Jan 7, 2019 · 56m · how-i-built-this
SoulCycle: Julie Rice & Elizabeth Cutler
Julie Rice · 19m spoken Guy Raz · 15m spoken Elizabeth Cutler · 14m spoken Rosalyn Goodwin · 1m spoken Gabrielle "Gabby" Goodwin · 27s spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
This episode of How I Built This chronicles how Julie Rice and Elizabeth Cutler co-founded SoulCycle, transforming a scrappy, shower-less basement cycling studio into a nationwide boutique fitness empire and cultural phenomenon.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 30.5% of the talking time here. How this is scored →
Guy as informed peer 3.5 Guest teaching 2.3 Guest disagreement 0.8 Guy pushing back 1.5
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 36:25 Elizabeth rebukes risk-averse commercial bankers during the 2008 crisis
Elizabeth passionately describes confronting bank lenders demanding unreasonable collateral, declaring they would not need bank help once revenues reached sixty million dollars.
Hardest push from Guy ▶ 18:31 Guy challenges founders to define what made SoulCycle fundamentally uniqueGuy presses past vague notions of community, demanding specific explanations of how the music, lighting, and hospitality created an indispensable customer pull.
Biggest teaching moment ▶ 47:46 Julie reframes Guy's luck question around productive ignoranceJulie refutes Guy's conventional skill-versus-luck dichotomy, teaching that lack of formal corporate knowledge kept them moving forward fearlessly where spreadsheet analysts would stall.
Guy holds their own ▶ 5:18 Guy deconstructs the casual ideation trap compared to decisive executionGuy compares passive entrepreneurial dreaming to wanting to open a kombucha shop, sharply setting up the contrast with Julie and Elizabeth's immediate execution.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Frustrations with the Existing Fitness Landscape | 4 | 3 | 1 | 2 | Guy Raz probes why Julie and Elizabeth felt the need to start a dedicated cycling studio instead of just moving on like everyday hobbyists. Julie clarifies that LA already had boutique fitness, educating Guy on the distinction between standard gym buffet models and dedicated pay-per-class fitness. | |
| The First Meeting and Securing the First Location | 3 | 2 | 1 | 1 | The founders detail their first lunch meeting and their philosophical alignment on turning cycling into an aspirational sanctuary. Julie and Elizabeth casually correct each other on the initial rider target (75 vs 100 riders), maintaining a warm rapport with Guy. | |
| Personal Financial Risks and Initial Bootstrapping | 3 | 2 | 0 | 1 | Guy inquires about the financial backing and personal stakes of starting the business. Julie recounts living on a strict 200-dollar weekly cash envelope while Elizabeth details self-funding with 250,000 dollars from a real estate sale and savings. | |
| DIY Studio Build-Out and Naming SoulCycle | 3 | 1 | 0 | 1 | The guests describe the scrappy studio build-out in a former mortuary lobby and how Elizabeth's husband suggested the name SoulCycle. The mood is lighthearted and nostalgic. | |
| Developing the Business Model and Hospitality Experience | 5 | 4 | 1 | 3 | Guy presses the founders on what concretely differentiated SoulCycle from existing spin classes. Elizabeth explains their digital booking innovation and radical hospitality standard, defending their 27-dollar price point. | |
| Grassroots Guerrilla Marketing and Opening Day | 2 | 1 | 0 | 1 | Julie and Elizabeth explain their early guerrilla marketing tactics, including making yellow camo t-shirts and walking flyers into apartment mailrooms. | |
| Mid-Episode Break and Upcoming Challenges | 3 | 2 | 1 | 2 | Guy asks if the early slow burn worried their families. Julie corrects the premise by pointing out that they reached positive cash flow within five months, defying typical startup timelines. | |
| Hamptons Summer Pop-Up and Merchandising Explosion | 3 | 2 | 0 | 1 | The founders describe setting up a seasonal pop-up in Bridgehampton and how retail demand surged from small batches to over 100 monthly apparel SKUs. | |
| Hamptons Momentum and Citywide Recognition | 4 | 3 | 1 | 2 | Guy asks about the departure of their founding instructor partner Ruth. The founders maintain discretion, steering the conversation toward how they hired a business therapist to safeguard their own partnership. | |
| Opening Tribeca Amid the 2008 Financial Crisis | 4 | 3 | 2 | 1 | Elizabeth recounts confronting bank executives who refused credit after the 2008 crash despite SoulCycle processing millions in transactions, walking out after asserting she would not need them once they reached sixty million in revenue. | |
| Emerging Boutique Competition and Elevating Instructors | 4 | 2 | 1 | 2 | Guy asks if they felt threatened when Flywheel emerged as a direct competitor. Julie explains how they focused on treating instructors like rock stars rather than reacting defensively. | |
| The Equinox Partnership and National Scaling | 4 | 2 | 1 | 2 | Guy asks whether selling a controlling stake to Equinox was necessary to expand. Elizabeth admits in hindsight they could have scaled on their own, though the partnership provided critical execution confidence. | |
| Founder Divestment and the Emotional Cost of Exit | 4 | 3 | 1 | 1 | Elizabeth firmly refutes the common corporate advice that selling a company is unlike giving away a child, insisting the emotional attachment of founding is visceral. | |
| Post-Exit Routine and Assessing Skill Versus Luck | 5 | 4 | 2 | 2 | Guy poses his signature skill versus luck question. Julie rejects attributing their success to mere luck, arguing that entrepreneurial ignorance shielded them from overthinking mistakes. | |
| LifeShop Venture and the Uncollected Hamptons Bet | 2 | 1 | 0 | 1 | The episode wraps with a light anecdote about Elizabeth's husband's uncollected bet followed by the standalone How You Built That segment featuring Gabby's Bows. |
Statements from this episode (20)
Cutler: Pre-SoulCycle NYC Gym Classes Were Repetitive and Uninspiring
“For me, what was going on in there, it just wasn't inspiring. People would play the same playlist over and over. They would phone it in. It was super boring.”
Rice: In 2005, NYC Had No Pay-Per-Class Fitness Outside Yoga
“I mean, there was no marketplace in New York at the time. There was no opportunity to take pay-per-class fitness. At the time, we were talking about 2005, there were some yoga studios, but other than that, you know, the model for gyms, and this is a lot of wha…”
Rice: SoulCycle Opened Three Months After Its Co-Founders First Met
“We met in January, and we opened SoulCycle in April.”
Cutler: SoulCycle Launched With $250,000 in Initial Startup Capital
“So we took 250,000 dollars and started SoulCycle with that.”
Cutler: SoulCycle's first studio rent was $5,000 per month
“I think we gave them three months security and the rent on the studio was 5000 dollars a month.”
Cutler: SoulCycle Framed Its $27 Class Price as Two Cocktails
“We started at 27 dollars a class. We thought about it as two cocktails or inexpensive personal training”
Cutler: Customers Value and Engage More When Paying Per Class
“People value what they pay for, and if they pay for something, then when they walk in the front door, And they participate, they're going to bring something different than if they aren't paying for it.”
Rice: We Predicted the SoulCycle Logo Would Become the Nike Swoosh
“One day it's not even gonna need to say SoulCycle, it's just gonna be like the Nike swoosh. People are just gonna know what it stands for.”
Rice: SoulCycle Absorbed $65 Daily Fines for Guerrilla Rickshaw Advertising
“So we would get a ticket for 65 dollars a day for each day that the rickshaw was chained up to that parking meter.”
Cutler: SoulCycle Reached Positive Cash Flow in Five Months
“So we were positive cash flow by month five.”
Rice: SoulCycle designed 65 to 125 apparel SKUs monthly three years in
“I would say by the time the collections really got into full swing, which was probably about three, four years into the business, we were designing about 65 to a 125 SKUs a month.”
Rice: SoulCycle Merch Acts Like a Souvenir From a Great Vacation
“I always say that the merchandise at SoulCycle is almost like having to buy the t-shirt from the best vacation that you've just been on.”
Cutler: SoulCycle Reached $10 Million in Transaction Volume by 2008
“We are running ten million dollars of cash from our, all of our transactions through your bank, and that, that is your message to me”
Cutler: SoulCycle never missed payroll during 2008 Tribeca expansion
“But we never missed payroll, and we always had toilet paper, and, you know, that part really worked out well.”
Cutler: SoulCycle Co-Founders Used a Coach to Navigate Business Tension
“There's no question that it did. There, I mean, I think that we also lived by this one saying, we always said to each other, high road, long view. High road, long view. We would never allow ourselves to get down in the mud and get dirty.”
Rice: SoulCycle Elevated Fitness Instructors Into the Brand's Rock Stars
“So we were sort of, we sort of thought, let's build the stadium. Let's put these rock stars on this stage. Let's let them sort of, you know, be the faces of and bask in the glory of and change these people's lives. That was really what we were doing. We were b…”
Cutler: SoulCycle could have scaled without outside investment
“The truth is, looking back, yes, we could have done it.”
Cutler: Advice to remain emotionally detached when selling a business is false
“I will say that there are those who said to me when we were getting ready to do our original deal in 2011 you know, selling a business is not like selling a child. I mean, You have children. This is your business in a very detached way. And I will say that tha…”
Rice: Selling a Business Triggers Mourning, Spending, Then Forward Planning
“You know, I think that there's, you know, there's definitely a mourning period. There's definitely, you know, a period where you spend some money. And then there's definitely a period where you begin to think about, you know, what am I going to do next?”