Fitness CEO Behind P90X: It Was Almost a $2 Million Flop

Now it's the cornerstone of a $1.3 billion business.

Carl Daikeler, the CEO of Beachbody, was in town Monday.

Carl Daikeler, CEO of Beachbody, was in town Monday.

Like many other Americans, I did P90X at one point in my life. (Ok I did about 50 days of it until I couldn’t take it anymore, don’t judge me.) But I was so excited about the workout-from-home phenomenon, I told anybody who would listen how great it was. And that’s just what Carl Daikeler wanted.

“Our customers became walking billboards … When you go to a July 4 picnic with family you haven’t seen in a while and you lost 50 pounds, you’re instantly the most popular person in the room. Everyone wants to know how you did it,” said Daikeler, the chairman and CEO of Beachbody, the company behind Insanity, Body Beast and lots of other training videos. He was in Philly for an on-stage interview with Philadelphia magazine Editor Tom McGrath at the IMPACT 2015 Capital Conference on Tuesday. (Full disclosure, Tom’s my boss.)

Daikeler grew up in Lansdale, Pa., and built an empire that had $1.3 billion in sales last year. Part of the reason he’s been successful, he said, is that he hasn’t been able to figure out how to live a healthy lifestyle.

“I need to figure out how to solve my own problem,” he said. “I literally had a cheesesteak earlier today. I despise working out. I eat like a toddler.”

Before Insanity and P90X, there was 8 Minute Abs, which proved to investors that Daikeler was an infomercial guru. In fact, he said he got $500,000 from angel investors without even having an idea.

“I said ‘let’s start with fitness, then go to hardware, then music — whichever works’ ,” he told the crowd. Soon Beachbody took off, and he got fascinated with selling P90X‚ but was hampered because of its obvious drawbacks: It’s 12 DVDs, cost more than $100 and featured unpopular moves like pull-ups, squats and yoga.

“The industry told us it’s a stupid idea,” he said. “It cost $2 million to develop at a time when the company was choking for air. That’s a year longer than expected and the first infomercial flatlined.”

In fact, it wasn’t until the 22nd iteration until the infomercial took off. The secret? Airing video testimonials sent in by the company’s small but dedicated group of customers. Walking billboards.

“It took on a life of its own,” said Daikeler. “There were moments we should have shut it down but I knew there were a reason to keep pursuing it.”

What’s next for the company? Daikeler said there’s still a “huge economic opportunity” in the fitness space and said his goal is to increase sales by 10 times.

“We’re missing a zero,” he said. “We just have to figure out how to motivate people — especially in October, November and December when people are unplugging from fitness and portion control.”