Ryan DeLuca: Exit Bodybuilding.com, Enter Black Box VR

0:00 – Introductions, Filmed on Memorial Day 2023

After a long weekend, Mike and Ben sit down with none other than Ryan DeLuca, the founder and 17-year CEO of Bodybuilding.com, and now the co-founder and CEO of Black Box VR, a virtual reality fitness company that provides an immersive, gamified physical fitness experience.

1:00 – The Beginnings of Bodybuilding.com

Ryan once said of Bodybuilding.com, “There have been an insane number of ups and downs, as any entrepreneur can understand, but the highest ‘up’ has been working with my team to create something special that will live on.” Now, he’s got that chance to do it again at Black Box VR!

Ryan was born in the late 1970s and grew up in Boise, ID. Like many of us, Ryan got into fitness for sports and aesthetics in junior high and high school, and fell in love with everything about fitness.

He graduated from high school in 1996 and wanted to do something with the Internet, which was beginning to grow rapidly around that time. His goal was to run a business that merged with his love of fitness.

It all started with wholesale-creatine.com (which still redirects to Bodybuilding.com’s creatine page to this day). He had one product – creatine. At the time, it was very expensive and cost about $120 for a month’s supply. He found a supplier and started selling it online for less than the local retailers like GNC.

Nothing much happened at first, and then orders started flying in one day, and he was off to the races. He then aspired to something bigger.

Someone owned the domain bodybuilding.com but they weren’t doing anything with it, yet didn’t want to part with it. A year later, he tried again, and this time they were open to selling the domain, and came to an agreement for $20,000 – a huge celebratory moment in DeLuca’s life.

He wanted to build something bigger than supplements – articles and community on top of online sales.

4:00 – Building a mission-based company

Ben affirms that Bodybuilding.com was indeed greater than just selling products, and Ryan talks about wanting to build a mission-based company that truly stood behind its mission of bettering lives. Everyone was built around DeLuca’s aspirations for both fitness and knowledge – and having a place where others could ask experts questions and get real answers.

Before the Internet, you could either ask someone you knew, or go to a store and ask someone who’s getting a commission. The Internet broke that barrier, and the Bodybuilding.com Forums were the best places to get information in the 2000s.

Yet the mission of building healthier individuals created a positive feedback loop for the business – they’d continue to buy products!

6:00 – Ryan DeLuca: Visionary and Pioneer

MuscleTech and Ryan DeLuca’s Black Box VR joined forces at ASF 2023!

Mike comments that Ryan is a true visionary:

1. He saw the rise of the Internet far earlier than most, yet built a dotcom that actually made money when so many others went bust
2. He foresaw the growth of the dietary supplement industry
3. He built a community before social media was a big thing
4. He knew content was king before anyone realized it

So now we see Ryan getting into VR, and given his track record of success, we should be paying attention.

Ryan says thanks, but he’s not doing anything special – it’s just stuff he’s very passionate about. He didn’t do much else in his 20s besides Bodybuilding.com stuff. He even wrote his congressman early on telling him to support the Internet, it’s going to be a big thing.

The biggest key is the ability to talk to people, and have information. It looks obvious in retrospect, but not everyone got it. So the community was ripe from the beginning.

He had no clue how crazy those forums would get!

9:00 – Using tools to achieve the mission

Ryan credits the Bodybuilding.com team to doing everything they could to help users reach their goals. They jumped on web 2.0 quickly. They were all over video early on. But they did it in a way to stay on mission, not just make money.

Ben comments that the forums were a great re-creation of what had existed in gyms. Entire brands and personalities were built on those forums. But Bodybuilding.com did so much, and trends followed them, and their concepts and content set the tone for the industry.

11:30 – Content is King

The Bodybuilding.com website went live April 19, 1998. You can see it pretty early on at archive.org:^[1]

The earliest known archived page of Bodybuilding.com in May of 1999.^[1]

Right from the beginning, it was all about the Cyber Store and High-Quality Content. Ryan really impresses upon the content. Others would frown upon him making content and not focusing 100% on making product pages, but Ryan quickly realized that people don’t immediately search for products, they search for solutions to their problems!

They decided to catch users when they’re searching for “build bigger arms”, while their competitors were trying to catch them once they were searching for “creatine”. Ryan knew to get them earlier in the funnel.

So they’d have workout content, realistic transformations, and of course sell supportive stacks to help users reach those goals. They allowed negative comments about products, which their competition couldn’t believe, but it led to the positive reviews being believable.

People began offering to write content, and DeLuca’s realized they didn’t need to do all of the work themselves!

14:30 – DeLuca is a Tech Founder – How to Prioritize

Mike points out that there was no Shopify back then – Bodybuilding.com was built heavily from scratch, and DeLuca is a tech founder just as much as he is a fitness founder (which bodes well for Black Box VR).

The priorities changed often. First it was a bunch of friends in a garage – that’s one type of management. Then it was an office of 20 or so people – that’s another type of management. But that starts to break down when you have 50 people. And then eventually you have people in other states and people you’ve never met. That was a part of what made it difficult.

After a few years, they had different groups:

• Content / Digital Publishing
• E-Commerce / Store
• Community and Forums

When leaving in 2015, there were 800 employees, but 150 of them were software engineers. So Ryan appreciates it being understood as a technology company.

16:30 – Running a tech company in the fitness world

Ryan points out that there aren’t that many people who know sports/fitness and heavily understand technology too. He’ll go to a tech conference and remember that there are people who don’t know the difference between a rep and a set. There aren’t many people like us with both, and that allows you to build a competitive moat.

Mike asks if he aged out of the demographic – both of them aren’t exactly “steroid guys”, although they’re both liberal with it. What’s interesting is that Ryan, despite not being a huge guy, related most with the bigger folks.

The question is, “how many people are really bodybuilders?” but while competitive bodybuilding is small, there’s a massive demographic of those who are building their body, especially wanting to get into better looking shape. Ryan related to those types of people the most.

20:00 – The stigma of bodybuilding

Back in the 90s and 2000s, Ben points out that bodybuilding had a bit less of a stigma. But Ryan says it was something he had to combat — when he’d tell someone about the site he ran, they’d assume it was competitors posing in bikini shorts, which it wasn’t after a while… even though the site started out like that.

Going through the steroid scandals and BALCO, there was a lot of negativity, but folks wanted a lot of that too!

22:00 – Core values of Bodybuilding.com

Ryan says they made sure they were open to everything, but in terms of serious fitness. If you wanted to be on stage, great, but they would support you if you just wanted to get bigger or fit like Jamie Eason.

A lot of advice was to go more wellness and holistic, and Ryan resisted that – they kept it to aspirations such as looking elite in a bikini. They also resisted heading into sports, although there was a bit of that. The core focus was for those who were building their body.

There’s a correlation between this and Black Box VR:

• Nearly everyone’s building their bodies, but not everyone’s a “bodybuilder”
• Nearly everyone’s playing games, but not everyone’s a “gamer”

24:00 – The trajectory of Bodybuilding.com’s Growth

Bodybuilding.com had a steady growth curve – there was no insane overnight success. As expected, January was biggest, then things would slow down a bit through summer, you’d have another upswing in the fall, and then December it drops. But the next January would always be bigger than the previous.

Vendors really wanted to be on Bodybuilding.com with the best promotions and the best content. They leveled up as the bigger and bigger athletes wanted to write content for them.

26:45 – Transitioning out of Bodybuilding.com

Before getting into Black Box VR, Mike asks about the transition out of Bodybuilding.com.

Ryan started the company in 1998/1999, and an Internet business is 24/7. He didn’t take a day off for about 10 days. Everything was built from scratch.

Examples: in order to accept credit cards, someone from New York had to fly out to them and inspect them. You want a search engine on your site? You need to build that. The idea of a shopping cart wasn’t even a thing in the beginning! Gotta build that too.

So it was 24/7 and busy, but eventually as the team built up, he could take some time off.

But towards the end, there was some burnout. There was never a huge moment, but he was always thinking about the next big thing or the next thing that could hurt them, even as they became bigger and more powerful. It never stopped.

At the end, Ryan wanted to work more on technology/innovation projects. He only got to do that about an hour a day. He’d come in all refreshed on a Monday morning, excited to talk about some new idea he had, and then an hour later would get pulled into some HR drama.

So wanting to get more into technology led him to selling the rest of his shares to Liberty Media, and allowed him to take a bit of a break.

29:15 – Were there alternatives to selling?

Mike asks if maybe Ryan could have gotten a CEO and then become Chief Technology Officer… or was he just tired? The answer is that Ryan was a bit more bored of e-commerce, there wasn’t as much innovation to do anymore.

As CEO, “if I’m happy how things are, then that’s a bad sign. As CEO, you should be constantly irritated”.

Being bored with e-commerce is bad for the business – that means it’s time to sell. And as you’ll see at the 31:30 minute mark, he sold everything because he wanted a clean break.

30:30 – You sold a business. What next?

Ryan admits, this is a weird time. An enviable time, but weird. Not many people have been in a situation where you don’t have to work ever again if you don’t want to. There are some negatives though – things can go in the wrong direction and there’s not much guidance out there.

It was the weirdest moment of his life: Ryan remembers getting home that day, sat down, and then all of the things he had been worried about for 17 years… and then it was a strange moment of relief that he didn’t have to worry about anything.

It lasted a few months, which was great, but then Ryan was the most unhappy and depressed of his life. He didn’t have something passionate to focus on, work on, create, and build.

32:30 – Tuesday’s here. What do you do on Tuesday?

There were fun things on weekends, but Ryan points out something his retired dad said: “Weekends are great, Mondays are good because you’re catching back up from the weekend… but then Tuesday’s here? What do you do on Tuesday?”

That’s where people get themselves into trouble, and Ryan had to avoid that.

So six months is how long he lasted. Ryan is a builder – and he needs to build. He’s been building things his entire adult life. It’s a bad feeling to see people on social media doing things and you’re not.

Ryan wanted to be an example for his kids, be someone his kids were proud of. You want your kids to see you doing something — it means less if dad did something.

35:30 – The genesis of Black Box VR

At Bodybuilding.com they started playing with VR, and it looked like the next thing, a magical technology. Looking at the “next thing”, you start hearing about Facebook buying Oculus.

VR immerses you into an entirely different world, but studies show that it changes the way you perceive things. Your brain thinks it’s real, and looking into that made him realize it’s the next big thing, and one of the final frontiers. How can we go and use that?

Ryan throws two incredible quotes right in a row:

“Really, what Black Box is, is using video game psychology to help people stick to their fitness program.”

Which dovetails into:

“By far the biggest thing we learned at Bodybuilding.com was that our biggest competitor was the couch. We lost most of our customers to the couch, not to GNC or Amazon or other places.”

So how do you get this addicting video game technology, but get people to stick to their workout program. Black Box VR is the answer.

39:00 – How does Black Box VR technology work?

The basic idea is that Black Box VR is at an F45 style or Orangetheory gym – it’s a smaller boutique gym with an app that you can visit a certain number of times per week.

The San Francisco location has 14 booths, and that’s where you have the exercise machine, which was built from scratch. Each one costs about $25,000 to build. It has electronic resistance up to 250 pounds. It’s standing but has a bench pad that you can stand against.

So you can do the following exercises:

• Bench Press
• Standing Row
• Deadlifts
• Squats
• Overhead press
• Lat Pulldown
• Biceps Curls
• Triceps Pulldown

You put on the headset, but you’re in an esports style arena. In this arena, there’s a crystal in front of you. There’s a big field in front of you, and on the other side is the computer-controlled crystal — you have to destroy their crystal before they destroy yours. Certain exercises work best in certain situations, and those exercises become your workout for the day.

However strong you are is how strong you are in the game. It’s putting resistance at where you can do about 12-15 reps. So you do these different physical moves, with cardio patterns and heavy lifting, to attack them and defend your crystal.

30 minutes flies by, and you’ve had an incredible workout with 60,000 to 80,000 pounds of total volume, and will probably be the hardest workout you’ve ever done.

42:45 – How will the Black Box VR business expand?

Ryan mentions that this is a franchise business model – it’s been in a “Beta R&D” mode the past two years, and now it’s ready to scale up. Once you’ve built it, you can scale well, and there’s a great competitive moat because this machine is not easy to replicate.

44:00 – More Show notes coming… stay tuned!