Rock Gym Pro: Unlikely King of Climbing Gyms
Back in 2007, when Andy Laakmann was spending an enormous amount of time writing code for his new software program, he was not thinking about a business start-up. Even though he had co-founded a highly successful tech company in the nineties (an early photo sharing service that was later sold to a large technology company), at the time he was only trying to solve a problem for his own business, the Enclosure Climbing Center in Jackson Hole, Wyoming.
“It was absolutely not intended to be a business, that was a serendipitous thing that happened,” said Laakmann in a phone interview.
Enclosure had been using health club management software to run its operations, but it wasn’t working well. The software was complex and had many features that weren’t relevant to a climbing gym. It took nearly a week to train staff on the software, and they would still make mistakes when entering new memberships. Costly mistakes, like accidentally giving a year-long membership instead of a one month membership. “Thousands of dollars were being wasted each month on staff training, data entry mistakes, and poor work flow. This was all a direct result of running software not designed specifically for the unique needs of a climbing gym,” said Laakmann.
Drawing on his 20 years of software development experience, Laakmann decided to build his own management software, and Rock Gym Pro was born. After using the software successfully at Enclosure, in the fall of 2008 Laakmann took the unique step of offering the software to other climbing gyms, for free.
One of his early promotions for the product on a RockClimbing.com forum cheerfully claimed: “The product was built for and is used by a busy commercial climbing gym, and is now being released as a free application for the benefit of other gyms.” RGP was offered under the GNU General Public License, which allows anyone to copy and distribute verbatim copies of the software.
A BUSINESS IS BORN
The software was quickly adopted by other climbing gyms, and within a year 40 facilities in six countries were using RGP to run their businesses. Around that time Laakmann added a Premium Support plan that provided RGP users with personalized technical support for a low monthly fee. He also removed the GPL license. Laakmann described the changes he made during this time as essential to keeping the software going.
“This is software that runs businesses that process millions of dollars, and at the end of the day, I am responsible. This thing processes money. It just has to be right, and I have to control it,” Laakman said. “Its a full time job, I have to make money on it or I’m not going to stay the course. Other people have tried making software for the climbing world and they’ve all faded away because they weren’t making a return for the time invested.”
BY THE NUMBERS
Today there are 335 business using the software to run their operations. “There are almost no climbing gyms left in North America not running it. I bet it’s about ninety percent of all for-profit climbing gyms,” said Laakmann. In the past he has spent a lot of time migrating climbing gym businesses from other software to RGP, but that service has slowed to a trickle as he has run out of gyms that aren’t already using the software.
That doesn’t mean growth has stopped altogether. Other businesses in the recreation industry have found a need for RGP. About ten percent of businesses using the software are not indoor climbing facilities. Most of them fall into other types of “high risk” activities, like skateboard, trampoline and wake boarding cable parks.
“It’s a curious niche. There’s lots of software out there to run a business. What RGP shines at are businesses that have a lot of day users that they want to keep track of, particularly when release of liability is an issue,” said Laakmann.
The software supports a wide range of businesses, from small facilities that process $100,000 in transactions per year to large businesses with multiple locations that process more than $5 million per year. To date, Laakman estimates about a half a billion dollars in transactions have been processed through the software, with the rate going up each month. At the end of 2013 he estimates the transaction volume will reach about $20 million per month.
Big Tweaks, Little Tweaks
Over the years RGP has grown into a robust business tool that handles all aspects of membership sales and billing, customer check-ins and waiver collection, point of sale purchases and employee management. One of Laakmann’s challenges is to figure out how to keep improving the software without adding so many features that it becomes cumbersome and difficult to use.
“I probably get 20 suggestions a week, and I have to filter that,” Laakmann said. “My job is to listen, and then to not do anything for awhile, and see if I can collect these various thoughts into sort of general changes that will be helpful while simultaneously not confusing them or their staff.”
Every change has ripple effects on the gym staff that interact with the software on a daily basis. “I’ve discovered now that if I change the order of the buttons I get mail … there’s tens of thousands of staff members trained on this thing,” said Laakmann.
One improvement that is definitely not on the list is a Mac version of the software. When asked about this Laakmann said, “RGP is 200,000 lines of code and has been tested for years. Creating a Mac version from scratch would be a completely different 200,000 lines of code.” He did note that several businesses successfully run RGP through Parallels, a software application that allows Mac users to run Windows applications.
“I’m getting very few significant suggestions any more. Lots of little stuff, lots and lots of little stuff. But I’m not getting many big things because I’ve checked it off the list,” Laakmann said. The last big piece missing from the software is an online booking and sales system that will allow customers to book parties, personal training, and courses online, and to have this information integrate with the RGP database. This feature is slated to be release sometime in 2014.
“RGP is now enterprise level, mature software,” said Laakmann. “Changes are slower, changes are harder, because I can’t break anything. People depend on it to function a certain way.”
WAIVERS BECOME BIG BUSINESS
One of the major improvements that RGP made along the way was the development of a digital waiver system. This feature allows customers to complete a paperless digital waiver at the facility, or to complete it online even before they arrive. The customer information is seamlessly transferred to the software, saving hours of staff time on data entry while creating a simpler and more robust method of storing these legal documents.
This tool was immediately popular with RGP users, who processed a million waivers in the first eighteen months and another million in the following eight months.
Other industries took note of this innovation. “I created the waiver for my clients, I released it, and within two weeks other businesses started calling, BIG businesses,” Laakmann said. He discovered that waivers are the most commonly needed legal document in the country, with around a million signed each day. There was a clear business opportunity, but Laakmann said he put it on the back burner because he didn’t want to run another business.
Eventually, Laakmann teamed up with Mark Silliman, who had experience operating websites dealing with mass amounts of data, and Smartwaiver was launched in early 2012. Smartwaiver now offers a range of digital release of liability waivers that are signed electronically and stored in WaiverVault, the company’s highly secure database. The organization has quickly grown thanks to interest from major players like the NFL and YMCA.
THE FUTURE OF RGP
In addition to Laakmann, Rock Gym Pro has one other full time staffer, Amy Recker, who provides technical support to customers. Laakmann said he has no plans to increase this number. This makes the software highly dependent on the knowledge and skills of its founder, but Laakmann doesn’t seem too worried about this.
“If I were to drop off the face of the earth tomorrow — it would suck — but the software will keep running, the web service would keep running, the bills would still get paid. And I’d recommend that people start looking at other options. But the way things are set up the system will keep on running.”
A more likely scenario is a planned retirement of the software. “There will become a time when I’m no longer interested in working for RGP,” Laakmann said. When that time comes he expects that RGP will have reached the end of its useful life, and won’t continue without him.
He wouldn’t provide a firm estimate of how long he expects the software to continue, but he was emphatic that RGP customers will get two years notice before he plans to sunset the software.
When the time comes for him to move on to something else, Laakmann said he would consider selling the software, not so much for the money but to ensure that the software keeps going. But on further reflection he seemed skeptical of this prospect. “When it comes time to sunset this thing, it’s going to be because it’s time. I really believe that. Any piece of software has an arc to it, you just have to know when it’s time for something else to come along,” said Laakmann.
“That being said, business software, people give it up kicking and screaming.”
Sender One To Host SCS Open
Just months after its grand opening, Sender One has been named host facility of the 2014 Sport Climbing Series (SCS) Open National Championships, the United States’ premier sport climbing competition. Sender One owner Chris Sharma, one of the world’s best climbers, will make his first appearance in the competition since 2009.
The competition-climbing world will converge on Santa Ana on April 4th and 5th as the country’s best professional climbers compete in sport and speed climbing, with the top finishers eligible to move on to the World Cup circuit and World Championships. The event will be internationally webcast by USA Climbing.
Sender One is the newest world-class climbing gym in the United States and opened to widespread acclaim in June 2013. Located in Orange County, California, Sender One’s 25,000 square foot facility features, among other things, dramatically designed climbing walls and surfaces up to 50 feet in height. Sender One will host a Vendor Village outside the gym that will feature displays by the top climbing and outdoor product companies as well as local, southern California-based partners.
Mary-Clare Brennan, USA Climbing CEO, states, “USA Climbing is extremely pleased to partner with Sender One to host the SCS Open National Championships at their facility in 2014. We expect 2014 to be a landmark year for this event and for the sport of climbing.”
“I’m really excited and proud that my gym, Sender One, will be hosting SCS Nationals,” shares Chris Sharma. “It’ll be great to have all of the country’s best climbers here sharing their love for the sport and putting on a great show for Southern California as well as the rest of the country. It will be a great time! I’m also excited to compete and see if I can give the young’uns a run for their money!”
USA Climbing and Sender One will release more information as the event approaches.
Is Your Gym Guilty of Music Piracy?
At this very moment, climbing gyms across America are pumping pop, rock, reggae and other background music into their facilities to entertain customers while they climb or work out. Whether the music came from CDs or MP3s, satellite radio or streaming music services like Pandora and Spotify — or whatever other music service their hip, young staff have discovered — chances are the music being played is in violation of federal law.
While you may be entitled to personal use of this music, according to U.S. Copyright Law playing music at your business is considered a “public performance” and requires a license from the copyright holder. The reasoning behind the license is that your business is benefiting from the performance of the music, and thus the artists should be fairly compensated.
In the U.S. music licensing is managed by a handful of Performing Rights Organizations (PROs): ASCAP (American Society of Composers, Authors and Publishers), BMI and SESAC. The royalties collected by the these organizations are distributed to the artists, authors, composers, publishers and other rightsholders.
BUSINESS ACCOUNTS
About now some you may be congratulating yourself for being a lawful license holder because you were savvy enough to sign up for a business account through Pandora (Pandora for Business by DMX) or SiriusXM for Business. These services promise to provide unlimited, ad-free and fully licensed music for your business.
DMX advertises that they have partnered with Pandora “to provide legal and licensed personalized radio specifically for business use.” SiriusXM for Business claims “We save you both time and money by paying all royalty fees including ASCAP, BMI and SESAC — costs you would otherwise incur if you use CDs, MP3s or regular radio for your overhead music.”
Unfortunately, if you are using these services at your climbing facility you are still breaking the law.
Tucked deep in their terms and customer agreements is this unfortunate clause: “The Service is not authorized for use in connection with a business that charges an admission fee (such as nightclubs, bowling alleys, fitness centers, skate parks, etc).” A spokesman for Mood Media, which owns DMX, confirmed that the Pandora for Business service would only be allowed in areas “where people can be without paying a fee – such as a lobby or front desk area.”
While restaurants, coffee shops, retail stores, hair salons, medical offices, hotels and the like are allowed to use these services to play music day and night, a climbing gym that charges admission is not.
SMALL BUSINESS EXEMPTION
The U.S. copyright Law does have some exemptions for small businesses that meet certain criteria. According to Section 110 of the law a business may perform music broadcast by a radio or television station providing the facility is either, (1) less than 2,000 square feet, or (2) the music is broadcast by not more than 6 speakers, of which not more than 4 speakers are located in any room.
Even if you do meet these criteria, you will still be subjected to the DJ chatter and commercials broadcast by these stations.
UNDER THE RADAR
It is true that, because of the difficulty of monitoring the millions of performances of copyrighted music taking place every day, many businesses do not pay the royalties they should. However, performance rights organizations have grown increasingly vigilant about enforcing their licensing agreements. The Better Business Bureau informs its members that they should not be surprised if they are contacted and offered music licensing agreements by ASCAP, BMI, and SESAC representatives—either by mail, phone or in person.
Furthermore, BMI and ASCAP file hundreds of copyright infringement lawsuits each year, although historically these lawsuits have targeted restaurant and bar owners. According to the BBB, performing music without the proper license could lead to a civil suit in federal court with fines of up to $150,000 for each copyrighted song, plus the copyright owners’ legal fees.
A ROYAL(TY) PAIN
If you do want to follow the letter of the law, what are your options?
One avenue is to obtain a blanket license from all three of the PROs: BMI, ASCAP and SESAC. The PROs determine your licensing fee based on your businesses category, although each use a different methodology for determining how much your license will cost.
An annual license from BMI for background music at an indoor recreation facility is a flat rate of $660 per year. A license from ASCAP for a fitness center, according to the customer service representative we spoke to, will cost $230 for up to 3 speakers, with each additional speaker adding $47. SESAC doesn’t list their license fees online, and we were unable to reach a spokesperson to confirm their rates.
Thankfully these blanket licenses will cover all types of music played at your facility, whether its music played from your iPod, streamed from the web, beamed from a satellite or performed by a DJ or live band — yes, even live performances require a license. However, music played during a fitness class is a special situation that is not covered by the blanket public performance license!
The other option is contract with a commercial music service. CBJ was able to locate one service, Rockbot, that provides music and licensing services to businesses in the fitness industry. According to Garrett Dodge, co-founder of Rockbot, their service can be used to provide background music to fitness centers that charge a membership fee (but is not licensed for use during fitness classes).
Simple enough, right? Of course, we recommend that you speak to a trusted attorney to ensure that you are meeting all requirements of the law.
5 Ways to Boost Member Referrals
Climbing gyms in America typically don’t have much of a marketing budget, and even though they may not know it they rely almost exclusively on word of mouth marketing. For better or worse, your members are your sales force.
Historically climbing gyms have relied on their first-mover advantage; being the only climbing gym in town has its benefits. But those benefits run out very fast when a second climbing gym moves into the area. When that happens a market disruption takes place and customers finally have a choice as to where they spend their time and money. Customers don’t just take their money with them when they switch to a new gym, they also take their friends.
According to McKinsey & Company, a management consulting firm:
Word of mouth is the primary factor behind 20 to 50 percent of all purchasing decisions. Its influence is greatest when consumers are buying a product for the first time or when products are relatively expensive, factors that tend to make people conduct more research, seek more opinions, and deliberate longer than they otherwise would.
All gyms are local and people still talk to each other face to face; at school, at work and even in your gym. They’re going to talk whether you like it or not so you might as well give them something positive to talk about.
Here are 5 ways to get your customer’s friends coming through the door.
1. Appreciation days
Your members are connected to a variety of communities that hold untapped customer potential. So let them be your ambassador! Offering an appreciation day for teachers, service workers, firefighters and military are just a few groups other gyms have targeted. By why not branch out? Creating special deals to members of different professions, hobbies or neighborhoods could give your members a good excuse to talk about your gym while they are at work, at the book club or their local market.
2. Free guest passes
This low tech approach is one of the best ways to get new customers signing up. Everybody knows somebody at the office that would “just love climbing”. But getting them to pay for a $12 – $20 day pass might be too big a hurdle for the first time customer who just wants to try it out. Offering free guest passes is a great way to allow your members to bring in their friends and get them hooked on your gym. Here’s how it works: Every month each of your members will have a guest pass directly added to their account that they can use to bring in a person that has never been to your facility.
3. Date night
For adventurous athletic people going to dinner and a movie just doesn’t cut it. They want a better way to show their date a good time. Offering a date night or singles night uses your current members to bring in fresh customers. Your members are the best speaker box for your gym and many members want to show off how cool, strong or athletic they are. Many of you may balk at turning your gym into a meat market, but let me assure you it already is. Now with “date night” you can use that to your advantage by harnessing the power of love! Just make sure to get them to sign the membership contract before they break up!
4. Throw a party!
Any excuse to throw a party is a good excuse. Hosting a party and offering half-price or even free day passes for new visitors is a great way to show off the gym and how hip it is. Having games such as crate stacking, bench bouldering, dyno games or slack lining comps are easy ways to get your members to have fun in a memorable way. Some members may not come to the party but like knowing they are part of a gym that does throw parties. Team up with a local brewery or restaurant to offer drinks and snacks.
5. Ladies night
We’re not sure what this says about women’s feelings about men at the gym, but many women feel more comfortable climbing with other women. Offering half-off day passes to women during specific nights or offering ladies only instruction may help to bring in those reluctant ladies that are interested in climbing but have been intimidated by the all those swaggering men showing off their campusing skills.
