ClassPass becomes the newest unicorn: How did they get there?
ClassPass became the first unicorn of the decade last week when it passed the billion-dollar mark after announcing a $285 million Series E investment that put their valuation over the billion-dollar threshold. Also, it’s quite fitting that the founder of the first tech unicorn of the 2020s is a woman of color.
“We are motivated by the impact we’ve had on members and partners, including 100 million hours of workouts that have already been booked,” said founder Payal Kadakia in a statement about the latest investment. “This investment is a significant milestone that will further our mission to help people stay active and spend their time meaningfully.”
How did ClassPass become a unicorn in a little more than six years? Here we’ll explain what leadership decisions got the company to this point.
First of all, what’s ClassPass?
ClasPass is an American fitness company that provides access to many different fitness and wellness classes such as yoga, martial arts, boxing, pilates, and the use of health clubs through a flat-rate monthly subscription.
It was founded by Payal Kadaka and Mary Biggins and is the globe’s largest wellness club aggregator, and it expanded from 4 countries to 28 in the last 18 months. At the same time, they’ve entered the corporate wellness business partnering with 1000 companies such as Google and Morgan Stanley.
How did they get there?
First of all, they identified a breach in the fitness industry: there was no aggregation. Consumers wanted variety, and they weren’t able to get it in one single place. ClassPass gave them a chance to pick from a vast catalog of fitness and wellness activity so that they could personalize their training schedule for a flat-rate subscription.
After initial success, they were bold. Growing from 4 countries to 28 was a significant bet, to say the least. But when you’re a business leader, you’ve got to trust your product. That helped them launch SmartTools, which helped their more than 30,000 business partners (gyms, health centers, spas) to increase their revenues with better yield optimization. That, in return, will allow ClassPass to improve their variety of offerings, and give a better experience to their subscribers.
The Key: Service-Focused Strategy
Payal Kadakia, the founder of the company, has always said ClassPass is a mission-oriented company with two primary purposes: 1) helping people around the world to get fitness and 2) helping small fitness and wellness businesses grow. It’s pretty simple: when you offer an excellent service and support your partners, so they provide a great service, everyone is happy, everyone is making money, and everyone is satisfied. The subscribers get better, varied, and more personalized business experiences, partners thrive, and ClassPass grows. A killer combination.
What can we learn from this?
The ClassPass case gives two great lessons for every organizational leader. First, trust the quality of your product and don’t be afraid to be bold in your decisions, and, second, use a service-driven strategy. Always seek to offer the best product and the best experience and focus on helping your partners grow, too, as it will benefit your clients, too.