From Experiment to Success: The Rise of a Fitness Tech Company

The Core of Fitness: Overcoming Resistance

Fitness fundamentally involves confronting resistance – whether it’s the challenge of running into a headwind, the exertion of muscles working against gravity during weight training, or the mental fortitude needed to resist the allure of comfort and indulgence.

For Tonal, this concept of resistance isn't merely a marketing point; it’s the foundational element that has propelled the startup to prominence within the fitness technology sector.

Financial Growth and Market Position

The company’s success is demonstrably reflected in its funding. Tonal has secured approximately $200 million in venture capital funding to date.

It is rapidly gaining recognition with its $2,995 wall-mounted device, which utilizes a digital weight system to replicate the functionality of various traditional gym machines.

Since its initial launch in August 2018, Tonal has established a strong reputation among fitness enthusiasts.

These individuals are seeking a robust strength-training solution for home use that minimizes space requirements without sacrificing the benefits of serious weightlifting.

Pandemic-Driven Surge and Retail Expansion

The surge in at-home fitness sales during the pandemic significantly benefited Tonal, with sales increasing by an impressive 800% from December 2019 to December 2020.

Further expanding its reach, the company recently announced a partnership with Nordstrom.

This collaboration will introduce 50-square-foot sales areas within the women’s activewear sections of at least 40 Nordstrom stores across the United States.

This expansion will bring the total number of Tonal’s physical retail locations to 60 by the close of 2021.

Overcoming Obstacles and Founder's Journey

However, Tonal’s achievements are the result of considerable effort and perseverance in the face of numerous challenges.

Founder and CEO, Aly Orady, personally battled burnout and weight gain while simultaneously cultivating the vision and drive to forge his own path.

The company faced repeated rounds of venture capital funding negotiations, often encountering skeptical investors who were hesitant to invest.

The Power of Resilience

It is this very experience of overcoming resistance and navigating barriers that makes Tonal’s story particularly inspiring and insightful.

The Genesis of Innovation: A Founder's Journey to Wellness

Following the Christmas of 2013, Orady experienced a profound sense of physical distress. For approximately 17 years, he dedicated himself to the engineering field, contributing to companies such as Samsung, Sun Microsystems, and HP, as well as three different enterprise startups. This intensive work schedule significantly impacted his health.

His demanding professional life resulted in several health concerns, including substantial weight gain, a diagnosis of Type II diabetes, and the development of sleep apnea.

“I felt as though I was approaching a critical juncture, and my health recovery seemed impossible without decisive action,” he remembers.

Orady determined that a comprehensive lifestyle overhaul was the only feasible solution. Shortly after the holiday season, he reduced his consulting hours with Samsung’s TV and display division – a position requiring frequent travel to Korea – and initiated a rigorous exercise regimen.

This plan involved dedicating four hours daily to physical activity six days a week, typically divided between morning and evening sessions, coupled with intermittent fasting twice weekly.

Frequently, Orady would begin his days at 6 a.m., driving to a Gold’s Gym in San Francisco. Initially, his workouts consisted of elliptical training and outdoor cycling. He diligently researched strength training through online resources and books.

As he progressed, strength training became the central component of his six-day-a-week routine. Throughout 2014, Orady successfully lost 70 pounds while simultaneously decreasing his workload at Samsung.

Despite achieving considerable improvements in his physical condition – results that were readily apparent – Orady disliked the daily commute to the gym and desired the convenience of working out at home.

While seated on a gym bench in March 2015, he observed a cable crossover machine, a standard piece of gym equipment measuring 5 feet by 3 feet by 7 feet, used for a variety of exercises with detachable weight plates.

“It struck me that the machine’s large size was due to its reliance on substantial metal plates and gravity for operation,” he explained. “I reasoned that if I could substitute these plates and gravity with electrical power, I could significantly reduce its size and create a more compact device.”

This realization sparked an idea. That same month, Orady established RiptLabs, a name he would later refine to the more concise and memorable Tonal.

Product Iteration: A Journey of Refinement

While observing a cable crossover machine, Orady initiated a thought process centered on integrating weight stations into the home environment, significantly reducing their overall size. Conventional gym equipment typically relies on substantial, cumbersome weight plates to provide adequate resistance for strength training. However, Orady considered the possibility of developing a product that replaced these large metal plates with a more compact alternative.

This technology would be integrated with sophisticated software designed to monitor a user’s exercise regimen. “I hypothesized that harnessing electromagnetics could be a truly groundbreaking approach,” Orady explains. “This technology already powers electric vehicle motors and high-speed rail systems, yet its application in fitness remained unexplored.”

He began to contemplate whether electromagnetics could be utilized to create a device that genuinely mimicked the experience of using a traditional weight machine. Orady, a graduate with a bachelor’s degree in computer engineering from McMaster University, possessed a theoretical understanding of electromagnetics.

However, his previous professional experience hadn't involved the practical development of electromagnetic devices. He procured various components online to construct an initial prototype. This rudimentary device, secured to a workbench in his home, featured a cable designed for back-and-forth movement.

The first two iterations of these “digital weights” proved largely unsuccessful. Excessive friction during cable movement and insufficient magnetic force hindered the replication of the diverse weight ranges offered by conventional gym equipment. The initial version incorporated a single magnet, providing a limited usable range of 25-40 pounds.

The second prototype employed numerous magnets, enabling resistance generation primarily through magnetic force rather than relying heavily on the cables. Following two further refinements, Orady successfully engineered a unique electromagnetic technology capable of generating resistance comparable to traditional weights.

At this stage, the prototype had evolved to a point where it effectively simulated the sensation of performing exercises such as single-arm cable rows and bicep curls. This marked a significant advancement in his pursuit of a compact, home-based weight training solution.

Navigating a Series of Investor Meetings

Concurrently with the development of the prototype that would ultimately evolve into Tonal, the founder of RiptLabs embarked on a demanding nine-month period dedicated to securing investment. Orady possessed a background in enterprise solutions, having previously held positions at three enterprise infrastructure startups and also served as an advisor with Mayfield Fund for a six-month term in 2013. He presented his concept for a streamlined, at-home strength-training system, but encountered skepticism from potential investors.

A primary concern raised was the existing saturation of the fitness market with home-use equipment, originating from both emerging companies such as Peloton (established a few years earlier in 2012) and established brands like ProForm, Nautilus, and NordicTrack. Investors questioned the need for another fitness offering.

The complexities inherent in hardware development also presented a significant hurdle. Venture capitalists traditionally exhibit reluctance towards hardware investments due to substantial initial capital expenditures, unpredictable consumer preferences, the intricacies of supply chain management, and the inherent technical risks associated with product creation. This risk was amplified in this instance, as Orady’s vision required not only functional hardware but also integrated software and compelling content to deliver a complete user experience.

Even assuming market readiness and successful development, a fundamental question remained: Why should Orady, with his extensive experience in enterprise hardware engineering, spearhead this venture and guide it to market?

“I would present this rudimentary prototype – a truly innovative creation that I believed defied conventional limitations – only to be met with disbelief by most investors,” Orady remembers. “’You cannot be serious,’ one investor stated. ‘You are a highly skilled technologist. I would gladly fund you – provided you focus on developing solutions for data centers.’”

Despite the initial resistance from investors, he continued to refine his pitch, steadfastly avoiding a return to his established expertise and remaining committed to his vision for the future.

“Building connections is crucial, and founders shouldn’t hesitate to share their narratives,” Orady asserts. “Networking is often the only path to success.”

A pivotal connection materialized in 2015. Leveraging his prior six-month engagement with Mayfield Fund, he received an introduction to Bolt through Tim Chang, a partner at the fund specializing in consumer internet, digital media, e-commerce, and health and wellness. Bolt was notably one of the few venture capital firms specializing in hardware investments, and subsequently led RiptLabs’ initial $250,000 investment.

Orady ultimately secured commitments from other investors who recognized the potential of his work and identified a viable market opportunity. While the fitness landscape was competitive, no existing product fully aligned with Orady’s innovative concept. In October 2015, RiptLabs finalized its $250,000 seed round, followed by an additional $1.5 million in seed funding in April 2016, with investors including Rick Marini joining Mayfield and Bolt.

Receiving the initial investment from Bolt, along with access to the firm’s hardware laboratories and a collaborative workspace filled with other hardware entrepreneurs, served as a significant validation for the RiptLabs’ CEO. However, he also understood that this seed funding represented only a small portion of the capital required to bring his product to market.

“I understood that substantial funding, measured in millions of dollars, would be necessary to launch this venture, and this was merely the first step in a long process,” Orady adds.

Early Adoption and Product Refinement at RiptLabs

Having secured funding, Orady concentrated on expanding his company and further developing the core product. He brought on board a team of four specialists – an electronics engineer, a mechanical engineer, a software engineer, and a designer – to collaborate on the device’s evolution.

Together, they also created foundational software capable of tracking the number of repetitions completed during workouts. This initial software provided crucial data for assessing user performance.

In July 2016, Orady proposed an unconventional birthday request to his team: “The Birthday Challenge.” This challenge centered around constructing a new prototype of the RiptLabs device.

The aim was to create a wall-mounted unit, similar in design to the later Tonal system, featuring adjustable arms extending to either side. These arms would facilitate a broader range of weight training exercises.

Previously, the prototype had been limited to a single cable, restricting workouts to one arm at a time. This new design aimed to overcome that limitation.

A few months later, in October, the startup initiated a limited alpha testing phase. Twelve individuals – primarily friends and acquaintances – were granted access to an apartment equipped with the device.

These early users were given free access to the machine and invited to exercise at their convenience. In return, their workouts were recorded, and they participated in post-workout interviews to provide valuable feedback.

Despite this progress, additional capital remained essential. While a full product launch was still distant, the tangible prototype allowed investors to experience the workout firsthand.

This hands-on demonstration significantly aided their understanding of Orady’s vision. The refined prototype ultimately facilitated a $11 million Series A funding round, featuring investments from Shasta Ventures and Next Play Capital.

This funding closed approximately one year following the company’s initial seed round, marking a significant milestone in RiptLabs’ development.

A Drive to Innovate

Over two years had elapsed since the inception of RiptLabs, and close to four years since Orady’s departure from his corporate position. While the company’s hardware was nearing a launch phase, a new challenge emerged: developing compelling content to encourage consistent user engagement with the device.

In March 2017, Orady contacted Ryan Vance, an experienced content programmer. Vance’s prior work included creating programs for Discovery’s HGTV and DIY networks, and leading content development for Fitbit Coach, previously known as FitStar, which Fitbit had acquired in 2015. Fitbit, having recently completed an IPO and expanded to over 1,000 employees, had evolved from its initial nimble startup form. Vance, though not actively seeking a new position, began receiving inquiries from smaller startups offering opportunities to build content from the ground up.

Initial discussions between Orady and Vance took place at RiptLabs’ office located at 1074 Folsom St., in San Francisco’s SoMa district, near the intersection of 7th and Folsom. The office space was sparsely furnished, prioritizing functionality over comfort, and often saw individuals experiencing homelessness resting in the doorway.

Vance attentively listened as Orady detailed his vision for the company and presented the prototype, which was displayed on a nearby wall. “The device, with its metallic, leaf-like design and articulated arms, resembled something that could detach from the wall, akin to a Terminator from a dystopian film,” Vance remembers. “However, the pivotal moment arrived during my first workout. While performing a bench press with 40, then 80, and finally 40 pounds on each side, the dynamic weight adjustment was truly remarkable.”

Vance and Orady quickly found themselves aligned in their perspectives. They envisioned the product as a combination of hardware, software, and content. Vance conceptualized the device as a sophisticated video game controller, allowing users to interact with various weight classes guided by on-screen instructors.

A key strategic consideration arose: who should lead these on-screen workouts – professional actors or certified fitness instructors? Actors possessed camera experience but often lacked formal training, while instructors had expertise in fitness but needed development in on-camera presentation. (Notably, other fitness companies ultimately favored fitness instructors for their on-screen roles.)

“Should we engage skilled actors, provide them with scripts, or invest in training fitness professionals for on-camera work?” Vance questioned. “This was a significant decision, as both approaches presented unique hurdles. Ultimately, however, authenticity felt paramount.”

Having resolved this question, the next step involved the challenging task of recruiting fitness instructors for a product with a limited user base. Vance initially focused on instructors from DIAKADI, a popular fitness center frequented by members of Silicon Valley’s tech community, and other local gyms. Liz Letchford, a former athletic trainer for the Golden State Warriors and a personal trainer with her own business, was among his first hires.

Letchford recalls the unusual initial outreach from Vance in May 2017.

“Ryan contacted me via email,” she recounts. “He assured me he wasn’t suspicious and that the opportunity was legitimate. He acknowledged the unusual company name and the unconventional nature of the proposal, but invited me to see the product firsthand.”

Letchford accepted the invitation and was presented with RiptLabs’ ambitious and innovative vision for home fitness. Impressed, she joined the team.

With a defined strategy and a growing team, Vance began production of fitness classes. RiptLabs established its first production studio near 6th and Bryant in SoMa, though many shoots also took place at the original Folsom St. office. A two-camera setup was used against a simple gray wood backdrop, allowing Vance and his team to capture multiple angles and create cohesive workout classes. The project was steadily gaining momentum.

A Significant Final Challenge

A key paradox often arises when constructing a hardware startup: as a company nears its launch phase, securing funding can paradoxically become more difficult. Initial strategic and technical uncertainties give way to concerns surrounding production and market acceptance. While initial seed funding for RiptLabs relied on belief in Orady’s vision, and Series A investments hinged on achieving product-market fit, Series B investors were asked to commit substantial capital based on projected consumer adoption – all without the benefit of the extensive user data commonly available to software companies.

Orady initiated the process of raising RiptLabs’ Series B funding, describing it as one of the most demanding endeavors he had faced.

“The experience of leaving partner meetings with eight rejections is profoundly discouraging,” he recounts. “My team was dedicated and enthusiastic about the impending launch [later in the year]. However, the uncertainty of securing the necessary funding was a significant burden. The potential consequences extended beyond personal disappointment – it risked letting down the entire team.”

Despite numerous setbacks, a single affirmative response ultimately proved sufficient. Orady successfully secured $30 million in funding from Sapphire Ventures, alongside continued support from Shasta, Mayfield, and THVC.

With this final round of pre-launch capital secured, the company enhanced its San Francisco production facility and established a second studio in Los Angeles. This new location featured a three-camera setup and a minimalist, neon-lit set designed to project a more contemporary and refined aesthetic.

Following consultations with two marketing agencies, and after reviewing three rounds of proposed names, Orady rebranded RiptLabs as “Tonal.” (The winning name was suggested by the second agency during its second presentation.)

The rebranded Tonal officially launched in August 2018 – approximately three and a half years after Orady’s initial encounter with the cable crossover machine at the gym. He had navigated personal challenges, including resistance and professional exhaustion, overcome investor skepticism, and addressed the concerns of new employees joining a pre-launch venture.

Orady had emerged from these obstacles with a potentially innovative product, but the ultimate test remained: convincing the market and discerning consumers to invest in a $2,995 machine designed for home installation.

Successfully addressing this challenge necessitated a meticulously planned launch strategy, which will be the focus of the next part of this narrative.

Tonal EC-1 Contents

• Part 1: Origins
• Part 2: Product launch
• Part 3: Community building
• Part 4: Competitive landscape and future

Further EC-1 analyses are available on Extra Crunch.

Revised March 30, 2021: The original name of the company, previously listed as Ripped Labs, has been corrected to RiptLabs. Clarification was also provided regarding Ryan Vance’s employment history at Fitbit.