In 1995 Greg Glassman was 38 and muddling along as a personal trainer in Santa Cruz, Calif. He owned neither a home nor a car. He and his young son were between residences, staying with a friend's family. He hardly looked like a man about to upend a multibillion-dollar industry. He was.
The regimen he built for clients in a local gym drew a passionate following. The company he founded in 2000, CrossFit, would grow to thousands of affiliates. Calum Marsh tells the story in "The Glass Box." Step into almost any gym today, he writes, and you'll see kettlebells, medicine balls, rowing machines and buckets of chalk, all of which CrossFit helped normalize. Every boot camp and high-intensity interval class is its legacy.
The anti-marketer
Glassman's insight was to mix hard, basic exercises into one daily program that changed every day. A barbell clean, then a medicine ball thrown at the ceiling, then jump rope, then lunges in the parking lot. He wanted gyms spartan, no soft lights or sound systems, so people called them boxes. He hated advertising and charged gyms only a small fee to use the name. Growth came by word of mouth, and from soldiers. By the mid-2000s Army trainers at Fort Bragg and the Special Operations Command had adopted it. He also had a truculent streak and spent recklessly. In June 2020 an ill-advised social-media post set off a revolt. Hundreds of gyms moved to drop the affiliation. He resigned and sold the company for $200 million, about $249 million today.
CrossFit peaked in 2018 with more than 15,000 affiliated locations in over 100 countries. Today there are fewer than 10,000. Marsh says the biggest reason may be the copycat effect. Gyms and health clubs everywhere became more like CrossFit. If your next workout has more kettlebells than treadmills, he writes, you'll know why.
Our read
This is an Investments and Risk story, module IN04, about moats. CrossFit proved its idea so well that everyone adopted it, and the proof didn't belong to anyone. The founder won the argument and lost the market. Investors see this constantly. The company that invents a category rarely owns it twenty years later. Watch what's happening right now in AI. The data-center boom is real, and this week the market punished the suppliers anyway, because a true idea isn't the same thing as a protected profit.
Here's the check for your own portfolio this week. Pick your largest single stock, the one you'd defend at dinner. Write down, in one sentence, what stops a rival from copying it. A patent, a network of users, a cost nobody can match, a brand people pay extra for. If your sentence is "they were first" or "everyone's doing it," that's a CrossFit answer. It may still be a fine company. It's just a fragile reason. Our model books hold their positions at weight this week, apart from small housekeeping moves. If you'd like a second opinion on that one sentence, bring it to a fifteen-minute call.