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Thursday, March 23, 2017
Fritz Lanman takes CEO role at ClassPass as founder Payal Kadakia steps in as Chairman
Early investor and Executive Chairman of ClassPass Fritz Lanman will be taking over as CEO of the company, with cofounder and former CEO Payal Kadakia swapping with him for the Executive Chairman role.
ClassPass, for those of you who live under a rock, is a subscription service that lets users book and access a variety of fitness classes and boutique gyms under a single ClassPass membership.
The company has grown since its launch in 2012, after a tumultuous beginning and a couple of successful pivots. When ClassPass was still just Classtivity, Lanman and his partner Hank Vigil stepped in to join the seed, and eventually led the Series A round on the heels of the re-brand to ClassPass. Since then, Lanman has served as Chairman of the Board (until now, of course).
Before Lanman, ClassPass was merely a website that let you book and pay for classes online, without adding that ‘monthly subscription’ model that pairs so well with the business of fitness.
Lanman is a former Microsofter who has gone on to angel invest in companies like Wish, Pinterest, and Square. He’s also the Chairman of the Board on two of his other portfolio companies, Verst and Doppler Labs.
Kadakia told TechCrunch that she was the first to approach the idea of her and Lanman switching roles.
“I started this company so I could have an impact on the world,” said Kadakia. “I want people to go to class, and that’s the number one thing that drives me, that gets me up in the morning. I want my day, every day, to be surrounded by that mission, and as a company grows, product and vision become less of the day-to-day of a CEO.”
On the other hand, Lanman has gotten his hands dirty with ClassPass in 2016, helping oversee a price hike that put the company in a difficult position.
To even margins out across all users of varying usage patterns — FWIW, ClassPass operates at an average 20 percent margin on each user — ClassPass was forced to raise prices and bundle subscriptions across three tiers. It cost ClassPass 10 percent of its user base, but it ended up being the right decision, says Lanman.
ClassPass doubled subscriber growth from 2015 to 2016, and says that Q1 of this year stands be the highest growth quarter ever for the company. For reference, the pricing adjustment happened in Q2 2016.
Given that the kinks have been relatively smoothed out, it’s worth wondering what ClassPass has in store next. The company acquired FitMob in April of 2015 and has been operating from both coasts, with one office in SF and the other in NYC.
It’s easy to imagine how ClassPass might eventually expand its subscription bundling of ‘experiences’ into verticals beyond fitness classes. The service has already incorporated regular old gym time into the service, and could very well move beyond fitness entirely to help you book art classes or fine-dining experiences or even the theater.
But for now, ClassPass is getting its executive ducks in a row.