AB Show Keynoter Randy Hetrick Talks TRX Success

It began by accident. Isolated from fitness equipment during a 1997 deployment, Navy SEAL Randy Hetrick rigged some martial arts belts he found packed with his gear into a makeshift workout tool — what would evolve over the following eight years, including a stint at Stanford Business School, into the suspension trainer at the core of fitness juggernaut TRX. AB senior editor Paul Steinbach asked Hetrick, who will deliver a keynote address titled "Lessons of a Frogman: Business Leadership I Learned as a SEAL" at AB Show 2018 this November in New Orleans, for a closer look at the surprises and successes that have turned his functional training equipment and education brand into a rapidly growing $60 million-a-year enterprise.

What is a frogman exactly?
Frogman is the term of endearment that is used inside the Naval special warware community to describe themselves. It harkens back to the World War II and Korea era in which the underwater demolition teams were formally attached to the Navy, and they were the guys who went in and did all the pre-invasion reconnaissance and a little bit of near-shore direct-action missions — along-the-coast radar installations, security outpost, that kind of thing.

Where were you deployed?
For the first four years of my career, I was in platoons that were deploying throughout southeast Asia and Africa. And then I shifted over. I came back, went to grad school up in Monterey in the Naval Post graduate school, got a degree in international relations, and then shifted over to the counter-terror unit, which has a global focus and spent a significant amount of time in Europe, specifically Bosnia, a little bit in the Middle East and some down in South America. So I finished my squadron command at the Special Missions Unit in July of 2001 and I had, in anticipation of a promotion out of the field, and with a baby on the way and a wife who was completely done with the super-hero-gone-nine-months-a-year lifestyle, I had done and exploratory application to Stanford Business School, which was the one business school that kind of worked with a big promotion that my wife had back to San Francisco for The Gap, and I applied kind of never believing that they would accept me, but mostly to mollify her, and damn if they didn't decide that they needed a frogman, and so they decided to look the other way at my math scores and admit me. So having been accepted to the MBA program there, I resigned my commission and packed up my pregnant wife and headed back to California.

Had you gone to Stanford with the intent of launching what would become TRX?
Not at all. I actually went to Stanford Business School expecting to end up going to work for one of the giant emerging tech companies like Google, or one of the biggies that's been around awhile, like IBM, Oracle or HP. I thought that I would take what I knew how to do, which was lead large groups doing hard things, go learn some business skills and the vocabulary of business and then pivot into a management role, or potentially get involved in institutional investing, venture capital, private equity. But I wasn't sure. Ironically Stanford had a pretty big pitch around entrepreneurship — that was part of Stanford Business School's positioning. "Hey, we're a hotbed of entrepreneurship." So I started taking some entrepreneur classes. I also had a buddy who had been a tailback on the Stanford football team as an undergrad and who had relationships with the coaches. And he got us permission to go and work out in the athlete training center instead of the campus gym. So we would go over to the athlete training center and get in there, and by that point I had created this harness in the SEAL teams to train myself and my guys when we would be deployed abroad into places where there was no way of training. It was literally just this kind of clever harness that I had cooked up originally from an accidental deployment with my jiu jitsu belt stuff in my gear. I started tinkering around while we were waiting to see whether this counter-piracy operation was going to go down in southeast Asia, and I started playing around with this thing, and came up with this kind of clever little harness. Now, imagine that that had become popular in this very closed society. I had another friend who was a Navy parachute rigger, which is a glorified seamstress in uniform, and this guy liked beer, and he would make — as he called it affectionately — my "gizmo" for guys in the squadrons in exchange for a case of beer. He'd just call me and be like, "Hey, boss, can I make Jones one of your gizmos?" And I'd laugh and say, "Sure. Of course." And I never, never thought of it as a business. But then I get to Stanford, we're out training in the athlete training center, and over the course of two months, every single one of the coaches, and the assistant coaches and the strength and conditioning coaches, came over to ask me, "What the heck is this?" And 10 minutes later they'd be asking me if I could make a bunch of them and how they could get some for their squads. First time, the female tennis coach came over and asked me about it. I thought, "Huh, that's interesting." But it really got interesting when the football strength and conditioning coach started coming over and saying, "Man, I need this for my linemen." Now all of a sudden I'm like, "Wait, I've got 90-pound women on one end of the spectrum, and I have 300-pound linemen on the other, and I'm at business school after all. Huh." And so I took the summer between my first and second year, and instead of taking a paying gig at a consulting shop, I went out and bought a $50 ancient sewing machine from a little sewing shop, sat down in my garage and started working on taking this very Cro-Magnon prototype and making it more aesthetically appealing. I spent the summer prototyping and researching supply chains. And then I came back to my second year and that's where I began thinking about making TRX into a business. I wasn't calling the business that at the time, but I used my entire second year as an incubator to explore whether this was a good idea or a really dumb idea. And at the end of it, I had concluded that it was a good idea, so I launched in 2004. I graduated in mid-2003 and started working on a business that I really had incorporated in 2004, and 2005 was really our first year in the market.

How much time elapsed between you first rigging martial arts belts and incorporating the business?
A long time. My first experiments with the straps were really back in around 1997.

Stanford was the first exposure outside the military?
Correct. And remember what I had in the military, although it looked roughly like today's TRX in that it was upside-down Y, it was basically just two pieces of nylon webbing that had been stitched together — no handles, no adjustments, no nothing. Just think "strap." And then I evolved loops into the end of it as kind of quasi handles, but it looked nothing like the straps today. It's highly evolved.

What has guided that evolution?
We're following the classic category-creator model, where you come in with a thing that is really different than anything thing that was there before, and it starts to create a category. And once you get enough momentum and you start to build enough brand following, and you get some ambassadors out there, then you start thinking about, "What else should we be doing?" In our case, it started with education, because the straps don't stretch, there are no weights attached to them, so nobody had any idea how to use it. So we created a course. The course was really good and trainers loved it, so they wanted more courses. So kind of through the back door, not through the front door, because we didn't intend to become an education company, but as we developed that business, the business got broader and deeper, and now we've ended up the largest education provider in all of fitness. We do about 2,000 courses around the world.

Was there a difference between military personnel and the general public in terms of reaction to your product?
Not as big as you think. Not as big as I thought. I've learned a lot. One of the things — and it certainly is sort of the substance of this talk — is that coming from two very different contexts in roughly equal tenure. I was a SEAL for 14 years, two years in business school, and now I've been an entrepreneur for 14, 15 years. What you ultimately start to realize is people are people. There are certain things that humans have an affinity for. And one of the things I've learned is that humans love tools. That's just sort of in our evolutionary DNA, I think, but what they really love is simple and elegant tools that work. And if you give those to them, then they'll use them, and use them in different ways. What happened with us is I knew I had potential with hard cores, because that's where I came from. What I did not anticipate at all, but was very happy to have discovered, was that on the civilian side of the equation the suspension trainer is as often used for unloading and stabilizing exercise as it is in a way that I envisioned it being used, which is to destabilize and load for the elites. But it turns out it's become one of the most-popular senior fitness tools. Who saw that coming? Not me. It's become absolutely a staple in every physical therapy clinic in the country. Why? I wish I could claim I was a genius and saw it coming, but that's not true. The answer is because it turns out that it's really, really useful in providing a point of stability for bodyweight movement. Simple things. Squats. If you're a senior, a squat is not necessarily a friendly thing, because you may have had muscle mass in your lower body that has diminished over time, and for an 80-year-old, doing a simple 90-degree squat at the hips and knees is not possible — unless I can put a set of straps in your hand and I can tell you, "Hey, as you go down, support some of your weight with your upper body. Do a little bit of a squat-row, if you will." As you squat down, you can support yourself, and to get out of the squat, you can use your arms a little bit and pull yourself back up, like you're getting up out of a chair. Turns out that's the extreme end of the example that I'm making, but all of the regular folks, hey, it turns out the straps are really useful for allowing people to do these great human movements, bodyweight-based exercise in ways that they feel are appealing and appropriate for themselves.

Do you think people find it less intimidating than a typical resistance machine?
It's really interesting. One of the other epiphanies that we've had as we've been building the brand is that our following skews just slightly female. So every survey that we do, we end up being either 50-50 or 55-45 female to men. That was this really interesting reality that didn't necessarily align with my expectation, because I thought this was a damn commando tool, right? And so it runs out, if you think about it, it makes sense. Women as a cohort do not like steel. As a cohort they're not big lifters, and yet they know that they need strength training. Everyone, from their trainers to their doctors, are telling them, "Look, you have to do loaded strength training to keep your bone density up, to keep your body strong and support your joints, etc., etc." But they don't like weights. So the question is, "How do I do that?" Well, there's a reason why power yoga skews wildly female, because it's one of the places where women can go and get their strength training in a format they like. So we brought women to strength. And then the equally interesting thing is that guys tend not to do group fitness. As a cohort, guys don't like group. Guys like to go in and stand by themselves and do bicep curls. But, the TRX suspension trainer, because of its heritage — it's suitably macho — that guys will come and do group fitness involving TRX where otherwise there's no way they would walk in that group fitness room. So what's ended up happening is our gender divide is literally right down the middle. And then the age span of our following — when people ask what's the epicenter of our demographic, it is 50 percent male, 50 percent female, and the age spans from 20 to 70, which is a great thing and a marketing challenge all at once.

How often do users show you things to do with the TRX that you didn't think of yourself?
Constantly. It is one of the coolest things about my decision to start this business. It's so amazing to me. I have been living on for 20 years, and I learn something almost weekly. It's really remarkable. And the cool thing about it is, if you think about it, the suspension trainer has no hinges, it has no tracks. It will move any way your body wants to move. And then with a little bit of knowledge, you can figure out how to load that movement by adjusting your body angle. You're either single-sided or you're double-sided. You can change your center of gravity, and that affects the experience and the load. So what's ended up happening is the suspension trainer has become something different to every body, literally. Then, because we built the business in a partnership with training pros — from physical therapists to strength and conditioning coaches, personal trainers, group fit instructors — and put more than 250,000 training pros through our courses over the past 10 years, we have this giant army of training pros out there who make their living training and treating others who have adopted the suspension trainer as one of the key tools in their tool kit, and they're constantly creating new, cool stuff that they're trying to solve for a particular issue with the client. They're using all their knowledge to try to solve a problem for you, and in the process they create something that I've never seen before. And so what I think we've done a very good job of is to capture those things and roll them in, because one of the fundamental concepts of our brand is inclusiveness. We want to be both aspirational, which I think we've certainly achieved, but attainable — both aspirational and attainable, not or. And that I think has been one of the keys to TRX's success is that everybody can absorb something into their existing routine that uses our gear and knowhow. It's been a really special cool thing to watch as the years have mounted.

How much do you reinvest in R&D?
If you talk to my shareholders the answer would be way too much. That's been arguably a fault of mine as a business operator — that I am a big believer in what we're doing and I have big ambitions for the opportunities in front of us. I firmly believe, as does my team, that TRX can become the world's first great training brand. There really isn't one, if you think about it. There are great big equipment manufacturers. There are behemoths that do apparel and footwear. But when you go into that soft spot in the middle — how to train for what and which tools to use — there's no brand in there. Very, very vulcanized. Generally, you go to your trainer for that information, or you go to Men's Health, Men's Journal, Men's Fitness. We believe we have the opportunity to become the Nike or Under Armour of training, and so for that reason I have invested full tilt. Everything we've ever made we've reinvested in either education development, product R&D or product improvement. Fortunately, it has worked, but we were really at the very, very forefront of the functional training movement. I certainly wouldn't claim we created it, but we popped up on the wave when it was a ripple, and it built behind us with us participating in that build. To tell you how early we were to the party, one day I was sitting there thinking, "Functional training. I really like that. I wonder... ," and I bought the URL functionaltraining.com. We have some big ambitions for it, but right now we forward it to TRXtraining.com.

How many patents do you hold?
You have utility, you have design, you have method, so if you add them all up we're probably over 30 or 40 patents.

How big a threat to knockoffs pose?
I'll answer this in a couple ways. How big a threat? It's a big threat. It was a big threat. The threat has been largely eliminated, to use my old terminology. Not completely. Frankly, it's impossible to eliminate your competition, and I don't even think it's healthy. I think monopolists very quickly devolve into yesterday's news, because they stop being afraid and they stop being hungry, so they stop innovating and they start being pigs. I'm not a believer in monopolies. I am a believer in intellectual property, and I think it's important. For a capitalist marketplace to work, you have to respect intellectual property or the whole thing comes unglued, because the innovators have no incentive to make those investments and innovate, which is why we had to bring a very significant lawsuit, which we won last year, on behalf of our patents. We've spent tens of millions of dollars creating a really great experience and investing in the awareness around functional training, only to have a bunch of these low-rent opportunists come out of China and try to use digital marketing to steal from us by infringing on all of our intellectual property and then buying our registered trademarks in search and having Amazon put these cheap knockoffs next to us as if they're equivalents at a quarter of the price. That's not fair and it's not sustainable, so ultimately we launched a big strategy that had one legal component to it and then a couple of business components. The legal component is we brought a suit against one of the more material infringers that's based in the United States, because we had to have somebody here that we could enforce a verdict against if we won. That wound out for three years and cost us more than $2 million to win — last year — a unanimous verdict and a $7 million award in lost profits. So that was a big investment, but it paid off, and then we took that verdict and had also evolved the partnership with Amazon — and Craig's List and eBay, the other major online marketplaces, but Amazon was the big one — and we had forged a partnership and agreement that when the verdict was delivered, they would immediately put it to use in cleaning the marketplace of infringers. So that was the legal strategy, and then the other side was that we realized about three or four years ago that we knew as much or more about functional training than anybody else in the business, and we had a lot of customers in the club and athletic facilities space coming and asking us, "Hey, why don't you guys make these other tools that I need for functional training? I love your education. I love your brand. My staff's all bought in on you guys. Why don't you make kettle bells and balls and bands and ropes? Because if you did, I'd buy them." At first, I said no, because I had in my mind that TRX was 100 percent about innovation. But at some point you kind of smack yourself and say, "Alright, all the customers are asking for something and telling me they'll buy it. Let's not be a jackass and be dogmatic about what we are or aren't." And that also makes sense for us, because we don't want the entire kingdom resting on the back of one knight — meaning the suspension trainer. We want to start to diversify our army of products that are out there and bring down, somewhat, our dependence on the suspension trainer. So we did. Fourteen, 15 years ago, you'd walk into any gym in the country, there was not a single bodyweight rack. The closest thing that was happening, they put some pull-up horns on the cable crossover towers and Olympic racks. But there was no rack in the middle of the floor with people hanging from it. That just didn't happen. So, I actually brought the first one to IHRSA, not to sell, but so I could show multiple people at a time how to use the suspension trainer, because at a previous training show we had a big line of people wanting to try the one strap I had hanging from a doorway and they'd end up walking away. I said, "Damn, I have to fix that," and we created a modular swing set, what we call our suspension frames, and I brought that as a trade show booth artifact, not to sell. And what happened was, I'll never forget it, a club owner walked up to me and said, "Hey, Randy, can I buy this?" And I said, "Yeah, I'll sell you as many straps as you want." He said, "No, no. I want to buy the whole thing." I said, "You want to buy my trade show booth?" And he said, "Yep. I'm going to take it and I'm going to put it right in front, and everybody's going to be sitting around on their bikes and on the treadmills, and they're going to see all this great stuff going on in the center of the gym. They're going to love it, and they're going come do it." It was one of these hilarious moments where you're looking at a guy, and you're mind is working at a thousand miles an hour, saying, "Son of a gun. Can you give me just a minute?" I'm on the phone, "What did we pay for this thing?" I came back and said, "I guess we will sell this to you," basically doubling the price that we paid for it. "You can have it for this." "Great, I'll buy it right off the trade show. I'll have my guys come over and pallet it up." And that was the first sale of a body weight training rack in the training universe.

Had you envisioned TRX as a potential group exercise vehicle?
No. That was that sort of moment of inspiration, when I said, "Wow." Let me caveat that by saying in the SEAL teams we had used our straps together in a loosely organized group, but that's a different thing that what you're talking about: Did you envision this as a group class? The answer is no. That was really one of the first moments when I went, "Holy smokes." Because if you think about it, it's one of those funny things. People talk about being too close that you can't see the forest for the trees. And sometimes if you're a hammer, everything you look at looks like a nail. I had been envisioning that this was a single-user tool that would be mostly used for travel but also for the home. That's how I viewed it. I had no idea that what was going to happen was quite different than that.

By the time you were attending IHRSA, you had to know this had a commercial appeal, right?
By the time I went to IHRSA, yes, but I hadn't thought yet about group. We launched, the first public thing we ever did — we, myself and my dog — got in a Jeep with a trailer behind me and drove down to IDEA in August of 2004, and I bought a 10-foot booth in the very back corner — you know the spots that nobody wants — wedged between the toilets, the corndog stand and then the one-stage where people blared music round the clock. That was my spot. I went there with the idea that this would be a personal trainer tool that these trainers will take into their clients' homes. That's how I saw it. And what happened was very different. We sold out of everything we had at that show. That was on a Friday, and I had my part-time office assistant back in San Francisco pallet everything else we had left, had her FedEx it overnight — so you can imagine how expensive that was — down to San Diego so that the next day of the show I was selling futures on paper and telling them, now come back tomorrow and redeem your paper for a strap, which I'm not sure was legal in retrospect, but at the time I didn't know better, so it was legal enough.

At what point did you really think, "I'm on to something"?
At the IDEA show was when I went, "Holy smokes," because these trainers were all telling me they're going to go back and hook it up to squat racks, they're going to hook it up to cable crossover towers. They were all telling me how they're going to hook this up in their gym, and that was a head-scratcher. I was thinking, "Wait a minute. I thought you were going to use it outside the gym. In the gym, you got all this gear. Outside the gym, you got nothing." And they're saying, "I'm going to use it there, too. This thing is going to go everywhere with me. I'm going to train clients at home. I'm going to take my people outside, and then I'm going to go into the gym and do all my personal training. I'm going to integrate it in as part of the routine." So that was a big epiphany of like, "Whoa."

IHRSA was the group-ex epiphany for you.
Exactly. That's exactly what it was. I was like, "Holy smokes." I was seeing a whole new possible line of business that had not occurred to me.

How many "holy smokes" moments have you had since IHRSA 2005?
Ha! Too many to recount. I don't believe in the concept of the tipping point. I like the idea, but I think success is built over a long period of time and it's a series of tipping points. It's a little tipping point that leads to the next tipping point that leads to the ever-bigger tipping point, and I've had a lot of those as we've just put our nose to the grindstone and invested and invested and invested. For instance, one of the big holy smokes moments was the realization that we were going to become the biggest training company in the industry. I had no intention of building a training company. Just to frame it up, we do about 50 courses per weekend all around the world. So when you think about the machinery — eight-hour live courses, and then we have a two-day certification course that's at the very top of the curricula that requires a couple of other courses as prerequisites. We have a master instructor cadre of about 350 master trainers that are 1099s, and each master instructor candidate takes about a year to get through the development and certification process. They're all functionally oriented trainers of a variety of stripes. Physical therapists, we've got a variety of competencies in our cadre, and then we have them geographically distributed around the world on a kind of demand-based basis. We try to optimize it so our instructors get plenty of work teaching our courses, but it's not too little work or too much work, and that's kind of how we manage the cadre. But we do about 2,000 live courses a year, and we also have a variety of digital offerings that we use to support our club partners and our facility partners.

Are you the greatest fitness brand as we speak?
No. I would say that we are the leading training brand, and training because we have a lot of programs that we run for athletic training centers. We have, obviously, group fitness programs and personal training programs and physical therapy programs, so it really is training across the continuum — rehab through high performance. And it also now incorporates all the products that we make, and frankly a lot of products that we don't. We do a lot of content and programs for our partners that use other people's tools.

Do you think people look for a unified brand in their space?
I think that's become part of the benefit set, that unification under a single brand. As you walk through a functional training area, sometimes they look like my old man's garage. There's stuff everywhere. It's all different colors. And it all represents one big tripping hazard. I think one of the things that's driving it today is the experience in these high-end boutique studios is very curated. It's very aesthetically pleasing. The customer experience is very deliberately manicured. If you're a full-service club or an athletic training facility or a YMCA, you don't want to be a junkyard when you're trying to compete with these pristine boutiques. So that's driven a little bit more, I would say, attention that used to exist on the organization and deliberateness of a space. And that's worked in our favor. Honestly, I think one of the more practical benefits that our customers were seeking was logistical simplicity — one-stop shop — but more importantly one-stop shop where they have one dedicated point of contact and a brand that they trust. Let's face it, in the fitness space they're a lot of charlatans and a lot of fly by night companies. You go back to a company and try to get service and they're no longer in business. You bought it through a cataloger who says, "Sorry, look at the fine print on our website. It tells you that we are not responsible for the products we sell. The liability goes through to the vendor." And then there you are as the buyer. God help you if you're a buyer of a large-scale chain because now all of a sudden you've got a product problem, nobody accountable because the protagonists who originally sold the gear to the distributer are gone, and you know you go through that a couple of times in a career and your interest in repeating it again is zero. It's not a friendly thing for buyers. What we're trying to do is say, "Alright, look. You can trust us. We've been in this business now 14 years, we're not going anywhere, we're growing like a weed and we stand behind everything single thing we do, even if it means a negative-margin sale. We will make you happy, and that's been the premise since the day started the business."

Have you come full circle? Do you have a Department of Defense contract?
We do. We have several, and we're actually bidding on a very, very large one right now. We're also starting to do a lot more consulting to our customers on facility design. We've obviously been consulting to them for a long time on program and program maintenance, but now we're taking it a step further and we're starting to do in both the traditional fitness space and also in corporate wellness and hospitality and multifamily residential more consulting projects, where we're coming in and helping people bring their vision to life, and then to the extent that they want us to we can also help manage the ongoing operation.

What is the one thing you hope AB Show attendees take away from your keynote?
If there's one thing that I will adamantly try to leave them with it is the power of belief, because I think if there's anything that my story and my experience emphasizes is there's really no idea too dumb to make work if you care enough, if you believe enough and if you're willing to work hard enough to bring it to life. So the talk I'll be delivering at AB Show, the way I think about it, it's one-third hardcore business leadership that I learned in the military and the SEAL teams, it's one-third entrepreneurship and the power of entrepreneurial mindset within any organization, and then it's one-third just pure inspiration. If you can believe it, you can achieve it. It's really that simple.

This article originally appeared in the May 2018 issue of Athletic Business with the title "Entrepreneurial success and the power of belief." Athletic Business is a free magazine for professionals in the athletic, fitness and recreation industry. Click here to subscribe.