We’re excited to host guest author Payal Kadakia, the CEO and Co-Founder of ClassPass, for this post!
When I started ClassPass, my goal was to make it easier for people to stay connected to the things they love. But it wasn’t an easy journey. I spent years working on the ClassPass dream—which started out as a search engine for users to find classes and has now grown to a platform that gives people access to thousands of experiences around the world. Working with investors in the startup industry taught me the importance of staying true to your mission, but also being willing to pivot and be flexible when it comes to making your dream a reality. Capital is important, but so is staying true to your vision. Below, I share some key takeaways from my experience starting ClassPass.
KNOW YOUR MISSION
First and foremost, you need to have your mission at the heart of what you want to achieve. If you want to build your own yoga studio, be thoughtful in having the foresight to know how you want it to grow and what you hope your members will feel when they walk through your door. You have to be excited and committed to your vision—it’s what will carry you through both the ups and the downs.
CONSIDER YOUR FINANCIAL HEALTH
Whether starting my own dance company or building out my vision for ClassPass, I’ve never been afraid to take risks—but that doesn’t mean acting carelessly. I always made sure to make calculated risks. Understand upfront what you’re comfortable bargaining with and the finances needed to make it a reality, but don’t go beyond your own means. If you’ve relied so heavily on monetary means that you don’t have a roof over your head or are asking friends or family for money to get by, you’ll be distracted by the basics of taking care of yourself and won’t be able to commit all the energy and passion it takes to get your business off the ground. Take stock of your livelihood and get your house in order first.
PRODUCT, PRODUCT, PRODUCT
When talking with investors, you must know: it’s always about your product. What makes your business something that people will want and become addicted to? (Side note: Get them to a class/use your product and try it out!) Focus on your craft and getting your core execution intact so that, even as you scale, this element is irreplaceable. It can’t just be about one teacher or instructor. What makes your studio or class experience uniquely yours? There’s no easy blueprint for this, no strategy. It’s something you need to know in your soul.
FOCUS ON YOUR ACCOMPLISHMENTS
You probably know the basic ideas you need to cover in your pitch deck: market dynamics, problems or pain points you’re solving, how you’ll acquire users and use your funds. These are all things investors want—and need—to hear. But don’t forget that, above all, people are investing in you and your energy. Anyone can have a good idea but it takes a certain kind of person and drive to execute against it. Focus on your accomplishments and the moments that make you proud. For me, it was about sharing the story of starting my own dance company. Sharing something I was so enthusiastic and passionate about, something I’d poured all my own money and efforts into alone, allowed others to get excited as well. When you’re just starting out, it’s important to share those early successes and data points. Magical moments are key to winning over investors.
INVEST IN CURVES
I always like to stress, “Don’t invest in dots, invest in curves.” Show your investors the progress you’ve made, even if you’ve encountered barriers or setbacks along the way. If anything, you’ll show your ability to be nimble and redirect your pursuit after getting stuck. Highlight your ability to solve problems and persevere no matter what challenges come up.
FIND BALANCE WITH YOUR TEAM
Having a support system you can turn to during your journey is so important. But you also need to find balance and diversity in your team of advisors. They should be experts in areas that you’re not. So if you’re the passion and inspiration, they need to be the analytical mindset. If you’re more business minded, let others lend you their excitement and charisma. Build a conservative budget and be reasonable with cash to make enough capital. When you do take money, realize that your investors become like your family. It’s like entering into a marriage—you’ll work together for the many years to come, so understanding and communicating well with one another is key.
DON’T LOSE FAITH
Getting users is the hardest part! In the beginning, we did everything we could to get people to try ClassPass. We emailed our friends directly inviting them to take class, threw launch parties, gave major discounts on just about anything. There were times when we wondered, is this going to work? But then people began to get excited about this *new* thing that was starting. They started telling their friends and family, and people everywhere started to share the passion I felt every day about the impact this could have in people’s lives.
BE OPEN TO CHANGE
ClassPass started as Classtivity—which was essentially a search engine for classes. We all thought we’d come up with this great idea, but no one was using it. So we had to learn to pivot. Next, we tried something called the Passport, which offered users 10 classes for $49. People began to buy that package and go to studios, which worked because we were able to deliver on our promise of exposing boutique studios to new users. But then, people didn’t end up going back to the studios as we wanted them to. Instead they found ways to just buy the Passport over and over again. We found that they loved that ability to explore new studios in a seamless way. This was an opportunity for us to pause and think about our business model—was it working for us? More importantly, was it what our users, and our studios, wanted? I knew we had to change the roadmap—it might not have been my original vision, but the business was able to evolve to what ClassPass is today, a platform that encourages exploration while also fostering loyalty to our studios. Don’t be afraid to make a change—embrace those moments of uncertainty where things aren’t going as planned as opportunities to improve your offering. Listen to your customers to understand what makes them happy and know there are many ways to achieve your vision, even though it may not always match what you originally set out to do. For me, and for ClassPass, it was about staying true to that core mission of making it easier for people to connect to the things they love, while also opening up to the realities of what the market wanted and pivoting in order to execute on that.
Payal Kadakia is the CEO and Co-Founder of ClassPass, a monthly membership program that provides people of all fitness levels access to the best boutique fitness classes and gyms across the US and internationally. Since its launch in 2013, ClassPass has facilitated over 17 million reservations across 8,000 studios in 39 cities globally. Payal is also the Founder and Artistic Director of The Sa Dance Company, founded in 2009 with the mission to increase awareness of Indian Dance in the mainstream and serve as a platform for expressing the Indian-American identity through movement. Payal previously worked as a consultant at Bain & Company and holds a degree in Operations Research from MIT.