When his first start-up hit hard times in 2012, Aly Orady knew that if he ever started another company, he would give Mayfield managing director Navin Chaddha a shot at investing before anyone else. Navin, more than any other board member of Pano Logic, the thin client company Aly co-founded in 2007, stood by management when many other investors were “running for the hills,” Aly says.
“I remember one phone call when our bank was demanding its money, the investment bankers were spent, and we had 100 or so employees to worry about,” Aly says. “Navin assured me, ‘No matter what happens, we’re going to do the right thing’.”
And Mayfield did. As part of a sale and wind down process, the company had to lay off almost all of those employees on very short notice. In a move that’s almost unheard of in the world of VC-backed startups, Mayfield led the charge to cover the cost of severance packages. This required not only money from Mayfield, but leadership to convince the investor syndicate and influence with the company’s bankers.
“Mayfield talks about being people-centric, and it sounds like a tagline. But it’s not,” Aly says. “I experienced it first-hand.”
The trust engendered in those tough days set the stage for a much more rewarding relationship. Over the past six years, Aly has built Tonal, which makes an ingenious digital strength-training system for the home – essentially, a Peloton for strength conditioning – into a star of the booming home fitness market. Mayfield was there every step of the way.
Partner Tim Chang, an early quantified self, biohacking & fitness enthusiast, provided early strategic and product help and led the effort to secure seed financing. Since then, he’s helped recruit key advisors and executives, who have successfully overseen the company’s hyper-growth. Tonal recently announced a $250 million funding round, led by Dragoneer Investment Group, at a valuation of $1.6 billion with new athlete investors including Maria Sharapova and Mike Tyson. Mayfield invested in the round alongside other existing investors, including consumer VC giant L. Catterton. Prior investors include Amazon’s Alexa Fund and athletes including Steph Curry and golfer Michelle Wie.
“It’s been especially rewarding to get to work closely with a repeat Mayfield founder right from the very early days of the company, on a product that I’m personally excited about and have always been the perfect target customer for,” says Tim. “I’ve been into strength training for more than half my life, and had spent months and months prior to Tonal researching every home system on the market trying to build out my own dream gym. I knew from first glance that they had a breakthrough innovation never seen before in the field, enabling safe self-spotting for newbies as well as ‘quantified reps’ and advanced lifting modes such as eccentric loading for experienced lifters. It’s incredibly gratifying to see that early vision and thesis play out in the market, and resonate with so many customers!”
The Tonal story began after Aly joined Mayfield as an entrepreneur-in-residence in 2013. Coming into his office at Mayfield twice a week, he discussed ideas for another enterprise technology company with Navin, Rajeev Batra and other partners, who also opened doors to many of their contacts. And spending time at internal and external Mayfield events, including the daily lunches for staff, provided him a view on everything from finance to culture. “I haven’t talked about this much publicly, but I was a solo founder. When you don’t have co-founders, it’s a lot more important to trust and be comfortable with your investors,” says Aly.
While this was happening, Aly decided to get in shape, and lose the chubbiness that had frustrated him since childhood. He was soon hooked on weight-lifting and lost 70 pounds in nine months.
But he’d also lost countless hours driving back and forth to the gym and waiting for equipment to free up. Then, while lying on a bench staring at all the digital displays on the analog equipment, an idea popped into his head. “If I could make a system that uses electricity instead of gravity, I could shrink it down into something I could use in my apartment,” Aly recalls. “It could completely change the world of strength training, which has been stuck in the past for too long.”
At first he kept the idea to himself, wondering if a heavy-duty technologist who’d never been a CEO could pull it off. When he shared it with Mayfield’s partners, Navin asked: “Are you sure you don’t want to do something in enterprise infrastructure?” But when Aly pointed out that he wanted to follow his newfound passion for fitness to make an impact on people’s health, Navin encouraged him. And Tim was a believer and a booster from the start, and loved the company’s initial name: Ript Labs.
After six months, in late 2015, Aly had a working prototype and asked Tim to give it a try. After just a few bicep curls, Tim told Aly to come back and pitch the partnership again.
Aly did so a few days later and just as he returned to his apartment afterwards, he got a call from Tim asking him to come back to Mayfield’s Sand Hill Road offices. A $1 million term sheet awaited him. After some minor negotiations, they shook hands on the deal and an updated term sheet soon followed.
Tim sought out seasoned entrepreneurial talent with the right backgrounds to help build the team, as well as other angel investors that could help. Tonal ended up raising $1.5 million in its seed round in May 2016, led by Mayfield with participation from Bolt Ventures and angels, many of which resulted from Tim’s introductions. Just as important as the money was access to Bolt’s R&D lab, which was equipped with 3D printers and $250,000 CNC machines that are used for rapid prototyping.
Tim has continued to counsel Aly on everything from strategy to product, helping to gamify the Tonal experience. He introduced Aly to numerous venture firms which resulted in an $11 million series A in October 2016. And Tim helped to persuade former Fitbit chief business officer Woody Scal and former Twitter COO Adam Bain to become independent directors, and helped recruit Tonal executives such as content chief Ryan Vance.
“I think I have personally sold more Tonals than any other board member,” says Tim, who proudly describes himself as an advocate and word-of-mouth promoter of the product.
Looking back, Aly says none of that would have happened without the enduring bond that he and Navin cemented during the bad-old days at Pano Logic. “When things are going smoothly, it’s not really so necessary to have strong relationships with your investors,” he says. “But when things are rocky, that’s when you see who your friends are.”
“As a people-first investor, you have to believe in people, even if their prior experience is different from the idea they are passionate about,” says Navin. “It has been inspiring to see Aly grow into a great leader and to watch the impact that Tonal has made in delivering fitness to thousands of people.”