SoulCycle: A model for all startups?
SoulCycle, an indoor cycling studio, launched in New York City in 2006 and will have expanded to 55 locations by the end of 2015. Hockey stick growth.
Its founders are credited with helping kickstart America’s latest boutique fitness craze. Many have written about the company’s cult-like success:
SoulCycle is so successful — and its fans are so devoted — that there have been entire New York TimesStyle Section pieces devoted to its “front row divas” and the outcries of consternation and dismay that arise when a studio has to be closed for renovations. [Racked]
Last night, I walked into my 3rd ever SoulCycle class.
During a spirited remix of Save Tonight, a very strange thought popped into my head:
Many lessons that we’ve learned over the past year+ building Uptake translate shockingly well to this boutique fitness studio’s success.
While enterprise software has little to do with a consumer lifestyle brand, at Uptake we talk non-stop about the value of curiosity; unexpected connections across companies and industries can drive tremendous insight.
So fuck it. Let’s have some fun, dive in, and draw weird comparisons to see what tech entrepreneurs can learn from SoulCycle’s success.
[1] Focus on true fans.
I’ve decided that any article about SoulCycle is required to describe to its customers as cult-ish or obsessed. They’ve done an incredible job of activating a core group of riders who are more than willing to pay for classes and happily evangelize the experience to others.
If this sounds familiar, you’ve probably read Kevin Kelly’s 1,000 True Fans. The takeaway? A creator only need 1,000 true fans to make a living.
It’s easy to get caught up in broad, pitch-deck definitions of your total addressable market. Don’t do that. Focus on identifying your target market (and diehard fans) that can become a sustainable base for your company.
[2] Talk to your community.
My friends at PumpUp built an incredible business by reaching customers where they live. In their case, and with SoulCycle, a lot of it came down to Instagram. Each business combined aspirational story telling and customer interaction on a platform that was home to an engaged fitness community.
SoulCycle also encourages instructors to showcase their personalities on social media. These stories drive home the narrative that the product is a unique experience, powered by people — and allow riders to buy-in even more deeply by talking to and forming relationships with instructors.
Find your own Instagram; prioritize channels that your target market naturally gravitates towards.
[3] There’s a war for talent.
Hardware is commoditized! Not sure if I’m talking about servers or spin equipment, but, if you haven’t noticed, most indoor cycling classes have the same bikes and equipment. You can tinker with the room’s setup around the edges (more premium products, lighting in the room, scoreboards, etc.) but in my novice head: a bike is pretty much a bike.
So how do you differentiate from the hundreds of other studios? The same way many human capital powered businesses do: talent.
SoulCycle offers a different compensation package than their competitors. They want the best, so they treat them like the best. In return for exclusive deals they offer more stability (health insurance), higher salaries (the job is, potentially, very lucrative), and motivate instructors by making them entrepreneurial and asking them to build their own audience under the broader support of the brand.
You don’t want to get into a price war over a data scientist, but you should find ways to creatively outmaneuver your competitors in a race for talent.
[4] Teamwork makes the dream work.
There must be thousands of articles on the power of teams. They help increase motivation, productivity, buy-in, etc. And SoulCycle embraces this psychology more than most businesses I’ve seen.
For a high-end product (often described as exclusive) when a first time rider enters a class they’re immediately welcomed as a part of many groups. In my class last night, Brent, our instructor, explicitly mentioned teams so many times that I would be shocked if it wasn’t an important part of training.
We were a part of: the “SoulCycle family”, a “Chicago community helping launch Soul”, “Brent’s class”, the “Sunday Night crew”, etc. Many constructs that all hammer home the same idea: you’re a part of something.
Borrow from this.
Customers fit into multiple teams; reward them and help them buy into the company and product. They want to believe they have access to something (community, software, a deal, etc.) that’s exclusive or insanely valuable. They want to be a part of something, whether they know it or not.
Employees are teams, too. Rally around product teams, sprint teams, functional areas. It’s a small win but can be very influential.
[5] Charge what you’re worth.
I’ve always liked SaneBox’s messaging on pricing. They charge you for their product because they believe you should pay for it. Many do.
Similarly, SoulCycle makes no apologies for premium pricing. Unlike many gyms, they moved off a membership model that thrives on breakage. Instead, they charge per class. Pricing is worthy of a longer post, their model also helps with demand generation in interesting ways. But, I’ll move on.
A related point: Find ways to cross-sell without diluting your brand. SoulCycle drives meaningful revenue by selling items like water and apparel to their customers. What started as a marketing play has since expanded, quality fitness gear proved to be a hit with core fans.
[6] Build a seamless checkout experience.
SoulCycle does a great job of removing friction at checkout — few abandoned carts to see here. Two quick examples…
(1) They stored my credit card in an account after one visit. A rider checks into each class at the front desk. It’s a seamless offline experience to ask for rental shoes or a water bottle; no need to pull out a credit card. Most people ahead of me in line did this. I bet pricey, fancy water has nice margins.
(2) Simple account information. If you forget your password at checkout, rather than removing you from the flow to send to you to a ‘Request Password’ page, a simple module pops up along the top navigation. You can request or reset a password without losing your place. The bikes you’ve reserved are yours and with one click to login to the module you’re back purchasing whatever you wanted to buy.
[7] Eat your own dog food.
This one’s pretty common thanks to Microsoft.
SoulCycle’s corporate employees are required to work the front desk for at least a week. Many companies have similar programs. You should too. Have your team answer support emails and calls to truly understand customers.
[8] Personalize your offering.
No customer is the same. Find ways — ideally scalable, but any effort here will do — to customize each person’s experience.
As NYMag notes: what an Upper East Side mom wants at a 9:30a ride is very different than what an NYU student wants at a 9:30p class.
While it’s easy to believe that most spin classes are 99% identical, SoulCycle goes to great lengths to fit the music and workout to the customers in the room or type of year (local events, holidays, etc.)
Your product should feel consistent, but finding ways to personalize the experience can be a big win if executed properly. It helps adoption and experience when your users feel like the product was built just for them.
[9] Focus on the customer.
I know, I know. How many times can one phrase be written across countless posts offering unsolicited advice to startups? It’s important for a reason.
SoulCycle’s instructors shout out to riders by name, encourage them in the middle of class, and build direct relationships before and afterwards. They note big events like a wedding or birth and spend time off the bike, running around the room and interacting during the ride.
On a related note: It seems like much has been written about being a strong enough rider to sit in the font row (although anyone can select those bikes.) Embracing community norms that empower and reward your users can be incredibly impactful.
[10] Solve a problem you uniquely understand.
As Peter Thiel would ask: What’s your secret?
In a few interviews, the SoulCycle founders say they were fitness users, not teachers. They attribute much of their success to finding a need that wasn’t being met in the community. They created a class where many in the community wouldn’t have seen opportunity or an ability to differentiate because they knew something — about community and experience — that others didn’t.
They were also agile in their approach. They started with an MVP of a studio and iterated around that core idea and vision before eventually expanding.
So, that’s it. Interesting food for thought. A retrospective in the middle of the exciting marathon that is building Uptake on what (from a distance) looks like it’s also working for SoulCycle.
Like a million other articles offering unsolicited advice, take each of these with a grain of salt. Every situation is different. Good luck and thanks for coming along down this rabbit hole with me!
