How Zwift created a global fitness unicorn - Steve Beckett

0:00Ladies and gentlemen, welcome back to Uncensored CMO. Now in this episode, we're going to be talking about an incredible tech startup that has transformed the world of sport, Zwift. And the CMO joining me today, Steve Beckett, was employee number five on that journey. Now they've gone on to achieve incredible things, creating a unicorn out of the brand. And Steve is sharing his experience of being early on that journey, but also seeing it through many stages of its development. and how do you balance brand with performance when you're on the hook for financial results as well as trying to establish a brand in the long term.

0:31We talk about lots of sponsorship, product innovation, marketing, branding, everything that's involved in that. Steve's got amazing experience having previously worked at Sky as well, so he brings that across with him. This is a fascinating conversation. I know you get a lot from it. Here it is.

0:53Steve welcome to the show thank you nice to be here good to have you and it's uh well it's nice

0:58Steve Beckett:to see out of your lycra for once yes yeah last time I saw you was on top of a mountain we were yeah I know it was rather cold wasn't it and wet yes indeed but I was very pleased to have made it up the mountain in time well what people might not know about about these things is um we were We're doing Le Tap de Tour Femmes, Abik Zwift, of course, your headline sponsor. And it gets opened up, doesn't it, on one day of the calendar where amateurs like me can actually go and actually ride the course ahead of the pros. But you have to finish in a certain time before the pros come through, of course, which is the little twist on that.

1:33Steve Beckett:Yes, because this year the pros rode or raced on the very same day. It's the first time it happens. Is that not how? Oh, that's not happened before. I mean thank you by the way for inviting James and I to do it I mean one of the things I reflected on that is I'd probably never climbed more than 1200 meters in a ride before this was three times the amount of climbing I've ever done on a bike in a day but it just shows that if you stick at it do the training have got good people around you can do it yeah it's quite amazing really I mean we'll talk about startup successes but you know you've got to believe it to achieve it and at the of the day when you look over your shoulder in the startup there's not many people behind you and I think it's very much the same when you're training for an event so and like a like a startup success it can be quite a defining moment in your life and you you did amazingly well you should be incredibly proud I genuinely look back and one of the proudest moments of the year for me for sure given the the work required to achieve it and uh the you know the the insight into the world of cycling was amazing you know um but look I'm dying to get into Zwift and and the business and how you've done what you've done but for everyone listening uh you had a really fascinating job just prior to this working for team sky and many people will have probably known about the success of team sky obviously you know winning the tour de france the first british team to do that um you know the golden generation of cyclists that won at the olympics and so on so what were you doing with team sky i had a rather silly job title called head of cycling so i managed the project on behalf of the corporate entity that is Sky.

3:07Steve Beckett:And the project itself, we kind of owned outright. So I got great insight into the world of sport and how people like Sid Dave Brailsford operated. And for me, it was a real right-angle moment in my career because before then I was in marketing and advertising. But I was known as a cyclist. And I think in July 2005, when London was awarded the Olympic Games, Sky said, look, how can we get involved in the Olympics? we can't broadcast it because it's got to be free to air we don't want to just badge or sponsor lots of other people can do that but let's do it our way and so we thought we'll invest in a sport so when it meddled at the olympics consumers at large would play back sky's investment and that's where team sky came from the partnership with british cycling the olympic success and so when they said we want to go build a cycling team to go win the tour de france of this big hairy audacious goal then we're like, oh, we could ask Steve to have a look at this.

4:01Steve Beckett:He cycles to work. It's a bit of an odd one, but I just so happen to be in there. Did you get picked or did you volunteer because you thought, oh, I like cycling, I fancy the job? How did it come around? Kind of got asked. So like I said, it was Sir Jeremy Derrick in 2005 said, look, the CEO, how can we get involved in the Olympic Games? And we ended up investing in the sport. We looked at other sports like swimming, athletics, triathlon. We chose cycling. They already had this kind of medal factory in Manchester. the team did incredibly well at Beijing in 2008 we did a deal shortly before then and then between that and London we came up with the idea of Team Sky well Sir David Brailsford did that's where where it all started and I was working in the brand marketing division of Sky and so I just so happened to be helping Sky who were trying to become carbon neutral as a business James Murdoch very green thinker wanted wanted uh sky to really take on cycling in terms of fun a transport function coming to work so i was busy like helping him out with showers and bike storage and then all of a sudden a year later i'm you know managing this project called team sky which was pretty incredible incredible now it's obviously one of you know big success stories dave brail's famous for his marginal gains what did you learn being inside of that about what contributed to their success?

5:17What were the sort of big lessons you took from that period in your career?

5:19Steve Beckett:Well, I guess everyone talks about the aggregation and marginal gains. That philosophy is widespread now. I think lots of people apply it. But in terms of what I took into, we'll talk about Zwift inevitably, but what I took into Zwift, it really was. I think this was more of a prominent theme at Zwift. We just want to own what we do. So people think of it as a sponsorship. It wasn't. We decided if we're going to do this, we're going to do it ourselves. We'll build a team. We'll buy the buses. We'll build the brand, which is the blue line. And, you know, when we think about how the startup Zwift was built and all the foundational elements of the brand and ultimately what drives the marketing function, we do so much of it ourselves.

6:02Steve Beckett:So in housing, owning the challenge, I think, is something that I also took. Amongst a few other things, like with Dave Brailsford, I think he's a really good orchestrator. So when it comes to nutrition, when it comes to training, when it comes to all the technical aspects of what equipment Team Sky were using, and ultimately the athletes, he identified the leaders he needed to go do the best job. So when it came to Swift and creating our iconic logo, Big Z, the person I got was the person who rebranded Netflix. No way. I didn't realize that. So, yeah, we didn't mess around when we were building the Swift brand.

6:41Steve Beckett:And, you know, that schooling came from Sky. They just never used to miss the mark when it came to marketing. So, yeah. So you went from this incredible world, you know, very well-funded. I think Team Sky at the time had the biggest investment in cycling, didn't it? Correct. To achieve what it did. You had experts in every position, well-known for your marginal gains and all that went with it. Sky obviously is a big brand. Had celebrity, you know, Bradley Wiggins, Cav, obviously, you know, a superstar lineup. you went from there to be am i right in saying employee number five at a startup that's quite a quite a jump how did the transition from one to the other happen well i actually knew this project was happening and people were telling me steve you should you should check out this uh startup that's happening the founder the one of the founders is based in london i was like no it doesn't sound like familiar indoor training i often still think now would you know if i didn't work at Zwift would I be a customer I think that's a great piece of psychology to have you know but lo and behold Zwift Eric Min he found me he really wanted someone with a brand and marketing background and yeah I mean Team Sky was very demonstrative in the sport of cycling and you know it was there to build an emotional bond between a nation at large specifically Zwift customers and a corporate entity and the corporate entity if you strip it right back is Rupert Murdoch it's the Premier League, you know, and we wanted to put some warmth between the consumers, the country and Sky, and that's what it did.

8:13Steve Beckett:And it taught me an awful lot about building a brand from scratch because at Sky, it's one of the largest brands in the UK. I'd learned so much around brand and marketing, but the team Sky was a real schooling. Yeah, yeah. In fact, you can actually see that translate across in terms of confidence, your branding, the boldness, the simplicity of design, all the work you've done. But again, being kind of in so early, how do you go about effectively creating a category that didn't exist? I mean, you invented pretty much indoor cycling in terms of connecting to the virtual world in the way that you did.

8:51I mean, maybe describe for anyone who doesn't know Zwift, like what it is and how it works. That's a good place to start.

8:56Steve Beckett:So Swift is a massive multiplayer online training platform for cyclists and also runners. And if you heard the term MMO, massive multiplayer online platform before, you think of gaming. And Swift is a video games engine. And what it does, though, it connects to people who are riding bikes in their houses. And they ride together in 3D generated computer game worlds. and I guess at our peak period in January you might find well over 50 ,000 people at any even time. It just so happens that we hit upon product market fit with this idea because that's the first step of building a category. If a category has not been built, there's no consumer demand there.

9:44Steve Beckett:So the marketing team are really on the hook because sales are a function of awareness and then awareness needs to translate through to demand which is about building a value proposition it's building that emotional connection it's building that i need it you know in cycling like a lot of other sporting activities you kind of want the latest and greatest because there's a big herding mentality that goes on there so i don't think it's a bit like sky like no one was saying we want high definition television we invented it and then we had to drive the man behind it and so you need a very clear value proposition you know and that's really the basics of who you are Zwift is a fitness company born from gaming you know who you're for people who ride bikes outdoor regularly for exercise you know what you do like we make reaching your fitness goals fun and rewarding and then but critically what makes us different and i think this is this is the magic with uh Zwift is we really believe that fun powers performance and therein is the whole creative dna of zwift it's a tool and a toy if you go into zwift there's people who are geeky lovable gamers and then you've got sports jocks tension is at the heart of everything we do you need a go-to-market strategy as well and i think the thing at zwift i wouldn't say like building a category is like a there's a book that works for everybody or a playbook but you know we're a platform at heart and so if you think about onboarding people and building social density then all of a sudden you can think actually there are people in real life who have pre-existing relationships with brands so the bike manufacturer the bike the bike brand they own the apparel brand the events that they take part in in real life you can really create a go-to-market strategy around partnerships that was a big part of how we built Zwift because it was recognizing we need to facilitate community growth be community first so really identifying every cmi over marketing function needs to obsess about knowing the customer but before they're a customer they're a prospect and it's really bringing all those those experiences in the outside world into the real world.

12:01Steve Beckett:So you could ride London on Zwift. You can ride the virtual tap de tour on Zwift. You can own a canyon bike. You can work hard to unlock a canyon bike in Zwift. So what that does is build a network effect in a kind of B2B2C capacity. And that was a big part of how we built demand, not just from consumers but also from our industry. The industry really sees Zwift as a bit of a media house and a media platform. And so that's what I think of. Obviously these big elements are like the brand DNA and how then everything that we deliver with the rigor, the polish and consistency becomes quintessentially Zwift.

12:46Steve Beckett:You often talk about distinct brand assets. I think we've done a pretty good job there. We've got our core creative DNA. also i mentioned earlier that you know embrace the tension is one of them we've got some other other ones that we really believe in so make it fun if it's not fun it's not zwift we always want to believe in making bold moves you need to do that as a startup you know what's your you know team sky let's go win the tour de france within five years you know we set out at zwift to not just build a brand not just build a business but to build a category and then on top of that makes Zwift the colloquial term for riding a bike indoors you know it's called Zwifting yeah we've we've really invested so much in integrating and aggregating what happens in cycling in the real world and bringing that into our product experience for the customer yeah it's pretty cool the uh the gamification elements isn't it yeah you can uh the more the more kilometers you do the more kit you can kind of you know do i love as well the sort of behavioral science of it all the little nudges i mean um i mean i mean i i got into zwift first in about 2016 i was a very very early adopter because i was working away from home so i was using it to kind of stay fit and then got into the last year a lot more uh thanks to you and um it's just all the encouragements and nudges you get and like the ride on thank yous from other riders there's a lot of sort of psychology isn't there to how you kind of encourage people to uh engage with the platform and exercise more yeah i think when we talk about fun powers performance the the core insight i take and the human truth is when i reminded myself when i was a kid and my mum was shouting upstairs and saying you in bed yet and i'd be like yeah i'll be i'll be in bed in half an hour and then three hours later i'm still playing a computer game and that was in the context of you know the joystick being what i was controlling in the game with well the joystick now as you ride on a bike with game controllers and the level of immersion you just get lost but you work harder you work for longer you get fitter you know and that's how we've managed to build this it's i guess it's the world's largest training community for cyclists so yeah and how serious is people taking because one of the questions i had was has anyone ever turned pro having like started out on zwift got really good and then ended up kind of in the real world translating that performance on the bike indoors into into real life so yeah i mean um one of the things that zwist really famous for is a program called the zwift academy and we really took we really took all the learnings we could see from the nissan gt academy which took spotty kids from bedrooms to to racing a le mans and so actually how can zwift be a talent id platform for cycling and uh next year will be our 10th year but we've we've delivered many pro cyclists into the pro peloton we partner with a very well-known team called canyon sram a women's world tour team and alps into current men's world tour team and uh yeah once a year there's a talent contest and really it's like a tv show and uh you know one lucky contestant has his life-changing experience and and becomes a pro cyclist having never really thought of that there's one very well-known cyclist called jay vine who actually he won the zrift academy in lockdown and so actually the zrift academy was hell from home we normally go to an in real life event this was at home and uh you know he subsequently went on to he writes for team uae now it's won multiple stages of grand tours the three of the famous three-week races and there's many other riders as well so that really builds you know the credibility in the brand that really consumers believe in because at the end of the day you know Zwift's a sport if you're a participation sport it's a bit like a pyramid you know for if you're into cycling if you're into football triathlon running you're often looking up to the elite crowd and you know you want to adopt what they use and what they advocate and obviously this is you know very very authentic in terms of the use case and we've had pro cyclists been injured recovered on Zwift discovered Zwift very famously in 2015 Australian just trained on Zwift for six weeks and then won the biggest one-day race in the world it was all down to training on Zwift really yeah and so they're good they're a great credible stories that built a lot of trust and ultimately translated to consumer demand that's growing our business that's fascinating you mentioned lockdown and jay vine what did covid do to the business because was that a good was that a good thing in terms of getting everyone to train indoors so it was probably the largest help and the largest hindrance so obviously people talk about the covid whiplash effect and when you speak about like how do you build a new category and how do you build consumer demand one of the first parts of it is for zwift it's like how do you build an engine of growth a paid engine of growth and the fundamentals there is how do you price your product?

17:48Steve Beckett:And it's just got a recurring revenue model. So we get a pretty good view on LTV when we get acquired customers in terms of having a view on retention. And then from there, you can look at the lifetime value of a customer and decide how much you can spend on marketing. And that's your CAC function. And prior to COVID, we had a really good view. So when you're raising money and investors are saying, how does your paid energy grow for it? You go, great question. This is how it works. And we knew it pretty well because every year we'd be cranking up the spend and it was translating very well in a kind of linear, measurable, manageable way to customer growth.

18:23Steve Beckett:And so what happened in COVID is the product market fit that Zwift had just got pulled forward. So we doubled our business in a year. And that was great because many people knew of Zwift, but it just goes to show that, given the preference, people still probably want to ride outdoors. Who wouldn't? But then you couldn't ride outdoors. So this huge tsunami of customers came to Zwift. And that was great. We did some amazing things. We talked about the creative DNA of Zwift and taking big swings and making bold moves. We built France World on Zwift and we held the Tour de France virtually on Zwift in July when the Tour de France was cancelled.

19:04Steve Beckett:Oh, wow. That's amazing. It was organized with their full broadcast infrastructure. It was broadcast into 180 countries. All the World Tour teams, all their riders. beamed live into people's homes and critically and we'll talk about this a bit longer we we we said if we're going to do this deal then we need to have a woman's race as well because we think you know that's driving equity and equality in the world of sport is also really important but we grew we grew a lot and inevitably investors came knocking on the door and um i think uh it was a good time to raise money anytime you can raise money raise it you know and you can always just keep it in the bank but the uh we'd done a series c raise in uh january 2019 and we did another one in august 2020 and when you think about what is zwift is a endemic fairly you would say cycling's fairly niche but you know you'll probably raise a few eyebrows when you say actually we raised 450 million dollars that year and that was building on 125 million the year before because we had product market fit we knew our target addressable market we were a we're vertical so you can you can mine a vertical audience really well compared to like the peloton which will be compared to zwift you know it's a very wide angled broad field when you look at fitness you know even if you've got lots of money into when you're spending money on marketing you're kind of you're still pissing in the wind like you know pardon my french but for zwift you know we were really able to cost effectively target and acquire customers however we like a lot of other businesses spent into covid and you know i look back at covid and i think you know what would i change i think one of the things that would have been really beneficial is not spending on marketing and the reason the reason why i say that is we really lost our feel and measurement around our hack function so yeah the marginal cost of acquiring a customer we we're still struggling now to to understand that and that's really critical when you're talking to an investor and it becomes a very uncomfortable conversation for me when i'm saying like we don't know what the marginal cost is of acquiring a customer at the moment this is a covid whiplash also we spend so much of our money away from the point of purchase because the customer journey for forgetting Zwift is so long you know you've got to think about where can I put this thing in my room can my loved one give me permission to to change a living space what equipment should I buy and then the availability of audience who we market to cyclists well interest in cycling's at its peak in the summer and so we have this kind of brand to demand marketing strategy which which means I'm spending a lot of money in the summer away from the point of purchase but uh We believe it works.

21:55Steve Beckett:And, you know, the cost of acquiring a customer, we still feel good about. But also, we didn't just spend on marketing. We spent all areas of the business. So the investment world, like the world of marketing, is very trend-driven. And we were being told to spend money, hire, spend more money on marketing. And we did. And fast forward to today, we're the same size as we were pre-COVID, 300 people. we got up to 700 and and like a lot of tech companies a lot of vc-backed companies we had a couple of episodes where we we hired people and we let them go and you know that that's awful as a leader and you know that that really starts and stops with leadership in terms of the accountability the accountability to hire the accountability to buyer you know and i've i did many zoom calls so i told people they didn't have a job no any longer and so you know that you know that that's the the covid whiplash just part of it but there is a silver lining that those people have options they have equity and you know what make really motivates me to go to work is to to grow the business so we all share in a financial outcome that people who don't just work at Zwift can benefit from so that's that's really great but uh i think the big one you know in terms of your audience uh getting insights into the startup world is i think most people are familiar with the big startup stories um uber is probably a great example and uh the way the way things worked is you'd uh you'd you get product market fit you pour fuel on the fire in terms of vc capital and then it was all about capturing the market as quickly as possible and in doing so you could afford to lose a load of money you know you you monetize that audience further down the line you generally become an earnings business and become profitable when things like public offerings happen and uh you know what happened during covid was obviously the cost of capital prior to covid was pretty low but you know i think you've probably heard the heard the phrase like free money banding or banded around in the context of startups and the money's never free but the interest rates were so so low that there was so much capital swollen around the market and so that promoted the you know grow all costs kind of mentality and uh startup businesses now need to be earnings businesses.

24:09Steve Beckett:They need to make profit. So you've gone from growing the market at a rapid rate by spending all costs and not worrying about losing money so much to investors demanding that you're an earnings business. And that's really what drove the need to reduce operating costs. And it comes like Swift, the single biggest operating cost is the marketing budget. And I think for CMOs in startups, the thing that's different in a startup world to work in a big corporate company is that you know you're the person with a number on the back of your head so when you when it comes to like how do you build demand you know my job at Zwift originally was VP and customer acquisition I needed to determine who we're going after how we'd go after them how many we would acquire and so you know you do need to be a lot closer to the customer you you are in a startup it's a it's a smaller business you the leadership are generally more visible especially founders you definitely have more product input you know wasn't this guy you know commissioning programming or you know but as with i i we do develop a lot of product through synthesizing feedback from marketing a very focused on on the market obviously get very close to investors which is which is great when you're raising money and then And in the stickier times, it could be quite difficult.

25:30Steve Beckett:But I think ultimately, you have to be prepared to own the number as a CMO within a startup. And that's what's really exciting. I mean, the interesting thing, actually, listening to you talk about it, is the closeness to the business model is you talk about, you know, what's the lifetime value of a customer? What's the return? You know, what's the cost of acquisition? Like, so few CMOs would think like that, would they? because my job is to create demand, but I'm not accountable for the money on the other side. So it's really powerful to see that you're constantly thinking about the return on investment.

26:05Yeah, I kind of had a bit of a schooling at Sky

26:06Steve Beckett:because I had the privilege of being on the exec floor quite a lot because I was a person who planned and bought media. So we're often in fights with competitors. I'll be pulled in to cost out media that we hadn't planned for, but we were going to put into market. And Sky itself is a recurring revenue business. The unit economics are the same as Zwift. So it was marketing, it was content, it was knowing a cat function and being familiar with that. And cycling, that's why it all combined at Zwift and so far so good. All right, all right. Sorry to interrupt this conversation. I promise you it's for a good cause.

26:42So I've just put a rather large deposit down on a very big venue in central London called the Outernet that can hold 400 people. It's an amazing venue. Now, we're going to be doing the very first Uncensored CMO, The Calling. Now, what is The Calling? The Calling is your opportunity to join us live and be inspired by the world's best founders, the most inspirational CMOs, and the best thought leaders. This is one day that will completely transform your career, I promise. It will be well worth it. I'm so excited to be doing this. And if you want to find out more details, please go to the show notes and check it out.

27:23And I really look forward to seeing you there. It's on the 21st of April. Do not miss it. Now, back to the show. Well, let me ask this, Greg. What's it like working for a founder compared to working for a corporation?

27:35Steve Beckett:With founders in startups, when you've got lots of money and no shortage of ideas, like all kinds of chaos can issue. And Eric, our founder at Min, is an incredible visionary and is an ideas machine. And it's very hard to say no to your boss, especially when you've got lots of money in your bank account. And so, you know, what I really think about the learnings that everybody should take is that you need rocks that hold down the kites. And so, you know, the rigor that comes from having a very good FP &A function, you know, the financial planning accounting function, having a very good CMO where you really focus on roadmap roadmap roadmapping and you're very focused on delivering roadmapping you know good program management chops within the business you know that's what every everybody needs when you're in a founder-led company and that allows the founder to flourish you know you've got the yin and the yang and the yin and the yang is is what a cmo's job is you know you spoke about you know you got to talk to to investors about the numbers and a cac function and at the other end though what else does a CMO do?

28:42Steve Beckett:Well, I think there's three things that a CMO has and I don't think any CMO is good at all of them. And the first one is really, really good sound conceptual thinking and creative thinking. And you need a big idea to take to market. Like what is the big idea? Obviously that needs all running through a system in terms of how, you know, your brand proposition flows through all your creative DNA and all your DBAs that we talk about. But yeah, you need, you need good conceptual chops and then you know rather like a funnel you then you need to be articulate to really articulate the the value proposition in terms of how are you solving for customer problems how are you people's making lives people's lives better through uh technology and products like swift and that's the the product marketing chops at the bottom it's about driving short-term sales and the the drag net which is you know performance media and i and i think no cmos are good at all three i think i'm middle and upper but when it comes to the numbers game the macro bit around the cac function and how brand drives a business i really love that and you know that how we raise money was always a brand story i guess in the first instance you know we had a founder who i did a friends and family round and they invested in him because he was very successful in a prior life well then you get to series a series b series c so series a was we've got product market fit.

30:07Steve Beckett:We've got a good view on CAC. We can spend more. This channel mix is working. How scalable it is. Well, it will get us to the next step where we'll do Series B. Series B is a brand story. We're going to get into esports. We are going to bring competitive sport, professional sports to Zwift. And we did it. And that was a brand story. The last chapter, Series C, it was, yeah, we did esports because we created a brand that gave us a license to go and do that. That's why the Tour de France on Zwift happened because we earned the right to do that because our brand was so powerful. And then seriously, we got into hardware.

30:48Steve Beckett:For people listening at home, the customer journey for Zwift means you've got to figure out how you Zwift at home. Okay, you have a computing device, but you're either on a stationary bike or a bike on what we call a trainer. Hardware is really the enabling force. We talk about Zwiftiness at work, and Zwiftiness is really about bringing a real consumer centricity to how we develop products. Often in the startup world, you have founders who are engineers, and they're building products in their vision, and they're engineers by trade, but they're often over-speccing things. At Zwift, we really want to try and simplify everything for the customer, the cost the cost and really like how to get on Zwift and so that series c was um getting into hardware and so that you know the the the frontline role of a cmo is selling the dream selling the vision it's the same thing that you're trying to do to a customer because you're you're promising something you're promising great value and a great time and so you know a good cmo a startup needs to be really good at raising money albeit with all the help and rigor that the cfo brings because you know they are that they're the magicians when when it does when it does come to raising money really and what's it like making that pivot from because you're going from a software subscription at 11.99 or 14.99 whatever it is a month to selling a 1500 pound 1500 dollar uh full bike that's quite a different thing to sell isn't it so what was it like marketing the full bike rather than well it's interesting yeah we've we we retail a bike to get on Zwift a bit like a peloton bike but uh when we when we originally wanted to design manufacture and retail all all the hardware that currently exists in market the bikes existed we want to make a better bike and then try trainers as well and but what you know what was really apparent is that we built our business by people buying hardware from other people.

32:53Steve Beckett:And what we thought wouldn't be the right thing to do ultimately was to deliver competition into a market that already exists, manufacture our own hardware that is very capital intensive. And so that's a really big bet. So you look at Peloton and where they struggled. They put huge down payments on making hardware. There was a bet on how many customers they were going to acquire. So we decided actually we're not going to get into the engine of how you Zwift, which is the trainer. What we did was we built a bike, which is a modular frame that sits on top of a trainer. And then we really elevated the experience in terms of how the bike looks.

33:35Steve Beckett:And I think, I'm not sure how familiar people are with the Zwift ride, I think, but it looks like it's made to be in the home. It's really proved to be the catalyst for growth for Zwift because it does come down to hardware as the enabler. so this bike is on itself has sold in one year more than all bikes sold before it from all manufacturers but also it's been a growth catalyst for more people riding trainers and so i think what swiss always trying to do is integrate and aggregate the industry around it you know take everybody on the journey so i think we got a bit confident when we originally raised money so we're going to make our own first party hardware i think we got over our skis a bit too much and so but we've ended up in a really great position.

34:16Now earlier on you meant you dropped into conversation the Tour de France Femme AVEC Zwift of course and that's you very kindly invited producer James and I out to experience it which was incredible I have to say and big thank you. It's one thing that struck me apart from obviously the seven hours it took to get up the cold of Madeleine at the end in the rain was getting a front seat really to see what the Women's Tour de France was like actually and and the crowds and the organization and and i was amazed that like there's no compromise with the men's event is there you know it struck me just how far women's cycling has come in the last few years which is amazing and you've been a core past that journey haven't you because you took a big investment in the sports yeah so it's about making bold moves

35:02Steve Beckett:and also as with we we want to create our own weather so by creating our own weather it means creating moments around our brand that are very noticeable in the consumer demand because everyone's fighting for attention and i think the tour de france firm of x with combines both of those things but critically yes we're a title sponsor but we founded that event and again like as a brand we earned the right to do that we we did the tour de france on zwift and then we said hang on, the last bastion of male sport is probably the Tour de France. Let's found together the women's Tour de France. And it's been an incredible success.

35:44Steve Beckett:When you look at the average budget of a women's World Tour team, it's doubled in the last three years. If you look at the amount of viewing that it generates, it's like 150 million hours of TV for the event last summer. The number of days has increased over the four years. And what's really interesting is that we founded the event, because it costs a lot of money, right? It's our biggest single marketing expense. Very, very super duper upper funnel. But we founded it in a year where our marketing budget was three times greater than it is now. So when we came to renewing this year, it's a really sensitive topic.

36:20Steve Beckett:And, you know, we've got to be head over heart when we're making these decisions. And so, but we do know it's working. and uh you know i think i think startups do think a bit more long term so like as it's on holiday last week i was reading the steve job that the phil knight book uh shoe dog and you know he wanted knight to be a multi-generational brand and that's what we believe at zwift and that's why we make these investments so investments not costs right and i saw at sky like one of the kpis for team sky was creating a million more cyclists in the uk we did it you know this inspiration to participation and this year women account creations on Zwift are up 23 % year on year this is I was going to ask you that can you see the investment in the FEMS and then more people participating yeah so we need to we we look at it right the way through the funnel so we try to measure the media value the marketing value and then people come to the front door they create an account then they get into a trial then they hopefully become a member they subscribe and then hopefully we retain them so we look at this right the way through the funnel and you know the customer onboarding needs to be mindful it's a female audience it's not this one size fits all mammal audience but you know we believe we can grow the sport of women's cycling to grow our business that's the strategy growth grow the sport grow our business and that's what's happening and it's a and it's a big bet and you talk about being strategy first in approach and what those behavioral traits are that you take from Sky.

37:54Steve Beckett:Like, you've got to make bold moves. You've got to have big targets. You've got to believe it to achieve it. They're all the things. This thing was never going to fail, never going to fail. And so, you know, it's something that everyone at Zwift is incredibly proud of and really, really close to, like, emotionally. That's amazing. Very exciting and huge kudos to what you've done. Maybe to round up then, And what, if someone's starting out, they've got an idea like Eric and the founders had, they want to do what you've done. Because you're in a very rare category of kind of tech startup unicorns and ones that have survived through a major structural change like COVID.

38:33You know, it's quite a rare position to be in. What would be your advice to somebody starting out today wanting to do what you've done?

38:38Steve Beckett:I think I looked on Google a few years ago, how many unicorn businesses are there? Like businesses that are valued at more than a billion dollars and it was like 1300 also how many billionaires in the world are there i think it was three and a half thousand so i was like holy shit you know you can't expect you're going to become a unicorn you just can't do because it'll be a recipe for failure and then also i said that the financial playing field start has changed so much now with startups so you don't have the opportunity to spend money so freely in the past but i think it comes down to surrounding yourself with the right people and I was quite fortunate because someone found me if you're starting off in marketing I think it's great that you can get a foundation uh for the likes of Unilever or Procter & Gamble you really learn a methodology and a system that you can really take elsewhere but um the opportunity to work in the startup world is incredible so I think there's if you've got an idea you you've really got to look to seed investors there are many of them but it's really you know the the nuts and bolts through a marketing lens are knowing your target addressable market your serviceable addressable market having a really good view on the competitive picture the competitive picture informs your value proposition your brand positioning and then you need a go-to-market strategy that has a very firm point of view on the cost of acquiring a customer that then you build an economic model around like i don't think anyone's really gonna fund a big idea without the the hypothesis that that goes into that work and the rigor that says actually i've got an idea but i think it's going to be a successful business you just got to get on the road and and in travel traveling salesman mode you'll have heard from so many successful startup founders who beg stole and borrow from from many different places so many people said no in the early days but you've just gotta you've really got to persevere and uh yeah I think every unless you've got bone deep belief in what you're doing you're probably not going to make it because you put everything on the line when you when you're part of a startup you just commit everything it's it's very personal to you you know it's uh your friends and family it's your identity right and then yeah then you've got to also think about passion and profession for me it started at Team Sky actually started Sky I can't believe I worked at Sky I thought I had the best job in the world you know and and at Zwift it's just those you just can't pull apart those two things so you've got to be able to acknowledge and embrace there's going to be tension by the passion and profession colliding but if you can find it if you can moderate yourself it's uh pretty bloody amazing i was reading something from sam altman actually who was asked like what what's the common characteristics of the billionaires that he's met and one of the points i remember stuck out was i can't remember quite what the description was it's something like unreasonable uh levels of self-belief yeah beyond all logic you know that that that is gonna work um you know beyond and the ability to kind of take the knocks and have unshakable belief yeah you've got to walk through many walls you've got to think that what you're building is going to go on forever as well you know talk about the multi-generational brands and companies but also I think a lot of those Charlie Big Chip billionaires I just don't know when to stop either like how much money do you really want to make but yeah it's pretty crazy the people that you know I've been exposed to and met on the VC side of the investor side and been born in Grimsby in the north east of England and then hanging out around Silicon Valley.