This week, on the Fitness + Technology podcast, host Bryan O'Rourke welcomes friend and colleague Hans Muench, principal of Muench Solutions Consulting, live from Amsterdam. Hans has served in a variety of executive roles including the Director of Europe for IHRSA, Chief Development Officer for Elixia Clubs, and currently serves as an advisor for VirtuaGym and Urban Sport Clubs. He is an ambassador for Gym Factory and acts as a consultant for suppliers and club operators. As one of the leading, trusted advisors in the European health club market, listeners will enjoy Hans’s advice as he and Bryan discuss the overall shape of the marketplace and recap VirtuaGym’s FitNation 2019.
One Powerful Quote:
4:31: “There is much of a danger [technology] to be too early as too late…You can only really effectively do as much innovation as you can integrate and implement in your organization.”
4-10 Bullet Points (w/ timestamps) - Highlighting key topics discussed:
3:26: Hans shares his perspective on the European marketplace and the misconception of “one size fits all” approach. He mentions how innovators are adapting in countries with low penetration rates and understanding the implications of political events such as BreExit in the UK.
6:26: Bryan asks Hans his opinion on the budget model in Europe and the focus on high volume, low cost sector of the industry. Hans says this strategy may succeed if clubs raise prices and build their presence to be dominant in the market.
9:21: Hans discusses how innovation and technology must be integrated into an organization at the right time. He warns, though, that there is a limit to how that can be implemented. He and Bryan also discuss how this is a competitive advantage and the opportunity it gives owners for scalability and value to their customers.
11:58: Bryan asks Hans about the idea behind VirtuaGym’s FitNation 2019 Conference and the importance to its attendees showcasing keynote speakers, location, and topics discussed.
15:00: Hans encourages listeners to visit Europe to learn and understand from savvy operators and their innovation adoptions compared to the U.S.
Bullet List of Resources:
Guest Contact Information:
Host: Welcome to the fitness plus technology podcast for club owners, operators, and fitness professionals. Each week, host Bryan O'Rourke brings you an expert interview with a global influencer at the crossroads of fitness and technology. You gain the insights, tools, and inspiration you need to stay connected to the pulse for what matters most for your business in the age of exponential technologies.
Bryan: Hello listeners and welcome to another edition of the fitness industry technology podcast. How is your fall going? I am getting the first taste of cooler weather being back in the New Orleans area after touring around Europe for about 10 days. And I had the pleasure of interviewing and this episode, Hans Muench, many of you might know Hans he served in a variety of roles and currently advises a VirtuaGym, UrbanSport. You know, he speaks quite a bit. And is, you know, involved with several other organizations as an ambassador for Gym Factory for, for example and serve quite a, quite a long stint of eight years with the International Health Rec and Sports Club Association as a director of Europe. You know, he and I see each other at events all over the world. And I had the pleasure of going to the VirtuaGym FitNation event, their first main one this September or October I should say. And they did a small one the year before and it was quite a great event as we'll talk about in this interview. Han shares some great insights on Europe in general. Renee Moss in his talk, the CEO of Basic-Fit we talk about in the event and I think it's just a great interview with Hans. And I really appreciate it as well. The VirtuaGym folks, Hugo, Paul, Jesse, and their team for their hospitality and for putting on a great technology focused event. All of our colleagues there really enjoyed it. So without further ado, let's start with the interview with Hans.
Bryan: Hello listeners. And as you got from the intro being an Amsterdam with the VirtuaGym team and so many leaders from across Europe, and I gave you his bio before, so I'm not going to embarrass Hans Muench again because I'll record that separately Hans, but we are in Amsterdam. Hans and I sat on a panel, he did a great workshop, so I got to keynote Hans. Thanks for making time. You know, it's great to see you as always enjoy our time at these events.
Hans Muench: Well, the time is never enough to be able to exchange in enough detail, but it's a privilege and an honor to spend time on the same platform with you, Bryan.
Bryan: The feelings mutual. I always enjoy bumping into you and you know, you have a really clear view of the marketplace. I know you talked about medical today. You're very familiar and advise a number of brands. You know, this is about, you know, I think a little bit about technology, but talk a little bit about what you see going on in the European marketplace right now from your perspective.
Hans Muench: It's difficult to talk about Europe as a place because there are 28 countries. There's different levels of sophistication. Even looking at Russia where we had a couple of people here, Russia has part of its land in Europe and part of it in Asia. So each market has has its own specialties. When you look at the penetration rates as examples that Scandinavia is generally in the 20 to 22% area. Generally in Europe you're looking at 1214, you've got innovation leaders and Athene countries and you have laggards. Even though for example, Germany is a powerhouse in Europe, they're not as eager to embrace change. So you're being correct to say that a market like Europe is one market. Having said that, I think that it's appropriate to say that the UK has been a, a beachhead for technology coming from America to Europe. Who knows what Brexit will do to that innovation, that investment eagerness and how it transmits if someone else will pick up here in Amsterdam, we have some interesting innovators, Saints & Stars being one of them. But Spain for example, is very eager to innovate and some, you know, brands and think about Anytime Fitness, well they're not yet in Germany, but there are 100 Anytime Fitness in the Benelux and there are close to 40 in Spain. So that's where it's a bit spotty. You can't say that one size fits all.
Bryan: Very, very true. And great answer. I really particularly, I think you got to see Rene's presentation on Basic-Fit and boy what an interesting their penetration into France and their plans. I, I, I thought his use with technology with their camera systems and their automation AI. Wow. What a presentation
Hans Muench: And you know, those things didn't exist so you had to create them themselves. And I loved his self deprecating humor to say, you know, admitting, Oh, we've made a lot of mistakes along the way. Here are the lessons learned. So he was refreshingly frank, whereas a lot of people in our industry might not be as forthcoming.
Bryan: There were some great great highlights from that talk. And you know, just so happened that I, in my presentation I had prepped for Basic-Fit because you know there are a public entity trading and we looked at Planet Fitness, we compared stock shares and their growth rate, their story, what they're doing. The budget models are a massive force in Europe in general. I know by country it varies, but it's been a big trend here as well as it's been in the United States. Right?
Hans Muench: Yes. And what's interesting is that both of the, the major drivers in the high volume, low cost sector in the Netherlands, Basic-Fit and Fit For Free, have independent of each other, made a significant step in the last year and that they have raised their prices and it's maybe affected by the fact that Basic-Fit is a publicly traded company but Fit For Free. I learned, you know, employed a specialist consulting company from Germany to look at and help them with their price strategy and their market segmentation and independent of each other. They both raised their prices. Realizing that, you know, there is a limit to how cheap you can be and maybe you don't want to be the cheapest in the market.
Bryan: Yeah, it's true. And you know, and then maybe they're starting to gain market power also a little bit where they have enough scale. I was fascinated though by by France because that's a big focus. And what I thought Renee, really to your point of his self deprecation, he goes, what I learned from a hell city, right, is not to be in too many countries. I think he said, he goes, well, we love the food in Italy. So we figured we can have some clubs there. He said we don't, we're not gonna make that mistake anymore. Can you find that pretty, I dunno. Refreshing. I know what I mean. What do you think?
Hans Muench: Well, in from a historical standpoint, you know, Renee didn't share all the details, but there was an interesting anecdote that going back probably to 2010 or so, give or take a couple of years, they went over to UK to pitch Fitness First, Hey, buy our estate. And they came back, you know, we're Fitness First was saying, no, you buy ours state with the result that they took over the Benelux clubs of Fitness First. And I remember doing an interview and talking to them about, you know, if they have an appetite for more. And they said, no, we've just swallowed so much. We've just first have to digest that. And 16 months later, Fitness First basically dispose of their France, Italy, and Spain clubs in one go. So it wasn't so much we liked the food, but here's a package where Fitness First was eager to get out of those markets and they opportunistically took it. So I think that was more of the motivating factor than the good Italian food, which I also love.
Bryan: You always have some insights on those things when people make comments. So you know, you're, you're, you know, tennis was in your background. Of course, you're a sports person, you're like working out and you know, what do you see in tech right now? Like in the last few years? Obviously there's some things that are gonna be pretty clear, but is there anything in particular that you'd like to share from your experiences and views with technology?
Hans Muench: You know you had said today dealing with technology merged with something that I was talking to one of the other participants in, in the after event this evening. You can't do everything in tech and there is, you know, a certain you, you showed in your presentation the product life cycle curve and there's as much of a danger to be too early as too late. And the second point is you can only really effectively do as much innovation as you can integrate and implement in your organization. So getting it right, meaning following what's happening, deciding what you want to do that is good for your organization, that your members or clients are going to value and be able to fire on it. I'll give you an example from this evening. The Russian Fitness Group, they have over 100 clubs. They're in the premium sector and they've decided to start with VirtuaGym and they have five clubs that are using it. They want to get that right before they scale to 100 so they're saying we want it, but we first have to get it right from an organizational standpoint. And that's wonderful. I don't think that there's very many operators that can do the things that Renee is doing, developing their own virtual classes that the cameras, and he explained his learning curve of having an external security system, a security company, and they're saying, no, we can't open up that locker because it's not in our book of what we're expecting to do. And the police are there. Sorry, we still can't do it. Realizing, no, we have to invest in doing it, bringing it in house. And those were exciting examples. But if you're a publicly traded company, you're growing fast and you're successful, you can make those investments, but it's not fair to compare them to others. They don't have the capacity to make those steps.
Bryan: Yeah. And it makes it harder for people to compete when you have people that are capable of doing what they're doing, which is exactly right. It's their secret sauce. I mean, I thought his presentation was outstanding and, and generally this is the first FitNation event that VirtuaGym and several other key partners and I've known those guys now for a number of years. I know you've known them longer. I've followed Hugo closely, I get to spend time with him and talk to him. You know, Paul, the whole team here, Jess, I know you've been involved for a while. I really am impressed with the company. I liked the culture. I like the idea of this event. What do you think?
Hans Muench: Well they didn't have a smaller event last year and it was the event planner Jess, who had the guts to say, we're gonna do this. We're gonna do it on relatively short notice, three months, we're going to make it a cost neutral. And she stuck her neck out and she got sponsored to, to participate. And you know, nothing is more powerful than that idea whose time has come. We've got 300 people here to attend. And that was a testament to her, you know, courage to do it. And the fact that people are interested in this topic, you might say the attractiveness of Amsterdam played a certain role in that decision making process. But the fact that VirtuaGym is a technology company, they were able to leverage their skills to get the word out on short notice. You know, in 12 days I'll be in Dublin versus European Congress, which has had consistently 600 people. They've been holding that event for 19 years and here they got already essentially half of what IHRSA'S European Congress has gotten in their first year. So that is just great. Obviously having star studded a cast, including and featuring Renee Moss, the CEO of Basic-Fit ,Bryan on work on the program, it does pull people in. And I just think that for, you know, there's always things that you can improve, but they did a spectacular job in their first event.
Bryan: No, I agree. I thought it was very impressive. And you hear the listeners here, some of the noise in the background cause we're about ready to go on a party. You we agreed that we'd spend time, I think we've missed a pocket several times. So you hear a little clank ring around because we're in the the aftermath of the big show. So people are picking up around us. Hans, you know, if you don't mind for the listeners, one last thing, any words of advice? You've been in the industry a long time. You're, you're one of the more connected people that I know and you have that perspective of the current day of the future and the past, which is I think a really great cause, wherever we talk, I learn so much. Any, any observations that you think for people in the industry space that you think is important for them to pay attention to? What, what message would you have?
Hans Muench: To answer that question, can I ask you in terms of your it's not readership, it's listenership, if there's such a word, you know, what is your breakdown of?
Bryan: It's a pretty broad group. So, you know, we have 20,000 monthly subscribers to our newsletters. We have operators, we have fitness professionals, we have suppliers. You know, we cater more to decision makers, but there are other enthusiasts that listen. So it's a pretty broad spectrum and by the way, more international than the U.S. I mean it's a pretty equal mix. And it a lot of Australia and so it is broad. I'm sorry I'm not helping you with the answer.
Hans Muench: That is an answer that will help me because if it was very us focused in terms of readership, I would have maybe a different answer. But I think that anybody that's been involved internationally knows that there are some very savvy operators out there and the, you know, your typical U.S. Listener or audience might think that the United States is the cradle of fitness. You know, there's an incredible amount of innovation that's happening outside of the United States and it is worthwhile to go outside of your own boundaries to see what's happening. And you'd be surprised ICAROS for example, based in Munich, [inaudible] based in Switzerland. There are some really interesting things. I think that the innovations at Basic-Fit has done, McFit, Another one with you mentioned 15 brands. It's worth it for people regardless of where you are to come over and take a look at what's happening because there is a lot of innovation here that others could learn from.
Bryan: I think that's great advice and I've been so fortunate to do that a lot. You know through Asia, Australia and New Zealand cause you're right, there's a lot of stuff happening all over the world and if you don't get out and see it sometimes you don't understand what's really happening. And I agree with you. I think for people that know me, I've helped many U.S. Citizens say get your passport cause you need to go here and go there. And so that's great. Hans, you know, always been a friend, you know, one of the most trusted people in the space. I know I'm so grateful that we got to spend some facetime and you shared some of your views with our listeners. I'm humbled by it.
Hans Muench: This is my first podcast with you and maybe it won't be the last, but again thank you for giving me the opportunity to exchange some points of view with you and hopefully it will be of interest and value to the listeners.
Bryan: Well I'm sure it will be. I know it will be. Thanks Hans. We look forward to seeing you again soon. Doing another podcast. Hello listeners, this is Bryan O'Rourke and thanks so much for listening to the fitness plus technology podcast. The podcast is made possible by the Fitness Industry Technology Council, a consortium of global brands working together to enhance the adoption of technologies in the business space. Our company Vedure Ventures, which is invested in VertiMax, Motosumo, Gold's Gym Houston, Texas, and Fitness 24 Seven Thailand. Also underwrites the podcast along with our service companies, Integerus Advisors, Moon Mission Media, and others. Please feel free to share this podcast with your colleagues and if I can be of any assistance to you, don't hesitate to reach out email@example.com or find me on any of the major social networks. Have a great day and thanks for listening.