Winning in Highly Saturated Markets with Rishi Mandal, Future

The process of being an entrepreneur is not convincing your skeptics, it's finding your believers. And it's that's the painful process is turning over enough rocks to say, okay, these people think it's a material advancement of our company. If we just prove these couple of things. I need some traction.

You need some traction. Let's get some traction.

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The biggest outcomes on the planet are founder led Shopify, Dropbox, Airbnb. The founders are still there and so it's very important for founders to take care of themselves because if you don't take care of yourselves, you're going to suffer mentally and your business is going to suffer and your personal life is going to suffer. Ultimately, a healthy body leads to a healthy mind. I'm super excited to have Rishi here. Co founder and CEO of Future. Future is backed by Kleiner Perkins Founders Fund and Khosla Ventures. It's a one on one digital personal training experience that pairs clients with world class coaches. So Richie also comes from a serial entrepreneurial background. He was the CEO at Sash. Is it Sosh or Soch? Sosh, which was acquired by Postmates, which got acquired for over a billion dollars by Uber recently and then he was product manager at Google and prior to that he was an astrophysics researcher at NASA and Stanford University. That is a phenomenally bonkers background, Rishi. Like you went from astrophysics to product management to sort of on demand economy to now fitness. Give us your background, tell us about your journey. It's fascinating. And when I look at you, I can see my future is going to be fit.

Yeah, in a nutshell, you got it started in academia and science doing physics and specifically a very obscure corner of astrophysics. I was born and raised in the Bay and through osmosis had seen people inventing things all around and my hobby was building side projects and just producing things. And so ultimately found my way from academia back to what I enjoyed to do, which is building things. And had the great opportunity to build a company called Slide with with Max Levchin and a bunch of early PayPal folks. That company was acquired by Google in 2010, had a great experience there, working on some pretty high level things and then ultimately like you said, decided to start a company and started SOC in 2012. That company was backed by, you know, Sequoia and Khosla and a bunch of great companies, a bunch of great investors, saw very quickly a lot of uptake. It was acquired by postmates, had the pleasure of helping to scale that company up. And then finally about four years ago felt had some insight here in health and saw a generational problem. 70% of Americans are obese or overweight as we were talking about and quality of life is suffering and all the knock on effects. We talked about this for founders, but the same is true for mothers and students and folks who have a lot going on in life that fundamentally when you can be physically at your best, you can be mentally emotionally at your best. And so saw this just exacerbating set of trends, had some concepts that were interesting and started the company a few years ago. So here I am building future. Now I was gobsmacked to really grapple with the state of health in our country, that 70% of us are obese or overweight, 80% of us will die of a chronic condition. Things like heart disease, hypertension, diabetes for sure are going to kill most of us. And not only that, compared to all of our peer countries, quality of life is unremarkable, life expectancy is unremarkable and declining, which is wild. And there's a lot of reasons why these things are happening. But I could not find anybody, not an optimistic entrepreneur, not clinicians, not insurance executives, anybody who is predicting, oh, this is all about to get better, right? We're going to totally shift and everyone's going to get healthy, and this is getting better. In fact, every single person was predicting these trends are only going to exacerbate, and they're only going to. We're only going to get to 75, 80, 85, 90% obese and overweight. And so that problem, that generational issue was galvanizing. And the gap that we saw, my co founder and I was, there's these everyday behaviors that we have that we do that have a massive impact not only on how long you're going to live, but how great those years can be. And there's basically five things you do on a daily basis. How you move, how you eat, how you sleep, how you deal with stress or mental health, and whether or not you take your meds, medications, if you're supposed to, Americans are terrible at being compliant with that. And so these five little things, how you move, eat, sleep, deal with stress, whether or not you take your meds are critical. Everyone kind of knows it too, right? It's in the public consciousness that we should walk a little more, eat a little better. And yet 80% of us don't exercise enough for it all, despite the fact that we spend a fortune every year trying. We spent $100 billion a year. And so we saw this gap in intent is high. Every January, the majority of Americans picks up 100%. Yeah, exactly. We fail at insane rates that would be unacceptable in any other industry. And then it's become the great American experience to pick up a workout routine and fail, or start a gym membership and fail, or have a piece of equipment that you used to use that now sits there. Everyone can identify with that. And I think the question. I think we really were asking a slightly different question than everybody else. The question we were not asking was, why don't people exercise? We felt like it's perfectly reasonable why people don't exercise. Today, your average American has a job or two, they've got a partner, a family, or they're dating, which are very emotionally draining experiences. They have social obligations, bills to pay, meaning they're overwhelmed. There's a lot on their plate. So to ask them at night to also take care of their physical fitness and to take up a meditation practice and figure out how to eat healthy is an unreasonable ask. And so what we did is we were asking the inverse question, not why don't people exercise? It seems logical, rather, where are there subgroups of people among us who can maintain high performance or healthy Living for long periods of time, not just three or six months at a time like most of us can do, but three or six years, 10 years at a time, what are those people doing? And what we found was with near 100% consistency in these really niche populations, pro athletes, executives, celebrities, you see these populations that can maintain high performance, we saw that with near 100% consistency, they were not trying to take on all these massive problems in these different aspects of their health. They were building constellations of people around them to help with it. And they were getting experts in their life, whether that was a personal trainer, a private chef, sports psychologist, who could actually get in their boat with them, co own a goal, and then actually drive them to success. And so we started to see everyone who can afford it opts for coaching. And we unpacked that. Coaching is such a gift. If we can give you somebody who's there for you, just think about your fitness. For example, they do three amazing things for you. Number one, they tell you exactly what to do, no matter your constraints. You're sick, you break your picky toe, you're traveling, whatever, you're lazy. Today, that's a perfectly reasonable human constraint. And so no matter the constraints, they tell you, here's what you should do. The second thing that a coach does is they keep you accountable or get you motivated in a way that is really highly acute. When there's a one to one human who has expectations of you, who's trying to help you, we actually have a physiological response to monarize to the occasion. And then a third thing that the coach does tell you what to do, keep you accountable. The third thing we watch people and their coaches do is they actually spend a lot of time. If you clock the time they spend in person together, just talking about life, about the vacation they're taking, or I hate my boss, or the little types of things that come up. And what we saw was as you build a relationship with them and they take an interest in you actively, it allows them to push you harder, it allows them to keep you accountable, better, and so on. And so long way around, we saw that actually coaching is this powerful thing. It's worked for decades, but it's been economically infeasible for 99% of Americans because at $100 an hour, that's tens of thousands of dollars a year. And we said, coach tells you what to do, keeps you accountable and gets to know you. In this day and age, they really have to be standing next to you to do those things. Perhaps not. And that's where future was born and future allowed. We pair you with one of the world's greatest coaches and all of our coaches are employees of our business. This is not their side hustle, they're not contractors. This is really a central part of the central focus in their life. And we pair you one to one with a great coach. They tell you what to do. We send every customer an Apple watch so that your coach can keep you accountable to doing it with great granularity. And then they're constantly in touch with you over text message proactively. And so that's in a nutshell what future is where it came from. And we've seen just tremendous success with giving people one to one attention and scaling that scaling connection. We've seen a huge response.

What else did you consider in terms of ideas to build? Because you came from a great background, right? Google Postmates soc like you were an EIR at Khosla. You must have considered a bunch of ideas for me.

I am not one of those founders who wants to start a bunch of companies. I think a lot of people on this call and you also will know that being a founder is hard. It's hard on you physically, mentally, emotionally and so on. It's honestly it's a matter of last resort. And so I initially was attracted to this problem because it spoke to me personally. I was, I'm constantly struggling to maintain my health and to brain space and all of that and to realize there was this huge generational problem. My initial thought was to look for people working on a beautiful brilliant solution and figure out how can I help invest or join them or cheer them on, whatever, be a customer. And, and when I did not find anything that I thought satisfied modern criteria as a matter of last resort, I ended up starting the company. And so I wasn't really writing five business plans and figuring out what's most viable. I found a problem that I needed to seek a solution to. And I remember asking the naive question, you do this as an entrepreneur. I said okay, if I want to improve the quality of life for a hundred million people in 10 years, that's a lot of people in a little amount of time, what would I have to believe? And my intent was to say this is going to be crazy. I'm going to rule it out. I have to, you know, invent some magical pill that doesn't exist exist. But then we went down the path and said actually there's this huge lever that is suboptimally utilized your day to day behaviors. These five Things. And there is this solution that exists. One of the things I love about Future the company that I'm building is we are not wandering in the forest looking for what will fitness look like in the 21st century. And like throwing lots of darts where we are is, we've seen a solution that exists one to one connection. And coaching, it's actually worked beautifully for about 50, 60 years, but it has really been constrained to a tiny percentage of people. Right? Because if I want to pay $100 an hour for a coach and I only want to see them three times a week, which is not asking the world in terms of your physicality, that'll cost you $15,000 a year. And the average American family, the whole entire household, doesn't spend $15,000 a year on anything. Not on housing or transportation, not healthcare, food, utilities, nothing. And so what we found was this incredible solution that has been successful, that has been unavailable to people. And that little bit of a leap. There is a leap there and there's a question of why now and all of those things. But that little bit of leap started to take up our time and attention and then we ultimately started the company.

How did you go about early customer development? How did you get your first customers?

Yeah, we felt it was important early on. I'll put this into the framework of how we wanted to build this company. So the end point of the company is something large and crazy, right? The goal is pair every person, every human with either an individual or a constellation of people who can help them manage their day to day health. Non clinical stuff, how they're moving, eating, dealing with stress, so on. And how do you go from zero to helping hundreds of millions, billions of people with all aspects of their day to day health? You have to then size it down and build in phases and stages and not try to, you said, eat the elephant in one go or something crazy like that. But I would say not try to boil the ocean and you gotta walk before you run. And initially we said, what are the most critical problems or answers to go out and seek in this first phase of the company? And we'll push off other things and then we'll ladder up into over time, really de risking and having a robust sense that this company makes sense. And so initially we really said the first question was simply could you even enable a coach to coach at a high level if they're not standing next to you, could you even do that? So what we did is we brought some of the world's greatest coaches in. They'd never heard of us and we bothered them until they gave us their time and we started to hand them a tool set and said, okay, do you need to zoom in with someone synchronously? Do you not need to do that? Do you get some incremental benefit when we give you some signal off of this device, wearable of some sort? We use the Apple watch or not? And we kept iterating and iterating. It actually took us a long time. It was like an 18 month build just to realize you can coach at an incredibly high level. You can coach a pro athlete or a beginner when you're not standing there. But it took a lot of time to develop that tool set. And once we felt really comfortable with that and we watched coaches proficiency rise, the next thing we did is we said, okay, if people were to pick up this product and we gave them a world class coach who gave them a lot of time and attention, do we see them sticking with it? So retention was the first question at anomalous levels. And there's a characteristic curve in fitness which is when people pick out any fitness routine, piece of equipment, membership, et cetera. Three months later, about half of them will no longer be actively engaging with it. And so you think you're anecdotally that lines up January 1st, people sign up for their gym memberships or whatever by April 1, three months in, a day later, about half of them are not as actively doing it, half of them are still there. And then there's a huge churn curve there. And so we said, okay, for our little product with a couple of great coaches and what we've built, we're going to go get some paying customers and figure out if when people pick it up 90 days later, we don't want to see 50% churn, we want to see something crazy 5 or 10% churn. We want to see 90, 95% of people sticking with it. And this answers your question for how we got our initial customers is we went out and found a bunch of strangers.

We actually used just Facebook ads.

They were unoptimized, they cost us a ton because we didn't know what we were doing. And we got these strangers to pay the retail 150amonth. Obviously I think you've probably validated for yourself that a paying customer will give you different feedback than someone friend you give it to for free. And we put them into these little cohorts and we said, okay, watch these people for 90 days. And in the cohort it was like we were not getting 95% retention after three months, which is crazy to look for in fitness. We were seeing something high but not quite there.

Aim for the stars and maybe you'll reach the clouds.

Exactly. And we just kept, you know, iterating. It took us a few cycles of 90 day cohorts until we actually started to see 90, 95% retention after 90 days. And we could replicate it and we could take another cohort. So that took us a year to just take that one. Now think about what we're not doing in this time. We're not marketing ourselves, we have no landing page or website and all of our team is like, our digital presence sucks. I want to tell my friends that I work on this cool thing. And we're like, that simply doesn't matter what we're trying to.

You got to do things that don't scale.

Yeah. What we're trying to do here is simply say, when we give somebody a coach, can we keep them 95% of the time after 90 days? Engaged, not paying us. Engaged. Using it. Really high value stuff and with enough numbers to believe. So we had to set an end that gave us enough signals. And after we did that for several cycles, we said, we have great confidence now that actually we know we have a playbook, we have some infrastructure, we have the operations and the digital tools to take someone, engage them, figure out their goals, support them, get them to retain. Now the question is, can we do it efficiently? And so then there was a phase of our company where we're like giving you the one to one attention of one of the world's greatest coaches and they only take on two clients. Sure, that works, but we're losing money hand over fist. So now how can we actually introduce some efficiency to what we do? And so there we hired our coo. She's a very talented person. Kathy Vigrass. She came from Square, where she reported directly to the COO there and has just an illustrious career. And she was an executive at my last company. She came in to really help us think through the operations side of this. How do we actually become more efficient in this model? And then we found we were now a couple phases in we can make coaches productive. We found people, we could make them incredibly retentive and we could do it efficiently. We have this great margin structure and we have a really exciting proposition for our coaches, for our customers. And then the next phase became how do we scale this thing up? And that's, I think critical to the story is the way we found our customers early on was very different. Than how we find them now. Today, about 60 or 70% of our members were referred by another member. That's how we grow and we really focus on that. In the early days, there was no one to do that off of. And so we really focused on just validating individual questions we had about the company.

And I see a lot of people right as early founders, you can't de risk a hundred things. You can probably de risk one max, two things. If you do three, then I don't know, you're God. But like the first thing is can I get customers and can I keep customers and you take a small amount of them and I think you've said it so eloquently is don't focus on 100 things. Don't focus on the shit list or the shiniest objects here. Just focus on keeping this customer to this retention metric, which is my North Star. You guys came up with it.

It's cheap to say. It sounds cheap to say. But when you're like that's the only thing that matters in this phase of the company and so like literally nothing else matters and I'm going to be embarrassed of what this thing looks like and the design is bad, whatever, it doesn't mean none of that matters. And frankly, one of the tough things for us was to say the economic model doesn't matter right now. And I need to explain that to my team, my investors. That what I'm not trying to do is figure out all of these endeavors all at once. I am just saying if I give you a world class coach and I build enough tools to create intimacy, I figured out how to keep you and make you just thrilled and active. And we had an eye on how the thing scales. Of course you need to have a working theory, but we were not trying to solve too many parts of the puzzle and that it felt painful in different ways to do it that way. But. But we built high levels of confidence on each of those problems along the way.

So in that year time when you got to this sort of 90% retention, which is like SaaS, like retention for, I would say automating a services business. Right. Coaching is a services business. Yeah. You basically are automating that or bringing that or digitizing it is probably the better word.

That's right.

How many people did you get to in that year time before you said I had this product market fit. 90% retention is the definition in my opinion of product market fit. And if you pair that with high nps, which probably is the case.

Right.

What were your metrics there to say, now I'm gonna, like, throw fuel on fire.

Yeah, you're right. Number one, we were looking for high retention, and then we were looking for some supporting facts. And high retention people stick with it and they're happy about it. We don't want to do is bully a bunch of people into working out. And so we mps with something to measure. A couple other things that we looked at that were, you know, specific to our business, and you didn't need huge numbers in the hundreds and thousands to say, are people willing to pay $150 a month, which is probably 15 times what you pay Netflix, and are they happy about it and using it? And so in just like these cohorts of a few hundred people, when you see that 90% retention, you actually, you're looking for a big effect size. So you don't need a million bajillion outcomes to get that sensitivity. And you can say, I have high confidence here. And of course, as a founder, you are making decisions on imperfect amounts of data. And so you are. What you're trying to do is take as many variables out as you can. Because we were acquiring these customers, going out and acquiring them, we were sure to acquire variability of experience level, geographical spread, things like that, and we could control that. So in order to. One of the other things you have to do when you're setting up an experiment at small scale is to know that you've done the highest quality version of the experiment so that when it fails, you don't go, oh, we actually half asked this and that wasn't quite right and failed. But we didn't quite learn that it's a bad concept. So what we tried to do was build. We got the world's greatest coaches. We gave them like, really your under. We gave them. We give you their undivided attention. We did a lot of things that were better than we could imagine scaling, and if it didn't work, then it wasn't going to work at some, you know, additional scale. And so we were able to look for a big effect size with small groups, hundreds of of customers, they were.

Paying, so their feedback was relevant. When you get these free users, you get distracted, especially if there's no common commonality between them. Right? Yeah.

The other thing we learned about fitness, this is not relevant to everyone's business, is when some fitness, physiologically, when you go and do a physical exercise, it raises your testosterone levels. And so when you experience a bug with your workout, and by the way, you're a very busy person. You've got kids and work and you finally carved out time. You make it to the gym, whatever you hit start on this thing and it doesn't work. You get angry, and you're paying $150 a month for this thing. And that was actually a really favorable setup for us because we heard about every little thing pretty vociferously and it allowed us to say we're getting high signal back versus when we gave it to my mom. She was like, I'm really proud of you. This is great. And it's not high signal necessarily.

We both have brown moms, and I'm pretty sure your mom's. Hey, Rishi, you look so fit. I think you should try out for Bollywood movies.

Yeah, I get a steady drip of that.

How much of it is operational design versus just pure software play here? Because there's aspects of operational design which I'm fascinated by.

Yeah, so we are. I think digitizing is a better word. So when you talk to your coach on Future and like, I'll just lay out our model. Like every coach we have, I think 85% of them come directly to us from a professional sports team or a Division 1 college athletics program. These are really high level coaches. And 95% have a four years bachelor's degree in exercise science. 60% have a master's degree. These are people who are previously only available to professional athletes and I guess really rich people. So we go and get these world class coaches now. When you get a coach on future, we pair you with the right one. They're training you, they're talking to you every day. And you never, ever once ever receive a message that's not actually from your coach. So we're never automating, putting words in their mouth. Not even the welcome message. Humans are great at detecting when something's automated. And so what we are really in the business of doing is taking great coaches and giving them tons of leverage. And you're right. Part of that is how do we automate away things that are encumbrances or not the highest value things? And how do we create the conditions for somebody to do something more efficiently? That is high value. Evaluating Rishi's performance on a workout and giving him the right feedback based on his personality. Do I need to be competitive here and challenge him? Do I need to have the white glove treatment and tell him it's cool, don't worry about it. It happens to me too. Depends on what that person needs in that time period. So anyway, all of that is to Say we're in the business of giving massive leverage to talented people. And part of that is software. A big part of that is software to be a coach. There's two real parts to it. There's the IQ of being your coach and then there's the EQ of being your coach. And the IQ is given Rishi and his goals, the time he has available, the equipment available, his physicality, age and so on. What is the optimal program or training plan for him to be on. That's the IQ of the job. How do I design the exact right thing to get you a result? And then the EQ part of it is it doesn't matter how good his plan is if he doesn't do it. So how the heck do I get this person to actually want to do these things and carve out the right amount of time? And so on the IQ side, we do provide a bunch of tooling to save coaches time, to use machine learning models, to give them suggestions and give them a lot of leverage. But it's on the EQ side that I think what future does is really unique. And when you think about scaling connection one to one and making you, putting you in a relationship or in a partnership, that allows you to feel accountability, motivation. What we need is for your coach to be able to gather lots of details and then like utilize them along the way. It's called collecting dots and connecting dots in our parlance. And that's something that they're constantly doing. And so we're using technology to help them collect those dots and saying, who is this person Aria that they mentioned? No, that's Rishi's daughter. And on and on, collecting dots and then eventually resurfacing those things at a useful time to allow them to connect dots. And we learned a lot from the hospitality industry. My last company was in local discovery. My co founder, Justin Santa Maria was an Apple veteran, 10 years at Apple, but then spent some time at Airbnb where he learned about hospitality. And what you learn about in hospitality is in these real world experiences. In the world's greatest hotels or restaurants, you can use experience design to give people to surprise and delight and give people a great experience. And so we as a company playbook constantly and we say for the various archetypes of customers and the various archetypes of coaches, what are the most successful tactics given different situations that arise? And the overarching kind of spirit of this is to give them riverbanks. So what you don't want to do is tell your coaches scripts here Say this exact thing, it becomes robotic, it becomes inauthentic. What you want to say is don't go to the left of this and don't go to the right of that. The future way is to be accommodative and to be understanding and to be flexible. But read the room within that. If you're in an extreme example, if you're client as a coach on future, if your client is comfortable with swear words, meet them there. If they're competitive, meet them there. If they're not, don't do that. And so we provide riverbanks and say, given the situation, here's the best practice. And that gets woven into all the tool set, all of our onboarding learning, you know, ongoing learning and development. And given this, this combination of technology to give leverage and efficiency and playbooking to give guidance and direction and riverbanks, we can now scale connection to lots and lots of people, to coaches. And our coaches are spread across 39 states, throughout the states and there are big diversity of coaches helping a big diversity of people. And we've been able to operationalize that like connection.

I love how you put it, experience, design. And I designing not to inform or educate, but designing to delight and entertain. Right. Because if you want to inform people in the traditional way is fine, you just yell at them or you send them a memo, but your job is to inspire, motivate, excite and delight people.

I had the random and great luck for my first job in tech to be designing digital games to try to understand how do you actually help draw someone in and keep them motivated. And that's a very different problem set than what we do now. But got me thinking early on about the psychology of it.

It isn't it easier to have the luxury of taking your time to figure things out when you've had a couple of successful exits before?

That's a really good, I think, direct question. And I would say when you think about building a company, first of all, you're right. It takes a lot of both luck and circumstances, the right ecosystem to allow you to even take that leap and start a company. Right. If you're going to have to, you know, forego your salary for some amount of time, finding funding is a hard and sometimes hard to break into thing. And so to take your time to de risk a thing step by step is it's a specific strategy. And what I found was you actually. So the process of starting a company is not a personal challenge to be successful. I think in the best case, it's a Group of smart people who come together, who say we see a problem and opportunity and the work here is to figure out if our assumptions are right or wrong. It's not obvious on the outset. So we want to either prove or disprove this thesis. And what I tell a lot of young people who come to me and say, I want to start this company and how should I approach it? What I say is your goal at the end of this journey, if it's six months, 12 months, whatever years, is to feel like you've taken a shot at proving or disproving this thesis around whatever you think there's a gap here and an opportunity. And let's say you fail along the way. If we, we didn't have the Runway, let's say we didn't, people didn't give us the leash to, to take our time, to go and go step by step by step, and we did all of that in a year. That's like the time period of a raise, typically anyway. But if we did get some affordance, and let's say you get interrupted along the way, what I'm, what I, the way I would approach it is there's no way you're worse off for having gotten a smart group of people together, having had a clear eyed thesis, for having worked systematically to prove or disprove it, done it honestly with high integrity, you're transparent with the people around you who've given you funding. Let's just say you run out of time, you disprove the thesis, et cetera, you don't find your way to additional funding. If you do it that way, and you can talk about it that way in the future, you've only made yourself more valuable, you've only actually learned something. But if you say, we have a vague idea here, we're thrashing about, everyone's wearing lots of hats and it's all chaos. And then the thing ended. I'm not sure you have a lot to draw on and a lot of value that you've created. And so I think it's a fair question, can you raise more once you've had two companies exit? Yeah, absolutely you can. There's no two ways about it. But we tried to, in our, in our way, communicate our plan to our investors and to say, we are not going to solve every problem about this company. So opt in if you're into that and opt out if you're not. And by the way, plenty of friends of mine or people who had previously backed us were like, this is not for me because what you're telling me you're going to do at the end of this phase for me is just not that interesting or exciting. And we said, fair enough. When the process of being an entrepreneur is not convincing your skeptics, it's finding your believers. And that's the painful process is turning over enough rocks to say, okay, these people think it's a material advancement of our company. If we just prove these couple of things and a lot of people said, you're crazy, that's not enough progress for the company. And we said, this is a very valuable idea and we're going to be that much further along at that.

The biggest, largest successes are going to be outcome driven. Customers want an outcome. They don't want a piece of technology. I use future, I want to get ripped kind of thing. I use boast. I want to get money from the government, I want to check in my bank right to a usable product. But at the same time it doesn't have to be done in a very expensive way. I'm just curious, like you took a year to do this. How much did you spend?

Yeah, initially we were self funding it and then at some point we were like, this is an interesting enough idea. Let's, let's raise a seed round. And we were spending very little. Our first office first was a WeWork. And then when we got big enough, you know, it was an underground basement in Hayes Valley that was, I'm not sure how it was owned and it was like cheap as anything. And all of our friends were like, like it was the water. When it rained, water would just come into the space. I mean it was crazy. But we were, our goal was not to go and spend a bunch of money. So I think good storytelling, good product design doesn't have to be expensive. And it wasn't in our case. Yeah, I would agree with that. I think the, the spirit of the question is fair, right, that you get more leash if you, if you're somehow in, in fit the prototype or you're in the right geography, at least historically or whatever. I think that's a totally fair question. But what I was going and telling our, you know, folks who signed up for our seat was by the, here's the long term thesis. By the end of this phase, here are the questions we will have answered. I will have answered these questions and I will have not answered these 12 other questions that are critical or I think when we said that we actually had outlined in our cdac what are the existential threats to the business. And there were Four and we said by the end of this phase we will have answered only, you know, one of them and the other three will come. And those are additional phases of the business. And some very friendly and reputable investors were like, thanks but no thanks, I don't know what this is. And some of them were like, that's progress. And then in phase two we're going to go answer that question and then in three we're going to answer that question and by a couple of years from now we'll actually know if this thing is interesting and massive or not. So I think that we were pretty transparent about our intention there and about good things take time. But here's our plan and I'm a very plan oriented person and say the plan may change, but here is how I'm thinking about that.

Where things fail is when you raise money and you convince investors that you're on a different path than actually what's happening. And then they've tried to force you to grow and you don't have product market fit and so you can't invest in growth. You're trying to fix product, but they think you should be focusing on growth. I think that alignment and being upfront saying, hey, we need to answer these questions. I think also raising lots of money makes you lazy maybe sometimes, depending if you're not, if you're not done it before.

Yeah, it can, it can be, it can, you know, definitely create bad habits. It can also muddy up your plan once you feel like you have way more resources than you bargained for or whatever. And so I'm, I'm a big fan and I actually, what I found is like investors, right, most of them are investing either their own hard earned money that they're unwilling to part with easily or on behalf of other institutions and they take it seriously. And the best path to that conversation is to say you have to look at me and understand what I'm trying to do and understand that I have a plan that if you give me money now, it's just add water. Here's what I'm going to go and do. And that requires you to size up how much capital you need and so on. And I think just all of that stems for me from the way I want to build a company is to say I have this specific idea, it has four real big possible holes in it. And, and over time my goal is to figure out if those are right, but not all at once. I'm not going to worry about 2, 3 and 4. I'm just going to do one, and I might find a harsh reality once I solve number one, that number two is a no go, but I will get there. And of course, you're overlaying your judgment and saying, I think these are, these are the less risky business parts of the business. Let me go in and take on the biggest and hardest question.

You're in a highly saturated market. This peloton there is class pass. And you can say they're not direct competitors, but really, what is the outcome I'm looking for? I want to be fit, right? Or I want to improve it. I either want to improve my, my physique or I want to improve my endurance or I want to improve overall fitness. There's the outcome I'm looking for that there's a number of options, from peloton to class pass to class fit to future.

So how do you mention all the brick and mortar options?

Like I talked about all the brick and mortar options, but, like, I'm in Silicon Valley, so are you. I'm not even thinking anymore brick and mortar options. But look at it from a global perspective. You're going global, you're competing with like, it's a very heavily saturated market. And also now there's coaches messaging you on WhatsApp. How do you win in a saturated market?

Yeah, in a word, it's uniqueness. I think that's the word. Now, you have to qualify that with a few preconditions that have to be met. And in the case of physical health or fitness, one of the things, let's just look at the U.S. for example, is it's a massive market. It's been robust every single year. I said like clockwork. Americans in January pick up workout routines, have more than half of us do, and then we spend like a hundred billion dollars trying to get healthy and we fail. And that second piece of it was really interesting to us, which is despite there being a gym or studio in every corner in America, virtually despite there being all of these other services, one stat has stayed very steady, which is 80% of Americans don't exercise enough for it all. And so, broadly speaking, without hubris, just broadly speaking, nothing has worked at that population level with any kind of sustained efficacy. And the history of fitness has been people pick something up with all the greatest intentions, it might even work for a while, and then it doesn't stick. Because life happens. You get sick, you change jobs, you get a partner or so on and so forth. And so I think your uniqueness, the question we had to ask was, what can we do that hasn't been done before and we were obviously modeling off of the real world behavior. And and then you have to ask a couple of other questions which is can we cut through the clutter? There's a lot of noise here, a lot of people throwing free solutions at you. Right? There are 500 hours of video uploaded to YouTube every hour. And one of the top three verticals there is health and fitness. Right. And so there's no shortage of resources available to people. And what we felt like was this is a market, it's an important problem. And what we are going to do is lean into a solution that nobody else is really leaning into, which is one to one connection. And yes, rich people can go get their personal trainer today. So that's fine. The 1% already have their performance coach or someone who knocks rings their doorbell every morning. But for 99% of us the options are one to many, automated, self guided. That's the options that we have. And we are a company that says you're busy, you deserve to have somebody helping you with this. And it's one to one. And so we talk about from the outset when we talk about our company, we talk about the person who we're pairing you with. This coach used to be the performance, the head of performance for University of Wisconsin women's basketball and she was born and raised in Wisconsin and has these interests and has a dog named Kenya and lots of other things and to really feel the human behind it. And we're going to pair you our average response time. This is great for our coaches. When we pair you with a coach and you text them, including nights and weekends when they sleep, obviously their average response time is 15 minutes. And that means during the middle of the day it's one minute. And then of course it's much more protracted at nighttime. And we tell you that we're like here's a real person who's going to be there for you. They're going to create a plan for you, keep you accountable, be there for you seven, seven days a week. Average response time is 15 minutes and it's $5 a day. And I think that is us trying to lean into what we're doing that let's say Nike never wants to do which is pair every single customer with a human or Apple was not in the business of doing. Even Peloton is has a really beautiful solution that is a completely different kind of axis. And that's one of the other parts of building a company in pieces and parts and phase and stages is we don't have a community aspect to what we do, period. And is community a good idea on top of fitness? Of course. Do people ask us to introduce that every single day? Of course. I said 70% of our members were referred by member. That means almost everybody knows someone else that uses future. And yet you can't see that friend. It's completely a single player, or at least you and your coach experience. And yet what we said is our uniqueness is the intimacy between you and a coach. And until we can replicate that in person, intimacy that a coach and a client have, we are not going to go with game mechanics and leaderboards and competitions and community. Will those things eventually get layered on to incrementally make your experience better? Yes, but we have a job to do, which is to lean into the one thing that we do. And so in saturated markets, you have to understand, is it big enough? Is this worthy? Can I go out and either carve out or win? Is there some behavior that tells me there's an entry point? For us, it was, doesn't matter. When people pick up all of these great programs, 80% of them are still churning and failing. And then do we have something? Do we know something that other people don't? Or can we, do we have a story to tell that other people aren't saying? And that for us was one to one. But in broad strokes, you're trying to build confidence with your biggest existential threats. That's, you know. So for example, one of the things you talk about saturated markets, one of our existential threats for a consumer fitness company was from the get go from before we started. And we weren't even working on this problem when we started. It was, can you even cut through the clutter? Because to your point in the previous question, there are so many options for people and so many free options and cheaper options. Could you even find a path to reaching customers? The other quirk of fitness, consumer fitness, which a few other industries have, like consumer finance, is any results based claim you try to make, hey, we're gonna get you a six pack AB in 12 weeks or less. Sounds like spam. Or if I told you in consumer finance, you know, make more money with less work or save more at lower rates. It all sounds a little bit like spam. And so you have to figure out a different tackle to take. You can't just say our average customer, you know, benefits in this way. And we wrote down our existential threats. Can we cut through the clutter? Can we make coaches actually productive? Is there a Great experience to have. Will people stick with it? Which is obviously a question all of fitness has. And so we had a couple others and. And then I think what you want to say is which of these scare me the most and how do I go and. And work on those earliest on. And if you want to generalize that you can. You're looking for. I'm not sure there's an order here. Do we feel like we have product market fit? That there's an economic equation here that makes sense where we create value and capture enough of it and either that's captured today or over time. But can we de risk that over time and answer that question, do we know how to grow? Distribution is, you know, basically everything. And so if I have something that keeps people, keeps them happy, is generative of value and captures some of it, and I know how to add more people to it, that sounds like a pretty good set of things to focus on. But for example, for us there was one additional precondition. Could you even coach someone from afar? So we had to go and answer that one first before we could say, do people stick with this? Before we could say, does this economic model make sense? And then before we could say, can you scale this thing up? And so you have to figure out just what's the order of operations there?

What is I guess, the biggest driver of building affinity you find, or maybe top two or three things.

This is where I think you get paid to be a product person or a founder, which is to try to understand how to speak to people. And you can definitely your way into some of this stuff. But it really helps if you can, number one, have good taste and number two, self edit along the way and know when you've been irrationally exuberant about something and the data is telling you that's not exactly playing out. And so I would say, how do you build affinity? The first, the way I approached that problem initially is to go and find the right people on my team who I feel like have a sense for that. And actually a lot of them are unproven and they have high upside on this front and they have smart things to say. And then some of them actually have great consumer DNA in what they've worked on. So an example is when I started to build this company, my co founder, Justin, who I was mentioning earlier, he spent 10 years at Apple on the iOS team. He was on the original iOS team right when it was a secret project. And he built out FaceTime and iMessage, which were all about connecting people from Afar and then spent years at Airbnb connecting guests and hosts who would never meet in space and time. And so when we said what we want to do is build this service that connects you with another person and have you feel excited about it, the first thing I wanted to do and we co created this but was to say find the right people who have seen problems like this before, maybe not this exact problem, have thought about it and then find other people and then we eventually hired some less proven people around him who had great instincts for these things and then put them in a position to get enough feedback by sizing down the problems they're solving and to look layout in advance. What data are we looking to come back. You can then give them feedback and give them honest and real time feedback to help them sharpen that. And so I'm a big believer in it takes some amount of instincts. And I don't think you can just take random people wandering in the forest and find your way through data. You have to have a perspective towards building affinity. Yeah, I would say that's the highest sort of thing you can do is find people who are saying smart things and then give them a feedback loop.

As you look back at your journey. Rishi, what do you wish you did less of and more of?

I was a kid and my parents are from India and we would visit India like every other year or so, visit our family there. And I have this memory with my dad and we were sitting in the back of a rickshaw like a bicycle rickshaw. There's a guy riding a bicycle pulling us in like a, a car in the back. And it's, it's the summer in New Delhi, so I don't know, it's 100 degrees plus. And my dad, I pointed to the guy in front of us who is working real hard to pull this rickshaw and said, see this guy, he's working hard like from the crack of dawn to the end of the day he is working hard and he's going to do it again the next day and the next day. And so I want you to know that working hard in and of itself is not enough. You also have to be lucky. And you need to know if that's the case and you have to work smart and if you should be so lucky to be in a position to do that and you tell your parents, yeah, give me a break, I'm a 10 year old, leave me alone. And years later after building several companies you start to come to realize of course you have to work hard. That's part of it. But working hard is not enough. It becomes a substitute for actually being smart and thoughtful. And so I think over time, this is actually just part of the becoming an experienced person and knowing how you work and knowing your own strengths and weaknesses was thinking about, how do you understand where we have been lucky and take advantage of that and put ourselves in a position to be lucky. How can you be smart with what you're doing? And then, of course, you have to. The obvious condition is to. We have to work incredibly hard if you want to create outsized values. So that's one of the things that I wish I did less of, which is just toil and thrash on on things that didn't matter. And it's helped me now to say, what are we trying to solve in this phase of the company? Because I'll give you an example. Early on, when I started my first company, I took it very seriously to make the decision on what kind of lunch we're having and for our employees and what kind of trash cans and let's decorate the office or whatever. And I want to create it. It all came from. Not like, came from the right place. If I want to create a great place, a workplace. And then with this company, what I've been asking myself is, what I need to see is, can I make a coach productive in these? And I can make this phase of the company as short as I can, if I can prove that quickly or as long as possible if I try to do too many other things. And so when it came to picking out the trash cans or warehouse is or whatever, it became very obvious to me, it doesn't matter. I could work in a basement. I could work anywhere. I could work out of a friend's house. That's not what's going to fundamentally figure out. I need to find these great coaches. That's what I need to do. Everything else really doesn't matter. And so it helps guide your energy to work smart when you have a framework. And so that brings me to the second thing. This is not exactly a what I wish I did less of, but a thing that I've come to value. And it just so happens I don't know how this happened. There's another thing my dad used to tell me every single day when I was a kid, which was. It was this, like, trope in our house, which is the plan is always useless, but planning isn't useless. And my dad used to always tell me this, what are you going to be when you grow up? And I'm like I don't know. And he said the plan will totally. You'll be off track immediately once you make this big long term plan. But the process of planning is not useless. So the plan is always useless, but planning isn't useless. And I approach building a company that way. Which is to say, given all the information I have today, what's the plan? What are we going to do here? And then of course a week later you get all this new information and you're gone. 90 degrees or whatever, 180. But the process of having thought through what do I need to prove and what are my assumptions here and create some sort of framework and plan. How much am I going to spend? How many months does that give me to do this? And therefore I'm going to do it in three month cohorts or whatever. Having that plan, when you're immediately presented with a deviation, you have enough bedrock and a framework to then make the right decision on the fly to say how you can change things. It's a bit more upfront of having just like a sense and then you constantly reinventing this plan, but it allows you to react pretty smartly to all the bumps. So those are two things that I feel like I've benefited from is to just put a framework in place and that allows you to focus your energies, work smart and. And then having that plan forces you to ask all the questions up front.

Love it. Great advice, man. And lastly, any resources or books or anything you recommend for people around along the topic or anything else.

I'm a big, I'm a big reader of biographies because I think just again, collecting dots and connecting dots is a healthy behavior. In fact, it's just, frankly just reinforcing that muscle for yourself of looking at disparate stories and trying to draw out what speaks to you. So I will give you a jumping off point for finding some amazing biographies that you can choose to lean into or not. There is a book called the American Story by David Rubenstein. David Rubenstein was the founder of the Carlyle Group. He's this uber billionaire and he's random over time what he's done. He started to give philanthropic patriotically is what he calls it. And he gives money to refurbish the Washington Monument or Monticello. And one of the things that he's done is his belief is the. Whether right or wrong, his belief is a lot of the dysfunction in Washington is due to our lawmakers not having an appreciation for history. And so he started to host these talks at the Library of Congress bringing in luminary historians to talk about their core subject matter. So think about Doris Kearns Goodwin talking about Lincoln or Ron Chernow talking about Alexander Hamilton. Right. These are the people who wrote the biography about those different people. And he created this audiobook where he just taped all the, all the interviews. And it's like a one hour window into these biographies and you can choose. He talks about Lincoln, Benjamin Franklin, Walter Isaacson, who Benjamin Franklin was a genius and several other great characters. It's all about American history in this case. Case. But it's a little survey with the greatest minds who wrote about these folks. And if one of those stories speaks to you, you know, then you can go and jump off and go read the biography, which I ended up reading all of them. And I think it's a great place to start. The audiobook is amazing because it's real interviews and all the proceeds go to. The Library of Congress has a fund for children's literacy. So it's also like a win, win. And so I say generally speaking, biographies are what I read, I enjoy. I'm trying to collect dots, connect dots. That's what I'm doing when I read them. And that's a great jumping off point. And then I'll just plug. I'm reading Leonardo da Vinci's biography. Walter Isaacson, you know, wrote that and he just released it. And I don't blanket recommend it to people. It's great depth about one of these very the Renaissance man. But that's the process for me.

What's one advice you want to leave us with today?

I'm going to go back to that plan thing. It benefited me greatly. It's having the plan itself always becomes useless, but having a plan is not useless. And that pervades everything I do from how I fundraise, I share. Here's my plan. Step by step, you add capital. This is what I'm going to go do. It helps you hire people when you can show them the plan and helps you make great decisions along the way when things inevitably don't go according to plan, you have frameworks in place. So that's what I would say has benefited me. Again, I'm just reflecting my own experience back out to folks and I know that everyone's experience is a bit different, but that is, I think, been the healthiest thing that I've incorporated into building companies.

Awesome. Thank you so much, Rishi, for joining us. Wishing you great success, my man.

Great to be here. Thanks guys. I need some traction.

You need some traction.

Thank you for listening and we hope you enjoyed this week's episode of the Traction Podcast. If you enjoyed the show, please leave us a five star review and you can find more information and all the resources mentioned in today's episode at. Boast AI that's B o a s t AI blog.