The Exchanges

Q What happened with that lawsuit? You filed the lawsuit, and three years, and what happened?

A So three years, I mean, it was relatively recently that we, that we got the final, uh, verdict, but we, uh, we got a unanimous verdict, uh, had a, a jury award of, uh, 6.8 million in damages, which, which is quite something, you know, it implies, I don't know, something like 20 to 22 to twenty-five million in lost sales, and What it created was the precedent that validated all of our, our trademarks and our, our, our key patents, and the jury verdict ended up also allowing Amazon to take action on all of these infringers. And so, uh, you know, it's a very happy outcome. Yeah. Our business almost immediately leapt up by 40% year over year and seems to be growing. Wow. Rapidly.

AI assessment note: “we got a unanimous verdict, uh, had a, a jury award of, uh, 6.8 million”

Q So when did you start to think, hey, maybe, uh, you know, maybe I can do something with this?

A Well, I, I was promoted out of the field, and at that point, um, you know, my, my wife was, uh, was sort of done with the superhero, gone all the time lifestyle, and had a promotion out to the West Coast. In her career, and so we kind of cut a deal that I would apply to business school at Stanford, and if I got in, then I would resign my commission and, you know, move out there, and I thought that was, at that point, the safest bet on earth, because I hadn't had math in 25 years, and I wasn't very good at it even back then, but to my astonishment, they took me in spite of my scores.

AI assessment note: “I was promoted out of the field, and at that point”

Q And, and Outfit is this, as you say, this is a mobile exercise company. It's basically, it's a, it's a gym in a van and it's, it's kind of a franchise model, right? It's designed for, is that, is that right? People can buy a franchise and then run it as a gym wherever they live?

A Yeah, well, we're just getting going on the franchising aspect because, you know, I felt at the beginning I needed to really understand the ins and outs of, of this business, which is pretty pathbreaking, if you will. You're not in the gym. The gym, think of the gym as a rolling, kind of a rolling storage unit full of functional training gear that comes out of, out of the van. The group fitness class goes on in parks, you know, parking lots, beach parking lots, like beautiful places outdoors. And then in 10 minutes, it sets up and tears down and drives away. And ultimately, I'm very excited about it as an opportunity for veterans coming out of service, uh, because the cost of buy-in and the, and the operating costs are so much lower without brick and mortar. And, you know, as you know, I'm pretty passionate about, about the veteran space. I, two, two groups of people that I really love, veterans and trainers.

AI assessment note: “Yeah, well, we're just getting going on the franchising aspect”

Q Yeah, Randy, do you guys, you guys must sell TRX at Target, right?

A We don't sell at target, but we do big box retail, you know, through, through dicks. And we obviously do a lot on Amazon, but what I was going to, to mention to page was that very, very early at about the same point in, in our evolution. We had a great big opportunity with a big box, massive big box retailer called Costco. And what, you know, it was so tempting. And I flew up there to Issaquah and sat around a big table and ultimately ended up saying no. And the reason that I said no was because I was in the same spot you were. I was going to have to take on a big chunk of debt in order to finance this pilot. And, uh, the put rights are the thing that you want to really make sure that you understand. Meaning like if the product, you know, those guys are no dummies. That's why they have gigantic businesses. And generally they, they will have terms that if the, if, if the business doesn't work exactly as they, uh, hope it will, as the product doesn't work exactly as they hope they can put it back to you. In our case, you know, we had product problems that ended up coming out shortly after We passed this up. Had I not passed it up for that reason, there would have never been a T-Rex. So I would just, you know, sort of throw that out there. And if you have, if you have a great advisor who's very familiar with, with big box retail, then they'll, I'm sure be telling you something sim…

AI assessment note: “We don't sell at target, but we do big box retail”

Q So when you started to, to, like, do these exercises in this warehouse, waiting for a mission to begin, what do the other members of the SEAL team think about it?

A Well, I mean, you, you gotta realize it's a group of, uh, it's a pack of alpha males, so the first thing they do is come over and mock you, right, and say, what the heck's going on over here, and then, but then, very quickly, you know, seals are innovative cats, and when it comes to, you know, exercise, everybody's sort of interested, and so, literally, you know, guys started going, hey, wait a minute, let me try that, let me see, you know, let me, could we do this, and could we do this, and, you know, over the course of, The next maybe three, six months, I just kept tweaking it, and, you know, guys would have ideas on, hey, maybe we should put loops in the end of it, and It advanced at some level, but then it kind of froze at the level that I thought it needed to be because I never viewed this. Uh, I wasn't thinking about business. I just thought it was kind of cool that I'd created this nifty tool that guys, you know, liked and wanted. And so I had a friend who was a parachute rigger out in the peril loft who started making them for guys in exchange for a case of beer. And, uh, he'd call me and say, you know, hey boss, you know, Jones wants me to make one of your gizmos. Uh, is that ok? And I'd say, yeah, go for it. And over the course of a couple of years, it just kind of proliferated within that unit.

AI assessment note: “the first thing they do is come over and mock you, right”

Q So in 2005, when you, when you launched the company, tell me how you started to get the word out about About the, the system, because this was not, I mean, this, there wasn't anything really like it out there, so how did you get people to take you seriously?

A Well, I think a lot of people didn't take me seriously initially, but I, I did it in sort of the, you know, the least sexy way possible. Uh, I drove around initially around Northern California in my car with my wingman, Blueberry, my dog in the passenger seat and a backpack full of straps, and I went gym to gym to gym to gym doing these little presentations to their staff of trainers, and I would usually have to You know, beg the fitness manager to give me a half hour of their weekly in-service with their staff, and then I would leave a couple of straps behind. I mean, I'll bet you that I did, in the first couple of years after business school, I probably did between three and 500 presentations around the country. And you would get the skeptics, for sure. A lot of the big dudes that, you know, were used to throwing around a lot of weight, they would sort of look at me like, hey, you know, what is, what is this, uh, this little girly machine that you've got here? Um, but I would quickly disabuse them of the belief that it wasn't for them, and then after that, right, people would sort of be interested, and I would leave a couple behind, and it was just, you know, one gym at a time, one trainer at a time, uh, started to make a little progress.

AI assessment note: “I went gym to gym to gym to gym doing these little presentations”

Q I wonder if, if, if I could do something with this?

A Yep. And, uh, I ended up deciding to take the summer between my first and second year, and instead of going off and doing some cushy, you know, paying internship with McKinsey, uh, I bought a 50 dollar, uh, 40 year old sewing machine off of Geary Street, some little old sewing shop, and, uh, Sat down at my garage. You know, I knew how to sew because as a young seal officer, you had to go out and, you know, buy a case of beer for the rigger and have him teach you how to sew so you could customize your gear. And, uh, so I, so I had some rudimentary sewing skills and, and I just, uh, you know, started creating some different versions of the prototypes and optimizing the design.

AI assessment note: “Yep. And, uh, I ended up deciding to take the summer between my first”

Q So you, you get through that summer, and you get back to school in the fall, and, and what did you do? Did you, like, bring it to classmates at business school and say, hey, try this out, or how are you then testing it?

A I became, ah, you know, a bit of a fanatic, ah, with my idea, and I mean, anybody who was at Stanford Business School between 2001 and, you know, 2004 will tell you, oh yeah, I remember that cat, you know, because I, I snookered everybody in on every class project that got assigned, I turned into a, a incubator, if you will, for what would become TRX, and, you know, we had events sometimes on Fridays, the blow off steam, they were called liquidity preference Functions, which basically meant tapping a keg and hanging out together, and I would, you know, bring out my straps and get people on them, and it was this great incubator where I learned all kinds of stuff, and it was one extended focus group that taught me a lot about, you know, what people liked and didn't like about this contraption that I was proposing to sell.

AI assessment note: “I would, you know, bring out my straps and get people on them”

Q So you, you get through that summer, and you get back to school in the fall, and, and what did you do? Did you, like, bring it to classmates at business school and say, hey, try this out, or how are you then testing it?

A I became, ah, you know, a bit of a fanatic, ah, with my idea, and I mean, anybody who was at Stanford Business School between 2001 and, you know, 2004 will tell you, oh yeah, I remember that cat, you know, because I, I snookered everybody in on every class project that got assigned, I turned into a, a incubator, if you will, for what would become TRX, and, you know, we had events sometimes on Fridays, the blow off steam, they were called liquidity preference, Functions, which basically meant tapping a keg and hanging out together, and I would, you know, bring out my straps and get people on them, and it was this great incubator where I learned all kinds of stuff, and, and it was one extended focus group that taught me a lot about, you know, what people liked and didn't like about this contraption that I was proposing to sell.

AI assessment note: “I would, you know, bring out my straps and get people on them”

Q this is still a field where trends come and go, right? Like there was a time where Pilates is really big and bar three and yoga. I mean, they, Things stay, and things come, and things go, and jazzercise. I mean, it's all aerobics, all kinds of things. I mean, what's, you know, what's the guarantee that people are going to want to use TRX in five or 10 years?

A You know, I, I think that, I mean, first of all, if we're a trend, we're a fairly long-lived trend at this point, right? We've been around now for 1213 years, um, and are, are, you know, growing strongly, but I think that one of the things that has been unique about The, the company that, that my team has built is that we created both in our hero product, right? The TRX suspension trainer. We became Switzerland. And by that, I mean, whatever else it is that you do for your exercise, we want to be a part of that. And we've been very successful at, um, at embedding ourselves. I mean, just about every one of the Activities that you mentioned a minute ago, uh, TRX has become part of.

AI assessment note: “whatever else it is that you do for your exercise, we want to be a part of that”

Q And, and were you getting a lot of orders in that first year, first two years?

A Well, I mean, a lot's a relative thing, right? From zero, uh, 10 is a lot. And so, yeah, I started to, I started to get what I viewed as a lot. Um, it was signs of life, and I was fulfilling them out of this, this really kind of pathetic little, almost a shed that I was renting out in the western edge of the Sunset District in San Francisco. And I would, you know, I was everything. I would fulfill them. Uh, I had a little inkjet printer and was running the, you know, quote unquote, the enterprise software out of a, a desktop at my feet. And then, you know, then I met a gal who was a waitress by night, but would help me with, uh, office stuff by day. And, uh, we just started to plug away and ship out of, everything happened out of that little 1500 square foot, uh, shop out in the, the sunset.

AI assessment note: “yeah, I started to, I started to get what I viewed as a lot.”

Q to a high rise in downtown San Francisco is what has gotten him into trouble. It became hubristic, and it's literally killing the company. That, that quote came out a few years ago, but you've seen that quote, I'm sure. What did you think when you saw that? Did it, did it hurt your feelings? Did you think there was some Truth to it? Was it just completely off base?

A Well, you know, I think that, that, I mean, obviously I'm not, I'm not gonna agree with the quote, uh, you know, word for word. I, I think that there's, there's probably some truth in it in that, look, when you, when you're an entrepreneur and you're, You're trying to build something from scratch. You gotta have a ton of, of faith in your idea, and you have to be headstrong, because if you're not, you won't survive. And as you start to scale, there's a lot of things that happen to a business, and one of the things that I realized is that communication becomes really the hardest challenge to, to conquer. You know, your team grows large. You have people scattered around various geographies. And I think that, you know, there are different levels of understanding within the team sometimes about what's affecting a business. And so, yeah, there were, there was a period of time where I think we, you know, we got a little big for our britches and, and as the leader, um, of the organization, I certainly own that. Um, but there is, I wouldn't call it ego. I would call it more, um, I guess, strength of will, right? You, you have a, a level of conviction that there's some significant amount of hope behind. Um, and that's how you, you sort of keep, you know, the team focused on the realm of the possible and the opportunity that's just around the next corner.

AI assessment note: “I think that there's, there's probably some truth in it in that”

Q high rise in downtown San Francisco is what has gotten him into trouble. It became huge. Hubristic, and it's literally killing the company. That, that quote came out a few years ago, but you've seen that quote, I'm sure. What did you think when you saw that? Did it, did it hurt your feelings? Did you think there was some truth to it? Or was it just completely off base?

A Well, you know, I think that, that, I mean, obviously I'm not, I'm not gonna agree with the quote, uh, you know, word for word. I, I think that there's, there's probably some truth in it in that, look, when you, when you're an entrepreneur and you're, You're trying to build something from scratch. You gotta have a ton of, of faith in your idea, and you have to be headstrong, because if you're not, you won't survive, and as you start to scale, there's a lot of things that happen to a business, and one of the things that I realized is that communication becomes really the hardest challenge to, to conquer. You know, your team grows large, You have people scattered around various geographies. And I think that, you know, there are different levels of understanding within the team sometimes about what's affecting a business. And so, yeah, there were, there was a period of time where I think we, you know, we got a little big for our britches and, and as the leader, um, of the organization, I certainly own that. Um, but there is, I wouldn't call it ego. I would call it more, um, I guess, strength of will, right? You, you have a level of conviction that there's some significant amount of hope behind. Um, and that's how you, you sort of keep, you know, the team focused on the realm of the possible and the opportunity that's just around the next corner.

AI assessment note: “I think that there's probably some truth in it in that”

Q And, and were you getting a lot of orders in that first year, first two years?

A Well, I mean, a lot's a relative thing, right? From zero, uh, 10 is a lot. And so, yeah, I started to, I started to get what I viewed as a lot. Um, it was signs of life, and I was fulfilling them out of this, this really kind of pathetic little, almost a shed that I was renting out in the western edge of the Sunset District in San Francisco. And I would, you know, I was everything. I would fulfill them. I had a little inkjet printer and was running the, you know, quote unquote, the enterprise software out of a desktop at my feet. And then, you know, then I met a gal who was a waitress by night, but would help me with office stuff by day. And we just started to plug away and ship out of, everything happened out of that little 1500 square foot shop out in the sunset.

AI assessment note: “From zero, uh, 10 is a lot. And so, yeah, I started to”