Flight Plan #010 — Lift Off: Our Investment In Vitruvian
In early 2020, we visited founder Jon Gregory in a big shed in Perth, Australia, and learned about his bold vision to build a global powerhouse in connected fitness.
COVID hit and Jon continued to execute, having designed and built their first connected-fitness device, negotiated manufacturing agreements with suppliers, and successfully launched v1 of the V-Form Trainer to a cohort of global users gaining quick traction and user adoption.
The business is called Vitruvian, and they’ve set out to build the best ‘smart weights’ fitness product to use as a replacement for lifting pieces of steel in a gym; think about data-driven and gamified resistance training at home.
Whilst we are not usually attracted to hardware investments, Vitruvian has so many of the elements that get us excited about an early-stage technology business — an unapologetic, bold and ambitious vision that is global from day one, a core group of engaged early users (read: evangelists) who use the product consistently, fast-growing market in at-home fitness, and a world-class unique product offering.
What Peloton (NAS: PTON) did to evolve the stationary bicycle and on-demand training, Vitruvian is building for strength and resistance training — riding on the waves of connected fitness and in-home training. They are building the ‘smart weights’ platform of the future.
Vitruvian has created a unique at-home strength and resistance training product, effectively creating a ‘gym in a box’ that leverages unique IP to create a world-first training experience.
The genesis of the product is that strength training still reverts back to going to the gym and lifting weights. Why has this not evolved over time and included data tracking & performance, adaptive weight, and resistance using technology, portability, more convenient in-home options, etc?
Who better than CEO, Jon Gregory, to introduce you to the team and walk you through the product, story, and vision behind Vitruvian.
Why do we love Vitruvian?
Connected fitness is still in its infancy: Global fitness is a US$600bn industry (aka huge), the subset of in-home and connected fitness segment (US$19bn) is a small but exceptionally fast-growing subset within this industry that’s set to continue its expansion with new products and technological advancement, driven by new players like Vitruvian and front-runners like Peloton, Tonal, Tempo, Mirror, and others. There is space for emerging players given the abundant size of the market and relative shift from spending money and time in a gym to an at-home alternative.
Unique product: Vitruvian has developed the next generation of strength and resistance training with a unique adaptive weight system that can flex weight based on user profiles and programming plus is completely portable (vs permanent fixture competitors). This represents exciting intellectual property and differentiates their offering from the competition and provides an innovative and effective new way of weight lifting & resistance training. Pull it out of the cupboard, connect to your TV and get into your weights routine, once finished you roll it back into the cupboard — no weights & no permanent fixtures required.
The race is on for social plus fitness:
At the end of 2020, a16z published a series of articles along the theme ‘Social Strikes Back’. The articles detailed that the long-term category winner is one that is inherently social in nature because the power a community creates has exceptionally strong network effects, resulting in increased growth, engagement, retention, and defensibility.
In the case of Vitruvian, we see that they have the opportunity to target the ‘social + fitness’ category and carve out a connected community of fitness influencers and users who care about strength and resistance training. The table below shows players who have successfully targeted ‘social’ in other categories.
In our view, hardware without software is dead. Vitruvian aims to become the go-to digital fitness platform for strength and resistance training. This will comprise a range of 1) connected ‘smart weights’ products that evolve over time and 2) content delivered via their app to create the most engaging and personalised experience for their customers.
Content moat: Fitness classes and gamification:
One of the product moats that allowed Peloton to win the at-home cycling market was the strength of the variety of their fitness content. Vitruvian is building out a suite of fitness classes and content using its team of certified fitness instructors.
Vitruvian will be releasing fitness ‘games’ through the app aimed at boosting retention. Gamification is proven to increase retention, as well as increasing product usage and overall engagement with the product. Fitness is a hard category to generate retention but we believe that gamification will help to carve out a strong product moat. In education, Duolingo has done this very successfully for language learning with their S-1 now available for their IPO. This is a very hard habit to get customers into and stick to and we believe that similar step-changes in usage and retention are possible through gamification with a similarly difficult category — fitness.
Hardware is hard and it’s software margins that maketh software multiples:
It is said that hardware is hard; this is for a reason. Hardware requires tooling, product lead times, manufacturing IP, supply chain, and working capital, one-off sales revenue, and often has tighter margins than a pure SaaS business. However, Vitruvian has a clear line of sight to software-like unit economics as they scale, as well as the ability to earn ongoing monthly subscription revenues from their fitness content via their application.
The rest of the team backing Vitruvian:
We are super excited to invest alongside the lead investor and early seed backer of Peleton, plus our friend Andrew Larsen, Afterwork Ventures, and the other investors in the round.
We can’t wait to work with Jon and the team and help the V-form Trainer become a dominant strength-training connected fitness platform globally.
And a final call to action, if you like what you’re seeing — take up our discounted offer by inputting discount code “Founders#circle” for 10% off your own VitruvianForm.
Buy now here — Link