By Pete Williams
(Published Sept. 18, 2012) – We recently interviewed Tough Mudder founder Will Dean for a story on the growth of obstacle racing that will appear in next week’s edition of SportsBusiness Journal.
We spoke to more than a dozen people for that story. Dean talked at length about Tough Mudder and the future of this growing endurance sports category. Since only a few of those quotes were part of the SBJ story, we thought we’d include more of the interview here.
Dean, 31, might be the modern version of Fred Smith, the billionaire founder of FedEx who as a student at Yale in the early 1960s received little reaction from his professors after writing a paper proposing an overnight delivery service.
In 2009, Dean’s Harvard Business School professors thought his project for an event that would become Tough Mudder was unrealistic. These days Dean, who once worked as a civilian counter-terrorism officer in Great Britain, heads up the hottest race property in the endurance world. This year the Brooklyn-based Tough Mudder will attract 470,000 participants to its 35 events and generate $70 million, including six-figure deals with a dozen sponsors. Dean says revenue will double in 2013.
Tough Mudder, which only debuted in March of 2010, is not a race but a challenge. Athletes are encouraged to participate as a team in the 12-mile, off-road course, which includes obstacles that challenge the mind as much as the body. There are plenty of walls and ropes, but the event is best known for its dumpster of ice water, its electrically-charged gauntlet of wires, and its signature orange finisher’s headband.
Tough Mudder exploded at the same time Facebook became ubiquitous and that’s no coincidence. Dean says Tough Mudder has been Facebook’s No.1 advertiser, having spent millions on the social networking site. If you’ve spent any time on Facebook, you’ve no doubt seen pictures of muddy friends in their orange headbands. In many ways, Tough Mudder and its competitors such as Spartan Race and Warrior Dash have become the new triathlon, the Monday morning water cooler or Facebook bragging rights.
Tough Mudder, which debuted in Florida last year at Little Everglades Ranch in Pasco County near Tampa, returns to the Sunshine State Dec. 1-2 at the Hi Hat Ranch in Sarasota.
Here’s our interview with Dean:
Q: How big can this obstacle mud category grow?
A: In my mind you have really three distinct obstacle racing events. It’s like looking at road racing and putting 10K and marathon in the same group. They’re clearly quite different. Marathon is a category. Obstacle race is a pretty wide category. We would actively choose to exclude ourselves from the obstacle race group. There are no prizes at Tough Mudder; it’s not timed. There are no medals and the focus is on teamwork and camaraderie and lots of people helping each other. There are really few people treating it as a race.
There’s also Warrior Dash, which is a fantastic concept and absolutely no way am I belittling them. They’ve had phenomenal success, very smart guys. Great company culture, but they use the term “race” loosely. They’re as much about enjoying the post-race fun, having some beer and listening to music. I’m not saying anything controversial when I say that for most people in reasonable shape, Warrior Dash is not a very onerous event. It takes 20 or 30 minutes for most people. You spend more time in the post-race party than the event itself. Then you have Spartan Race, a very different business model than ours and doing very well but clearly an obstacle race
Q: What’s fueling interest in these events?
A: First, from a fitness perspective, the shift to functional fitness with P90X and CrossFit. At Tough Mudder, we’ve positioned ourselves, if there is a category, at the high end of that. We expend a phenomenal amount of money on obstacle innovation and construction. I’m pretty confident that our budgets are significantly higher than the other muddy obstacle course challenges out there.
People come for the obstacles, but it’s about creating a whole integrated user experience. It’s really a whole weekend concept and that speaks to the second thing, which I believe in very strongly: Experience is the new luxury good. Not just in the endurance space. People talk about what restaurant they’ve eaten at, climbing Mt. Kilimanjaro, bungee jumping, whatever. That’s far more important than what sort of iPhone you have and I think we’ve captured that.
One thing I realized early is that when people do their first marathon, they talk about how they hit the wall at mile 20 or mile 22 and how some person they’ve never met comes along and they run it in together. They talk about how meaningful that is for them, that shared experience and the bonding that comes with that.
At Tough Mudder, we try to create a variety of obstacles that test you in different ways. Regardless of your body type, shape and fitness, there will be something that will get you outside your comfort zone. We try to create that moment every 10 minutes, that moment of intense bonding on the course. I’m not a sociologist, but with Tough Mudder you realize that even though we live and work in a world where we’re surrounded by people, we really don’t have much meaningful interaction with people. Here in New York, we specialize in avoiding eye contact with each other on the subway or getting out of the car. There’s this irony that all this social networking gets us connected with more people but on the other hand it gets in the way of more meaningful connections.
At Tough Mudder, we created this very earnest, sincere, frankly kind of irreverent event that’s not a race, one that doesn’t take itself too seriously. We position ourselves as the opposite of the Ironman culture. You can help someone if they want assistance. Tough Mudder is about conquering your own Everest and being proud of what you’ve achieved. For some people it’s about getting around the course in an hour and 45 minutes and for other people it’s just about doing it.
Looking at the industry, Warrior Dash is in the fun mud run space. Tough Mudder is the tough obstacle course challenge and Spartan Race is about an integrated racing experience. And while superficially they look similar – we all have mud and walls – they’re three very different events and value propositions. People often ask me if Spartan Race is a competitor and I say not at all. It’s good for us in exactly the same way that for Boston that New York exists and vice versa in the marathon space. Tough Mudder is and always will be an event that’s about more than just the obstacles. People will call it a race because we have a start and a finish line and water stations in between that make it look like a race but that’s not what we aspire to do.
It’s this whole weekend experience where guys – and it is 80 percent men – get together for a weekend away and it’s almost a bachelor party for a lot of people. Tough Mudder is tough and it beats you up, but if you’re in good shape you’ll finish Tough Mudder and still walk to the bar that evening. You see a lot of people wearing their headbands to bars after and that speaks to the experience component of it.
Q: Your Harvard Business School professors didn’t think too much of Tough Mudder. What made you think it would work?
A: The vast majority of my professors said, “How are you going to sell a race that’s not a race?” You’re going to have huge liability issues and it will be a real challenge trying to scale this event. Business school professors are very intelligent people but it’s hard to imagine something that doesn’t exist. And a lot of (professors) struggled to envision a world where people would spend this amount of money on an event like this.
At the time I was in my late twenties doing triathlons and marathons and all people would ask is what my time was. That was the only metric. I’ve done races where people were screaming at me to get out of the way, especially in triathlons. I remember asking for help to get my wetsuit off in a triathlon and a guy said he couldn’t. It would have taken all of three seconds. It’s not like this is your profession. There’s no prize money at stake.
I believe there’s no such thing as a good business idea; there’s just good business execution and that comes down to having good people on the team. It all comes down to understanding what problem you can solve and why. I was this guy in my late twenties who enjoyed staying healthy, but I had a full-time job and I couldn’t spend lots of time in the gym. I wanted an event I could focus my training on that required more than aerobic fitness and I wasn’t looking for it to be a race. I knew I wasn’t alone in thinking that way. A lot of professors said it was a bad idea and that I should take a job with a large management consulting firm but I think you have to believe you’re an entrepreneur even if everyone else in the world is telling you that the baby you’re holding is ugly. You have to believe that it’s not.
Q: How do you address the liability issue?
A: Any activity is potentially high risk. It’s about building world-class systems and we’re very proud that nearly half a million people will do our events this year – after more than 150,000 last year – and we’ve had no fatalities. Statistically, over the course of any day at home watching TV, at least one of that many people might have had a heart attack.
Tough Mudder is about getting you out of your comfort zone. The adrenaline is pumping when you’re jumping into a dumpster full of ice, but it’s a somewhat controlled environment. And in some ways it’s like a high ropes course. You can say that if you fall it doesn’t matter because the harness is going to catch you after three feet. But your brain doesn’t think that way. What it sees is that, ‘Wow I’m 50 feet up here and if I fall I’m screwed.” One of our concerns is that there are hundreds of smaller events popping up. From a commercial perspective, having them do well is good for us. If the Des Moines Marathon does well, it’s good for Boston. But there’s always the danger of putting a lot of new players into the market. You have people who might not be aware of best safety practices. Tough Mudder has spent a lot of money working with the relevant safety people here and overseas to see that we meet and exceed safety standards. We have a $50 million general liability policy with Lloyd’s of London and we have to meet standards. It’s a big cost for us, but the far greater cost is providing all of the safety stuff, including 100-plus personnel at any event. We have ambulances, local hospitals briefed, and Medevac helicopters in place at more remote events.
A: The days of being able to drop a lot of money on NBC and reach men in their 20s and 30s are gone. They’re looking for ways to engage with me. It’s a challenge and that’s why you see Super Bowl commercials selling for what they are. We’ve had 1,100 people have the Tough Mudder logo tattooed on them and that speaks to the engagement people have.
Tough Mudder is a real life Fight Club. You have obstacle racing, but Tough Mudder is this beast in an off itself. We have very high levels of Facebook engagement. If you look at our major sponsors – Bic, Under Armour, EAS, Dos Equis – they know there are lots of places with 20,000 or more people in one place. A stadium, sports event, wherever. But where else can you have this many people with a clear purpose in mind? They’re not just thinking about a game for two hours, but thinking of this experience for weeks leading up to it and they have real pride. They’ll wear the headband to work. Brands realize that we have something really unique, a fantastic activation program.
Q: How fast is Tough Mudder growing?
A: We’re hoping for a million participants in 2013. We’ll be at $70 million this year and that should double next year. We have a 50,000 square foot warehouse in Brooklyn and six 53-foot trailers. That will double next year. We also have warehouses in the UK, Canada, and Australia. It’s like a traveling circus. For a typical event, we’ll have 10 to 15 of our headquarters-based staff and another 200 staff plus volunteers. At out Sydney (Australia) event (Sept. 22-23) we’ll have 40,000 participants and easily could have had 70,000 if we did not have to cut it off because of the venue’s capacity.
A: Earlier this year we had an event in Melbourne. I touched down at the airport, having never been to Australia. The immigration officials assumed I was from Great Britain, but I said I lived in New York and worked for Tough Mudder. When I mentioned I was the CEO, all these immigration officials came over. Many were doing the event that weekend. It’s all still amazing to me because if you look at the original business plan, which I have new employees read, we projected 7,500 people competing in year four. Now we’re heading into year four and will hit one million.