The CEO of a Kazakhstani startup told Spot why he chose the field of fitness, how he promoted the project without funding, and why the team does not measure its payback. Murat also shared the details of 1Fit's entry into the Uzbek market.

1Fit is a Kazakhstani startup founded in 2018. Today, the app is successfully operating in five countries: Kazakhstan, Uzbekistan, Azerbaijan, Malaysia and Mexico.

1Fit is a service that helps people find and visit different gyms and studios with the same subscription. In fact, it is a platform for those who want to play sports, but do not want to be limited to one place or type of activity.

"This is convenient because different sports are collected in one subscription: from boxing and swimming to dancing and yoga. You can combine any activity and sign up for training in any part of the city without being tied to one location," says Murat Alikhanov, CEO of 1Fit.

The service started operating in Uzbekistan in the summer of 2022. Today, the company cooperates with 438 gyms and studios.

In an interview with SpotMurat Alikhanov told how the idea of the startup came about, how he promoted the project without financing, how much they are currently investing in advertising and why the service does not work with luxury halls.

Previously, we were a Codebasters company and were developing applications and websites for others. At some point, our large customer, who occupied 80% of our programmers, broke off cooperation, he simply disappeared. The profit from the contract with the customers was supposed to provide employees with salaries for several months in advance. Then we had free hands to occupy. We thought it would be great to have a project teaching programming to younger professionals. We could also hone our product development skills — when we don't just write non-code, but develop a full-fledged product.

It is a well-known fact that original IT products rarely appear in Central Asia. We usually notice something interesting abroad, get inspired, and try to implement something similar. That's exactly how it was with the 1Fit project. At that moment, I was looking for ideas that would be both fascinating to me and easy to implement technically. I wanted to create something understandable that doesn't require complex solutions.

I chose the field of fitness because it was close to me. At that time, I recovered, stopped actively exercising and ate a lot. Considering that I can't practice one sport for a long time, I found it interesting to combine different sports with one subscription. The implementation seemed quite simple, so my team and I decided to create this project. In addition, the concept of single subscriptions has already been popular in Russia, America, Europe, and Southeast Asia.

The team supported this idea. To explore the needs of potential users more deeply, we conducted interviews with people, literally stopping them in the street. We have prepared a list of questions to understand how important it is to be able to combine different types of training and visit different locations. We assumed it was convenient, but it was important for us to hear people's opinions.

After sketching the user interface, we did everything quickly enough. It took two months from writing the first code to developing the mobile app and conducting closed testing. We invested all the money we earned in Codebasters — about $500 thousand.

In 2021, the TMT Investments fund invested the same amount in us. As part of a new investment round in 2023, they repeated their investment. An additional $100,000 was allocated to the project by the Estonian Capital Mill fund, and just over $400,000 came from a syndicate of Kazakhstani digital nomads, specialists working in the world's leading IT companies.

After about a year, we stopped financing the project, as it began to earn a sufficient amount of money, which we simply reinvested. A total of $1.7 million was invested in the project.

After creating the platform, I went to gyms and studios. It is very difficult to persuade an existing business to cooperate without having any reputation and trust. In addition, at that time discount services were popular in Kazakhstan, with which we were confused. We could spend hours explaining who we were and what we were offering. It was lucky when the owner was there. As a result, we started with 20 halls and studios.

On the very first day of the commercial launch, we were able to sell subscriptions, which was quite expected. Among the participants of our focus group, which numbered more than 100 people, some decided to subscribe. To create a sense of activity for our partners and to show that the halls are visited, we asked the office staff to go to training sessions.

In the beginning, due to lack of budget, we tried to move forward using non-standard methods. I won't say that we've become more modest now, but then our marketing was really unusual. We constantly analyzed the results and searched for the most effective ways of communication that would cost the least. We came to the conclusion that the best tool is the one that evokes strong emotions, is memorable for a long time, and encourages people to share information on their own.

Back then, I adhered to the principle that every 1Fit publication should have a resonance. We could call people fat. Perhaps it wasn't perceived as offensive, because I wrote — being fat too (laughs). It's like in America: the N-word, only representatives of N can speak.

I remember we even brought in "Irina Kairatovna" for advertising. Then the video with the band cost $500. I was acquainted with one of the band members and we went to a meeting. To this day, I am grateful to them for this, we literally spent money on renting a camera and lenses for it. We were trying to be creative, looking for ways to get people to know about us. Later, when we started having money, I personally started marketing companies.

Sometimes we hear that many people are tired of our advertising, so in Kazakhstan we decided to conduct an experiment: we cut the marketing budget in half and noticed that revenue had dropped slightly. This is due to the high saturation of the market. Therefore, we are trying to optimize expenses in order to find a balance between income and the opportunity to expand. Currently, 1Fit's advertising contributions amount to about $800,000 per month, and there are 108,000 customers worldwide.

At the moment, the company's turnover is $40 million. The most interesting thing is that we have never measured payback, as growth is our priority. Startup development is not about payback or making a profit, but about creating value and scaling. In this model, investors invest in the company, hoping that in a couple of years their share will grow several times. Then, with the arrival of new investors, they can sell their share at a profit.

Startups work differently than a classic business. For example, if you sell meat, you should consider payback and profit from day one: build a farm, make capital investments and return investments. In the case of a startup, this is a venture model, where the main focus is on developing and increasing the value of the company, rather than on instant payback.

Our first international launch was in St. Petersburg, where everything was going well. But the war happened and the decision to exit the Russian market was made on the day of the outbreak of hostilities in Ukraine. First of all, it was a matter of conscience: we could not accept that the taxes paid by our company supported military aggression. We were also shocked that people who did not share anti-war views worked in the Russian office, and it is important for me that the team share common values. In addition, the continuation of work in Russia faced serious reputational risks.

After returning home, we still have a desire to launch in other countries. Here we recall Uzbekistan, our neighbors. Since we have a very similar culture, we can find mutual friends and consult.

A month later, my partner and I flew to Tashkent, met with local entrepreneurs, and began to learn how the local market works. Tashkent seemed promising to us and we decided to try it. With a difference of one month, we launched in Tashkent and Bishkek.

The launch was quite fast and lively. It took us two months to gather partners and several tens of thousands of dollars to launch. Considering that we have existed in Kazakhstan for three years, we already had experience and people who know how to negotiate with the owners of the halls. In addition, the cultural and linguistic proximity to Kazakhstan played into our hands: the Uzbek language is quite similar, which facilitated communication, negotiation and the process of persuasion. This made it easier for us to organize our work.

We also decided to hire local staff as an experiment. Currently, 95 people work in the Tashkent office. All interviews with candidates are conducted personally by the founders. We believe it is important that the values of employees coincide with the values of the company. This creates an atmosphere of trust where everyone can be themselves even in conflict situations.

Conflicts are normal, they are inevitable. However, it is almost impossible to come to an agreement without common values. For example, if a person values justice, and I prefer to act in my own interests, then we will not find a common language. In such a situation, I can endlessly search for excuses to avoid a fair decision.

At the start, we already had 150 halls and studios. We used the same concept as in Kazakhstan, without changes. It is important for us to maintain a unified approach that works successfully in Kazakhstan, Uzbekistan, Mexico and Malaysia. This is a standardized process that has proven its effectiveness.

As for working with halls, conditionally in the premium segment, there are practically no exceptions. If we cooperate with halls like Befit, it means that they comply with our pricing policy or have agreed to our terms. However, there are no other premium lounges in our network, only economy or something close to the business segment. I had an attempt to negotiate with another premium class gym chain, but it was unsuccessful. When I contacted their co-owner, I was very rudely turned around. This experience has only confirmed my understanding of who we are ready to cooperate with and who we are not.

The Uzbek market has given us a boost in self-confidence. He showed that we can "take a shot" at international markets, because Uzbekistan became the first market where we earned $1 million per month in sales. After six months of working in Tashkent, the startup began to pay for itself operationally and cover expenses: salaries, office rent and marketing. We invest $100,000 in marketing alone, and we have a team of three people who produce videos: a creative, a videographer, and a motion employee.

Uzbekistan generates 12% of the total profit. We used the money we earned here for launches in Malaysia and Mexico. At least our marketing office is located in Uzbekistan.

For us, one of the key differences in the market is the use of installments. We are actively working with services such as Uzum Nasiya, Alif and Paylater. However, Uzbekistan's legislation in this area differs from Kazakhstan's. For example, if a person takes out a loan or an installment plan and stops paying, his debt cannot be sold to collectors. There is such an opportunity in Kazakhstan, which reduces the risks for banks and allows them to set lower interest rates. In Uzbekistan, on the contrary, the risks are higher, so the stakes and sanctions are much higher. This increases our costs for cooperation with services that enable customers to purchase subscriptions in installments.

Market segmentation is also different. The economy segment in Kazakhstan seems to be more developed and capacious than in Russia. Tashkent. Gyms and studios are much more expensive here than in Kazakhstan. Seasonal differences are also noticeable: in Uzbekistan, water sports or water parks are popular in summer, probably due to the heat. In Kazakhstan, on the contrary, there is a decline in activity during the summer period, as many people go abroad. These features are taken into account in our work in every market.

If we consider the development of sports culture and a healthy lifestyle, it can be noted that in Kazakhstan and Uzbekistan, interest in playing sports and buying season tickets is significantly lower than in Malaysia or Mexico, reflecting differences in motivation and entrenchment of sports habits. We tested the launch in the regions, and to be honest, we didn't succeed. Fitness is there, as if it's still in its infancy.

We often receive feedback from our partners that we are changing the market by attracting new customers. One of our key achievements is that 70% of the customers who purchase our season tickets are starting to play sports for the first time. This, in my opinion, is the merit of our marketing. For example, imagine a girl who has never played sports, but decided to start. Considering that our ads are everywhere and constantly in plain sight, it's not hard to guess that she will choose us for her first training sessions.

Over time, thanks to our work, the owners of halls or studios open new locations, as we see the statistics of visits by location. We advise them for free, this is part of our policy, which we have been following for six years. Throughout the entire existence of the company, we have never taken money from our partners — on the contrary, we pay them. There are different ways to make money from partners, for example, to promote them through the app for a fee or to offer other services, but we basically do not do this. This approach was announced at the very beginning and remains unchanged to this day.

Payment to the halls is made once a month. For each visit to the studio or hall, a certain amount is accrued for one subscription, which accumulates during the month and is paid at the end of the reporting period. All conditions, including the bid, are agreed in advance with the owners of the halls.

In addition to Kazakhstan and Uzbekistan, 1Fit also operates in the markets of Malaysia, Azerbaijan and Mexico. Previously, we tried to enter Dubai and London, but after some time after the launch, we had to leave these markets.

After London, we revised our approach and began to choose the countries for exit more clearly. Now we have strict criteria. For example, now we are looking at macroeconomics and demography — it is important for us that the economy grows and the population increases. We also select countries where you can roll out a model that already works well in Central Asia.

On September 3, 2023, we launched in Baku. Azerbaijan was chosen because its market suits us well. In general, the experience in Tashkent inspired us to go to other countries. Baku is a big city with more than 2 million people, and there are many young and solvent people among them. We also thought about Tbilisi, but we refused, because there is an aging population there, and it is important for us, and our target audience is young people.

To prepare for the launch in It took us two months to get there. During this time, we have studied the market and connected 50 fitness halls. We already have 125 halls in our partnership.

Now about Malaysia. We are here for several reasons. Firstly, Malaysia is somewhat similar to Kazakhstan. For example, the prices for sports are about the same, and payments to partners are also similar. But the main difference is that in large cities, about 50% of the population can be attributed to the middle class. This is much more than ours, and, consequently, more of a paying audience.

Secondly, Malaysia is convenient in terms of costs and communication. There are a lot of English-speaking people here, which makes the job easier. For example, in Thailand, which we also considered as a launching pad in Southeast Asia, this is more difficult.

We launched in Malaysia in February, and growth was slow at first. We started with 13 halls, then increased their number to 50, and only then did customers begin to actively come. We already have 477 halls and studios. The financial results are also encouraging: if in the first month the revenue was only $121, then in October it was already $167 thousand.

Mexico. This country is my area of responsibility, and I've been living here for a year now. We entered the market in August, and in the first month of operation, revenue exceeded $115 thousand. Interestingly, unlike Kazakhstan, where we started from Almaty, in Mexico we started not from the capital, but from the second largest city, Guadalajara. This helped us quickly test how much our product is in demand.

Launching in In Mexico, he became the most successful in the company's history. Today, we have 608 halls in our partnership, and we continue to grow actively.

Our goal is to earn money to scale in other countries, because we want to grow and one day become the first unicorn from Central Asia. We are not talking about companies like Uzum or Kaspi, which call themselves startups, but in fact they are not. We are a startup created by ordinary people in a small office, and it is important for us to take our product beyond the borders of Central Asia.

We currently have successful projects in Malaysia and Mexico. This year, we plan to continue our development in Southeast Asia and Latin America.