The Future of On-line Coaching
Our photo this week is my friend Sandi on her way to a personal best in the Edinburgh Marathon. A PB and a big smile! I also want to give a shout out to my pal (Miss A) in Sydney, she's going through chemo right now and good thoughts come in handy. The Byrn Family sends you a healing vibe...
Alan and I started a "book club" here at GordoWorld HQ. The first one that he offered me was "de Castella on Running". I will give you a chance to read it before I offer up my book review -- well worth the time to read. My book for him was "The Richest Man in Babylon". Mat has joined us for the summer so, perhaps, he'll throw in a good title.
I had a quote sent to me from Vern Gambetta's Blog -- I surfed the blog and found a great post on success that he linked up from three articles -- Really Good Stuff.
More than being smart, what's helped me is the ability to learn from smart people. Thank you to all the readers that share their "good stuff" with me.
My buddy Ken is doing his MBA at Berkeley. He is kind enough to keep me in the loop on the latest developments in entrepreneurship as well as what's happening in the Bay Area. I've been developing a business plan for a new company and we have been sharing ideas covering technology, coaching, on-line communities and what's 'happening' on the internet. Much of what follows is a reflection of various ideas that Ken's shared with me -- perhaps there's value outside of Harvard after all... ;-)
This could be a bit choppy as I'm still working through my ideas . Writing is, part of, how I think and develop concepts/strategy. In addition to Ken's tips, Alan has been surveying the wider coaching, community and training applications market -- he's put together some surprising briefing papers that have been really helpful to my Advisory Board. When it comes to fact-finding and analysis, he does a far better job than I could. I tend to "rush to judgement" -- Alan's the other way, he'd still be doing research if I hadn't put a deadline on him...
...we're a good fit.
On-line coaching (triathlon) is a bit unique on the internet in that clients pay for content. Other successful content models that spring to mind are WSJ-online and The Economist. In those cases, I pay for timely, specialist content, written by smart people. The content (for now) is superior to what's available on the free sites.
But perhaps triathletes aren't paying for 'content' -- perhaps they are accessing an application for peace-of-mind and to make contact (on some level) with the founder/creator/moderators of the site. Perhaps they _want_ to pay to feel like they are doing something positive for their athletics -- I know that this is a big driver for the urge to "get a coach" or "join a club".
With web technology, it is tempting to over-invest at the front end to increase the "gee whiz" factor with clients and, therefore, justify the subsciption fees that are charged. Personally, I'd want to attract people with a reasonable, free beta version -- let them debug and help me design my vision.
Another approach is to be a follower of technology and focus on creating a simple, effective application. A low overhead front end where you plow a decent chunk of revenues into direct marketing to your clients -- late summer/early fall advertising, free articles and booths at key expo locations.
Both of these models are operating successfully in the triathlon marketplace. What struck Alan and me was that in other sports 'coaching' applications are given away for free -- equipment manufacturers develop them to build their brands; shift product; and attract traffic.
If you are shifting millions of dollars of merchandising, then fifty thousand (per annum) on programming is merely a portion of your marketing budget. Fifty grand per annum across five years would wipe out (the technical edge) of all the existing players.
I've had two smart companies approach me to build a coaching business for them but they wanted me to do it, essentially, for free. Why would a coach:entrepreneur build a brand for free? Within a branded goods business, it is straightforward to calculate the increase in equity value that can be created from a successful web-marketing strategy. I'm sure that many people see the opportunity -- however -- we are all busy folks. Someone will need to get on with it.
When I think about what matters in an on-line training program -- Basic Week Generator; Log; Season Planner; Reference Articles -- these components manage themselves once built. The founding team can sit back. I don't see sustainable advantage from a content, or application, driven business model.
The structure of athletic success // consistent, variable overload across time // that doesn't require constant revision of reference material and application drivers. It's a lot like coaching -- once you've "taught" your athletes your protocol then client retention is down to: (a) whether they like hanging out with you; (b) whether they are proud to be associated with you; (c) non-athletic value addition (life skills, career management); and (d) the team/community aspect that you create within your business. There could be more -- that was off the top of my head.
So I've been thinking how all the above will impact the new business. Four things that I've come across and have been thinking about for the new business:
A -- Good brands market themselves
B -- Build it for yourself
C -- "If I had asked my customers what they wanted, they would have said faster horses" -- Henry Ford
D -- A business exists to serve the goals of its owner
When those components mix in my head I get the urge to strip away the endless complexity that is conjured up to market products & services. Complexity in goods to make you pay for more gizmos. Complexity in services to make you pay to look inside the Black Box.
Why not offer a simple program and spend time supporting clients in a manner that enhances success?
Some people just want a plan -- give that for free. Others may want interaction, personal advice, a deeper understanding (the complexity behind the simplicty) -- they can purchase consulting services or join an on-line community. This level of interaction requires: judgement; share of mind; and experience. Specialist advice that requires human capital -- providing sustainable advantage within the advisory team.
A key question -- "How would you respond to a new entrant offering your application for free -- what is your sustainable advantage?"
Looking ahead on the technology, I expect that we'll see "coach-in-a-phone" shortly -- PT On The Net as well as Dave Scott's site are laying the foundations for this next step.
Mark asked me my thoughts on the best video feed; I thought about that for a bit and advised him to wait until the market sorted it out. Just like podcasting gave all of us the ability to become radio broadcasters; I'm sure that vod-casting (or its equivalent) will be worked out in 12-24 months.
Similar to PT On The Net -- I expect that we'll get PT-down-the-wire with workouts coming directly down the internet into plasma TVs -- there are people doing this already via DVD. I don't think that their current pricing models are sustainable as new entrants will enter the market and give it all away for (close to) free. If a company has a subscriber base of several thousand readers then you can pump the workout down the line for 25c, or give it away for free by selling an advertising header/footer.
The personal training market is going to split into low-end (cheap and cheerful) and high-end (relationship/high value added) -- the people in the middle that are charging $50-80 per hour to hang out with clients -- they will get squeezed.
A bit of an aside... I've never been able to figure out tech-valuations -- given the rapid change; the tendancy for competitors to give away applications for free; the near-zero site loyalty... why the large valuations? I'm sure there is an army of investment banker writing reports on "why" but I don't see sustainable, long term cash generation. I'm a long term cash-flow kind of investor.
Video coaching -- I was riding yesterday and thinking that it must be possible to combine GPS, key workout structure, and coach video into a handbar mounted device. You could have Coach Gordo along for your ride -- in my dream, I had Dave Scott telling me not to slack off with my twenty minutes standing on the flats!
Some of the more nimble triathlon entrepreneurs are starting this process with Computrainer's group training product -- Mark joked that it was the perfect combination for overtraining... twelve triathletes; loud music; head-to-head video monitors and sixty minutes on your lunch hour... you don't even get a chance to "sit-in" -- hammer down the whole way!!! :-)
Video consulting and conferencing -- watch the weekly or daily briefing where the expert panel discuss questions that were sent in by their clients. Personalise the concept with high quality "face-to-face" interaction with the smartest minds in your sport, or industry.
If we look to the hourly rates in law, taxation, accounting, finance then the best of the best will be able to greatly leverage their knowledge. The challenge faced by many highly skilled people is that they are tied to their office and local geography -- that's going to change. You'll have the world on a plasma screen in a few years, if you want it. I see it starting with live video feeds into "success conferences".
The question, "How do we position our team, and create the reach, so that we'll be able to access the clients that will want these services?"
From my own point of view...
>>>front end costs should be incurred to leverage personal human capital
>>>a model focused on traffic / reach generates a return via an increased premium earned on personal human capital
>>>follow technology via the widest, established channels -- let MS, IBM, Yahoo, Apple and Google battle it out. Sit under the technology umbrella of the market leader(s).
>>>consider how to address the 'entertainment' factor -- 'gee whiz' is how a lot of people have fun // very important in coaching as it is recreation for the target market (as well as distraction at the office!)
>>>focus on increasing specialist knowledge and experience -- entire team must be dedicated to continual study // human capital, connections, networks and real relationships. While the basics remain the same, the ability to appear at the cutting edge is good marketing. Looking at it another way -- race results attract clients; delivering success keeps them.
>>>share expert information/experience constantly and as broadly as possible.
>>>invest assuming that your application can be wiped out in 12 months. The established players are better funded (essentially "free" equity) and have the ability to crush you whenever they feel like it.
That's a tough way to end it -- good thing we sit on the fringe of a niche sport.