One additional thought–do you think SoulCycle would ever have to modify its pricing as the environment becomes increasingly competitive?
I would echo many of the above comments. I do agree that Soul Cycle still has a fantastic growth trajectory with many markets still ripe for a high-end spin experience (including many parts of Boston!). However, having come from the highly saturated spin market of New York City myself, I have seen an erosion of many of their competitive advantages. For one, price is a good $5-$10 per class above many competing studios, without a notably better instructor or course quality. The same goes for facilities. Anecdotally, most people I knew switched from SoulCycle to more affordable options as soon as they came on the scene. I think it would be very interesting to get your hands on some data on how SoulCycle has been performing in different markets based on how long it has been there and what the competitive landscape looks like in each market. My hypothesis is that margins and growth erodes once the market starts to look more like New York’s.
Patrick–I also wrote about Warby, but you obviously have a great insiders perspective that I could not capture, so this was very interesting to read!
I would like to know more about how the company’s leadership and team factor in to the operating model and this buzz element you talked about. A lot of the branding and hype has come from very creative marketing and PR that has really driven WP into the spotlight. What elements of the organizational design have allowed WP to source the best talent and the best ideas? Is all of the creative work done in-house or do they partner with others? What does WP look for when hiring people on to the team? These are some of the questions I had when writing my post and would love to learn more about them.
There is very limited data on WP’s growth plans given they are still a private company. Based on information that is publicly available, it seems they will continue to grow their retail footprint slowly but surely and only in major urban areas. I agree with your suggestion that growing too quickly could dilute their brand image so they will need to be very careful about how and where they grow!
Thank you! I will check that out!
After reading this post, I could see a lot of merits to Tinder’s operating model. In terms of the business model, I believe they do a great job of creating value for users, however I question their ability to capture value, similar to Kevin’s last point. As someone who has used the application myself, I do not believe it is an effective vehicle to deliver advertising. Ads are clearly differentiated from normal matches and are dismissed within less than a second through the swiping functionality, barely making an impact on the user. Similarly, the subscriptions provide very limited features at a higher price compared to many other dating apps and sites. For example, for the same $9.99 price that users under 28 pay, you can purchase a subscription to OK Cupid that includes a host of other features not available on Tinder. Also, Tinder is seen as a less serious way of finding dates and includes many people just looking for a hookup rather than a serious relationship. I question whether anyone will be willing to pay for premium features when they either (a) don’t take the process seriously, or (b) take it seriously and recognize that there are a host of competitors that offer a clearer value proposition and ROI.