Small Business: Octane Fitness on what makes it a top workplace

Octane Fitness, which makes elliptical machines for home workouts and health clubs, is continuing to gain strength through its long-term focus on creating both exercise equipment and a workplace that operate smoothly.

Fitness industry veterans Dennis Lee and Tim Porth committed to investing in product innovation to make the smoothest-running "zero-impact" exercise machines possible when they launched Octane Fitness in 2001 in Brooklyn Park. Over the years, their standing, seated, lateral and cross-circuit elliptical machines have earned about 70 "best buy" awards from publications, consumer groups and fitness retailers.

Their latest additions include an iPad app that tracks and plans workouts and the Zero Runner, a new category of machine aimed at dedicated runners. Runner's World magazine described it online as "a mashup of an elliptical, bicycle and a treadmill" and said it offers "a close approximation of running without the impacts you get from landing on a solid surface."

Lee, president and CEO, and Porth have committed to innovation on the business side as well, creating a culture that helped Octane Fitness last month earn recognition as one of the Star Tribune's Top Workplaces, based on input from the company's 85 employees.

Porth, executive vice president for marketing and product development, and Lee instituted a more rigorous hiring process that includes candidate interviews with multiple employees and assessments to gauge passion for the job and cultural fit.

"The thread that ties it all together is that concept of zero-impact exercise," Lee said. "That strategy has driven what we do and who works here. It's one thing to have great people; it's another to sweat the details and spend the time and effort to bring in great people."

Once hired, employees get "treated like a real partner in the business," Lee said, with employee and company performance determining an annual profit bonus. "It's like everybody has their own piece of the business to run."

This year's revenue is expected to top $60 million, Lee said. Octane Fitness made national headlines in April when the U.S. Supreme Court ruled that it could collect legal fees from a company that lost its patent infringement suit against the Minnesota firm.

The Zero Runner, priced at $3,299, will be in full production in August. It's on sale now at 2nd Wind Exercise Equipment stores. Health clubs that feature Octane Fitness machines include Life Time Fitness, Snap Fitness, Anytime Fitness locations and YMCAs.

Longtime runner Larry Schmidt, 61, of Sparta, Wis., said the Zero Runner has helped him run without the pain that has slowed him since surgery for osteoarthritis in his hip.

"It has returned me to a love of running I hadn't experienced since surgery," said Schmidt, who has completed 92 marathons. "I never thought I'd have that again."

Carrie Tollefson, a middle-distance runner and member of the 2004 U.S. Summer Olympics team, said she would use the Zero Runner to supplement her outdoor miles or to recover from injury. She believes the machine would be especially useful to women runners during pregnancies.

Alan Egan, executive vice president of 2nd Wind Exercise Equipment, said the Zero Runner has great potential.

"Since the elliptical came out there hasn't been anything brought to market that's set the consumer on fire," Egan said. "The Zero Runner, in my opinion, has really accomplished that. … I have never experienced anything like it and never imagined there would be a piece like this."

The expert says: Dileep Rao, Twin Cities-based founder of uEntrepreneurs.com and clinical professor of entrepreneurship at Florida International University, said the lessons that Octane Fitness offers entrepreneurs include finding a unique niche and becoming the best at it. The company's culture also is noteworthy.

"Making employees feel valued can only help the company improve its productivity and help them cement their position in the market for exercise equipment," Rao said. "What would be interesting to know is how the company plans to reach the next level of sales where they build the organization's size while keeping this unique small-business culture."