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Photo by Merfam

The Inspiration

When Will Dean graduated from Harvard Business School, he faced a choice between helping the British Government catch terrorists or pursuing his dream – one that HBS called “too ambitious” when his business plan made the semifinals of the Harvard Business School New Venture Competition. Dean had soured on the corporate business world, and was in a mountain of debt upon graduating business school. He decided to focus on a building a lean startup, spending $300 on a basic website, $20 on Facebook ads and then worked hard to generate buzz for what would become the first Tough Mudder event.

The Leap to Greatness

The inspiration for Tough Mudder was the insight that, for athletes, the marathon experience can be quite dull. With over 500,000 people participating in marathons and 1.4 million attempting half marathons, the founders saw room to disrupt what were often poorly-run events with suboptimal experiences. As opposed to an individual event, they focused on teamwork. The result was a challenge that features a 10-12 mile course packed with 25 obstacles designed by British Special Forces to test the participant’s all-around strength, stamina, mental grit and camaraderie.

“Something that we saw is that experience is the new luxury good,” Dean said. “Memories, particularly shared memories, are this experience that, unlike an iPhone, appreciates in value over time.”

The Tough Mudder team tapped into several trends. People were becoming more interested in functional fitness. 

The Result

With participants paying their $100-200 entrance fee in advance, Tough Mudder was in the black before ever building a Chernobyl Jacuzzi. Starting with the initial $20 investment in Facebook ads, the company has grown to a $70 million enterprise in just two years. While initially expecting 500 participants, they wound up with 5,000. Partnering with the right national brands was key – deciding to opt for the quirkiness of the Dos Equis “Most Interesting Man in the World” campaign sponsorship over Bud Light, which wasn’t a fit with the off-kilter brand.

The key revenue driver was Tough Mudder’s Facebook interest targeting campaign focused on people who liked physical sports such as ice hockey or extreme sports, resulting in 5-10 times return on advertising spend and 24 times growth in signups.

Beyond the Leap

The Tough Mudder founders have strived to create a unique corporate culture that’s not focused on “beer and foosball.” Rather, they send their teams on expeditions like climbing Mt. Kilimanjaro and African Safaris. “People really enjoy coming to work,” Dean said. “Having an organization full of people that enjoy their lives is probably one of the most rewarding things that I’ve done with my life.”

h/t Tough Mudder Conquering Obstacles Zooming from Zero to $70 Million in 2 Years – Inc.com
Playing With Fire, Barbed Wire and Beer – NY Times