Investing in An at-home workout like never before.

I am going to start this memo by admitting a mistake and a bit of luck.

Early last year (2020) I was unsure of the direction of the home fitness trend so hedged by betting both sides of it. I shorted the (I thought over-hyped) leader, Peloton, and doubled my investment in Fight Camp, an early stage up and comer. Of course, I took a bath on Peloton, and Fight Camp has become one of the best performing investments in my portfolio by far.

Home fitness is here to stay and users expect more than dumbbells, yoga, and bodyweight stuff. They are demanding advanced technology in the convenience of their homes. Over the last year, I tripled down on finding a company that had a fundamental technology advantage that would create a new blue ocean of opportunity behind this meta trend of home fitness. is the best company I have found. I believe Katalyst could be bigger than Peloton and Fight Camp combined.

The Background

Like many of you, I have always been into physical fitness. Soccer team in high school and college, biking and running for fun. In my 30’s I was one of those CEOs who worked 70 hours a week and competed in marathons and triathlons on the weekends. I have spent hundreds of thousands of dollars on fitness over the years joining every kind of gym and buying every fitness gadget that came along. I bought one of the first Peloton and returned it (I prefer my own bike and Zwift). Unfortunately, I have also spent almost as much on doctors to recover from the injuries incurred along the way. When cross-fit came along, I jumped in with both feet and six months later had a terrible case of tennis elbow from jerking all those weights around. My primary care doctor was overjoyed: “I love Cross-Fit, the best thing for my business! Everyone gets injured!” A patellar tendon overuse injury ended my running days and now I mostly bike and lift weights. Physical fitness has always been a brute-force time-sucking injury-prone activity for me. Working in the technology industry, I saw the power of technology to transform wide swaths of our lives. A tiny idea came to me: “Why are we still doing the same basic physical fitness exercises our caveman ancestors did? Why hasn’t technology fundamentally changed the time/reward/injury relationship?”

Five years ago after I invested in Bulletproof, Dave Asprey introduced me to biohacking. ā€œBiohacking is the art and science of changing the environment around you and inside you, so you have more control over your own biology,ā€ Asprey explains. That seed of an idea started to grow. As CEO of Upgrade Labs I was in the middle of the technology-enabled health and fitness revolution unfolding. Innovative fitness technologies tend to start in with elite athletes, doctors, and gyms before coming broadly to consumers. Electro Muscle Stimulation (EMS) is a technology that has been on that path for nearly 40 years. Katalyst is the first company to bring it in a convenient package to consumers in their homes. With EMS you get a full-body strength workout in 20 minutes that would take over 2 hours in the gym, without any muscular-skeletal stress and a significantly lower injury profile.

I strapped into my first EMS full-body suit four years ago in Santa Monica (yes Los Angeles is always on the leading edge of fitness). The advertised 20-minute workout took almost an hour with all the set-up, suit adjustments, and tweaking. I was had to wear a base layer from the club (ick!). The suit was connected to the control unit with heavy cables that kept getting in the way. The system costs over $40,000 and the user interface was so complex you needed special training, certification, and facilities, hence the $150 price tag for the session. The workout itself was amazing and I have done over 100 sessions with significant strength improvements, about 5x what I would expect for the same amount of time in the gym. While the core method of action was sound, the technology was too expensive and cumbersome for the mass market.

I meet Bjoern Woltermann, CEO of Katalyst in 2018 in Seattle as he was raising funds to build a chain of EMS studios using his in-house developed wireless EMS suit. EMS studios were a $1.7B worldwide market of over 13,000 studios, just starting in the US. My first question was “Great, so can I buy a suit and do this at home?” “No, the FDA requires current EMS systems to only be operated by certified instructors, preferably with a doctor’s prescription.” “Could you handle all their safety concerns in software?” I queried. “Theoretically yes, but no-one has attempted that yet,” Bjoern replied. “Do it and I will invest in that company.”

Bjoern ended up raising (I did not invest) as he pursued a dual strategy of building studios and seeking FDA approval for home use of his suit. Katalyst came to the Upgrade Labs conference in 2019 and the most common question was “How can I buy one of these for my home?” They received FDA clearance for studio use and the studio business started growing well in late 2019. Then Covid hit killing the studio business and drying up funding. Bjoern took the remaining capital and reworked the supply chain and product for home use. There was a ton of software and hardware upgrades required to get FDA clearance. Katalyst received FDA clearance in Q4 of 2020. The company is now solely focused on in-home fitness. The product and supply chain are complete, it is about sales and marketing from here on out.

Bjoern called me in February to see if I wanted to try one of the new suits. There were going into closed Beta. I said, “of course, and are you raising capital?” He was, so I am now an investor in

Why I am Investing

I am obsessed with fitness and efficiency. I have spent hundreds of thousands on fitness and the Katalyst suit is now my only go-to for strength training. EMS is the most efficient full-body workout I have come across in over decades of searching. Katalyst is the first to bring down the cost and improve the useability for the home user. They have a three-year head start on the competition. Bjoern and the team have proven their resilience and ability to pivot in a difficult market. Peleton, Fight Camp and others have shown the way to bring technology into home fitness. By not being tied to one sport and being portable (you can take it with you), I believe Katalyst will appeal to a much larger market.

My tiny idea finally has an answer. We don’t need to exercise like our cavemen ancestors. The Katalyst technology fundamentally upgrades the time/reward/injury relationship. In 20 minutes three times a week, I can keep fit for any other activity I want to do. Today I went for a bike ride with a friend and a hike with my kids. I am super excited to help Bjoern and Katalyst bring the most efficient fitness technology into every home.

Trends I am betting on

At-Home is the new gym.. 2020 “pulled forward” many trends that were already underway, especially those that reduced friction in a material way like ecommerce, telemedicine and at-home fitness. The Gym business was already faltering with less than 15% of americans belonging to one and less than 4% going regularly, and obesity/overweight people growing much faster to over 60% of the population. The “Fitness industry” was not delivering fitness. It was a house of cards. The COVID pandemic was the storm. In 2020 while the physical retail fitness business shrunk, at home fitness of all types exploded 1-300%. The pandemic “pulled forward” the demand for more effective and friction free fitness. Most of my friend who now have significant investments in home gyms see no need to go back to the gym even when the pandemic is over. I believe the switch has been flicked in the public’s mind in favor of home fitness and won’t get switched back.

Efficiency and Efficacy win.. How many of us have started a new fitness program in January and by March are not doing it anymore (or February)? Usually there are two reasons: Time and efficacy (not seeing results). Fitness classes are like old broadcast TV. You have to get yourself to a certain place at a certain time, disrupting your day and conforming to someone else’s schedule. At home fitness is like your iPhone, always available whenever and wherever you want it. Any company that provides greater Convenience (Efficiency) for customers will win over time. Convenience is a major reason why Amazon is killing store based retailers and you buy a coffee at Starbucks drive through for 50x more than you could make it at home. Efficacy (results) is also related to Efficiency. Everyone wants the results faster. That is why Amazon has same day delivery. Traditional fitness is a brute force effort that has traditionally consumed 6-10 hours a week for an active person. What if you could get the results in a fraction of that? While there has been a lot of snake oil sold with this promise, EMS is a proven technology used by professional athletes for decades. I have replaced 4 hours of strength training (weights) per week with three 20 minute session, a 75% improvement in Efficiency. And efficacy has gone up as my muscle gains have exceeded my gains with weight training. EMS provides the best Efficiency and Efficacy I have found for strength training. Desire for Efficiency and Efficacy is a long term meta trend which is impacting many industries. This trend has been “pulled forward” in the Fitness industry and will continue in my estimation.

Growing appreciation for: “An ounce of prevention is worth a pound of cure.”. We have all heard this phrase, but few of us apply it in our daily choices. While many people quarantined at home eating the same processed foods and not going to the gym while waiting for the vaccine “cure”, I ask myself “What can I do on the prevention side to strengthen my immune system so when I get it (and everyone will eventually), my body will be ready?” I focused not on the prevention of getting the virus (impossible), but on the prevention of an adverse outcome. While the hospitals were packed with COVID patients, many people could not even access the health care “cures” for any other issue they may be having. I believe this jolt has flipped another switch. The switch that makes you take action on prevention BEFORE you need a cure. I am betting that there will be a material and ongoing shift in wallet spend from “cures” into “prevention” across many areas of our lives. In healthcare (a cure), given the colossal spend there, even a small shift toward prevention (fitness, supplements, etc.) will drive massive growth.

One thought on “Investing in

  1. Thanks for sharing this post. I too have been training with a Katalyst suit and it does wonders for my workouts. Katalyst is a rocket ship and Iā€™m glad I have a seat.

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