 Five from New Orleans, Louisiana, at theCUBE. Covering .NEXT Conference 2018, brought to you by Nutanix. Welcome back to theCUBE. This is SiliconANGLE Media's live production of Nutanix .NEXT 2018. If you've eaten a lot of the cuisine here in New Orleans, you might want to do something to help burn those calories. And joining us for this segment, we're happy to welcome Sarah Rob O'Hagan, who's the CEO of Flywheel Sports and also the author of Extreme U. Sarah, welcome to our program. Thanks for having me. Tell us a little bit about your company and what brings your group to the show. Yeah, we're very excited to be here. This is a whole new experience for us. Flywheel is an indoor cycling business. So we started off as basically bricks and mortar indoor cycling classes. And we were the first company to put technology on the bike. So have either of you done spinning before, ever? I've seen them in a gym. You've seen them in a gym. I take my bike on the trails and get my kids out a bunch, but not indoor so much. So in the old days, if you did a spinning class and the instructor was like, turn up your resistance, you'd maybe kind of pretend, but you didn't do it. Whereas we put tech on the bike. So it's like, oh, you have to hit this number and you got to get this output. And so it makes it much more athletic and accountable. And then we just recently launched a streaming platform. So now you can stream the classes into one of our bikes in your home. It's called Fly Anywhere. So we ended up coming here because I was speaking at the conference with regards to my book. And we were like, these are fun people. They're going to want to check out our bikes and our tech. So let's do it. Wait, wait. So the tech people, are they getting engaged? Are they trying it out? Amazing. Yeah. We've seen people like riding to win the leaderboard wearing jeans. It's fantastic. That is, I'm a runner. So. Yeah, me too. But there's certain runners and there's certain cyclists that there's this built-in competition, like, ah, cycling is for the hardcore folks that really like to work out. And then you have guys like me. I can't screen an app to say, hey, you know what? You need to pick up your pace and keep it moving. That is an amazing kind of innovation, especially for that market. There's an awful lot of competition. How are you differentiating yourself between the competition? That's a great question. So it starts with who we're serving, who we're doing it for, right? So if you, there's about 100 million people in America that work out maybe between zero and six times a week. Our consumers are the ones that are like five to six times a week. They are hardcore, they're intense. They like competition. They are like, I can't let the kids win a monopoly kind of people, you know? And so how we differentiate is everything in the product has been designed with them in mind. So allowing them to really push their own performance in a big way. And the metrics, like every time you do a ride, particularly on the streaming platform, like you can pace against yourself last time you rode. So you can see, am I keeping up? Am I doing better? So it's basically about really focusing on one kind of athlete, as we call them, and meeting their needs the best that we can. Yeah. The digital transformation is hitting your industry hard, your streaming now. You've been through some big brands in the past. How's this impacting? How does your company deal with the pace of change? Well, you know, it's funny, like I have been lucky in that my career, I've journeyed through some very big, iconic brands. So I was at Virgin Mega Stores when we used to buy music. Do you remember on things that went round and round from a retail store, right? And then along came Nats, they're totally disrupted that industry. I was at Gatorade when we had to transform that. And what I've learned along the way is that you just have to commit yourself to constantly innovating and disrupting yourself. Because if you let the environment do it to you, it's too late. And so I think that's how we think about it. We saw it not so much from the market because certainly streaming is taking off. Like health and fitness apps in the app store are always the top category, both Android and iPhone. Also, boutique fitness was exploding. So that's where you do one kind of modality as opposed to going to a full service gym. And so we saw these trends happening, but then you speak to the consumer. It's like, what are you looking for? And what we kept hearing was, I love being at Flywheel, but I wish I could get it when I was on the road, when I'm in the hotel, when I'm, you know, and so we're like, how do we bring our content to you wherever you need it at any time? So that was really what led to it. So I'd like to talk to you about discoverability. Like you said, go to the app store, you know what, you Google fitness app, you're going to get 10,000 results. How do you guys rise to the top? How do you find new customers? So interestingly enough, we, I think are lucky because of our existing business. So we have a footprint of 42 studios. We have 600,000 people that have ridden with Flywheel over the years. And what's neat about having that in-person experience is you really build brand evangelists. So a lot of our early sales of the streaming platform have come from those people who are telling their friends about it who are not in communities where our studios exist. And then from obviously a paid digital ad standpoint, we can get very, very specific into look-alike types to the kinds of consumer we have because they have pretty standard typical behaviors in terms of they happen to do a lot of marathons, they happen to do tough mutters and stuff like that. They're runners, they're doing strength workouts. So we can see what these kinds of people are online to like really be focused on how we target them. Sir, what about the monetization? You know, there's the freemium models, there's all different things. How has this move impacted that? It's a great question. So we're doing our streaming as a subscription model and actually we look for a one-year commitment because we really believe that, particularly because we're going after someone who's very engaged in the category, we want them to sign up and be with the program and basically get that loyalty to not only the programming, the instructors they love, but the data. Like, once they've got data in the system, it becomes, that's a method of loyalty because I want to, you know. It keeps them wanting to know what their previous results were. So that's a lot of, for us, we're not really doing free leading in. I mean, certainly we do trial classes in our studios, but we know that people, basically, if they make a commitment, that's how they become really loyal to our brand and our category. So talk to us as a leader and someone who's, you know, there's probably nothing more personal, more critical to me than my running data. Like, I completely trusted to my cloud provider and if it was to ever go away, I'd be devastated. Like, you know, if I have a big running goal, as you pick technology partners you have that weight, like someone may look at it from the outside, oh, what's the big deal if your cycling data is gone? That's very serious. How do you pick technology partners that help you to extend the trust that your users put into you to your technology partner? We're just so, like, it's so profoundly important to the relationship with our consumer that when we're picking technology partners, we're always going to go for best in class and we're always going to make sure those other people that we know are treating the data with the same kind of importance, I guess, that we are. So, for example, we're actually doing a lot with Apple right now, not surprisingly, with the Apple Watch because that's the kind of partner. We see so many of our riders are using Apple Watches in the experience anyway and we want to be able to take the data that's coming through that device, add it to what we're getting off the bike and make it more meaningful for that particular consumer. So, it's very important to us. We would not ever go with some fly-by-night tech partner if they didn't have the kind of credentials that we were looking for. All right, Sarah, tell us about the book. Step up, stand out, kick ass, repeat. Kick ass, people, that's what it's about. So, I wrote the book about a couple years ago. It's interesting how it came about. You're a runner, so I think you'll appreciate this. I have three kids and my kids were going and playing youth sports and coming home with participation trophies. I'm like, what the hell is that? Like, why did you get a trophy for just showing up? And then at the same time, I noticed in the workforce, like younger employees that were coming in who are like, where's my promotion? I'm here and it's connected, right? And so I started to do a lot of research and I realized that for 20, 30 years, we had been raising kids from a self-empowerment standpoint to not expose them to risk and failing and all of these things, yet the most successful people in the world have gone through really tough times to get there. And so I went down this journey of interviewing some really incredible people, like from Condoleezza Rice through to Bodie Miller, the skier through to Mr. Cartoon who's a tattoo artist, like all people who are top of their game and what they do. And to basically weave together what were the commonalities that got them there to help educate another generation of how to do the same for themselves. And then also applied it to business. So take those themes and then how do you bring that to life as a leader within your team to get the most results out of your organization? Well, it's surprising. Well, I guess it's not surprising. How many people in our industry that are high performers, executives, that are also extreme athletes, whether they're extreme cyclists, or ran into a ran with a group of people the other day, one of the cyclists says, you know what, my biggest complaint about the iPhone is only last three hours. No, yeah. Yeah. Which is a huge complaint. Yeah. For sure. And that same attitude extends out. One question about innovation. Yeah. How do you guys consider or approach innovation in a market that actually, you know, like cycling, pretty straightforward. Yeah. You know, get on a bike and you run. Or if you're not, you know, directly creating equipment, how do you guys consider innovation? Is it just physical? Is it data? Is it services? So all of the above, right? And what I love about being in this category, I've been in sports and fitness for 20 years. I was at Nike. I was at Gatorade. Now I'm at Flywheel. And what I love is innovation is all about, are we making the athlete better? Period. And so it's such a clear filter. And that may be through data that gives you insights of how you rode today versus yesterday. What did you eat? Did that make the ride better or worse? Or it may be the, in the case of Nike and Gatorade, the products you put on your body and your body. Like they're all in service of helping you be better. And I think it enables us to sort of like, not get distracted by the sort of, oh, this is the cool hip thing right now that everyone's doing in every category. And instead go, well, is that helping to make an athlete better? Is it motivating them? Is it helping them physically? Is it essentially getting them better results? All right. Sarah Robo-Hagan, thank you so much for joining us. It's been fun. Definitely have to check out your area before we wrap up. Awesome. We'll be back with lots more coverage here from Nutanix.NEXT 2018 in New Orleans. For Keith Townsend, I'm Stu Miniman. Thanks for watching theCUBE.