When I first spoke to Jason Khalipa, it was early March and snow was still on the ground in Louisville, Kentucky. We were discussing the initial launch of Box Pro Magazine and how it would differ from anything else in the market. With a business focus for Affiliates, it immediately peaked Khalipa’s interest.
Competing in CrossFit is only fortuitous for Khalipa. He said he uses exercise to relieve stress and help him solve life’s problems. He works out so much, he just so happens to be good at CrossFit.
In 2008, he found his accomplishments three-fold: he graduated from college, became an Affiliate and won the CrossFit games. When I told Khalipa I’d like to do a phone interview with him about his business, he immediately scoffed.
Khalipa’s business isn’t like any other current business in the Affiliate community. He has four NorCal CrossFit locations in Northern California, but that’s just the surface of his business — which explains why he said I had to come see it for myself.
On May 4, I jumped on a 7 a.m. flight out of Louisville International Airport to San Jose Airport to discover what all the hype was about. Personally, I’ve been writing about successful fitness businesses for almost five years. I’ve heard of legitimate sales propositions, companies being sold for more than a billion dollars and just about every major gimmick you can think of. So, when Khalipa said I actually had to see it to understand, he caught my attention.
During the photo shoot, Khalipa started answering the interview questions. Like most kids in the late 80s and early 90s, he grew up playing soccer, then transitioned to BMX racing and finally, to football. “When I first started competing it was in BMX racing,” explained Khalipa. “I raced BMX bikes for years and years and years on the competitive level — like, the national level. I worked my way up through the chain. I started as novice and worked my way up through expert. You could turn pro when you hit 16. I would travel around the country — I raced in Nevada, I raced all over the place.”
Looking back, Khalipa believes that time was significant in his life. “It was a cool sport to get into, but it didn’t have the community appeal,” he explained.
Community was something Khalipa really sought after, which explains why community became the lifeblood of NorCal. “Going into high school, I got a bunch of injuries from BMX racing, and then I found football,” he said. “I got introduced to the camaraderie and the community, and that was the end of it.”
Khalipa played football all four years of high school and threw the shot put in track and field. It was also at this time he began working in a traditional gym. He started at the front desk checking in members, but quickly moved into a sales role. “The thing about the conventional gym is, it’s all about sales,” he said. “The thing about CrossFit is, it’s all about the service — it’s all about the product … a totally different mindset.”
Throughout high school, Khalipa continued to work for the traditional gym, honing his knowledge of sales, which he also strived to perfect while achieving his business degree at Santa Clara University (SCU). In the same month that he graduated from SCU, he took those skills and opened his first NorCal location.
“What I was able to do is blend the two,” explained Khalipa. “Yes, we’re going to have great service, that’s number one. But, you also might need to be like, ‘Hey look, our product will get you where you want to be,’ and, selling it just a little bit. You don’t need to do it a lot, because the product speaks for itself, but I think that was one of the things I was able to bring with me — a little bit of a business acumen and a little bit of a sales perspective to a product that was already awesome.”
At 21 years old, Khalipa signed the first NorCal lease on the hood of a truck outside the facility for $1,500 a month. “I was very fortunate I was living a lean life,” he said. “My girlfriend at the time, who is now my wife, she had a place so I would stay with her, so I didn’t have to pay any rent. I just lived a lean life. It was just me — I coached all the classes, so all I had was rent for the gym and food, and that was it. I didn’t pay any other expenses.”
For a while Khalipa lived this lifestyle, trying to build his brand and learn the ins and outs of running a business. “The memberships started adding up, and we broke even within a month,” he said. “We got 20 members and we were breaking even, and just kept growing.”
As Khalipa said, truly successful people tend to thrive at what they set their minds to. Winning the CrossFit games in 2008, and continuing to compete at a high level, is simply part of the ever-evolving circle for Khalipa.
“I have a will to work hard and to win, and it’s the same thing in business,” he said. “Mark Cuban wrote a really good book. It’s called ‘How to Win at the Sport of Business: If I Can Do It, You Can Do It.’ It’s a great book.
“It’s the same thing right? This is a sport of business and I want to win at it. And that’s the sport of CrossFit — I want to win.”
The concepts work well together, helping Khalipa to focus his energy to work hard both inside and outside of the gym. By concentrating his attention, it has allowed him to develop a brand that is strong and solidified in its practices.
“I think we are an industry leader for several different reasons,” said Khalipa. “One is, I think we have more locations than pretty much any other Affiliate. We have staff that can back it up by being some of the best in the world, so we have maybe 10 CrossFit HQ seminar staff that travel around the world and certify the new Coaches. We have more of those than any other gym on the planet. We’ve created a brand that will hopefully continue to grow and be synonymous with excellent service.
“I want our brand — this logo — to be known in the next five years as representing people who take fitness seriously. I want people to look at this brand NorCal, look at it and say, ‘Wow, that is a brand where people wear it and they take fitness seriously.’ Because people who come in to do CrossFit take their fitness seriously.”
The key to the growth of the brand doesn’t have much to do with direct marketing. However, Khalipa does enjoy arming NorCal athletes in the NorCal-branded gear. That, along with possessing a well-established business, has helped to organically stretch the brand’s exposure.
Additionally, it was a friendship that assisted Khalipa and NorCal in brand design. “One of my really good friends — I’ve been friends with him for 15 years now — he started an apparel company that didn’t quite work. [He then] started another apparel company that didn’t quite work, and when I was in my second gym, he’d be there with me and he was trying to run his apparel company out of there,” explained Khalipa. “It would flop. And over the years he started helping us with this apparel stuff, and then really over the past couple years it has gained some traction because of him.
“He’s passionate about apparel. I’m passionate about CrossFit, and we have a voice because of what we have done in the athletic world with CrossFit and from the Affiliate model, and it’s just worked out really well.”
What has really set NorCal apart from other Boxes throughout the U.S., and really the world, has been its move into the corporate market. Khalipa believes CrossFit, and more specifically NorCal CrossFit, will be the future of corporate wellness.
Possessing a top-of-the-line facility attracted unique individuals to the gyms for workouts. Of these people, some are high-level executives for major companies with offices in Northern California. One executive happened to be working out at NorCal and asked Khalipa to come host a sales presentation to his company. From there, opportunities seemed to align for NorCal.
“Our biggest client is HGST [Western Digital] … they are literally the groundbreakers, the future of corporate wellness,” said Khalipa. “They have legitimate CrossFit gyms, Affiliates, in their locations here in San Jose, in their location in Rochester, Minnesota. [In] Irvine we outsource so employees can walk down the street to a CrossFit gym there for free. [There are also] fully subsidized onsite CrossFit all throughout [locations in] Asia.”
HGST has NorCal CrossFit locations in Malaysia, the Philippines, Singapore and Thailand — all instructed by NorCal trained and CrossFit certified Coaches. “All in total, we’ll have about 14 different CrossFit sites, onsite at their corporate sites, with about 40,000 employees,” said Khalipa. “The [Coaches] here we train through our normal NorCal process. What happens when we do Asia is we send someone out to Asia. Finding the good Affiliates in the area [is] step number one.
“Step number two, we start a dialogue asking if they’re interested in getting involved in this program. Step three, we send one of our NorCal Coaches out when we’re ready. When the site has already been updated, the equipment is already there, we send [the Coach] out for a month to train a person onsite and grow the program. They leave and that [new Coach] takes over.”
There are currently four NorCal retail locations and 14 managed corporate sites, which include HGST, offsite at LinkedIn and another company called CH Reynolds. “It’s changing the game,” said Khalipa. “We’re not really interested in expanding our corporate model, yet. I want to become an expert at it, and then we’ll grow. But right now, our most important client is HGST. I want to offer excellent quality service to them, make sure it’s perfect. And once it’s perfect, we’ll move on.”
As a business owner, it’s important for Khalipa to keep his focus. “Running a successful business, there are so many opportunities that keep popping up,” he said. “What’s easy for me to do is to take all of them on. But what’s hard for me is to say no. And I need to say no, because if I continue to say no to some things, lots of things, it’s going to help me focus on what’s going to drive the company forward, and that’s excellent service.”
At NorCal, sales aren’t necessarily an ongoing situation. People either enjoy CrossFit at NorCal, or it’s not for them. Additionally, like many CrossFit gyms, the cost is at a level people will pay for and come, or they won’t and they won’t come. In the corporate sector, Khalipa has found his sales hat coming back to the forefront more often.
“Those are the challenges,” he began. “A, you have to find a company that’s interested, and B, explain to them why CrossFit is so much better than what they’ve been doing, and then you have to make sure you put together a model that is sustainable for them.”
Each day, Khalipa wakes up, trains and focuses on the development of his business. For him, and many business owners, success is a long journey with new opportunities and challenges.
In five years, there isn’t a true certainty where NorCal will be, but it is certain that NorCal will exist. What will endure is a brand well known for thinking outside the Box and providing real results for individuals and corporations alike.