Paul Farr, Bryan Kelly, Anthos, venture capital and the CrossFit Community

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Events and rumors about the potential acquisition of 50% ownership of CrossFit by Anthos capital are at the forefront of social media and making its way to the mainstream press. I have had a chance to sit down and consider the potential upside and downside of having Anthos involved in CrossFit. Normally, I write blog posts from a neutral declarative perspective, but this post is going to reflect my opinion and thoughts from the point of view of one of the original (13th) affiliate and as a member of HQ seminar staff. The views reflected here are my own and do not speak for anyone but me.  

 

Origination: Affiliate model – I found CrossFit in 2004 and completed my level 1 in early 2005 and affiliated.  My initial conversation with Coach Glassman about being an affiliate sums up like this: Affiliates are friends of the program, can use the name CrossFit – other than that – it is up to the affiliate to run their business as they see fit. I am history buff and thought of it as the confederation of independent states. The common currency of affiliates it the Internet. It is still the same way.

 

One of HQ’s missions is to make using the name CrossFit valuable for affiliates to use, which they have. Brand recognition of CrossFit has never been better. People are funneling into CrossFit at greater rates than ever before. New affiliates are getting to 100 to 150 members faster than I ever thought possible. Startlingly fast. CrossFit is helping to build successful small businesses all over the county and world. Affiliates have expanded the grass roots pool of people doing CrossFit. Demand for L1 courses is supported by affiliates. Affiliates change people’s lives for the better, people want to learn more about CrossFit and attend an L1. I meet people every weekend who come from affiliates and want to get their L1 so they can train people and want to improve people’s lives. L1 sell out every weekend. The hand in glove relationship between CrossFit and affiliates is HQ provides information to make independent trainers better, affiliates use the information to positively impact people’s lives and attract more people to seminars. The relationship between HQ and the affiliates is a win-win for both parties.

 

Chasing excellence and the money comes. Coach Glassman’s thoughts about becoming excellent trainers and money follows is widely known. The core of the affiliate model is to provide excellent training. Anything that adds to the affiliates ability provides excellent training is a positive; anything that takes away from it is bad. Each affiliate can choose to sell shoes, supplements or have a juice bar as they see fit. There is a market for Grande Latte Enemas but you won’t find that shit at HyperFit USA.  Our business is teaching people to move better, providing a positive community environment and exceptional coaching.  I evaluate the each piece of equipment, each movement, each member and each one of my staff in relation to how much it contributes to making the training exceptional. I run a meritocracy.

 

The real strength of the affiliate model is each person who owns an affiliate is an expression of that individual. People may have open gyms, structured training, semi structured, barbells or no barbells – the expression of the CrossFit is as unique as people are.  There is no intervention from HQ as to how people run their training. HQ promotes virtuosity and leaves it up the affiliate to choose what that means to them. Affiliates may succeed or fail based on their own ability.

 

Outside Intervention: Hostile Takeover – Anthos’ back door forced entry attempt into CrossFit underscores its malevolent intention. Think of it as a stalker trying to date your sister so he can get to be part of the family business. He buddies up to dad, bull shits mom and she eventually gives in. It starts out with small compromises, then more controlling things and grows into full-blown manipulation. In the movies, dad has an accident, mom dies of grief and the sister is kept the out building after she signs over controlling interest in the company for a fraction of what it is worth while stalker moves on to the next victim. Stories of this kind are too common and the results are invariably the same.  Sister gets dumped on and the business screwed. It is the classic unhappy ending.

 

Anthos is unwelcome as a part of CrossFit. The community, which really is CrossFit, doesn’t want to be controlled by HQ or anyone else.  Athos has purported that they have strategies on how the affiliates can be provided more services from HQ and all involved make more money. My contention is if they have a better mousetrap that will help affiliates, stand up a new business and sell into the CrossFit community without forcing their way in. The stance from HQ has always been the same – do something to help the community and you will always be welcome. Do something to harm the community and you will be treated like a leper. End of story.

 

There have been several occasions where I have been approached by investors who wanted to sell into CrossFit. Anyone with half a brain can see that being associated with CrossFit is a good investment. My response has always been the same, do something to help the community and you will succeed. You do not need permission from anyone to do it. Do something of value and you are good to go.

 

  • http://profile.typepad.com/bergerrussell Berger Russell

    Great read Doug. Remember that Bryan Kelly has publicly denied CrossFit’s claim that he wants to manage CrossFit. He has even said that he respects Greg Glassman and his ability to lead CrossFit and make good decisions.
    Which begs two important questions he has never answered:
    1. Why do you respect Greg Glassman’s decision making and management decisions except for the decision to reject you as a partner?
    2. Why has Lauren Glassman publicly state that she is selling her stake to CrossFit FOR increased “corporate management” and “Accountability”?
    Does anyone else smell what I’m smelling?

  • http://profile.typepad.com/wj6 Wj

    I am not currently for or against Anthos buying Lauren’s share but I am trying to be an intelligent person and gather the facts so that I can make my personal judgement. In following that I have to ask – what or how is Anthos demonstrating a “back door forced entry attempt into CrossFit?” I mean, you’re saying that based on what? The simple fact that Lauren is attempting to sell them her shares? I’m just reading rhetoric everywhere stating this is a “hostile” takeover but in reality, what does that look like? There’s not been any evidence that has been publicly presented – unless I’m missing something. Please, tell me. whiskyjuliet@facebook.com is where you can message me.

  • http://profile.typepad.com/larrycrooks Larrycrooks

    Good shit Doug!

  • http://profile.typepad.com/6p0120a601d5e6970c Craig Massey

    I like the sister dating analogy very much.
    That’s exactly what this feels like.
    I think that makes Russell Berger the annoying kid brother who tries to warn everyone? :-)
    And I like the suggestion that Anthos sell the services they think will improve Affiliates’ operation to the Affiliates. That’s obviously not their agenda so I can’t see it happening, but if they really did understand the relationship the Affiliates have with HQ and want to help the Affiliates, that’s what they’d do.