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In the 90s, we were making some attempts to make it mainstream in clubs.
And we said, we've got this great idea.
You need at least 10 machines.
We'll train your staff to instruct how to row in a team kind of workout.
And that was the same year that spinning started.
Which was a huge craze, yeah.
Yeah, so all the space that we were thinking the health clubs could use for a rowing, this about spinning is where it is at.
That was a bad timing. It was kind of a flop.
A flop. Yeah. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Roz, and on the show today, how two brothers helped bring a niche sport into the mainstream with a rowing machine that really felt like rowing.
And is now in fitness centers around the world.
You can build a pretty good business of a niche product.
Something that a hardcore group of devotees will love and support.
Like a tongue scraper, or a salt slab, or a ring light.
The trick is how to turn that niche into something bigger with wider appeal.
If you listen to the show, you've heard us tell stories about a bunch of brands that made the transition from niche to mainstream.
Like Simple Mills Snacks, or Strava, which started out as a website for hardcore cyclists.
But probably the best example we featured is Burton Snowboards.
Back when Jake Burton Carpenter offered up snowboards, very, very few people had even heard of the sport.
Today's guests also launched their business, Concept 2, in the far reaches of the niche netherworld.
Back in the late 1970s, brothers Dick and Peter Dreisigacker were Olympic-level rowers who were looking for a way to get an edge on the competition.
They started by making something that was totally new at the time.
Ores made from carbon fiber instead of wood.
These ores were lighter and faster and more durable.
But after a few years, the brothers realized the market for selling ores to competitive rowers is decidedly limited.
So they eventually moved towards the product that they're now best known for.
Stationery rowing machines.
Machines that capture the sensation of being on the water.
Now at the time, the product was still very niche.
But today you'll find Concept 2 rowers and fitness centers all around the world.
And how did they do that?
Well, as regular fans of this show may have guessed, it was a mixture of luck and skill.
The skill came from Peter and Dick's deep knowledge of the sport and their engineering know-how.
The luck came from the CrossFit movement, which embraced the rowing machine and helped to popularize it.
The machines are still assembled in Vermont, where the brothers first began putting them together.
Peter and Dick were trained as engineers and their dad was an engineer too.
They grew up in the 1950s and 60s near New Haven, Connecticut.
That was a little bit of an open rock well, I guess.
Bike riding, zooming through the neighborhoods, playing with the kids.
We did the things that people did.
We went to visit grandparents and cousins and did plenty of stuff.
And then of course in school, we did sports all the time in school.
Would you call your kind of upbringing more like a stoic New England type of upbringing?
Not in a bad way, just like in a sort of very, we don't talk about emotions or we don't talk about feelings.
We just move forward. I'm going to say yes on that.
Definitely yes. And there's some benefits to that.
I'm not saying that's a bad thing.
I'm not saying that's very much correct.
I'm not sure we saw parents fight much.
They had some arguments, but really it was not visible among the family.
Yeah. All right. Well, Dick, you're the older brother, so we're going to start with you and then we'll bring you and Pete.
I know, Dick, that you ended up, because you're older, you ended up going to Brown.
And I guess while you were at Brown, you played football on the football team.
I played football for two years, but I started rowing freshman year.
I had seen it in New Haven.
I watched the Yale crew row at least once or twice on Houstonic.
And I said, well, that's kind of an interesting sport that looks like it would be good for me.
It looks like I'd be built for it.
And rowing is one of these things that if you're so inclined, it's very easy to get hooked on.
It's different than most sports because it's very team oriented.
Yeah, it's a race. There aren't too many sports that's both a race and a team, and a team where you have to work together totally.
Synchronously. It's not like, I mean, even on a basketball team or soccer team, you're working together, but rowing is different.
You are literally doing the same movement, motion, exactly in time in order to win.
Right. It is the team aspect of it that draws you in because you're doing it with, in the case of the college eights, you're doing it with these seven other guys.
So there's a real kind of bonding effect there.
And you know that you're not in it alone and these other guys are relying on you to do your best.
Yeah. So Dick, I guess you graduate from Brown with an engineering degree.
And I read that at that point you moved to Philadelphia.
And I guess you start rowing with a pretty famous rowing club there called the Vespa rowing club.
Yes. Right. But I'm kind of bearing the lead here, which is you were really good at this.
Like you would eventually be part of five US champion teams between 1970 and 1972.
And in 72, you made the US Olympic team, you went to Munich to row for the United States.
Yeah. I've been on the national team for a couple of years.
Went back to Vespa. There were a couple of other guys that were there and we started to row and continued to improve over the summer.
And we started winning smaller races and we wound up winning the trials.
But it was kind of an uphill battle.
I think we peaked at the trials.
And then very shortly after, we were over on the course in Munich.
I think we were quite ready to make the jump from trials to the Olympics and we didn't do as well as we thought.
You didn't come back with like seven medals like Mark Spitz?
No, no, no. No. But still, it's pretty cool.
Yeah, no, it was still a great experience.
Yeah. All right, meantime, Pete, you went to Stanford also studying engineering.
Yep. Right? And tell me a little bit about, I mean, you did not do any kind of rowing, right?
I mean, your sport was tracking, I think, discus, right?
Discus and shot put. I mean, I was sort of in high school, I ended up getting fairly good at discus.
Part of it, Dick also was through the discus in high school and this kind of he and his buddies would practice out in the field.
And I'd be the little brother out in the field throwing it back to them.
And so as they got better and better, I got better and better too to get it back all the way to them.
And so by the time Dick graduated from high school, I was basically throwing as far as he was when I just got into high school.
Nice. And so as kids, were you playmates or also was the age gap so big that you didn't really play that much?
We didn't really play. There was like two separate, totally separate crowds that we hung out and, yeah.
But clearly, I mean, clearly you were close, right?
I mean, even though, Pete, you were at Stanford, Dick, you were on the East Coast, I know that Pete, you went and visited your brother in Philadelphia at a certain point, which is I think the first time you actually tried rowing, right?
Absolutely, yeah. Of course, I was, you know, athletic and so he said, why don't you try rowing?
And I said, okay, great.
So he put me in a single, which is, it's got to be about 10 inches wide, I think, the single, and pushed me off the dock.
In Philadelphia, there's a dam just downstream from the boat houses.
I was sort of drifted around out there trying not to flip over.
I really thought I was petrified.
I really couldn't move and boats were coming right at me and I had to shout out to say, stop, I can't move.
And finally, I sort of picked my way around and got back to the dock, but it was probably half an hour later before I got back to the dock.
And that was my first experience.
It was terrible. You hated it.
I hated it, yes. Even though you're a strong guy, you were doing shot put in discus, which I mean.
That doesn't do any good when you can't move.
By the way, you're one of the very few people I've ever encountered who did shot put in discus.
I don't think enough people do those sports anymore.
We need to revive those.
Yes. You know? Yeah. Discus actually is in a way similar to rowing in that it is you practice and practice the same move, trying to get it perfect.
And when it's perfect, it just flows beautifully.
Yeah. Just very similar to rowing.
All right. So the first time that you try rowing, you're not that into it.
But I guess while you're at Stanford, your brother Dick also comes out to California to be a coach for Stanford's rowing team.
And eventually the two of you end up pursuing master's degrees in engineering at Stanford.
And so during that time, like, did you guys ever talk about, hey, maybe after this we'll do something together?
Or was there any, do you recall any kind of conversations like that at the time?
Yeah, it wasn't right away.
It wasn't really until we got into doing a couple of classes together that had to do with starting a business and writing a business plan.
Right. And oddly enough, our business plan was called Concept 2.
Yeah. The product design program that I was in, there was a final year long project.
And I had chosen to work with North Face Company on a backpack project.
And we use that as the subject of our business plan.
You designed a backpack?
Yes. And they did actually produce it for a while.
And they licensed some of the components that we were getting royalties from them.
Wow. That up a little bit.
We figured the royalties, when all was said, amounted to about $0.35 an hour for our work.
Not bad. Not bad. Not bad.
Pete, this is something that I'm curious about because you hated rowing when you first tried it in 1972 or something.
When you first tried it in Philadelphia, you didn't like it.
But eventually, something clicked with you and rowing because you then got into it.
Certainly when your brother was the coach at Stanford, you got more involved.
Tell me how that happened.
How did you go from hating it to all of a sudden, not me, but all of a sudden, but to liking it?
I guess when you jump into a boat, you say, well, I can do this.
This is nothing. Look at all these people out there.
And you get in there and you realize you have no clue of what to do.
And that puts you at very disadvantage for the first time you go out there.
Then what happened is that after my sort of disco throwing was done with, Dick said, well, why don't you come down and we can row a pair together.
We'll get in the boat, teach you how to row.
And I think I picked it up pretty quickly.
We got into some races and we beat some people in pairs.
And when you beat people, you feel good about the sport all of a sudden when you start doing well.
Yeah. And clearly, like your brother, you had some talent for it.
I mean, you guys were good enough where you decided to try out for the 76 Summer Olympics team.
Yeah, I think that the few pair races we got into out West, we typically won the race.
The two of you guys were a pair.
Yeah. So you guys were a brother rowing team.
Brother rowing team. Yeah.
The Drisagakha brothers were like the Winklevoss brothers from Harvard, you know, the guys who tried to start Facebook.
They were also rowers. That's a different story.
And so tell me, you know, not to give away the ending, but you did not make the Summer Olympic team.
What happened? You just had to.
Well, we had an interesting plan, I guess you'd say.
Our plan was to drive across country and do altitude training.
We would camp and row and it was great conditioning.
I mean, some of the lakes we found were like two miles high in Leadville, Colorado.
But you wanted to train at altitude because obviously that would require more aerobic exertion and you figured that would help you.
Yeah. I think we had a great idea for altitude training, but we didn't really understand it.
We don't know how to do it.
So we got quite fit, but not fast.
And there were a lot of good pair of rowers.
Yeah, I'd like to point out that most people don't win trials.
Got it. During that training period when you were training for the Olympic trials, which would be for the 76 Montreal Games, you started to experiment by kind of modifying your rowing oars a little bit and kind of playing around with them.
What were you doing? Because oars, I'm assuming, were just big wooden oars, right?
At the time? We had a plan to create this modified oar as our secret weapon.
Okay. What was the modification?
Well, we cut off the last four feet of the oar, blade and shaft, and then created in our apartment a lightweight blade.
So we had these sort of hybrid, I guess you'd call it nowadays, but there were pretty ugly kind of contraptions that were half wood, half carbon.
And that's what we came to the trials with.
Yeah, I mean, I would add here at this point in time, the plan, we had a plan to try to start a business together.
And these new oars that we had was going to be our first product.
And it was changing from wood to where the whole oar would be composite material, fiberglass, carbon fiber, et cetera.
So that was our real plan, first making these prototypes, which were real Frankenstein oars, going to trials, and then going on and starting a company where we would do kind of product design, not necessarily a manufacturing company, but we're saying, well, you know, the oar market's not that big.
We could make a few oars just to make ends meet and in the meantime, come up with other product designs that like the backpack or something that other companies might want to manufacture.
I got you. Okay, let's let's kind of break this down a little bit.
First, let's talk about the oars, right?
Oars, I'm assuming in the mid seventies, if you were a rower, were entirely wood.
So the innovation that you guys came up with was to add things like carbon fiber.
Why was this so revolutionary at the time?
Like why would somebody who was a rower be like, wait, what are you doing?
Boat builders were using carbon and synthetics for boats.
And typically a boat builder would have some guy in the corner making wooden oars because they needed them for the boats.
But it was really a boat oriented industry.
So we came along and said, well, you know, the oars are important too.
And by utilizing the synthetics, we could make them lighter, more durable, easier to maintain.
How heavy was the average oar at that time?
Nine pounds. And then what did the synthetics do in terms of reducing the weight?
About seven and a half. But even that reduction would be significant if you're competing, like to get a lighter oar.
How would that give you an advantage in the trials?
There's two advantages.
First, when you're rowing at a high stroke rate, you're having to move, swing this, rotate this oar back and forth through this wide arc.
And because there's weight, particularly the weight out at the end where the blade is, it takes effort to accelerate that back to get to the next stroke.
So that takes a little bit of effort.
And races are won and lost on little bits of effort.
Now the other element is when we started manufacturing the oars, they were round shafts, smaller diameter than the wooden ones.
So there was a lot of wind resistance.
And again, that may not seem like much, but every little increment gives you an edge.
I mean, races are won and lost by a couple of feet.
Yeah. All right, so you do not make the Olympic team, but you have this idea to build a design studio.
You might make backpacks, you might make other products.
Right. We'd make prototypes, like we did the backpack with North Face, that gave us some confidence that we could operate.
I guess the problem was when we started making oars, the oars kind of took off and it kept us busy full time.
All right. So you, I guess both of you were still kind of in California, but you decided that you needed to find a place to build your business.
Tell me about the decision.
Like why didn't you just stay in California and keep making oars there?
I think our decision to move out of California was really a lifestyle kind of decision.
Usually it's the other way around.
People come to California for lifestyle.
Well, but we'd already tried that.
Right. I think we had a very clear vision of the place.
We had a clear vision of the place that we wanted to move to, to live, to do this business than we had of what the business was going to be.
The vision was to be more rural than we could find in California, to have a place where we would live, get up in the morning, have a shop right there, walk over to the shop, do our thing.
And if it was a beautiful day, we could stop early and go for a ski or work in our garden.
It was definitely a mid-70s kind of vision.
I'm curious for a moment because you would end up in Vermont, in Northern Vermont, in a rural part of Vermont.
And I want to ask you about that in a moment.
Did your parents think that was a little weird given that both of you had these Stanford Master's degrees in engineering and that your dad had been an engineer his whole career?
And that this is still a time where people were doing these traditional career paths.
Did your dad or mom or anybody say, wait, what are you doing?
Yes, that's correct. Yeah, they were wondering what we were doing, but I think there was a gradually they came around when things started to happen.
But in the beginning, I mean, I think they were probably worried of what we were doing.
But, Guy, I'd like to come back to one thing that you had asked a question about.
Did our family hide emotions or express emotions?
I think this was one case where we benefited by the fact that they probably hid their actual feelings about what they...
They might have been like, what are they doing?
Yeah, but I think, unfortunately, probably because of the family dynamic that we don't have any good stories about that.
You don't even know. Yeah, yeah.
When we come back in just a moment, how Dick and Pete expand the business by building a stationary rowing machine, come up with a plan for getting it into health clubs and fail.
Stay with us, I'm Guy Riz, and you're listening to How I Built This.
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Hey, welcome back to How I Built This.
I'm Guy Razz. So, it's 1977.
I'm a new customer and I'm a new customer.
I'm a new customer and I'm a new customer.
I'm a new customer and I'm a new customer.
I'm a new customer and I'm a new customer.
I'm a new customer and I'm a new customer.
Hey, welcome back to How I Built This.
I'm Guy Razz. So, it's 1976 and Pete and Dick have moved to Vermont to set up shop in the barn of an old dairy farm.
The idea is to start a design firm and make all kinds of things.
But at this point, they start out by building a new lighter weight ore for competitive rowing.
Remember, the ores were kind of an interim thing, though.
They were to get us going.
And we were hoping that we didn't have to make too many, so we'd have time to do other stuff.
I think the reason we picked ores is because we knew a lot of the coaches that were at the colleges, so we could take ores to them and say, here are these ores we're making.
Try them. And people liked them and they started buying them.
And you had the legitimacy because you were a coach at Stanford and you probably had the connections.
And both of you guys had been in the rowing community, so you knew some of these coaches.
Yeah, we knew most of them.
Yeah. Let's talk for a moment about the name, Concept 2, because it's an unusual name.
You called your firm, it wasn't that you were calling the product Concept 2.
Your firm was called Concept 2, right?
Your design firm. Right.
We were looking for a name that was rather generic, so we could, in fact, work with other products and other companies.
And the other thing, at that time, and this is a product of taking the master's courses and the product design at Stanford, we did a lot of almost studying or learning about the design process.
The whole idea of Concept 2 came out of the idea that you don't just consider one idea.
You look at at least more than one idea, preferably many ideas.
This initially was supposed to be kind of a side project for the design firm, but at what point, and I think pretty quickly within a year or so, it really became what you were doing.
You were making oars. I think our breakthrough came probably when Yale bought some oars because we knew the coach really well.
And they end up beating Harvard for their big Harvard Yale race, and a lot of people took notice on that.
And a lot of people attributed it to the quality of the oars that the Yale team was using, the fiberglass and carbon fiber oars?
Well, let's put it this way.
I think a lot of people attributed it to that, whether or not that was the case or not.
Whether, yeah, Yale might have just had a better crew that year and we lucked out.
But I would say that after Yale beat Harvard, we got an order from Harvard for the oars.
Got it. And tell me about the process in the barn.
How long did it take to build one oar, for example?
Oh boy. I think in the beginning we could make two a day with just the two oars.
That was with us, just us.
But in the end, we were making one set a day, eight oars a day.
Probably with the two of us and two or three other people.
In the early 70s, the federal government, there was a ruling, Title IX, that essentially required publicly, I think, probably funded institutions to equally fund sports for boys and girls, men and women at high school and college level.
How did that affect, I mean, it must have had a huge impact on your business, right?
Because all of a sudden, you've got girls and women getting into rowing, I'm assuming it just doubles your potential market.
Yes, I think right in the beginning, it wasn't as big a factor because it took Title IX a few years to really gear up.
But very shortly after we started making the oars, it really was noticeable that there was more women's crews at a much bigger pool of universities across the whole country.
All right, so you guys are, I think by 1979, three years in, you have built your 1,000th oar, okay?
But this is still very small business, right?
Like how much was each oar, were you selling each oar for at the time?
I think they started out at like $160, maybe?
Less expensive than the wooden oars that were available.
And I think that was one reason why we helped anybody to kind of infiltrate the market.
We tried to price it at what we thought we could eventually make it for.
So we were projecting ahead that we could eventually get to the point where it was more profitable.
And we use that philosophy all the time with other products now too.
The business in 1980, which was basically making oars, this was a seasonal business.
Can you explain why? I guess seasonal because nobody was buying oars in the middle of winter?
Yeah, the teams that buy the oars, the college teams, they're on sort of a budget schedule, you know, that they have money to spend or in certain times of the year.
So they would typically, you know, they would buy oars early.
I mean, it would be kind of winter really because they're buying them for the spring.
Yeah. So you had to come up with another product that could basically, you know, help sustain your business.
Otherwise, you're just making a seasonal product that sells seasonally.
That's right. So I guess the idea that came up was, all right, if we're going to have a business that we can sell a product year round, let's sell an indoor rowing machine.
Let's make an indoor rowing machine.
Was that the thinking? Yes.
Most of the products that we've worked on and been successful with are products that we want to use ourselves, you know.
And the theory is that if we, you know, like the idea of having some way to train specifically for rowing without having to get to the water or have a water available, then there's going to be other people like us that are out there.
So, all right. So you decide to create an indoor rowing machine.
Now, let me actually clarify something because in 1980, indoor rowing machines existed.
Oh, yeah. That's not an invention that wasn't out there, right?
There were, there were probably you guys had used them before.
Yeah. In 1880, there were rowing machines.
Yeah. And were they widely used or would you find rowing machines at fitness centers in 1980?
Yeah. There was, you know, fitness studios, gyms would use them.
And, you know, there was a pretty good market for those at one point, but that kind, I don't think people really like to use them that much.
It wasn't that exciting to use them.
It was more of a drudgery.
But the whole idea of indoor rowing was kind of, nobody was out there beating the indoor rowing drum when we made our early rowing machines.
I'm looking at a photograph of the first prototype that you guys built, which essentially, it looks like you took a bicycle, turned it upside down.
I guess you nailed it to the ground and then attached some kind of chain to the rear wheel and then some kind of seat.
And that's what you basically would just pull and pull and pull and that would, you know, feel like you were rowing.
Yes. And it felt quite good, actually, surprisingly.
Just in that crude form, we could see the potential.
We had these little fan blades, paddles.
It's almost like putting baseball cards on your bike, you know, on your bike spokes and putting the right amount of weight on the wheel, on the bike wheel.
Which would create resistance?
Yeah. The weight would create this sort of momentum and then the paddles would create the resistance and you get the right blend of momentum and resistance.
And it can feel like, you know, rowing on water.
So as you started to kind of refine this concept, because it wouldn't take you very long, I think it took you about a year before you actually had a product.
In your mind was the market still rowers, like students and professional rowers who wanted to train the offseason?
Yeah. At one point when we were first selling these, thinking that a lot of them were to individuals, we had, we visited by a benefactor of one of the schools and he saw them and he said, you know, I think I'm going to get 10 for my school.
And that was the first kind of mass school training sale that we had.
Did you do any research at the time looking at, you know, the potential market for the product?
I mean, did you have any data or insights that led you to believe that this could be actually a really big product?
I think we figured that the rowing machine could branch out into the non-rowing market if we did it right.
But I'm interested by Guy's question.
One issue is we don't really have a good answer to your question about market research and that kind of stuff.
I mean, we didn't go into this from the idea of a business major might go into it in a different way, you know, and say, well, let's look at the market size, what percentage of market can we get?
And this kind of thing, we didn't do that.
Because had you done that, you would have discovered that the potential, at least at that time, was small.
Right. We might not have done it.
Yeah. All right. Your first indoor rower comes out in 1981.
Help me understand how you, 1981, pre-internet, you know, pre-fax machine, I mean, it's like, you got to sell one of these things at a time.
I mean, did you take it to a trade show?
How did you even start to make people aware that these were available?
The first thing we did was there was a national master's rowing race in Boston that year.
This was on the Charles River?
Yeah. And we took the, probably the one machine we had down there and set it up in front of the boat house that was where the registration was.
I mean, it was a pretty rickety thing.
You have to laugh at it at this point.
And I would say almost every one of these people who registered for their race came out the door, looked at it, tried it, said, oh, man, I'm going to get one of these.
It was just an instant. Yeah.
Well, at that point, we were doing our first batch.
I think it was like 50. And I think we sold most of those, if not all of them, at that master's championships we've got to.
How did you make these machines?
How did you get the component parts for them?
Were there factories that could make what you needed nearby?
Well, one of the beauties of the design was that a lot of the parts were bicycle parts, just off the shelf bicycle parts.
Yeah. And the metal framework, there was a machine shop in town that probably most of their work was fixing tractors and farm implements, but they were able to cut and weld and drill and poke.
And so they took our pencil drawings and created the framework.
So, all right. So I'm thinking like these initial, like from today's perspective, these first models looked kind of janky.
Like they probably had like, you know, uneven welding, not uneven, but sort of they weren't machine tooled, right?
It was like hand welded.
So each one was probably a little different.
Right. It wasn't robotic welding like you know.
Yeah. And how much did they go for at the time?
$400. And was that a good deal in 1981?
82? Well, these rolling machines that the colleges would use that they couldn't really afford to have a whole bunch of them in their gym, but they maybe have one or two.
They were over 3,000 at that point, maybe 3,500.
And they were big, clunky kind of machines.
They took a lot of space.
Whereas for that same amount, they could get eight of our machines and have the whole team of eight rolling at the same time and training at the same time.
And the difference between yours and the earlier versions was this air resistance, right?
That basically you could you could ratchet up, make it harder or easier using air resistance and it could and it would adjust how easier hard it was to use the roller.
Right. And it felt more like rowing in a boat.
And by February of 82, we had the first indoor race down in Boston.
We got a call from a friend who was rowing down in Boston.
Yep. Who said, we're going to put together a little race at the boat house.
What kind of race? An indoor rowing race.
What is an indoor rowing race?
Explain this. You get a couple of machines.
In this case, I think there were five or six.
Yep. You set people in a starting line and you have a starter and you say, okay, everybody go.
And they go for a distance on the speedometer.
Okay. And how do you measure it?
Oh, I see you. Because it was a mechanical and analog speedometer, right?
A little cheapo bike speedometer.
Yeah. And so, and then you time it and then at the end, whoever had the highest number on that speedometer wins.
Yeah. They have a stopwatch.
Time over the stopwatch.
On the odometer. And if we were a marketing group from the beginning, we probably would have come up with the idea ourselves, but we weren't.
Yeah. And after the race was over, they tapped a keg of beer and everyone had a good time.
I'm trying to remember.
We had done, we've done a bunch of fitness stories in the show.
We did the story of Jazzercise.
But in 1982, 83, right? We're, I mean, I don't think fitness studios were quite like what they are today, right?
It wasn't, I mean, people went, but it wasn't as widespread and ubiquitous as it is today, right?
I would say that's correct.
Yeah. But it was shortly after we were doing the rowing machine, there were other pieces of fitness equipment like the stair climber type one.
Right. Stairmaster. And the, yeah, stairmaster, they became a whole class of machines that were, you know, people just would kind of stride on.
Yeah. And if they had any, a rowing machine at all in those gyms, it'd be stuck in the corner and no one was using it.
And I think by 83, you had sold a thousand rowing machines.
So, you know, you'd done about $450,000 in revenue by that point, you know, a couple years in, which, you know, not horrible, but not, you know, gangbusters.
There's an advertisement that I'm looking at from that time.
And it's an awesome ad actually that you guys put out.
And it's a series of photographs of a man doing different exercises with like different weight exercises, but holding up the actual row.
So like trying to lift it, trying to bench press it, trying to squat it.
And then the last window is the guy just rowing on it.
And it says, you know, you can do all of these exercises and work out, or you could just do this one exercise and be in great shape.
So was it hard to make that case to people like, hey, this rowing thing is great.
It's low impact. It's full body.
Did people not quite get that concept in 1983, 84?
Yeah, well, that was me with the doing the exercise.
Oh, that's you in the picture.
Yeah. Yeah. All right. It was somewhat of a take on machines that were meant to do all these exercises on and thinking that rowing does all these things for you.
You know, that is definitely what we're trying to convey there.
I think we were one of the few voices trying to say that for quite a while in those days.
But still not a whole lot of interest because you'd go to a gym, they'd have a rolling machine and nobody would use it.
Nobody would be on it. Right.
All right. 1986, you're 10 years into the business.
And I would assume that at this point, your overall revenue is in the hundreds of thousands of dollars.
So it's still a very small company.
Is that fair to say around that time?
Yeah. I mean, we were growing slowly.
Were you concerned about the slow growth or was that sustainable?
Was that, you know, even though you didn't have a lot of revenue, you were still able to make a profit?
Yeah, we're profitable.
And we had money to be able to sort of start putting into research, going away from the bike wheel to more custom components that were able to refine the machine.
Because I think you changed the design in that year, which was it was no longer just an, the wheel was enclosed in like a, it looks like a big fan, like a, yeah, like a fan blades are enclosed.
I think that was an effort to make it more suitable for more general public.
I think the health club market for us with the original model A as we call it was very limited because you had this open flywheel spinning around that people could walk up to and stick their fingers in.
Although nobody ever did that, that I know of.
It seems, you know, you see this spinning thing and you know, you shouldn't touch it, but having it in a cage was big and big, broke that barrier for us really.
I wonder by the late 90s when there actually were stores selling fitness equipment, were you still resistant to the idea of doing it that way?
Did you still want to focus on, no, you got to buy it from us?
I mean, I think when we first started out, you know, stores or retailers were, were demanding very large margins, you know, they had to have 40% margin or whatnot.
And we didn't want to raise our price so that we could give them a 40% margin.
We were looking after the end user.
We thought the end user was really our person.
Our customer. Yeah. But in the 90s, we were making some attempts to make it mainstream in clubs.
And, and we said, we have got this great idea, similar to what the boat houses have now, where the boat houses will have 20 machines for their team, and they'll work out together.
So we've created this package.
And we said, okay, this is how much space you need.
You need at least 10 machines.
We'll train your staff to instruct and coach how to row in a team kind of workout.
And we had the whole thing sort of packaged.
And we had a couple of pilot health clubs that we inserted these into.
And that was the same year that spinning started.
Spinning. Yeah. Yes. It was a crazy craze.
Yeah. So, yeah. So all the space that we were thinking the health clubs could use for a rowing style class that they spoke about spinning is where it is at.
It was a bad timing. It was kind of a flop.
A flop. Yeah. Yeah. And so it just kind of blew rowing out of the water, so to speak.
When we come back in just a moment, after rowing gets run over by spinning, it finds a new home in another fitness craze.
Stay with us. And you're listening to how I built this.
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Hey, welcome back to How I Built This.
I'm Guy Riz. So it's 2007, 30 years into the business, and Concept 2 is selling pretty well.
But the rowing machine is mostly being used by competitive rowers, so still pretty niche.
But then, Dick and Pete go to a trade show and meet a guy named Greg Glassman, the founder of another fitness community, CrossFit.
The way I understand it, Greg was, has always been a fan of the rowing machine.
I mean, he's into that hardcore stuff.
And he said he liked the machine because it'd make people puke, basically.
And so that was one of the pieces of equipment he started his gym with.
He told me a story one time that he actually felt a little self-conscious when he would contact Concept 2 to buy more rowing machines because he wasn't in the rowing community.
And he was concerned that we wouldn't sell them to him because he wasn't a rowing team.
So at this point, they started, and CrossFit, CrossFitters are a tribe, you know, and they are very loyal.
And that's a different audience because it's not rowers.
All of a sudden, you've got, and did you see a shift starting in 2007 with your rowers becoming more mainstream?
Yeah, absolutely. You know, we saw our planned 5% or 10% growth year over year increase to more.
I don't know exactly what, but it was like, you know, higher growth than we expected.
We called it, that's the CrossFit bubble.
It'll pop soon. But it lasted, lasted a number of years.
I mean, I think there's something like 13,000 CrossFit gyms out there now.
Many of them with these rowers, with the Concept 2 rowers.
Probably, yeah, 90% or more.
Wow. When did you, I mean, were you still able to manufacture most of the rowers in Vermont?
Or at a certain point, I imagine as you started to scale, you had to move some of the manufacturing overseas or at least some of the components had to come from overseas?
Yeah, our first step was moving from the farm production shop, but also we happened to find a good one in Vermont that was very progressive in terms of efficient metalwork.
But we do make components, you know, it's, I mean, now it's a, it's a world product.
We get components from everywhere.
But, so you, but you continue, you were able to and you continue to assemble them in Vermont.
We assemble here, yeah.
Yeah. So everything is similar to Vermont, right?
Yeah. Okay. So what I'm trying to figure out is as these kind of grew, I mean, the, was the growth just kind of organic?
I mean, I imagine you didn't have a huge marketing budget ever really to get the word out about what you were making.
I think, yeah, I think most of, yeah, we tried, but I also think our best marketing was really taking care of customers.
Making sure that, that people have access to the parts they need to maintain the machine and make sure that the parts aren't obsolete.
And then the word of mouth tends to follow.
And the customer service folks we have here have a lot of pride.
I think they, they consider themselves part of the product.
We sometimes try to embarrass them when we get these glowing letters from people and we read them at staff meetings.
And you've got how many employees now?
Do you have total? It was like 130.
130, which includes about 40 overseas at subsidiaries.
And I guess eventually you would branch out into things like ski machines and even a bike.
You have, you now make a bike as well.
All based on the similar concept of the air resistance wheel.
Yeah. And the technology for accurately monitoring that output.
I think it's been a technology that we've transferred to each of the products quite well.
So one of the things that really intrigued me about this story when it came to me was, you know, your Vermont based is still mainly assembled there.
And it's a decidedly, you know, lower tech machine than some of its competitors.
Not to say there's no tech there is.
I mean, but, and you can attach an iPad and get to that and use wherever you want.
But, you know, the, the competitor machines out there, there's like the hydro or the Peloton and they've got these immersive screens where you can, you know, attach to them where, you know, you're like on a, or any river you want and you're, you know, they have sound effects and things like that.
As those competing machines started to come out, did you worry, did you think we better get on this and try to do something like this?
Well, it's interesting.
Years ago, we made the decision to have the data from the monitor be able to be used by other apps.
We have like 40 other third party apps that connect with that monitor.
But your monitor, just to be clear, is not a, it's not a graphics monitor.
It's just, just numbers.
Right. It's just a digital LED screen with numbers.
Right. Yeah. We made that decision to not create content and not be, you know, an entertainment company.
A media company. Media company.
Like Peloton or. Yes. Yes.
Yeah. And to basically allow creative people in the world to do that stuff that connects with our machine.
So basically you, you, you have a holder for like an iPad or a tablet and there are apparently, I guess, a bunch of apps that are rowing apps that integrate, that can integrate with your machines.
Yeah. Yeah. Yeah. And you can, you have the, you could have the scenes of any river on the, in the world or have guided workouts from with a coach.
And that's a customer's choice if they want to do that or not.
Right. Right. I think one of the things is we have such a diverse customer base.
Some people like to throw the machine in the back of their car and take it with them everywhere.
Right. And you can do that.
You can just fold it up. Yeah.
Yeah. Yeah. And then there, some customers are going to like the more media based, media driven kind of workout experience too.
It's interesting because I think that there is a lot of membership fatigue going on.
We pay a consulant or paying subscription fees for these things.
So you buy a concept too and it's a lot cheaper, but that's it.
You buy it and you don't have to pay anything anymore.
Yeah. Well, last year for a long time, it's so good that you have your rower and now you're going to buy a ski or a bike.
Yeah. That's the hope. Right.
And it happens a lot. One of the things that I'm curious about is community because my brother-in-law has a concept too rower.
You know, there's a, there definitely is a type of person who loves these things, machines, machines, right?
How have you cultivated the community?
You know, we did Strava on the show years ago and those guys, they've really cultivated a community of hardcore Strava users.
People who, you know, are in a community, in a social network, how have you guys been able to harness the concept to community?
One of the things that comes to mind are all the little events and challenges we would have, you know, like, like the holiday challenge.
It's how many meters can you row between Thanksgiving and Christmas?
You know, it all gets posted online.
You get this big list of people and, you know, you see where you stand in that.
There's the ranking system and people look in to see where they are and who's ahead and behind them in the ranking system.
I had a UPS driver come by, drop off a package and he looked at it and said, oh, I'm right behind you in the ranking.
Did either of you ever worry about money over the course of lifetime of the business?
We haven't had to. I mean, we haven't ever, well, to go back to the very beginning, an interesting story, you know, our father was kind of worried at some point when we were making and selling the product.
But when you start making product, you have to buy materials and you have to pay bills.
So in general, the cash flow goes down in the beginning.
He was worried. So he said, here's a check for $5,000 because I think you're going to need it before you start going up.
So we kept that check and didn't cash it.
We watched the bank account go down and just as it was getting close to being ready to cash, we got some more payments coming in or more sales.
And from then on, it's gone up.
So we tore up the check. And I know you're privately owned company.
You guys don't never took on any outside investors.
Is that right? Correct.
Yeah. And so your revenue numbers are not public.
But from what I gather, you would be considered to be still a small business by U.S.
standards. I think a small business is anything under $100 million.
We'd be a little bigger than that.
Medium business. Right.
So pretty efficient. I mean, it's such a small number of employees and you've got pretty healthy revenue.
But I think it's, would it be fair to sort of assume that, how do I put this?
It sounds like neither of you really care that all that much about getting rich.
Is that fair to say? I think it's fair to say.
Yeah. I think it mattered to make a lot of money.
I mean, in the beginning, it mattered to make enough money.
The bigger issues are how to keep the thing going once we're not around.
Yeah. And how do you do that?
Do either of your, do both of you have children?
Yep. And any of your kids interested in taking it over?
No. They both, they all have different things, different directions.
Different what's going on.
Yeah. So looking ahead, I mean, has, have you been approached by, I don't know, private equity groups or other, you know, companies that have said, hey, we want to maybe buy you?
You know, we've been approached for the last 30 years.
Well, we're working on how we can assure that the company continues on more or less than the way it is now.
And it just hasn't seemed like from experience that the sort of buyout thing is not necessarily the way to do that.
You know, yeah. We had a guy on the show many years ago, Bob Moore, and some people listening will recognize the name because he passed away not that long ago.
He found a Bob's Red Mill.
And which became one of the most successful, you know, flour and, you know, baking goods brands in the United States.
And essentially he, he gave the company to his employees.
We're studying that right now, actually.
And you know, we've looked at things like what Patagonia has done and, you know, they become kind of this poster child a little bit for this idea of the purpose trust.
Where the company was given to a trust.
And, and yeah. So that's all, all being looked at right now.
What do you, what do you got?
It doesn't sound like the two of you have had many disagreements.
Have you? Not many. I'm sure we have.
But in general, you know, I think this stems back to our kind of the concept to thing, you know, where the problem-solving or decision-making process is more of a, more of a, more of a mechanical decision-making process of trying to figure out what the best option is, what's going to give us the best outcome.
And I think some of it's temperament.
I just think the both of you are just, just, neither of you seem like you have massive egos.
Well, you know, it, it kind of, you wouldn't know about rowing a pair unless you've wrote a pair that it's a boat that has no stability whatsoever.
And all of the stability is based on how you're holding the oars.
And each person only has one oar.
So you have to sort of have this mental connection and physical intuitive connection as to what is the other person going to do with his oar and when's he going to do it?
Because if it doesn't, if it doesn't happen simultaneously in a total flow, it just messes up entirely.
And you guys wrote together?
Yeah. Yeah. So naturally you knew how to work in tandem?
Yeah. There is a thing there to it.
Yeah. What's your favorite place you ever wrote on, Pat?
For me, it's got to be someplace in Vermont.
It's either Crasberry or Lake Champlain on a calm day.
Yeah. Crasberry is where we did all of our oar testing.
Yeah. And we'd always go on the perfect mornings.
And I mean, just be able to the water be calm and just black.
And you could see the bubbles from your last round still sitting on top of the water.
It just, that's pretty nice.
One question I'm curious about is, rowing, right?
You got to do it really early in the morning, but it's cold.
It's so cold. It's so freezing.
I've done it before. It's freezing cold.
But do you like, do you, how do you do with the cold?
Do you wear a wetsuit or do you just like, I don't know, do you just have like, like, like walrus blood or something?
We stay out of the water.
Fair enough. That's Pete and Dick Dreisigacker, co-founders of Concept 2.
By the way, both of them still row regularly and both still compete indoors and out.
They even competed at the famous head of the Charles Regatta in Boston, where they row with other over 70s in a boat called the Motley Crew.
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