President & CEO of Stark, Todd Vande Hei – On Business, Leadership & Peak Health for America’s Top CEOs
Stark is a personal training company founded in 2011 in Orange County, LA that was inspired by Fortune 100 CEOs in the U.S., who built their own teams of specialists to oversee and maintain their peak health. Stark has applied that model to provide clients with a team of fully-integrated specialists who are all working together to achieve maximum results for the clients or as the company calls them, students. Stark primarily serves CEOs, business leaders, and professional athletes, providing training, nutrition advice, chiropractic care, Active Release Technique (A.R.T)., and IV therapy.
Stark President & CEO Todd Vande Hei sat down with Clarence Paller, Director of Public Relations and Corporate Partnerships for LGFG Fashion House.
Todd hails from Minnesota, where he went to school at St. John’s University. After graduation, he lived in Chicago for a number of years and then took a job in Southern California in manufacturing. He has been in California for the last 20 years. Todd is fifty years old and married with three teenaged kids. He is in terrific physical shape, while running a very successful business and enjoying life. However, that success did not come overnight. It was the business experience that Todd learned at the manufacturing job, coupled with the devastation of getting fired and losing almost everything to the 2008 recession, that would spark the creation of Stark in 2011.
Not only has Todd built a successful business, but he is also actual living proof of the effectiveness of the Stark methods.
“I am the ultimate example of the work product of having a team of specialists working for you. I am not a fitness industry person, I’m not a personal trainer, not a nutritionist, not a doctor; I can’t fill any single one of those roles in the company. What my role outside of running the business, is to allow for a nearly perfect compliance to the programs, so that we can learn from it.”
How did you start Stark and what were the challenges you faced to get your business off the ground?
The company I came to work for in California was called Fabrica, whose parent company is The Dixie Group (DXYN). After just a year, Fabrica was acquired by a public company. Eventually, I was promoted to President. I ran this public company and had a conflict with the Board of Directors. I had suggested they back out of some of the strategic changes that they wanted to make, as I thought it would be difficult for me to perform as the President of business, but they disagreed and I was fired. This is how things happen in these types of positions. I walked out like they do in the movies; people in the hallway were waving me good-bye and everything. I got home and told my wife that I was fired. I was only 36 at the time and in a financial position to retire. Three years later in 2008, the real estate bubble collapsed and along with it, the financial services sector.
At the time my wife and I were heavily invested in financial services and real estate. As you can imagine, we were completely wiped out. From all the money we had, we were only left with sixty thousand dollars, five years after retiring. It was a gut-wrenching experience. To make matters worse, so much of my identity was wrapped into my financial success. I felt like God reached in and ripped it out from me. It was a very painful experience and there was a lot of shame that came with it.
I recall standing in my jacuzzi in the backyard taking a break from putting my resume together as I was taking in the view that overlooked the coast of the Pacific Ocean. I had long hair and some signs of a midlife crisis; the cool breeze was playing with my hair. It was straight out of an Eagles song. I was standing there looking at that beautiful view and thinking that I would probably not have it for much longer. I was getting ready to go through the stages of the accepting process.
I was interrupted from my deep thoughts by the ring of my blackberry. I picked up the phone. It was my ex-business partner Brad, who was a personal trainer of mine at one point. He too, was on the edge of a nervous breakdown, probably just like me. He was struggling with his personal training business and about to shut it down. He didn’t know what to do and how to fix the business.
When we met, I told him that I would be happy to work with him for as long as I can while I was still in California. Also, I told him that the moment I get a job likely in New York or Georgia because of the industry I was in, that I would have to move. I really wanted to stay in California and make it work with his business. Looking back, there was nothing: no infrastructure, no operational processing, and no money. The lease even sucked. It was a disastrous little business. My partner was a great trainer, at the time, but not a great business person.
A month later, after I made the books for him, I realized the financial predicament, which was that the business was operating at a loss. He was collecting fees from clients in advance and running a business on these advance payments. In reality, the business was building liability on the balance sheet. At that point, I told Brad, let’s make this business work. From that point on, we scrubbed his existing business and started Stark on January 1st, 2011.
Of the sixty thousand, I had left in my savings I put forty-two of it into the business. I had no income and borrowed thirty-five thousand at a twenty percent interest because we had no ability to borrow, otherwise traditionally.
How did your past experience shape your ability to create a successful business?
At Fabrica, there was a process for introducing a new product, and the cost was a million dollars, sometimes less or sometimes more. My job was to ensure that the success rate was higher every time we rolled out a new product. One of the things that had to happen before a product could be launched was that we had to have input from manufacturing people, engineers, the CFO who knows financial side, the marketing people, designers, and so on. We would all get in a room in a sweaty armpit type of situation.
It was through this collaboration and the different perspectives that three months later there would be a beautiful product that is also manufacturable and profitable. I understood when I started Stark that this process is the most basic thing that occurs in every single industry around the globe. At least every business that’s successful, however, it was completely absent in health, fitness, and medicine.
The gap in the industry was what inspired the model for Stark. Today we have a whole team of top educated professionals working with each of our students. A doctor, a nutritionist, a trainer, a chiropractor and a person who analyzes data to write programs. I decided that those individuals would not only work in the same building, but they need to be debating, sharing ideas, and all working together for the student. From here, we combined medical technology with labs and physical exams. We use as many diagnostic, non-invasive tools as possible. For example, DEXA scans to measure bone mineral density or our fit 3D device that gives us a 3D avatar of a student’s body from which we gather circumference measurements.
How did the business grow into what it is today?
In the beginning, it was really primarily just training, then nutrition and supplements. After that, we started addressing problems with our clients not getting where they wanted to be quick enough. It was kind of what you see in most commercial gyms where you have clients working with trainers, the clients of such gyms are really there for the sake of the relationships they build with their trainers. They end up feeling obligated to be there. I didn’t want that kind of business. There is no supervision, no cheques, and balances in this process. Each trainer operates independently, and I didn’t want that either. I wanted to have some kind of cohesive entity that would represent us as a unified brand, which of course added value. Personal training is difficult to scale because it’s a service business.
I took my partner, Brad, who was operating as a trainer and I broke him up into several pieces. It was the same idea as what Henry Ford did in his vehicle production, there was nothing new I invented. Brad became the person who wrote programs, assessed people, and wrote nutrition plans. Later he backed down on the actual coaching side of the training sessions. As we got busier, we replaced some of those tasks that Brad was doing with others. At this stage, we had someone who wrote nutrition plans and someone who wrote training programs. Those people can manage up to 400 students at a time. Coaches themselves can only manage 15 or 20. Today we develop coaches and all they really focus on is leadership. They learn how to get someone to like and trust them quickly and learn about someone’s challenges and to empathize, all while holding students accountable to their end of the deal. This is really the base of our business, a partnership with our students.
What are the common issues you find with executive level clients? Who are the biggest CEOs and how do you work with CEOs’ schedules?
One of the big-name students we have is the founder of Alteryx, which is a software company that just went public in 2018. Our whole business is around CEOs and for privacy reasons, we can’t disclose names. Generally, when CEOs come to see us, they are traveling, could be a full week out of each month, sometimes more, sometimes less, depends on the type of business. They would get an IV to recover from the trip they just came back from and begin working with our coaches by taking several sessions before leaving again the following weekend. They get a custom-tailored plan that they take with them.
We also teach CEOs what to eat while they are traveling and dining out. CEOs dine out sometimes ten times a week and this can be a challenge for their nutrition. We teach them how to eat properly during their business travels. Here is advice we give to CEOs, eat sardines before you go for dinner with a big client, then at the dinner order a big salad. That is the perfect dinner. We also teach CEOs how to practice good sleep hygiene in a hotel room for example by blocking out all red or blue lights, making sure to put a towel under the door so that the light does not come out from underneath, turning down the thermostat, and all the small details. There is a tremendous amount that we can do for people who travel a lot.
It is totally normal for CEOs to expose themselves to new ideas like going to conferences, taking courses, hiring a business coach etc. What’s not so normal is putting a team of specialists together to care for their bodies. Neglecting physical health is a serious disadvantage for a CEO or anyone for that matter. If someone is overweight, they are tired and not thinking clearly. If they have low back pain, then they are impaired and certainly not going to appear happy. CEOs make high-level decisions while affected by different health factors. These have to be fixed in order for CEOs to perform at their best.
What is something you have learned about life from your profession?
I think like most CEOs; my profession is a huge part of my life. It’s hard for me to separate the two. The experience of intense failures that I’ve had and how I approach failure today has completely changed. In other words, when I was thirty-six and I was fired, now I think it was cool but back then it was scary and devastating. Losing everything was a huge punch to my ego. I recognized through failure that ego is not your amigo, and it’s so true. Ego gets in the way, screws things up, and impacts your judgment. Today, I always make sure, whether it is spending time with my eighteen-year-old son, doing my job, working out, or whatever, that I attempt to keep my ego in check. Ego can be one of the most damaging barriers for any CEO. We start getting high on success, and that’s probably one of the first steps to failure, at least that’s how I see it.
The other thing that changed a lot in me over the years is that I am an absolutely different person as a result of failures. Today, I have a tremendous amount of empathy. I can see that in a week maybe I’m homeless, and that’s an actual possibility. All sorts of crazy shit can happen in life. It’s not impossible. I’m not immune to losing everything all over again. I’m not afraid of it as much anymore but I can see the fear in others. When I see people try things and fail, I’m most concerned about how they are perceiving the failure. What it actually means to them and how quickly they bounce back from it. In my life, work, success, and failures shaped a huge part of who I am today and how I behave.
Could you comment on how important attire is and how physique and attire go together for a business person?
Most things in life you don’t have much control over. For example, I don’t have complete control over my physical appearance and my fitness levels. It would take a long period of time if I wanted to change some of those things. When it comes to your image, you have complete control over that. I’m always astounded by business leaders that show up with shoes that need to be polished, or suits that look wrinkled and not fitting properly. People immediately make decisions about others in a fraction of a second. Your image plays a big role in people’s perception of you. As a business leader, whether it is with your employees, a big client, your bank, or whoever, if you don’t look like you’re really visually, physically put together then you are doing yourself a disservice. You are not performing against the same results as you otherwise would. I think the style of the clothes may not matter too much because that’s a character, personality, taste, kind of thing. I am conservative when it comes to attire. You don’t want your clothes to take too much attention away from who you actually are. That said, how the clothes fit is a huge issue. Even if you are really overweight, if you have a great suit that is put together well by a good company; then you would look head and shoulders above where you otherwise would have.
How is your business growing and what does the future hold for Stark?
We have always been a company of millennials and I am the old guy. I recognized millennials were our future when we opened eight years ago. I decided I would need to become one, not the other way around. This seemed more practical. I could change myself a lot easier than I could change a generation. I allowed for a lot of testing of different things that as a generation X person, I wouldn’t have really considered in the past like philanthropy.
One of my employees, Tyler, convinced me that we should be giving money away. We didn’t really have the money several years ago when he suggested this. Now we are very financially stable and vastly growing, so we are in a really good position. Back then it was like, really Tyler? We don’t have much money, and you want me to start giving out money? He said, don’t worry about it, it will come back around through the universe, Christianity, whatever you believe in. I said OK, I don’t care where the money goes. I don’t have a lot of emotional feeling about it. You go figure it out. From there on we started giving out a huge percentage of our profit.
Last year we gave away 30% of our profit. That is becoming a massive area of prospecting for us, meeting people who are on boards for charities and all the people who go to gala events. Philanthropy pumps us up above the local fitness industry. We also found it is great for retaining employees and getting them involved in the community because millennials want to feel that they are a part of something larger than themselves.
Philanthropy has led to growth and it is more than just about the money. Again, it’s a shocker for me. I just did it because I wanted to see what it could lead to and if Tyler was correct that it is worthwhile: I love holding people accountable. They tell me that by getting X we’re going to get Y, OK, that’s on you; and it actually worked.
The other area where we have grown is retention and referrals. We’ve put everything from the resource standpoint into improving the quality of the experience at Stark for our students and for our employees. As a result of that, we can’t help but grow. We just opened our second location in January, and we are going to have our third location by the end of the year in Orange County. The fourth location will be in LA and the fifth will be in San Francisco. From there we will grow outside the state.
What advice do you have for other CEOs?
Most of my peers are constantly lamenting the fact that they do not know how to deal with millennials. They call them lazy, and all the negative ideas from the older generation’s standpoint. I look at my peers and say, I love my millennials; they work their asses off, they are passionate about what they do, and they think long term. These are wonderful things that are related to the millennial generation.
My advice for other CEOs is to learn how to be a millennial and really embrace it. Find joy in being more like a millennial, rather than pissed off that they are so different. The latter doesn’t do any good as a leader. Being angry at them is the same degree of lack of empathy that you believe they have towards the older generation. If you cannot be like a millennial and you say that they are not as good as us, that’s ego and lack of empathy right there. As mentioned earlier, an ego can lead to failure.
At Stark, we have made a small business, at four and a half million dollars annually. I am really proud of every dollar that we’ve brought in, and it’s not huge; almost all our students run businesses much larger than us. Our students, they look at Stark and wonder, how did you get this culture where all these young people care so much? That’s the outcome of being empathetic and not having such a big ego around your own generation.
Written by Clarence Paller
Transcribed by Evgenia Stroganova