The Ledger
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Kadakia: ClassPass Listed Fitness Studios Without Agreements to Prove Demand
“There were certain studios that we just put on the platform where we didn't have like full agreements with yet. Because we just wanted to test and, you know, we started sending them so much traffic that they would call us up and say, Hey, like, who are you guy…”
Payal Kadakia rejects work-life balance, favoring structured systems instead
“And look, I never believed in the word balance, and I don't think you can have it, but I knew I needed a system that the same way I was able to accomplish every dream I had professionally, I didn't understand why I didn't have that system. Personally.”
Kadakia: Fitness Booking Struggles Because Working Out Is Aspirational, Not Utility
“And so something with like airline tickets, like you already made the decision to go, or if you're going to go eat, you're going to eat. Eating is, is a utility. Like you're going to eat. Right. And that was the difference where working out and going to these …”
Kadakia: Aggregator CAC is More Efficient Due to Higher Lifetime Value
“The synergies, right, of a company like ClassPass being able to do customer acquisition for an entire industry, right, where a class is, you know, 25, 30 dollars is just obviously more efficient when we're selling a product that has a bigger lifetime, right? W…”
Mindbody acquiring ClassPass was a matter of when, not if, says Kadakia
“So I do believe it was a matter of when, not if, these two companies would come together, and I think given everything that the industry had gone through through the pandemic, we kind of knew that this was the right time to join forces”
Kadakia: Class reservations are the single heartbeat metric for ClassPass
“Over time, and I still always make this the most important number that my team sees, it's the reservation number, because that is the heartbeat of the company. That means our product is working. That means our partners are happy. That means our customers are e…”
Kadakia: ClassPass unlocked market growth by targeting non-enthusiasts
“And there were a lot of fitness products in the market, That were actually speaking to the one percent of people who already did fitness, and I realized I wanted to go and talk to the 99% of people who were like me, and who were scared to walk into a spin clas…”
Kadakia: ClassPass revenue dropped 95% within two weeks of COVID-19
“Mandated by the government, almost every studio was shut down, right, within two weeks of COVID starting. So that was like a 95% drop in revenue. It was just a shutdown completely”
Kadakia: Lower Pricing Tiers Cannibalized Profitable Users and Worsened Unlimited Margins
“When we started doing was introducing lower, lower packages. And then what happened was, you know, our really profitable users were obviously choosing the lower packs, which made the unlimited package even get worse in terms of our margin. Right. And the peopl…”
Kadakia: Unlimited Tier Cancellation Backlash Far Exceeded Actual Business Impact
“The noise was bigger than the impact it had on the business, for sure.”
Kadakia: A Marketplace's True Product Is the Offline Experience, Not Tech
“Our teachers are our product, right? I always say this. It's not, you know, our product is not this technology we built. Our product is this class that someone goes to, right? Offline. It's the experience they have with our instructors in our studios”
Kadakia: Founders Must Be Mission-Obsessed Rather Than Product-Obsessed
“I've learned this, you know, to be mission obsessed as a founder and not product obsessed. It's not my product that makes us, it's us actually creating a solution right to the problem.”
ClassPass expanded into beauty and wellness during the pandemic, says Kadakia
“And then the other one, which actually did stick, which was something a part of something we had actually tried right before the pandemic was we went into beauty and wellness and that actually ended up sticking because what we realized is people were more comf…”
Kadakia: ClassPass spent $500k and one year building initial product
“I mean, the first product we built, we spent half a million dollars building it, a year in the making.”
Kadakia: ClassPass incentivized 6-month subscriptions with $100 Lululemon gift cards
“And so one of the things we did, and we figured this out early on, is we gave away Lululemon gift cards for anyone who joined and stayed for six months. So we said, hey, this is a 99 dollar product, you get a hundred dollar gift card if you stay for six months…”
Kadakia: ZocDoc Founder Cyrus Massoumi Helped ClassPass Raise a Bridge Round
“And so I thankfully, you know, raised a bridge round from, actually Cyrus from ZocDoc helped me
Raise that round, which got me into, got me through to January, which is when I officially closed my seed round that was going to let us launch in other places.”
Kadakia: ClassPass Saw 95% of Fitness Markets Shut Down Overnight During COVID
“So overnight in almost, you know, close to, I would say, 95% of our markets most of our studios closed down.”
Kadakia: Lululemon Sent ClassPass a Cease-and-Desist Over Gift Card Promotion
“And one day
I get to the office, and there's like a letter on my desk, and I open it, and it's a cease and desist from Lululemon.”
ClassPass expanded to 20 U.S. markets by January 1, 2015
“By January first of 2015, we were in 20 markets around the U.S.”
Kadakia: ClassPass Raised a $40 Million Series B Six Months Post-Series A
“Six months after my series A, I raised a forty million dollar series B, right?”
ClassPass users averaged five to six classes monthly on 10-class plan
“We were seeing our average around, you know, five or six classes per customer.”
Kadakia: ClassPass revenue overtook Passport revenue within three months of launch
“By month three of having the class pass out, we, it took over the passport revenue, and we knew that that was the model to focus on.”
Kadakia: ClassPass Reached a Billion-Dollar Valuation in January 2020
“And we got a billion dollar valuation in January, which is incredible.”
Kadakia: Startup Raised $500,000 Before Entering Techstars Incubator
“I raised about a half a million dollars. This was before we got into Techstars, which was this big incubator.”
Kadakia: ClassPass Negotiated Studio Payouts at 50% of Pack Rates
“The way we were doing a lot of the discounting was it was a 50% off of their 10 class pack rate.”
Kadakia: Under 15% of Early Passport Users Returned to Same Studios
“We saw less than 10 to 15% of people go back to studios.”
Kadakia: 95% of Surveyed Users Demanded a Recurring Monthly Subscription
“So we did a survey with our users where we asked them, you know, if you could go back and do this product over and over again, use the passport month over month and visit your favorite studios, you know, would you do it? And 95% of them said, yes, I would.”
Kadakia: Dabble Rebranded to Classtivity Due to Chicago Trademark Conflict
“We actually had to change our name because there was a company in Chicago that started selling classes under, under the name of Dabble. So we had to actually overnight change our name and we couldn't think of anything, so we, like, literally were just scouring…”