Today's episode is a conversation with

the founders of the company that was my

very first ever angel investment, a

company called Ladder. At the time, I

had absolutely no idea what I was doing.

I didn't know the first thing about

venture capital, startup investing,

technology, software, all things I've

learned a lot about through Invest Like

the Best and elsewhere since. But at the

time, I was betting on my friend Tom. As

you'll hear Tom and Greg discuss the

story of building this company together.

This is a classic example of what it

really takes to build something special

and valuable in the world of startups.

It has not been a straight line. It's a

company that easily could have died and

probably should have died many times.

But it has survived and gone on to

thrive, reaching almost hund00 million

of recurring revenue and building what

they hope is the system of record for

fitness and health. I believe this story

is a great example of what it really

takes to go the distance. Of course, the

story is still being told, but I love

this episode with Tom and Greg because

it's an inside look at the difficult

things that any founders will have to go

through on the way to an ultimately

great story. We try to get into all the

nitty-gritty details. What went wrong,

what they did to fix it, and why they're

now on the right trajectory. Please

enjoy this great conversation with Tom

and Greg, the founders of Ladder.

So, Ladder was the first ever angel

investment that I made, which

effectively was a bet on Tom. This was

before I had any idea what I was doing

in private markets. And uh I've learned

a lot from watching you guys build over

the years. The story is fairly amazing

and unlikely and dramatic, which is why

I'm excited to do this with you guys to

tell the story of the business that

you've built so far and and where it

might go. The idea, I think, for our

conversation today is to show people how

incredibly hard it is to build something

that ends up being very valuable and the

twists and turns that happen along the

way. It's amazing that you've ended

where you are, but I find it all the

more interesting how you got here. And

of course, we'll also talk about where

you're going. Maybe to begin, since not

everyone will know what the business is,

just literally describe what the actual

product and business is. And then I want

to tell the the the real dirty version

of the story of how you got here.

>> Ladder is the number one app for

strength training. We've built a system

that's designed to make it as easy as

possible to maintain a consistent

routine. We spent a lot of time thinking

about personal training. Arguably the

most reliable way to get to the results

that you're looking for is hiring coach.

Unattainable for most inaccessible for

most. But personal training, if you

think about how it breaks down, it's

programming, coaching, and

accountability. Programming, you know

exactly what to do. Someone's prepared

it for you. There's no guesswork.

There's no thinking. Uh coaching, you

have an expert there to guide you,

answer your questions. And

accountability, you have a coach

standing in front of you. You don't want

to piss off your coach. which is a

really powerful motivator. Then we took

those three pillars and designed an

experience from ground up to get as

close as possible to to that experience.

>> How has it been so successful? Because I

feel like this is almost like a Silicon

Valley meme like you have a fitness app

like there's 4,000 million fitness apps

to what would you attribute the fact

that this one is the one that seems to

have come to dominate in a sea of

competition? I think it's it's going to

sound simple, but it's understanding

your customers and really being an

engineering first business. If you look

at most companies in our space, they're

started by creators and they're good

products, they're good companies, but

the creator is the face of that

business. They make every decision and

they don't have a DNA that's rooted in

in engineering, in problem solving. And

when you look at these apps, they're

mostly just content libraries and the

motion is just constantly creating more

and more content. But what we saw was

nobody was spending time thinking about

how to use these incredible levers uh to

deliver an experience that actually

increases the odds of you continuing on.

We looked at apps like social networks

and we looked at Dualingo. all these

apps that we're using all these powerful

motivational mechanics and pointing them

at at an action. For social media

networks, it's selling your attention.

For Duolingo, it's learning a language.

And so, we took that mentality of how do

we use software to create an experience

that's totally different than what

exists today that isn't reliant on a

neverending content machine. And it's

been guided by our members. We spend

more time than you could imagine just

speaking to our members, dissecting

exactly what we should focus on based on

what they care about. And so I think

it's just not looking at other companies

for inspiration. Like we just don't look

at fitness almost ever.

>> Just to give people a sense of scale,

like roughly, you know, how many people

use it? What sort of revenue does the

business do? Just like give people a

sense of of how big the business is.

>> Yeah, we're we're north of 300,000

paying members today. I think at the

beginning of 23, we were 9,000 paying

members. So the growth has been

exciting. We're getting pretty close and

knocking on the door at 100 million of

AR. So it's been very exciting from a

revenue growth perspective, but it all

boils down to we've created a product

that gets people the results that they

want and they stay with us.

>> So sort of having like laid that quick

simple groundwork for what the thing is.

I would love to rewind time and Tom have

you talk about actually we've literally

recorded podcast at the same table. I

don't know do you know what year that

was? 2017 maybe

>> 2017 the beginning chapter of the

business call it 2017 to 2020 or so was

a struggle to sort of stay alive and you

personally put so much of your time your

reputation on the line to go do this

thing you left a really lucrative

successful hedge fund career to do it

maybe you can just tell the story of

those early years and what was going on

and why it was such a again I want to

paint the story of like 100 million AR

is awesome congratul ratulations. That's

really fantastic. I'm very happy as an

investor, but the more interesting part

of this is is what it takes to get

there. So, maybe set the stage for us.

>> So, ladder started as a it was really a

side hustle for me, I guess. A uh high

school classmate

uh that I went to school with up in

Boston had pitched me on a on a fitness

startup. The product didn't exist yet. I

think it was um a pitch that I was just

kind of looking to swing at at the time.

Was, you know, very interested in

startups and technology. He asked me to

put some money into the business, which

I did. I then raised the rest of the

money and ended up joining him as uh

co-founder and president of the

business. And my condition for joining

the business was to move the company to

Austin, Texas. You know, for me that was

less about warm weather and a change in

lifestyle. It was about separating

myself from safety nets and uh putting

distance between New York and my

Bloomberg terminal and kind of the the

easy way out cuz I assumed it would get

hard. I didn't know it would get, you

know, quite as as hard as it did.

There's really two ladders or two

different companies here. Same name. I

would call ladder 1.0 as everything

pre2020 and after 2020. The name's

ladder and we're in the fitness space,

but it was a it was a different team. Uh

it was a different product. What we were

originally building was more of a

managed marketplace for personal

training. We thought that it was about

there was heavy emphasis on on

personalization and a relationship with

another human. We thought that was, you

know, really the opportunity. What we'd

come to find out is that business would

be very operationally complex, um,

difficult to scale. You know, ultimately

as you scale that business, it starts to

look more like a call center and you'd

be um, inclined to start to automate

away the very human you were selling in

order to build anything that had

margins, you know, worthy of venture

type economics and scale. So

uninteresting. But what we were seeing

was that all of the innovation in the

space was focused on the casual fitness

consumer. We were noticing that it was

all very cardiobased and we saw that

this fitness enthusiast customer was

really they were being ignored. Strength

training in particular, there was no one

selling strength training solutions. And

we got excited that there was this

fitness enthusiast customer that was

already working out that had a huge pain

point around just planning their

workouts daily. and we got excited that

this is something that we can solve with

software. So, you know, we find

ourselves in Austin, Texas. You by the

time I get down there, I realized, you

know, startups are really hard and it

didn't quite look like, you know, what I

had been hearing on your podcast as far

as like the uh the iterating and the

learning and just um you know, it was

hard. It was messy. We were kind of out

of money the whole time. We didn't have

>> really any customers to speak of. There

was no signs of product market fit at

that point. Fortunately, this is where

Greg answers the the picture. So Greg

and I went to went to Notre Dame. I

should disclose that all three of us

were classmates at Notre Dame. And uh

Greg and I reconnected in Austin, Texas.

He had left banking and has now been

building startups for a period of time.

It was very obvious that he had this uh

small team that believed in him very

much and it was clear that he wanted to

build something very meaningful and

consumer. So I kind of spent my time um

you know tricking him into joining us if

you will. eventually, you know, I got

him under the hood and excited about um

about what we were building. And why I

was so interested in startups myself is

that I had this um this sense that you

could you could something to happen in

the startup world. It just felt like if

you were willing to not stop and you

just keep going. It it seemed like you

could just sheer force determination,

you could build something that was

appealing because in the hedge fund

space, I can promise you in the finance

world that's not possible. You can't

just like will hedge fund returns. I

think Bernie Maid off tried to do that

and um and it doesn't work. It was

obvious to me that he shared that same

belief. We'd be in the middle of a doing

something messy like a debt collector,

whatever it is, something hard. And in

that same next conversation, he's

talking as if our success is inevitable,

you know, and we're going to build this

enduring business. And um I was

attracted to that. I've always felt that

way. And so, you know, I could just tell

that Greg seemed like the type of guy

you wanted to be in a foxhole with. So,

it's now it's now uh the end of 2019 and

I'm realizing that we have this

opportunity to reset and to really think

about like what what can ladder 2.0 be.

But in order to do that, we need to

really refocus, restructure, was

thinking about a you know what a

leadership transition could look like. I

found myself in a position where I was

our largest financial shareholder. you

know, in addition to being in the

company as a co-founder early days, it

was all people like yourself that had

put money in because they trusted me

personally. And so I felt this this

naturally this obligation and um you

know I think my my role and mindset

shifted from one of co-founder to trying

to be a steward of the business. And at

that point this is the day after

Christmas 2019 came to the board and

proposed that that we needed to make um

some pretty significant leadership

changes in order to really um in order

to really reset the business. And as

part of that we had some changes at the

executive level including naming Greg

CEO. But it felt like at that moment

like you know we we had this sense of

like we can go we can go build this

thing now. Like our problems were hardly

solved but it felt like the problems

were now worth solving.

>> Just to put like a finer point on the

situation for you personally. You've

left this job. We're making a bunch of

money. You're in Austin. You moved your

family. You've gotten most of your good

friends and your family as far as I

understand it. My family. So many people

that you cared about that that cared

about you too

>> uh to invest in this thing. What did

that feel like? What was the darkest

point and what did it feel like for you

personally?

>> Well, it just felt like there was

nothing you you weren't willing to do to

to make it work, you know? And I think

that's why it was um it was appealing to

meet someone else that kind of felt that

way that was kind of going to be in that

fox. I should have learned that lesson

and said I need to not raise money from

friends and family. Instead, they were

the only people at that moment that I

needed to double and triple down. Um you

just had to go even further all in. Um

not sure I would do it again or or

recommend other people take that path.

>> Why not? You have to just like know deep

down that you'd be willing to do

whatever it takes, you know, including

like, you know, some very difficult

conversations with your wife and you're

building a family and, you know, you're

leaving a lot on the table on, you know,

a much easier, cushier, you know, hedge

fund, country club type, you know,

existing here in the Northeast and, uh,

you know, you want to go and, you know,

do something hard. Turns out it's it's

pretty [ __ ] hard. I think that

dynamic is why ladder is here, though. I

mean like your motivation was delivering

to everyone in your life and like that

that sits with you every single day. I

don't think there was a moment where we

thought we weren't going to figure it

out. Like I can't think of one day we

were like it's not going to happen. Like

we're we were going to figure it out.

And on my side I don't have that same

dynamic I do now. But it wasn't true

when I first joined. Not everybody was

invested in ladder. But I had a

conversation with my wife where she said

this is the last one. Like if you if you

don't figure this one out there are no

more startups. It had been 10 years of

not a lot of success tied to a lot of

work. And my wife married an investment

banker who was a closeted entrepreneur.

And she's been an investment banker for

18 years. And it's been a long time of

like, you know, I'm going to the

clubhouse. I'm going to figure it out

today. Like I promise it's coming. It's

coming. And that's been an enormous

motivator of like, no, this is going to

work. I mean, we're there's just no

scenario where we can, you know, let

this not get to the vision that we we've

set ourselves on. Why did you decide to

join it? You know, if you think about

the circumstance that you were opting

into, uh he said it best, you know, no

money, no product market fit, like need

needing a whole new team, you know, why

not just like start a new company or

something like why why come into this?

>> It was kind of this perfect moment that

is very unlikely to ever happen again. I

was building a company inside of a big

real estate private equity business, a

consumer company, uh, which had all

kinds of complexities of trying to be an

innovator inside of a really established

company. But I had this amazing team of

people, some that have been with me for

a couple of ventures, some that I've

worked with for two, five years. Really

powerful team that could build anything.

This is product and and engineering and

and marketing, but a core group that we

wanted to just keep working together and

we wanted to be in consumer. We wanted

to work on a hard problem. But we had a

group of people that were not at a stage

of life where they could take zero

salary and start something from a

garage. People were starting to have

kids, you know, life is starting to

happen. We got spouses

and so just starting something from

scratch. And we thought about it. It

just seemed like it was a hard task to

keep the group together. That was my

number one focus is like keep this group

together. It's special and I wanted to

hold on to it for for dear life. So like

that's what I was solving for consumer

and bring my most important people and

let's take another swing together.

>> Talk about what a given day was like in

when you guys joined forces there's

still this mess to clean up and then

there's this thing you have to go build

and it's like two sides of the coin. How

what would a day look like in those

early days?

>> It's literally like late March 2020 when

we've zeroed in on the concept for this

this new product and we're having to go

fully remote. the teams knew. So,

everyone's working from home other than

Greg, myself, and and Johnny. And the

mornings were for the messy stuff. It

was um you know, just figuring out how

to untangle some of the situations we

found ourselves in, debt collectors,

actually just trying to to kind of fix

things so we can move forward. And um in

the afternoons, we're actually building

product and Greg's focused on, you know,

winding the team up and, you know,

iterating on what we're about to build

and launch, you know, a few months

later. Um, we're raising money kind of

at any moment during that. Like I'm

spending every moment redialing people

that are already investors and reaching

out to new people. What I what I

remember most though about those days

cuz it was it was hard but it was also

so exciting. And I think about um you

know at night at like 10:00 we would

finish the whole world has stopped.

Everyone's at home. We've been in the

office grinding since 6:00 a.m. And at

10:00 it would be like all right like

whatever win we had that day let's

celebrate. And it was like um you've

seen that scene in Good Fellows when

they're all in prison. And when wise

guys go to prison, it's not like

everyone else. They got lobsters coming

in and

>> slicing the garlic.

>> Yeah. Slicing the garlic with the uh

with the little razor blade. You know,

for us, our version of that, we're

cooking steaks on the grill. We're

smoking cigars in the office cuz no one

else is coming in. Uh I'm shaking

martinis up there. And uh we're

high-fiving about raising $10,000

checks. That was exciting cuz frankly it

felt more like the startups that were

romanticized by the you know podcasts

and books and you know all the kind of

fun stuff.

>> But it it was survival and like when

you're in a moment where it literally is

survival it's not hard to know what to

work on where it wasn't hard for us to

know what mattered. We needed to not run

out of money. So Degan was spending time

trying to solve that problem. We were in

debt and owed a lot of people a lot of

money and it's a startup so it's really

hard to get a clear picture of the

financials and where money is going and

it was the first thing I worked on was

like where's where's the money going. We

put that piece together and you know no

one can really see this or is looking at

it and you realize like money's going in

different places that we're not totally

aware of and mission number one was like

figure out the cash flow and we got we

got visibility into that and then we had

we had some money that we owed to people

and we owed some like hardcore creditors

like American Express who like doesn't

really mess around and I learned and

Degan learned all about how to negotiate

creditors and that was a new skill set

for me.

>> What's the key to that? What's the

lesson? uh begging you money.

>> Like when when you get them to really

believe and it was true that there's a

chance you get zero, there's a door to

negotiate. Like we were negotiating with

big creditors at 20 cents on the dollar.

>> And we knew the list of groups that we

owe money to and it was like it was like

sales. We're like, "All right, we got to

go one by one and figure out how to

close the door on this and not let it

overhang the business." And so raise

money, get money back to the right

people, clean up the house to survive.

And then we had this moment around this

time where it's like we have this

existing existing business. It's not

it's not working. There's some insights

that are coming out of it, but it's

really not working. Um, but we're still

trying to maintain it. So we're kind of

living in this like in between moment of

like keep that thing alive so we can

pitch something to to folks on the

outside, but also like what are we going

to do? Like what are we going to build?

isn't this like there's no path in this

thing that that we've built. So there

are really funny stories uh where Degan

was pitching, I'm pitching, and you're

basically trying to figure out what the

investor likes and you're like, "Let me

tell you about this one to one business

we got." It's like super excit Oh, you

know, like that like we're thinking

about this social concept and you're

just kind of living this world of

figuring out how do I make it through?

And there were enough wins like the the

micro wins on survival felt big to us

and there was enough to like celebrate

to keep going and wake up and go do it

again. If you were to teach a class on

fundraising for startups now, you you

you've done this as masterfully as

anyone with the with their cards you

were dealt. What would the lesson plan

look like?

>> One of the biggest lessons particularly

from that moment is like selling people

on like your your conviction in that

moment we were selling both like the

product that we were about to shut down,

but we didn't really even have visuals

yet for the new product. So, it was as

much just like selling the team and the

conviction on what we were about to

build. Like I think like the best

example of that is a story about um

another friend of ours named we'll call

him Bill in March of 2020 trying to

kickstart a round but no one's going to

lead this round naturally cuz who would

who would lead a round in our business

at that moment. And so I was about to

lead another inside round where

basically like I'm pricing the round and

uh passing the hat to you know to all

the boys and whoever would listen. And

um and so what what happened there was

now I need some more cash. I think

Braden knows like how many times I wrote

check in into the business. But I kept

um this was another example of being

like all right the only way to get this

going is to write the first check and

then you know and and lead with that uh

with that conviction showing that you

were you know had skin in the game here.

Again at this point I'm trying to figure

out how to sell anything that's not

nailed down. And so it's you know 401k

put that in done. Uh what else can we

do? And um this story here is funny

because I'm looking at kind of the line

items on the balance sheet if you will.

I'm like, "Oh, permanent equity." And uh

that's that's Patrick's friend, Brent

Behore. And uh Brent came and told his

story on this podcast. Uh he has an

unbelievable strategy, and it's called

permanent for a reason. And that, you

know, he buys these family-owned um you

know, awesome businesses and then holds

them forever. And so you're not, you

know, you're not necessar there isn't

like a liquidity profile here. But I

read the documents and it said that if

you found another LP to sell to that you

could sell. And so I called Brent and

said, "Hey, I need your investor list."

And he's like, you know, the market S&P

is down 35%. We're in a global pandemic.

Like, of course, I'm not giving you my

investor. You're you're my smallest

investor. Like, you think I'm But he

does me a solid and he's like, "Hey, you

should call Bill." Bill's a friend. He's

Patrick's friend. You know, Bill,

another Notre Dame guy. So, I call I

call Bill and uh and Bill's a gamer. So,

he's just like, "Uh, what are you

looking to do? When do you need this

by?" And he's like, "What are you

thinking? Like, how do we mark this?"

And I'm like, "Well, the market's down

this, you know, what about down 10%."

And we and he's like, "What about down

50?" and we do the dance and we end up

kind of somewhere in the middle and I'm

like you're done but I need the money

tomorrow and he's like I'll send you the

money tomorrow and I'm investing in

whatever this is going into. He doesn't

even really know what ladder is but he's

like but I'm in and like I think the the

point there is like just like in

particularly those early days it's

important to have skin in the game in

whatever way you can. Like and I think

you know for us it was about um being

able to show that level of like

conviction and urgency like Bill didn't

need to see a deck. We didn't have a new

product yet. He knew you were involved

and he was just like if you're willing

to do this like you know I need I need

to be involved too.

>> So he bought your steak and then also

invested in the round that you were that

you were investing in.

>> I think he matched what he was what he

was sending me which was which was

awesome and that kind of kicked it off.

>> We're glossing over a lot. Maybe we'll

keep returning to fun. I love that

story. Um but let's get to the point now

where things are starting to feel like

okay now we have to build this next

thing. Maybe this is a good opportunity

to ask you what you now know about the

world of like fitness and people that

want to get fit like what becomes your

northstar for what product can we build

here that's scalable that can get to

what it's become.

>> Yeah. It was no magic bullet that said

go do this and you'll and you'll win.

But we spent a lot of time the first two

three months I was there trying to

dissect the current business. And the

current business was this onetoone

essentially marketplace connecting

independent contractor coach with a

consumer who is looking for personal

training. And we're we're kind of

studying the behavior and watching

what's going on here. And what I noticed

was like the coaches could set their own

price and like some people had crazy

high prices, some people had more

approachable prices. And they're

building this as customizable program.

like I'm I'm building it for you based

on your very specific goals and that's

why I'm charging you this amount. And on

the back end, we could see that, you

know, it really wasn't personalized. It

was like big bucket personas and like

the names were like uh Sally Pilates,

you know, and that was being built as

super personalized programming and

charging like you would work with a

coach. But we could see like these big

bucket personas. were like, "Okay, like

maybe personalization isn't the secret

here, but it's having good programming

that's relevant to you." And that same

moment, I went through the list of

coaches, and there weren't a lot of

coaches that were making a lot of money

on this, but we had a couple that were

making four or five grand a month. And

uh and I spent time with them and I

asked them like, "What are you doing

differently? Like, how are you making

this a thing when everybody else is is

struggling with it?" And we had one in

particular and I was like all right so

like you're making four grand a month

your earnings aren't growing like what's

going how did you get there and like uh

why isn't it growing anymore and Lauren

was a trainer in New York like a high

ticket trainer in person and she was

filling up all of her downtime with

online clients with with ladder and we

had no idea how to grow. She figured out

like I had this Instagram profile. She

had five or 10,000 people and she was

telling a story to her audience and they

were coming in but she filled up all of

her time and she couldn't take on any

more clients. I'm like that's a bad

business. Like you've capped how big

this can get. You the constraint is

human human time. So these two insights

of calling [ __ ] on personalization,

kind of watching what Lauren was doing

and seeing how she was growing and

piecing those together into what became

like a trial test or an MVP of this

vision. We didn't know what we would

build, but we said there's something in

these concepts. And in February 2020, we

said, "Okay, uh, you can't take on any

more business, Lauren. Like what if we

jimmy rig the existing app?" and we

created an experience where there could

be more than one person in there. You're

going to program for a group of women.

You'll go out to your Instagram audience

and you'll say, "Hey, this is for I'm in

New York, you know, busy women in New

York, kettle bell training. I'm an

experienced coach. I'm going to give you

new workouts every week. It's not

customized, but very specific persona

that she was talking to. And we're going

to have this chat in the app where we

all can talk to each other." And the app

looked like [ __ ] like the functionality

barely worked, but the concept was was

clear. We're in process of dying in this

moment. She went out to her Instagram

audience and we had like a 100 people

sign up at 100 bucks a month very fast.

Like that was the most exciting thing

I'd seen yet, you know, other than

getting wins against American Express

and her creditors. And that was awesome.

We're like, okay, there's demand. Like

Lauren's audience, they came in like

very clearly like there's interest in

this concept. So that first month it was

uh we were just watching what was

happening because there was nothing else

to look at from a a product perspective.

And I think what the most amazing and

impressionful thing to me was these

people had found each other in the app.

They were similar personas. They lived

in a similar place, busy women following

the same workouts every day interacting

with the coach and each other. They'd

never met each other, but they started

posting on Instagram about Lauren and

Ladder. And then we saw them meeting up

in New York at the park together. They

had never met each other before. And

that was like magical. We're like, we

have this community elements and social

and they're happy. And we had never seen

anything like that in the original

version of the product. So all these

like little glimmers of hope on this

concept of programming that's not

personalized, but it's high quality.

It's meant for a specific persona. This

social accountability element. all these

things were like bubbling up as real

tangible proof points of something that

could be interesting to to go work on.

And that group like the renewal rate was

like 90% plus like people paid again.

We're like damn like they're doing the

workouts and they're staying with us.

And if you looked at the app, you would

go this is garbage. But like the promise

was being delivered uh on what we were

proposing. We ran one more trial with

another coach. It was the exact same

outcome. I talked to almost all those

women like on the phone. It was like who

are you and like how did you find

Lauren? Why did you go into this app?

What problem were you trying to solve?

And we talked to all of them and built a

relationship and like all those were

inputs.

>> Did anything surprise you in those

conversations?

>> It validated a lot of things we were

learning in in real time. It's like why

did you join? I'm tired of thinking

about what workout to do. I'm already

into fitness, but I spend time actually

planning this. It's a painoint for me. I

don't want to go spend $1,000 on a

coach. I need something more

approachable, but I need help with a

plan. I need to know that I'm doing the

right thing. I want a coach that is

helping me and have confidence that it's

the right thing to do. That was a real

thing. And then we saw them meeting up

and they would say, "Oh, I met someone

just like me." And they had the same

pain points and they become a friend and

we work out together and that was magic.

Uh and so all these little kernels just

speaking and forming a picture that got

clearer and clearer and clearer was the

was the beginning of what that what that

product would be.

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>> If you think about the uh everyone's

very fond of the Elon algorithm for

company building now, uh it's been been

kind of passed around as like one one

method for doing this. If you had to

distill your like algorithm for how you

proceeded from that initial kernel of an

insight of okay here's something that

people are paying for and like

>> and we can do something with this all

the way through to where the product is

today.

>> What's what's been that your as the CEO

algorithm for that iterative improvement

to get from the original kernel to now?

>> Well, I can tell you number one is like

don't listen to investors on product

feedback. That's that is by far number

number one. But for us is it's two

things. It's prioritization like

ruthlessly prioritize. You have to prove

we have to prove to each other that this

is going to be additive to the product.

And additive to the product means we

have a thesis that is going to increase

workout completions. That's our

northstar. Like we're solving not for

getting you to pay one time. We're

solving for you to actually complete

workouts with ladder. And what can we go

build to go improve the odds of you

doing that and and staying with us? And

how we get to that is we don't guess.

Like we absorb every piece of

information that's coming in and it's

all driven by our members. And if you

ask the right questions and you have

people that are talking to you, you can

start forming a picture of what are the

huge buckets that actually move the

needle and you can do some work to

figure out how complex is this to go

build and go do it. And don't do 10

other things just because it's

interesting or you can do it. Just do

the one thing and do it really well and

then do it again. And like that's still

the case today. like we just launched

nutrition. It's the biggest thing we

built since the first version of the

product. And people on the outside were

like that's a that should be a separate

app or like that's a different business.

And we're like well to our customer it's

not. You know we did this survey a year

ago. You had 5,000 people spending 50

minutes and it was qualitative and quant

and we were trying to figure out what

are the biggest bets that we could go

make. We were ready for a big project

and we didn't want to guess. And out of

that work it became very clear that it

was nutrition. And what we learned was

we have a third of our members who are

tracking macros. And of of that third,

90% are using an app. And of that 90%,

most are using My Fitness Pal and they

hate it. And they're really tired of

managing their problem set in two

different spaces. And what we learned

through that experience and talking to

members was that for the consumer, it's

one problem set. I want to lose weight.

I want to gain muscle. There are inputs

and outputs to that math equation.

Outputs is activity and exercise. input

is what you're eating and they're

managing this in two places and they

know that's not the right way to do it

because if you worked with a coach these

things are all symbiotic together but it

all started with a colonel from our

members and we had really clear line of

sight that this was would move the

needle they were telling us I want you

to use all of these things motivational

mechanics streaks badges celebrations

and help me with the other side of the

equation which is going to dictate

success or not and then once we have

that kernel like we go very we do

another survey we go very deep on

nutrition like extremely deep to

understand and we all review it, read

everything, we synthesize it and it

gives us a blueprint. When you do that,

that becomes obvious what to build.

>> What does very deep mean?

>> Uh the nutrition survey uh you know that

was probably couple hundred questions.

We read all of them like now you can put

them in chatbt. In the beginning of this

like I would copy and paste app store

reviews into a word doc. I would read

every single one of them and I'd

organize the the words by buckets and I

color code them and I would do chat GBT

and I have these documents that are 100

pages long and it's all just

deconstructed words

>> from our our members and very similar to

survey work in the in the beginning we

would do that with surveys we dissect

the themes what do people care about and

now you can use chatbt to synthesize all

this what is the biggest bet that we can

make on behalf of our members and then

we'll think about what are the building

blocks of what this should do is this

nutrition coaching? Is it macro

tracking? Like what does the feature set

do? And you aim questions at uncovering

the painoint and what they're looking

for and that becomes the guide on the

first version.

>> What did you learn there? What do people

want on nutrition?

>> There are two halves to this. And from

my perspective, it's looking backwards

and looking forwards. What they were

doing is tracking looking backwards.

Make it really easy to track macros. I

want to know if I'm in a surplus or a

deficit. I want good visualizations. And

I want it to be really easy in terms of

how to log. It's very tedious. It's very

hard with some of the existing uh legacy

products. So give me an easy way to do

this. And so the looking backwards to us

was basically the table stakes. We need

to give a really easy path to tracking

macros, logging your meals, logging your

food, and telling you what's happening

as a result. And then if we do that, and

we do that really, really well, there's

going to be a whole other opportunity to

tell you what to do. not what you did,

but what to do. People want to, our

members want to know what to eat

specifically. Where should I get it? I'm

at a restaurant. Here's the menu. What's

the best choice right now based on my

goals? They want prescriptive advice.

But the looking backwards was what they

were using for uh the apps that they

were using at that moment. It was mostly

my fitness pal. And there was no brand

affinity or love. It was just the tool

that existed that there was trust

because they had the biggest database.

They had done it for a long time. But

there was just a lot of pain in these

conversations on how they were doing

this stuff. So we we made a a conscious

decision not to charge for it. So we're

going to give this part away. We want to

go build trust with this group and win

over tracking with ladder. We're not

going to convince the whole new group to

do this. We're going to go get the

people who are already doing it. We're

going to do it better and we're going to

win their trust. Start compiling this

data and there's a million products that

we can now build. Like if you think

about what nutrition does for us, it

gives us the whole math equation of

inputs and outputs. There's no product

in the world that that has that. So the

picture around the consumer, it's the

clearest of any other potential product

or service around around this consumer.

We know exactly what's happening on both

sides of the equation. And that's going

to unlock a whole bunch of products and

services to to help our our consumer.

>> And this would be things like I could

take a picture of my food and you're

like, I'm

>> we already have that table. Take a

picture. That's easy. but also tell you

what's the level of confidence and

accuracy because there are trade-offs if

you use take a picture versus scanning a

barcode or entering uh very specifically

an ingredient or or a recipe. So, we had

to nail that use case, make it super

slick, make it very easy to use. And

that was the beginning of like building

trust. Even in that process though, you

have to like how do you how do you

figure out what to build? We built the

first version. We have a group of 2,000

members who are beta members and we give

it to them. But first, we do it as a

team. That's the alpha. We're all giving

feedback. We have a Slack channel.

Everyone's communicating on what's

happening. That helps the picture get

clear. And then we release to our beta

members and it's in the wild and they're

using it and like you hear right away.

What's wrong? What's the gaps? What do

you need? And we had a question. Uh we

would survey these users every week and

we had a question. How likely are you to

switch from your existing app that

you're using? And when it started, uh,

the number was like 20%. Like pretty

low, not super exciting for us. And then

we would go build and and make the

picture clear and help fill the gaps of

what folks were experiencing. And it

kept going up, kept going up, kept going

up, and like there's a point where you

could just you could keep building the

MVP forever, but it was 85% one day, and

it was like, we're ready. Like we're

there, we're done. This is ready for

this is ready for the wild. And then we

released it. And it's been a it's been a

home run. We're in week six. were almost

4 million meals logged which is insane

thinking about those early stories where

we were literally we knew all the people

in the app. Yeah. We were like it was

our buddies who were in the in the we

knew the faces.

>> Yeah.

>> So a really amazing experience.

>> You said before don't listen to

investors on product. Can you say more

about that?

>> Well I think one don't listen to anyone

person on on product that everyone has a

unique use case persona problems

solutions that they're looking for. So

no one person is the source of truth. If

we get one piece of feedback, that's

just one piece of feedback. So when we

talk about investors, like I remember

earlier meetings, it would be like

really prescriptive advice on you should

go build this and it's like maybe like I

don't know like that's what you want and

then we would go test that with our uh

with our user base and ask them and they

would say no I don't want that.

>> Yeah.

>> Extremely empirical way of building.

>> So it's just empirical and like you

don't it doesn't have to be completely

precise but it becomes very clear what

the big chunky buckets are and

everything else on the fringe. It's like

that's not that important. But what is

important becomes very very obvious even

if if it's in line with what an investor

is looking for.

>> At various points through this business,

you and I have had a call and it will be

some period where you describe him

having gone into like a cavelike process

to like go study some new topic like

some new thing has become the the

bottleneck for the business

>> and I I can think of several occasions

when he was studying X Y or Z. describe

from your perspective this like cavelike

process that you've seen him go through

to unlock these bottlenecks.

>> Probably four years ago when we're

trying to figure out growth, we've built

a product, people love it, they're using

it, they're telling us what we need to,

you know, to to build and what features

we need to evolve to improve it, but we

still haven't figured out how to grow,

right? Like that, you know, the way you

get to from 0 to 1 million AR is very

different than the, you know, the 1 to

10. And for us, um, you know, Greg's

view was, look, let's go run some

experiments. And so we're looking at,

you know, some different ways to to

grow, saying, you know, here here are

the kind of different options right now.

There's SEO and we're thinking about how

to go and start to create content on

search. We have a lot of assets in the

app that we can leverage there. Um,

we're looking at some different

channels. Tik Tok kind of being the most

obvious where it's just like all the

eyeballs are there, but the brands

aren't there yet. So like that was

compelling to us. Like we understood

that like the consumer was very

interested in engaging with short form

video. Um, Meta hadn't quite kind of

copied that with their reals product

yet, but it was obvious that that's

where the consumer was going with their

attention and yet the brands weren't

their spending yet. We partnered with

coaches, these world-class coaches who

were all creators. None of them knew Tik

Tok yet. They were all Instagram native.

In fact, I don't think any of them at

this moment were even on Tik Tok. And we

were excited to go figure this out. And

it was it was hilarious because Greg, I

don't know if you've seen his Instagram,

but like it's not particularly cool.

Like he's not a creator,

>> but he was like, I'm going to go and

become like the Tik Tok guy. like I'm

going to be the guy. And I'm like, "All

right, like Mr. Tik Tok over here." And

>> I was like, "You got to go hire

somebody. You got" I'm like, "I'll I'll

figure it out."

>> So he he goes all like mad scientist on,

you know, trying to just like understand

every aspect of Tik Tok to the point

where like fast forward two years later

and like the big dog engineers from

China, you know, are in our office cuz

like Greg would be calling and being

like, "The algorithm is broken." And

they'd be like, "No, no, it's not." And

then and then Greg would go get a bunch

of information from Ryan Mod and send it

through and they'd be like, "Oh, wait.

He he's right. There's something wrong

with ads manager cuz like the ad tech

was very new and so Greg was very much

like triaging and troubleshooting their

ad tech in real time. The other story

that just speak to Greg going into his

cave. Um it's it is winter 2021 probably

March or February and I don't if you

remember like the Texas freeze when like

the entire like the entire state shut

down.

>> We had like an inch of snow but there

was no uh we lost the power grid. So

anyways, Greg goes into a cave because

there's nothing else to do and uh he's

reading the book Crossing the Chasm,

great book that I think all founders

have read. Uh but Greg's output of

reading the crossing the chasm was um a

100page slide deck that he sends me like

when the power comes on and we finally

have internet again and he's just like I

figured out who our customer is. And um

ultimately, you know, that was very

important work because it set up, you

know, what we were about to go do on

TikTok that you couldn't have success

without understanding who that who that

customer is.

>> What did you find in the book?

>> Not trying to be all things to all

people, especially early on. You can go

after a big market problem, but you

don't have to start there.

>> And we were trying to tell a story to

everyone. Like the world was upside

down. Consumers were up for grabs cuz

your gym folks were at home. Everything

was a a mess. all these other companies

are launching and we're saying we're

weights, we're body weight, we're gym,

we're home. Like it was all things to

all people and it wasn't working. Like

we weren't getting to the right person.

And Crossing the Chosm just helped me

kind of zone in on who is like the most

important person that we're talking to

right now and who's finding success and

how do we speak specifically to that

person and not go try to tell a story

that's relevant to a Pelaton user. It

just helped me like just move away all

the noise and narrow in on what mattered

for this person and build a whole kind

of growth strategy around around that.

>> Like you have unlimited time right now

to talk to us about solving this problem

and like how you've how you cracked the

code of growing through something like

Tik Tok like the more detail the better.

I just think obviously it was a like a

or the critical moment for the business

early on once you had figured out the

product just just riff on the experience

like literally what you did.

>> Yeah.

>> And what you learned.

>> We had a whiteboard meeting. We're like

what are the growth loops that we think

are available to us uh that we think we

have an advantage on that we think we

can do within our own team that we can

learn fast enough to get proof points

and to uh to dive in on go all in on.

And Tik Tok came out of that as the as

the winner. And what we started to do

was just make content and we knew

nothing, but we grabbed uh I had this

breakfast meeting with Edel who leads

Branding Creative. And I was like, uh,

hey man, um, do you want to work on

TikTok with me? Uh, and he was like,

sure. This guy is like building all of

our amazing campaigns. Like he's

shooting for Nike. He's done all these

things. And I'm like, I need you to make

Tik Toks with me. Uh, and it's just

going to be me and you.

>> He's got the creative mind. and we

grabbed a coach and we said, "Hey, we're

going to start an account from scratch.

Uh, you're not on TikTok. We want to go

learn. Give us all your raw video that

you have on your iPhone. So, you have

this inventory of video. You have a

smart creative person." We started

handles in the coach's names and we

started to create content. And very,

very quickly, we started to learn what

was the content that worked and we were

dissecting every inch of it. What worked

multiple times in a row? Why? What are

the commonalities? How is this product

used? It's not Instagram. It's like TV.

People are consuming content for

entertainment and it's not a social

platform. It's a media company. And so

you have to think about like what is the

right content that is educational,

provides value that get gets to the

right person because unlike Instagram

where you have an audience that you're

creating content for, you have to create

content that the algorithm knows who to

put in front of the right person. So

it's all about the content. But the

advantage for us at that moment was it

didn't matter how many followers you

had. You can start from scratch. Nobody

knew how to go how to go do this. But

that first account that we started, I

mean, I remember being on the playground

with my kids and uh Edel was like,

"Dude, once one's ripping and it was

like a million views." We're like, "Holy

[ __ ] like that's amazing. That video

took you two seconds to make." And it

was like, "Do it again." And we did it

again. And we took that account from

zero to 250,000 people in in like 45

days. Like we weren't thinking about

paid at all. We were thinking about what

is the pro what is Tik Tok as a product?

How is it being consumed and what

content wins and how do we how do we

create that content? So we got views, we

had proof points of traction and then we

said all right we have blink and bio.

Can we get somebody into the app and and

we did very quickly and we're getting

the right people into the app and all

these things were like starting to

compound. We started another account did

the same things. So we're like all right

like we can we can do this organically.

It was like three months and then we we

said let's start putting some money

behind this and see how it goes. We had

no performance marketing team. Uh we had

no agency. Uh I was absolutely against

hiring anybody outside the company and I

just committed to learning how to be a

performance marketer Tik Tok because we

didn't come from performance marketing

or Facebook. We had no preconceived

notions of how things should go. And

when you talk to Facebook marketers who

are moving to Tik Tok, they were

applying all these rules and heruristics

of Facebook and Instagram to Tik Tok.

But these are two separate platforms.

You have this Chinese app and a

different algorithm. Why would those

rules matter over here? I spoke at a at

a all hands for Tik Tok and I was

talking about some of our strategy and I

had really high conviction in what we

were doing and I was like, "Yeah, I make

budget changes seven to 10 times a day."

And if you talk to the TikTok group,

they're like, "You shouldn't touch it

for two weeks." like it's the learning

phase and all these things. Well, all

those people came from Facebook and all

the rules they were telling me were

Facebook rules. And at the end of the

meeting, this woman comes up to me and

she was like, "That was really

interesting because the things you had

most conviction in are the opposite of

what we're telling our clients to do."

And then I just I realized pretty

quickly that everybody is taking this

mental model over here and applying it

and not trying to figure it out from

scratch of like if it works, do it

again. Who cares what they tell me it

worked? Do it again. Um, that was an

important piece of like just thinking on

our own on on how this how this should

go. I launched my first ad. Okay, like

we could do this. But like very quickly

it was getting people into the app and

then it just became a drug addiction. I

mean it's like it's like trading. I'm

bad at mental math but I'm also

fascinated by traders. And when I was at

Goldman I I would interact with traders.

It was just magic to me. All the screens

and the attention span just like how

does this happen? But it felt like that

for me like I'm moving money around

driving growth for the business and it

became a video game. It's like how do we

beat the video game today? And I had

this amazing creative partner in Zel.

Like I can figure out the ugly of how to

be an ads manager person as my job. And

those two things together unlocked that

channel to just keep going, keep pushing

on. I

>> I feel like the rewards for doing this

in a consumer business are extremely

high. And so lots have probably tried

but not lots have succeeded. What do you

think it was that let you start to win

the video game? Was it the knowledge of

like how to cut a video together? Was it

topics was

>> no what we learned is the for you page

is making a decision on your content of

who your content is for and then it's

shoving it to that person. So the first

game on the creative side was can we

create content that gets to the right

person for this coach. This is a

crossfit modality. Can we get to

crossfit people using content? And that

was just iteration. We would do

something

>> and so you'd say like what does a

crossfit person care about?

>> What do they care about? What's their

problem solution statement? What should

a coach say to get you in? We learned

about hooks. what you say in the

beginning, the first three sentence. It

matters. What should a hook look like?

What do I need to say? Like, it's a

billboard that I need to get your

attention very quickly. And we had a lot

of bad content that didn't work. And

then we had stuff that started to work.

And we have these whiteboards. We

dissected every inch. It's like, what is

she wearing? What word was first? What

was the setting of the gym? What was the

movement? What did we say? And all of

the insights of that come from knowing

your customer. It's not like, hey, we

magically figured out TikTok. We did,

but our edge was we knew our customer

inside and out. Like I had dissected

these app store reviews so deeply that

like we knew the words that were coming

out of the mouth for people in CrossFit

coming into the app and we used that as

our ammunition on how to speak to them

and create compelling content hooks that

got to that person and told the story

very fast that got them to keep going to

follow to come

>> just to orient in the history of the

business. So like how much revenue or

whatever was there at the start of this

kind of scurve and and like how quickly

did it accelerate? Five at the end of

>> yeah it was yeah four four five million

of era we we were getting some success

but like the beginning of the Tik Tok

journey it started at 3 million but five

when we started to put money into the

into the machine

>> and it sort of exploded since then

>> it exploded but like the one of the

things we learned that was critical to

Tik Tok is you have to own the creative

and this was like not typical for brands

in our space they would hire an agency

the agency would make creative but we're

learning all this stuff on the organic

and we're learning that the iteration

cycles are so fast. You can't just hand

it off to an agency and hope that it

comes back correctly. So, we started

investing in creators full-time. We had

JDs on the website in 2023. It said

full-time Tik Tok creator. People were

like, "What the hell is this job?" But

it's no different than social media jobs

10 years ago. That's not a job. Well, it

is a job. It just wasn't a job yet. And

it was the same dynamic. So, complete

control over the creative. We had these

coaches on our team gave us this edge on

compounding learnings. this mini agency

that was figuring it out across all

these different creators that we

controlled that we weren't just waiting

and hoping that somebody on the other

side of the fence would throw us the the

right thing.

>> If that was like the frontier then what

is the frontier now?

>> What we're thinking about now, right,

like is the short form video strategy

will always be a core part of our

strategy. That's not going away. But I

think what we learned

>> it's expanded well beyond TikTok at this

stage.

>> Exactly. I think what we learned last

year though is that we certainly don't

have a product problem. We have a very

special product. Our customers love us

and they're asking us to go deeper with

them, but most people still don't know

who Ladder is. Like we're consistently

top three or four in our category in the

app store and yet like the awareness is

very low. I think that's you know

largely a function of the short form

video strategy that we had that was

speaking with creators in these winning

formats to a specific persona that

wasn't really leading with the latter

brand. Now we're excited to go and um

you know think about celebrity

partnerships and out of home and and TV

and we're already making these

campaigns. Now we're just going to go

and put them in these other in these

other channels. Um so that's like

certainly a big a big focus of next year

is just thinking about telling a telling

a wider story that frankly is just going

to amplify what we're doing on short

form video.

>> How do you how are you going to be

empirical about that in the same way

that you've been about product and and

marketing so far? It seems like a very

different kind of harder to be empirical

kind of.

>> It is, but it's it's small controlled

bets, big on scale, but limited on bets

that we're making. So, if it's a

celebrity partner, we need to know

exactly who that audience is. Is this

someone that resonates with our user?

Are they going to amplify the right

message that represents ladder? And like

to date, we we had no leeway to spend

money that didn't turn into results. It

was like here's the money in the bank,

turn it into users, keep doing it again.

And this is a little bit different, but

what we've realized very quickly is that

like we we do have an awareness problem.

People haven't heard of ladder. We're

getting big. We're the number one

grossing fitness app in the app store.

We're top 100 in the US of all US apps.

It's big. So, we need to go invest in

really concentrated bets that speak very

specifically to our user that leverages

the creative horsepower in our team. We

have like really special people in our

team that can create stuff that no one

in the world can from a from a brand

perspective. So, it's not as perfect of

a science and I kind of bucket it in two

different paths. But my thesis is over

time, it's going to make the short form

engine a lot more efficient. If people

are not aware of ladder, we have like

one video we're trying to convert you.

Like they're learning about ladder in

that video. If you've seen and build

trust with uh someone who's endorsing it

or you have consciousness, a nugget,

yeah, there's a higher likelihood that

that person's going to take the first

the first step. So, I think the two play

together. and you asked like what was

the supercharge over the last you know

couple of years we did deal with general

catalyst that changed the game for us

and their customer value fund and uh

essentially what we realized is like the

capital markets aren't funding CAC in

consumer companies like we can't just go

raise a bunch of money just to put it

into TikTok like the appetite's not not

there no matter how good the product is

and General Catalyst has solved that

where they're financing our investment

growth every month so the payback

happens over times. Not as much of a

cash hit, but it lets me think about

half the house is very performance, very

controlled. You can underwrite it, which

which General Catalyst did. And now

we're going to go invest in some squishy

stuff that should be proven downstream

that it has an impact and makes things

more efficient, but it'll be iteration

like nothing else. It will be a game of

figuring out what works, what doesn't.

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>> If you think about the experience of you

said you' built some enterprise

companies before this versus consumer,

it seems like in the last 5 years, for a

long time, no one invested in consumer

because actually really up until I guess

very recently, AI is of course unlocking

things in interesting ways. maybe pitch

like if you were to pitch a a young

entrepreneur, a teenager or a young

college student on building a consumer

business rather than the traditional

like B2B thing that's dominated the

startup world for a long time. What

would your pitch be? Why is it fun and

different to build this kind of

business?

>> The the fun part is you you get to see

it every day and it's impacting people

and that that's real. We're providing

real value. We're changing lives. I read

these stories every day coming in uh to

our team of like what happened to this

person because of ladder. Like what else

could inspire you more than that? We're

not selling their attention to

advertisers. Like we're helping their

lives. That's really fun. And the

feedback loop is fast. You make them

think you know exactly what happened and

like that is a that's exhilarating. You

have a report card that's your users and

no one user is the right answer but

collectively they they are. I'd say what

people don't realize in consumer is how

freaking hard it is. And there is no

like quick fixes. There is no growth

hacks are not a real thing. You have to

be black belt black belt at building

products for the consumer and growth.

Like you have to have both those things

within your own team to survive and then

be able to raise money to go fund that

which is its own mission. So in my mind

if you want to get into consumer like

you got to love talking to people. You

got to love extracting information from

human beings to go create solutions for

them. It's not like I think it should be

like that's how consumer companies die

because they just freaking guess and it

doesn't match what the consumer is

looking for. So it's really hard and you

have to you have to be excellent at both

sides of the house. Half our team works

on workout completions. Half of them

works on trials off Tik Tok. That's the

business. Very simple. But we are equal

weight and black belt on both of those

skills. And without either one of them

there would there would be no ladder at

this stage. Great product, no growth,

doesn't work, doesn't get funded. Great

growth engine, no product, leaky bucket,

doesn't become a big company. Both those

things have to be true to be able to

build a company that's durable and last.

And just be ready for 10 years. I mean,

it's not it's not going to be 6 months

or a year. It's going to be a slog and

constantly problem solving along the

way. So, it's splashy. It's fun, but

it's it's really [ __ ] hard to to do.

>> I'd probably say don't do it. There's

easier there's probably easier things to

to get funded to do. Um, but listening

to the stories, as Greg said, when you

hear from one of your members about how

ladder has changed their life in some

way, and it's easy to to um, you know,

when you're looking at the charts and

everything kind of, you know, that that

gets lost on you sometimes, but, you

know, you're constantly pulled back by

these stories. And we I think our

creative team does a great job of

telling those those member stories, and

that's something we'll continue to do.

Our customers, as Greg said, they they

literally tell us what to do. I mean, we

we sent our annual survey out this year.

we'll we'll get, you know, we had 5,000

responses that take an hour on average

is what people are spending. We already

have 5,000 responses in the last two

days. Um, and they're answering 230 of

our like most, you know, burning

questions about, you know, what to build

from here, what companies to partner

with, would you be interested in

supplements coming from ladder,

everything as it relates to all the

different kind of surface area that we

could explore. So, like that's that's

really exciting to us is just continue

to listen to them. Like they're huge

advocates for us. Um, and so we're going

to continue to do that.

>> If you want to be by yourself with

headphones on, working on consumer, it's

a losing strategy. I mean, like like

that. And I I see that all the time

where it's like you're just building

[ __ ] You got to be talking deeply to

the user.

>> If I think about the two like big world

things happening that probably most

impact your business that are out of

your control, it's AI and GLP1s. And I'm

really curious how you think about both

of those things as creators of

opportunity, as potentially risks.

>> I mean, I'll mention like I'll mention

GLP1 fast and then AI is like a much

bigger conversation, but like on GLOP1,

it's interesting because um all the

science would support that you need a

strength training plan alongside your

GLP-1 to, you know, you're at risk of so

much muscle loss. So, we think that's

actually a, you know, kind of macro

tailwind and something that will help

us. It's not something that we've

investigated to date. Um, but, you know,

could totally see us, you know, working

with some of the bigger GLP1 providers

at some point like that. You know, the

the science backs that relationship and

so that's not something that scares us.

Uh, in fact, it's a question we asked in

our survey which have never asked before

>> like are you on it or are you

>> Yeah, just these are people who are

fitness enthusiasts doesn't mean that

they're not on GLP1s and so we're going

to continue to learn more there. you

know on the AI I think what gets

exciting for us is that feels like we

can kind of have our cake and eat it too

now and that at in the beginning we felt

like we need to focus on a venture scale

business here and solving a problem

that's solvable for a customer with

software which felt like one to many

programming now with what's available to

us in AI we're we're able to deliver

that personalization as well which like

four years ago we couldn't have you know

two years ago we couldn't have launched

nutrition with our same team you know in

a you know six month span like we But I

think like beyond that um what I get

excited about is that in an age of like

you know just a lot less differentiation

in tech and commoditization of certain

features because it's become so easy to

people think you can just use chatt to

build an app. I would challenge someone

to try to build like the the experience

that we've built you know using AI and I

think we're going to continue to lean in

the things that the AI can't touch which

is like we've built a compelling brand.

We have a tremendous amount of trust

like from our members um which is which

is really exciting. We deliver a human

experience at scale because of it. We've

been thinking about it for four years.

We've been using as a tool for three

years and it it is chapters for us. In

in the beginning it was a a non-coding

tool. It was how do I synthesize

information? Well, it was amazing. I

could take 5,000 responses and really

understand what's what's happening. And

so then it was everywhere. Oh, I can

take it to think about how do I create

compelling Tik Tok hooks based on all of

this survey data or user data. That's a

tool. It saves time. But it happened at

the exact right moment where our entire

team is 50 people and that includes 20

full-time coaches. So 30 people

excluding coaches and we it came we

started scaling at the right moment

where AI started to become a a use case

that made us not have to go hire expand

the team just to solve a a problem that

we were looking to solve. like the team

would have been a lot bigger if this

were four years ago if we didn't have AI

in every element of our business. The

second chapter for us is is is using and

incorporating in the product, not

replacing the human. We believe in like

humans as motivation. It's really

important to feel like we're having a

relationship with the coach. But I don't

want to have coaches and reading chats

all day and interacting onetoone with

users. I want it to feel that way and

use tools to expand the capabilities of

our coach. We have teams with 60,000

people that are in it. And now the chats

are big and cumbersome and complex. And

the coach's message isn't the only

reason they're there, but it matters.

And the magic moment for a coach is

saying the right thing at the right

moment that makes the most people

satisfied with what they're saying. What

isn't a great use of time, which was

happening, is scrolling the chat for an

hour to go figure out what's happening

here. So, uh, we built a product called

Ladder Pulse that automatically you come

in, reads every single chat that's come

in, tells you, "Here are the three most

burning questions. Here's the content

you should create. Here's the member you

should respond to because they've never

been responded to by a coach. Send.

Done." So, now we've removed all the

cognitive overload of what to say, and

it's all powered by this tool that we

built purposely for for the business.

We're building software now to go

support a better experience that's built

on AI. Nutrition is a great example.

We'd have never gone into nutrition if

there was no AI. My fitness pal had to

build a database over time by hand that

became the value of My Fitness Pal.

That's not the hard part anymore. The

hard part is the consumer experience and

knowing what to do with the data. So, it

opened up the capability that wouldn't

have taken the business sideways for 5

years to go solve that problem. And then

we're inventing products from scratch.

Like I'll give you uh two examples. One,

we have I told you north 30,000 paying

members. We have one person that touches

support. It's not even her full-time

job. We have tickets coming in every

single day and we spent time trying to

understand who's coming in, what are

they asking, what are the buckets here

and we built a product. That person's

name is Mave. We built Mave AI, M A I V.

And we built a customer support tool

from scratch. It's purpose-built for our

company that manages now 90% of the flow

coming in and the experience is as good

or better and it's faster than it was

before. And we made it ourselves in our

team. Like that would not have been

possible 5 years ago. So like that

solved a huge problem. Now we don't have

to go expand that team and we can

deliver a better experience through

that. And we have a person on our team

who only works in AI. Like that's the

job. And he's been doing that for a long

time.

>> How do you think about um saying no to

potentially juicy revenue opportunities

that aren't core to the, you know,

subscription, complete a workout, you

know, acquire customers like uh I could

imagine the ladder data dating service.

I could imagine ladder being an

origination platform for GLP1 for

>> or ladder coach tools

>> or ladder coach tools. Absolutely. Yeah.

In the Ben Thompson sense of aggregation

theory like

>> you're maybe a consumer aggregator.

>> Um you've aggregated a lot of demand in

this specific space.

>> Historically those companies have

figured out how to monetize in lots of

different ways. How do you think about

the siren song of like higher RPO and

new sources of revenue and

>> but but a lot of those businesses have

have died too because of doing too much

at the same time and like we've had a

we've had a multi-phase vision from the

beginning of like what this thing can

become and our goal is is to be the de

facto product in this category and we

have stepping stones that we anchor to

and they get moved around but we have a

vision for how to go to go do that. I

think about new ventures, new business

as push versus pull. Are we being

dragged into this area by our members?

Is it so freaking clear that this is

going to be really exciting and solve a

really important problem for people that

are relevant to us like nutrition.

Nutrition was on the board as an

investor deck that you have from 5 years

ago, but it didn't make sense to build

it till last year when we had critical

mass. It was very very clear from our

members that that was going to move the

needle and now we'll build products on

top of that. So like we're ruthless in

prioritizing like you have to make a

clear clear case of what this does to

the business. We have no Android app.

People think that's insane. But building

an Android app requires basically

pausing development on iOS, splitting

the team's focus in time, playing this

game of catchup for a user that has much

lower revenue potential and could

absolutely take the business sideways

for a year. Will we have an Android app?

Yes. We won't have it this year. And so

like it's these levels in my mind like

we have to go earn the next level. And

if we earn the next level, what should

that be? let's figure it out and then

start to work on that. So, I think all

these things that everyone uh talks

about ladder, we'll go do all of them.

But I'm playing like a long game here.

Like this is not go sell the business.

Let's go build the generational business

in consumer that solves the most