The Exchanges

Q how you could learn how to become a Zumba instructor, and you realize that that wasn't actually a sustainable model. You made a huge pivot to support training and to create a network instead of just selling videos. This seems to me what you're doing now with virtual courses, And training, that seems to be the biggest pivot since your whole business model was established. Is that, is that fair?

A I think our pivot now, yes, I, I think it's more than just a virtual piece. It's how do we pivot into a place where our instructors are going to have to be even more entrepreneurial than before. We don't know what's going to happen to the four walls. Our, our great friends at 24 hour, at Gold's, even a lot of the boutique James, it's tough, and we've been trying to help them, and one of the ways we've helped is we really push their instructors and motivate our instructors to teach outdoors and tell our gym partners, hey, our instructors can teach in parking lots, in the parking lot at your gym, and you can partner with them and host these classes there, and so that could generate some income for you, or some instructors would say, I'm going to go to the park, and I'm going to talk to the park ranger, and I'm going to rent the park for an hour, And I'm going to charge 10 dollars a person, and I'm going to get 20 of my students to show up, and I'll generate 200 dollars in revenue for my classes at the park. And we're seeing, every day, we're seeing more and more people teach outdoors. I saw a huge class happening in New York with, I think I had like 300 people outdoors in Central Park. And some instructors have even doubled up and said, well, I'm going to teach outside, or I'm going to teach socially distant inside, But I'm also going to stream at the same time, and so I can gene…

AI assessment note: “I think our pivot now, yes, I, I think it's more than just a virtual piece.”

Q Yeah. How has the economic crisis affected Zumba?

A So, so we sat out and said, let's base our response to the pandemic. And we started seeing this in January and February because we have instructors in China and our instructors in China were telling us, Hey, this is really bad. You guys have to prepare for this because if this gets out, This is not good. So we said we have to do three things. One, most important thing, how do we continue to help our instructors generate income? Two, how do we deliver education virtually for people, new people who want to become instructors or our existing instructors who need further education, especially if they're transitioning to virtual? And three, how do we keep our promise to make the world happy and healthy? The first thing we did was we allowed our instructors to start teaching online, and they started teaching on Zoom, but parallel to that, we started developing our own platform, and it's called Zinn Studio. Zinn stands for Zoom Instructor Network, so Zinn Studio, and Zinn Studio allows instructors to livestream their classes. It allows them to upload pre-recorded classes with licensed music. It allows them to charge for their classes. It allows them to list their classes on a platform on Zumba.com. We really focus on this in-studio concept to help our instructors generate income during the lockdown. And at the same time, we said we, our instructors are not necessarily trained in using…

AI assessment note: “we sat out and said, let's base our response to the pandemic.”

Q I remember you talking about in the episode was this, uh, concept that you called FEJ, freeing, electrifying joy, right? This, like, idea that, like, 20 minutes into a Zumba class, you just, like, hit a zone. You're just like liberated from the world outside, you know, this, and anyone's taken a Zumba class probably knows what I'm talking about. Can you get that feeling when you're doing this virtually?

A So we did a survey of people who've taken Zumba virtually, and we interviewed over a 100,000 people, and 50% of them said that they started doing Zumba virtually because they needed to stay in shape. But the main reason that they're doing it now is because of stress relief. It's like forced meditation a little bit. It's like you have to follow those dance moves. You're, you're concentrated. You're listening to this amazing music. All your other thoughts go away. It's just you, the music, the instructor, and the movement. And that's what's beautiful about Zumba is that moment that we call Fej, which is like our Zen. What Zen is to yoga, Fej is to Zumba, freeing, electrifying joy.

AI assessment note: “we did a survey of people who've taken Zumba virtually, and we interviewed over”

Q Yeah. Walk me through a little bit how you guys are, um, successfully doing virtual training and virtual instruction. Cause not only are you onboarding new people, but you're also updating and offering continued instruction, but then like teaching people how to use the virtual platforms. I imagine that it was kind of a rocky period at the beginning, right? When you were trying to do this.

A Oh, it was crazy at the beginning. So we started off with helping our instructors get on zoom, right? And Zoom, Google Meet, Microsoft Teams, they were teaching on these platforms, and, and a lot of audio issues or video issues as they were learning, right? There's a lot of different settings that you can use on these platforms, so there was a whole learning process and a lot of issues at the first few classes. Then we launched our own platform, and in our own platform we had to work out all the technical bugs, and now the platform is incredible. Our platform has better video Than I've ever seen in any other platform. That's what we wanted to focus on is video and audio being crystal clear. HD come through amazing. And then we had to train our instructors, right? That was a big piece of it. So we created Zumba virtual Facebook groups that people could join and learn how to teach virtually. We created courses, e-learning courses, and we created Zumba virtual pro, which would help them really Not only on their technical skills, but when you're, you're speaking to a camera, when you're dancing to a camera, your movements have to be a little different. You're, how do you engage when you're not seeing the feedback, when you're not seeing what the other person's expression is? How do you engage? How do you, it's almost like acting classes, right?

AI assessment note: “we created Zumba virtual Facebook groups that people could join and learn how to teach virtually”

Q So what, what was like the tipping point? Like when did this, this model really start to take off?

A So in 2008, the network was growing, but we started seeing what was happening in the economy and we got very nervous. And I remember that we sat in our conference room and we said, this is going to be a very tough year. I mean, look at everybody's losing their jobs. Uh, people cannot pay their mortgage, but over the next few months, we started seeing that our instructor trainings were getting packed, and that there were more and more people who wanted to become instructors, and we also saw that the instructors were reporting to us that their classes were packed, calling us, telling us, we don't know what's happening, but we've doubled from 25 people now that I have 50 people in my class. What's happening? And so we started asking people, And there were two things that were driving it. One was some people were out of a job. People were sad. They turned to Zumba, and they said, for one hour, I'm going to forget everything that is happening, and I'm just going to be happy. And people who needed extra income said, well, now I'm going to get paid to work out, and so I'm going to become an instructor, and I'm going to make this part of my income.

AI assessment note: “So in 2008, the network was growing, but we started seeing what was happening”

Q So did you have to go out and raise money to, to start this?

A So we, it was July of 2001. And we went to some of our investors that had invested in spider labs, which was the incubator. And we told them about this and they said, we love it. We're in, we had raised about half a million dollars, but we hadn't gotten the wire transfers yet. And then September 11 happened and everybody backed out and said, everyone pulled out. Yeah. We don't know what we're going to do, and we didn't know. I mean, for, for the next two months, we're all confused what's going to happen with the world. I mean, you remember that time. It was, it was very tough, and then around November of that year, Beto told me, my boss at Crunch wants to introduce you to the CEO of Crunch at that time, and Crunch is a, is a gym chain. I don't know if you, you've heard of it. Yeah. And so I, Met with her. Her name is Donna Cyrus, and Donna told me, go meet with Doug Levine, the original founder of Crunch. So, I flew to New York, met with Doug, and he told me, listen, I've seen Beto teach, and I love what you guys are doing, and I said, would you like to invest? And he said, I can't invest because right now I'm, I'm, I'm selling my company, and, but I can introduce you to some interesting guys in Ohio who Do infomercials for a living, and they might be able to not only invest, but also help you. So the next day, I'm on a plane to Ohio to meet with a company called Fitness Quest,…

AI assessment note: “we had raised about half a million dollars, but we hadn't gotten the wire transfers”

Q So what was, like, the tipping point? Like, when did this, this model really start to take off?

A So in 2008, the network was growing, but we started seeing what was happening in the economy. And we got very nervous, and I remember that we sat in our conference room, and we said, this is going to be a very tough year. I mean, look at everybody's losing their jobs, people cannot pay their mortgage, but over the next few months, we started seeing that our instructor trainings were getting packed, and that there were more and more people who wanted to become instructors, and we also saw that the instructors were reporting to us That their classes were packed, calling us, telling us, we don't know what's happening, but we've doubled from 25 people now that I have 50 people in my class. What's happening? And so we started asking people, and there were two things that were driving it. One was some people were out of a job, people were sad, they turned to Zumba, and they said, for one hour I'm gonna forget everything that is happening, and I'm just gonna be happy. And people who needed extra income said, well, now I'm gonna get paid to work out. And so I'm going to become an instructor, and I'm going to make this part of my income.

AI assessment note: “So in 2008, the network was growing, but we started seeing what was happening”

Q So did you have to go out and raise money to, to start this?

A So we, it was July of 2001. And we went to some of our investors that had invested in spider labs, which was the incubator. And we told them about this and they said, we love it. We're in, we had raised about half a million dollars, but we hadn't gotten the wire transfers yet. And then September 11 happened and everybody backed out and said, everyone pulled out. Yeah. We don't know what we're going to do, and we didn't know. I mean, for, for the next two months, we're all confused what's going to happen with the world. I mean, you remember that time. It was, it was very tough, and then around November of that year, Beto told me, my boss at Crunch wants to introduce you to the CEO of Crunch at that time, and Crunch is a, is a gym chain. I don't know if you, you've heard of it. Yeah. And so I, Met with her. Her name is Donna Cyrus, and Donna told me, go meet with Doug Levine, the original founder of Crunch. So, I flew to New York, met with Doug, and he told me, listen, I've seen Beto teach, and I love what you guys are doing, and I said, would you like to invest? And he said, I can't invest because right now I'm, I'm, I'm selling my company, and, but I can introduce you to some interesting guys in Ohio who Do infomercials for a living, and they might be able to not only invest, but also help you. So the next day, I'm on a plane to Ohio to meet with a company called Fitness Quest,…

AI assessment note: “we went to some of our investors that had invested in spider labs”

Q You know, are you guys strongly discouraging your instructors from doing indoor classes?

A We're not. We want nothing more than for people to be back at the gyms and for people to be teaching classes together because community is such a big deal. People are a lot more accountable to other people than they are to themselves, unfortunately. And so if you know your buddy is going to show up at your Zuma class, Or at your strong nation class, you're more likely to go because there's someone waiting for you there. So we want the gyms to reopen. We want people to teach indoors again. We want to experiment with this hybrid model of teaching indoors and teaching virtually. We want people to be teaching outdoors. The more we can get people together, the happier we are.

AI assessment note: “We're not. We want nothing more than for people to be back at the gyms”

Q a game changer for you. It was like a really one of the You know, one of those pivotal moments that really brought Zumba to a wider audience. Um, when you think about, and when you advise founders on partnerships and working with other more established brands, obviously it's not so easy, but what advice do you give them? I mean, what kinds of partnerships should people be looking for?

A Oh, partnerships that provide awareness and reach a brand alignment, even though we weren't promoting sugary cereal. We were, we were really working with Special K, but we did a kids video that had Tony and Tiger in it, and one thing that really resonates with me is that When you're starting out, and even later in a business, one of the key elements of a good entrepreneur is that nothing is beneath you. Like, that day Beto dressed up as Tony the Tiger, and he was sweating, and like, no one understood how Tony the Tiger was dancing so well, because this is a big costume and heavy costume, and we had to give him oxygen in between every song. And we also, that same year, had a Zumba event. And the valet parking guy didn't show up, and I was parking cars. I was parking people's cars because I wanted people to have a good experience, and so nothing can be beneath you. But going back to your question of the partnership, I would focus on companies that can bring awareness to your brand, but you need to really make sure you can add a lot of value to them, because if it doesn't resonate with them from the beginning, it's very hard to navigate bureaucracies of bigger companies, and we got lucky. We got lucky that At that time, the CEO of Kellogg's, his wife had bought the Zumba VHS tapes off television. And so she told him we should do something with Zumba because it's just magical and p…

AI assessment note: “partnerships that provide awareness and reach a brand alignment”

Q I'm gonna, I'm gonna go to some questions from our viewers. Um, this is from Claire Murashima. Hello, Claire. Claire asks, what, like when you get tired of doing Zumba, what do you do? Cause you know, you don't, you probably don't do Zumba every day. I know you exercise. So what other things do you do?

A So strong nation is our new program, which is a high intensity interval training program. It's non-dance where you're doing a pushup, a squat, a burpee, 10 jacks, and then you go into punching and kicking and we synchronized music to it. So we went to our favorite DJs, DJs like Steve Aoki, Or producers like Timbaland, and we said, can you score music to this workout? Instead of the music being in the background, let's score music, just like you would score music to a movie, like a training scene in a movie, or like the movie, a battle scene in the movie, and they created this very cool, epic music that matches the workout completely. So if you take a Strong Nation class, you can take virtual Strong Nation classes, or you can take them outdoors, or you can take them in gyms that are open. And you feel like one with the music. You feel like you are completely immersed. Zumba was about FEDGE. Strong Nation is about hacking motivation. So there's, it's like, uh, remember Pavlov's dogs?

AI assessment note: “So strong nation is our new program, which is a high intensity interval training program.”