This story is part of CNBC Make It's The Moment series, where highly successful people reveal the critical moment that changed the trajectory of their lives and careers, discussing what drove them to make the leap into the unknown.
Anne Mahlum stumbled into her first Pilates class in 2013. Seven months later, she threw all her savings — $175,000 worth — into launching her own version of the company.
The workout was transformational, Mahlum says, but no one around her seemed to know about it. Her day job as CEO and founder of Back On My Feet — a Philadelphia-based nonprofit running club for homeless people — made her confident that she could build Pilates into a bigger business than anything she'd seen, to date.
"I never saw my body respond to a workout like this, and I was running 50 miles per week," Mahlum, 42, tells CNBC Make It. "I felt like my skillsets around branding, building communities and fitness gave me the ingredients to make something work."
Mahlum wagered everything to start Solidcore, a Washington D.C.-based company that brands itself as "Pilates core workouts redefined." If the business failed — as 81% of fitness and health startups do in their first year, according to the Global Health and Fitness Association — she'd have $0 to her name, and a reputation as a "one-hit-wonder."
She wasn't discouraged, partially because she'd been broke before. Growing up, her father gambled away her family's savings, she says. After college, she put herself into credit card debt chasing dietary and fitness trends.
She had no savings when she started Back on My Feet in 2007, and being a CEO changed her habits, she says: People relied on her, so she lived more frugally. She stockpiled money, hoping to avoid starting from scratch again — until Pilates came along.
Earlier this year, Solidcore opened its 100th location. Mahlum has profited, personally making $88.4 million by selling her shares of the company over two investment deals and an April acquisition by private equity firm Kohlberg and Company, according to documents reviewed by CNBC Make It.
She could gain more — potentially in the millions — based on the company's future performance, she says.
Mahlum is already onto her third company, spending $250,000 to launch a New York City-based fitness studio called Ambition, she says. She also raised $5 million from family and friends, leaving her with 80% of the startup's equity, she adds.
Here, she discusses why she spent her life savings, how she navigated the risks of her decision, and what led her to cash out and start anew.
CNBC Make It: What convinced you to pour your life savings into a Pilates business after a single workout?
Anne Mahlum: After I took that first class, I just thought, "There's nothing like this style of working out." I knew I was an early adopter, and I needed that speed to market to get Solidcore off the ground at the right time. So, I went all in.
I left Back on My Feet, moved to Washington D.C. and opened my first studio in November 2013. I rented an apartment a block away in the Adams Morgan neighborhood, licensed 10 machines and put another two in my apartment to start training instructors. It was as humble as it gets.
When I started Back on My Feet, I was broke. I had nothing to lose. This time, I put literally every dollar I had into the studio, which was nerve-wracking.
But I did have the benefit of experience, and I knew entrepreneurs don't have to have everything figured out when they start a business.
How do you recognize a window of opportunity opening, and when is it worth the risk to jump through it?
It's all personal experience, right? When I started Back on My Feet, I knew the power of running, that it could help a lot of people feel invincible.
Solidcore was no different. I thought the workout was unbelievable, and people didn't know about it.
Whenever I have that experience of feeling like something's incredible, I know other people are going to feel the same way. I had some self-doubts, but doubt isn't a sign you shouldn't do something.
What were some of those doubts?
When I started Solidcore, Larry Solomon — my good friend and, at the time, Back on My Feet's chairman — offered me $75,000 for 30% of the business, simply because he saw what I did the first time around. "I know whatever you're going to do, you're going to make work," he said.
It was so flattering. I only had $175,000, and taking the money felt smart. But I had a realization: If I take this money, all I'm communicating is that I'm doubting myself. I'm setting myself up to fail.
Being aware of those doubts — and wanting to prove to myself that I could overcome them — was actually helpful. I didn't spend a dime on marketing until we opened our 25th studio. I paid myself very little, and let the success of each studio fund new ones.
If I'd taken the money, it wouldn't have affected Solidcore. The studios would still be successful. But I'd have less money today, and I'd have to work through knowing that I gave into that self-doubt.
How did you know it was time to walk away from the business you created?
Selling Solidcore was joyous, and part of the plan all along. I'm really good at the beginning stages of starting a business — branding, building a team and a community, fundraising.
Once the business gets to a place where it's really functioning and needs to go radically deeper, there's less risk and excitement. Less work in the areas I'm really good at it.
I think a lot of startup founders screw up there. If you tried to throw me into a company like Tesla, I'd be like, "This is a horrible idea." I have no idea how to run a company of that size.
This story has been updated to reflect that Mahlum could earn millions in potential gains, based on Solidcore's future performance. An earlier version contained a more precise figure.
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