From Business School to Startup: Tough Mudder

Challenging people to an almost 12-mile trek through rocky terrain that involves jumping into ice baths and running through four-foot flames isn’t the logical way to build a budding business or loving customer base. But it works for this company.

Challenging people to an almost 12-mile trek through rocky terrain that involves jumping into ice baths, running over four-foot flames and climbing up “human ladders” to scale 25-foot walls isn’t the logical way to build a budding business or loving customer base.  But this rather wacky idea of a “muddy run” that was shot down by business professors and classmates has made Will Dean’s Tough Mudder a million-dollar business. Dean holds an MBA from Harvard Business School, one of the most prestigious business schools in the country.  The grad recently chatted with FOX Business about the little company he founded two years ago that now boasts more than 1.1 million Facebook fans and is heading to the U.K., Australia and Canada in 2012.

FB: Where did Tough Mudder originate? When I was 26 I started at Harvard. One thing I noticed at the business school was that international students would find what works in the U.S. and take it home. I decided to look in the other direction. I stumbled upon a tough adventure obstacle course in Germany and on the back of an envelope started sketching out what the business model would look like. I spent most of my second year trying to understand what the value proposition would be. I entered the Harvard Business School competition and we managed to get to the semi finals, but I think most professors thought the idea wasn’t that great and that people wouldn't want to do this muddy run I kept talking about.  

FB: How did the company grow from a business plan in Cambridge, Mass., to an operation in Brooklyn, N.Y.? I graduated in 2009 and founded the company that October. I got in touch with a friend from the U.K. who is more of an operations guy and asked him to come to the U.S.  We spent a lot of time driving around fields and trying to figure out where it might work.   We each invested $5,000 in seed capital. Once we built the website we had about $8,000 left.  We launched the website in February 2010, by March 6 we had sold 5000 spots for an event in Pennsylvania.  That’s when we thought we really might be onto something.   That year we rolled out two more events: one in California and one in New Jersey. So far, we have held 14 events with an average of 15,000 people participating at each event. We’ve generated $25 million in revenue, and are doubling in size every six weeks.  We have more than 30 people on staff now and have had 12,000 resumes come in this year and have all the growing pains of what happens when an organization grows quickly.  But, we are really enjoying the tremendous growth.

FB: How did your business school experience help you create a successful company? During the first year of the business my life was very similar to what it was prior to business school.  I didn’t feel that I was drawing from what the school taught me. But now I see that changing. Now that we got bigger as a company, my role as CEO is no longer headworker-in-chief.  Now I have to think about strategy.   I believe 95% of a new business is execution and 95% of execution is marketing. Understanding your customer and how your brand connects with them--that I learned from Harvard. To me, it was a huge confidence boost to think ‘I may not have four years at Goldman or McKinsey; I’m a guy who was looking for bad guys in shady places, but I can rub shoulders with the rest of them.’  It [Harvard Business School] did give me a lot of confidence.

FB: How will Tough Mudder grow in the coming year? Next year we are growing to almost 30 events. We found a place in New Jersey that can accommodate 20,000 participants. We have a pretty large international expansion in the works.  We actually went back to Harvard for a case study with the business school students. We asked them to determine if we have a sustainable business model and the right international expansion strategy. According to their findings, we can! We are continuing our affiliation with the Wounded Warrior Project and we’ve raised approximately $2 million for them so far.

FB: Do you worry that your business might become a fad like Tae Bo? No. A lot of people are bored and dissatisfied with the solitary focus of physical events. In the U.S., there is a celebration surrounding people being physically fit and having stamina. There is a huge affiliation with the military here and a big focus on team work and camaraderie.  But, American life is incredibly competitive. This event celebrates personal achievements and goals and tests your mental and physical prowess.  That is something that resonates with people.