What Does It Take to Succeed in the Business of Martial Arts?
Updated: Sep 22
EconBuff Podcast #57 with Ty Garrett
Professor Ty Garrett joins me to discuss martial arts as a business. We begin with an overview of the business model in martial arts. Mr. Garrett explains how the traditional model of martial arts falls short. We then turn to the model that he employs at his business, where he took inspiration from the Crossfit business model. He lays out how he learned from his first martial arts business and its failure and how that set him up to succeed. Mr. Garrett also discusses the challenges faced in trying to break the mold of the older business model, and how he had to go against conventional wisdom and the opposition of others in the industry. We explore his business model, and how he eventually expanded into being a minority owner in two additional locations across the state. Mr. Garrett provides his perspective on a better way to approach expanding without becoming a minority owner in new locations. We discuss the role of mentors in his development as a martial artist and businessman, and we compare and contrast his experience in college with his experiences with his mentors. Finally, we consider how start power, achievements, and personality is an asset in the martial arts industry.
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Transcript:
LEE STITZEL: Hello and welcome to the EconBuff podcast. I'm your host Lee Stitzel. With me today is Professor Ty Garrett. Ty is the owner and operator of Extreme Martial Arts in Amarillo, Texas, the biggest gym in the area. Our topic today is going to be about the business aspect of martial arts. Ty is a fourth-degree black belt in jiu-jitsu under Carlos Machado. Of course, I would lead with that because I'm a jiu-jitsu guy. He is also a fifth-degree black belt under Troy Dorsey in kickboxing. He's the reigning World Kickboxing Organization champion and current best male fighter of the year. And I understand three-time best male fighter of the year. Three years in a row?
TY GARRETT: Yes, sir.
LEE STITZEL: Three years in a row. So, not just three titles, but three in a row. Welcome to the podcast.
TY GARRETT: Oh, my pleasure. I look forward to it.
LEE STITZEL: So, our topic today is the business aspect of martial arts. So, I just kind of want to get us started with a discussion about sort of there's this sport and art and hobby that people think about. And then there's this aspect where we need to be able to run those as businesses, how we make them survive day-to-day, how we make that something that somebody who has a black belt or multiple black belts like you do, how we make that something that we can actually go on and continue to do.
TY GARRETT: So, one of the problems a lot of gym owners have is that we're copying broken business models. My very first teacher, great martial artist, but his main job was being a landlord and he ran a liquor store. That was his real job and he taught martial arts in the evening. Another one of my great instructors, fantastic kickboxer, great man. He was the best man in my wedding. He worked my corner in a title fight and the next day I got married with a big black eye and a cut over my eye and my ring hand was too swollen for the ring, but that's a different story. He was a full-time police officer and then he taught kickboxing in the evening as his side hustle. Most gym owners, it's their side hustle. It might be their passion, but it's not really their career. So, they don't know how to run a business. And that was generation one of gym owners in martial arts in the U.S. Guys like me, generation two or three are now trying to copy guys who didn't have businesses in the first place. They had hobbies.
Maybe the hobby made a little bit of money, but it wasn't a profitable business. So many guys in my industry are trying to copy a model that's already broken. Another model a lot of guys tried to copy, two of my instructors are world famous. When I travel with them, they get recognized and asked for selfies and pictures. So, they're profitable, but their business structure might not be great, but it's based upon having a celebrity teach all the classes. So, they don't even realize in a real way they're not living in the real world because they have a celebrity. The celebrity happens to be them and they're teaching. So, they can do things that other business owners can't do and generate income. So guys like me who actually want to make it successful, we had to go back and break that old business model and come up with a new model. If you want a full-time gym, which is something I wanted, you know, in college, I always liked the college model, and my original model was actually trying to copy the university model. I'm just a martial arts nerd. I love it all. I've trained in karate, taekwondo.
My real passions are kickboxing and Brazilian jiu-jitsu, but I've trained in Chinese kickboxing called Sanda. I've done Israeli martial arts, Krav Maga. I got my instructor certification in that. I'm a competitive boxer. I was a high school wrestler. All I've ever done is martial arts. I've never liked soccer, football, baseball, etc. No harm, no foul. It just wasn't my thing. I'm a martial artist. My whole childhood, I grew up fanboying out over Chuck Norris, Bill "Superfoot" Wallace, Troy Dorsey. Some of those guys would go on to become my coaches, but I'm just a martial arts nerd. And I always wanted to have a university or a college. So, like me and my wife, and I'm rambling, I'm sorry, but me and my wife both went to Texas Tech and we got different degrees, but more or less we have the same physical piece of paper. We both went to Texas Tech. We just got educated differently. So, my original idea was I'm just going to have a martial arts university. This guy can get his black belt in karate. This lady can get her black belt in taekwondo. This guy could get his black belt in judo.
This guy can learn jiu-jitsu. This guy over here might train kickboxing. Maybe your son does wrestling, but you do Krav Maga. My original idea was I'm just going to keep getting black belts in different styles. And it's going to be just like WT or Texas Tech. You might be a marketing major. I'm a finance major, but we both go to the same college. And on paper, that sounds really cool until you realize how many coaches you're going to need or how big of a facility you're going to need, how many mats you're going to need. So, my original idea was just martial arts university. And I'm glad I jumped off that idea because, just the space, the mats, the staff, the tuition, I mean, you'd have to charge college rates if you had a facility like that. So I really went back and go, okay, what are my two favorites? Kickboxing covers all things striking. Whether it's boxing, Muay Thai, Sanda, karate, taekwondo, pretty much all the effective kicks, punches, knees, elbows, and blocks fall under the kickboxing umbrella. So, kickboxing covered all the striking arts. And to me, jiu-jitsu covered all the grappling arts.
So, those are my two favorites already. So maybe it's just my bias showing and I'm forcing my two favorites to the front, but to me, kickboxing covered all the striking. Jiu-jitsu covered all the grappling, whether it's clinch, takedowns, pins, escapes, submissions, etc. So, we ended up getting rid of the karate classes, getting rid of the wrestling classes, getting rid of the self-defense class, and we switched to just focusing on the two things that I'm most passionate about, or maybe the two things I'm best at, kickboxing and jiu-jitsu. And once we really started just to focus on those two, I started to realize those are two different markets. There are guys like you, Lee, who do both. I know you're more of a jiu-jitsu guy, but you train both. Most of my students are either kickboxers or jiu-jitsu guys. Most of them aren't as crazy as me and want to be on the mat four hours, five hours, eight hours a day. So, with that said, we started to realize we have two different cultures in our gym. And there's like the jiu-jitsu culture and the kickboxing culture. And it was almost like those two cultures aren't terribly compatible.
So, as a business owner, we really wanted to kind of shape the culture of the gym. And once we started focusing more on the culture of the gym as opposed to the actual business model or what we charge or things of that nature, once we really started to focus on the culture of the gym, something really cool happened. Students started staying for years instead of months. And once we started having students train for two, three, four, five, six, 10 years, our business model got so much easier to work with because now when we sign up a new student, we have a 10-year relationship or a five-year relationship as opposed to, this guy's going to take a six-week fitness challenge and lose 5 pounds, quit, never come back and gain the five pounds back, and his life's not any better. Now we're changing people's lives because they're actually training with us long enough to make a huge dent.
LEE STITZEL: When did you start shifting your focus? Like you were talking about shifting your focus towards kickboxing and jiu-jitsu just as a rough timeline. When was that? What year, approximately?
TY GARRETT: So, in 2003 I opened my first school and it was while I was going to Texas Tech. So, I was literally learning how to be an entrepreneur while I was taking business management classes at Texas Tech. A lot of what they were teaching back then was how to do a stock split or how to evaluate a Fortune 500 company. It was good stuff. I'm sure it was not helping me at all running a small business. They didn't talk at all about low-level marketing. It was like how to buy a Super Bowl ad, which was so beyond me. It might as well have been learning about how to land on the moon. It just wasn't in my atmosphere. So trying to take what I was learning at business school and apply it to running an actual business was quite challenging. In 2006, I graduated. I moved back home here to Amarillo and I opened a new gym and I knew just using the college model wasn't going to get me there. So, I started hiring mentors. And what I was looking for were guys that were better than me on the mat.
So, they're either better at kickboxing or jiu-jitsu, but also understood business. I didn't want, you know, the term is McDojo, a guy who's just in it for the money. I didn't want to learn business from a McDojo guy. But at the same time, I didn't want to keep copying these great martial artists that were broke. So, I was trying to find that sweet spot of who's an awesome, reputable martial artist who has a successful business, isn't a celebrity, and whom I can actually copy. One of my coaches is best friends with Chuck Norris. So, every now and then Chuck Norris pops into his dojo. Well, I'm not best friends with Chuck Norris. I can't just call him and have him pop in. Another one of my coaches was so famous that the Dallas Cowboys Cheerleaders would come take his kickboxing class. That's a pretty good piece of marketing to have a picture of you and every Dallas Cowboy cheerleader. The Dallas Cowboys Cheerleaders don't drive to Amarillo to train with me.
So once again, copying these guys, even though they're awesome and super successful, I can't follow their path because they have some one-ups in life that they earned, but they have some advantages in life that I just can't copy. So I would find gym owners who weren't famous, who were successful, and who were awesome martial artists. And I would literally just ask them if they would let me buy private lessons. And the private lessons would be half on martial arts and half on business. And I just kept buying mentors and it was expensive. And I remember at one point I was in my mom's basement. I couldn't afford rent yet. I was about to get married. And my mom found out I was paying $1,500 a month for mentoring. And she's like, "You can't pay rent. You're about to be married, but you can afford to pay this knucklehead $1,500 a month to teach you." I was like, "This is an investment in my future. This is college for a martial artist." And in hindsight, it worked out. Statistically, she was probably right to tell me not to do it, but in hindsight, it worked out great.
LEE STITZEL: But look, do you believe that, though? I mean, statistically, it's like being able to pay somebody for one-on-one instruction that is exactly, specifically, what you have narrowed it down to and they're not a superstar in their own right and they don't have these idiosyncratic advantages like proximity to the Dallas Cowboys. I mean, in some ways, I think the world is trending that way. You know, let me get a mentor who does exactly what I want and pay them. I mean, you tailor-made your own education.
TY GARRETT: In hindsight, I 100% agree with you. And obviously, I agreed with you then because I did it. My mom's argument, every martial arts professional I know is broke financially or broken physically. So, I jokingly told your whole class today when we talked to the economics class, "Let me take a picture. My mom's going to be so excited. I was a professor of economics today. Even if it was just for a day, it was pretend." That's what she wanted me to be, was a high school teacher or a college professor. That's what she saw as success. She saw all my martial arts instructors were broke. So from my mom's perspective, four out of five small businesses fail, which is true. And then from my mom's perspective, every martial artist I've ever met that's a professional is broke or broken. And when I say broken, it might be their body or it might be their marriages or it might be just their social life. I understand why my mom said that.
You know, if one of my kiddos just wanted to turn their hobby into a career and it was something that I didn't think was profitable, I would probably try to lead my kiddo the same way my mom led me. So, I'm not throwing my mom under the bus. I think she was telling me out of love and she just wanted the best life for me. In hindsight, the best thing I ever did was start paying for business mentorship. I think I still would have been successful. I think the mentorship literally saved 10 years off the learning curve.
LEE STITZEL: So, I mean, I see that if you're trying to hire mentoring into a place where you're not sure the final product even exists. So, longtime listeners of the podcast will know I'm a little bit cynical about the education model that we have. And the reason is actually similar to what you said before. It's not so much about education as it is about certification. Well, the one exception to that is college professor, right? Because the system is designed to get a degree, go get a PhD, be trained by PhDs to be somebody with a PhD who then goes and becomes a successful professor. That's a mentoring model in disguise. And so as an undergraduate student who wants to get a business management degree and then go run a martial arts gym, of course, maybe it shouldn't be "of course," but of course there's a mismatch there. I had a totally different experience because when I went to grad school, the person who was teaching my classes did exactly what I do today. I teach classes, I research, I go to meetings, and in my case, I'm really lucky, I get to host a podcast.
Those are all skills that I learned very directly. So my question: in general, martial artists end up broke or poor or both. But I mean, you told us a story where you're specifically seeking out people that are successful and not for idiosyncratic reasons. And I presume you're also choosing people that didn't end up with these other types of outcomes, their bodies broken or their relationships broken or so. So, I mean, you tailor-made an education probably towards that specific goal. Do you think I'm on target there?
TY GARRETT: No. 100%. In hindsight, I always hate saying this because I get kickback. I don't know if I actually needed college. I needed four more years to mature. I 100% needed an education. I think college might have even given me... Because I had a 4.0 in business, I thought I knew business. Once again, it wasn't, and maybe they have a program now, it wasn't how to run a small business or even harder, how to start a small business. The first few years were the hardest. Having a mentor take me from barely profitable to profitable was huge. Having a mentor take me from top 30% of the market to top 10% and then top 5%, top 2% was huge. I'm so competitive and driven. I think I would have still been successful. But once again, I'd much rather pay a guy six grand and save 10 years off my learning curve with a few private lessons for several months as opposed to going the old cheap way, the school of hard knocks. The most expensive school is often the school of hard knocks because it takes decades plus opportunity cost.
That was decades I wasn't profitable, or that was decades I was wasting money on the wrong thing. So I think finding a mentor is huge. I would definitely recommend that for anyone. For my own personal kiddos, no matter what job they want, I'm recommending they have three options. One of my kiddos wants to take over the gym. I'm like, fantastic. I will help you. But you still have to have two fallbacks. I think options give you power. When you only have one option, it's a dead end. You have yes or no. When I have option A, B, or C, I can pick the best choice. So whether it's college for you or trade school for you or mentorship for you or real world experience, I think getting educated in something you're passionate about is crucial.
LEE STITZEL: I kind of wanted to circle back to the timeline question. So, oh, let me make one comment actually. You know, paying mentors thousands of dollars, I don't know what the exact numbers are there for a number of years, it's probably almost certainly cheaper than starting a second business in Amarillo and then failing it and having to start a third.
TY GARRETT: 100%. And not even close.
LEE STITZEL: Yeah. So, I kind of want to circle back to the timeline. And the reason is something occurred to me when you were talking about there's all those different arts. But your sort of trajectory and timeline does overlap a little bit with the popularity of martial arts in general because of mixed martial arts and the UFC in particular. And this is not exactly true, but my intuition is that, among the disciplines that benefited from the popularity of mixed martial arts, kickboxing and jiu-jitsu have to be two of the highest in that area. Jiu-jitsu is like the classical story when it comes to UFC. But then kickboxing has really had a heyday, with several of the champions who have been stars having kickboxing as their base discipline. Now of course a good pushback would be there's also been wrestlers and Sambo guys and whatnot. Did that factor into your focusing on those two arts at all?
TY GARRETT: So it didn't factor into me doing it as, "The UFC is popular, so I'm going to teach X, Y, Z." However, I'm a product of my age. I think I was 10 or 11 when the UFC came out. And of course it was VHS. We didn't do pay-per-view at my household, but VHS maybe six months after the fact. Yes. Everybody wanted to learn jiu-jitsu. I was a karate student and I just realized, oh, at least half of the game, if not more, I don't understand. And karate didn't fully answer the kickboxing, the striking realm, either. I was really good at kicks, but not so much with punches. And then I started training with kickboxers and I realized, okay, I have to learn how to box. I have to learn how to get conditioned like an athlete. I have to learn how to stop takedowns from a wrestler. So, like anyone in my age demographic, yes, kickboxing and jiu-jitsu became more popular, but they weren't profitable. The first wave of jiu-jitsu black belts in the U.S. were almost all karate black belts, and a lot of them were guys that already owned karate schools.
So the first generation of black belts in the U.S. were already martial artists and they understood jiu-jitsu was the missing link more so than the regular person. Now jiu-jitsu has become a whole thing, an industry. But in 2006 I was the only school in Amarillo teaching jiu-jitsu. So it did give me a competitive advantage back then. I was only a blue belt in jiu-jitsu. But it gave me a huge competitive advantage because I was the only guy teaching jiu-jitsu at the time. But I wouldn't say I switched to jiu-jitsu and kickboxing because the UFC, those just happened to be the ones I was most passionate about. But talking about kickboxing, everyone talks about the UFC. I'll be honest, there's one guy who got more people to start doing kickboxing for fitness than anyone on the planet, and he wasn't even a real kickboxer: Billy Blanks. Billy Blanks changed kickboxing in the U.S. with Tae Bo, which, literally, for you younger guys, was a VHS and then a DVD workout that you could do from home. And it was martial-arts-inspired aerobics. And I'm not knocking it at all. It wasn't what a fighter would call kickboxing.
It wasn't what any of my students would call kickboxing. But I think it was the first time kickboxing and fitness started being used interchangeably. So Billy Blanks drove more people into training "martial arts," in air quotes than I think any one person in the U.S. And I get kickback with other owners when I say that. But I still believe it. I actually got to meet him recently at a tournament. He came out of retirement at age 70. I got to see him fight recently in Las Vegas. And I just walked up to him, and I know he knows some of my coaches. So I name-dropped one of them that I knew he liked. He talked to me for five minutes, and I go, "I just really wanted to shake your hand and say thank you for creating my job." I don't know if I would have a job teaching kickboxing if it wasn't for people like you, who got the first generation of Americans really training in martial arts for fitness. And of course, you know, the Gracie family got people doing grappling. But Tae Bo was such an easy gateway for people to try it out.
And even though a lot of people bought the Tae Bo DVD or VHS, they would then go enroll at a real martial arts academy and start learning martial arts. So once people started realizing, oh, kickboxers are elite athletes. Maybe I don't want a concussion or I don't want to get elbowed in the face or kneed in the face, if I go to a gym that trains properly, I can learn all the real techniques and I just don't have to do the hard sparring. So that's kind of what we do at my gym. We have about 600 students and about 20 of them fight full-contact and the rest train the lifestyle. So we get all the benefits of being a full-contact fighter, learning the same techniques the competition team is learning. However, have I ever kneed you in the face, Lee?
LEE STITZEL: Never.
TY GARRETT: And we've sparred a lot. Have I ever hit you what you would really call hard?
LEE STITZEL: No.
TY GARRETT: No. Anything ever close to a concussion when I hit you?
LEE STITZEL: Nothing.
TY GARRETT: No. But it's with real techniques. I'm throwing a jab, a cross, a hook, an uppercut, a low kick, etc. You're learning the same techniques my fight team learns, but we're teaching you in such a way you can come back the next day or even more importantly, you can show up to work the next day without a black eye and a broken nose. So, it's a way to show real martial arts to the community without concussing and breaking all your clients.
LEE STITZEL: How closely do you view the link between martial arts and fitness? Obviously, within the broader industry of fitness, but you could do that even if really what you were trying to do is, say, make fighters. Which, as you just described, is a part of what you do, but it's not the primary part of what you do. But there's just nothing compared to combat sports in terms of conditioning, right? That is just objectively one of the hardest possible things that you could do because of the intensity and the cardio and strength demands that go with that. So in your mind, how do you position yourself kind of in the market: I'm selling this to people because they want to be in shape versus somebody like me. I really enjoy it for the art itself and I do a lot of my fitness outside of the gym and then I allow what's going on inside the martial arts gym to be like a supplement to that. I'd expect most of your clients are probably or maybe I should call them students are doing a lot of that as their primary or maybe even only fitness aspect.
TY GARRETT: Great question. I said one of my goals today, I didn't want to talk bad about any martial artists, but I guess I will. I won't say anybody's name. One of my pet peeves, I'm 43, mind you. I hate when I see black belts my age that can't fit into their black belt anymore. We call them the bow tie black belts. When I earned my black belt, it hung to my knees or my mid thigh. And now that I'm 40, my black belt ties like a bow tie because I've gotten so out of shape. Now, if I'm injured, I get it. If I'm 65, I kind of get it. But if you're in your 20s, 30s, and 40s, you should be a product of your gym. So, I think coaches, they don't need to be elite athletes every second of the day, but you need to be a product of your product. So, I don't have any fights booked. I don't know if I'll fight again. I should retire from full-contact competition, but I stay in decent shape all year round and I get in great shape for a fight. And that was taught to me by my coaches.
I was training with Bill Wallace this weekend. He's 80. He's 166 pounds. He fought at 165 to 170 pounds. He's 80. He's still fighting. I trained with Troy Dorsey this weekend. He did like a three-hour class straight without a break. He's in his 60s. Phenomenal athlete still. Both those men are products of their product. My Muay Thai coach and my Dutch kickboxing coach is closer to my age, James McSweeney, former UFC fighter, incredible athlete. Outworks the 20-year-olds in the gym. All three of those guys are products of their gym, products of the product they sell. If martial arts teaches discipline, I think those coaches need to be disciplined. If you say martial arts teaches fitness, which we all say that, your coaches need to be fit. Once again, if you're injured, like I gained some pounds when I broke my foot. When you're injured, I'm not talking about that. But if you're selling martial arts and fitness, you got to be a product of the product. Then you ask about how many of my students come to the gym as their only gym.
Our goal is if all you want to do is train martial arts, I want my product to be able to take care of you. Now, if you want to go do CrossFit or you want to do powerlifting or you want to do extra, by all means. If you're on the competition team, I'm going to give you a list of homework you got to do. But for my average student, we start every class with 10 minutes of strength and conditioning. It's usually kettlebells are my favorite. We don't do a traditional warm-up. I feel like warm-ups are wasted. Jumping jacks, shadowboxing, everyone chitchats, or worse, everyone just shows up 10 minutes late if we're being honest. So, the first 10 minutes of every one of my classes is strength and conditioning. I'm real lucky. My strength and conditioning coach used to be Brett Favre's strength and conditioning coach, Todd Pratt. He has custom-built a kettlebell workout. We call it prehab or bulletproofing your body. Some of it's just for functional fitness, and a lot of it is injury prevention for martial artists.
So, we do a lot of kettlebell lifts differently than you'll learn in CrossFit or from a regular fitness coach because we're going after the big areas of injury for martial artists: shoulders, lower backs, and knees. If you think of any of your teammates who have been hurt in the last three months, that was probably most of them. Shoulders, backs, or knees. Shoulders from punches and submissions, lower back from kicks and playing guard, knees from playing guard or kicks. So all of our lifts have preventive maintenance designed to increase your durability and your range of motion in your knees, your lower back, your shoulders while getting you warmed up, while working your strength, while working your flexibility. So my goal is if all you do is kickbox with me, you don't need to go do cardio somewhere else. You don't need to go strength train somewhere else. If you want to do more, by all means. However, if you just want to be a kickboxing and jiu-jitsu student, I will get you in good shape and teach you fantastic techniques at the same time.
LEE STITZEL: I've been in your gym a while now, and when I showed up, it's because even though I'm a hobbyist, maybe I'll do a little competing here or there, but I'm never going to be a competitor. It's because I wanted to learn those particular arts. I wanted to share that with my son, and I have some younger sons, too. So eventually, all of my sons... And as I've gone along in your program, your business, your setup, however you want to think about that, you know, one of the things that I realized is there's actually a lot of things that I'm getting that I think I wouldn't necessarily get in other martial arts gyms. So in economics we might think of this as bundling. And if I had to put it down to one thing, that'd be a real challenge, because on one hand it's something I'm sharing with my son. So you're bundling adult and kids training together. I am also getting a certain number of experiences like some of these world-famous athletes. I've had seminars where they've held pads for me for 30 seconds in the middle of a seminar and given me some tips and feedback.
I've rolled with some people who gave me like tailored feedback to my particular jiu-jitsu game. So, it's the kids, it's the experience, it's the fitness. You know, you mentioned culture earlier. I think that's an enormous part of what it is that we're doing. You know, inside that gym, I've developed so many friendships. Is that an intentional thing that you're doing? Do you think that's a part of the business model for martial arts? Or is that maybe a product of yourself and the culture that you like to develop?
TY GARRETT: It's definitely intentional. It wasn't originally. When I did karate as a little kid, when I think about some of my best childhood memories, I don't actually think about throwing reverse punches and sidekicks and different karate techniques. But what I do remember, we were all in the back of the minivan driving to a seminar or a tournament. It was like a three-day hang with all my best buddies. I remember the sleepovers. What does a sleepover have to do with martial arts? Nothing. But that's where I made all my best friends. All my best friends growing up became black belts. And it's in a good way. It's almost like we were trauma bonded together. Like we had to do the same 100 push-ups. We had to do the same five-mile jog. We had to go to the same tournament with the terrible referee. It's like my best memories are all around the activities surrounding being a martial artist, not necessarily the day I learned a low kick on the bag. So the techniques are great. However, it was all the things outside.
So at our gym, we really go out of our way to try to make it what I call the third place. You know, you have work, you have school for students, you have your house. So a student has school, their house, then their third place. People like us adults, we have our work, we have our house. What's your third place? I wanted the gym, the dojo to be their third place. So, it can't exclusively be about the moves. It can't exclusively be about the technique. I want people to want to stay late. I want people to want to show up early. I want people to want to show up to Saturday events when we're usually closed on Saturday. So, it goes beyond just the techniques, even though those are kind of what we pay for and love doing. It's the culture. So whether it's having silly nights like we do the John Wick night where we dress up in suits and I'll be honest, John Wick night last year was one of my favorite days of the year. We all dressed up in suits. We did kickboxing and then we grappled in full business suits and just shredded them.
So much fun. Whether it's going to a tournament in Europe with a bunch of my teammates and you know we did three or four fundraisers. And it sounds silly. One of my most vivid memories of last year was the pancake breakfast where we raised like $2,500 and all that money went to my competitors flying to Europe to fight for titles. But those little activities beyond the training, that's where you really get to know people. My wife was asking me how did I get this guest gig as an economics professor when I'm not a professor at any university. And I was telling her after class sometimes me and Lee just talk economics and I'm always picking his brain. What do you think? Are these tariffs going to be good or bad? I always learned tariffs are bad, but you said... And I just genuinely enjoy those conversations. What does that conversation have to do with martial arts? Nothing. But it builds that culture. It builds those relationships that go beyond just sparring partner to friend. And once you make your gym a third place, it's hard to quit your third place. It's easy to quit a gym.
Gold's Gym went out of business. Cool. I'll go lift at Planet Fitness. But if all my friends, my mentors, this guy coming up underneath me, if my whole social group is at one gym, I don't want to quit that gym. So, yes, it is a business decision, but I have to show up to work every day. You see me, how often does it look like I'm having a bad day?
LEE STITZEL: Almost never.
TY GARRETT: I feel like I have the dream job.
LEE STITZEL: Only in the depths of your worst cut. That's [laughter] the only time.
LEE STITZEL: When he says cut, he's talking about a weight cut.
TY GARRETT: Yeah, I should be clear when you're losing weight to try to make weight for a fight, which is, of course, everybody knows, losing weight's rough. So, I get a little cranky once I get into the 160s.
LEE STITZEL: So, I'm really interested in that because on one hand, you know, the martial arts industry, I think it has some challenges because there's probably quite a wide variety in how people perceive the industry. So, there are going to be some unserious gyms where, basically, you show up, you do X number of classes, you get a belt, now you get to go around telling people that you're a black belt in, I'm not going to name a discipline, but a discipline that then will sort of damage the reputation probably of the various martial arts, or whatever particular martial art that is. So you need to position yourself probably in terms of the seriousness of your gym. How do you balance kind of I need this third place culture where people want to come and train, but like you said, a lot of your memories are related to sort of like overcoming these challenges of a bad referee or preparing for fights or whatever it is. I mean, I can go buy a black belt on Amazon tomorrow.
TY GARRETT: $12.
LEE STITZEL: Yeah. It doesn't mean anything. But I'd rather have the blue belt that I have now because I know that I showed up on the mats and I learned and I developed skill and I overcame those challenges that were in the way. So, how do you kind of balance that third-place culture with how people overcome and achieve, and how do I position myself in a market as like a serious martial arts place and not just somewhere that's just selling you a belt?
TY GARRETT: That's a great question. 100%. I've seen gyms where, I'm going to make up the number, every 40 classes you get a new belt and the quality of the martial artist is just terrible. Imagine college: every 40 days you graduate regardless of whether you learned anything. Now you're a sophomore. I mean, no one's going to learn anything. They're probably not even showing up. So, that model I don't think works at all. So, that's one extreme: just literally class-based promotion. Go to the other extreme. Make it so hard only the most alpha of alphas can get their black belt. Well, now you're stroking your own ego. And I've seen guys do this. They're like, "Oh, my black belt test is four days." This is a quote: "I take them into the woods. We do mitts in the forest and then they have to sleep and randomly they're going to get attacked by my other black belts that are dressed up like ninjas." Like, did you learn martial arts from an '80s movie? Oh my gosh. And then they have to go on a five-mile run. And I asked this owner, I go, "How many black belts have you produced?"
And mind you, he was 60. He goes, "Three?" Wow. And I'm thinking, "You're a failure. You ran an academy for 40 years and you've only produced three black belts." And he happened, this gentleman happened to be one of those bow tie black belts I was mentioning earlier. That's just stroking your own ego. You make your black belt so impossible. No one can get it because no one's up to your standard. Well, probably not you either. Or even if you are the elite, if you never give a black belt and you've had an academy for 15, 20, 30 years, you've not promoted anyone to black belt, you're just giving black belts for your own ego. That's no good either. One of my coaches, one of my mentors, Mark Stury, I think he said it perfectly. Your black belt should be your personal gold medal in life. That doesn't mean you had to beat somebody to get it. But your black belt is the hardest thing you've ever accomplished. And your hardest accomplishment is going to be different than my hardest accomplishment, which will be different than, you know, an elite athlete like Jon Jones's hardest accomplishment.
But your black belt should be your personal gold medal. It should be your claim to your own personal greatness. I'm more concerned that you jump through a bunch of hard, fiery hoops that are achievable, but you did your absolute best. So, you have to find that sweet spot where it's hard enough that elite athletes can't do it with half effort, but you also need to make it challenging enough that people feel like it's the hardest accomplishment they've ever had. And that is a hard line to walk at our school. If you're perfect in kickboxing, it takes about six years. And when I say perfect, that means you never miss a test. What we do is you have to come to class. Every six weeks, we have a module. We'll do six weeks of boxing, heavy kickboxing, six weeks of Muay Thai, six weeks of waist-up kickboxing or old-school American kickboxing. Then we'll do six weeks of Dutch kickboxing and we just keep rotating. So it's six weeks on one chapter essentially. If you learn all the new techniques, combos, and strategies of that theme, you get a stripe.
Once you have X number of stripes, you are allowed to come to a test. If you're not great at boxing, maybe you don't get the boxing stripe, but then you get the Dutch stripe, and then you get the Muay Thai stripe. You kind of fill in the blanks. So we hard fail people on the stripe test and it's not always loved. Sometimes you get some little kids crying or adults a little frustrated and we'll bring them in and anytime someone fails, that's the best time to have the perseverance lesson. You can tell them one of the lessons. I'll give one of the lessons of my personal failure. It was so hard losing. However, that loss made me better. It made me refocus. It showed me some holes. Every loss in practice is a chance to fix my mistakes. So, we do fail people hard on the stripe test. Sometimes we'll do an 80% fail rate if they're not looking good. However, on a belt test, I think of belt tests as high school or college graduation. No one fails high school graduation. You just walk across the stage. You fail the six-week tests that get you to graduation.
So, we fail people on stripe tests left and right. Once they have enough stripes, they come to a graduation, which is a glorified seminar. We'll do a bunch of push-ups, sit-ups, crunches, a bunch of bag work, get you exhausted, make you run through one last fiery hoop, and then everyone passes the belt test, but we won't allow you to belt test till you've passed several stripe tests. For me, I feel like that's the sweet spot. It's achievable. You know exactly what you got to do. You got to show up to class. We don't monitor your attendance. If you can show up once a week and learn the curriculum, awesome. If it takes you showing up three times a week to learn the curriculum, awesome. But you are responsible for the curriculum. So, we don't take attendance. But if you're not showing up, you're not going to know the new techniques or combos. If you pass all those tests, then you're allowed to belt test. At a certain belt, we add a sparring component. We call it a battle stripe. And once again, we're not trying to knock you out, but now we're saying, "Okay, you learned all these moves.
You essentially learned how to swim while you're on land. With the sparring stripe, we throw you into the pool and see if the swim strokes work. We're not trying to kill you, but we'll try to jab you. We'll try to cross you. Do you know how to parry? Do you know how to slip? Do you know how to check a low kick? Can you actually apply the techniques in real time?" In kickboxing, it's sparring. In jiu-jitsu, it's rolling. Can you actually do the defenses? Can you do the sweeps, the submissions that you're learning? If you look good on that, then you get your blue stripe and you're allowed to belt test. So, we battle test all of our athletes. If you're 60, the battle is going to look way different than if you're 25. We keep that in mind. But our goal is you're learning our curriculum and you're learning how to apply our curriculum. And if you do this for five, six, seven years, you could be a kickboxing black belt. Jiu-jitsu, it's more like 10 to 12 years just because of the number of techniques in that art.
LEE STITZEL: Yeah. I've never passed a jiu-jitsu stripe test on the first try. So that's important.
TY GARRETT: How much more meaning does it have? And it's just so people that don't know, it's literally a piece of tape. It's electrical tape. It costs me less than two cents a person. I'm not failing people to save money. When you fail your stripe test, typically I try to say, "You look good at A, B, C. You really need to work on X, Y, Z." Then you go to work, and whether it's mount escapes or submission defense or you're not attacking, I feel like when someone fails, then they come back three weeks later and they pass, I feel like there's a huge level up. Is that your experience as a student?
LEE STITZEL: I could probably take my white belt and point to each stripe and tell you what thing it was that I had to overcome to get that particular stripe. One time it's choosing my timing wrong and blowing all my energy all the time and another time I can't retain guard at all. And so each one of those almost has its own... I should write them on there. Each of them has its own individual... Yeah. So I mean I think you're finding that balance really well in terms of you have to overcome to get this but it's not an impossible five-mile hike with ninjas attacking me. So, [laughter] let me ask this. You partially answered that, but, you know, we're in the gym and then there's guys like me that are in their mid-30s, have a wife, kids, and a job and then, you know, put it nicely or maybe not nicely, I don't know, there are literal grandmas that are training on the mat right next to me, and then there are 22-year-old killers on the other side of me.
How do you sort of balance that quality control of your black belt if you will or just your upper belts even with, you know, this guy's an elite athlete. This is your average working man and this is a 60-year-old lady.
TY GARRETT: Great question. There's not a cookie-cutter answer. A cookie-cutter answer would be: to get your stripe, you've got to be able to kick this high or throw this way. But a 60-year-old grandma is not going to be the same as a 22-year-old full-contact fighter who fights internationally. So, we do our best to grade people on their potential. So, the techniques and the strategies are the exact same. I might be teaching you jab, cross, liver hook, pull his defense down, left head kick. If I throw the left hook to the liver, you'll drop your right elbow to block the liver shot. Your face is open for a head kick. My little old grandma can't throw the left head kick. So, she might throw the same strategy. Jab, cross, liver punch, reload, left hook to the face. Same strategy, different tool. Sometimes we adjust tools on different athletes. If I have a guy who's 6'5", it might not make sense for him to level change and punch the body. It might make a lot more sense for him to knee the body to lower the defense or to kick the body to lower the defense. So we'll adjust the tools both ways.
I can show you the way I do it. I can show you the principle behind why I do what I do. And then we might tweak the techniques that you actually use to fit your body type.
LEE STITZEL: You've been very generous with your time. We're coming up on 45 minutes here, so I want to bring this in for a landing. You've mentioned several times, you know, different famous people, personalities, accomplished people. How do you leverage that as an asset that's probably somewhat unique to martial arts in your particular business model?
TY GARRETT: So, it's so cool. If I owned a basketball gym, there's no way I could afford Michael Jordan, Shaq, Larry Bird. You can't afford those guys. In martial arts, you can actually afford a lot of those guys. So, they're still expensive and they're worth every penny, but I wish I knew how attainable some of those world-class coaches were when I was younger. I would have gotten them as coaches a lot sooner. Just this weekend, I had Troy Dorsey and Bill "Superfoot" Wallace, two of the best American kickboxers ever. Bill Wallace was literally in the first generation of American kickboxers, when they hadn't even established the rules yet. Sometimes they didn't know how many kicks you could throw. They weren't even sure what the targets were. They weren't even wearing boxing gloves yet when he first started kickboxing. They were still wearing the old karate gloves instead of kickboxing gloves. So, he's literally the Michael Jordan of kicking in our sport. I had him at my house and I had Troy Dorsey at my house, who's the only man to win the world title in boxing and kickboxing.
Really often I'll bring in Carlos Machado, who's like the godfather of jiu-jitsu in Texas. Literally, Chuck Norris moved Carlos Machado to Texas to be his personal jiu-jitsu coach. That sounds fake, but that's like a true story. So, there's these guys in our field that are literal legends that once again, they're worth every penny, but it's not $100,000 to get their time for the weekend. It's a few thousand. And if you charge your students $50, $60, $70 to get to train with them for three hours, all of a sudden, sometimes I get to train with Superfoot for free because my students will actually cover his fee. Or sometimes I'll bring in Carlos Machado. I'm only out $200 because his fee was X and my students paid enough to almost cover his fee. So, it is so cool that in martial arts you can literally train with people that you would ask for their autograph or now it's a selfie under normal circumstances and you can actually train with them on the mat two, three, four hours and they will show you their secrets to greatness. And the cool thing is they're all doing the same moves.
It's kicks, punches, sweeps, throws, chokes, depending on your art, but they all do it just a little bit differently. And it's usually those differences that make them successful.
LEE STITZEL: My guest today has been Professor Ty Garrett. Ty, thanks for joining us on the EconBuff.
TY GARRETT: My pleasure.
LEE STITZEL: Thank you for listening to this episode of The EconBuff, where we find applications of economic thought in a variety of topics and fields. If you enjoyed today's discussion, be sure to check out our previous episodes on YouTube, Spotify, and Amazon Podcasts under the title EconBuff Podcast. And be sure to like and subscribe. For updates and information, visit our website at econpodcast.wixsite.com. If you have any questions, comments, or suggestions, we'd love to hear from you. Drop us an email at econpodcast@yahoo.com.
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