Caitlin, it’s great to learn more about such a popular and rapidly growing business! I’d like to learn more about the company’s gross margins – how much is ClassPass paying studios for their inventory? Is an individual user profitable for ClassPass? My guess is that the company’s gross margins are extremely high, given the high price tag studios charge customers for classes and that ClassPass raised their monthly fee by 20% recently. Additionally, as others have mentioned above, I’d be interested to see the data on customer retention. If customers are leaving to join a studio, the ClassPass needs to work on its churn/ customer retention. However, if customers aren’t leaving the platform, ClassPass’ value proposition to studios isn’t actually true.
Cam, this is a great post. It’s exciting to learn more about a really successful business with HBS founders! While others have hit upon my main concerns- customer retention and trends in courses/ races per user – I’d love to understand more about competition and the “fad” nature of this business and profitability. Given that the company is relatively new and has experienced fantastic growth, what does the company view as its barriers to entry, and why does it think it will continue to grow going forward, especially in the face of new workout trends. Additionally, I’d be interested to learn more about the company’s economics and profitability – how much capex is required to set up a course? What number of racers need to sign up for a race to be profitable?
This is a great post about another successful marketplace business using software to alleviate pain points. While ZocDoc operates within the fee-for-service healthcare reimbursement model, the company’s reviews section allows patients to comment on the quality of care they receive. In addition to giving ZocDoc credibility and trust with consumers, reviews also allow consumers to make assumptions about the quality of care they will receive before booking an appointment. As the healthcare system in the U.S. continues to evolve away from a fee-for-service model and towards quality-based reimbursement, it will be interesting to see if and how doctor reviews have a place in this new reimbursement model.