FitTech Insider

Paolo Aversa: "Consolidation is the most underestimated fitness trend."

What does the future of fittech look like? We asked Dr. Paolo Aversa, one of the leading academic experts in sport business and technology. His recent studies focus on business model innovation in fitness app ecosystems and platforms.


His research is featured in Harvard Business Review and the Financial Times. Among other awards, he has been listed among the “World’s Best 40 Under 40 Business  Professors” by Poets and Quants. He is Associate Professor of Strategy and Full-Time MBA Director at Cass Business School in London.

Paolo Aversa about Paolo Aversa


What is your personal interest in the field of fittech and why did you get into it? 
There are three main reasons:
1.It's an industry driven by passion. The beauty of it is that it shows very interesting humankind – it doesn't have the standard economic logic as other industries. I’m a humanist, I love the human being, so I like to see how passion drives the industries — and for me, sports and fitness are synonymous with passion and wellbeing. There's great value in studying that.

2.It's a bottom-up-driven industry. People want to be hands-on and come up with new solutions, and they are usually very knowledgeable and passionate about what they do. So I like to see industries that are driven by user logic, as they make us understand better user consumption compared with other industries. So, a lot of things happen because when companies want to make something happen, they just do.

3.I’m a tech nerd. There are not so many people, at least in the business and strategy field that study technology in sports. Usually when they look at technology they look at more classic industries like pharmaceuticals, automotive, or aviation. There was not so much about sports, so for me it was a perfect fit between two. Plus, I’m a sports lover myself so I always learn something useful for myself. 

What kind of technology excites you most applied in fitness?
Virtual reality (VR).

Paolo Aversa about market trends


How did you approach your research in the fitness and technology space?
Whenever a shock happens, every challenge can be turned into an opportunity. At this specific time, one of the high priorities for the people who are into sports is transforming their fitness routine within the pandemic. People who are really into fitness care about the equipment, how they eat, how to sleep, how they meditate. They are usually very well equipped in terms of devices and technology artifacts to make this happen at the most advanced level . Then, all at once, they have been cut off from gyms and fitness centers.

So my question was: how do people who are so driven manage to recreate equally effective or even more effective environments in their homes or public spaces they can populate during the pandemic? And how can organizations support these people? Most of all, my idea was to look at: what are the better patterns of supporting the fitness world? Which are the organizations that are better placed to really gain a competitive edge in this market?

How did the Covid-19 pandemic affect the current state of the industry? 
"When shocks like the pandemic happen in any industry, they act like accelerators: things that usually will happen in 10-15 years in normal conditions might happen in a year or two."

So, you have an amazing time window to measure: it’s like you’re squeezing the time all at once and you can see an entire life cycle in one year or two. Companies grow and die at a faster rate, and adoption happens at a faster rate. It’s fantastic, like being able to watch an entire movie in 10 minutes. For us as researchers, it’s incredibly valuable.

Sports is not the only environment where this has happened — for example, remote working has also been affected. But these sorts of things go hand in hand: if remote working will consolidate after the pandemic, people will think of training at home more, independently from the pandemic because they will be in their home area more often.

This means subscriptions for gyms will be more valuable when you have access to a network of gyms — like an aggregator — rather than a single spot, because you will not go every day to your office and you might need a gym closer to your home.

What company in the fitness space would you want to study and why?
Peloton. I think the phenomenon they created is fantastic and I’d like to understand how they developed it so quickly and so successfully.

The most interesting part for me is anchoring to a specific lifestyle and building on an urban community that is theoretically virtual, but actually very successful in a specific area because it builds on specific living habits. When you think of the virtual world, you always think of something that runs online — but a lot of the success of what happens online depends on understanding how life in that specific area develops. I don’t think that they would have been equally successful if they had started in Oklahoma — not because people in Oklahoma don’t do sports, but because they have completely different needs.

I think there is a wannabe professional cyclist in the heart of many New Yorkers and maybe there is a wannabe surfer in the heart of a lot of people in Paris — and if you discover that, you can offer something. So, probably you shouldn’t be selling a surf virtual experience to people in California because they can just go and do surf. So I think it was very smart — with cycling, it is a little easier, but I think there’s a huge potential to do other things.

If you were to launch your own fitness company, what would that be?
I would try to discover the sports aspiration of people and connect it to virtual experiences that allow them to be who they want to be while living in areas where they cannot do it — like the bobsleigh guys from Jamaica [the movie “Cool Runnings”, ed.]. I would apply that kind of logic.

Paolo Aversa about the future


What are the three most important things about the future of fitness that you learned in your research?
1. The world has changed before and after the pandemic and the rules that were dominating the world before, are not the ones that will be dominating the world after. So, we can expect surprising things. There’s a lot of reshuffling and trajectories are not linear anymore. For example, companies that are very established might tumble down and companies that are growing if they make the right actions could be huge in five, ten years from now.

2. The industry will work more as an ecosystem. And the role of the integrators in bringing together multiple offerings and solutions under one big umbrella will be key. It's not clear who’s better placed to do that: there are certain companies that for sure are quite ahead, but this also means that it requires an effort from the complimentary services — like the app providers. They need to work in conjunction. The ecosystems' performance would be highly determined by the ability of collaborating and doing teamwork better than others. In the end, it’s going to determine the victory of one solution over another. 

3. It's going to be a frontier industry for wearables as it has huge potential to expand in the field of health — the more hardcore, classic idea of health, not just wellbeing. The medical industry has a lot of knowledge on the functioning of the body, but they’re not that advanced in developing technologies. In many cases, the disruption seldom comes from the incumbent — the disruption usually comes from players in other industries. If I had to bet my money, the next big player in health is not going to come from their own — rather, the fit-tech industry. It is super interesting because we’re not just in the future of sports here, we’re seeing the future of health.

What do you think is the most underestimated fitness trend right now that will shape the future of fitness?
"Consolidation. I think a lot of players still think within the boundaries of their own service — they’ll say: 'I want to provide the best connection for my bike or fitness app' but they don’t think in the logic of the user —it's not about selecting the single solution, but dialing into an ecosystem of solutions. A lot of players are still trying to get their best product possible out and not dedicating enough energy to bundling things together.

Which unexpected area has potential for development within the consolidation space in the near future?
Work productivity – the connection between fitness and productivity. When people are well and feel great, they’re more productive and more creative. So as an employer, you have an opportunity to put your users in the condition of working better also from home. Companies used to build gyms and fitness centers on their premises, but now people will go less to the office. So, how willl companies allow their employees to get the same level of benefits in order to increase their productivity at work?

A lot of companies  will go ahead with their gyms and be surprised when they see they’re empty. So I would expect some illuminated companies in the future to subsidize those services and tell employees: “We care that you are fit while you work for us and do some sports that we subsidize, while you are home. In your package you can choose a home rower or weight sets, personal trainer two times a week included". There’s lots that can be done, but I don’t think we are at that point yet. We'll get there. 

Paolo Aversa was one of the speakers at the talk "Bird's-eye view: How emerging fitness ecosystems are changing the rules of the game" at FitTech Summit 2021. Subscribe to our mailing list here to stay up-to-date with our future events.

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