In Depth

The Business Of Removing Excuses

There are so many great excuses not to work out: “I’m too busy;” “I’m too tired;” “My house is on fire;” “I can’t find interesting workout class options.”

If ClassPass meets its goals, that last excuse, at least, will be scratched off the list for good.

The fitness subscription service is changing the way people take the intention to workout and turn it into actual sweat. With the new year’s resolution season fast approaching, ClassPass is positioned to continue to change the way consumers connect with fitness.

Having launched in 2013, ClassPass is an app that connects the fitness-minded with classes and studios in their area. A monthly subscription fee (which ranges from $79 to $125) gets users access to an unlimited number of classes a month with up to four classes at a single studio a month. Since its initial launch, ClassPass has also expanded its product offering to include a line of athleisure wear in partnership with Outdoor Voices and has even started a program to help more fitness studio businesses get off the ground.

“Our mission is to utilize our internal resources … to help studio owners,” Michael Wolf, the global head of operations and partnerships at ClassPass, recently told Racked. “We’re trying to support the entire ecosystem.” The Studio Empowerment Program works by providing de facto loans to studios to help them open new locations. In exchange, ClassPass asks that a certain number of class spots be reserved for ClassPass users at the new location.

And the model is working. In 2015, according to numbers released by ClassPass and reported by New York Observer, the service’s users booked 594,036,380 minutes of class time, or 9,900,606 hours. That kind of usership is helping the service track and predict trends in the fitness space. In 2015 the most popular classes booked were spinning, yoga and strength training, according to the report. And the classes that have gained the most booking in the last six months are rowing sessions, which ClassPass predicts will be a rising trend in 2016.

Of course, ClassPass could just be riding the fitness wave, with gym memberships reportedly at an all-time high. According to the International Health, Racquet & Sportsclub Association, 52.9 million Americans paid for memberships in 2013, up from 39.4 million a decade prior, while health club industry revenue was $22.4 billion in the U.S. and $78 billion globally.

ClassPass was valued at $200 million in its last (Series B) round of funding, according to The Wall Street Journal. To put it in perspective, that’s more than Town Sports — a long-time operator of more than 150 health clubs up and down the east coast, including the New York and Boston Sports Clubs. But while Town Sports is contracting, WSJ points out, ClassPass continues to grow, expanding to between 75 and 100 cities on three continents, including the U.K. According to TechCrunch, the company is tracking to a $60 million revenue run rate for 2015, a run rate that has doubled in the past three months puts ClassPass in contention to wear the crown as “the next Uber” — a title that a more-than-crowded field of competitors (i.e., every startup) is constantly seeking.

ClassPass CEO Payal Kadakia is a leader who believes not only in dedication but also following one’s passion. When asked by Elite Daily in a recent interview, Kadakia explained her motives behind founding her company: “The mission for me was always to be able to help people discover things.” Undoubtedly, discovery is a key step in the online-to-offline buying cycle.

Named to Fortune’s 40 under 40 Women To Watch list, Kadakia also told Elite Daily about the empowerment her service offers its users. “We listen to people,” she remarked. “We kind of give them permission to do what they want to do. It’s like, they already subscribe to it, so they feel like the world is their oyster. And that’s such a great feeling.”

ClassPass may be appealing to millennials who are drawn to the “choose-your-own-adventure” nature of the service and the ability to continually seek the “best” fitness experience possible, rather than settling on a single long-term gym membership. Part of the company’s mission is to get people out of their comfort zone, out from behind their computer screens and the anonymous connection of social media, and get them interacting in physical space.

“We have helped foster people to meet each other on a different core value, which is this interest of exercise or activity,” says Kadakia.

ClassPass is a win for consumers as it makes it easier to connect to more fitness options and book classes faster, all while saving money. However, it’s not necessarily a win for fitness studio owners. The service pays participating studios a flat fee each time a member books a class at their studio.

As CityRow Founder Helaine Knapp told Racked, “We built a product that costs $32, so committing to something that could ultimately cost us a full-paying, long-term client seemed really scary to us.”

ClassPass is certainly reinventing the way people find and book fitness classes; along the way, it may also be helping to shape fitness trends and fashion. How the company will continue to evolve as it experiences astronomical growth is unclear, but if it stays true to its founding principles and continues to listen to its users, the future looks promising for this empowering innovator.

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