Number
TRX: 350,000 trainers certified, in up to 70,000 gyms
Hetrick says TRX has put close to 350,000 training pros through its coach qualification courses and is in roughly 50,000 to 70,000 gyms and studios worldwide — most of them closed during COVID.
$350K
Trainers certified through TRX courses · trainers
“And we've put close to 350,000 training pros through our— our TRX Coach qualification courses. And we're in about, I don't know, somewhere between 50,000 and 70,000 gyms and studios around the world, most of which are closed right now”
Fact
Institutional capital is roach motel money
Hetrick warns that once you take institutional capital, it's very hard to get rid of — he had to recapitalize the business in 2018-2019 just to exit his initial PE partners.
“because that's one of the dirty little secrets about institutional capital is once you take it, it's very difficult to get rid of”
Steal thisTreat institutional money as semi-permanent — only take it when you're prepared for a long, hard-to-undo relationship.
Framework
Stay on common stock until you're ready to sell
Hetrick argues founders should avoid preferred-stock structures and prefer angels (who invest on common) until they're ready to sell a chunk of equity or exit, because a preferred layer destroys the solidarity across the cap table.
“Generally, angels are willing to invest on a common stock basis, which, you know, I strongly recommend to entrepreneurs that they stay away from preferred structures up until they're ready to to sell a significant piece of their equity or exit altogether. Because once you bring in a preferred layer of equity into the cap stack, everything's different in terms of the solidarity that you once had, right, across the team and the investors, because that changes.”
Steal thisRaise from domain-expert angels on common stock and delay preferred structures until you're ready to sell or exit.
Number
TRX revenue: from $30M at first PE raise to $60M+
Randy Hetrick says TRX was around $30M in annual revenue when it first took private equity, and is now north of $60M.
$60M
Annual revenue · USD/year
“In annual revenue, yeah. Who knows? We'll be north of— probably north of $60 million somewhere.”
Framework
The magic wand product: low expectation, high astonishment
Hetrick describes TRX as a 'magic wand' — 12 feet of nylon webbing that looks like nothing, but in the hands of a trained pro produces astonishing results. He frames the rare advantage as a product people approach with low expectations and leave amazed.
“And, And that's a unique characteristic that not many products or services ever have, which is you have people that come in with a very low expectation and leave with a very high level of astonishment.”
Fact
Why pure product companies get punished on valuation
Hetrick explains that durable-goods companies get lower multiples than tech because their products last forever, forcing them to either fund expensive R&D for new products or constantly chase new customers — while tech has the potential to scale infinitely.
“I think that's why pure product cos get what I would say unfair valuations relative to some of these more fake companies that are tech-based companies that have the potential, not the promise, but the potential to scale infinitely. And so, those kinds of companies tend to get higher valuations than gear companies.”
Steal thisBolt subscription, content, or education revenue onto a hardware business to escape the low durable-goods multiple.
Story
Close rate dropped from 100% to 5% without Randy in the room
Hetrick had nearly a 100% close rate selling the suspension trainer one-on-one, but when buyers only saw a picture on the website, conversion collapsed to 5% — which forced TRX to scale his product knowledge through a trainer education business.
“So, if I was with you or one-on-one, I had almost 100% close rate in the earliest days. Problem was, I can't be everywhere. If I wasn't with you, and you were just looking at a picture of it, say on the website, the conversion would drop to 5%. That was something that I realized very early. All right, well, I have to be able to scale my knowledge on how to use this thing.”
Steal thisIf your product needs a human to demonstrate its value, build education/content to scale that demo instead of relying on a static page.
Number
TRX's $4.95/month app — paywall flipped off during COVID
TRX runs a consumer app priced at $4.95 a month; they turned off the paywall during COVID to acquire users, planning to switch it back on once gyms reopened.
$4.95
App subscription price · USD/month
“We have also got an app that we make money off of that is a $4.95 a month app that supports the end user. We have turned off the paywall on that during COVID but that will go back on once everybody gets back to work.”
Story
A 10-year B2B base of TRXers who never owned a strap
Because TRX was B2B for a decade, millions of devoted users only ever used it at the gym. When COVID shut gyms, that huge installed base suddenly rushed to Amazon and the website to buy for home — driving the explosive sales growth.
“But, what happened with the virus was when all the gym doors got shut, all of a sudden, all of those installed, that installed base of TRXers went, well, how the hell am I going to do my workouts? And so they turned to our Amazon site and our website. And that's been, I believe, the big source of the growth, the explosive growth.”
Take
Hiring a big-company suit to run a startup is asking a cat to bark
Hetrick's analogy for why big-company executives fail at small companies: it's like asking a cat to bark, or Michael Jordan switching to baseball — a different game entirely. Small companies (under $100M) pivot in months, not quarters or years.
“Yeah. Well, it's a little bit akin to trying to get a cat to bark. Cats meow, dogs bark. So saying that, well, either one of them should be able to do this thing is just not right.”
Take
Hiring a big-company suit to run a startup is asking a cat to bark
Hetrick's analogy for why big-company executives fail at small companies: it's like asking a cat to bark, or Michael Jordan switching to baseball — a different game entirely. Small companies (under $100M) pivot in months, not quarters or years.
“Yeah. Well, it's a little bit akin to trying to get a cat to bark. Cats meow, dogs bark. So saying that, well, either one of them should be able to do this thing is just not right.”
Idea
Automated pizza kitchen that beats restaurant quality
Hetrick is invested in Basil Street Cafe, an automated pizza kitchen combining technology, branding, and distribution. He argues COVID made it more viable and that the machine's pizza rivals or beats Blaze — defying low expectations of machine-made food.
“There's one of my— ironically, one of my board members started a company called Basil Street Cafe, which is a really really cool automated pizza kitchen concept that I think COVID-19 has actually now made more viable even than before. But it's a really sophisticated combination of technology, branding, and distribution to create a nationwide initially and then global automated pizza kitchen”
Idea
Everence: encapsulate hair or ash into jewelry and tattoos
Hetrick is helping Everance, a company with a patented process to capture material (hair, ash, a flower from a meaningful place) and encapsulate it into jewelry or tattoo ink as a permanent keepsake.
“I've got another buddy that I'm helping that has a company called Everance, which I think is a really cool opposite end of the spectrum in a lot of respects. It's basically a very unique way to to collect, capture, and then encapsulate. Can be anything, but the idea is hair, ash, could be any kind of material from a flower from the mountaintop where you got married or buried your grandmother or whatever.”
Framework
Sell at least a third before taking institutional money
Hetrick's rule of thumb: if you must raise from institutions, sell at least a third of your holdings to take cash off the table — enough to be okay if things go differently than expected, since liquidity becomes very hard once they're in.
“I'd sell at least a third of my holding to bring those people in, basically enough to be okay if things go differently than you expected. That would be sort of the rule of thumb answer.”
Steal thisWhen taking institutional capital, sell at least a third of your stake in the same round so you're financially safe regardless of outcome.
Story
A Stanford MBA who made ~$50K/year for a decade building TRX
Hetrick took no pay for his first 3 years and roughly $50K/year after — averaging about $50K annually over the first 10 years. Dollar-cost averaged, it was a brutal hourly rate for a Stanford MBA, though he says it evened out as the company grew.
“But if you dollar-cost average the first 10 years, I probably made $50,000 a year, which after 14 years as an agency owner with a Stanford MBA ain't killing”
Tactic
The Branson playbook: build a personal brand that ladders the company
Hetrick's next vision is to take a page from Richard Branson — grow a personal brand (randyhetrick.com) that helps the company brand do things it can't on its own, and vice versa, laddering the two up together like Branson did with Virgin.
“I'm working on a randyhettrick.com website right now where some of my stuff that— my next big vision is to take a page out of Richard Branson's handbook and basically figure out ways to grow my brand that can help the brand that I gave birth to do things that maybe it can't do and vice versa. You ladder yourselves up just like he's done with Virgin.”