Episode #605: How Mighty Pilates Became a Leader-Community Building, Teacher Training, and Smart Expansion

0:01 This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing a friend of mine since September 14, 2016 is when cricket and I met in Manhattan beach and her new partner, Kat Martin from Mighty Pilates. We're going to talk about what's exciting going on with their business, their growth, the Pilates industry in general, and the resurgence of successful studios. Post Covid. Ladies, welcome to the show. Thank you. We're happy to be here. Thanks for having us. So, so, Cricket, you and I met through a mutual friend, David Katz. I had lived in Manhattan Beach. I think you were up in San Fran, and you just opened up a studio in Santa Monica and you're like, this thing's doing awesome after six months.

0:47 And I basically tracked your progress over the last short 10 years. And then the three of us met up at an event in in Tucson a couple months ago and reconnected. And that brings us to this podcast. So I'm excited to give everyone an update on what Mighty Pilates has become. And Cricket, why don't you take it away and give us the history of this? Because I think at that point this wasn't necessarily a full time gig. Right. This was something new and exciting. Yeah, I think at that point I was either at Yahoo or big PR agency Edelman, but I started this. Actually, I couldn't quit my day job at first, but I started this back in 2009 when really the only Pilates studios were sort of the small, crunchy places that you would maybe get a private. There certainly wasn't group classes, but I was over in Australia for a year because Yahoo sent me over and I actually wasn't a big fitness person. And I went to a class with actually 25 reformers in the room.

1:53 And it was the first place I felt graceful. I was like, I can do this. I'm not a very coordinated person. But I came back and I loved it so much that I wanted to bring that idea back to the States, which at the time I think there was maybe one or two studios in LA that had multiple reformers in a class and went through teacher training because just like someone that owns a restaurant, you have to know what the chef's experiencing every day. Sure. But I would be a horrible instructor because of my lack of coordination issues. But started a studio in San Francisco, where I was at the time 17 years ago, and took it slow.

2:34 You know, when we met, I was still taking it slow because I still had a full time gig living in LA and had started the second studio, Santa Monica, which is Now I believe we are told that it's the number one revenue generating studio, Pilates studio in the world. It's a big studio. We laughed that we could have classes at 3am and people would still come if we put a disco ball in there. There's two, two classes around the clock. So I really just stuck to those two for a while. And then I quit my day job and opened over a few more years, four more studios.

3:14 And then in December of 2024, we were doing great and decided we, you know, we took in a business partner and they helped us open actually five studios just last year. And to be honest, we actually did those all on the profits of the studio, which is pretty amazing. And so we have 11 studios now, 12th one ready to go. And, and I'm going to turn it over to Kat because we actually worked together in our day jobs at one time at Edelman and she's now our CEO, which is such a joy to work with her again in this capacity. Yeah, you know, Kat, take it away. Sure.

3:57 I mean, it seems like decades ago, but I think it was Cricket and I met, but I actually, you know, used to take 6am classes in that studio in Presidio Heights in San Francisco. I would, you know, worked it into my calendar. Cricket introduced me to Pilates. I had been going to just, I mean, at the time, I think bar, the bar method was really big. And I, I had grown up being an athlete and I came out of college with a ton of injuries and so being able to find something that could keep me fit and also kind of take care of my body was really a real transformation for me. I fell in love with it. I still obviously had a career that was not in the fitness space.

4:48 And I did that for 15, almost 20 years working in, you know, startups, working in technology, big global companies. It brought me down to Los Angeles and Covid hit. I was, you know, in my house with two toddlers working a global corporate job kind of around the clock. I was talking to Cricket and I was like, all I, you know, what I would love to do is to use all of this energy and do something that was helpful for people that was, you know, I had started doing Pilates on live streams with Mighty during that time during COVID and Cricket was like, just do a teacher training program.

5:33 See what it's like as, as, you know, teacher training started back up. And so I went through the teacher training program, got certified, and then Cricket and I just continued to partner on the business. That's awesome. So Cricket I don't think I've ever asked you, but why was it not called Graceful Pilates? And how did you get to the. That would have been a great. It's actually funny because I really wanted it to be a little bit more masculine with Mighty, because I wanted men to feel welcome to come to the studio too, which we do get tons of really fit men coming into the studio. That's amazing.

6:14 So, you know, when you started out with the first two locations, you know, how did you think about the growth of the business and, like, the DNA of what Mighty Pilates was at the time and what it's been able to hold on to to today? Sure. So as a brand marketer, I really thought a lot about that. And we've always been focused on how Pilates is great for your mind and great for your body. We've never focused on weight loss and skinny images and things like that. We've always really, you know, made it for everyone, and that hasn't changed at all. And actually we add in class formats and things that change. But as the Pilates boom is here and people are open up everywhere, and we actually have stayed the same because it's really authentic Pilates, where at first we didn't have a teacher training program, but it takes.

7:19 We don't put somebody on the floor until they've had five or six hundred hours of training. And now we do. A key kind of differentiator for us is we have, gosh, Kat, six, seven trainings every year, and people have to have at least 400 hours before they're an apprentice and hit the floor. And do they. Do they pay for the training or is that something you guys do? It's a great revenue stream for us. I guess we lowered the cost at one time so we could make it more accessible for people and added more in. But, yeah, they pay for the training. And it's not just the training. They have to do, you know, at least 100 hours of training, their friends and family and things before we actually hire them on as apprentices. But that's been super important for us because we actually are not able to hire a lot of folks from other studios because they haven't gone through certification training. You know, they just get. Get done in like two, two weekends or whatever.

8:18 Is their, you know, official sort of Pilates training right now. We've seen it become so popular. We've expanded the teacher training program. So it's in both markets, L.A. and the San Francisco Bay area. We've expanded to Santa Barbara. We've increased the amount of trainings. And we're seeing people who go through the program are so dedicated and motivated to get into mitei to get on the floor. It's really helped us, especially in times of a real demand on. On teachers out there. How, how do you think about, you know, I was a good friend of mine, Brian Myers, at. At Solid Core. He spoke on a panel I was on and.

9:03 And also a guy named Terry Blacek, who runs Orange Theory. And they both have a perspective that says, you know, I have to grow my business in order to provide opportunities for my employees and for my instructors. Right. Because I need more hours. But I also will not outgrow my business purposely because I'm not going to deteriorate the quality and the efficacy of my program. So it was kind of like. And both of them kind of said, like, I'll take a lower private equity deal if someone that wants to grow at my pace, because I'm not going to open up locations because they're not a box and it's not a studio. Like, this is actually like a system and it's a business, and it's like a. A replication of who I am to an extent. And I'm not going to let that, you know, falter from where it is today. So how have you kind of thought about managing growth and managing people?

9:56 I mean, last year, I would say, kind of tested our model of how we did that. We almost doubled in size, and we were really able to stay consistent in the experience that people received regardless of where they stepped into a mighty studio. And Cricket mentioned it earlier, but this idea that you're walking in and you're welcome, that it's very inclusive. We don't want technology to be the first thing someone sees when they walk in the door. We want it to be a smiling, welcoming face, a tour that takes you through the studio, a connection with a teacher that really understands how to move with your body. And what that means is that sometimes we can open with a schedule that's really full because we have qualified teachers. And other times we need to bring in a teacher training program immediately because we've scanned the market and there aren't teachers that are trained to the level that we require in our studios. And so it's been a balance to do that. But we do have this model where we know how to get people who have natural interest or talent and get them trained in the proper way.

11:10 This is Pete Moore. I want to let you in on a little secret. There's this company called Promotion Vault. And what they do is they give out rewards from retailers that allow you to incentivize your members without having to do zero down and one month free or giving away shakes or giving away T shirts. What you want to do is build a rewards program that lasts, that people value and that doesn't discount your own products and services. So here's the deal. There's something called Rewards Vault. The Rewards Vault is going to allow a member to set up their own profile. They are going to answer questions, you are going to get those answers, you're going to be able to target those members and you're going to reward them inside your club, inside your spa and outside of the club and outside of the spa to get them to become loyal, to get them to pay their monthly dues and to be rewarded properly for the actions. A lot of companies are cutting back on rewards. You shouldn't be Promotion Vaults. Your answer, trust me, this is real.

12:14 The one thing that I'm pleasantly, I wouldn't say surprised, but, but excited about with Pilates is that there haven't been any disruptors in the space that have come in and say like, oh, let's do like nine dollar Pilates or like, let's do like a planet fitness in this model. Part of it I think is a testament the, you know, the instructors and the fact that like you can actually get hurt if, if you're not, you know, doing these exercises properly. And I do a fair amount of plies now with, with the studio in, in Arizona and I think it's the best from a workout standpoint. It's definitely the best return on time of any modality I've ever experienced for myself and like what you see in the mirror, you know, after like 30 days and how you feel stronger, so on and so forth, you know, so as you take a look at like the price point and that some investors or some people say like, oh, there's too many Pilates locations out there. You know, there's also too many burger joints out there. But you know, a lot of people survive. So how do you kind of think about, you know, the, the category and the fact that, you know, Pilates is not going anywhere. It's not a fad. It's not, you know, like the next hit or it's not the next bar, like plies been around for know, I don't know, probably almost like 70 years, I guess. Yes. Yeah, I think that's a great question because we are actually for sure at the high price point in the market really, definitely at the top. And a lot of that is because we have qualified instructors. We go into neighborhoods that are like, you know, we don't

13:46 really go into strip malls. We really pick, you know, a place that has local coffee shop, lots of connections for the people. And, you know, we have seen, especially in la, there's a lot of people out there and there actually is people lowering their prices to get people in the door with Pilates. And sometimes, you know, we'll have somebody trace out something and they come back. It's. We. We really haven't seen it in, because actually, in Santa Monica, gosh, there might be like 12 within a half mile radius of us, probably a quarter mile radius of us, but we're still doing great there. And I do think some of the folks that don't have good training and don't have a great experience are going to unfortunately fade away in the next couple of years. And I just think there's going to be a little bit too much. But at the same time, it's just growing and people are realizing how great Pilates is. And so we are actually seeing an upswing in and people that, that come in and sometimes they've been to the places where they don't get good training and they're like, oh, wow, it's a really different experience here. So. So Kat coming in as CEO, obviously you and Cricket have been friends and, and colleagues for a long time. What are some of the things that you say, hey, we could probably optimize this, or, you know, like, maybe I could throw some optimization on, like, you know, like the process and things like that without kind of, you know, like, tinkering too much or like, say, like, hey, let's like, do an

15:19 overhaul of this. How have you kind of picked your spots, if you will. Yeah, absolutely. So I think, you know, coming in, Cricket had already kind of left her day job and I had stayed in the corporate world. So by the time I kind of got involved and saw everything that was going on in Mighty, I think there were still instances where technology hadn't been leveraged yet. There were a lot of people, a lot of Excel sheets kind of taking care of things that platforms can do and just purely speed up a process so that the people on our teams can actually do the thing we really want them to do, which is knowing your vacation's coming up, know how you're doing, know about your family. We really know our members. And so some of the things we've done, especially with opening new studios, is being really efficient on how we understand what's getting ordered, where things are getting ordered, some price efficiencies there, optimization, understanding not just, you know, the class time and the class program, but really taking a look at the instructor, the style. How do we optimize for both classes and privates? In our studios we have a really strong, healthy privates business, which is a bit of a differentiator. And in every studio we have really nice private space. It feels like a special space. So how do we kind of manage our teams within the studio to optimize each of those areas? Gotcha. And then

16:51 when you take a look at, you know, class schedules and the times and you know, people's new habits and you know, I used to, there never used to be classes at, you know, 1, 2, 3 o' clock in the afternoon because you figured nobody really could show for those. And I think, I think that's kind of been turned based on working remote and people making their own schedules. How have you guys kind of leaned into that and what have you seen that works and what are some of the things that you say? That's that we gotta shut this down at some point or is there more room to go? You know, each studio, I think what, because we've moved into neighborhoods, they have a community feel and we're a part of that community. We can't take a completely cookie cutter approach to certain hours of the day. Our 6 to 9ams are very busy in certain studios and sometimes that's in some neighborhoods, that's school drop off.

17:45 We are not going to get busy at the 7 and 8am hour, but then the later in the morning it is busy. So we really need to look at what's unique about the community we're going into and where we think Pilates is going to kind of fit into that community schedule best. Now some studios, you know, we're open all day long and we have some really urban, dense environments where we can have classes at 8pm because there's still people coming home from work, they're getting off the subway and they're hopping in a class that's not going to work in some of our, you know, more suburban locations. So we really are flexible on that piece. We've also rolled out a lot of new classes to kind of, in response to some of the new research that's coming out on longevity, on strength, we just unloaded a whole bunch of heavier weights in almost all of our studios because really what people are looking for and we want to make sure they understand, you know, there's a way we can work that in Now. The reformer is a beautiful machine that's been kind of perfected over time that we can use in so many different ways. But we know that the added weight helps. We know that's in demand of our clients, especially some of our male clients that are coming into the studios. And so we try to be nimble in response to that. Gotcha. So the last five studios, have there been anything materially different

19:15 that you put into those studios or size or number of reformers than the six legacy studios? Cricket was really ahead of the times, I would say, on increasing the number of reformers. Mighty had 12 reformers years before it was common in boutique studios. Where Most studios had six, they had already increased to 12. What we have begun doing is really incorporating towers into some of our new studios. Some other accessories that you can use with the reformer. But one of the biggest things that we've done in our new studios is gotten really clear perspective on what the design is within the studio and how intentional it is. We really want someone to come. I mean, our clients are incredibly busy. You know, we want them to come to our studio and feel taken care of. We want, you know, that's that little premium extra touch. And so the design has become very intentional. When you come into the studio, you don't need to look where to put your shoes. You don't need to look where to fill up your water. It's all. All really designed beautifully. We brought in some outside help to do that with the new studios, and it's made a big difference.

20:34 When you take a look at people's behavior, you know, used to. Every studio that I used to go to New York City had a shower, you know, had big locker rooms. What are some of the. What's like some of the mighty Pilates, you know, behavior isms of your member base. They want to chat. They. This is their time to connect. You know, interesting. Okay, gave God. And this is their moment in their day. That's theirs. And so we create spaces where, you know, I walked into a studio the other day and someone had their laptop up. We have a coffee, a tea beverage area. They were chatting with a friend. They met there. They were taking care of emails. It just. It feels like a place where, you know, it almost kind of feels like it's as nice as your house. You would have these things in your home. So that's, you know, so it's an environment where people use that time to catch up. You know, like, we hear people saying all the time, like, we'll see you at Mighty. As they're on their phone, they're walking, you know, where we have, where we have parking, which is in a lot of our studios. We tell people, you know, stay there for a couple of hours. We want this to become a part of their routine and we really make it easy to do that.

21:52 Yeah. So I would say, Pete, we would always put round chairs where they can talk to their friends above a shower. And we really, like she said, I mean, we didn't used to have a coffee and tea station. We didn't used to have all these things. Now we, you know, we always actually have had a fun happy hour class where we serve a little champagne. It's probably more champagne in some studios and more juice in the Santa Monica studio, but that's always been something important. And I can go to the San Francisco studio and see the same people that were there 16 years ago. They all know who's had babies, who's gotten divorced, who's going back to school. And that's really important to us to maintain that sort of community environment.

22:38 So it's like a buzzword right now of community. But that's like one of the things we started that way and it's not going to change. This is Pete Moore. Here's the last tip for you of the podcast. We are partnered up with a company called Higherdose. Higherdose.com they are the leader in workout recovery products. Infrared technology, LED light masks, neck enhancers, and other products such as PEMF mats and sauna blankets. If you have not gotten on the workout recovery train yet, your time and your stop is now. You got to get these products in there before these workout recovery and spas end up saturating your market.

23:24 Having your members walk out of the club and going into one of their locations for 200 bucks per month where they're paying 39 to you. Let's become an expert in workout recovery. If we are already an authority in workouts, higher dose, check it out. There's a wholesale code and we look forward to helping you augment your products and services to meet the demands of your members. And hey, let's get people happy, healthy and sweating. And the recovery should be just as good as the workout. You know, a lot of people like to say business is using the term like scale, you know, and sometimes scaling, you know, sounds great or looks good in an Excel sheet, but doesn't really feel right, you know, on the ground floor. So how do you think about, you know, the next three to five Years, you know, I, I know because I've seen, you know, what you guys have done that you haven't made any quote unquote, like mistakes right on, on location. So obviously it's about can I get a good lease in the neighborhood I want to be in and is it the right cost structure and the unit economics going to work?

24:33 So how do you, how do you think about, you know, scaling intentionally and not for the sake of like doing it because it looks good in a financial model. Cricket, do you want to take scale? Sure. So we look at scale in two ways. You know, more revenue per customer, you know, more time in studio from customers, which we work on a lot. We use AI for utilization and all those things. That's, that's a constant in the business. We are never, you know, if you look away and you don't focus on retention, you're done. And then the second one on the scale I get, you know, you've probably definitely realized Cat's the operator on the call and I am the entrepreneur. So I'm not involved in the day to day business except for selecting studios. And it is a, I mean of course we use again AI tools and things like that, but for me it's the feel what's around there. So we're kind of slow. I probably look at 12 locations for every one that we select.

25:31 And of course the money's there, but you know, like looking at the rent and things, but that's important. And we do plan to scale. You know, opening five in a year was not a problem with scale for us. That's great. It's a lot being 50 in a year, that's not what we're planning on doing. We actually don't franchise right now. We've used existing revenue to open those five studios and you know, you know, opening a few to 10 a year is no problem for us, but we're not really looking at right now. You know, we'd be open to some things, but you know, we really worry about just the mass growth all at once because that's not our DNA. Other thoughts on that? No. Agree. Okay. And, and then just in closing here, from a standpoint of, you know, being in San Fran, being in la, is there, you know, if you want to disclose this or not, but is there another market that you're like, you know, this is the, the next city, or is it, you know, expanding LA to, you know, greater LA down to San Diego? Is it, you know, infilling in San Francisco? What are your thoughts on that? Sure. So it's definitely expanding more in these key markets right now, especially in San Francisco. We're not feeling any economic pinch at all.

26:52 We've really looked at Chicago. We love and there's a couple big cities. We like places where you can go urban but that you can also go to high income suburban locations around a city. We don't plan on going in markets and putting one or two there, really. We love the idea of one, you can host the teacher training there, you can get more teachers and then you can expand out. So we've spent a lot of time thinking about that and that would be one place we'd really want to focus on. All right, that's awesome. So thanks for coming on. It's great to reconnect. We'll do another podcast in exactly 10 years so we can wrap up this 20 year journey from Manhattan beach to maybe wherever we are in some suburb in Chicago to end the chapter.

27:40 We need a little Pilates ceremony. Yeah, exactly, exactly. So congrats on what you guys have built to mighty Pilates and for all of our listeners here too. Understand that you build the business right, put the foundation, then get some of your best friends to join the business that know what they're doing is not a bad idea on how to run a business. So congrats on what you built and keep going and keep moving. Amazing. Thanks for being a great supporter for us. No problem. I love it. This is Pete Moore on the halo talks. Your captain speaking. I am the founder and managing partner at Integrity Square. We've been around now for 15 and 1/2 years. We have been helping people like yourselves get capital, do mergers and acquisitions, consulting, strategic advice in the health, active lifestyle and outdoor halo sector, trying to help as many entrepreneurs as possible get to the next level and take that inflection point point and be the force behind your growth.

28:43 We are helping companies that have at least $3 million of EBITDA, around $10 million of revenue and we are positioned to help you get institutional growth capital or to negotiate deals with strategic partners. If you go to integritysq.com isq you can see our capabilities Deck. Happy to set up a consultation at any time that is free of charge and we look forward to helping solve obesity, loneliness and diabetes. Go Halo.

29:31 Sam.