Parallels In Gym Ownership And Software Services Companies
I am fortunate to have had the privilege to see the inner workings of two different industries. My background and education is in computer science but my passions and enterprises have always been in fitness. That led me to having both a career in computer sciences through gyminsight.com and in gym management by owning a small but successful local gym business.
Since the readers of the Gym Insight Blog tend to be fitness professionals I thought it would be useful, as a contrast, to talk about the computer industry and the differences between small and large software vendors. There is a definite parallel between the software business and the fitness industry. In software there are large companies and small just as there are large gym networks and small, independently owned, studios and gyms.
The Big Box Advantage
For some things big companies are unbeatable, like developing complex solutions for consumer applications. When you have economies of scale you can afford to invest in new segments and put a price on your product that reflects the perceived value of your brand and the risk you took to get it to market.
Once you get going it is easy as a big company to continue to expand because you are just repeating what was done elsewhere. In theory, the large well established national and multinational brands provide high quality products with good support and the surety that they will be around in years to come, to follow up with the solutions they are providing.
On the down side, large vendors can be difficult to communicate with, and account managers get moved around so that you constantly have to deal with unfamiliar contacts. The owners of big brands also feel the power of setting the price that they want if they are working with clients that on average are much bigger than the small businesses that we are talking about here. When company reps are looking for the big kill they will pay less attention to small-scale customers.
When the overheads of big business get in the way of a competitive market, the lines that support the smaller customers are the first to get cut. This is where the table begins to turn. I think it must be down to physics or economics or some combination of both, but the best match for a small company is a small company.
Likewise small vendors that service giant corporations have a rough time as well. When the vendor and the client are working on a similar scale they have a balance of power in the relationship. I don’t have a reference for this; it’s just what I have determined by observation over the years.
In the fitness business some of the big box companies are notorious for taking on newly qualified and inexperienced trainers as they are less expensive and (in theory) easily molded into the company culture. When you work with the locally owned brand you may be dealing with experienced staff and even owners; the same applies with software vendors.
In spite of the supposed advantages that large companies have innovators keep appearing on the fringes of fitness and of software services. With big companies comes bureaucracy and inertia. When companies grow the layers of management tend to grow exponentially. The C-level bosses become further and further removed from daily interaction with customers.
When you work with companies that are similar in size to your own you’ll get more individualized attention and a better match to make for a partnership as opposed to an unbalanced give and take. Large companies are notorious for being slow to pay and fast to demand payment, even when they have fundamentally failed in the services they are expected to provide. Big companies are more sensitive to their own internal pressures than what is coming in as feedback from customers.
I’ve seen both sides of the line in both industries and there is a list of pros and cons for both large and small. On the balance I would say that there are plenty of opportunities in both industries for small independent businesses and start-ups. This is because of the fresh ideas and energy the enthusiastic entrepreneur can bring to the game.
Cane, Mark. 6 Factors for Selecting a Small vs. Large Software Vendor. January 15, 2013. http://blog.bluelinkerp.com/2013/01/15/6-factors-for-selecting-a-small-vs-large-software-vendor/ (accessed February 25, 2015).
Fagan, Lawrence. Gym Insight Is Now Servicing Over 2,000 Fitness Businesses. September 20, 2014. https://blog.gyminsight.com/2901-gym-insight-is-now-servicing-over-2000-fitness-businesses/ (accessed February 25, 2015).
Laut, Robert. “Big Vendor Risk.” A3 Solutions Inc. http://a3solutions.com/a3main/wp-content/uploads/2011/05/Big-Vendor-Risk-RL1.pdf (accessed February 25, 2015).