Payal Kadakia started the precursor to ClassPass, a subscription service for dance and fitness classes at studios and gyms, in 2012 after imposing a 14-day time limit on herself to come up with a winning idea for a startup. Seven years later, her company has 500 employees in 18 countries, and has raised more than $200 million in venture funding. At its inception, the New York City-based business had a stint in a buzzy startup incubator and a splashy launch, but that didn't result in a huge influx of users. A year after a pivot, it still wasn't working. Eventually, Kadakia, now ClassPass's executive chairwoman, turned things around by rededicating her efforts to the original intent behind the business.
--As told to Christine Lagorio-Chafkin

I went into business after studying management science at MIT, and I worked at Bain & Co. It taught me a lot about how to get things done, be a good leader, and manage people. When I was six years out of college, I realized I'd already checked all of these boxes of things I wanted to do: have a good job, make enough money, graduate from a good school. But something was missing. I wanted to build something bigger for the world.

I met a bunch of entrepreneurs in San Francisco and decided that I'd give myself two weeks to think of an idea for a company. I know it sounds strange but I figured if I couldn't think of an idea in two weeks, I shouldn't be an entrepreneur.

Lo and behold, about 36 hours later, I was online searching for a new dance class. I've danced since I was 3 years old. Being a dancer was a really big part of who I was. It was where I found my confidence. So I had like 10 browser tabs open, and was researching all these different studios, and I realized: This is so hard to do! What If I could make this process easier?

The initial idea was to build a search-engine for classes. At the time, OpenTable was out there, and ZocDoc--and I figured, why not do that for dance and fitness? I called it Classivity. I got into TechStars' New York City incubator in 2012. When we launched, we had about a million classes listed. But no one went to them. We didn't have users flocking to our site.

After doing one of these big incubators you may have press and the illusion of investors but it's a false success signal. Inside, I knew my product wasn't actually working. I started realizing we missed something. We had built this amazing database of classes, but we hadn't really built something that motivated someone to get off the couch. So we came up with this idea to build a passport-type product--a 30-day discovery pass for trying different boutique studios in your area. We launched it at the end of 2012, and people loved it--the idea of a spin class on a Monday, a dance class on a Wednesday, and yoga on a Friday.

Things went well for a few months, but the studios weren't happy. They were calling us saying, "Why is this person coming back--they're supposed to only get one trial class!" We thought it was impossible, until we realized people were making up multiple email addresses to sign up and go back to the same studio.

I remember thinking back to the mission and vision for promoting fitness, trying new things, and helping people discover classes of all kinds. I didn't want to build a product for a month. I wanted to build a lifestyle. And the biggest thing we'd discovered was people loved variety. The trend we'd hit on was that fitness could be fun and exciting and something new that people want to do. We actually fell upon that by listening and learning. And then we launched ClassPass in June of 2013 as a monthly $99 subscription to fitness classes.

About six months in, I remember starting to show people our growth figures. They'd be like, "Oh, wait, show me that again!" We had the hockey stick. Everything changed, like overnight. The investors we could get meetings with, the people we could hire. I still remember the first time I heard someone talking about ClassPass--I was in an elevator in my apartment building. I was like, "Oh my God, that's us!" For me, it had been two and a half years of working hard on something--and now I knew it was working.

In 2014, we had to prove this could work in places outside of New York City. And we did. The next big change came a few years later. The vision for the company we wanted to grow into was not just to offer fitness classes, but to be the destination for all of your free time, to connect you to all sorts of incredible experiences in your area, such as aerial yoga or kickboxing. But we were constrained because we couldn't get some of the [more expensive] classes we wanted because we had no flexibility in the pricing we could get or offer. 

We thought: What if it was more like a carnival. where people could buy different amounts of tickets? To make sure it didn't take longer to book, we did a lot of testing on small groups, and realized it was working. We switched to a credit system.

The nice thing was, we were growing fast at the time, and when we'd launch in a new market, we could roll out the new model. Now we are in 18 countries, in 2,500 cities. ClassPass has more than 500 employees and we are approaching having made more than 100,000,000 reservations.

We want to be a multibillion-dollar company that completely changes the way people spend their time. That's a huge vision. We're only like a small percentage of the way there. I think that's what keeps everyone hungry.

Published on: Jul 5, 2019