposed running a campaign for Hamburg's bid to host the 2024 Olympics. They reached out to Christian, an expert in event operations, to collaborate on the project. Christian was known for creating the Cyclassics cycling race, which integrated amateur and professional cyclists, significantly raising his profile in event management.

The collaboration between the speaker and Christian led to a successful pitch for the Olympic bid, where they triumphed over 47 competing agencies from around the world. This achievement marked a significant milestone in their professional journey.

In January 2017, a referendum in Germany resulted in a vote against hosting the Olympic Games, leading to the cancellation of the entire project. This pivotal moment coincided with the personal decisions of the speaker and Christian, who both quit their respective jobs around the same time, marking the beginning of their collaboration.

In March 2017, the speaker and Christian began exploring the idea of optimizing branding strategies for athletes. They identified a significant gap in the sports market, particularly the lack of a sport that combined running and functional workouts. Their discussions revealed a strong interest among people for events that integrated both running and weight training, leading them to pursue the concept of 'Fitness Racing.'

At the FIBO convention in Cologne, Germany, which attracted 175,000 attendees, the speaker and Christian encountered a presentation indicating that 52% of gym-goers identified fitness as their sport. This revelation prompted them to question what sport these individuals were actually participating in, reinforcing their belief that there was a need for a defined sport that encompassed fitness training, ultimately motivating them to create a new sport.

The speaker explained that a Hyrox event is a unique combination of running and functional fitness workouts, defined as 'Fitness Racing.' The format consists of eight 1-kilometer runs, each followed by a functional fitness workout station. The events are standardized globally, with 83 locations from Los Angeles to Sydney, ensuring comparability in performance metrics. The speaker confidently predicted that Fitness Racing would become an Olympic sport within the next decade.

The speaker describes their approach to creating a new sport by combining swimming, cycling, and running into a single event format, similar to triathlons. They clarify that they do not claim to have invented the workouts but have organized them into a cohesive event structure, hosting these events in large halls that require 13,000 to 15,000 square meters of space.

The discussion shifts to the desire for continuous revenue generation from their events, moving beyond the static nature of hosting events only eight times a year. The speaker reveals that they plan to host 83 events in the current year, which will result in 175 event days, indicating a significant increase in activity and potential revenue.

The speaker anticipates approximately 650,000 athletes participating in their events this year. They mention that the average cost for participants is €130, which is benchmarked against other competitions like marathons and half marathons. The pricing strategy is influenced by the duration of the events, with longer events typically commanding higher fees.

The pricing for participation is determined through benchmarking against similar events, with the average time for their events being comparable to half marathons. The speaker notes that pricing can vary significantly based on location, with higher prices in the US and lower prices in regions like Eastern Europe and India.

In the UK, the speaker shares that they have experienced high demand, with 70,000 applicants vying for only 16,000 tickets for their London event. They discuss the challenges of scaling capacity, emphasizing the importance of maintaining quality over simply increasing the number of events.

The speaker elaborates on the logistical challenges of setting up events, which require significant resources, including nine trucks for transportation and 36 to 48 hours for setup. They express a commitment to high-quality branding, aiming to create the appearance of a $2 million event with a budget of $200,000, focusing on a distinct color scheme of black, yellow, and white.

The event aims to make participants feel like Olympic athletes, with 650,000 participants expected this year. Additionally, 600,000 spectator tickets are sold, allowing fans to watch live, take pictures, and cheer. Ticket prices range from £7 to £20, and the event is designed to enhance the spectator experience with concessions and merchandise.

The projected revenue from participants is estimated at £85 million, calculated from 650,000 participants at £130 each, alongside £7.2 million from spectators. The speaker notes that all markets have shown over 100% growth year-on-year, indicating a strong understanding of market engagement and growth strategies.

The speaker discusses the recent entry into the Indian market, with the first event scheduled for May 3rd in Mumbai. They reflect on past decisions to license markets, noting that they are now reclaiming ownership in many regions, including China, where they previously licensed operations.

Production costs for events vary significantly. For instance, an upcoming event in New York City at P76 will host 15,000 athletes and sold out in 40 minutes at a ticket price of $200. The speaker highlights the potential for upselling media packages, with 75% of attendees purchasing a photo package for an additional $35.

The speaker emphasizes that the business model transcends mere profit; it focuses on building a community. They mention the growth of businesses around their platform, including training courses and merchandise, which cater to the needs of participants and fans alike.

The speaker emphasizes the importance of community in the fitness racing space, explaining that keeping the community engaged is a priority, which is why they have chosen not to raise the price to $300 in New York. They believe that focusing solely on profit, as suggested by Charlie, undermines the community's value.

Discussing the cost per event, the speaker notes that New York is particularly expensive, with costs around $200,000. They explain that a one-day event can be profitable with approximately 1,500 to 1,800 participants, indicating that any participants beyond 1,500 contribute to pure profit, although this does not account for overhead costs.

The speaker recounts the evolution of their events, starting in 2017 and facing challenges during the COVID-19 pandemic. They describe how they initially struggled to accept the reality of COVID but eventually pivoted by creating testing solutions, similar to the NBA's bubble concept. They sourced tests from China and opened a testing center, which led to the establishment of 150 testing centers in Germany, funded by the government, allowing free testing for the public.

The ability to pivot during the pandemic was crucial for the survival of their live events business, which many in the industry could not withstand. The speaker highlights that all funds generated during this period were reinvested into the business, with no profits taken personally.

Reflecting on their first event on November 18, 2017, in Hamburg, Germany, the speaker shares that they invited friends and sold 200 tickets but ended up with 650 attendees. This overwhelming turnout was seen as a success for a new venture, indicating strong community interest and engagement from the outset.

The initial price point for participation in the events was set at 69 EUR, which has since increased by approximately 25-30%, now standing at 99 EUR. This change reflects the growth and evolution of the event since its inception.

The first event, held in Birmingham, UK, attracted 650 attendees, which was a significant milestone. The subsequent event saw attendance double to around 1,300, marking a consistent growth rate of 100% for each event thereafter, culminating in 8,000 attendees at the London event in 2020.

From the outset, the strategy focused heavily on social media, particularly Instagram, which accounts for 90% of their community-building efforts. Despite challenges with TikTok, the team excels in content creation, leveraging their unique insights into the sport to produce engaging material that resonates with their audience.

The organic growth of the community has been remarkable, driven by the athletes themselves who actively promote the events. The speaker emphasizes that the best marketing comes from satisfied customers, leading to an impressive reach on social media without the need for paid advertising.

Interestingly, the speaker has not spent any money on digital marketing or paid media, believing that the product, Hiero, is inherently explainable. Instead, the focus has been on educating potential customers about the product through various touchpoints, such as gyms and social media, rather than impulsive advertising.

The speaker likens purchasing a Hiero ticket to buying a car, emphasizing that customers typically make their decision well before the actual purchase. This understanding informs their marketing strategy, which prioritizes informative content over quick, impulsive ads, allowing for a longer sales cycle with high return on investment.

The discussion begins with the importance of Lifetime Value (LTV) and retention in the context of HX athletes. Retention is emphasized as crucial in most businesses, including sports like HIROX. The speaker notes that for many, HIROX is not just a one-time event but a sport they are passionate about, akin to football fans who watch regularly. The LTV of HIROX is still being defined, with current estimates suggesting a 50/50 participation rate, although there is speculation about a potential 90% repeat rate if circumstances allow.

The speaker elaborates on the lack of a singular ideal customer profile for HIROX, indicating that the audience can be segmented into various groups. One example given is the 'Average Joe athlete,' a 45-year-old woman with three kids who works out twice a week. She may not even realize she is training for HIROX but feels challenged to participate after learning about it through social media. Notably, 50% of HIROX participants are women, which is significant compared to traditional endurance events like marathons and triathlons.

The structure of HIROX events is highlighted, showcasing the variety available, including singles, doubles, and mixed doubles events. The speaker mentions that relays are particularly popular, especially in Asia, where they serve as an entry point for newcomers. For instance, at a recent event in Hong Kong, nearly 30% of participants engaged in relay formats, which require teams to split the running and workout tasks, making it more accessible.

The conversation shifts to the potential impact of hosting multiple HIROX events in a city like London. The speaker acknowledges that while they currently have two events over eight to nine days, there is still room for growth. Plans are in place for a week of fitness racing in London, featuring seven days of HIROX racing. However, there are complaints about limited spots, as events in London have sold out rapidly, indicating a strong demand for participation. The speaker notes that they are experiencing a 100% growth in offerings and participation slots annually, but operational excellence remains a priority amidst this rapid expansion.

The speaker emphasizes the importance of finding a balance between supply and demand while managing growth effectively. Over the past 12 months, the company has significantly increased its workforce, highlighting the need for careful control of this growth on the backend of the business.

The discussion shifts to partnerships, focusing on three main areas: gyms, brand partnerships, and merchandise. The speaker reflects on how they have built a community of fitness organizations under the 'Hiero' brand, which has evolved since its inception.

The speaker recounts the origins of their affiliate partnership model, which began in 2017 when they introduced their workouts to a local gym in Hamburg. Initially, they paid gyms to promote their events, but a year later, gyms began paying for the right to license the 'Hiero' brand, recognizing the value it brought in fostering community engagement.

The 'Hiero Training Club' model allows gyms to offer group classes under the Hiero brand. The speaker notes that they have 5,000 global partner gyms that have purchased this affiliation for $1,500 per year, which is seen as a low investment that can quickly return value by attracting new members.

The speaker introduces the 'Hiero Performance Center,' a more comprehensive investment model for gyms. They mention that the first center has recently opened, with expectations for significant growth in the UK market over the coming years.

The speaker reflects on their initial marketing strategy, which involved leveraging gyms as a direct channel to reach their target audience. This approach has transformed into a revenue stream, demonstrating the effectiveness of engaging with gym owners and their communities to promote the Hiero brand.

The speaker discusses their journey in establishing brand partnerships, highlighting their initial collaborations with Red Bull and Puma. They emphasize the importance of finding the right companies to align with their growth strategy. The partnership with Puma was particularly significant, as it involved a local retail representative in Hamburg who understood their product and facilitated a merger deal. This partnership was crucial for Puma, which was struggling against competitors like Adidas and Nike, and it took five years to solidify their relationship, culminating in increased engagement from Puma in 2022.

The speaker announces the launch of the first co-branded HX shoe with Puma, which took place yesterday. They clarify that this is not a new shoe but a rebranded version of an existing product. The collaboration involves a retail logic where they sell the merchandise at events and online, with Puma obtaining licensing rights to distribute the product through their channels. The speaker notes that while Puma pays a sponsorship fee, the main sales occur at their events, where they retain 100% of the sales revenue.

The speaker elaborates on their merchandising strategy, which developed organically from their early events where participants received shirts. Initially, they purchased discounted items from Puma, printed their designs, and sold them at events. This approach proved successful, as attendees appreciated the memorabilia, akin to Hard Rock Cafe merchandise. Over time, this aspect of their business has grown significantly, becoming a major community driver and marketing tool, with social media showcasing their merchandise globally.

When asked about a 'hero product,' the speaker expresses hope that the newly launched shoe could become that flagship item. They reflect on the absence of a standout product until now, indicating that the recent launch might change that narrative.

The discussion begins with a query about sales performance, revealing that the least sales might occur in Germany, although this is uncertain. The speaker elaborates on their product range, which includes fitness kits, t-shirts, shorts, shoes, backpacks, sweaters, hoodies, and jackets, emphasizing the importance of apparel in their business model.

When asked about merchandise revenue, the speaker estimates it to be around $20 per athlete, highlighting a significant revenue stream from events, such as a recent one in Hamburg with 650 participants. This reflects a rapid growth journey over the past two and a half years.

The speaker discusses the challenges faced in breaking into the US market, attributing slow growth to a perceived resistance from the CrossFit community. They express confusion over this sentiment, noting that their product has not changed, yet the US remains their slowest growing market.

A pivotal moment occurred on May 1st of the previous year when the speaker organized a major outdoor event in the US, which attracted 8,000 attendees despite initial weather concerns. This event marked a turning point, leading to sold-out events in the US thereafter, fulfilling their strategic goals.

The speaker asserts that their sport is distinct from CrossFit, comparing it to different types of running. They emphasize that while there are similarities, the training methods and overall approach are different. They do not view other sports as competition but rather see themselves competing for attention in the broader entertainment landscape.

Looking ahead, the speaker predicts significant growth in the number of affiliated gyms, estimating an increase to 20,000 over the next two years. They also mention the importance of renewing long-term partnerships with global partners, which they believe will impact future revenue positively.

The discussion highlights the potential for innovative media partnerships, particularly with platforms like Netflix, which is venturing into live content. The speaker envisions a future where sports that lack traditional distribution channels could thrive through creative storytelling, combining live events with documentary-style content. This approach could enhance audience engagement and broaden the reach of lesser-known sports.

The speaker reflects on the missed opportunities in leveraging TikTok for promoting fitness and sports, acknowledging that the fitness community on the platform is significant. They express a sense of personal responsibility for not prioritizing this avenue sooner, attributing it to a focus on other growth areas within the business. The speaker emphasizes the need for a strategic approach to social media to capitalize on emerging trends.

The conversation shifts to the importance of recognizing athletes as icons in the sports landscape. The speaker notes that fans are increasingly drawn to athletes, which enhances the appeal of the sport. They discuss the journey of athletes, including the rise of lesser-known competitors to stardom, exemplified by Alexander Rovic, a world champion who transitioned from being a teacher to a professional athlete, gaining recognition and a following of 60,000 on Instagram.

The speaker underscores the evolution of financial sustainability for athletes, contrasting their own experiences with the current opportunities available. They mention the lucrative contracts being signed by athletes today, such as those with Puma, which far exceed what they could secure despite having won two Olympic gold medals. This shift signifies a growing recognition of the value of athletes in emerging sports like High Rocks.

In response to a question about which athlete they would love to see participate in High Rocks, the speaker suggests Matt Frasier, a multiple-time CrossFit champion, as a logical choice. This highlights the interest in attracting well-known athletes from other sports to enhance the profile and competitiveness of High Rocks events.

Tumi, a seven-time CrossFit Champion from Australia, showcased her skills by finishing third overall in a recent race in Melbourne, completing a 'hiero mix double' in an impressive 55 minutes. This performance positions her as a potential rising star in the sport.

The speaker believes that tennis players, such as Novak Djokovic, could excel in CrossFit due to their strong leg muscles and experience with interval training. They predict Djokovic could become a champion in the 40 to 45 age group within two years, emphasizing the importance of lower body strength in CrossFit workouts.

The discussion highlights the performance differences between elite male and female athletes in CrossFit. The world record for men stands at just over 53 minutes, while the women's record is around 57 minutes, indicating a four-minute gap. Despite this, women are achieving times comparable to men in the same weight categories, showcasing their competitive prowess.

In terms of financial incentives, the speaker notes that elite races offer substantial prize money, with $50,000 allocated per race and the winner receiving approximately $225,000. This financial aspect is crucial for attracting top talent to the sport.

The speaker expresses caution regarding the integration of entertainment elements into CrossFit events, referencing ideas like Mr. Beast's potential involvement. They prefer to maintain the integrity of the sport, focusing on the competitive challenge rather than entertainment gimmicks.

Looking ahead, the speaker emphasizes the need for structural growth within their company to support the expanding business. They acknowledge the challenges of transitioning from a startup mentality to a more organized approach, where team members focus on specific verticals to enhance operational efficiency.

The speaker expresses a desire to invest in advanced technology for events, such as digital displays that show real-time performance data during competitions. They envision features like a digital sled that tracks the power exerted by athletes, enhancing the spectator experience and providing valuable insights into athlete performance.

The discussion highlights a partnership with a Chinese company named MAFIT, which offers a product featuring an HX track. This device enhances user experience by allowing seamless tracking of workout sessions without manual input, thus making data collection more efficient and user-friendly.

The speaker reflects on the challenges of building H Rocks, emphasizing the importance of perseverance and belief in a novel product. They acknowledge the ups and downs typical of entrepreneurship, underscoring that resilience is crucial in navigating these challenges.

Drawing from their experience as a professional athlete, the speaker stresses the value of feedback in business. They assert that constructive criticism is vital for growth, likening it to receiving guidance from a coach during their formative years in sports. This perspective fosters an environment where open communication about performance is encouraged.

The speaker identifies Argentina as a key market they wish to enter, noting that they are currently launching operations in Brazil. They express optimism about expanding into Argentina soon, indicating a strategic approach to growth in South America, which they describe as a region with untapped potential.

Looking ahead, the speaker envisions H Rocks playing a pivotal role in the evolution of fitness racing as a recognized sport, potentially qualifying for the Olympics. They foresee a future where H Rocks could be the sanctioning body for events leading to Olympic qualifications, with aspirations to host events in 150 major cities worldwide, up from the current 85, aiming for 450 event days annually.

The speaker emphasizes the importance of creating a spectacular event experience for participants, aiming to make them feel like professional athletes. This focus on enhancing the event atmosphere is part of their broader strategy to improve the overall product and engage participants more deeply.