Cycle of Success
Heads bowed and eyes closed, the cyclists sway from side to side, their legs pedaling madly as they visualize themselves sprinting down a mountain slope with a pack of other racers.
Leading the way is Johnny Goldberg, the founder of Spinning, the fitness craze that transformed the ho-hum stationary bike into an international phenomenon.
Goldberg, better known as Johnny G, describes Spinning as his spiritual gift to the world. But with the help of his partner, John Baudhuin, he also has turned Spinning into a profitable venture, capitalizing on the public’s insatiable demand for new ways to stay fit.
With Spinning’s success, however, has come challenges. First, there are the competing companies eager to carve a piece of the growing indoor-cycling market. Then, there are the headaches and expensive legal costs of defending the Spinning trademark.
“Johnny created this whole industry,” said Mark Eckhardt, a program director at Voight by the Sea in Santa Monica, which uses a rival brand called Spin Cycle. “So like any king, he’s going to want to protect his kingdom.”
The Spinning duo have been able to cash in on their trademarked concept through retail sales, an extensive instructor training program and royalties from Schwinn Cycling & Fitness. Schwinn manufactures the Johnny G Spinner Pro, which performs more like a road bike than a traditional stationary cycle. They also have licensing agreements with Polar heart-rate monitors, Gu energy gel and Chiquita bananas, and they recently signed a deal with Nike Inc., lending the Spinning name to an indoor-cycling shoe.
Sales are up in all three divisions of Goldberg and Baudhuin’s Santa Monica-based company, Mad Dogg Athletics. This year, the company expects to draw $1 million from its clothing and accessories division; $1 million from its instructor training division; and $1 million from various licensing royalties.
“Our business has doubled every year,” said Baudhuin, adding that there are about 3,200 health clubs in 55 countries now offering Spinning, including 1,000 clubs in the United States. The vast majority of the Spinners are sold to health clubs.
But last year, Reebok, Keiser and Body Bike USA introduced their own indoor fitness bikes and programs in the United States. Although Baudhuin said the Johnny G Spinner Pro still has about 85% of the market, the added competition has prompted Mad Dogg Athletics to become even more vigilant about defending its turf.
“This is our brand name, and we spent 10 years developing and perfecting the Spinning program,” Baudhuin said. “It’s essential for us not to allow any of our competitors to take advantage of all of the efforts we put into this.”
Mad Dogg Athletics now spends about $25,000 a month in legal fees, mostly to ensure that its many trademarks, including the use of the terms “Spinning” and “Spinner,” are not violated in worldwide markets.
Baudhuin compared the company’s predicament with that of Rollerblade’s. Just as the public associates in-line skating with “Rollerblading,” people across the globe have come to know indoor cycling as “Spinning.” As a result, Mad Dogg Athletics has to be a stickler about trademark issues, because so much of its business is generated by licensing the Spinning name to other companies.
Joan Wenson, who has worked with Body Bike, said Mad Dogg Athletics’ effort to defend its trademark is a point of contention in the fitness industry.
“They’re trying to hold on to the Spinning term, but that word has been around for years,” she said.
Competition from Reebok, Keiser, Body Bike and others also has meant that the creators of Spinning can’t depend on their name alone. If they are to maintain their dominant place in the industry, they must stay on the cutting edge of cycling technology and programming because buyers are becoming more choosy.
Stacy McCarthy, general manager of the Frogs Athletic Club in Encinitas, said her club still uses Johnny G Spinner Pros, but that two other clubs in the chain now use Reebok’s bikes.
“Before, Schwinn was the only game in town,” she said. “But now, health club owners are shopping around because there are lots of bikes to choose from.”
Eckhardt said Voight used to have Johnny G Spinner Pros, but switched to the European-made Spin Cycles in 1995. He considers the Spin Cycle to be a better-performing bike with more features.
Baudhuin said it would be “foolish to say the other companies don’t pose a threat,” but he believes the Schwinn bike and Goldberg’s program are so far ahead of others in quality and innovation that Mad Dogg Athletics will remain the market leader for many years to come.
For instance, he said, Schwinn has worked out many of the kinks in its bike that other companies are only beginning to run into. And next year, Mad Dogg Athletics plans to introduce upper-body-strength equipment that can be incorporated into Spinning classes.
“What’s different about our company from our competitors is that we’re not involved in other markets,” Baudhuin said. “We spend 100% of our time trying to make Spinning better.”
Kathie Davis, executive director of IDEA, The Health and Fitness Source, a San Diego-based organization for fitness instructors and personal trainers, believes the entrance of new players in the indoor-cycling market ultimately has benefited consumers.
“Whenever there’s competition, it makes the products better,” she said.
Spinning has become a ubiquitous part of many health clubs’ regimens, but it began simply as a grass-roots effort by one man with a passion for cycling, fitness and motivational thinking.
Goldberg began developing the Spinning program in the early ‘80s, while training on a stationary bike for the 3,100-mile Race Across America. He designed an indoor cycle that resembled a sleek, black racing bike placed on a stand. While many stationary bikes have computer controls, Spinners rely on a manually controlled tension knob that adds resistance, to mimic hill riding.
With his unique bike in tow, Goldberg began teaching Spinning first at his own studio and then at the former Voight Fitness and Dance Studios in West Hollywood, where he met Baudhuin.
After taking Goldberg’s Spinning classes, Baudhuin, an accountant by day and an avid cyclist by weekend, convinced Goldberg that they should market the idea together.
“I saw this person who had a really fantastic idea, but wasn’t in a position to capitalize on it,” Baudhuin said.
After forming Mad Dogg Athletics in 1992, the two began manufacturing the bikes themselves in Goldberg’s garage.
“At the end of 1993, we came to the realization that we weren’t very good bike builders,” Baudhuin said. “We could have started our own manufacturing company to build bikes. But what makes Spinning special is the energy we put into the program. That’s what we wanted to focus on.”
After pitching the concept to various equipment manufacturers, Mad Dogg Athletics signed a deal in 1994 with the Colorado-based Schwinn, which now manufacturers and sells about 2,000 Johnny G Spinner Pros a month.
“Everyone looks at Spinning today and says it’s a great thing, but back in 1993, we couldn’t get anyone but Schwinn to believe in what we were doing,” Baudhuin said. “Many companies didn’t even want to talk to us.”
The turning point came in June 1994 when Rolling Stone magazine named Spinning the hot exercise. At the time, Spinning had been available at only four U.S. health clubs. However, oncethe buzz about Spinning began to spread, health club owners around the world began clamoring for Johnny G Spinners.
The big issue when it comes to Spinning now boils down to one question: Will it last?
The fitness industry tends to be fickle when it comes to new trends. But Baudhuin and Goldberg believe Spinning will be around for the long haul because it relies on such a basic concept, the bike.
“There’s also no impact on the joints,” Goldberg said. “We climb hills that don’t exist, and we make it challenging by adding resistance. I think Spinning will be around a long time because it’s a worthy addition to the smorgasbord of training, and we have a special place for bicycles in our life.”