Decoding Digital

Vertical Ecosystems and Disrupting the Wellness Industry with Josh McCarter

By Ideas @ AppDirect / September 28, 2021

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Tech hasn’t just disrupted the wellness space, it’s revolutionized it.

Even before the pandemic drove many health and fitness businesses online, APIs have enabled organizations within the wellness industry to morph into thriving digital businesses.

One solution that’s been instrumental to many is Mindbody. The leading technology platform powers thousands of wellness businesses, including Orangetheory (OTF), F45, and more, with the aim of “connecting the world to wellness.”

Mindbody CEO, Josh McCarter, joins Daniel Saks to share how vertical ecosystems can revolutionize industries, and gives his insights into the relationship and development of wellness and tech. Josh founded Booker Software, the largest B2B SaaS marketing and management platform serving spa and salon sectors, in 2010 and has over 10 years of experience at the forefront of digital transformation in the wellness industry.

Hit play to hear the podcast episode or read on to find out more.

Why vertical ecosystems bring big opportunities

At the heart of Mindbody is a drive to help people live happier, healthier lives. But how does this desire digitally transform an industry?

Mindbody launched as a B2B software platform in the early 2000s. It was a pioneering technology, particularly because it was focused on serving several specific verticals: fitness, integrated health, spa, and salon. In the years since, it’s helped thousands of wellness businesses worldwide grow and market their businesses by connecting them with consumers.

Today, Mindbody boasts the largest and most diverse range of clients in the industry. It serves businesses of all sizes within the niche, from your small “mom and pop” startup to the industry giants like F45 and OTF. It’s also proud to host more locations than most of its competitors combined.

But what happens when your verticals—and the API you’ve built to serve them—need to pivot fast or face total shutdown?

The impact of COVID and why the future is hybrid

The big headline from COVID, says Josh, is that virtual experiences are more necessary than ever. However, that doesn’t necessarily mean compromising on authenticity.

He believes that the wellness industry is looking at a “hybrid future,” where Mindbody can help their clients provide local and authentic experiences to their users both in-person and virtually.

Mindbody pivoted a development team early on during the pandemic to create a “virtual wellness platform.” This enabled customers to provide live stream or on-demand content that was more customized and bespoke to their business compared to using software like Zoom or Instagram Live. It also provided membership integration and all the familiar aspects of online booking for in-person classes for virtual ones.

Josh says that hundreds of thousands of businesses and users adopted the new technology using the platform to access wellness content from their favorite suppliers while their physical doors were closed.

Mindbody’s research shows that even after locations open back up again, many people are still hoping to supplement their in-person fitness classes, for example, with virtual classes. Using customer research to inform infrastructure development has helped Mindbody be a key player in the digital transformation of the wellness industry since its conception.

Evolving a B2B technology platform into a comprehensive SaaS solution

Paying attention to the changing needs of the market has always been what’s driven innovation for Mindbody. Over time, the core software has grown from a scheduling and CRM platform to incorporate sales and payments, and continued adapting as the desires of their clients have changed.

One of the big pain points Mindbody saw was that their clients needed to capture customers' attention to fill classes. So they responded by designing a marketplace that allows “wellness seekers” to view classes and appointments across the Mindbody portfolio worldwide.

With this development and payment options in place, Mindbody diversifies their offering by partnering with companies like LastPass, which can use the inventory through its API. This is a big step towards Josh’s goal of making Mindbody a “household name for these local, authentic experiences” and powering partners, which allow clients to tap into customer demand.

“What we want is to make Mindbody a household name for these local, authentic wellness experiences. We want to be that marketplace that consumers come to for discovering and booking their wellness experiences. And then the businesses, which are running on our software platform, want to be connected too because they can tap into that consumer demand.”

Why the partner ecosystem is core to Mindbody’s evolution

Evolving a strong partner ecosystem is a core part of Mindbody. Josh references other SaaS platforms, suggesting that many start by developing a generic set of APIs that work for certain feature functions and then consider what they will and won’t continue building themselves.

In cases like these, companies get APIs into a place where they can extend the functionalities through a partner. But Josh says that the key to building successful partner relationships in this way is to open your ecosystem and extend feature functions that better serve customers.

“You kind of hope that if you build it, they will come. And that's really where you start out in the early days. But without having the APIs and having that capability, nobody's ever going to come. Nobody wants to partner with somebody that has a closed ecosystem and is really difficult to interface with.”

The solution for Mindbody was to extend their APIs into different feature areas. For example, a user exploring the schedule and pulling appointment information out is the beginning of a roadmap for future functionality.

A decade of maturing the tech stack

As one of the original vertical SaaS players, Mindbody’s tech stack has gone through innovations, iterations, and acquisitions to get to where it is today. Josh notes that currently, Mindbody uses a “room by room” approach, where they use each tech stack in conjunction with one another, a combination of bleeding edge, legacy, and acquired tech.

Mainly, Mindbody is focused on developing the API for its targeted SMB segment with an initiative aptly named “strengthen the core.” Josh describes this as strengthening “the core of your software, as well as the business.”

“We’re looking at those features that people use 90 percent of the time, and making sure that those experiences are new, they're modern, they're sleek, they're easy to onboard, they're easy to train people on. What we see, especially in the SMB segment, is that most of these customers look almost like consumer users, right? They want it to be as simple as using an iPhone. So we have to adapt our technology to where the current users are.”

With this in mind and a movement towards a better-integrated partner system happening, Josh says that Mindbody is on a transformational journey to replace the legacy aspects of the software with new technology from the back-end through to the front.

While Mindbody continues to play a core and influential part in the digital transformation of the wellness industry, it doesn’t happen without digital innovation of its own, something Josh and the Mindbody team are passionate about continuing.

To find out more about opening up a closed software system, monetization strategies for API partners, and the innovations still to come in the fitness industry, tune into the full conversation with Josh on the Decoding Digital podcast.

Check out more episodes of the Decoding Digital podcast series for more insights from inspirational thought leaders and digital innovators. You can listen to the podcast on your favorite podcast app, including Apple Podcasts and Spotify.