Spiegel founder Brynn Putnam on life with Lululemon – and whether or not she offered too early or not
Brynn Putnam is very busy. A Harvard graduate and former professional ballet dancer who opened the first of three high-intensity gyms in New York, she opened a second store in 2016 when – while pregnant with her son – she was exercising at home and unable to exercise. I can't find a natural way to see a class on their laptop or phone. Their big idea: to install mirror screens in users' homes that are roughly eight square feet and through which they can train to all kinds of streaming and on-demand exercise classes, with a monthly subscription of just $ 39 per month is paid.
If you've followed the fitness fever at home, you already know these mirrors were quickly popping up with celebrities who raved about the product on social media. Putnam's company has raised approximately $ 75 million in venture funding in several quick rounds. By the end of last year, Putnam said people had bought "tens of thousands" of mirrors, and she was starting to think of mirrors as content portals that offer fashion, doctor visits, and bring both classes of children and therapy to users' homes. In January she told The Atlantic, "See you as the third screen in people's homes."
Then, in June, the company announced that it had sold to sports company Lululemon for $ 500 million in cash – including an earn-out of $ 50 million. For Putnam, the deal was too convincing to secure the future of their company, which continues to be run as a subsidiary. Investors might have liked it too, as it meant a quick return on their investment, not to mention Mirror had stiff competition, including from Peloton, a growing giant in the home fitness market.
The deal seems to be clicking. Just today, Lululemon announced that Mirrors will be installed in 18 of its now 506 US locations, including San Francisco, Washington, DC and Miami. Lulemon hasn't started selling products directly through Mirror yet, but "buyable content" is "certainly on our radar," says Putnam. Mirror sales, which are expected to hit $ 100 million earlier this year, are now set to top $ 150 million, she says.
As the pandemic rages on, it's easy to ask what the fledgling company could have grown into, given the time people and their children spend at home and in front of their screens. We asked the question late last week Putnam, who continues to lead a team of 125 people. Our slightly edited chat follows. You can listen to the entire conversation Here.
TC: People who follow the company know why you started Mirror, but how exactly did you start Mirror?
BP: In the case of Mirror, I had this concept for the product, and then the first step was to buy a Raspberry Pi, a piece of disposable glass, and an Android tablet and put it together in my kitchen to see if that idea worked out work in my head and come to life.
TC: Have you taken coding courses? People couldn't imagine a former ballet actress with a chain of gyms putting something like this together in her kitchen.
BP: No, I was very fortunate to have a husband with some developmental background. And so he helped me put that first bit of code in the mirror and really make sure that the concept that I had in my head could come to life. And of course we hired a team from there over time.
TC: Are they made in the States? In China? How did you figure out how to put these pieces together?
BP: I had heard a lot of hardware horror stories about teams working with design agencies to create these beautiful products and who, by the time they actually got into production, found that something about their design was not feasible when they were commercialized or just run out of money. So I actually went backwards. I drew a sketch on a napkin and made a small series of bullet points of the things that I thought were really only crucial to making the product a success. And then I went to factories in China that were familiar with digital signage, working with large pieces of glass and large mirrors, learning about their systems and processes, and then bringing them back to a local manufacturer here on the east coast in the US to refine a prototype. And then we finally moved to Mexico when we were ready to scale.
TC: The mirror costs about $ 1,500. How did you win the consumer trust that would make them such a sizeable investment?
BP: When you're developing an innovation product, you can't really compete on specs and features like you do with phones or laptops. So you're really building a brand, which means you're telling stories. In our case, we spent a lot of time from the start really imagining the lives of our members and figuring out how to make up and tell that story.
And then we were lucky enough to have members fall in love with the product early on. And then they started telling our story for us. So once you have the customer flywheel that starts kicking in, your job becomes a lot easier.
TC: You had actors, celebrities, designers, and social media influencers talking through their mirrors. Was it just about sending it out to some people who were starting to go online and share [their enthusiasm for the product] with their followers? Was it that easy?
BP: We knew we wanted to make big efforts early on to make the Mirror brand appear bigger and more established than it was, as it is a premium product in a new category. And we wanted people to trust us and the brand. And so we did things like outdoor advertising pretty early, we got on TV pretty early, and we did some very strategic early celebrity placements too. The way the celebrity placements grew and expanded, however, was not intended and was just a fascinating early example of the product's network effects. One celebrity would get it and another would see it in their house. Or they would see it on their stylist or on their agent. And it spread very, very quickly through this fellowship in one of the earliest examples of the members' love for us.
TC: How did you convince early adopters that your company would last, and did you convince investors so quickly?
BP: Trying to reassure customers that they wouldn't invest in that mirror and then in a few years the company would go out of business and they would be left with a piece of hardware, but no access to the content, or the community, in that they fell in love was very important. This was one of the reasons for choosing to partner with Lululemon and have the incredible brand stability and love of such a premium global brand.
In terms of fundraising, I think we were really lucky enough to have a product that once you see it, in a market that was clearly big and growing, with a really good competitive data point, and fell in love with it Peloton.
TC: Who started this conversation with Lululemon? Have you spoken to Peloton and other potential buyers?
BP: I've been fortunate enough to actually work with Lululemon throughout my fitness career. Here in New York there was a team of Lululemon educators who were the first customers of my studio business and, frankly, were responsible in many ways for making this business grow and thrive and trust me as a first time small business owner. Then we reconnected with Lululemon as an investor about a year before the takeover. They made a small minority stake in the company. And we have started to work together on various projects. . .From then on, the partnership really grew. Mirror wasn't for sale. We weren't looking for an acquirer. But it is really your responsibility as a founder to always weigh your vision, your responsibility to your team and your responsibility to your shareholders. And when the opportunity presented itself – before COVID indeed – it felt really too good to miss an opportunity.
TC: But you also had ambitions to turn it into a much broader content portal where you might have doctor visits and other things that I don't think are going to happen now.
BP: The vision for Mirror remains largely the same, and we're excited to continue expanding the types of content we offer through the Mirror platform, with any type of immersive experience in mind that you can make a better version of Your own doing. I think you will see a wider range of content from us in the years to come.
TC: You mentioned in the past as a selling point that Mirror is a product that is used by families. Are there children's programs or is it coming soon?
BP I think one of the things that surprised us but delighted us about Mirror was the number of households with more than two members. Over 65% of our households have more than two members, which means you often include younger household members. I think that depends on both the versatility of the platform and the fact that multiple people can participate in more content. At the same time, we've actually seen the number of users under the age of 20 increase roughly five-fold in the COVID months as young adults returned home to be with their families or teens started remote learning. So we got involved with so-called "family fun" content that the whole family wanted to perform together.
TC: Do you see a secondary market for refurbished mirrors in the future? Will there be a second version if it hasn't already?
BP: We'll keep refining the hardware over time, of course, but the real focus of the business is on improving the content, the community, the experience, and so for us – unlike Apple where the goal is, really Bring out a new model We're focused on providing updates on the software and content so we can continue adding value to the base experience.
TC: What can the people on this front look forward to?
BP: We're taking an important step in building a connected community with our community feature set kicking off this holiday, including a community feature that allows members to see and communicate with each other and their instructors. Face Offs, which allow members to compete against another member of the community and earn points when you hit your target heart rate zones. and friends so you can find and follow your friends in the Mirror community to share your favorite workouts, participate in programs together, and cheer each other on.
TC: Do you still sell mirrors to hotels and businesses outside of Lululemon?
BP: We have B2B relationships. Via the Mirror website, the Lululemon website and our two [offline] stores, you can find mirrors in hotels, small gyms, buildings, residential buildings and then directly at the consumer.
TC: If you look at Peloton now and see its stocks completely skyrocketing this year, do you ever think you should have held out a little longer? Do you ever think, "Maybe I sold too early?"
I woke up every day for my entire career and focused on the same mission but tried to solve the problem and achieve my vision in different ways. Which is: I really believe that trusting your own skin is the basis for a good and happy life. And fitness is an incredible tool for building that trust, which carries over to your personal relationships, job performance, and friendships. For me it has always been the North Star: “How do we get more mirrors into more homes and provide more access to that confidence?” So I spend very little time compared to competitors and a lot more time focused on the needs of our members and like them can meet these.