How ClassPass Founder Payal Kadakia Mastered the Art of the Pivot

When Payal Kadakia started college at Massachusetts Institute of Technology in 2001, she began her entrepreneurial journey–though she didn’t know it at the time.

While the ClassPass founder was drawn to the university for its prestige and academic rigor, she was disappointed that the campus didn’t have an Indian dance group that performed in her style. So, she started one–and it still exists today, 20 years later. This same impulse to solve problems led her to launch her company in 2013, she told Beatrice Dixon, co-founder and CEO of the Honey Pot Company, during an Inc. Your Next Move stream event today.

“It’s this initiative,” she says of the entrepreneurial instinct that she since discovered. “It’s this sense of, ‘I want to make something happen.’ ” Like most entrepreneurs, Kadakia’s journey wasn’t always straightforward. For example, after achieving a billion-dollar valuation, ClassPass struggled along with all the empty gyms and fitness studios early in the pandemic. Then in October, ClassPass announced it would be acquired by Mindbody. 

“If I had one piece of advice for a founder, it would be to get started,” she told Dixon. “I think it’s the hardest thing sometimes to just put things out there and see how they do.”

Here are three lessons she learned along the way that contributed to her success.

Give yourself deadlines.

When Kadakia graduated from MIT, she took a job at Bain Capital and continued dancing on the side. Eventually, she switched to a job in the music industry that gave her a more stable work schedule, so she would be able to better balance her passion for dance. But she still felt like there was a path more suited to her. She became intrigued by the idea of entrepreneurship. She gave herself two weeks to see if she had an idea she could turn into her own company.

“Everyone always asks me, ‘Why’d you give yourself two weeks?’ ” she says. “I didn’t want to waste time. I felt like if I was going to think of something in two weeks, I was going to focus on it and see if I could do it. And if not, I was going to go and try and find another career option in the arts or somewhere else in entertainment that could bring together my business and creative side.” 

Ignore ‘false signals of success.’

Kadakia started her business as a search engine called Classtivity, and eventually made it to the accelerator Techstars. But after spending a half-million dollars building the company, she found that it wasn’t an instant success: When the site launched on demo day, no reservations came in. “It was like crickets,” she says.

That forced Kadakia to rethink her strategy. “That was when I became an entrepreneur,” she says. Until then, she had a lot of what she called “false signals of success.” These included support of those surrounding her, success fundraising, good press, followers, and email addresses. All gave her and her team a sense that the company was successful. “But the only thing that actually mattered,” she says, was “someone obviously going to class, which translated into revenue for my business and obviously revenue for our partners.”

Be prepared to pivot.

Kadakia tried something new: The company built a new product, “Classtivity Passport,” which allowed users to try different fitness classes in the span of 30 days. It was a hit, but it still needed some tweaks. She and her team realized that customers were signing up for the service with multiple email addresses, in order to get new comped classes. That was when they developed the company’s recurring membership model–which still exists today.

“People fell in love with the idea of discovery, and that was something we ended up realizing was so important,” Kadakia says. “To this day, when people ask, ‘What is the magic of ClassPass?’ That’s it.”

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