Episode #557: From Taekwondo to Tech-Marco Benitez on Building Rook and Connecting Fitness Data

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I am super excited to announce that we now have a formal

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partnership with the Prospect Wizard. And when I say

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wizard, I mean wizard. Obviously you have a website.

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This allows you to convert your website traffic visitors

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directly into leads. It's not just another chatbot and

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it's not AI but it allows a visitor to call, text or leave a

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voicemail immediately. Goes to you, your sales team or anyone else in the

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club instantly. MIT shows a study that if you contact

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the league within 10 minutes, chance of them converting goes up nine

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times. That of the average. We got the Atlanta clubs

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on it. Vita Fitness, Gold's Gym, Mountainside

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City Fitness, Philly, College Park. Become one

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of the next Halo companies to deploy the Wizard.

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It's easy to use. Go to the prospectwizard.com

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get a free 30 day trial. Talk to my boy Dave Gallen. He will get

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you all set up and let the leads flow based on the

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Wizard. Go get him.

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This is people on Halo Talks nyc. I have the pleasure of bringing

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our only taekwondo champion and bio

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medical engineer to Halo talks. In over 600

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episodes, we have not had someone with these types of

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attributes. So Marco Benitez, welcome to your

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first Halo Talks. Well, thanks, thanks so much. Very excited

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to be here, man. So really, really appreciate it.

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Awesome. So for our audience here, Marco started up a company called

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Rook R O. Okay. So if you want to start

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out and just tell us, you know, where this name came from because I, I

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play a little bit of chess so I know I got a rook or a

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castle and you know, tell us how you, you came up

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with this and why you decided that that four letter word was where we're headed.

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Yeah, well that's, that's a really good question because there's a lot of people who

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ask me the same thing. And everyone relates everything with Chase,

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but no, in fact it's with the around the crows. So we

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were thinking about crawls and when they are flying together,

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there's a group that work together and they, it's, they are

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one of the smartest birds in the earth. So and

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that's why we, we call it Rook because we are a group of

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birds, you know, flying together and every single time everyone will

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take their leadership in different type of areas. So that's why.

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And everything is connected between each other and they don't know why or how,

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but everything is connected between. And that's exactly what we do. We

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connect data. Love it, love it. So give

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us your background. You know, I already gave the abridged, you

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know, top two out of 10 or what have you. But what you've learned

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where you saw the frustration. Maybe also give us an analogy

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because I think there are several good ones in other industries where you need

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this kind of middleware. You need this group in between to kind of direct

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traffic and direct data. Yeah, well, being a

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middleware it's a lovely part because you can bring and be very

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specialized in different type of things with data. For example,

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my background, I'm definitely a taekwondo guy

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my whole life. Exercise sports, that's my thing. I

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love sports. I love because give you a lot of, you know,

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discipline, perseverance. There is a lot of things, very good things over there.

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But secondly also work in big pharma. Big pharma in

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clinical trials. So clinical trials. I learned a lot around

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the middleware. The clinical trial is something that apparently

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looks like from the beginning you have to create a protocol. You need to create

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a molecule and then find different, you know, find to

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solve different type of problems with different diseases. But in the meantime

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in the middle there's a lot of vendors working towards this

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to achieve that specific thing. Like you know, generate all

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the data from the data, you know, from the, from real world

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evidence to identify the problem. So there is a lot a different type of

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thing. So my learnings during these whole years is like

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if you special specialize in specific thing around data

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and you can create things and even more important, when you have a lot of

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information or data, you can improve people's lives. That's why we start

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to build rook because it's very important now. Data is the new

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oil so we can help people to being better.

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Gotcha. And then you know, when you started this up, were you

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currently at a different job and kind of moonlighting this? How

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quickly did you put your team together and then you said you raised some VC

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money, you know, so to give us a little bit of info on that.

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Yeah, I, I can start through. Well, when I was

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in the big pharma I was over there like I don't know, probably 12

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years in the big pharma. And again, different typ of learnings. When you

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work with an enterprise, you identify that it's, it's. You

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have to be very structured. That's the first and important thing. Even though

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that they are very long and old companies, they give

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you a very good structure of how to build a company. That's something

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that they give it to me. Secondly, also as I said before, when you have

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a lot of information, you can create things. But even more important, when you have

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a Lot of data. You can improve people's lives. So that's why we start

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to build Rook, because we were okay. Health industry,

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they are. There is a new wave of gadgets. There is

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a new wave of wearables, these commercial wearables. In fact, some

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of them start to receive FDA clearance. That's

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impressive. Now these wearables are becoming medical

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devices. So we identified something that potentially could

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be very interesting. The problem out there is, like a lot of industries,

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what we made a lot of research over there. A lot of

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industries want to pull the data from these devices, these wearable devices. However,

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they don't know how to pull all these data. They need to

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integrate all the wearables that are outside and make sense of all

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this data. And we saw the problem since the beginning because

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before we create Rook, we have a platform for the fitness

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industry, like My Zone for Latin America and

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these type of things. So we started to integrate all these wearables in

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our own platform. And we saw them. We saw the people, the big

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problem over there. Once we extract the data and once we start to

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make sense of all this information, we saw the big problem over there. So that's

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why we started to do this API for other. So you actually

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had. So you actually had a company that was doing the equivalent of my own

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with the body traps, heart rate monitors, and

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it kind of morphed it into like, hey, why don't we just not sell our

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own into studios or locations? Let's actually

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scale this and kind of move up to the. Not

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the food chain, but the. The data chain to say, let's just do this as

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agnostic. So how do companies like this, you know, get paid? I'll

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give you an example. Like, I use Zell or Zelli, right? For.

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For transfers. They're obviously just connecting two different banks, and there

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seems to be no transaction fee. There's a company called Plaid.

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Plaid, which basically is like, doing that as well. So

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how does that business model work for, like, the delay people here and myself?

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Thank you very much. Even though I went to Harvard Business School, I don't fucking

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know this. You know, how work and how do you kind of fit yourself in

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on something meaningful? Yeah, there's, like, different. Yeah,

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Plat. That's the perfect example. But because normally when we talk

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with different investors, they are like, okay, you are the platform, the wearables data,

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and the medical devices data. That's close. When I read. No,

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you know, you nailed it, Joe. I didn't know. I didn't know. You nail

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it. So you so that's cool. So

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yeah, it's mainly around some companies charge per

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API call what we charge per active user. It doesn't matter matter that

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you send one time data or 1 million

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of time this information which only charge per active

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user. So it's very simple, it's per use and you,

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if you want you, we can tier you in different buckets.

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Where. Who'S actually paying for the

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active user? Who, where's like what, what,

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what, what constitutes me as an active user? And then is it the

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device that makes me the active user? Is my data going to somewhere

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else which makes me the active user who owns me? Yeah, well it's the

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payer. So that depends a little bit because we work

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mainly with a fitness industry but also we work with sports and also

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with insurance companies. So in, in the case of the insurance companies,

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the payer, I will say that at the end of the day everyone, the

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end user is always, always the one who pays everything. Right? So

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that's, that's something too. Every single time that we go to one

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specific service, we are the ones who pay for that service. And

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on top of different type of services that the same you know, thing

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you are, you are buying. So but for not for us

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we are B2B meaning that we charge to the

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carriers or we charge it to the insuretech companies like I don't

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know betterfly or these type of companies that are

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using these data for a specific thing, they are the ones who are

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paying us. Or for example in the fitness industry and

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fitness app or the gym, if the gym has

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an application, they integrate my API which is only a

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code and they give access to more than 300 wearables

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so they can pull the data from the end users and make sense of all

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this information, make engagement or different type of things. And every time

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someone upgrades a device, does that require a different API

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on the back end, on your end or coding or what have you?

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Well that's exactly the problem that we are taking out from

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each company. So instead of. Because if they

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doesn't have a rook, they have to integrate all the wearables, they need

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to integrate the Apple Watch, the Polar, the Garmin, the Suunto, the.

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Huawei and upgrades every time. Yeah, exactly. Maintain those

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integrations and then make sense of all this data because they need to

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standardize, normalize, harmonize, take out duplicity. Well, we take

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out all these problems, take out that problem

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and they only have to integrate my API which is just a code. In

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my code we have already more than 300 wearables. And

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we make sense of all these data and we deliver clean and very

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structured, standardized, normalized, very easy to use the information.

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This is Pete Moore. I want to let you in on a little secret. There's

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this company called Promotion Vault. And what they do is they give. Out rewards

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from retailers that allow you to incentivize your

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members without having to do zero down and one month free

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or giving away shakes or giving away T shirts. What you want to

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do is build a rewards program that lasts, that people value,

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and that doesn't discount your own products and services. So here's the

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deal. There's something called Rewards Vault. The Rewards Vault is going

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to allow a member to set up their own profile. They are going

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to answer questions. You are going to get those answers. You're going to be able

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to target those members and you're going to reward them inside your

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club, inside your spa, and outside of the club and outside

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of the spa to get them to become loyal, to get them to pay

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their monthly dues, and to be rewarded properly

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for the actions. A lot of companies are cutting back on rewards. You shouldn't

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be. Promotion Vaults. Your answer, Trust me, this is real.

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I've got two questions. First question is there are 300 wearables

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out there. There might be a new one that comes out, you know, every week.

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Who knows who it's backing, what country it's from. Is there a threshold where

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you, like, look like, I'm not taking on a new wearable and

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actually devote time to that API and understand your system

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until it gets to X number of users. I'm asking you this one because

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we got a lot of entrepreneurs on the call here. Listen in to the podcast,

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and I feel like it's hard for entrepreneurs to say no. And you, you

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always want to just say, like, oh, there's a new device, let's just add it

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on. Like, we'll get to 305, we'll get to 3 10, and you realize, like,

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return on time. You know, you could have said no to those things and say,

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hey, once that thing gets some critical mass, then we'll add them on. That was

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my question. 1. That's, that's a really good question. And, and this is

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something that at the very beginning, we, we struggle, right, because you

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are focused on what you see outside. And if you don't have a lot of

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feedback from the client or potential client that depend on the,

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that you are, it's like, it's an, it's like you start to do a

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lot of Things and doesn't nothing works. So, so to

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answer your question is like we have to ask to our

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clients, that's the important thing. And first of all, the market

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share, who are the ones who are in the market share the most

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want, you know, is the Apple Watch, maybe the Fitbit. We make all these research

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and we start with something. Then when we have

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a client or a potential client, we start to ask, okay, what's

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the wor, which wearable do you need and why?

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And that's when we start to create the things for our clients.

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And then what we identify is that the same problem and the same

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wearables that those are, those ones are the ones that

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need the other companies when you are in the same

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industry because we are working with insurance companies. So they have

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already a specific target of wearables because of the

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fda, because of the gdpr, you know, information

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outside because of different type of things they already know know which

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kind of wearables they need. So those ones are the ones that we have

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already got it. Okay, my second question is and, and just as

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a, an update for our audience and for you, this, this year we started

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doing every Wednesday we do a two minute drill

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from our Halo Academy. So I teach people on here's what revenue is, here's

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ebitda, here's recording revenue, here's what your balance sheet looks

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like, here's how you do, you know, member attrition, retention, all that kind of stuff.

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What I'd like to do with you right now is I want to do like

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a cut, a two minute drill that will be that we do separately. And

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then it'll be like, hey, you want to listen to the whole podcast coming here?

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So let's do one on like the benefit of a

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B2B SAS company, why those companies are valued

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the way they are and why the recurring revenue is so

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sticky that to take you out and replace you with someone else

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is like a completely unnecessary financial

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decision and actually a much bigger nuisance that you would ever take that

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you're saving money on us. So I'm gonna start it. I've got Marco on here.

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We're doing our two minute drill segment. So Marco is with Rook.

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Start up a company that's a B2B SAS player which basically

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sits as middleware in the middle of all the wearables and all the

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data providers and, and actually getting

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that into their one of 300 app of choice or onto their fitness

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app, whichever they use. So Marco, when you started this company and thought about the

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business model, talk the benefits of how this business model works

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over time. Yeah, well, first of all it's because the pain that we are

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taking out, that's the first and important thing. Do we understood why they

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need this type of thing? What are the pains that we are taking out? Secondly

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is working with enterprises is the best way because it's take

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time. It takes a lot of time to close some deals and

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but once they are closed, you will receive a lot

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of feedback from them and you will be in the heart of the company.

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Because we as an API solution, we live

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inside the platform, inside the app. So

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for them it's a no brainer to still work with us and make a partnership

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and sometimes invest in the company. So we have some

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companies that already invest in Rook because we are not anymore like

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a vendor. We are like a part of the complete

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ecosystem. So it's great to work with them. Yeah. And then

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on the SaaS side, software as a service just

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for our listeners here. When you think about that business model on a monthly

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basis, Marco's getting a dollar amount from each one of his clients.

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It's such a de minimis part of the entire financial

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expense structure on a per user basis that there will really be

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never any way for someone to come in and say hey, I can do this

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API better than you. Right. Given the interchange costs. And

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also when you think about it from an investor standpoint, when Rook

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lands a deal, they land that deal as long as that company stays in business

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and hopefully continues to grow. That is a a accelerating

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recurring revenue membership model through SaaS fees

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that allows these companies to trade at 5 to 10 times revenue

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historically, because it's hard to pull out, you don't really need

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to pull out that expense. And it's very, very unlikely that someone

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who's on either side of your client base and your user base

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are going to build the middleware because they're conflicted and they're not

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actually neutral party and. It'S predictable at the end of the

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day. So when you are talking with investors and also for you, you want

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to hire people, everything that can be predictable. When you have

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some clients, that's perfect. That's the type of things that

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investors love. And if you're an entrepreneur and you do a B2B

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software play and it works like Rook does, then

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you can sleep at night instead of not sleeping anymore. So welcome to the

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Halo sector on that. Thanks Marco. Back to our originally

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started podcast. So Marco, thanks for the 2 minute drill. From a

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standpoint of, you know, where you take this company.

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Do you bring on more salespeople? Do you go international? Do you

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go and advertise at trade shows? Like how do you get this infiltrated? We're just

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on a call someone, one of the guys where they said like ABC

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Fitness a 38 year overnight success,

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right? Or another guy just told me it takes eight years to build something that

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people like really want in scale. So how do you think about that?

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You know, Taekwondo is obviously, you know, you can win or lose and it, you

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know, play several matches in a day. So how do you think about the long

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game? Yeah, I think everything is a long game. There is not no

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easy, easy roads. It's a ways like at the end of the year is like

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the Taekwondo for example. If you want to. I am black belt for them.

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But to become a black belt is something that takes time. It's

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not something that happened from one day to another. It took you to

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learn a lot of stuff. You have to work every single day. You have

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to, you know, go to the tournaments, prove yourself. There's

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too many things that need to happen during the whole, you know,

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it took me at least 15 years to become

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a black belt and be a teacher and be someone

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in the industry. So it's not something that happened from one

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day to another. It's the same thing with companies is there is like a

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one day turn on and turn off new companies, unicorns.

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It looks like that, but it's not even short. You know,

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it's like the, the egg and the chicken. There's a good book over

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there like the good for to great. It's.

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It tells you like hey, the chicken. It

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doesn't appear from one day to another. It take a lot of time. You have

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to be the perfect temperature, have to be the perfect environment to

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be to do you know that the chicken born.

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So it's. It's something that you know, everything is

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allowed around the long term. So on our

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side today we are this company technology company

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that helps to be a pipe. Like we strike the data, we

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structure the data and we deliver that data. But at the end of the day

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we want to become a data science company. A data science

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company is because we have a lot of data. We can help them to improve

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people's life. We can help to do business, you know,

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business smart business

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decisions with all this information. So it's like

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a helping them to do something with the data to

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insights, do predictions. Those are the type of things that we

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are in. That's our ambition.

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This is Pete Moore. Here's the Last tip for you of. The podcast,

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we are partnered up with a company called higher dose

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higherdose.com they are the leader in

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workout recovery products. Infrared technology,

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LED light masks, neck enhancers, and

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other products such as PEMF mats and sauna

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blankets. If you have not gotten on the workout

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recovery train yet, your time and your stop

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is now. You got to get these products in there before these workout

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recovery and spas end up saturating your market.

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Having your members walk out of the club and going into one of their locations

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for 200 bucks per month where they're paying 39 to

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you. Let's become an expert in workout recovery. If

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we are already an authority in workouts, Higher dose,

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check it out. There's a wholesale code and we look.

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Forward to helping you augment your products. And services

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to meet the demands of your members. And hey, let's get people

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happy, healthy and sweating. And the recovery should be

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just as. Good as the workout.

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So. So one of the things. Well, first off, we got to get you a

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copy of our book, which is called Time to Win Again, which is basically 52

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00:21:15,040 --> 00:21:18,880
takeaways from Team sports to ensure your business success. We'll, we'll drop ship

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a couple of those for you, for your team guys. But we basically say it's

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good to great meets Where's Waldo? In like a bullet point, like

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00:21:25,240 --> 00:21:29,040
cartoon character format. So we did that during COVID You'll love it. We'll get a

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book out. Second thing that I wanted to, to,

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to, to reference here with you on the,

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on the business model as it relates to, like, where this is going.

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I use this term. Somebody asked me at a tech conference, like, what do you

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think of AI? And I said to like all these operators. And I kind

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of leaned in. So I'll just lean in because I got room in here. I'll

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be like, you can't have artificial intelligence

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until you have intelligence. Exactly. Okay. And I step back and

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I'm like, just think about that. You got to collect all this data. And then

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when you say, hey, I'm going to provide this information, you

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know, in this industry, I find that you might not have, you might have to

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do more than just give them the information. You might have to tell what it

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means and then what to do with it. So how do you feel about kind

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of not only just being in the middle, but saying like, I'm coming at you

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right now and I'm actually going to tell you what the ship means. I'm going

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to tell you how to monetize it or optimize it or you know.

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Yeah, I mean that's again a really good

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question because I know everyone has a label say it's like a

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bumper sticker. It's like everyone has a bumper sticker about the

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AI. That's something that impressed me a lot. And

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it's, it's. I know, I know there is a hype over there and I think

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that will change everything. AI is changing

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everything, I believe so the problem is that if

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you don't know exactly what problem you are solving,

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who cares? The AI. Exactly, exactly.

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It doesn't make sense. So I, I, I with you. Definitely

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100 with you. Yeah. So you know, in closing

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here, can you give us, you know, who

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the right clients are to that, that you're looking for right now, either

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what trade shows you're going to be at or how to reach you guys and,

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and so on and so forth? Yeah,

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well, first of all we have different type of clients, but mainly the ones

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who are looking and we can help with A lot of value is

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in the fitness industry. Definitely everyone who wants to extract

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the data but to engage with the end users to try to understand

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a little bit more around them, we are a perfect fit for

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them because we can give you a lot of insights today because we started with

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the fitness but rather now we are moving towards, you know,

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with the insurance companies. Insurance companies, they are doing

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very interesting things and they are moving to the preventive side.

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Preventive more than reactive. So CPT

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codes are starting to move on the preventive side.

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So everyone who works with insurance companies and want

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to integrate this type of technology or working with an

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insuretech because normally the carriers are not the ones who are,

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you know, the, the state farms, they, they are not building the technology

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but they are working with insuretechs. The insurtechs are

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the ones who are building the technology. So with them that's where

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we can find a lot of clients over there in the digital health space too.

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So yeah, definitely the ones who once ap wearables

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in their own technology. We are the ones and we can help because

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it's very consultative. It's not something that, you know, we are not

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selling a product, we are selling consultation. Yeah,

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so, so Marco's company again is Rook. They

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are a flock of the most badass crows you're ever going to meet. Let them

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help you move your data, get results and then provide

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the AI as the special sauce. So Marco, look forward to meeting you in

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person and we're going to rip the two minute drill also, so thank you helping

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us unravel what a B2B SaaS business is and why it's

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so interesting and predictable and exciting

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once you kind of nail the actual business model and provide

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the results. All right, man. Good to meet you. Awesome. Good to meet you, too.