The Future of Fitness

Sarah Stebbins | January 29, 2021

DISCLAIMER the full fitness landscape is too broad to encompass everything in one post, so this article is focused on consumer and recreational fitness. In the market map, some companies may fit into more than one category, but are positioned as optimally as possible for the given layout. Trademarks are the property of their respective owners. None of the companies illustrated have endorsed or recommended the services of ICONIQ Growth.

The start of a new year is synonymous with jam-packed gyms, full waitlists at SoulCycle, and yoga classes so packed that you can’t see the floor. This year, the scene looks a bit different — it’s a Peloton leaderboard surpassing 10,000 riders on New Year’s Day, fighting for Queen of the Mountain on your favorite Strava Segment, and promising yourself that this year will be the year you meditate every day as you subscribe to Calm.

Fitness as an industry has undergone many revolutions. In the ’80s / ’90s, the fitness fad of gym classes began — classes like Zumba and BodyPump were some of the first to bring music, movement, and people together. And in the 2000s, the increased popularity of television and internet gave rise to the original version of at-home fitness, with P90X and Insanity selling off the shelves.

Though all of the aforementioned programs are still alive and well today, the 2010s brought in the next wave of fitness fads with the advent of community-based fitness. Propelled by companies like SoulCycle and Barry’s, boutique fitness classes were leading the charge to something much deeper than rhythm and sweat: the idea of social fitness. But as community-centric as these boutique fitness classes may be, they also left some opportunity on the table for more affordable and accessible alternatives. This paved the way for other innovative social groups like the November Project and apps like Strava to further build a community around fitness without the high paywall. The deep community embedded within these classes and groups has become a characteristic integral to many of the most successful fitness start-ups to date.

As we reflect on the plethora of fitness tech upstarts we see today, community remains a centerpiece — from connected fitness companies like PelotonTempo, and Hydrow to social networks like Strava and Alltrails to training-focused platforms like Aaptiv and Future. Beyond community, the next generation of fitness technology has been built outside the construct of the traditional gym — increasingly platforms are seeing how fitness can be built at-home, outside, and online. While many fitness startups have come and gone, the stickiest fitness platforms have remained those with a strong, supportive community to motivate people past the January gym rush and through to the end of the year.

While community will continue to be a key underpinning of the future of fitness, we believe there are three broader themes that will drive this new wave of fitness in 2021 and beyond:

1) The Fitness Creator Economy Will Boom

Fitness has always been full of entrepreneurs, but coaches and small businesses across the industry have often been underserved. Personal trainers often have to partner with a gym, which will generally take a sizable commission, in order to grow their own clientele. If one prefers to try the organic route, trainers or coaches might resort to posting free content online. When COVID first began, 480,000+ trainers lost a key source of income and were forced to think outside of the box to recruit new clients through social media or solicit donations through livestreams and Venmo requests.

As fitness shifts to more virtual settings and the demand for better access to fitness instructors increases, the creator economy has boomed. While monetization has historically been a challenge, companies are now building tools to help a variety of individuals monetize the unique content they create. Just like Patreon has helped artists, Kajabi has helped small business owners, Podia has helped online course creators, and Substack has helped writers, platforms like PlaybookStrydal and Superfit are now helping fitness instructors launch their own subscription platforms. These companies are helping coaches easily create content, distribute it to users, build a following, and track analytics to manage virtual fitness businesses.

In a more structured manner, companies like CaliberFuture, and Freeletics are building direct-to-consumer coaching platforms with an embedded community and brand. While trainers for these companies must be hired by the company (versus launching their own subscription), the unit economics for trainers are preferred and the sense of community among users is stronger. There is demonstrable market demand for platforms that connect instructors and clients directly, and these companies have built a product to optimize the experience for both instructors and customers alike.

Expanding from individuals to small businesses, platforms like ClassPassMindbody, and Urban Sports Club provide a platform for local studios to increase their reach and give individuals the chance to experience more unique studios. Though these companies have suffered more during the pandemic, they will be essential to bringing local studios back to capacity in the future. In 2021, we believe building platforms that elevate both creators and consumers alike will be critical to the success of fitness entrepreneurs of all kinds.

2) Fitness Extends Far Beyond Exercise

More than ever, fitness will be viewed as a holistic experience. One area that 2020 and the pandemic has brought to the forefront is the importance of mental wellness. We have seen hypergrowth in meditation apps like HeadspaceMeditopia, and Calm, along with increased support from employers providing access to mental healthcare platforms, like LyraGingerMindstrong, and Modern Health. Moving forward, we believe an increased focus on mental health will accelerate growth of both B2B and B2C opportunities.

Beyond mental health, optimizing recovery has become a key focus for competitive athletes and leisure athletes alike. Companies like OuraWHOOP, and Eight Sleep have redefined how people think about their fitness routine. People are focused on optimizing recovery as part of their fitness routine; fitness has extended to encompass continuous cycle between exercise, recovery, and sleep. One quadrant of the market map still ripe for the taking, however, is the combination of mindfulness, recovery, and social. Though WHOOP has begun to enter this market from the recovery standpoint, as meditation continues to trend, there may be an opportunity to build a deeper social network centered around mindfulness.

3) Bringing Community-Based Fitness to the Home

The pandemic has forced many people to re-evaluate their daily routines, causing both companies and consumers to adapt; and after nearly a year of this “new-normal,” we believe some of these trends are here to stay. Upon the initial wave of the pandemic, fitness classes that surged in the 2010’s swiftly pivoted — suddenly SoulCycle had an at-home bike set-up, Barry’s had at-home classes and free live Instagram classes, and the November Project had meet-ups over Zoom. While digital-first and connected fitness companies recognized the rapid ascent, traditional fitness classes also found a way to remain relevant.

Throughout the pandemic, traditional classes innovated to fit into the upper quadrants of subscriptions and connected fitness — quadrants that had recently been trailblazed by a myriad of new technology companies. Whether it’s strength training in Aaptiv, cycling on Zwift, team training on Ladder, or the variety at-home training platforms built by “fitness creators” (Playbook, Future, Superfit, etc.), the ability to share training content in a remote environment has been fueled by the pandemic. These content-specific platforms tend to have a higher affinity for finding the right instructor or coach to be your champion and motivate you.

In a complementary fashion, there has been a massive spike in connected fitness. Whether it is Tempo revolutionizing the strength experience through OCR technology, Peloton creating a cult-like following across multiple sports, Ergatta building a gamified workout experience, or Hydrow bringing rowing into your living room, companies are creating different ways to connect people through fitness. For these companies, the focus tends to be more on the community of people around you rather than the specific coaching you are receiving.

Enhanced digital and connected fitness have been crucial through this pandemic, but we believe are only at the start of their growth journey. These categories have not replaced brick-and-mortar classes but rather expanded the realm of fitness as an industry. Just as classes have created immense loyalty through community and coaching, digital and connected fitness are bringing these two crucial aspects of fitness to the home (and often at a more attainable price point).

January 1st always represents an interesting opportunity — a chance to reset, refocus, and re-engage. 2020 brought many surprises and challenges, but at the same time it gave companies across industries the opportunity to innovate and realign their mission with their customers. Back in April, Satya Nadella commented that “we have seen two years of digital transformation in two months.” While Satya was referring to the power of the Cloud, the same holds true for fitness. Community-centered fitness, technology-driven fitness, and convenience-first fitness trends were slowly being adopted into mainstream fitness for years, but 2020 led to a warp speed acceptance. In 2021, these companies will continue to grow, innovate, and pioneer the future of fitness.

*Have any thoughts or building a company that is going to redefine the future of fitness? I’d love to chat. Email me, tweet me @skstebbins, or follow me on Strava (Sarah Stebbins) and Peloton (sksteSPINS) 😊