Tough Mudder: Mud, Sweat & No Tears
Credit: Photograph by Gregg Segal
Tough mudder's headquarters are located in an old brick warehouse in downtown Brooklyn, not far from the Manhattan Bridge. Most of the building's other lofts are populated by young creative types – art gallerists, design firms, Etsy.com. If you want to find the Mudder people, just look for anyone with a tanned build and workout socks. Even the company's warren of offices, spread pell-mell throughout the third floor, stand testament to their somewhat astonishing success: They're growing so fast, their real estate agent can't keep up.

One afternoon in July, a group of new hires is in a conference room watching a PowerPoint training slideshow. On a dry-erase board nearby, someone is brainstorming a list of "Badasses in History." (First two entries: Ernest Shackleton and Gandhi.) In one bullpen-style office, a few dozen young people are hard at work on their computers, scouting course locations and assembling spreadsheets. And high on one wall, like a ticker at a PBS pledge drive, a big plasma screen displays the latest registration stats: 674 people so far today; 4,310 for the event that weekend; 411,194 for the year.

Down the hall, in a sunny conference room that smells of fresh paint, the company's co-founder, a toweringly self-confident 31-year-old Englishman named Will Dean, sits sipping a bottle of water. Dean is dressed in CEO-casual – Birkenstocks, cargo shorts, a Tough Mudder T-shirt – and his boyish face looks like it hasn't seen a razor in a couple of days. Soft-spoken and unflaggingly polite, he could be Chris Martin's slightly plumper cousin – a low-key presence for such a high-intensity company.

Dean grew up near Nottingham, literally down the road from Sherwood Forest. His parents were lawyers, and he figured he would be one, too, but when he was 16, he and a boarding-school friend, Guy Livingstone, participated in a school project where they were basically given government money to start a company. They acquired the rights to distribute color-changing nail polish in the U.K. and traveled to trade shows around the country, using their own nails as models. "We probably made £10,000," Dean says. Just like that, he'd caught the business bug.

After graduation, he went to work for the Foreign and Commonwealth Office – the British equivalent of the U.S. State Department – and was stationed in the Middle East, coordinating with Arab governments to freeze terrorist assets. Dean found counterterrorism work in the post-9/11 years exciting. "You could be 24 and be the de facto expert on something," he says. "You'd come up with some idea and say, 'It costs £10 million,' and they'd be like, 'Here's 12.'"

A few years later, Dean enrolled at Harvard Business School, where, according to an official company biography, "he finished in the top 10 percent of his class despite sadly finding much of his time there very boring indeed." "Most people there did not blow my mind," Dean says. A summer working at Bain, Mitt Romney's old firm, sealed the deal: "I was, like, 'This is as good as it gets post-MBA – I'm going to be partially lobotomized if I stay here for six months.'"

In the meantime, he was getting back into exercising. He'd grown up playing rugby and rowing, and at Harvard, he started thinking about how he might be able to turn fitness into a business. He'd already seen the potential for a Tough Mudder-style event: One semester, he conducted a field study of a race in Germany called the Strongman Run, which sold out its 8,000 spots in a matter of minutes. "I started thinking I could do this in the States," Dean says, "that Americans would really enjoy this sort of thing." (A cynical mind might wonder if he was doing more than just research; in 2010, a long-running, and very similar, event in the U.K. called the Tough Guy filed suit against Tough Mudder in the U.S., alleging the company had stolen its idea. The case was later settled out of court.)

Dean's second year at Harvard, he captained a team in the school's prestigious Business Plan Contest. The pitch? A seven-mile, military-style obstacle race. Dean's team made it to the semifinals but lost in the final round because none of the judges believed the company could be profitable. "No one is going to come to this," their professors told them. It's a story Dean loves telling because it highlights Tough Mudder's underdog roots – but also because it shows he's smarter than his professors.

After graduation, Dean recruited his old boarding-school friend Livingstone, who'd recently left his job as a corporate attorney and was drifting around Syria trying to learn Arabic. They moved to New York, because that's where Dean's girlfriend was, and put up $10,000 each in seed capital. They spent a few months sketching out obstacles, basically ripping off what Dean had picked up from the special-forces guys he used to run with overseas, and driving around the East Coast in their beat-up Jetta, scouting racetracks and ski resorts as possible locations. They were working 20 hours a day, and Livingstone was sleeping on a mattress in Dean's Brooklyn living room. They ate a lot of bagels, a lot of noodles, didn't shave. "I look at how we looked in October 2009 and in the spring of 2010," Dean says, "and it looks like we took up heroin."

One of the things Dean had learned was that it's good to have what's called a "positive cash inversion cycle": You tell people what you're going to sell them, take their money up front, and use that money to make the thing you're selling. You're not spending your own money at all. When it came to Tough Mudder, Dean says, "I thought, 'This is the same. I can get all the money in before I actually have to do anything.'"

They set up a $300 website, which, after expenses and the pittance they paid themselves, left them with an $8,200 marketing budget, which they spent entirely on Facebook ads. For their first race, at a ski resort in Pennsylvania, Dean thought they'd be lucky if 500 people signed up. ("I remember the day we got 10. We all went for beers.") Instead, they sold all 4,500 spots in about a month. At $85 per person, their costs were covered weeks in advance of the race. Even before they'd started, they'd turned a profit.

"I had, like, $100,000 in student loans," Dean says. "Six weeks after the website went live, I wrote a check for the whole amount."