#158 Avelo: The World’s First Smart Running Shoe

Royi: My name's Royi Metser and I live in Miami, Florida. Who am I? A husband, recently I'm an entrepreneur. I'm a runner. 

I’m Josh Muccio and this is The Pitch. Where startup founders raise millions and listeners can invest. Today on the show, Royi Metser is here pitching the world’s first smart running shoe. Why make a smart shoe you ask? In a minute in a minute! We’ll let the VCs ask that question. First, why start a company in the first place?

Royi: My parents were immigrants to the US And my dad, I I watched him grow and build companies for the first 20 years of my life. Just watching him, I didn't even know why, but it was something that I was attracted to and something that I knew that one day I would do I was waking up in the morning and all I could think about was this and so I had to. I didn't have a choice. 

The Pitch for Avelo is coming up, after this. And whether you’re watching or listening on YouTube, Patreon or your favorite podcast player - thanks so much for subscribing and don’t forget to turn on notifications.

[break]

Welcome back to The Pitch for Avelo. Let’s meet the investors

Elizabeth Yin with Hustle Fund

You're an A plus founder.

Charles Hudson with Precursor Ventures

I feel like I’m the lone dissenter

Ben Zises with SuperAngel

I’m not seeing anything else super revolutionary here

And Kate McAndrew with Baukunst

For those who can’t see, my jaw is currently on the floor

[clap]

[hellos]

Charles: Hey. Charles. Nice to meet you. 

Royi: Good to meet you. 

Elizabeth: Elizabeth 

Royi: Royi. 

Elizabeth: Nice to meet you. 

Royi: Good to meet you. 

Kate: Hey, I'm Kate. 

Royi: I'm Royi. Good to meet you, Kate. 

Ben: Ben. 

Royi: Ben. I'm Royi. Good to meet you. 

[pause]

Royi: Thanks for having me. Excited to be here. 

Elizabeth: Yeah. 

Royi: So my name's Royi, and I'm the founder and CEO of Avelo. Now, I want to take you back to 2021. It's a year into COVID, and for the first time in my life, I was overweight and unhealthy. I got kicked in the ass by the result of a blood test. I discovered that I had sky high cholesterol, and a biological age that was 10 years older than my real age. Three days later, I was signed up for my first marathon. And that's the day that I became obsessed with running. Fast forward six months and I crossed the finish line and it turns out running is great for you. My markers improved and my health was back on track. Now I'm a pretty competitive person, so I was hungry to get better at running, but I felt lost and I kept getting injured and it turns out I wasn't alone. Studies show that up to 79 percent of runners are injured every single year. Now, at the time, I was leading business development for health technology company Inside Tracker, where our software analyzed hundreds of biomarkers across blood, DNA, and wearables to help our users live longer, healthier lives. And so naturally I was fascinated by what else I could measure about my body to improve my running. But the existing products, pods that you attach to your shoelaces or smart insoles, they felt clunky and cumbersome. And that's when a light bulb went off. What if we package this technology in a cool and frictionless product, creating a new category of wearables that runners would actually be excited to use? I got completely obsessed with this vision and decided to quit my job and pour everything into building the world's first smart running shoe. Got a couple of them here. Our smart running shoes measure impact and running form, and they connect to an app that coaches each runner to reduce their risk of injury, improve their performance and achieve their running goals. It's a coach on your feet. And we already have a prototype that's getting great reviews from 10 runners who've logged over a thousand miles in them. Now, I want you each to think about your phones, your watches, rings, homes, and cars. They've all become smart to make our lives better. So why are shoes still dumb? We're raising three million dollars to go from prototype to production, launch our product and sell our first 5000 pairs, and our vision is to create and lead the smart footwear category, and I hope that you'll join us. 

Kate: Can we see the shoes? 

Royi: Of course. 

Kate: They're really lightweight. They're like surprisingly light. 

Ben: Tell us, like, where in the shoe the technology lies. 

Royi: So, you see the orange sock liner that's in there? 

Ben: Mm hmm. 

Royi: If you pull that out, you'll see there's a small cavity under the arch. Inside of there you'll actually see there's a sensor in there. So it sits right under the arch of the foot, which research has shown that's the best location for it. 

Elizabeth: Okay. Is there a reason you decided to make a whole shoe as opposed to an insert? 

Royi: Yeah. We think that great wearable technology is frictionless. One of the beautiful things about running is how simple it is. Really, all you need to run is a pair of shoes. And the second you start adding gadgets and accessories, like pods you put on your laces and smart insoles, you're adding complexity. You know, you have to set them up, you have to charge them, you have to move them between shoes, and all of that adds friction. If you think about how many runners use a smartwatch to get heart rate tracking, almost every runner does that. Almost nobody's using a chest strap, even though it might be a little more accurate. And that's because the chest strap is clunky and the watch is simple. And we were already wearing a watch before they became smart. With this product, all you have to do is lace up your shoes and go running just like you did before. There is a second reason, and I actually think it's pretty important, and it's that shoes are cool. It's the number one piece of equipment for every runner. It's what we talk about with our friends. It's what we spend the most money on. It's obviously a highly visible product. And so we think we can build a really exciting and aspirational brand around the first of its kind smart running shoe in a way that you just can't around an insole that's hidden inside of your shoes, or a gadget that's attached to your laces. So we think that's really important. Now, there's no question, this is the harder road, but we've got the team to do it. Our footwear team has between them over a hundred years of experience making footwear and not for small brands. I'm talking about for Nike and Under Armour and Columbia, right? And second of all, I feel we've really derisked it because we have a prototype and runners are telling us that they love it. So I think the hard road is where the billion-dollar opportunity is.

Charles: I run a fair amount and my experience has been most runners are particular about the shoe brand and they've put some level of thought into - whether it's stability, fit, foot issues. Like, how do you think about getting people to break their habit of maybe, maybe they're a Brooks person or maybe they're whatever their brand, Hoka, whatever their brand of choice might be, those tend to be sticky. How do you think about breaking through with a new brand? 

Royi: I think it's definitely true for a lot of runners. There's no question about that. I actually think it's changing though. I really do. Because in the last 15 years, there's not one, but two companies that have entered the running market and had not just modest success, but breakout success. Those two companies are On Running and Hoka. Both were founded around 2009. They started small, but they had a unique story and a unique value proposition. And last year, both of them sold $2 billion in revenue. So there's a recent proof that runners are open to trying new brands. And those companies have stolen market share from giants like Nike and been successful doing it. So there’s no doubt, Charles, that some runners are not going to be willing to try our shoe and that's okay. We don't have to capture the entire market on day one. We need enough people to try it. And we think we can get enough to get a really strong beachhead and build from there.

Elizabeth: I agree. I mean, I think the, the shoe market is huge. I mean, we know other upstarts who have done that. And I would say that actually it's pretty fluid in that, I don't know, most of the people I know who have Hoka shoes actually are not runners. So. 

Royi: They've built a lifestyle brand really. I mean they started in running. They had a very specific focus, which was ultra runners and trail runners and they did a great job of really zigging when the industry was zagging. So at the time when they were founded, shoes were going minimalist, less cushion. And they came out with this, honestly, it kind of looked like a clown shoe at the time and it was striking in, in a good way because it was different. But you know, they've done a great job of expanding beyond running and building a shoe that people are wearing every day. 

Elizabeth: So along those lines, I was actually going to ask you about the, the minimalist versus what looks like you have here. If you go down that rabbit hole of like, all those born to run kinds of books, they all basically say your injuries are caused because you have too much shoe, you have too much cushion.

Royi: Yeah. 

Elizabeth: Do you believe that? Do you not believe that? 

Royi: Yeah, I mean, listen, what I believe is less relevant to what the science shows. And the market moved in that direction in 2009 after Born to Run was published, and everyone thought that, hey, you run barefoot, you run in minimalist shoes, and just as many people got hurt in those shoes as they did before. And so the thing about running related injury and the rate of injury, it hasn't changed for 50 years. It hasn't improved. It doesn't matter what shoes we're running in. And so ultimately what we've learned, the shoe can have a small impact, the materials of the shoe and the way that it cushions the impact, but ultimately the biggest determinant of running related injury is training too much. 

Kate: Can you say more about the shoe's ability or what the features are that makes the shoe be able to tell me, Kate, when I should slow down. If Kate and Charles are going on runs together, which will never happen because I hate running, but let's just imagine that Charles and I are running together and, like, I'm close to getting an injury but Charles isn't, which is probably likely. So how does the shoe know that Kate should stop and Charles should keep going? 

Royi: There's a few things that we're measuring, a few buckets of insight. So the first bucket is what we call resiliency. And it starts by measuring impact. Every running step applies force on your body of up to five times your body weight. And that's going to damage your tissues, your muscles, tendons, ligaments, and bones. And ultimately, that's the root cause of running related injuries, that mechanical stress. And until now, there was not a good way for runners to measure that on every step. You'd have to go into a lab, and run on a very expensive piece of equipment, and that was the only option. And so we're making that measurement available on every single running step on every run, and we're using that and then feeding that into what we call our resiliency score, which is like a - if you're familiar with Whoop, they have a recovery score, or Oura, the ring, has a readiness score, right? So it's like that. It's a very simple measure out of 100 and it tells you: are you training at a safe level? And a lower score indicates that you're approaching or maybe even exceeding your body's capacity for training. And so that's going to allow runners to make smarter training decisions, but also allow us to provide really personalized recommendations to the individual on exactly how hard and how far they should run every day and every week to keep them in that safe zone.

Kate: Based on the force of my foot hitting the pavement?

Royi: Exactly.

Ben: That feels very powerful and valuable data. If you don't mind educating me, on the competitive landscape. 

Royi: Yeah, so the majority of similar products are gadgets. 

Elizabeth: Mm hmm 

Royi: Pods that you attach to your shoelaces or smart insoles. 

Elizabeth: Mm hmm. 

Royi: Those products, the technology is good, but they're, the form factor is not right for the consumer market. A lot of them are selling to the professional market, so practitioners, physical therapists, athletic trainers, sports teams, researchers. But again, for the consumer market, they really haven't taken off. And then, to make a smart running shoe, I mean, honestly, what we're doing is really hard. 

Ben: Tell us about that. How much have you invested? Both money, time, resources. 

Royi: It's really challenging, and I think that's why there's an opportunity to do it. And so you need, first of all, a team with skills and expertise and experience in three areas. I mean, each of these pieces could be its own business, right? You can make a shoe company, a hardware company, and a software company, and we're doing all three at the same time. So we've raised about $1.4 million so far. 

Ben: From who and what were those terms?

Royi: Mostly angels. We raised $516,000 in 2023, and then last year, we kicked off a pre seed and we raised $890,000 at a $12 million post money cap.

Ben: Mm hmm. 

Royi: I haven't taken a dime out of the business yet. I actually invested my own capital into the business and my co-founder has not been paid a salary yet. So we've gone a long way with a pretty small amount of capital given what we're building. And it's life or death for us. So, and I think people, the people who have invested in us early, they've been most impressed, honestly, by the team that we've put together. 

Elizabeth: Mm hmm. How do you know this team? Did you all work together before? 

Royi: No. When I started the company, I started reaching out to people who had built stuff in this area or, you know, for advice, advisory. And I got in touch with someone who actually built a pod, company that built a pod that was acquired and he became an advisor to me. And I got introduced to my co-founder, uh, through this advisor and I met with Peter, that's my co founder's name and at the time I thought he would want to be an advisor. The guy's been making shoes for 40 years. I mean, he's a legend in the footwear industry. And he told me that wasn't very interesting to him, that he wanted to get more involved. And that surprised me a little bit, but of course I was excited. And he told me, listen, man, this is unfinished business for me. Because I tried this at Nike 20 years ago. And we couldn't make it happen there. I just ran into too many roadblocks, but I believe that smart footwear is inevitable. It's going to happen, and I believe it's a startup that has to make it happen. And then from there, built - 

Elizabeth: What were the roadblocks? And that's very impressive that you were able to get, you know, marquee people. 

Kate: Absolutely. 

Royi: Thank you. Thank you. Yeah, I mean, honestly, the roadblocks is what we know about big companies. It's just that they, they really have a difficult time building stuff that's not in their core business. I mean, we've seen it time and time again. And so the footwear brands, they're just not going to build technology. They don't want to extend their business into technology. You're talking about hardware and software, and it's just not in their DNA. So we think it's a startup with a completely fresh perspective, that's organizing their team completely around making this happen. Because you have to make the footwear great, but you also have to make great technology. And both of those things have to work seamlessly together. So that's the player that's going to make it happen. 

Kate: I have a question around kind of market segment and size. The Hoka example is interesting. Like, yes, they started out as a running brand, but they became a lifestyle brand, right? A lot of the shoe market is in the lifestyle brand kind of part of the shoe market. And my curiosity is like, if the value proposition of the shoe is really about injury prevention, does it have crossover potential? Can it go from something that is truly for runners to being a lifestyle brand where most of the shoe market is? 

Hmm. Good question, Kate. We’ll be right back.

Kate: My curiosity is like, if the value proposition of the shoe is really about injury prevention, does it have crossover potential? Can it go from something that is truly for runners to being a lifestyle brand where most of the shoe market is? And secondarily, is it really for all runners? How many runners are there in the US and how many of them are running enough that injury is an issue? Like when I ran, I ran for 30 minutes and hated every minute of it. I'm not your market. um But let's be more clear: Kate doesn't like to run. Okay. We, we know that. So I'm trying to understand, do you think there's lifestyle brand potential here or not? And within the running segment, how much is really for yours to take, is this relevant for?

Royi: Yeah. So first of all, yes, I do think there's an opportunity to build a lifestyle brand. I think that's way into the future. I think there's plenty of people who would be excited about this to help them improve their performance and reduce their risk of injury. So I think we want to stay really focused and we think we can build from there. Now, in terms of the size of the market. So there's about 600 million people around the world who participate in the sport of running. There's about 150 million people globally who run at least once a week. There's about 60 million people in the US who participate in the sport. In 2022, there were 24 million people who completed a race. The London Marathon received 850 or so thousand applications for this year's race, and the previous record was 500,000. So it's a market that's absolutely exploding in popularity. And we think the target for this initially is going to be what we call the front runner. It's a competitive recreation runner. That doesn't mean that they want to beat the person next to them, although they might, but really, they want to beat themselves. They want to get better, and they have a running goal. And they're already wearing a wearable. They're probably signing up for races. So we think that's going to be the initial target, and there's millions of those people in the US alone. 

Elizabeth: How do you think about the business model?

Royi: Great question. So, we're going to figure out pricing. The shoe - we haven't figured out exactly what we're gonna price it at retail. It'll probably be around $250. Hopefully, we can get it a little bit below that. That's in the upper third of what running shoes cost, so we're in the zone. And then we're going to experiment with a few different options. On one end of the spectrum, we could go completely subscription. The way that you purchase running shoes is recurring, right? So every few months, if you're a regular runner, you're buying a new pair, so it's a consumable more than a wearable, right? So that's exciting for us. But we have to figure out the right way to price it and monetize it because we could charge just up front.

Elizabeth: Yep.

Royi: We could go the other way and go completely subscription. That's what Whoop has done. Or we could find a hybrid approach, which is what like the Oura Ring has done, where you pay a few hundred bucks for the ring, and then you pay six dollars a month. And they've done very well doing that. So we have to test those to figure out the right way to to monetize it. But we're confident that we'll find the approach that works for us as a business, and that our customers are willing to accept. 

Elizabeth: Yeah. What's kind of interesting actually about some of those inserts or whatever you want to call them is I actually think it's much more about the business model than the user experience. So as someone who has also trained for a marathon, but did not make it because I got injured, I have thought about those inserts before but somehow I'm just so averse to these subscription models. It's like for injury prevention, for anything preventative actually, you know, people have pause around, should I pay on a monthly basis to prevent something from happening?

Royi: Of course. 

Elizabeth: So, I, I think you're leaning towards maybe doing more upfront in the cost of the shoe. Like, people are willing to spend tons of money on the shoes, but as soon as you say, well, if we cut the price in half and charge you a subscription, they're like, no. 

Royi: Absolutely. 

Elizabeth: So, I think there's something to that because, you know, to your point, runners go through shoes all the time. Uh What are your COGS on that? 

Royi: We'll start around 60 percent gross margin. And obviously we're doing small volumes. That also depends on how we monetize the app, how much we can charge for the app and how many people are willing to pay for it over time. I see an opportunity to build a gross margin up above 70 percent over time as we get to greater volume. The greatest cost savings is gonna come on the hardware itself. When you buy those components at scale, you get pretty significant cost savings on them. 

Elizabeth: Sure. 

Ben: And then acquisition cost. How do you look at that?

Royi: Yeah, we're going to be very smart on that. I think there's a lot of cautionary tales over the last five, 10 years, especially in the consumer market. So I think, you know, go to market strategy. We think about it as a content led and community driven. Content led means we're going to create educational and aspirational content that positions our brand Avelo as the subject matter expert around the areas I've already described to you, running related injury, running efficiency, and running form. And there's a gap in this market. There's no trusted voice, trusted source for runners to go to to get this information. And we'll distribute that content on our own media properties, and then through partnerships with influencers and ambassadors. And so that's kind of the inbound marketing strategy that we're, um, planning. And community driven is - the running community is amazing and you, you have to be on the ground with them. You have to be. So we're going to go deep in a few markets, probably no more than three. Partner with the running clubs, the local running ambassadors, do good activations around the events in that city. So yeah, that's the approach.

Elizabeth: Very cool. I'm very impressed by you and the team that you've assembled, and this shoe looks great. I'm excited to become a customer. I think for us at Hustle Fund, the valuation just based on what you've raised before, and the capital requirements that you'll need going forward, I think are probably going to be too much for us as a small fund, but I'm excited to, to try this out. 

Royi: That's great. Is there a valuation you think would make sense for you or? 

Elizabeth: We typically go under 10. So like your last round was already quite high and so.

Royi: Yeah. 

Elizabeth: I, I didn't even try to negotiate here.

Royi: Yeah. So we raised 890,000 in the pre-seed. We allocated a million, so we've got a little over a hundred thousand dollars left in that SAFE. And I'd be open to raising on that SAFE if there was interest. 

Elizabeth: And you said that was at 12? 

Royi: 12 post money cap. Yeah.

Kate: I can't get over the fact that it's a shoe business. Sometimes it's just the scar tissue from your past comes back to haunt you, but, I have some worries about anything that can come in and out of fashion, as quickly as, as shoe brands can. And then I am worried about fast followers because my sense is that the technology isn't unique And I actually fully agree with you that the insoles won't get it done because people can't see them. So I do think that the signaling of 'this is the smart shoe' is, is totally critical. But I worry about the big shoe companies coming behind you and, and already having the distribution and the brand and it becoming really difficult for you to maintain that market share when you look three to five years out after you've been a wild success at launch. So I think those are the things that are holding me back from leaning forward from an investment perspective. 

Royi: Sure. 

Kate: I will say that the number one thing that matters is the people that you have, and you clearly have recruited top people. That's I think the number one sign of a strong CEO. That signal like makes me want to throw my negativity in the trash. But I think in this case, I'm gonna, I'm gonna hang back. But I do think that there's some really awesome stuff here. And the things that you're saying do resonate with me. So -

Royi: Thank you. 

Kate: - hopeful for you. 

Royi: Thank you. Yeah, I appreciate it. I think it's everything you're saying is fair. I think, we're going to be pretty strategically valuable to these big companies. I, I know how they operate. I think they're good at a lot of things. I, I just, I can't imagine them doing something so outside of their core business and doing it well. But, I hear what you're saying. It's not going to be easy, but I think that's what makes it exciting. 

Charles: I really liked your answers and your enthusiasm for the category. I've been thinking about something you said that, that I can't seem to shake… 

We’ll be right back.

Charles: I really liked your answers and your enthusiasm for the category. I've been thinking about something you said that, that I can't seem to shake, which is like, you know, like we've never had a smart shoe and I kept thinking why, and I think it's a consumer behavior mindset issue. I think it took a while to get people comfortable with the notion that you would buy something and continue to pay for it. I was an early investor in Fitbit and Fitbit really never figured that part of the business out. And I think that was because customers weren't ready to pay a couple hundred bucks for something like an Oura Ring or Whoop and continue to pay. That took an education campaign. And my concern is that that's why we don't have a smart shoe yet. And I think part of it is that I just worry that the consumer's not ready to think of a smart shoe as a - whether they're paying for the shoe, paying for the tech in the shoe, paying for access to the app. I just worry that consumers aren't ready to pay for that bundle yet and that that will be an uphill challenge. And I suspect at some point you'll figure that out. But that gives me too much pause to go forward now. But I have to say that you, as a fellow runner I think you really are in tune with the community and I wish you nothing but success.

Royi: I appreciate that. Thank you. 

Ben: So a few things for me. I really appreciate the go to market and the acquisition strategy around content and community. And I think, they're great in theory as we talk about them, but in practice, executing that is so hard And the cost of marketing a consumer brand, especially in this category are enormous and I don't know if I heard something that I feel was like just a superpower distribution strategy But otherwise, similar to everyone here, like rooting for you. What you've done so far is really impressive. I would put you in the top 1% of all the pitches that I get.

Royi: Appreciate that. 

Ben: Like you definitely are in that class of founder. And hopefully, see this in the market. It would be awesome to watch you succeed. 

Royi: Thank you. That's the plan. I appreciate all your time. Thank you. Thank you so much. So much.

[thank yous]

[applause] 

Josh: My question to you, Charles, is do you think that with Whoop kind of normalizing the subscription hardware model, why don't you think that that's prepared the consumer mindset for a business like this with shoes? 

Charles: I think shoes are different. I mean, part of me feels like as someone who does run a lot and has friends who run a lot, the simple thing I kept thinking is if you do a decent job of tracking your mileage, Strava will tell you, Hey, you are overdoing it. And as you've all pointed out, most running injuries are not these catastrophic things, they're simply compound overuse. I was just thinking, what happens when that person loses their shoes and gets the credit card notification that you got charged for your subscription shoes again that you stopped wearing. I just think like, if I told, if I went to someone who's not in this room and said, Would you pay to subscribe to a pair of shoes? I just don't think most people have wrapped their head around that concept. And what value would be attached to that? Now, maybe he could make the argument that like, Hey, there's all this technology in there. I just don't think that's going to be an easy sell. 

Elizabeth: He did say though, that he's considering not charging for it.

Charles: Not charging for it.

Josh: Yeah. 

Kate: I think he can't. 

Charles: Yeah. 

Kate: Yeah. I think you could try something freemium where like shoes with a free app and there's some premium features -

Ben: I totally agree.

Kate: - that people could maybe like, mapping your runs, but.

Elizabeth: Yeah, I would not pay a subscription. I mean, for the same reason I don't pay for inserts, I wouldn't pay for subscription shoes.

Charles: I, I think, and I think there've been a ton of IOT devices that went to market thinking we're going to get the consumer to pay a subscription. And it turned out that nope, so, which to me means you, then you, you then have to just eat the cost of the tech R&D that you did. And the only way to recapture that is to actually charge even more for the shoe.

Josh: Yeah. 

Charles: And you're at 250, like he's right, that's the high end of what most mass-market running shoes go for. 

Josh: Right. 

Charles: But also like On had Roger Federer. On had Roger Federer and On started as a tennis brand and moved into - I mean, like, so, I think all of the analogies in shoes fall apart. Generally upon closer inspection, you realize like, there's no theme. They're just a bunch of individual examples of things that have worked. And I just felt like - I worried that it was tech, too much technology to solve a problem that could be solved more simply. Because I think he's right. Like people get injured. Everyone who does a marathon, the first time I did one I got injured too. You just add too much mileage too soon, and you don't listen to your body, and don't back off because you're trying to stay on plan. You don't actually need a smart shoe to tell you that. 

Ben: Precisely. 

Kate: I think I've seen 10 smart running shoe pitches in my -

Josh: Really? 

Kate: Oh yeah. Oh, in my career. Yeah. This is probably the 10th I've seen. 

Josh: Are you also the smart running shoe gal? 

Kate: People also like haven't gotten the message that I hate running. Bring me a dance product, people. 

Josh: If you're listening, send all your running pitches to Kate.

Kate: No, no. I've probably seen 10 of these pitches. This is the best one I've seen. And I think one of the reasons it's the best is the market timing. I think in 2014 there was no market for this. But the other piece is the team that he's assembled is very strong when it comes to building shoes. I bet they know a lot about manufacturing great shoes, distributing great shoes. I didn't hear anything about the brand, the go to market, the whatever, and like, people often make the mistake that the technology is the brand, and it's not. The fact that it's smart is not a reason enough to buy it. And I didn't get the sense of like, what's the feeling you want to give people when they buy this brand? I don't think it's going to be, I'm safe in these shoes. But I don't understand what his unfair competitive advantage is in a very brand driven category, or my understanding it's a very -

Charles: It's pretty brand driven. Yep.

Kate: And the technology is not new. I mean, I've been, I have literally been getting this pitch for over a decade. Like this is very easily copyable.

Charles: I also do think like while most casual runners are happy to change shoe brands, most regular runners, in my experience, do not. 

Elizabeth: Yeah. 

Josh: Okay. So I want to lean into that just for a second. So this was one of the pitches that we polled our LP audience on. And they said exactly that. They were like, I would not try this shoe. Why is it smart? I don't want my shoes to be smart. Like, and it was just like, Whoa, Whoa, Whoa, Whoa, Whoa. Like they were like mad at me for suggesting that they maybe try a smart running shoe. But like when I dug a bit deeper, my takeaway was just like, Oh, they're so dang passionate. And with the moment running is having right now, the thinking was like, okay, like if there ever was a moment for there to be a smart running shoe that takes off, it seems like it's now. And is this the team that could actually pull it off? 

Elizabeth: But I think it's a matter of like, what is most important in a running shoe? So to Charles's point, and I'm not even an avid runner, but one of the very first pairs of running shoes that I bought for this long-distance running exercise was like really, really good. And then Nike discontinued it. And I've been trying to find shoes that are so similar to it in terms of breathability and the weight and the whatever, and even the colors. And I can't find anything. Like I've tried several other shoes, like even within the Nike brand. They're not the same. And that's why they have so many SKUs, right? And he has one SKU. And if that, it doesn't quite fit your foot, like it doesn't matter what the smart technology says, right? You're not going to use that shoe. 

Charles: I'll give you an analogy. Like the first time I heard about a smart refrigerator, I was like, you could. You could. 

Charles: But like, that doesn't mean you have to.

Josh: Just because you can doesn't mean you should.

Charles: Just because you can doesn't mean you should. There are other ways to approximate this data for lower effort. I just kept thinking like, I see why you put this in here. I see why it could work. I just, I hope it's not like the smart refrigerator where you like, you put smarts into something that was actually fine being dumb.

Ben: It was over engineered. It just wasn't a -

Charles: It's fine being dumb. 

Elizabeth: I would like to try the shoes still. 

Josh: Yeah. 

Charles: I hope he's successful. I hope I'm like really wrong.

Josh: All right. 

Kate: Thank you. 

Elizabeth: Thank you. 

Josh: Two more. So reset here.

Meanwhile, just outside The Pitch Room, Royi found an LP in The Pitch Fund waiting for him. John Armbrust - he’s an ultramarathon runner and totally saw the value of a smart running shoe. So he ended up writing an angel check!

Royi is still looking to close out the rest of the round. He’s just raising a million now, instead of the full 3.

In other news, Royi is planning to take preorders for the world’s first smart running shoe on Kickstarter in May. You can join the waitlist at avelorunning.com 

We’ll let you know how the launch goes in the season finale!

No offer to invest in Avelo is being made to the listening audience on today’s show. But you can join our private investor community on Substack. Where you’ll get access to the deals we’re doing behind the scenes.

So, if you’re an accredited investor, you can apply to join at thepitch.fund

Next week on The Pitch…

Kelsey: I graduated college with $150,000 of student loan debt getting into the game is not enough if you don't know how to play it That's why we're building Aura, the first psychology based financial wellness employee benefit And we're building the solution we wish we had at the beginning of our journeys. 

Jenny: I have to admit I get pitched a company like this probably once a week. 

Elizabeth: What is the user experience when a person leaves his or her employer? if my money is in your platform, I assume I can still get to it, right? 

Jenny: You have to figure that out because that's about $4,000 a year, and your average person is not going to pay that. 

Jesse: The employer is a great distribution channel, but the relationship with the employee is what ultimately matters for you. 

Kelsey: The revenue we currently have is $830,000 

Elizabeth: And so that's across the three years?

Kelsey: No. That is annual. 

Elizabeth: That's impressive.

Elizabeth: And what is your burn rate? 

Kelsey: Very low. 

[laughter]

Elizabeth: I love it. 

Kate: I’m kind of obsessed with you…I think you’re amazing and I think you’ve, you’ve kind of got it

That’s next week! Season 13 is available to watch on YouTube and Patreon, OR listen on your favorite podcast player.

Subscribe to The Pitch right now, and turn on notifications so you don’t miss it. If you enjoyed today’s episode, be sure to hit that like button. We’ll see you next Wednesday, in the PITCH ROOM.

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, Enoch Kim, and Jackie Papanier. With deal sourcing by Peter Liu, John Alvarez, and Phoebe Sun.

Music in this episode is by The Muse Maker, Breakmaster Cylinder, Joya, Marion Gibbons, Our Many Stars, Boxwood Orchestra, and Peter Jean & The Runaway Queen.

The Pitch is made in partnership with the Vox Media Podcast Network.