Colleen Werner of LulaFit

We Spoke to Colleen Werner of LulaFit About How to Build a Successful Service Business

As part of my series about the “5 Things You Need To Know To Create a Successful Service Business,” I had the pleasure of interviewing Colleen Werner.

Colleen attended the University of Michigan where she earned Bachelor’s Degrees in Dance and Kinesiology with a focus on movement science. After spending ten years as a professional dancer, she started LulaFit in 2014. While dancing professionally and studying the science of the human body, Colleen realized that our bodies are the most sophisticated piece of technology we will ever own. Unfortunately, when she looked around her, she saw people she cared about unable to make the time to care for their well-being. She started LulaFit to build community and conversation about our physical, mental, and social wellness in the places we spend the most time: home and work. Outside of LulaFit, Colleen spends time with her family and closest friends getting outdoors to hike, play tennis and walk with her Australian Labradoodle puppy, Ellie!

Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I attended the University of Michigan, where I earned my Bachelor’s Degrees in Dance and Kinesiology with a focus on movement science. It was through my professional dance career that I realized our body is the most sophisticated piece of technology we will ever own. When I looked at those around me, I noticed that a majority of people do not take the proper time needed to care for their health and well-being.

This is when I came up with LulaFit — the idea to create spaces for people to focus on their health where they spend most of their time: at home and at work. LulaFit helps people escape their everyday lives for an hour or two, allowing them to decompress and focus on their health. Today, our programs include everything from cycling and meditation classes to happy hours and trivia nights. We want to ensure tenants at Class-A commercial and residential buildings are easily able to create a healthier self physically, mentally, and socially.

What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?

While I was dancing professionally, I was also working as a personal trainer in some of the nicest condo buildings in Chicago serving a very elite clientele. One of the buildings where many of my clients lived hired me to run their wellness program for the building. Within the first six months, the program was so massively successful I realized that every other building in the city, along with its tenants, could benefit from a program as well. While the amenity boom struck Chicago, LulaFit grew rapidly and I actually recruited one of the original buildings’ residents, a retired business executive, to help coach me. She currently sits on my Board.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

I was so focused on helping people, that I said yes to deals we couldn’t make money on because I was so excited about the audience we were going to touch. That was dumb. If you want to build a purpose-driven company and not just a 6-month charity project, you need to also focus on making money.

Thank you for that. Let’s now pivot to the main focus of our interview. Extensive research suggests that “purpose-driven business” is more successful in many areas. When you started your company what was your vision, your purpose?

When I first started LulaFit, the mission was to help people. In my mind, if I could expand myself by 2 or 3 people, then I could help that many more. I was thinking very small, but clearly the universe had other plans. As the company has grown, we now touch tens of thousands of lives a day. It’s pretty surreal seeing a company that is still so mission and values focused grow to become a profitable, multi-million dollar venture. We were incredibly fitness and wellness-focused at the beginning, but it occurred to me that only about 20% of the tenants in a building use the gym. How were we going to help the other 80%? With that question in mind, we began to expand our service offerings. Today, we’re a full-service amenity management firm touching everything from the design and development of an entire amenity floor to all of the staffing and programming. We are focusing not just on physical wellness, but mental and social as well.

What do you do to articulate or demonstrate your company’s values to your employees and to your customers?

As a young, first-time entrepreneur, it was hard to comprehend that most companies are not values-driven. The original values of the company were a true reflection of my personal values. As the company has grown and become more diverse, the values have evolved to fit the growing needs of the company. I am a firm believer that every single person in a company is responsible for upholding the values. We are all values-keepers and we have to fight for them vigorously every day. This is especially tough given that the industry we are in, Real Estate, isn’t exactly known for supporting values-forward companies. I’ve been questioned many times in my career by clients, colleagues and industry leaders about LulaFit “being able to stay so values focused.” It has been a great fear of mine that my empathy as a person, and a core value to the company, could actually be a detriment. As I’ve gotten more confident in myself as a leader, I’ve learned that leading with empathy is one of my greatest strengths. It does not make me incapable of tough decisions, it only makes me more acutely aware that the tough calls need to be made to protect the firm and the LulaFam.

Do you have a “number one principle” that guides you through the ups and downs of running a business?

Be comfortable being uncomfortable.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

There have been so many tough days in this journey, but 2017 was truly the worst. While going through several personal crises, the business was not performing. We had exited 2016 with 400% growth and it was pure fun. In 2017, we hit what Les McKeown would call “white water.” It got rough. I realized we had said yes to deals we shouldn’t have as our clients were draining us, our margins weren’t high enough, and we had gone from profitability in 2016 to burning more cash in 2017 than my personal bank account could handle. It was time to make some tough decisions which meant laying off 80% of our staff. We had to completely rethink the strategy we had and make a big change in terms of growth: don’t say yes to everything. There were so many dark days in that year. I recall coming back from the holiday break in January of 2018 and sitting in my car crying before going into the office. I just didn’t want to keep going and had no idea how we were going to get out of the mess the prior year had created. Worst of all, there was a severe lack of hope in the company. I had to make a choice. I could either sit in my car and cry every day or I could pick myself up and keep going. So that’s what we did. By February of that year, we were back on track and grew 250% in 2018, followed by 380% in 2019.

So, how are things going today? How did your values lead to your eventual success?

Things are going very well. We grew significantly last year and continue to scale to multiple new markets every year. I’ve built an executive team around me that is rooted in our core values but are experts in their given part of the business. It has allowed me to stay focused on three things: 1) keeping my eye on our “north star.” Who we are and why we are. 2) finding the right people to help us continue to grow and 3) finding the right partners and clients to get us there.

Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a very successful service-based business? Please share a story or an example for each.

  1. You have to put your people first, above all else. If you care for your people, they will care for your customers. For me, this has been treating my team at LulaFit like a part of my own family. In fact, the name has caught on and now our entire team is lovingly referred to as the LulaFam.
  2. Let your team be in charge of their own lives and success. When you treat people like family, you stop trying to micromanage all of their time. For us, this has come out in ways like responsible time off and other cool perks, but the root of this is about trusting that people can prioritize what is important on their own. When they work for a company that connects with their own personal values and mission, they prioritize work. But sometimes, they need to prioritize themselves or their families and you just have to let that happen.
  3. Don’t look for VC money to start or save you. Most of my pure technology-founder friends find it quite shocking that I waited 4.5 years to raise my first round of outside capital. I think when you’re building a product, you absolutely need outside capital to get off the ground, but most service companies should be able to build revenue organically. Perhaps not as quickly, but organically. I would challenge any entrepreneur, but especially service-based company founders, to go through an exercise to try and figure out how to build the business without burning millions of dollars first.
  4. Because you’re going to treat your people well and not raise as much money as your SAAS friends, give your employees equity. Help them think like owners of the business by actually making them an owner of the business. I’ve heard so many people say that you’ll never find people who will work as hard or care as much as you do. I tell them they’ve never met my team. There are more than just financial incentives that can motivate people and I find that ownership is a strong one.
  5. If you’re a successful founder, the number one thing you’ll accomplish is getting yourself fired from every job at the company. You will hear a million times, it’s really tough to pass things off. Yes, it is. Who cares, just do it. And do it quickly. Focus on recruiting people who are better at you and then quickly fire yourself from that job. If a ball gets dropped (it is bound to at some point), trust that you can go back and address it then. But when scaling a company, there’s no time to try and stay possessive over every single thing.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

This would most definitely be my husband, Jeremy Werner. When I started LulaFit, he had a successful career in private equity. He worked 90+ hours per week but still spent every free hour working diligently with me on the business. He did all of our financials and legal in his spare time. He helped talk me through problems, wins, negotiations, and everything in between. In 2019, he left his job in traditional finance and joined the company as our CFO. He’ll be the first to admit he’s not technically a co-founder, but he has played an integral role in supporting me both emotionally and skill-wise with his expertise in business and finance. He is my partner in life and in this business. There is nobody I trust more to be in a leadership role than him. We work so well together that it is scary sometimes and I recognize it takes a special kind of partner to give up a lucrative career to join a company your wife has started. I am eternally grateful to him.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I truly believe in the idea of conscious capitalism. I believe all companies have the obligation to think about how their business will be beneficial to the community, their employees, their clients, and the planet. If every company though this way, we would have millions of movements doing good.

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