Ten years ago it never occurred to Billy Malkovich that he would be working in the fitness industry — he was dead set on becoming a lawyer and politician on Capitol Hill. However, like many things in life, direction changed for Malkovich. He graduated from Arizona State University, worked for Senator John McCain in Washington D.C. and somehow found his way back to be the CEO of the largest privately-owned fitness club in his home state of Arizona.
You Wouldn’t Call it a Calling
As a kid, Malkovich, now 31, grew up playing sports and working out at Mountainside Fitness with his buddies. For him, working out was as much a social event as it was exercise.
Mountainside became Malkovich’s first employer. As he got older he worked in different areas of the club — behind the front desk, then as a personal trainer. By the time he graduated college, he had worked almost every part of the club.
Although, his years of experience didn’t immediately drive him further into the industry, Malkovich had dreamed of becoming an attorney. He desired to attend law school in Washington D.C. and made the move east right after college. “I wanted to get ready for law school and I wanted to get into politics, so I went to work on Capitol Hill,” he explained. “I started taking classes at American University and spent a couple of years working for Sen. McCain.”
Working for McCain regularly brought Malkovich home to Arizona. It was at that time that he was staying in regular contact with the founder of Mountainside Fitness Tom Hatton. “He and I talked off and on about me eventually coming back and working for Mountainside, which at the time I was pretty set on going to law school,” Malkovich said.
The reason Malkovich avoided the industry was because he hadn’t seen the ability for growth. He said that since returning to the industry, he had seen a positive change in the opportunities provided by the fitness industry.
Malkovich said the industry is still young and just finding a way to promote responsible people from within. “Now, I can see a future in this industry,” he explained.
During college Malkovich had interned for several large law firms in Phoenix. It was there that he got his first glimpse at the profession he was considering. “Working on Capitol Hill I worked pretty close with Sen. McCain’s attorneys, and I found so many unhappy ones,” he explained. “I decided that I wanted the knowledge of going to law school, but I didn’t want to be a practicing attorney.”
Malkovich discovered that he didn’t desire the glamour of Capitol Hill, or of being an attorney — it was being around people that were intelligent and could push him that he desired the most. He wanted experience and the ability to make major decisions that could positively impact a corporation — he didn’t think he could do that working for a law firm.
As he arrived back in Arizona after his contract with the Senate expired, Malkovich found himself with a new opportunity.
“What eventually brought me back was the opportunity and the belief and the drive of our company,” Malkovich explained. “We were looking to embark on a pretty aggressive growth plan. We were going to open two locations in a year. Looking back, it was a pretty conservative growth plan, considering we’ve recently opened five clubs over a 12-month period.”
Malkovich returned to Mountainside, but not on the ground floor. “I came back to Mountainside, not on the operations side, but as a minority partner on a new club venture up in north Scottsdale.
The opportunity opened up a new world for Malkovich — one that couldn’t be had as an attorney.
Life as a Minority Partner and Pursuing Excellence
As a minority partner, Malkovich and his team could develop a great idea and execute immediately. He didn’t have to worry about passing an idea around a large table of venture Capitalists or a board of directors.
“We started a personal training company called Core Concepts, that was my baby for about three years,” he explained. “Today we do more training per capita than any of our competitors in Arizona. After some success with Core Concepts I took over sales for Mountainside Fitness as well. In March of 2008 I was named CEO of Mountainside.”
As CEO, Malkovich felt he had power over the success of a great club. The club started reeling in opportunities as corporate sponsors of franchises like the Phoenix Suns, Phoenix Coyotes and the Arizona Diamondbacks. Mountainside also launched three clubs in Colorado that created corporate sponsorships with the Denver Nuggets and Denver Broncos.
“The Phoenix Suns were the first professional sports franchise that we partnered with as a sponsorship,” Malkovich said. “The Phoenix Suns and the Arizona Diamondbacks are our two largest legitimate sponsorship agreements, but we have worked with a lot of other sports franchises.
“Our thought process in going into this was to garner more credibility in our brand. There wasn’t anyone else in our market that was doing that. They were still going around and dropping lead boxes at Chinese restaurants. We didn’t look at it as traffic drivers, we sent a message to our competitors and our potential members that we are here to play with the big boys.”
Although, Mountainside Fitness does come on strong, they still run their company as if they are a small up-and-coming fitness facility. “We are a $35 million company today, but we still have that all-entrepreneurial spirit that allows us to adapt quickly to changes in the market place,” Malkovich explained. “We have great people in our company that we put in positions to make decisions without having to call different presidents to get an answer or an OK.”
When growing, Mountainside has a desire to conquer the Arizona market. “We don’t want to be outside of a 90 minute plane ride,” Malkovich said. Even though they put capable people together to work in their clubs, they still want to be able to drop in and help on a moments notice.
“We’ve remained, in mentality, that small company that has continued to fight to be the best in our market,” he explained. “We always say, never become complacent.”
The Value of Relationships
Some clubs spend time attempting to discover who they are as opposed to discovering whom they serve. Mountainside has done a great job of focusing on the people around their clubs and building relationships.
Mountainside always is attempting to build a deeper connection with its members. “We’ve spent a lot of time trying to figure out who our customer is away from the general demographics,” Malkovich said. “Once upon a time, people lived within a five-mile radius of the club. Now, with Arizona weather and traffic, everything is based on drive time — it has to be within a nine-minute drive time.
“We look at lifestyle patterns, what magazines they read, where they shop. They’re distinct people that if you look at their income and where they live, you won’t get a true picture of your customer.”
Mountainside has devoted a lot of effort to be part of the local community. “We listen to our customers and we have an open-door policy,” Malkovich continued. “It’s through them that we make our contributions to the community.”
Malkovich said that customers could come in and ask for some help to raise money for their kids Little League, or their football program. A local school may need sponsorship for uniforms. It’s all based on the customer’s request that Mountainside gives back to its community.
Mountainside’s ability to develop strong relationships even helped them create a whole new club feel. After speaking with their members, Mountainside discovered that many of the members felt uneasy about attending Group X classes because they didn’t know how they operated.
Mountainside has devised a plan to move some of their Group X activity out into the center of the club. They still have at least three rooms for Group X in each club, but they are working on launching “a new initiative to attract non-traditional group fitness members,” Malkovich explained. “That initiative includes hosting group classes on the main workout floor, such as TRX and boot camp, and adding a boxing ring onto the main workout floor.”
Malkovich had started using boxing in his own morning workouts and discovered energy in the morning he never had. It is his hope that members will embrace the new opportunity and help diversify their workout plans.
“People can be on a treadmill and watch their peers in a group class or boxing ring,” Malkovich explained. “It is a lot easier for someone to get involved when they don’t have to enter a class full of people they’ve never met. They can just walk up and start exercising.”
Although, this concept may not work well for all fitness clubs, Mountainside has seen insurmountable growth and delivers more than 80 group classes a week.
Mountainside’s value of relationships continued into their back office with the club-vendor relationship. Malkovich explained how it could be difficult to find a vendor that desired a quality relationship with the club. For Mountainside, Precor, Paramount, Free Motion, Star Trac and Nautilus have given them that relationship.
“They are all going to say they build a better treadmill and elliptical,” Malkovich said. “They all build the same treadmill, the same bench. What keeps our relationship going is they really care about our business.
We ask ourselves if they are only calling on us when we are ready to open a new club, or are they checking in on us on a regular basis — how they handle the install? The companies we work with today, we stayed with them for so long because they are loyal and have looked after us, so we stay loyal to them.”
Pushing Yourself to the Limits
Malkovich always has been one to strive for excellence. His motivation is one of the reasons he went to work in Washington and one of the reasons he desired to be an attorney at a young age.
His desire for knowledge made him look at law school, but his need for greater control over a project pushed him back to his roots, where everything began at Mountainside Fitness.
Over the years, Malkovich has discovered that knowledge could be obtained through diverse sectors. He’s spent time traveling, both with friends and alone. He’s enjoyed immersing himself into cultures and learning from people. Also, he began pursuing a graduate degree from Harvard Business School, an institution that allowed him to be surrounded by individuals that demanded excellence.
It’s this desire for greatness in life that has made him successful at a young age. He keeps an open mind and pays attention to changes around him. He knows that his members are his livelihood and through them he can discover how to develop the greatest gym in Arizona. -CS