Tough Mudder: Mud, Sweat & No Tears
Credit: Photograph by Gregg Segal
The first Tough Mudder was held on Sunday, May 2, 2010. It did not go well. At midnight on the morning of the race, Dean and Livingstone were still out on the course, wearing headlamps and frantically banging rebar into the ground. Once the race began, there were massive lines at some of the obstacles, with some people waiting nearly an hour just to climb a wall. The day turned out to be hot, and they'd severely underestimated how much water they'd need – they ran out in about an hour. (Dean: "People seemed to be pretty angry about that.") In hindsight, he rates the whole thing a C-minus. "If there'd been any other competitors in the market," he says, "we could have become an also-ran."

One reason Tough Mudder didn't is that it found the sweet spot between tough and accessible. As Patterson puts it, "You don't have to quit your job or dump your girlfriend to train full-time." The biggest draw, of course, is the obstacles: a rotating arsenal of 60 or so, about half of which will appear in any given race. Some are your garden-variety basic-training staples, like the so-called Berlin Walls (12-foot climbing walls). Sometimes the elements come into play as well: At one sleety event near Big Bear last year, Dean remembers climbing out of the Arctic Enema and running straight into a snowstorm, the coldest he's ever been. Afterward, he says, his ass "felt like a frozen steak." He still has a scar on his knee from a mild case of frostbite.

According to Patterson, the next frontier in obstacles is probably psychological. "One we're thinking of is called Dark Lightning – it's like the Electric Eel but in a completely black space, so you can't see where the wires are. Or we'll have mileage markers, but we'll put them every nine-tenths of a mile – so when you think you're done, you still have another mile to go." They're currently looking to hire someone with the enviable title of Director of Obstacle Innovation, who will have a big work space in Brooklyn in which to experiment. "It definitely needs to be near a Home Depot," Patterson says. "Actually...they would be a good sponsor."

From a business standpoint, there are two things Tough Mudder has done better than anyone else. The first is branding. It's perfectly positioned itself as a bro-ish, dude-ish good time, employing gimmicks like intentionally sophomoric obstacle names (Hold Your Wood, the Ball Shrinker), free mullets and tattoos (more than a thousand people have taken advantage of the latter), and a free cup of beer for everyone who finishes (courtesy of Dos Equis, a sponsor). Dean says he took his inspiration from rugby culture: "It's not about trying to create some giant frat party or trying to be Jackass. It's just guys being guys, playing hard and going for beers after."

Tough Mudder's organizers also constantly point out that it's "not a race but a challenge." The event stresses cooperation, not competition, and it doesn't time participants or even have clocks. To hear Dean tell it, this is no accident. "This is where I start sounding like a Marxist-Leninist," he says. "But I genuinely believe that marathons and triathlons are kind of a continuation of the values of our corporate rat race, where it's about getting ahead, doing it on your own, putting in the hours, not getting help." Tough Mudder, on the other hand, is a little more like socialism, where teams go only as fast as their slowest member and pledge to "Leave No Mudder Behind." "I don't pretend to be some sociologist," Dean says, "but I did see this as all part of it."

The second thing they've done well is sell themselves. The company has grown in organic fashion, with three-fourths of new business coming by word of mouth. Almost all their marketing is done via social media – YouTube videos, Twitter posts. When someone likes Tough Mudder on Facebook, their friends start seeing ads. The customers do the selling for them. Even the notion that Tough Mudder is best done as a team is a stroke of commercial genius – once one person signs up, he's dragging three or four friends along with him.

As a result, the company has grown exponentially. In 2010, Tough Mudder staged three events and earned around $2 million. This year, it's 35 events and an estimated revenue of more than $70 million. Pretty soon Dean and Livingstone will move into another building in Brooklyn like the one they started in three years ago Рthe difference is, last time they had two desks, this time they'll have 250.

Meanwhile, that initial $20,000 that Dean and Livingstone invested is all the seed money the company has ever had. They've never tried to raise outside money; they've never even needed to. As a result, all profits are theirs, 50-50. And with $70 million in revenue this year – and overhead that basically consists of plywood, straw, and nails – they must be making just absurd amounts of cash.

At this point, the company is probably starting to reach its peak in the U.S. "We clearly can't keep doubling in size," Dean says. "It's unsustainable." He sees it topping out at around 50 events here, with maybe a million participants. "But, as you can see," he says, pointing to a large, orange world map with black dots stuck everywhere there's an event, "there are still a lot of countries that don't have dots." They expect people will eat it up in countries like Germany and Sweden – "cold places, places with Viking blood" – as well as more Westernized Asian countries like South Korea and Japan. They're also looking at everything from Tough Mudder-branded fitness gear to boot camps to a TV show – even to their own hotel-booking company. "Most of the Tough Mudder spending is not captured by Tough Mudder," says Dean. "We're looking into that."

Run for Your Lives, founded in Baltimore, is a "zombie-infested" 5-K obstacle course where participants try to get to the finish line before being "eaten." It started last year and has already spread to a dozen cities and towns. "Twelve thousand people at their first event," marvels Dean. "Amazing. And just to be chased by zombies. We think we don't have any costs – we still have to build obstacles. They're just like, 'Hey! Who wants to play tag?'"