Episode Transcript
Speaker 0 00:00:00 Who would ever thought that SaaS and cycling could become a business? Our next guest, Robbie Ventura, took his passion and talent in the cycling world and created a multimillion dollar business called Velocity. I can't wait for you to hear about it. Robbie, I'm excited to see you outside, out of your Lycra and off the bike. We, uh, we got,
Speaker 2 00:00:41 I look the same without a helmet on.
Speaker 0 00:00:42 Well, you know, almost the same. Your hair's a little better. <laugh>. Um, but no thanks for being here. The Lady Boss Podcast is really designed to help other entrepreneurs figure out the shortcuts so they don't make all the mistakes that at least I've made, um, and, um, most of the people I know have. So, um, we'll dive right into it. Perfect. I wanna hear, um, first, just not that many people we interview, were professional athletes. So can you gimme just 30 seconds on how that happened and how you got on the tour?
Speaker 2 00:01:11 Sure. Um, yeah, I, I was always an athlete as a kid. I had a lot of energy. Actually had, um, diagnosed with like underdeveloped lungs. So my parents were really into getting me, like doing exercising, right? So they started me with soccer and the craziest thing happened is I love baseball and I love soccer. And my buddy on my soccer team's like, Hey, I wanna go to the Velodrome in Kenosha. This is gonna take longer than 30 seconds. You got, we good. You're just keep going. Um, so basically we're gonna go down to the Velodrome in Kenosha. And I went down there with a, with a B M X bike. This is a track, a velodrome is a concrete track, and we're so, so lucky to have two of 'em here. We have one in Kenosha and we have one in Nofor. There's only like 30 in the United States, and we have two of 'em within like 20, 30 miles a year.
Speaker 2 00:01:54 And I went down there, got on my B M X bike, put the helmet on, and we did a race. We did one lap, and my friend Shane and I destroyed the other people in the, in the group, right? And there was like these kids race all the time. And I'll never forget this, I was so excited. I had my blue ribbon and Shane's dad drove him back to my house, me and Shane back to my house. And he said, Rob, ba Bob, my dad's name's Robert as well. These kids really did good on the track. I think you should come on down to the Velodrome and like see what these kids are doing. I mean, it's pretty cool. Like Shane and Robbie got first and they won by like, you know, half the track. And my dad's like, okay, fine, I'll go next week.
Speaker 2 00:02:30 So we go next week and they start everybody else in the front line and they start, Shane and I back like 50 meters on the Velodrome. So we had to make up 50 meters before we can pass everybody and try to win. And I just remember my dad was there and Shane's dad was there, and they, and my, the dad's hold you by the back of the seat and think about this. We're like, there, there's a, there's like 10 people in front of us and then Shane and my dad is, my dad's there. They're holding us, say, let us go. We just launch, we catch 'em. Like before the final turn, Shane and I both go around the outside, we get first and second again. And I was like so excited about my cycling skills, right? Like I could do this. Well, I literally go down to pick up my ribbon with my dad and everyone's like, Bob, what are you doing back down here?
Speaker 2 00:03:12 Like, everybody knew my dad in this entire infield. And 'cause after the stock bike races, the real racers go, the track racers, the guy who have experience that have pin numbers on their back, they're good. And every one of 'em, like these old timers knew my dad and I kind of didn't make a big deal about it. And I go, I get home. I go, dad, dude, everybody knew who you were down there. That was crazy. He's like, well, I didn't wanna tell you this, but I used to race. And he pulls out this box, he's like, state champion, national champion. He was like the greatest bike racer ever, never even said anything to me. And he is like, I just didn't wanna push you into the sport that I love so much. I'm like, are you kidding me? You were this good at the sport and you never even told me about it. So he started coaching me and he was just the greatest coach ever. I mean, like, he knew everything about the sport. He got me the best bikes, he got everything dialed in. I went to the nationals, I started placing, and it just kind of evolved. I just got better and better and better at it. But I was a little bit big. So
Speaker 0 00:04:04 Wait for the ome to the tour. How many, how many years is that?
Speaker 2 00:04:07 It's a long time. I literally started, I raced, I was starting racing when I was eight years old. And, um, I started, I I signed with the US Postal Service when I was 29. Wow. So it took a long time, but, but I didn't always wanna be a bike racer. I wanted to be a hockey player. And so I kind of got out of cycling a little bit and really focused my energies on, on hockey. Like I wanted to play professional hockey. That's all I cared about. And I was good, but I wasn't, I was, you don't know how good you are at something until you get to the highest level. Yeah. Because the difference, you feel like you really, really good at things until you get to people that are just a little bit better in the, in the, in the, in the, in the gains.
Speaker 2 00:04:48 And the differences are so tight and, and, and they're so narrow at the top that I ended up having a rough junior a career. I ended up playing college at or hockey at Lake Forest College. And then I started cycling a lot more in college. And I went to the World Championships in 1993. I made the World Championship cycling team as I was going to college, as I was playing hockey in 1993. Went to Norway. I went to Norway and I got fifth in the elimination, which was a big race on the track. As soon as I got back, the kind of word started to spread. And I signed a pro contract with Saturn, which was a big, um, professional team in the United States. And I had a great career there. Won a lot of bike races. And then I signed with US Postal Service.
Speaker 2 00:05:29 Now, I would just want to correct you, I never did the Tour de France because my teammate was, everybody knows him, was Lance Armstrong. And he was the greatest tour racer that's ever raced the bicycle. And I was a sprinter and they never brought a sprinter to the Tour de France because the entire team was built around getting him the victory right in the tour to France. They usually bring a sprinter, they bring different types of riders to win different stages. But our team was so focused on Lance that there was no room for a sprinter. And to be honest, I just wasn't that good at those really long races. I was better at shorter races, so that wasn't a race I would even do well in. So I won a lot of bike races as a professional and I commentated to Twitter, France for from 2006 to 2013. So I spent a lot of time in France, a lot of time, more time than I want. Um, but, uh, unfortunately never race the race.
Speaker 0 00:06:17 Okay. So normally speaking, people don't, uh, associate the, you know, not all the time do professional athletes get good at business. And now you find yourself with two businesses and, um, both very different. But, um, you sort of took, first of all, give us some numbers around like how many people in the United States are what you call road bikers, which is what your business has evolved around, right? Cycling.
Speaker 2 00:06:42 Yeah, cycling. Absolutely. Um, there are a, there are, there are, I, I mean the numbers are all over the board, right? But there an enormous amount of people riding bicycles on the road and it's growing and growing every single year. So our total adjustable market is enormous for what I try to do. But, but back to how do I get from cycling to professional to a to a business owner? I, I graduated from college. I'm one of the few cyclists, I've never met a cyclist when I graduated from when I finished my pro career that ever went to college. Now a lot more do because collegiate teams have cycling teams now, or colleges have cycling teams. So a lot more, um, um, scholarships are going to cyclists. But to me, I was missing something as a pro cyclist. I was, it's a very selfish exist existence.
Speaker 2 00:07:32 It's very difficult. You do everything for yourself. Your whole life is kind of circled around you and getting better than the next guy and beating the person next to you and fighting for a contract. It's super, super cutthroat. And, and you have, you develop a selfishness that isn't always great, right? Not great for relationships, not great for kids, not great for a lot of things. So literally I didn't know what I wanted to do. I was like going into the financial markets. I passed my series six. I was trying to figure out what am I gonna do when I retire from professional cycling? Because I see so many of these cyclists, you don't make money like pro football. Like the best paid cyclists make like 500,000 to like a million bucks a year. There's some that make a lot more than that, but that's the kind of the pro number and that's not enough to retire and finish your life on.
Speaker 2 00:08:22 So I was like, what am I gonna do? What am I gonna do? After cycling, I started like thinking I was gonna be a financial planner and then I was on a bike ride and I helped this guy's like, man, I've been in the back of the pack my whole life. I just wanna get stronger. Gimme some tips. What do you guys learn in the pro Peloton? And as a cyclist myself, I had to do everything right or I couldn't compete at that level. I mm-hmm <affirmative>, I had to be perfect. Like I didn't have the massive VO two max. I didn't have the massive horsepower. If I didn't train perfectly, eat perfectly, sleep perfectly, do everything right, I would, I would get dropped. So I learned everything about making myself good. So I literally met with this guy. I remember, I'll never forget it, it was EJ Lindsay.
Speaker 2 00:09:02 He owns E J's place in Skokie, a restaurant. He was, he was an owner of a, he was one of the people that started up Jean and Georgetti in the city. And he said, Robbie, help me out. And on the back of a cocktail napkin, I wrote him out a training plan. I said, try these intervals, get a power meter, do these things and try to do it on a regular basis. He goes, okay. He's like, what if I paid you to come ride with me sometimes? I'm like, no, no, no, just do the training plan. Literally three months later, he was the fastest guy in his group and the word spread, he's like, oh my gosh, what you told me I did it. It was perfect. I got this power meter. I did exactly what you said. And people started calling me saying, Hey, I saw what you did for ej, can you do that for me? And I was like, Lori, why don't I just start coaching people, like writing training plans and see what happens while I'm racing. I was a racer. I was, I was like still in the middle of my pro career and I started doing it on the side and it started to grow and grow and grow. And I literally decided to stop cycling 'cause I was making more money coaching than I was racing my bicycle. So it was a perfect flip for me. I got lucky.
Speaker 0 00:10:02 It's funny. So we hear all the time that the best success stories are where your customer takes you to the promised land. And that's a great example. Like you were doing something else and you run into this opportunity. And the opportunity is really the opportunity that is such a good reminder. Uh, 'cause it's always about the customer. How, okay, so you're coaching, what made you start Vision Quest?
Speaker 2 00:10:26 So this thing's just started to blow up, right? People started coming to me. The, these, these stories of these guys getting all the success started going. It didn't hurt that I was a member of the postal service and people wanted to be associated with me as well. I literally in the back of one of our rooms in our house and we had a small, small house. We, we had a really tiny little townhouse. I got all this blood lactate equipment. No one even knew what blood lactate was. No one knew what VO two maxes were. And I had all this information from all the coaches that I've had throughout my pro career. And I started applying it to these beginner athletes, these, these literally weekend warriors. And my business grew so much that I was like, I'm gonna rent some space. I'm gonna start to like hire more coaches.
Speaker 2 00:11:03 I'm gonna start to like make this a real business. And like I said, as soon as I finished cycling, I had a full blown business going on and it was phenomenal. And what I really figured out, and no one else figured this out, is that I could coach with these machines, a lot of people indoors based off of percentage of how strong they were. So most of the time when you ride next to somebody, you're telling someone to go this hard. You're telling other people to go that hard. I had a machine or I had a system where the machine would automatically regulate based on how strong somebody was. So everybody in the class could get the same relative workout. I know it's common now, but I was one of the first people to have that. So the word spread on that as well. He can coach a bunch of people perfectly with this percentage of threshold thing that he rigged up. So that started to grow. And then we moved outta one building, moved outta the second building, and then we went to the city of Chicago and I hired Dave Notta. That was a huge turning point because the, the suburbs are only so big. The city of Chicago was massive and it really opened up our business huge when I, when, when we opened up our second studio in the city.
Speaker 0 00:12:07 So you really, you find more people in a city environment that are those kind of road cyclists for the weekend than you would in, in the very wealthy suburbs of Chicago
Speaker 2 00:12:16 That wanted to train indoors. 'cause the city's a mess. Okay. You can't ride in the city. Okay. So the city was a perfect spot for indoor training because Yep. The outdoor training was too dangerous. Yep. So it ballooned.
Speaker 0 00:12:26 Okay. And that was how many years ago?
Speaker 2 00:12:28 Oh God, you're gonna make me think. Approximately
Speaker 0 00:12:30 20.
Speaker 2 00:12:31 Uh, this was probably 2007. Six.
Speaker 0 00:12:36 Okay. So you told me multiple times that during the pandemic, like all of us, um, I know I was worried about losing our business. You could've lost it 'cause nobody could come to your studio, which was the format you were making money Yep. At that time. A hundred percent. And you had those trips, which also were shut down. So what went through your head? And then how did Velocity come into your head?
Speaker 2 00:12:56 Yeah. That that, I mean, I'm sure every person you've talked to in these podcasts tell you how rough, you know, the pandemic was for us. And I, and I, and I, I think it was actually the, we had the worst potential business for the pandemic. And I lived in the worst potential place in Highland Park that was so strict against anything in terms of group working out. They didn't, they banned us from in, they had a, I went, I'll never forget this. I went into Highland Park and there was a thing on my door saying, this business is closed, do not come in here <laugh>. And I was like, oh my gosh, this is it. My business is done. And all of a sudden the word started to spread that you can't ride outside. The pandemic is so bad that if you're riding in a group with people, you're expelling all this air and it's going on the, they did this weird study in Holland.
Speaker 2 00:13:42 I definitely don't know how they got their data, but it said that it was worse to ride in a group outside than inside. And I was like, oh my gosh, I can't do outdoor rides either. Now what am I gonna do? And I spent literally an hour only and I said, NoDa, send out an email to everybody. I'm gonna do a video and I'm gonna talk about the pandemic and I'm gonna ask people to help me and support me. And I'm gonna give them full coaching from me virtually using Zoom. And, and I'm gonna send everybody the workout and I'm gonna coach 'em on Zoom. This is before anybody did anything like this is instantaneously, as soon as it happened. And the first ride, I had like six people and a bunch of people quit Next ride. I had like 15 people. Another bunch of people quit.
Speaker 2 00:14:26 All of a sudden people stopped quitting and started going to my Zoom classes. And I had a hundred people on my Zoom class. Like it, we've never done an indoor ride with even close to that many people. But the word started to spread. I started to do more and more classes. I got more and more instructors at Zoom classes and someone said, why aren't you like mono? Why don't you do this for your business? Like, why don't you take your ability to leverage your coaching and your ideas and push it out to the world because it's awesome. Your classes are great. I never get Robbie Ventura to teach me something. I'm in Chicago, I get these other instructors to teach my in class. Now I'm learning from you. This is great. I'll pay for this. Heck I'll invest in this. Like, let me like help you do this business.
Speaker 2 00:15:08 And I had a few people that were like, I'm totally into it. So I sat down with a buddy of mine, clay Brock and a couple others, and we came up with a business plan on how we can build this virtual cycling program that could rival Peloton and, but for more serious cyclists, it's evolved since that. So it's a really cool story. But basically that was the, that was the genesis. And we, we raised three and a half million dollars or $3.4 million. We only wanted to raise two. It was so people were so frothy to like raise money at this point. This was like a couple years ago that we raised more money than we initially wanted. Wow. And that's how Velocity started.
Speaker 0 00:15:47 So you're in a business now where you're, you know, you have a board, you have investors that you report to. How's that compared to, you know, being a rogue entrepreneur? And I say that in the best of ways. Yes. I've also always been a rogue entrepreneur. I never had investors. That's
Speaker 2 00:16:03 Great. I think that's a good thing. <laugh> um, being a rogue entrepreneur is, is terrific. But I, I wanna take it to the next level. I wanna help more people and the only way I'm gonna be able to do that is through this platform. And I had to take on investment. Right. And it's a, it's much different. It's much, much different. I think it's actually better for me. It gives me guardrails. I get a little loose with my ideas sometimes. No. And I just, this kind of keeps me more on track. And I think my board is, if I have one area that I've learned more than anything else, it's, I had the greatest board ever. I have the c e o of one of the greatest cycling companies in the world. I have, um, two of my lead investors and people that I completely respect and they've taught me more in the last two years.
Speaker 2 00:16:51 I've learned more about business, about success, about everything in life from this board. I really leverage 'em some people's boards. They're nervous by 'em. Right. And I was in the beginning too. I wanted to impress 'em at my first board meeting. I was scared and nervous. But what I've learned and what what has really helped our business is our board involvement. Hmm. They have literally changed our business in such a positive way. And they're not easy, they're not pushovers. They give me it straight. They make sure our financials are on, on, on, on, on par. They communicate to the investors. They do some of that heavy lifting. I gave all of my investors full transparency to our board. They can call 'em and reach out to 'em anytime they want. So they know everything that we're doing is, is positive and as straightforward and as and as right as it should be.
Speaker 0 00:17:36 Uh, so I know you raised, uh, north of $3 million a couple years ago and then I think you raised more money recently. Yep. Uh, so what does, what does that look like? So what do you do with the money and then when do the, the board start seeing profitability or when does the company start seeing profitability in a software business?
Speaker 2 00:17:54 Yeah, software businesses are tricky. They, they always cost more money than you think. This is what everybody told me initially. They were like, raise this much money, but trust me you're gonna burn through it. 'cause software is very, very expensive. It takes forever to have it done. Um, and they were correct. I made some mistakes early on. We took 3.4 million exactly in the be in the first round. And a large portion of that money went towards developing software and our initial marketing budget, customer acquisition. And we didn't do that well. And the reason why we didn't do that well in our first run is because we went directly to consumer. We went from, we designed a product that we thought customers would come and, and take my class all over the world. And what we learned over the time is we had other guest coaches that would come out of this, out of the platform and all of their athletes would go to their class.
Speaker 2 00:18:43 But once the guest constructor went away, the guest coach, their athletes went away as well. So we evolved as a company and learned that the customer, the end customer wasn't, it wasn't a B two C business. It was a B two B business. And not only was it B two B from to give the coaches the opportunity to do this for their athletes because Vision Quest did great. VisionQuest as a client of Velocity did great because all of our customers were loving the product. But if you weren't with VisionQuest and you already had a coach or you had a training plan, it was hard to get them to come take my classes. So we, we pivoted and we went B two B from, from from. So we made this a platform that all coaches can use, but we also designed these canned plans. So Trek Travel and all these training groups and all these Grand Fondos now can have a packaged 12 week plan to get people ready for a cycling trip or ready for a Grand Fondo, which is a hundred mile ride or ready for a charity ride. And people will pay for those canned plans as well. And the charity makes a little bit of money and velocity makes money. So that was our big pivot. But we were running outta money so we had to raise another million and a half in this last round. And our plan to profitability, our plan to just break even is 27 months. Like we have a 27 month process of, because we look at the total adjustable market from
Speaker 0 00:20:02 Now or from when the business started.
Speaker 2 00:20:04 The business started over two years ago. Yeah. Our money, our business will start making money 27 months from now. But it will be worth a ton of money if it starts making money. Because once it starts making money, your mon it's a SaaS business, right? It's a month over month. Those businesses trade for 10 to 20 times revenue. I mean it's a massive multiple. Yeah. Because we have all this, every month we get $20 from all these different cyclists that have all these different coaches. So it's a great bus. And that's what we tell our co that we, we send out a letter every month saying this is our revenues, this is our projection. Did we meet or did we go below projection? And if we hit these projections, we're gonna be worth this much money in this much time. And that's what our investors want.
Speaker 2 00:20:47 They don't want monthly revenue or they don't want monthly like payments. They wanna be able to sell this for 20 times what they put in or more. And that's really what we're focused on. And we have a whole process of how that happens. And we keep our investors up to speed. Are we hitting this projections? Are we missing 'em? Is there a reason why we're missing 'em? So our investors are happy as long as we're meeting these projections that we hit. 'cause we know the multiple that we can get if we get to this certain number.
Speaker 0 00:21:14 And it's a pretty short runway for them. Even if they're an investor on day one, we're looking at maybe an investment over six or eight years max,
Speaker 2 00:21:21 Like the, the initial like we wanna be done in four years. And again, it's all kind of this projection math. But at the end of the day, you gotta start taking slices of that as we go through this process. And the one thing that I've always been super like open about is our financials. We want our investors to be on every single month. Our investors get a report with exactly what's going on. So it's not a surprise, nothing is a surprise to our investors. Oh my gosh, it's been a year and I haven't seen any money. Well this is the process. This is how it's gonna go. Yeah. And they all signed on to that when they, when they initially invested with us. Um, and and that's
Speaker 0 00:22:01 Yeah. How the process works. Well here's, tell me maybe why you have such a good relationship with the board is 'cause you are so transparent as a person. Exactly. In general. And I think you are very open book and I think, um, I've always found that goes a long way. First of all, the people that work for you are like, great, he's real. 'cause I think everybody would look at you and put you on a pedestal. Obviously you've had this crazy great, um, success and when they find out you're real and you know, sometimes things are working, sometimes they aren't. I mean, that's what successful business people are all about. Yep.
Speaker 2 00:22:30 And they don't wanna make 10%. They don't wanna, people that invested in this business don't wanna see us making a little bit of money. They wanna see us make making something incredible and having people start to use it and it hockey sticking. Yeah. And then it being sold. And the nice thing about it is, is we have already, I mean, my mindset is around selling this business. Every decision we make is about selling this business. Eventually. We already are lining up people that could potentially buy the business. And what would, what would this business be for, for a company like Trek? Why would this be, why would this be something Trek would wanna buy? And when you start to make business decisions and thoughts, you have to think that way for the investor and for myself for that matter. Because I wanna sell this business and make a lot of money as well. So I think we're doing it the right way. And again, this is all supported and helped by the board. I mean, what I've learned over the last three years has just been mind blowing. And, and, and if I can give people one bit of advice is surround yourself with people that know a lot more than you, inspire you and believe in you. Because that's my board. And that's, that's why I'm so confident,
Speaker 0 00:23:38 Oh, such good lessons. I've always, always thought I I built my first business to sell it 10 years later and that happened and I knew who I would sell it to and I built the whole thing around it. Incredible. And that is great advice. And the other thing, it's dawn's on me that you're gonna get your hockey career after all that. Okay. Gonna get your hockey stick and that's gonna be your hockey stick to the big check.
Speaker 1 00:24:03 This
Speaker 0 00:24:04 Is my favorite part of the Lady Boss podcast because we put our guests on the spot to answer five questions about how they really got to be who they are along their entrepreneurial journey. So Robbie, you ready? Let's go. All right. Give us your favorite employee retention tool.
Speaker 2 00:24:22 My favorite employee retention tool. Um, I think it's culture. Like, if you create a culture where they're motivated, they're excited, and they're learning, that's the key. Like for me, money, forget it. You'll lose 'em to money for sure. There, there's always somebody that'll pay more. It's really about if you keep them learning and you keep them and you have a culture of learning and support. I think that's it.
Speaker 0 00:24:45 Robbie, what's your favorite business book?
Speaker 2 00:24:47 That's an easy one. Um, I give every, all of my employees, all of my kids, everybody that I know. I, I'm gonna tell you everybody here to get the book Mindset by Carol Dweck. It's really about the importance of a growth mindset in a business.
Speaker 0 00:24:59 Awesome. Great advice. Um, would you share with us your favorite, the favorite advice that your best mentor gave you?
Speaker 2 00:25:07 Surround yourself with people that believe in you more than you believe in yourself. I think that is, everybody has to find, that's for your mate. You want that for your business partners. You want that. You want people that really believe in what you can do. Um, and, and you'll achieve it. You'll rise, you'll meet their standard.
Speaker 0 00:25:25 Oh, that's awesome. Love it. What's the Robbie Ventura superpower?
Speaker 2 00:25:31 Uh, I think it's, it's, it's the ability to take whatever comes my way and try to find a positive spin on it. It's, it's like, it's like maybe yes, maybe no. I think when things go sideways or bad, I see them as opportunities rather than, um, challenges. I mean, they're challenges, but I just sometimes think things happen for a reason. And if you think deep enough and wait it out long enough, it's probably a good thing in the end.
Speaker 0 00:25:56 Great mindset. And if you were to give our listeners, uh, one piece of advice that would help catapult their businesses forward, what would it be?
Speaker 2 00:26:07 You gotta grind. You have to, I mean, nothing is easy. I don't care what anybody tells you. Do this and you'll make a bunch of money. People that are successful know how to grind. They have grit.
Speaker 0 00:26:20 All five, five on five. I'm believer. Good stuff. Thank you.
