A highlight from 1572: Is Tonal Worth the Money? With Aly Orady

Mind Pump
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June prime with no space for that discount. I should open since. I was the one that did the instagram post and probably stirred the stirred the pot. I yeah And we weren't going to originally start In this direction but since you listen to the only episode where i think we really probably went after tunnel a little bit I do want to bring that up. And i do want before i bring it up or we go here i. I do want to preface it by when we talked about it. The the main thing the valuation. That just was mind boggling for us because we've been in the fitness space for a very long time. We've seen lots of fitness products. Come and go very very Aware of you know valuations on companies and to see That valuation on a on a business. That's this new and this early already was just like blue all of our minds so we course had to speculate and talk about it and of course we got into some debates going to debate with one of my buddies but What this is what led to this conversation. So well you know fuck it. Let me just reach out to the ceo. He he's right up the road and let's let's have a conversation and let's let's hear it from the horse's mouth like how the hell did the company explain yourself. It was a one point. Six billion right when you got you got. You're able to raise additional quarter quarter billion dollars with that. So total i think total raised was what four hundred and fifty overall right today and It felt like you're getting you guys got valued like a tech company would and not like a fitness company. What we talked about in the show that you listen to by the way when you listen to our episode relay these guys no no not at all. I mean i think i was. I was watching. I was watching the episode. And you guys were going going back and forth and like putting out all the like how. How could this company be worth six billion. You had all these hypotheses. And i think one of you i wonder if you actually nailed it one of you remember. I don't remember who but one of you said the only way that technology company or is it just to be worth one point. Six billion dollars is if they could actually get people to work out consistently like not like other fitness. You sell them something like six months later. It's a towel rack right. If you could sell them something and actually get them to work out consistently then i could see how a company could be worth that much and that's actually exactly the answer. We people by tomas workout consistently is one of the most consistently used products in the world. It's just it's incredible and the product was designed to do that. And it was structured so that our interests would be aligned with with our members where we wake up every morning and i don't check our sales metrics. I check our engagement metrics. I see how many people worked out. I how long they worked out. That's what we kind of live and die by on in that. That's really the answer. The other thing is it was. It's been six years so this was. This was not an overnight success. I mean I started the company back in twenty fifteen. And i'm happy to share those early early stories if you want But it was like a six year built us so when you when you say that it's one of the most us. Is that most us pieces of fitness equipment. Just tools in general. Like what what do you. What do you say that. It's it's so much in comparison to what well let me. Let me just give you an example example metric People who buy tone. It comes with a monthly monthly subscription. Service where you're you're paying to have all of our coaching content and all the ai. That personalizes the workouts In any given month The cancellation rate is about zero point. One percent while right so ninety nine point nine percent retention month vermont and you look at that metric and like net flicks know they lose about two percent a month right so You know and we're point one percent netflix. Something like people don't quit they use it forever. They enjoy it they they binge watch So it's it's when you're able to actually deliver results to people and and and get them to use the product in a way. That actually improves their lives. Well they just keep using it and they they they remain members. And that's that's what drives us so. I a dive into those numbers. Because is okay. This is mind boggling to me because And no wonder it got evaluated like that because we know what the average person falls off for gym membership. I mean you you get a gym membership. You start working out for sixty to seventy percent in six hundred. That's right within six months. And so you're telling me we're your retaining ninety plus percent. Well

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