Rethink, Reimagine, Adapt: How Life Time Has Evolved

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Transcript: Rethink, Reimagine, Adapt: How Life Time Has Evolved

Season 8, Episode 17  | July 9, 2024

[MUSIC]

Welcome to Life Time Talks, the podcast that’s aimed at helping you achieve your health, fitness, and life goals. I’m Jamie Martin, editor-in-chief of Experience Life, Life Time’s whole life health and fitness magazine. And I’m David Freeman, director of Alpha, one of Life Time’s signature group training programs.

We’re all in different places along our health and fitness journey, but no matter what we’re working toward, there are some essential things we can do to keep moving in the direction of a healthy purpose-driven life.

In each episode, we break down various elements of healthy living, including fitness and nutrition, mindset and community, and health issues. We’ll also share real, inspiring stories of transformation.

And we’ll be talking to experts from Life Time and beyond who share their insights and knowledge so you’ll have the tools and information you need to take charge of your next steps. Here we go.

[MUSIC]

Hey everyone, I’m Jamie Martin. And I’m David Freeman. And we’re back with another episode of Life Time Talks. This is a unique episode in that we don’t actually have a live guest with us. David, what are your thoughts on this new approach we’re taking for this one?

I love it. I mean, the thing is we’re going to be able to speak from an experience that we had still. And granted, that the guests might not be on, I feel like when we actually hear from what the guest spoke on, a special guest spoke on, it’ll make everybody feel like they’re right there with us.

Exactly. So, the experience that David is alluding to is, back in April, he and I had a chance to go out to Monterey, California for what was called the Sea Otter Classic Summit. Life Time owns and operates about 30 athletic events. The Sea Otter Classic is one of the biggest bike races and cycling races in the nation. And tied to that was a summit where we brought together outdoor industry leaders. And David and I both had this opportunity to — we were the emcees for this event. And as part of that, we got to kind of hear from all these outdoor industry leaders. We got to take in and gather all this information in a setting that was new for both of us. And David, I was there last year without you. What was your first time experience of being at the Seattle Classic Summit like?

I love it. You know me, I always like to jump into certain things that might not be familiar with just for the simple fact that I’m going to gain some type of knowledge from that experience. And to be able to hear from so many different speakers on how they’re impacting the event space. And the outdoor industry was amazing. There were so many different angles from AI, from blind ambition, and to be able to hear from each individual and how they’re creating change in the space was amazing.

Absolutely, totally agree with you. And with that, the summit actually kicked off, the keynote was with the founder and CEO of Life Time, Bahram Akradi. And that’s who you’re going to be hearing from in this episode today. We were able to record that conversation that I had with him on the stage. And it was a really great conversation in that it was really about, you know, why healthy way of life is good for business, and not just for Life Time as a business, but for companies as a whole. Like why focusing on healthy way of life values can make a big difference no matter what kind of industry you’re in. And in this conversation, we got to talk with Bahram about his approach to leadership. The evolution of Life Time over the years and a variety of other things. It was a really interesting conversation. And I know David, you got to lead the Q&A portion at the end. We’re to get to hear bits and pieces of that in this episode too. What were some of your takeaways from that conversation with Bahram? I know you and I have both had multiple conversations with him over the years. We get to hear this stuff firsthand all the time, but what was your takeaway from that day?

I just, I just love the innovation piece, right? Like we’re gonna continue to evolve. And you even said the word earlier, like this evolution within the health and fitness industry, we continue to evolve and we don’t wanna become still at any point in time. As it relates to evolving within leadership, that goes back to another word that I said earlier, experience. And being that we’ve gone through so many different experiences, that’s allowed us to be shaped into where I feel like just an industry leader in this space and how we continue to lean into one another and understand the value of the different individuals around us and celebrating that is, in my opinion, why we continue to lead in this space and not slow down.

Yeah. And so to get to hear from Bahram directly about that was pretty exciting. So I would say without much further ado, I think we should jump right into the episode. You’re going to hear this probably about hour long conversation, maybe a little less from our chairman, CEO and founder of Life Time, Bahram Akradi.

[MUSIC]

You’re an entrepreneur, like you’ve been that since you, for years that’s what you’ve done. You’re also tirelessly innovating. You often say we have to innovate and then iterate constantly. So how has your vision and execution evolved over the past three decades from where we started?

Yeah. So I had worked out since I was 14 years old. And by the time I was redoing, thinking Life Time, it was 1988, I was 20, I was double the age. And I had seen the modality of exercise change. How we were exercising was changing every four, five, ten years. But the health and well-being was more of a meta-trend. And exercise itself, the type of exercise, was a little more fatty. So, I wanted to design something that would easily adapt to what the changing modalities will be. So the big perspective is when you think about the business or you’re thinking about three years, four years, five years, or if you’re thinking 20, 25 years, 30 years later. Well, the daunting task with 30 years later is that you really don’t know. There’s no way you really know unless you’re Einstein. You don’t know what’s gonna come. So, what you do need to do is design that adaptability. If you think about your business with adaptability in mind, knowing that you have to adapt and change and then build a wire frame in a way that you can make that adaptation.

Absolutely. Well, to that point, you’ve always been thinking broader than just fitness with the business. You know, 15 years ago, you shifted Life Time’s focus toward becoming a broader lifestyle brand that encompasses healthy way of life, which has influenced our theme for today. And you wrote this in one of your columns for the magazine — “Healthy Way of Life is the lens for examining every aspect of our lives. It’s a filter for honestly reflecting on whether our time, priorities, and choices are truly aligned with our values and passions.” So obviously this all goes well beyond wellness and nutrition. You how did you arrive at this meta trend? And how has Life Time’s ecosystem expanded to become a truly comprehensive, healthy way of life resource for its members?

Yeah. I don’t think you can be healthy by just being fit. I think it is a much broader perspective. Your soul needs to feel healthy, your mind needs to be healthy your body needs to be healthy. In order to do that, we are a product. We’re all exchanging molecules all the time, all of us. And we’re all exchanging energy all the time. And the health of the community, the health of the environment, the health of your workplace. All of these are so interconnected. A lot of us are in athletic events. So when you go to an event, the energy, the euphoria of all the people who have similar kind of enthusiasm and energy is amazing. We all feel it. It’s not replicated until you’re inside that event. So that’s always due to the exchange of energy, exchange of molecules, the fluidity of our universe, our environment. So healthy way of life is having that macro perspective on what’s healthy. It’s how I treat you, how you treat me, how we interact with each other, how we view our impact on other people. Is it a taker, a giver, or can we be really more fluid with the whole thing? And so I feel like it’s absolutely 100 % interconnected. And you can’t avoid it. You can’t just be healthy in one section of your life and not in the other.

Well, that goes back to a lot of things that we cover. Education has been a big thing that you’ve talked about over the years. Experience Life is part of the ecosystem as well, because we know that when we educate and empower people, they can make choices. And that’s really influenced all the different ways that Life Time has expanded. It includes Life Time living, Life Time work. It includes athletic events, which you’ve already alluded to. When you think about that, we’re in a room with a bunch of people who are experts in the outdoor industry. Why was that such an important addition to the Life Time portfolio? And how does it fit into the bigger picture?

I think a lot of times, we get to the club or someplace, and we’re strictly after the fitness. But fitness with a purpose is almost greater. So, when I train for doing level 100, I train way differently than if I were just training. So, and you all know this, is that the impact of a goal and an event that I’m gonna participate in, it just brings a much better purpose into my regimen, whether it’s nutrition or exercise or anything. So once again, it’s a whole ecosystem, right? And if you bring it all together, then it feels more natural. And that’s what we did.

So, let’s fast forward to kind of now, we’re four years post the start of the pandemic. And that changed a lot of things for Life Time. There were some really significant challenges that we faced during that. How did it ultimately change Life Time for the better? And kind of where did you start and what have we been doing?

Yeah. So, you know, look, I have a perspective on our planet and what we do as people. And I hope that we can do better quantum leaps without crises. But if you look at the history of mankind, unfortunately, we wait until there are massive, life-threatening crises, and then we react, and we prevail. Human has always prevailed, and we prevail again. And so I don’t think that crises are necessarily a bad thing. If you go into it the same way you attempt to do a three day long race, you know you’re gonna be in pain. When crisis come, you’re gonna go through pain, but you should really embrace it and figure out what you can do with it. So just a little bit of information for all of you guys. If you look at our history through Life Time, through March of 2020, the revenue and the EBITDA of the company grew every single year since we started. And if you asked me what would be the worst possible scenario, would be that in the one year, we just wouldn’t grow as much as I or the street would expect the growth. The idea that we would go backwards was unfathomable, unimaginable. So when COVID came, we were shut down. We went from like 40 million of EBITDA one month to minus 40 million of EBITDA the next month. And revenue went from hundreds and some million dollars to zero the next month. So first, you hope that this is gonna last a couple weeks. No more, then it goes months, then it goes forever. At the end, the impact of COVID, the swing of our EBITDA over five years, 2024. 2025 will catch up if there was a straight line, which is an amazing accomplishment for our team. But it was a two-billion-dollar swing of Ibiza. And that’s a massive, massive hit. It was the worst thing, and it was the best thing ever. We had a need and an opportunity arriving at the same time. The need was we had to change because the old metrics would not work. And the opportunity was now we’re shut down and some of the changes you wouldn’t be willing to make because you didn’t want to a division of your company just no longer be in existence. As an example, I was in this industry because I was a phenom natural salesperson and that led for me not to do engineering, but to do this field. So I trained all the salespeople, I trained all the sales managers. We had 700 sales team, people sales team. There’s no way I would ever just eliminate 700 people. I could never do it. If my life came to an end, I couldn’t do it. But at this moment in time, and I hate it, you when we first started, selling was part of our culture. When we got the company to be like a four-season Ritz Carlton brand, I didn’t want to have that health club used car sales anymore, but I could never get my team go away. So now all of a sudden, when we reopened and these people had gone and found other jobs, it was no reason to rebuild it. So, that was just one example of all the changes that we could now do with a clean slate that we couldn’t do on a normalized deal. So, we made that change. I transformed the company from a heavy, heavy management structure to leadership concept. And we cut layers where we would take seven, eight people to say yes to a decision. Now there’s no more than three layers. Absolutely. And you know that, Kimo knows that. There’s like three layers to make a decision is the ultimate. So, we had the opportunity to rethink, reimagine, and adapt. Like any other species, any business you need to adapt, sometimes you need to adapt evolutionary and sometimes you need to adapt revolutionary. But if you don’t adapt, you will die.

Yeah, we’ve definitely seen that up close and personal to see the impact that it’s had, not just, you know, on the teams that I work with, but probably across the entire company. I mean, your whole move from — your manager to a leader — has really shifted the dynamics.

Dynamics. And you know what? Today we are significantly more efficient in our margins than we were before COVID. We used to do an EBITDAR margin of about 31 and a half. We’re five percentage points higher than that today. And without these critical changes, we would have never gotten there.

Right. And one other thing that you talk about all the time, and we were just talking about this yesterday, is alignment. Right. So you’ve also made some significant changes so that there’s more connection, alignment, less of the silos across the organization. Yeah, so this is something I’ve always been extremely big on, both as a businessperson, as a leader, and as an engineer. So, the analogy that I’ve used many times, it’s how a piece of metal that has no power becomes a magnet and then has a ton of power, even though it’s the same number of molecules, and exactly the same molecules. Because every molecule of iron has a polarity of north and south, but in a piece of iron alone, they are so randomly distributed that they cancel all of their own energy. Unfortunately, the eight billion people who live on the planet are much like that piece of iron. We’re not a magnet. If we were more aligned, we would accomplish so much more for everyone. That’s my ultimate, ultimate long-term vision to be able to have a bigger impact on this particular message for our whole planet. But that’s years to come. For right now, the point I’m making is, the more, if you go to a company and you ask the employees, what’s your job? And if 90%, 95 % of the team members said, my job is to help people live happier and healthier. Now my only particular task how to do that is this. I make sandwiches, or I clean the locker room, or I draw layouts of clubs. It doesn’t matter but we’re all doing the same thing. We’re all helping people live healthier and happier. That is a way to create alignment. And if you can create alignment in your organization so the more people in your organization understanding what they’re doing, why they’re doing that, and why it’s important, their piece is important to the whole cause. This is another thing, it’s a Navy SEAL team — 13, 14, 15 Navy SEALs — they’re always in communication with each other, they’re always 100% aligned on the objective, and so you can see the units of any units of any structure, people, machines, when they’re fully aligned, the results are much more dynamic. And so I can go on and also I’m not going to bore you guys but alignment is the biggest thing in any sort of leadership.

Well, another one of the values that you really talk about a lot is, well, values that people want to describe is that it’s desirability. You know, one of the things that we do at Life Time, a lot of things are centered around creating exceptional experiences that create desirability. For the, focus on the best places, programs, performers. Why has this been such an important differentiating factor in Life Time success? This ability to, I mean, in fact, literally millions of people’s lives and help them make healthy, sustainable change.

So, this is once again focus on the business point of view or the customer point of view. Business point of view is profitability, customer’s point of view will be desirability. But if you truly build desirability, profitability will naturally follow. So, if the customer loves to go to your event, loves to use your product, then you don’t need to spend money in advertising. I’ll give you guys a little data in here. My vision when I started Life Time was to get to a point where we spent zero dollars in marketing and advertising. Zero. That means I would have to build a product, my team would have to deliver a product that was so good that the customer would come on their own. So, Peloton spent ten percent of their revenue or more and they’re almost gone because it’s just all money wasted in advertising. Health club industry on average spends five, six percent. The company that we sold my first business to and they went bankrupt, spent ten percent of their money, values on advertisement. They don’t focus anything on desirability. Life Time this year will spend less than 1.5 percent of our revenue in marketing and advertising and sales now because we have more salespeople combined. And this would have been easily more than ten percent of our revenue years back. So next year. We’ll grow the revenue at least ten percent and marketing dollars will not increase by one dollar. All of our focus is on desirability. You build a desirable product, customer will naturally come to you. And it’s sustainable because you’re building a brand by creating something that people actually love. And that’s sustainable. That will continue to pay dividends in the future. When you do promotional marketing, all the money you spent today, it has a quick impact, but then it’s gone. And then it doesn’t do anything else until you’re on dimensional motion.

I literally wrote down marketing and brand and you just covered that without me asking. I love how I know where we’re going. All right. So Life Time, I already mentioned you’re an entrepreneur. Life Time has an entrepreneurial spirit as part of our culture at Life Time. It’s always like, what’s the next thing we move fast? But your mantra is think big, start small, move fast.

Right.

How does this come to life in practice each day?

So, a little story would be fun. So, I left the company, we had sold the business to the division to start Life Time. I was 28, I had 600 people reporting to me and most of them wanted to leave to come with me. So that made me think I had to go and start six of these clubs a year. Actually, my first market that I was focused on was San Francisco Bay Area, so I was traveling, I was trying to get six of them started. So, between May of 1989 and end of ‘91, where I was trying to do these six big clubs a year, nothing ever happened. It never happened. It just, it was too big. When I first left, I could have built one of those clubs all with my own money. I couldn’t build six of them, so I was trying to raise money. I could never raise the money for one various reason or other. And by end of ‘91, I had literally gone through all the cash I had trying to start a new business. And I had zero to show for it. So, one day, I was thinking, Oh my god, what the hell am I doing wrong? And I went and took over a tiny little club that I would have never wanted to be part of that was bankrupt, vandalized. And I said, I’ve got to start this and I’m gonna start like the first chain of clubs that we build, one club, two clubs, et cetera. Well, that was the reason, Life Time’s on the map. I built a club that I didn’t want. It was against 30,000, it was antithesis of what we’re building today, it was not what I wanted, but it was a starting point. Start small. So, and then when I moved fast, we got the first club, which Eagan Club, which is a prototype, and then everything else happened. So, I came up with this — Think Big.

 

The vision was always the same, to build a mega healthy living, healthy aging company that was never different from the start of the point. But in order for it to happen, I just had to start. And so I sold everything I had. At this point, I had nothing left. I sold the ring off my hand. I sold my cars. I bought a $100 van to drive around. And I put everything into starting that little club. God bless and here we are. But so, I am very, very big on that. When you talk about entrepreneurial, I think, an entrepreneur, a leader, entrepreneurs need vision. They need to see things ahead of other people see. Otherwise, you’re really not an entrepreneur. The number one key thing to be an entrepreneur is to have a vision for what you see in the future. The built-in negative with that is the bigger entrepreneur you are, the bigger vision you have, the further out you can see, the more distorted is your depth of vision. What do I mean by that? If you see something is gonna happen 10 years from now and you’re real visionary, the real entrepreneur you think is this close, so you run out of time, you run out of money. Most often, 95 percent of the time, rather time or money, to get, it wasn’t a bad idea, you were just ahead of your time. And you didn’t anticipate the distance. So that’s the caution I give real entrepreneurs, is that the better you are, the bigger handicap you have in this section. And then in order to lead as an entrepreneur, you need vision, which you have, you need courage, you got to start. And so if you want to start, my recommendation is always just start small. Just get going. One foot in front of the other and go. And then, faster you can move, soon enough you’re going to get the big vision happen.

Yeah. And you talk about that iteration all the time.

Right.

Trust things and go from there.

In our quest to deliver uncompromising exceptional experiences, how does Life Time stay ahead of the trends in the health and wellness space?

 

Yeah. So I think, like we just talked about, business is iterations and it takes courage. Biggest thing that I think you have seen we’ve done at Life Time is admit we’re wrong. You know, we do it every Tuesday, we talk about what we screwed up last week and admit your F-ups and get after it. And if you don’t change, and sometimes we become stubborn and we wanna, you know, we wanna just not admit that that wasn’t a good path, that wasn’t a good direction. An example I give to people is the way an autopilot works in an airplane. An autopilot doesn’t actually fly the plane from place to place. It literally stops the plane from rolling right or rolling left. You give the autopilot two particular points. You go from here to here. This is a straight line. And all the autopilot does is rapid correction of rolling over right to rolling left or up or down the pitch. So that is what you need to do. But the autopilot does it so many times per second that you sit in the back of that. In fact, when you guys fly, when your pilots take off, within 300 feet off the ground, they hit the up button, sit back, the autopilot’s flying until 300 feet above the ground. Now when I fly, I fly for 20 minutes up, 20 minutes down, because I love flying. They’re just doing that. But the autopilot is just keeping the plane. But it’s such a rapid correction of mistakes that you never see. But if you took that flight and you magnify it one billion times, you see this plane is doing this the whole time. So, in business, rapid correction of your mistakes is the way you stay ahead. You watch, you rapidly correct, you watch other people doing a great idea, somebody else runs a better program, a better, some piece of your business. When you see it, you need to admit that they’re doing something better than you, and then see what you can do better than them, and you can get at least that far and beyond, and make rapid corrections.

So, with that, looking ahead, and knowing, what are your hopes or what is your vision for the next five years and beyond for Life Time?

So with that, as I mentioned, 25 is really the year that we will financially get exactly to where we would have gone straight forward if nothing had happened. So we have come, I would say we’ll completely have recovered, but with a much better engine. It’ll be better from there on. And we have gotten to the point we need. Our stock is not trading at the right multiple right now, but that’s just, it’s also gonna correct itself over the next five, six, 12 months, and that will allow us the ability to use our stock for M&A acquisitions. The ultimate, if we take money out of the equation for Life Time, I like to see us having a massive impact on everything healthy way of life, from perspective to education to training to nutrition to sports — worldwide, helping people come together to do the things that I think are crucial and our responsibility as human beings. We are destroying our planet, but unfortunately, much more like a tooth decay. You just don’t recognize it’s decaying. You hear stuff about global warming or CO2 impact, and you sort of like, ah I can’t do anything about that. We do this, the other guys will ruin it. There’s truth to all of that. There’s truth to it hurting our planet. There is truth to it causing irreversible consequences. There’s truth to the fact that you can do whatever you want to do in the United States or Australia or New Zealand. In China, in India, Iran, and Brazil, and there’s other, you know, third world countries, they’re creating enough damage to undo that. So, we still need to do, we need to take action. And so my vision is, at times I thought at some point I retire to go and work on this philanthropic aspect. Better yet, I think as long as I have my wits, I think Life Time has room to have a bigger global impact. As you know extremely well, we started years ago with our foundation, healthy little people fixing food in schools. And then this last year, we went to the back half of our vision — healthy people, healthy planet, and now we are committed to planting millions of trees or protecting millions of trees per year. Trees alone isn’t gonna fix everything, but this one step, if everybody on the planet worked on that, would be great. So, unity, common focus on doing the right thing. For the mother nature and the people and the other creature living on it. Building places that people can be healthier and happier. Building events that brings inspiration, aspiration, motivation for people like much of you guys are doing. Building products or equipment that makes people get happier. All of those, all of it, as in the roadmap. So as we get back to COVID financial impact and everything else behind us. And we only are now leaving with the benefits of it, not the negative side of it, which again is this year, next year. I would love to find other entities that are wanting to become part of our system if they’re entrepreneurs or building businesses. And they have a vision, because I’m not interested in trying to take other people’s business and go run it. I would want to find other people who have businesses with a vision that if they brought that vision, clear roadmap, if I had that vision, if I had the Life Time platform, I can have a bigger impact much faster. If that entrepreneur already knows how they could do that and has a roadmap, knows Life Time, knows their business, then I would like to be the place that we will aggregate more uniformly packaged together product and services that serve as a broader community across the world. All in healthy and happy. Anything else?

There’s one more question. And then we’re going to open it up for Q&A. So again, you can use that QR code if you have any questions for Bahram. But the theme of today really is healthy way of life. It’s good for business. So why is maintaining the customer point of view, we’ve talked about this a little already, and healthy way of life good for all businesses, not just Life Time?

It’s good for all relationships. It’s good for any relationship. If you think about it, you know, what would that mean in a relationship? Customer point of view is with between you and your husband is you would think about what’s your husband’s point of view is first. If he did, if you did that for him and he did that for you, right? Then everything’s gonna work. It’s when you think about yourself and he thinks about himself where you’re gonna have more roses, right? So, it’s not complicated. It’s the most natural way of staying focused. I would always, always have said, member point of view, when we first opened the first club, we created these little pins and instead of most valuable player, MVP, they were MPV, member point of view. And we were trying to push that with all the employees all the time. That has remained the guiding light for Life Time in all the decisions we made. And as with 40,000 people in the company working together, as long as we keep reminding one another that the member point of view is what makes us. If you have an event business, if you have service business, you don’t need focus group. Your customer is right in front of you. They’re actually using your product and you can watch. It’s the most accurate pick up of if your product is serving them correctly or not, right? So, you just need to stay focused. They’ll tell you everything you need to know.

Alright, we’re gonna open it up for questions if there are any. I know David’s back there, he’s got the iPad.

Yes, we got a few questions that have come in. So the first one I have here, any plans on including partnering with the healthcare industry?

Yeah, no. We try. The U.S.  healthcare industry is probably the worst possible Frankenstein way of serving the needs. In order for us, I provide healthcare for her. So, I’m involved, we build something, and then there’s an administrator, they’re involved. The government rules are involved. And when you have insurance companies, they’re involved. And so, and everybody’s playing a game. It’s such a massive, it’s 18 percent of GDP of United States. It’s so big and it’s so convoluted. I don’t wanna say corrupt, it is just convoluted. And every decision takes forever and it’s not a common sense approach. So, the way that I think we can help is the way we’re providing the opportunity for their clients. Aurora is an example, you guys know, our Medicare program has been a huge success and is helping them because these folks are costing them sick —they’re in our clubs because they’re happy. I want to emphasize, happy for an older person is the number one — happy or not happy is the number one cause of healthy or not healthy. If we can bring them in, we put them in social environment, have them do some activities, all of that is working and we have over 100,000 unique people right now per month using that program. So indirectly, yes. Directly, no. We’ve tried it.

Awesome. I just want y’all to understand the next 15 minutes is all about Q&A, so y’all definitely get the question then. So, we got another one coming from Jack. He says, how do you think about international expansion? And if so, which markets are the best opportunities for Life Time?

Yeah, so we have been approached numerous times over the last decade with people wanting to bring Life Time concept to international other than what I’m gonna consider Canada international for us, it’s just North America. So, being from a different country, myself originally, every country has its own rules and regulations. And then once you get past like a four or five hour time change, it becomes a whole new infrastructure. Your team that is working from seven in the morning till eight or nine for customer service responding to crises, et cetera, now you need a 24-hour team. So we have developed a brand, we have about 150-plus billion impressions a year right now, and growing all naturally without spending money on advertisement. We have the IP, we have the formula, but our initial thought is that we’re gonna grow internationally much like Four Seasons or Ritz Carlton, where we would find partners, financial partners from those countries who would wanna have Life Time brand, but they also are sophisticated business people in those countries, so they actually know the way of doing business in those countries, the rules, the regulations, the real estate, and that’s the way — we’re right at the cusp of moving in that direction now. Again, we would’ve been there a couple years ago, we will be there a couple years from now.

Next one says, it’s great to talk to current customers for your focus groups, but surely non-customers are key for your growth goals.

Ask that question again.

It says, great to talk to current customers for your focus groups, but surely non-customers are key for your growth goals.

Yeah. That’s an interesting question because we are today reaching a point where about 30 to 50 percent of our clubs in the next two three months would have to get on some form of a waitlist in order to deliver the level of quality that we want to deliver. I’m talking to different lead generals every single day about how to roll their clubs into that waitlist just because of that critical moment in time where the number of visits per day is reaching. And then we’ve had, while we have about a million and a half members, with the members that they have basically have dropped out or come back in, the total database is about five million people. It’s truly members and non-members. So that sample is so big that it encompasses everyone and it’s very easy. I don’t consider it would be any different learning from somebody who is not a customer. You could always come back and people say, well, here’s why I don’t join your club, right? And the only advice I would have for anybody in business is you don’t wanna chase every customer. You just don’t. You need to know your customer. You need to be focused on who your customer should be. And you need to go after only that type of customer. And the other side of that is that homogeneousness of that customer base, right? It’s super important. In our business, we are building a place, we’re building the programs, we’re building the performers. But at the same time, what makes a club a club is who else is the member. And so, all of that is part of that whole ecosystem. And so, I think we’re getting that intelligence from the customer abuse we have.

This next one is coming from Zach. There’s a growing public health crisis with kids who aren’t active and don’t get time outside that they need to grow physically and mentally. How is Life Time committing to creating change in this space?

Yeah. So I think part of our foundation is also working on not just nutrition for the kids, activity. But the bigger perspective is we run massive summer camps. Life Time clubs have been built from 90 days old to 90 years old. And we really work hard to provide everything inside of that continuum. So the culture, we’re all product of biology and ecology. And the more mothers and fathers with children that we can get into our clubs living this active lifestyle, the more those children will pick up the need to do that. Then there are other advice that I’m sure she writes down in Experience Life. Limit your kids’ time on iPads and machines. Those are decisions people have to make on their own. Our job is to provide the knowledge through Experience Life, through the podcast, and provide the places so they can, and we’re doing all we can with that.

Next question. What role, would any, does the latest round of weight loss drugs play the living in both lifestyles?

Well, my God, from don’t eat any sugar, to don’t eat any meat, to don’t eat any fat, to eat all the fat you can possibly eat. You know, I’ve seen every one of these things come and go, right? All these little bubbles will show up. So the weight loss drug, fortunately or unfortunately, I don’t have an opinion on that, is now going to become one of the biggest money machines for the pharmaceuticals. So therefore, my prediction is it is here to stay. But the fundamental of human body isn’t changing in this next hundred years or 200 years. When you restrict the food supply, you all know, you lose muscle, and you lose bone density. Yeah, you lose weight, but it’s the last weight you want to lose. Somebody is 400 pounds, 350 pounds, they aren’t going to go to the clubs. They haven’t. They don’t feel comfortable. They don’t feel comfortable going in, taking these drugs for them to get a kick start on feeling more motivated to go do something is a phenomenal thing. So yes, to that. For all the people chasing vanity in Miami and LA and New York, who ladies are 25 pounds overweight, but they just have this need to look fast, great, they get on this stuff. I’ve seen some extremely awful results in them. They look awful, their skins are shriveling, they lose weight, they don’t have any butt left on them. So, there’s just a lot of negative. However, it’s here to stay. The opportunity for anybody here is to incorporate that instead of fighting it. All these people need activity. They need to exercise, they need to be on their bikes, they need to be on their machines. They need to be doing physical activity to augment the weight loss drug. It has zero negative impact. Zero negative impact on our business. Our business is not a weight loss person. We are building a healthy way of life, athletic country club destination. It’s the place people want to be in to socialize, to do things, to do group fitness programs. Your type of classes David. And you know why the customer’s coming in. We haven’t seen one singular bit of a negative impact in our traffic or utilization or our membership. So, as I mentioned, clubs on weight loss, we haven’t seen any negative impact. On the positive side, I think a lot of the people who are spending $500,000 a month on these drugs, they obviously care about vanity and they have money. And if they want to complete the process, they actually need professional environment and professional personal trainers, nutritionists to help them combat the negative side of those drugs. And so it’s an absolute positive for a Life Time. Still, from a big macro perspective, my recommendation to people is extreme caution and study. Study exactly how that drug is working, is neutering your appetite, which basically means you don’t eat properly. And then, so it can be helpful if it’s done correctly.

OK, next one. You say vision alignment is key. When hiring and building your team, how do you ensure that the talent you and your team hires is in air quotes here, right?

So, we have a problem with that question because we have been working for 20 years. Plus, I think it’s more than 20 years. I was interviewing a gentleman for head of HR and he was awkward, very, very awkward, but I learned something from him that I implemented immediately into our company. He was from Hollywood. He looked like no other head of HR director. He came in and he looked like somebody just jumped out of Beverly Hills and his pitch was, companies make a mistake hiring people. They need to cast just like Hollywood. I love that. I thought that was absolutely brilliant. So I called my team. said, no more board hiring. You need to cast. You need to cast. You need to cast. And today, everybody already knows it. If I interview someone, I ask two questions. What are you the only of? What do you do better than anybody else around you? What is your superpower? It’s all the same question. And then the other question is what would you do for free? What are you passionate about? If you had all the money in the world, what would get you out of bed tomorrow? And if you can find the convergence of your passion and your superpower, work is never work again, and you will succeed. And so, at Life Time, my personal effort is always to cast, just like Hollywood. You look at European movies, much better plots, much better stories, but they have the same six actors trying to act everything so they screw it up. If you look at Hollywood, they have no plot, ridiculous plots, but they have perfect casting. So then you go watch that movie as entertainment. So casting is the key. And we focus, we teach, we communicate, and we reiterate, cast, cast, cast. And then once you cast correctly and you create the alignment we talked about, we’re all in this same way, find the right role for the person, then everything works.

Three minutes left, so I’m going to do two more questions. On this next one, they have to stand up so everybody can see your buckle. They want to be able to see so they have a visual reference here. That belt buckle is a symbol of a big athletic goal that you accomplished.

Alright, so this is my favorite. There aren’t a lot of them. This is a Leadman Epic 250 Triathlon. Years back when I was trying to take down, I changed that goal. But at one point I wanted to take on Ironman with Kimo. We wanted to create, let man try. I had a vision, though I wanted to actually clear. I wanted to be equally hard, as hard, maybe harder. So instead of 212 kilometers, it was 250 kilometers. But I wanted to eliminate the impact of the marathon at the end. So we went five kilometer swim, a little more than the Ironman. We ran 245 miles or so of run and a 16-mile bike and about a 16-mile run to make it less impactful, but yet as hard and dramatic. A lot of the triathletes at that time used to actually come do the Lead-Man-Tri, because they could do it, and two weeks later they could do an Iron Man as a training, because it wasn’t beating them up so bad from the full marathon distance. So that was the goal. This was in Lake Mead, five kilometers, I remember I get out of the water and I couldn’t move. I was so frozen. It was 55 degrees, even the mud suit was cold. But that’s the Lead Man Tri buckle.

Also, the last question, we’ll get back to it we want to make sure all these questions can probably be answered when we call our courses somewhere, make sure that none of these questions are unanswered. But the last question, what are the cultural values your organization shares with their customers, particularly around wellness, encourage?

I think it’s exactly the same thing as I mentioned to you. I think that if you want to lead in life, your personal life, anybody else, you need to have a vision, you need to have the courage, you absolutely need to have the communication skills to get other people to know that vision, and then you need to have thrust. You need to have a mindset, I’m gonna get this thing done and nothing will stop you until you get it done, right? And so that same mantra applies to the customer, applies to the team member. You just basically create the venue, you create encouragement, and you sort of instill in people that when you start something, you finish.

Bahram, thank you for kicking us off at the Sea Otter Classic. It was a pleasure.

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Thanks for joining us for this episode. As always, we’d love to hear your thoughts on our conversation today and how you approach this aspect of healthy living in your own life. What works for you? Where do you run into challenges? Where do you need help? And if you have topics for future episodes, you can share those with us too. Email us lttalks@lt.life or reach out to us on Instagram @lifetime.life, @jamiemartinel, or @freezy30 and use the hashtag #LifeTimeTalks.

You can also learn more about the podcast at experiencelife.lifetime.life/podcast.

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Thanks for listening. We’ll talk to you next time on Life Time Talks.

Life Time Talks is a production of Life Time Healthy Way of Life. It is produced by Molly Kopischke and Sara Ellingsworth with audio engineering by Peter Perkins, video production and editing by Kevin Dixon, sound and video consulting by Coy Larson, and support from George Norman and the rest of the team at Life Time Motion. A big thank you to everyone who helps create each episode and provides feedback.

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