The gym is tucked away in a dingy downtown mall known for its all-night bars and prostitutes. Pointed in the right direction by a mall security guard, I walked down a long corridor made sticky by spilled beer. I gave a wide berth to a couple drunks who trailed a fug of cigarette smoke and started wondering if I should be somewhere else on an early Saturday morning.
Things didn’t improve when I finally reached the gym. It was small and squarish with no mirrors and little equipment.
It didn’t look like much but this is F45, the fitness phenomenon that’s exploded to over 1,700 outlets in just eight years. And they did this at the same time the big chains like Gold’s and 24 Hour Fitness are going bankrupt.
So what’s their secret? For starters, F45 is a lot of fun. While I had my doubts when I walked into that mall past the drunks and the smell of smoke and beer, it all changed the moment I stepped inside the gym.
The trainers were hyper-energetic and the class of 20-somethings in their Lululemon gear was already buzzing with excitement. There was even a DJ setting up for a live set. This wasn’t a workout. It was a party.
This is the secret to F45’s success. More than any fitness chain, they are using social media to help people learn, laugh, feel inspired and come back for more. Usually with a friend.
I could look under the hood and explain the details — the reams of health data you can share with others, the trainers roaming the floor shooting videos for Instagram, and the hive of activity on their social media platforms. But it’s easier to see for yourself.
First, check out this Instagram page that Gold’s Gym uses to represent all 12 of its locations in Singapore. Some of these posts look like they could be from a pest-control company.
Now, here’s the page for just one of F45’s almost 30 locations in Singapore, each with their own Instagram account. See how those posts engage you directly, with introductions to members, training demos and challenges. And look at that engagement from their users.
Digital arms race
F45 has mastered the digital economy. This new way of doing business has empowered small but savvy startups to take on the giants in their industries and win. And F45 is not the only example.
In 1958, companies listed in the S&P 500 remained there for an average of 61 years. In 2011, this was down to just 18 years. And now, at the current rate of churn, about three-quarters of the companies in the S&P 500 will be gone by 2027.
Kodak was one of them. In the late 1990s they had a $28 billion market cap, 140,000 employees and a patent for the first digital camera. Then in 2012 they went bankrupt at the same time Instagram and its 13 employees were bought for $1 billion.
To Kodak, content was a printed photo you tucked in an album. For Instagram a photo was a story you can share with millions of people all over the world. It’s not about the photo. It’s about the story, message or memory behind every photo.
Kodak figure this out too late. Others woke up just in time.
Content on the menu
Just over a decade ago, Dominos Pizza was trading at $3 a share and had a product that even they admitted tasted like cardboard. Today, it’s the world’s biggest pizza company.
They stopped being a fast-food chain and became a digital company that sold pizza. It began with brutally honest ads that told people ‘yes, we know, our pizza isn’t any good, but this is what we’re doing to change.’
Then they dove deep into their customer data to find out what works, which led to a mobile-first strategy that started conversations with their customers on Twitter, Facebook and Slack — and even via devices like Apple TV, Google Home, Amazon Echo, Ford Sync and a smartwatch.
Dominos can boast one of the quickest and most successful digital transformations in the history of business. But the company is already facing challenges to its dominance.
About a year ago, Dominos downgraded its outlook for sales, citing hungry competition from delivery apps like DoorDash, GrubHub and UberEats. The 7-year-old DoorDash has received $2 billion in venture capital while expanding into 4,000 towns across the US and being named — for the second year in a row — the fastest growing brand in the country.
This is the double-edged sword of the digital economy. Sure, new technology breaks down doors and allows a company with a great story to race ahead of competitors.
But it’s also helping everyone else, fueling a digital arms race that’s creating an ever-faster cycle of destruction and creation.
Move fast or fail
JCPenney thought they had this all figured out. They were one of the first retailers to sell online in 1994 and were early adopters of Facebook and other social media platforms.
But the 118-year-old former catalogue company couldn’t figure out what their story would be, going through several confusing rebrandings until finally declaring bankruptcy last year.
JCPenney could have survived.
It was going out of business at the same time a pizza delivery driver named Ben Francis was growing his fitnesswear startup Gymshark from a side-hustle into a global ecommerce and social media sensation that turned over $200 million last year.
Francis was one of the first to recognise the power of Influencers to tell a brand’s story. He was sending popular YouTubers his apparel while the small army of staff at JCPenney were still discussing what to put in their next catalogue.
Now Francis is taking aim at larger rivals like Nike, Adidas and Puma. And this being the digital economy, he might succeed in overtaking these industry giants just as F45 did in the fitness industry.
Or, like Dominos, he might see his early success suddenly challenged by younger rivals telling better stories with newer technology.
Who knows. This is the digital economy after all.
The only thing we know for sure is that we won’t have to wait very long to find out.