Excellent Strategic Partnership Marketing

24 Hour Fitness Tough Mudder Boot Camp Classes!

http://toughmudder.com/attend-a-tough-mudder-boot-camp/

Tough Mudder Sponsorship Video

I really like this video -- it portrays the purpose and essence of Tough Mudder very well and tells a great story.

Why Tough Mudder? Find out:

http://www.youtube.com/watch?v=nj_0BENg47o&feature=player_embedded

Tough Mudder Melbourne

This is a brand new promotional video that was just filmed last month in Melbourne. Very cool!

http://www.youtube.com/watch?v=NRbOzfxKOY0&feature=player_embedded#!

Managing Innovation

To remain competitive, established firms must continually seek out opportunities for growth and new methods for strategically reviewing their performance. Changes in customer needs, new technologies, and shifts in the competitive landscape require that companies continually innovate and initiate corporate ventures in order to compete effectively.

Identify important customer needs:

• They identified a need to redefine what "endurance" means and how to test all-around mental and physical strength.  People were bored with endurance and Will Dean identified that need and found a gap in the marketplace that wasn't being filled by the 3 mile, fun mud-runs, marathons and various road races, and ultra races.
• Through the Tough Mudder website, anyone is able to submit comments or questions.
• Tough Mudder employees are at the events, interacting with people, observing the race, and then coming back together at TMHQ with feedback and some new ideas on ways to make it better for next time.

Create Solutions that fill those needs:

• I think that Tough Mudder often works to fill customer needs mainly through process innovation -- they continually work to improve the efficiency of their service.

Build Innovation Teams:

• It seems as though Tough Mudder has cross-functional innovation teams.  Teams are functionally structured, but as all teams are dynamic, I can imagine that they are interactive and integrated with each other.  The best ideas to fully develop new concepts often come through collaboration from many different backgrounds.  

Innovation champions who keep effort on track:

• Will Deal is without doubt an innovation champion. He has created a culture of "intrapreneurship" within the company that thrives on creation of new value and ways to keep up Tough Mudder's competitive advantages.  He runs a business that is complete with happy employees to love their jobs and love coming to work.

Align the entire enterprise around creating value for customers:

• It is Tough Mudder's goal to challenge and inspire participates all over the world.  They want Tough Mudder to be more than just an event for people, but as a way of thinking.  They create value to customers by creating an opportunity for individuals and teams to experience a true sense of accomplishment, have fun, and to experience camaraderie with fellow participants. * It's not a race; it's a challenge.

Collaborating with innovation partners:

• In choosing partners, Tough Mudder asks themselves what competencies they are looking for and what the innovation partner will or can contribute. This may include knowledge of markets, technology expertise, contacts with key players in an industry, etc.  The big innovation partner for Tough Mudder is Under Armour.  UA sponsorship was huge and helped tremendously with increasing the quality of the Tough Mudder brand and reputation, in addition to increasing the amount of people who were exposed, aware, and interested in Tough Mudder. 

Organizational Structure

It seems that Tough Mudder encompasses a functional structure, meaning there are specialists and teams of people grouped internally:

• Events (planning, management)
• Obstacle construction
• Site search
• Marketing
• Strategy
• Legal
• Accounting
• HR
• Office Management

People in these teams work together in a rewarding, dynamic, and fun environment. The functional structure provides for a high level of centralization that helps to ensure integration and control over the primary activities in the value chain.  While some companies with a functional structure find differences in values and orientations among functional areas to impede communication and coordination, this doesn't seem to be the case at Tough Mudder; it seems that there are high amounts of interaction across all teams.

Zooming From Zero to $70 Million in 2 Years

www.inc.com/tim-donnelly/tough-mudder-conquering-obstacles-to-build-70-million-business.html

"Inspiration and a $20 Facebook ad grew into a $70 million company in just two years-- and that's without any venture capital to seed the venture." This article discusses the four ways Will Dean and Guy Livingstone conquered obstacles while growing a fast business:
1. Create a disruptive product
2. Develop an offline viral product
3. Partner with national brands
4. Create a sustainable corporate culture

One of my favorite parts of the article is when Livingstone says, "We're not trying to be the Marriott Hotel. We're not trying to be everything to everyone.  I think you either get it or you don't with our brand, and we're very, very proud of that."

Role of Coporate Governance

Since Tough Mudder is not a corporation, a lot of the information in Chapter 9 does not apply.  Instead, I will take this entry to introduce the top management team:

• Will Dean, CEO and Co-Founder, served five years in the British Special Forces before earning his MBA from Harvard Business School.  Out of frustration with unimaginative and repetitive marathons, triathlons, mud runs, and other adventure runs, he started Tough Mudder.  He found a missing market niche and capitalized on it.
• Guy Livingstone, COO and Co-Founder, takes care of the company's legal, financial, and event operation divisions.  He has a background in law and has traveled all over the world! *
• Jesse Bull, CFO
• Alex Patterson, CMO

 *  Tough Mudder employee bios are a must-read. Click here and check them out for yourself. Working at Tough Mudder is a lifestyle.

The Tough Mudder corporate culture is strong.  They have an excellent system of shared values, qualities and beliefs:

• High achievers 
• Intelligent
• Driven
• Sense of humor
• Passionate and enthusiastic about the Tough Mudder mission
• Committed to continuous growth and learning and challenging one another
• Work hard and play hard
• Socially responsible and giving back (Wounded Warrior Project!)
• Innovative
• Diverse backgrounds, ideas, and perspectives

International Expansion

Tough Mudder has and is continuing to expand into international markets.  They have events in Canada, Australia, and the U.K. in 2012.  In 2013-2014, TM is also planning to host events in Germany, the Netherlands, Sweden, Austria, Switzerland, France, Japan, New Zealand, and countries in South Africa.  Many of these countries don't yet have planned events, but if people are interested in competing there, they can submit their name and email address on the website ("pre-register") and then receive a discount once an event is scheduled.

They employ an international strategy -- there is little pressure for local adaptation (besides geographical factors of course) because Tough Mudder wants to keep the event and their reputation consistent.  In addition, I would assume fairly low pressures to lower costs, although price will vary slightly country to country.

I see two main motivations for Tough Mudder to expand into global markets:

1. The obvious one -- to increase the size of potential markets.  The U.S. represents less than 5% of the world population, which leaves a lot of untapped opportunity to involve people in other parts of the world.  There are definitely high amounts of demand and interest outside of the U.S.

2. In order to truly find the "World's Toughest Mudder," the company better have events worldwide!  Tough Mudder is seeking to become the preeminent brand in endurance sports.  Obtaining a global presence will enhance their brand, and increase awareness and popularity.

The main challenges Tough Mudder will encounter with global expansion will involve inevitable differences between foreign markets: culture, customs, language, income levels, and customer preferences.  These factors automatically bring some degree of local adaptation.

Corporate-Level Strategy

Tough Mudder is a single business organization. They are very new, as the company's first event was just held in May 2010. Additional 2010 events were held in Northern California and New Jersey, followed by 2011 events in Texas, Georgia, Pennsylvania, Vermont, Southern California, Colorado, Wisconsin, Northern California, Texas, Virginia, New Jersey, Indiana, and Florida. Tough Mudder is hosting 30-40 events in 2012 while expanding internationally to the UK and Australia.  In 2013, they are planning to expand into more cities in the U.S. and also New Zealand, Canada, South Africa, Japan, and more countries in Europe including Germany, the Netherlands, France, Switzerland, Austria, and Sweden.  

So as you can see, they are growing and expanding like crazy! However, they have not yet become a diversified business (entered new businesses).

Business-Level Strategy

Tough Mudder is the most expensive in the industry, yet the company employs a combination focus-differentiation strategy that ensures unique and valued event experiences among targeted markets.

• Best developed and recognizable brand name
• Everyone knows the value associated with finishing a Tough Mudder race
• Focus strategy is on one, distinct race (*toughest in the world) creates a consistent image.
• Are not targeting people just looking to complete a fun, mud run (Warrior Dash) or trying to create something for everyone (Spartan Races).  They only want the mentally and physically tough -- and it is a challenge people have to train for.
• Under Armour sponsorship really sets them apart and above from the rest of the industry.
•  Adds to the "coolness" factor and high performance.

• I also think the higher prices give customer perception of quality and reaffirms that Tough Mudder is the toughest and best.  People are glad to pay a premium for this.

Example:  Registration prices for Tough Mudder Twin Cities on May 19th

First Week Special	Until September 23	$80
Early Bird Discount	September 24 to October 24	$100
Tough Discount	October 25 to December 15	$110
Mudder Entry	December 16 to March 31	$125
Final Entry	April 1 to May 12	$150

Example:  Registration prices for a Spartan Race in Texas on May 19th

$60.00	November 19th (Early Bird)
$70.00	December 19th
$78.00	January 19th
$83.00	February 19th
$87.00	March 19th
$90.00	April 19th
$95.00	May 2nd
$100.00	May 16th (Registration Closes)

Human Capital

ATTRACT

• High company growth and increased excitement about the company
• High position standards/requirements (increasing each month)
• However, they look further than knowledge, ability, and skill and focus on personality, attitudes, values, beliefs, and interests.
• Example application questions:
• You know that book (and website) about 6 word memoirs?  Well, now is your chance to write one.  We want to hear your six word memoir.
• Tell us what you do for fun.  This can be having a drink with your friends or playing chess --we don't care what you do, we just want to know what you do outside the office.
• Working at Tough Mudder is more than a job and is even more than a career -- it's a lifestyle.  Tell us why you want your work to become a lifestyle and the benefit of achieving such a thing.
• Everyone starts with an internship.  This gives Tough Mudder a trial period to see if new hires fit in -- they have time to decide whether to make a permanent offer.
• Have a fun and attractive corporate culture.  From their website:

Tough Mudder is not the average work place, and we don’t employ average people.


You’ll learn more in 2 months at Tough Mudder than you did in 2 years at your old job and will have real responsibilities from day one. Forget about getting coffee or making copies – you’ll be negotiating with vendors, brainstorming new marketing strategies, and traveling to planning meetings across the country. You’ll work alongside an incredibly talented group of 35 all-stars with backgrounds in everything from banking, trading, law, tech, construction, events, sports business and more.


Most importantly, you’ll be working in a place where we take our work seriously, but not ourselves. There’s a sense of humor about TMHQ that you won’t find at other companies and we’ve been profiled by the NY Times as a place that “exudes Gen Y cool”. Our offices are in DUMBO Brooklyn – the home of New York’s creative industry where we’re surrounded by start-ups, studios, and countless other innovative young companies.

DEVELOP

• Tough Mudder University
• Harvard Business Review case studies
• Mock HBS classes
• Reading program
• Employees are not limited to their position responsibilities.
• "At Tough Mudder, you'll learn everything from how to construct a quarter pipe to the in-and-outs of business development, brand management, and event production."
• Tough Mudder Ventures
• Start-up funding initiative that provides seed financing, office space, mentorship, and more to former Tough Mudder employees who launch their own businesses.
• They believe that people are their greatest competitive advantage and want to enable them to bring their visions to reality.

RETAIN

• Tough Mudder believes that hard work deserves to be rewarded.  Employee benefits:
• Up to five weeks of vacation per year plus official holidays
• Competitive health insurance benefits
• Free food and drink in the office
• Free gym membership "as long as you use it!"
• 40% off Under Armour gear
• iPad for finishing internship
• Attend regular company retreats in the Catskills
• Profit sharing plan
• Employees are helping to build an exciting endurance sports brand.  Belief and passion about mission.

Resource-based View of Tough Mudder

The RBV approach combines the internal company analysis with the external analysis of the industry and its competitive environment.  It identifies competitive advantages by analyzing each resource and capability and asking:

• Is it valuable?
• Is it rare?
• Is it difficult to imitate?
• Is it difficult to substitute?

Here is what I came up with for Tough Mudder:

Resource/ Capability	Valuable?	Rare?	Difficult to Imitate?	Difficult to substitute?	Implication for competitiveness
Tangible Resource
Target marketing system	YES	YES	NO	NO	Competitive parity
Employee development and rewards (TM University & benefits)	YES	YES	NO	NO	Temporary competitive advantage
Financial Resources – cash (high growth)	YES	YES/ NO	NO	NO	Competitive parity
Sponsors	YES	YES	YES	NO	Temporary competitive advantage
Intangible Resource
Brand name and reputation	YES	YES	YES	YES	Competitive advantage
Innovation and creativity	YES	YES	NO	NO	Temporary competitive advantage
Employee capabilities and skills	YES	NO	NO	NO	Competitive parity
Organizational Capabilities
Excellent customer service	YES	NO	NO	NO	Competitive parity
Innovative and tough course and obstacle development	YES	YES	NO	NO	Temporary competitive advantage
Ability to hire, motivate, and retain human capital	YES	YES /NO	NO	YES/NO	Competitive parity

HUGE strategic move: Tough Mudder signs Under Armour

On December 5, 2011, Tough Mudder signed Under Armour and brought in $25 million. Under Armour will also make branded gear for purchase and even says its training specialists will help people train for the events.  Matt Mirchin, Under Armour's head of Global Sports Marketing, said he learned of Tough Mudder when Under Armour employees started talking about it in the office.

"This is not only a community, it's a movement," Mirchin said. "We're a growing brand, they're a growing brand, it's just the right thing to do for us."

"In many ways, it looks like were already sponsored by them," Dean said. "An Under Armour shirt is something that you'll see on 70-80 percent of participants. It dries quickly, it's good when it's wet."

Click here to read the full article and watch the video interview:  
http://www.cnbc.com/id/45554832

Tough Mudder on the Under Armour website:  
http://www.underarmour.com/shop/us/en/tough-mudder

S.W.O.T Analysis

Internal

STRENGTHS:  

• Every race is different - climate, terrain, geographies, evolving obstacles
• Tough Mudder dominates the niche market of obstacle races
• Human Resources
• Tough Mudder University -- HBR case studies and book club (dedication to professional development)
• Every employee starts as a 6-10 week intern -- only hire from within
• Great employee benefits -- pride themselves for work being a lifestyle
• 21,000+ applications for employment within the last year
• Location: DUMBO Brooklyn -- home to New York's creative industry
• Surrounded by start-ups, studios, and tons of other innovative young companies
• Strong corporate culture
• Profiled by the NY Times as a place that "exudes Gen Y cool"
• Excellent word of mouth advertising -- Tough Mudder is a marketing company that puts on events
• *Facebook
• Target Internet ads
• Tattoos
• Memories
• Training programs
• Tough Mudder Post-Party

_____________________________________________________________________________

WEAKNESSES:

• Event participant logistics
• At a sold out event, waves of 500 people go every 15 minutes -- congestion and back-ups at obstacles
• ....
• ....

____________________________________________________________________________

External

OPPORTUNITIES:

• International markets
• Clustering events/cluster markets
• Membership?
• Further developing training programs -- the training programs are becoming a huge social component and a key way to grow
• Focus/development in college markets
• College student only events -- student I.D. discounted
• End of the year celebrations with friends and classmates
• Training programs could be implemented into athletic/extracurricular class offerings

____________________________________________________________________________

THREATS:

• Obstacle racing could just be a fad and people return to the Ironman, triathlons, and traditional marathons
• World's Toughest Mudder Competition does not compete with Ironman
• Three-mile mud runs such as Warrior Dash
• http://warriordash.com/
• HUGE competitor: Spartan
• http://www.spartanrace.com/
• They offer something for everyone: Spartan Sprint, Super Spartan, Spartan Beast, and Death Race
• Threat of new entrants = low
• Tough Mudder, Warrior Dash, and Spartan are becoming well-established and max-out the obstacle racing market

 ____________________________________________________________________________

Who is Tough Mudder?

Tough Mudder events are hardcore 10-12 mile obstacle courses designed by British Special Forces to test your all around strength, stamina, mental grit, and camaraderie. As the leading company in the booming obstacle course industry, Tough Mudder has already challenged over half a million inspiring participants worldwide and raised more than $2 million dollars for the Wounded Warrior Project. But Tough Mudder is more than an event, it’s a way of thinking. By running a Tough Mudder challenge, you’ll unlock a true sense of accomplishment, have a great time, and discover a camaraderie with your fellow participants that’s experienced all too rarely these days. 

FACT #1 – Marathon running is boring.

FACT #2 – Mudders do not take themselves too seriously.

FACT #3 – You cannot complete a Tough Mudder course alone.

Will Dean, founder and CEO, is a former counter-terrorism agent for the British Government and launched the company in 2009 soon after earning his MBA at Harvard.  He was inspired to start Tough Mudder out of frustration with unimaginative and repetitive marathons, triathlons, mud runs, and other adventure races.


Mission: Tough Mudder's long-term mission is shift the entire focus of endurance sports away from personal performance and boring repetitive exercises to varied challenges, teamwork, camaraderie, and genuine fun. By the end of 2012, they aim to replace Ironman as the preeminent brand in endurance sports.


In the past year, Tough Mudder has grown from $2.2 million in annual revenue to $22.2 million...that's ten-fold growth!