#5: Product-Market Fit in the Fitness & Wellness Industry
"Healthspan" is changing fitness' target customer.
Healthspan and longevity are concepts relatively new and distinct to the 21st century. Before 2000, less than 15 papers were published with “healthspan” in the title or abstract. Yet, evidenced by a $127.8b consumer health market, significant funding, and irrefutable peer-reviewed studies on chronic disease, aging, and overall wellness, healthspan has entered into mainstream health discourse.
In order to take advantage, fitness and wellness companies are asking the question: how do we capitalize on this nascent market?
The answer lies in understanding the fundamentals of product-market fit (PMF).
PMF is defined by entrepreneur and venture capital legend Marc Andreessen as finding a good market with a product capable of satisfying that market. He believes that the lifeline of a startup is dependent on whether they ever reach PMF and that an emerging company’s timeline is divided into just two stages: before product/market fit (”BPMF”) and after product/market fit (”APMF).
As a company, you know you’ve reached product-market fit when users are growing faster than you can produce your product or provide your service. It is apparent when a company hasn’t achieved PMF — sales cycles are long, customers don’t review the product/service as valuable, and there is minimal word-of-mouth exposure to potential consumers.
In the startup version of what came first, the chicken or the egg, there is still considerable debate over what is more important, product or market.
According to Andreessen, product-market fit has nothing to do with the actual product, and everything to do with identifying the needs of a population:
“In a great market — a market with lots of real potential customers—the market pulls product out of the startup.”
The product itself doesn’t have to be all that great to begin with. It is almost always better if you can get customer feedback on v1 of your product as early as possible so that you are iterating with a clear purpose.
Andy Rachleff, Founder of Benchmark Capital and current CEO of Wealthfront, holds a slightly different viewpoint on finding PMF:
“In contrast to what most people think entrepreneurship is, which is evaluating a market to try to find the holes or the problems and developing solutions of those problems,…start with the product and try to find the market as opposed to starting with the market to find the product.”
Regardless of whether product or market is more important, the challenge with the fitness industry and healthspan is that consumers want solutions to problems they didn’t know previously existed.
When thinking about PMF in the fitness and wellness market, I see successful companies following Rachleff’s emphasis on transformative technology.
AI diagnostics are uncovering otherwise undetectable health issues. Wearables are showing users the impact of lifestyle choices on their health in real-time. Personalized supplements are unlocking enhanced quality of life that consumers have never before experienced.
To illustrate the ever-evolving health and wellness market, just look at wearables. Sweat sensors, heart rate trackers, and continuous glucose monitors have all recorded increased YoY adoption from laymen — a stark contrast to their original target audience of high-performance athletes.
Much to the disappointment of larger companies and the delight of emerging ones, the fitness industry is distinct in that the market comprises of many unique audiences. A yoga studio boasts a very different audience than that of a powerlifting gym which is different from a kickboxing class. These differences in audience bring both immense opportunities for innovation and substantial difficulty for a single company to capture a sizable market share.
The fitness and wellness industry will continue to grow, as healthcare spending shifts toward 60% prevention and well-being by 2040. Consumers are finally realizing what President John F. Kennedy meant when he said:
“It is not enough for a great nation merely to have added new years to life. Our objective must also be to add new life to those years.”
It will take investors who understand the needs of new audiences — the result of prioritizing healthspan and longevity — to help bring innovative ideas to fruition.
Jim Crowell, Managing Partner of The SageHouse, brings experiences as an athlete, coach, and trader to venture capital. As an athlete, he learned the importance of having a deeper connection to health and wellness. As a coach, he identified the pain points of his clients that weren’t being satisfied by the fitness industry. As a trader, he gained a stomach for investing large amounts of capital and holding positions long-term.
In his current role, Jim helps fitness companies “Go farther, faster” by investing and consulting. His portfolio spans connected fitness, digital health platforms, and infrastructure that supports every aspect of healthy living. Understanding that people want to enhance their quality of life, Jim will be launching “Proof 3”, a series of healthspan-focused brick-and-mortar gyms in Q1 of 2024.
To learn more, listen to this week’s podcast episode with Jim Crowell, Co-Founder and Managing Partner of The SageHouse.