Why would someone pay $1,200 a night for a hotel room they barely even sleep in??
ok so I recently sat down with a founder who designs gyms for some of the richest people on the planet. Luxury hotels. Private members clubs. Country clubs. Home gyms for people who run companies you've 100% heard of.
his home gym builds start around $100K. Some of his club projects are pushing past $1M.
and for the first 6 years of his business... he made zero money.
Not low money. Zero. Revenue went $100K, then $200K, then $300K, and profit just sat there flat the entire time. Then he made one decision (luxury only, nothing else) and that same year he broke $1M. He's been scaling ever since.
When I asked him about it, he basically said if he could go even more niche, he would.
I walked out of that conversation with more notes than I've taken in months, and the funny part is almost none of it is actually about gyms. It's about how the top 1% of customers buy, why most brands lose them, and what you can steal from a guy selling $150K home gyms even if you sell $40 supplements.
So in this one I'm going to talk about (1) why going narrower is what finally made him money, (2) the hook vs. payoff problem that kills most brands, (3) why the smartest operators treat their "extras" like a retention machine, (4) how to sell to a room full of people who will never meet you, and (5) where all of this is heading.
The niche that finally paid
If you read How To Win In Saturated Markets, you already know how I feel about puddles. This is honestly the cleanest real-world proof of it I've ever heard.
Six years of taking anyone with a budget. Six years of break-even. Then the second he said no to everything below his standard, the business finally started making money.
The backstory is kind of wild too. He used to be a trader. Hated it so much that he told his boss he had another offer, just to get a raise... and his boss said "awesome, you're fired." He didn't have an offer. He was standing outside the building with his bag like, ok what now.
So he became a personal trainer. Did cold calling. Spent about two and a half years figuring out what he even wanted. He liked fitness, he liked business, he just didn't know how to make them work together.
Then an architect called him out of nowhere asking which treadmills were the best. He said "let me get back to you tomorrow," went home, and built a 50-page deck on treadmills (he knew how to make a deck from his trading days). He literally went into a store and measured how loud each one was.
The architect loved it and asked for the same thing on dumbbells. He ended up working with that guy for three and a half years, doing nothing but gyms for one of the most exclusive members club brands in the world.
That's where the standard got set. Once you've seen what the top end expects, everything below it feels off. So when he started his own thing, the luxury niche wasn't really a strategy. It was the only room he wanted to be in. It still took him years to commit to it, though.
Here's why it works once you do. When you're known as the luxury gym guy, every client makes the next one easier. Every logo on the site is a reason for the next owner to pick up the phone. And you stop competing on price, because nobody else is pitching what you pitch.
The hard part is saying no.
He told me that if a big college athletic program called him tomorrow, he'd love to work on it. He'd still probably pass. It wouldn't be his best work, and somebody else would do it better. (And the funny thing about telling people no? They want you way more.)
That question of "should I take this deal that's outside my lane" kills more founders than bad ads ever will.
I did my own version of this early on, just in the other direction. I took deals way under my market value because I knew one logo on my website would bring in the next 25 clients. He did the same thing about 5 years in. He took a project at a beach resort he made zero dollars on, because there was only one of that venue in the world and he wanted his name behind it so bad. He fell in love with his own pitch, and the halo from that one image probably paid him back down the line.
Both of those were investments. Totally fine to make them. Just know you're making one, and know when to stop. He has a project minimum now, and honestly, so should you.
The hook and the payoff
His whole company is built around one word: misalignment.
Picture this. You book a $900 hotel. The lobby is stunning. The pool is stunning. The rooftop is stunning. Then you walk into the gym and the dumbbells stop at 50 lbs, half of them don't match, and there's one bench.
That's a sick hook with a payoff that doesn't deliver.
and this happens in marketing every single day. The ad promises one thing. The landing page delivers something else. The customer bounces and you blame the algorithm.
The higher your price, the worse this gets. Once you gatekeep something (a high price, a membership fee, a waitlist, you have to own real estate to get in), whatever's on the other side of that gate has to be worth it. Limit the supply and you're on the hook to deliver. Every time.
His process is two steps, and I'd steal it for any product, page, or offer you have.
Step 1 is the essentials. What does this customer expect to be there? And what usually lets them down? For hotel gyms, it's always the dumbbells. So he doesn't do 5 to 50. He does 5 to 100, with so many sets spread around the room that you'll never wait for a pair. Boring? Yes. Does every single guest notice? Also yes.
Step 2 is the wow moment. Once every box is checked, you add the one or two pieces people have only ever seen on TV or on a streaming doc. The thing that makes someone pull their phone out and go "the club I belong to has this, look."
That photo is the marketing.
People love sharing something nobody else has seen yet, because they get the credit for finding it. Same reason you send your friend a restaurant before it blows up. The goal is that someone sees a picture of the space and knows exactly where it is.
Most brands get this completely backwards. They spend the whole budget on the wow and skip the essentials. A viral ad sending people to a slow site with 4 reviews is a wow moment sitting on a broken foundation.
Fix the dumbbells first. Then buy the fancy machine.
so where does the wow actually come from?
I asked him how he designs spaces that look like nothing else out there. His answer surprised me. He barely looks at other gyms.
He looks at luxury cars. He looks at fabrics. He studies how those customers react to new launches and finds what carries over, like obsessive attention to detail, or how a certain buyer just prefers analog over digital no matter how good the tech is. Then he takes a render to his manufacturers and pushes them really hard on what's possible.
He starts at 150% creativity. Engineering, budget, and reality drag it down to about 70%. But if the rest of the market is sitting at 10%... that gap is still massive.
I see this with real estate developers too. There's a new tower in Austin where the renders looked like straight utopia. I went and checked it out in person, and it's legit. Sell the 150% version, deliver the 70%, and you're still miles ahead of everyone else on the block.
The same lesson shows up in consumer brands constantly. The best ideas almost always get carried over from the industry next door. What if supplements looked good enough to sit in the beauty aisle? What if a gym felt like a five-star restaurant? Your competitors are all staring at each other's ads. Go look somewhere else.
The amenity is a retention machine
This part changed how I think about "nice-to-haves" in a business.
For most hotels, the gym is a sunk cost. Money spent so a box gets checked on the booking page. The smart operators flipped that, and now they get paid a few different ways from the same room.
First, they charge more. Say you've got two hotels side by side, same price range, same amenities. If one gym is lights out, the guest who trains is picking that one, and will happily pay $25 to $50 more a night for it.
Second, they get the guest back. Once you find a hotel you love in a city, you stop researching. You just book it again. One of the biggest names in business told him it's the only hotel he'll stay at in that city, and the gym is the reason. He had no idea who designed it until they met. (Of course, the first thing my guy did was ask him to say it again on camera.)
Think about why that is. Someone at that level can't just walk into a packed big-box gym. Privacy is the product. The hotel gym has four people in it and everything he wants. That's a retention play, not an acquisition play.
Third, they keep you on property. One of the biggest hotel groups in the world figured this out years before everyone else, and the funny part is the people running it don't even work out. They just understood dwell time. Start your day in their gym and you eat breakfast there, grab coffee there, take your 10am there. Leave for a class across town and they might not see you again until midnight.
I've felt this myself. I stayed at a hotel in Miami Beach expecting the usual cramped hotel gym, walked in, and it was incredible. Great workout. Then I was starving for protein, so where did I eat? Right downstairs. The room was fine. It was a hotel room. Everything around the room is what I still remember.
Fourth, some of them turned the gym into its own paid membership. Now the amenity pays for itself every month, and the spend on building something memorable actually makes sense on paper.
The math he walked me through: a $200K to $300K gym on an asset where that money comes back roughly 3x in value. Put $1 in, get $3 back. Same logic as a paid ad.
Quick side note on where they draw the line. He said most of these places should stay away from things they aren't good at. A hotel doesn't need its own spin studio when there's a great one down the street. Do what hospitality already does well. Run a run club, then bring everyone back for a free coffee and a croissant. Same for food and drink in a gym. The $14 smoothie isn't making anyone rich. It's part of the experience, and people do the hard workout partly for the reward.
So what's your gym?
What's the thing in your business you're treating as a cost center that could be raising your price, bringing customers back, or keeping them around longer? For a lot of DTC brands, it's the unboxing, the post-purchase email flow, or customer support. Everyone treats those as overhead. The brands that treat them like the gym win the second order. And the third. And the tenth.
He thinks country clubs are the next big opening here, by the way. The golf course is amazing, and then the gym smells like 1994. If one person is out on the course all day, what is the rest of the family doing? The clubs that answer that question are going to win the next decade of members.
Selling to people you'll never meet
He sells to hotel groups, developers, and families with serious money. Big checks, a lot of decision makers, and most of them never get on the call.
His goal is to get a proposal out within 20 minutes of hanging up. Most people think a proposal takes a week. He wants it in their inbox while they still remember every word you said.
And every proposal gets written for the 3 people who will actually look at it.
The owner won't read it. He needs a headline and a picture.
The chief of staff reads every single word.
The VP of development skips straight to the budget. He wants to know when he pays, how much, and what happens if the hotel gets sold halfway through construction. (In construction a lot of that is debt, so the timing of payments is a big deal to them.)
So every proposal has a headline, a visual of what they're getting, the return, and a cash flow schedule. Everyone can find their answer without picking up the phone.
I learned the exact same thing selling into big brands. The CEO sees a viral video and asks the CMO why they aren't doing that. The CMO tells the head of growth to find an agency. The head of growth tells an associate to go pull 15 options. How you show up for that associate decides how you get pitched to the CEO.
Your real pitch is the one your contact gives their boss. Write it for them. Hand them the exact words, give them a reason their boss won't be mad they picked you, and let them take credit for the idea if they want it. Seriously. Let them.
Where this is all going
Last thing. I asked him what gyms look like in 2035, and we ended up deep on friction.
Every time a machine asks someone to log in, a huge chunk of people just walk away. They go back to the old machine with a pin and a weight stack, because it just works. I do this literally every day. The treadmill at my gym makes me click through 4 screens to get to quick start, and I'm standing there like... why does this suck so bad?
Your product can be the best on the market. If there's half a second of confusion at the start, people are gone, and they tell their friends it wasn't great.
The future he's betting on is wild though. Machines with no weight stack at all, just digital resistance that changes on the fly. Way cheaper to ship, and you can actually get a better workout in less time. There are already small units that double the weight on the way back down.
Here's where I pushed back a little. At the high end, I think less tech becomes the flex. People hate how much time they spend on their phones, but they're addicted. Something has to give. At some point, low screen time turns into a status signal. I'd want the gym at my favorite hotel to feel as analog as possible.
He agreed that a lot of people feel that way. Some clients literally ask to take the screens off the treadmills. So my bet is the winners will feel analog on the surface and run all the tech underneath. Cameras that track your workout so your phone can stay in the locker. You walk in, the front desk already knows your name and that it's your birthday. No login. No four screens.
That goes for your checkout, your onboarding, and your signup form too. Count the clicks. Then cut half of them.
(and if you're wondering what the most outrageous request he's ever gotten was: hyperbaric chambers. The good ones run $80K to $150K, show up looking like submarines, and sometimes the house has to be built around them because they're never coming back out. There are dog ones now too. That's when you know we might need a revolution.)
So where are you?
Be honest with yourself on these:
Can you say who you're for in one sentence, and would you actually turn down a big deal that didn't fit?
Does your landing page deliver what your best ad promises?
What's the one wow moment a customer would screenshot and send to a friend?
Which "cost" in your business could be raising your price or bringing people back?
How fast does your proposal go out after a call, and could your contact's boss understand it without them in the room?
If you got stuck on any of these, start there. Go narrower. Fix the essentials before you pay for the wow. Then build the thing people keep coming back for.
The richest customers on earth barely use the room. They're paying for everything around it.
hey, and if you'd rather we build this for you :) click here