Soulcycle’s CEO on Sustaining Growth in a Faddish Industry

by Melanie Whelan

I HAVE A RULE: Whenever I hear about something from three people, I need to give it a try. In 2008 I heard about SoulCycle from a few friends. At the time, it was two years old and had just one studio, on the Upper West Side of Manhattan. I was immediately curious. I loved group fitness classes, and I was a consistent runner, but I didn’t Spin. I had tried indoor cycling a few times and hadn’t enjoyed it. My friends promised that this studio was different.

It was. First, the studio was tucked away at the end of a long hall. A subtle grapefruit scent emanated from the doorway. The class was packed, but somehow I felt both alone and bonded with the other riders. Every song on the playlist was a remix or a killer mashup of two songs I loved. The instructor was charismatic and authentic. Her energy, and the passion in the room, were contagious. The class was actually fun. Afterward, riders mingled in the lobby with flushed faces, lingering much longer than the tiny space would seem to encourage. It was clear that this was more than just a fitness studio—SoulCycle was a full sensory experience with an engaged community of superfans. One ride in, I understood why and how the buzz of this tiny uptown business could grow.

In 2012 I joined SoulCycle full-time to develop and lead the company’s operations, and in 2015 I became CEO. In both those roles my goal has been to see how far we can grow the business and the brand. When I first joined the team, we believed that SoulCycle had the potential to operate 20 or 25 locations concentrated in U.S. coastal cities. Today we have 74 studios, and we’ve been steadily growing by about 15 locations a year in noncoastal cities such as Chicago, Dallas, Austin, and Houston. We just opened our first international studio, in Toronto. We now know we have a long runway for growth.

As we expand, we stay acutely aware of a potential pitfall: The performance of the fitness and wellness industries tends to be cyclical. That’s true for workouts, and it’s true for diets. This is a space where things may come and go, and trends may disappear entirely. You can probably think of examples: Jazzercise and Tae Bo and a continual stream of short-lived at-home fitness products—the kinds typically sold on infomercials. Some workouts just repeat the same thing again and again; fatigue, boredom, or distraction sets in, and people decide to try something new. Our challenge is to ensure that SoulCycle never falls into this trap.

We don’t think of ourselves as a fitness company; we’re a player in the broader experiential economy. I’ve found that our smartest decisions come from understanding and connecting with our customers. The best testing ground for growth is within the walls of our mirrored studios. We recruit and train our instructors quite differently from the way other fitness companies do, for one major reason: Their role is crucial to our riders’ experience. Our instructors are inspirational coaches who leave riders more empowered on their bikes and in their lives. We count on them to make every class unique, to localize the experience, and to connect with different demographic groups. We count on them to inspire in hundreds of thousands of riders every month the same things I felt during my first ride, nearly a decade ago.

Build an Experience

My career in corporate development began at Starwood Hotels in 1999, and it was an exhilarating time. The company had just acquired the Sheraton and Westin brands and launched the W brand. I worked on brand strategy, corporate finance, and real estate acquisitions. It was incredible training for developing an experience-first approach. We rethought the function and feel of a hotel’s public spaces. We piped in handpicked playlists, tweaked the lighting, and created just the right energy and vibe to attract and appeal to the local community as much as the guests upstairs. From Starwood, I went to the Virgin Group, where I spent four years working on the launch of Virgin America. We scrutinized our onboard experience. We explored ways to surprise and delight travelers and to offset rudimentary inflight frustrations. In 2007 I joined Equinox as the vice president of business development to help expand the country’s most comprehensive fitness brand: personal training, a spa, a boutique, and group exercise under one roof.

In 2010 the CEO of Equinox met with SoulCycle’s founders, Julie Rice and Elizabeth Cutler. With just five studios at the time, they needed a partner to keep growing. In Equinox they found expertise in real estate acquisition and operations. By 2016 Equinox held a 97% stake in the company. Through the process, I spent a lot of time with Julie and Elizabeth, focusing on maximizing the brand’s potential while maintaining its unique culture. In 2012, nine months after Equinox’s first investment, I joined SoulCycle full-time.

My experience in the hotel industry couldn’t have better prepared me. From the beginning, Julie and Elizabeth viewed SoulCycle as a hospitality company, with the workout just one dimension of the brand. Our most passionate riders talk more about relationship building and connecting with instructors and other riders than they do about the exercise itself. Leaving a dark studio, sweaty and wearing Spandex, and walking into a bright and crowded lobby breaks down barriers and makes it easier to have real conversations. For many people, friendships made at SoulCycle are the beginning of bigger changes in their lives. They start eating better. They prioritize sleep. Very organically, they plug into a more positive lifestyle. Aspiration becomes reality.

Our studios also differ from traditional fitness classes in the way people value the experience. At a gym you can take unlimited Spinning classes as part of a basic membership. At SoulCycle we don’t charge monthly fees, but each class costs $30 to $35, and we ask our riders to book bikes in advance. We believe the pay-per-class model inspires a different level of energy and commitment that contributes to the overall experience.

Our Greatest Asset

“Calories burned” is just a piece of what we deliver to our riders. Measurability matters, but we’ve heard repeatedly that our team is what keeps riders coming back. We use behavioral interviewing and on-the-job shadowing to ensure that our teams are motivated to make the time a rider spends at one of our studios the best part of the day. It’s simple but intuitive: Inspired people want to encourage inspiration in others.

Our instructors are our greatest asset. They take riders on a 45-minute physical, emotional, and musical journey that’s similar to theater. You could take a class with the same instructor multiple times in a week, and each experience would be different. Autopilot isn’t an option. Lighting, playlists, words of encouragement—everything is customized in real time to the group of riders in the room. The one constant is the incredible physical challenge.

To recruit superstar instructors, we prioritize great personality and individual expression—our training program will fill in any Spinning-specific gaps. To retain those stars, our model values career trajectory. We pay above-market wages, and 78% of our instructors work at SoulCycle full-time, with health insurance, paid vacations, and continuing education, which is very unusual in this industry. (They also have free access to on-staff physical therapists.) Our retention rate over the past few years has exceeded 95%. We get about 20 applications for each opening in our training program. Instructors go through a rigorous 12-week training at our New York headquarters, where they learn everything from the elements of the workout to musicality to anatomy and biomechanics. Once they’re on the podium, we invest considerably in further training and development. Because we’re a growth company, they see how they can build careers with us by relocating to new markets, growing into regional development roles, or through promotion.

What Makes Us Unique

Soon after I became CEO, we set our sights on going public. But the stock market had other plans. As the financial climate changed, we opted to stay private, partly because the company’s solid financial footing didn’t require us to rush into the public market. As we prepared for a potential road show, I was peppered with questions about the appeal and sustainability of our brand. One I heard frequently was: “Why are people so obsessed with SoulCycle—and how do you know they’ll stay obsessed?” It was a great opportunity for me as a new CEO to consider their concerns and figure out how to address them.

When SoulCycle launched, the boutique fitness industry wasn’t well established. Arguably, we created the space. Now competitors are opening Spin, boot camp, and other hybrid-format studios in a fragmented market. We don’t pay a lot of attention to other companies in the indoor-cycling or general fitness space, but competition does challenge us to innovate and reconnect with the needs of core customers—our strongest brand ambassadors.

Some of the best lessons come from outside our industry. We consider how Disney trains its staff and how Starbucks keeps its stores community oriented. We watch how Airbnb adds digital products while remaining intuitive. SoulCycle enthusiasts will tell you that it’s not just one or two things that make us unique—it’s the combination of many. It’s the welcoming attitude of the staff, the charisma of our instructors on the podium, our clothing collection, and even our website. It’s difficult for imitators to copy any of that, let alone all of it.

We do keep a lookout for blatant copycats that infringe on our intellectual property. If we believe that a studio is truly trying to make customers think they’re at a SoulCycle, we pursue a resolution. We found one studio outside North America that looked exactly like our Manhattan studios, with our logo and the same mantra on the wall. We pursued the owners aggressively but appropriately, and the studio made changes.

Great Moments in Group Exercise

Some group exercises become popular and stay popular. Others run out of steam. A sampling:

1980s: Jazzercise

Created in 1969 by Judi Sheppard Missett, a Northwestern University undergrad who taught jazz dance on the side, Jazzercise reached peak popularity in the 1980s. Today it has 8,300 franchises, utilizes pop music, and incorporates moves from kickboxing.

1990s: Tae Bo

Tae Bo originated when the U.S. fitness guru Billy Blanks created a workout in his basement while playing the Rocky soundtrack. By 1992 he’d launched an exercise video that became one of the decade’s most popular infomercials and has sold millions of copies. Blanks is still producing Tae Bo videos, but he’s been eclipsed by Beachbody, a company best known for the P90X workout.

2000s: Zumba

The fitness instructor Alberto Pérez was teaching aerobics in Cali, Colombia, one day in the mid-1990s when he forgot his usual workout tapes. He grabbed salsa and merengue music and improvised, and the Latin-infused dance movement was born. In 1999 he took it to Miami; by 2002 he’d trademarked the name Zumba and was selling DVDs on infomercials. Zumba classes would eventually be taught in 200,000 locations worldwide.

It’s never been part of our strategy, but we’ve attracted an influential clientele, especially in New York and Los Angeles. Some people think that relying on celebrities to create buzz is its own form of faddishness. There’s no question that celebrities have brought us attention, but we don’t do anything special to bring them in. From what we hear, high-profile customers appreciate that they can ride in a community setting and that our instructors will never draw attention to them. Michelle Obama rode with us in 2014, when we opened a new studio in Washington, DC. I knew she was there, but we didn’t change anything. She seemed to enjoy being one of 60 people, riding a bike to an amazing playlist, sweating a lot, and pushing herself … just like the rest of us. Soon she was coming in a couple of times a week.

Location, Location

Choosing the right location for a new studio is a science, and we begin our research a year before we hope to break ground. There’s no substitute for spending time locally and hearing from our future riders what matters to them. What do they do with their free time? Where do they exercise and when? What gets them out of bed early? By understanding their lifestyles, we can build a studio around them—not the other way around. And, of course, we consider which of our instructors can best help build community in a new market.

When we look at real estate, we’re pretty adaptable. Our studios are 2,500 to 3,500 square feet—a fairly small footprint, so we can go into spaces that wouldn’t work for traditional retailers. We care about parking, but we don’t need to be on main streets, because we’ve become a destination. Over time we’ve also become a desirable brand for landlords, because we bring in traffic and an energy that can complement some of their other tenants. As a result of our disciplined process and approach, we’ve gotten all our location decisions right so far: Never in the company’s history have we closed a studio.

Extending Our Brand

When it comes to innovation, we do some things you might expect. We’re always looking to improve the design of our studios, which some people have compared to Apple stores. For instance, we put iPhone chargers inside the lockers, because the charging stations we used to offer at the front desk were getting crowded. This year we plan to introduce our next-generation bikes, which use magnetic resistance and a carbon belt drivetrain. They’re superior to our current bikes, which use friction-style resistance: They ride more smoothly, and they last longer. We redesigned the handlebars to accommodate our choreography and to provide greater stability for the upper-body workouts we do on the bikes. And our workout continues to evolve as our riders become stronger. Today our instructors utilize more interval training in their classes, and our hand weights are heavier than they were a few years ago.

We’re also expanding our apparel and other categories. After Julie and Elizabeth launched the first SoulCycle studio, they had $2,000 left, so they had T-shirts printed. The first batch sold out in 24 hours. Last year we introduced 14 apparel collections, each a combination of performance and lifestyle pieces—the kind of clothing you can wear outside the studio too. In our most firmly established studios, revenue growth from merchandise exceeded revenue growth from riding in 2016. People wear our logo as a badge of honor, telling the world that they belong to this community.

We’ve also continued to widen our demographic. When SoulCycle first opened, our riders were almost entirely women from Manhattan’s Upper West Side. By 2015, when we were considering an IPO, nearly 80% of our revenue came from locations in New York, Los Angeles, and San Francisco. Today less than 50% comes from those cities, and our clientele varies according to location and time of day. A typical “rooster” class—what we call our 6 AM ride—may be at least 50% men. Some studios offer a teen class at 4 PM. We encourage our instructors to create the right vibe to make every group feel welcome.

We’re Not a Fad

I’m confident that we’ll keep growing, because people are looking for places to connect with one another and disconnect from technology. They want experiences more than they want stuff. The reason so many wellness categories are growing is that people recognize the importance of investing in their bodies and their minds. That’s why we believe that SoulCycle isn’t as sensitive to the economy as some other premium brands are. Transitions have proved to be times when our brand is acutely relevant to our customers. Although we were much smaller during the Great Recession, we found that our riders needed us then as a sanctuary and an escape. Similarly, our business increased in the weeks after the 2016 presidential election, which was an uncertain and emotional time for many people. If the economy slows, people may spend less on travel or restaurants, but they’ll keep investing in themselves—and we believe they’ll keep coming to SoulCycle.

Simply put, we’re not a fad. Indoor cycling has been around for more than 30 years because it’s a safe and efficient way to get a cardio workout. It’s easier on the joints than many other forms of exercise, so riders can stay with us for years. Our founders took this old form of exercise and reinvented it as a full-body workout with emotional and mental benefits that go far beyond fitness. A neon sign that hangs in one of our New York City locations captures who we are: “Pack. Tribe. Crew. Community. Soul.” That’s how we describe one another, and our riders apply those words to themselves. A first-timer could see that message, glowing from the studio’s back wall, and feel a sense of invitation.

Friendships and communities are enduring. Because SoulCycle has those elements at its core, our brand will endure too.

Originally published in July–August 2017. Reprint R1704A

Life’s Work

An Interview with Kareem Abdul-Jabbar

Kareem Abdul-Jabbar, one of the most celebrated players in basketball history, was a natural leader on the court. But the head coaching jobs he later aspired to eluded him. More recently he has become a successful writer, historian, and filmmaker, producing several well-received books and a documentary about unsung African-American heroes. Interviewed by Alison Beard

HBR: Which is more important—talent or practice?

Abdul-Jabbar: I think that to really excel, you need both. But a good work ethic trumps lazy talent every time. Conditioning and preparation are key aspects for any competition. My talent would not have lasted as long as it did without them. But I know I was blessed with natural gifts. So I’ve always felt that the two need to be paired.

You’ve worked with many coaches over the years, including the great John Wooden at UCLA. What were the most important lessons you learned from them?

Preparation. It was something that Coach Wooden stressed very emphatically. I trained with Bruce Lee for a while, and it was the same deal. Being prepared, having a good understanding of your own strengths and limitations, and having a good game plan: Those are essential elements of success. Coach Wooden was also an English teacher and a big poetry buff, so it was great to have a relationship with a man who was so multifaceted and such an excellent mentor.

In the NCAA and the NBA you occasionally faced racism. How did you play through those distractions?

If you let it distract you, you’re playing into their hands. Their whole purpose is to distract you and prevent you from succeeding. And for me, success was the goal. My success and the success of other black Americans was exactly what would silence people who indulged in racism. So it was “Keep your eyes on the prize.” That was one of the messages of the civil rights movement, and I tried to do it.

You were known as a focused player who wasn’t very personable. Did that hurt your career?

Well, it had a negative effect on how I was portrayed. But I had no one to explain the value of public relations to me. When I was in college, there was such an intense demand from the press that John Wooden said they couldn’t talk to me at all. So that was what I took for normal going into the NBA. Being at the top of my game and working as hard as I could for the people who employed me—that was my primary focus, and everything else was secondary. So I didn’t always respond to social situations in a pleasant way. When it came to talking to people, I was kind of reserved. But shyness is something you have to overcome. Later in my career, I started doing a lot better relating to fans and talking to the media. I think that’s continued to improve in my retirement.

Do you enjoy it now? Or do you still grit your teeth?

Well, let me say this: It doesn’t bother me anymore. I can handle it. A lot of the people in the media are good people, and by being more accessible, you get to find that out. It’s just like being in any marketplace. There are good people and thieves. And you’ve got to have the judgment to understand which is which and adjust.

What did you learn from your teammates?

You learn to appreciate them, because you can’t win by yourself. One person can’t get it done. So you appreciate the guys who put in the hard work and don’t necessarily get the accolades or the big paycheck, but they’re the guys who make it possible for you to shine and for the team to shine.

There’s a funny story about the end of your first game with Magic Johnson.

What happened was I made the winning shot, and it was like he had just won a championship. He was going crazy, wrestling me down and hugging me and everything. When we got in the locker room, I said, “Look, we’ve got 81 more games to play.” So he got the message from me that it was a long haul, and if you’re going to ride the emotions that intensely, you’ll be a wreck. But from him, in that same moment, I learned that it’s OK to have some fun and enjoy things as you’re having the experience. You can’t be so totally about brass tacks that you don’t enjoy the smaller successes that of course lead to bigger and better things.

As a captain, how did you motivate other players?

By example. I was always in shape. I was always a team player. I understood the fundamentals of the game and worked on them constantly, during the season and in the off-season. And I tried to be always prepared and focused.

What about “managing up” to your coaches?

I was fortunate to have very good coaches who knew what they were doing. But if I had a suggestion, I would try to convey it in a respectful way. Respect always makes people more amenable to criticism or a correction. The whole idea of mutual appreciation really smooths out those interactions between people on different levels.

You played until you were 42. How did you avoid burnout?

I just thought that I had the greatest job in the world, wouldn’t last forever. In one of my books I quote Jackie Robinson saying “Athletes die twice.” When you no longer have what it takes to play professional sports, that’s a death of sorts. So I knew that was coming. But I tried to be at my best for as long as I could, and I enjoyed the competition.

You’ve done some coaching work since your retirement. How difficult is the transition from player to coach?

I don’t think it’s a difficult transition, because all the people who criticize—the management and the media—focus on the players. You have to do some really obvious things as a coach for them to focus on you. So being out of the bull’s-eye helps.

I read one interview in which you said you had this vast body of knowledge in your head, you knew the game inside and out, but the trick was to figure out how to communicate that. So what’s the secret?

You have to be patient. Talented young athletes always think that they’ve got it all figured out. And they don’t. You never do. People who have played the game and have experience—they know things that can help you. Dealing with cocky players who don’t feel that they have anything to learn—that’s a tough job. Dealing with players who don’t have that attitude is much easier. In any coaching situation you’ll find a mixture. So you’ve got to be flexible. You’ve got to understand personalities, what motivates people, how to break through the things that make people stubborn and unwilling to try new things.

Are you disappointed that you never became a head coach in the NBA or the NCAA?

When I first tried to do some coaching, I was approaching 50. So I was advanced in years to be a rookie. And then the whole lack of being social—my reputation as a difficult person—might have scared people off. It’s been disappointing at times, but I’ve had some successes, most recently with Andrew Bynum at the Lakers. He was 17 years old when I started working with him, and had not played a lot of basketball. He made great strides because he had a great attitude, and I think I was able to make him a very valuable member of our team. I kind of hang my hat on that situation.

Tell me about your transition to working as a writer, a historian, and a filmmaker.

I didn’t really see it as a transition. I was probably those things, certainly a writer and a historian, when I was in grade school. I used to get good grades in English and history because I enjoyed writing. So I had that foundation to call upon, and it’s been a very rewarding part of my life, especially after having one career that had nothing to do with it. With the filmmaking, I’ve always been a movie fan, because my mom was. She would take me to all the classic films in the ’50s. And at UCLA, I worked for a film company for three summers. Mike Frankovich, a UCLA alumnus, was at Columbia Pictures, and he gave me a job.

Could you get people to take you seriously right away?

Many athletes make grandiose statements, and very rarely do they follow through. So I imagine most people were waiting for the proof. But the proof came pretty quickly. My first history book, Black Profiles in Courage, made the New York Times best-seller list. But the best reward was teachers in inner cities telling me the book made it possible for them to figure out their black-history lesson plans.

I know you recently battled leukemia. How has that changed your perspective?

When you face something that could be life threatening, it makes you really appreciate the good things in your life. I’m in total remission now, and the doctors say that if I continue to do what they tell me to do, I’m going to continue to hang around. So I feel very fortunate, and it makes me appreciate every day even more.

Did that take resilience of a different sort from what you needed playing basketball?

No—actually, I think it was more or less the same. I thought I was in a life-or-death situation, and just like everything else, you’ve got to go into it prepared. That really helped calm me down. I was going to face it calmly and do the best I could.

You have five children. What advice have you given them about their careers?

Well, the very first thing is be educated. My youngest is in college now, and the other four all have their degrees. And then I’ve just told them to follow their hearts, their instincts.

What would you like to be remembered for?

I know I’ll be remembered for the things I did on the basketball court. But I hope people will also see that, with my books and my film, I was multidimensional, and somebody who should be respected.

Originally published in January–February 2012. Reprint R1201Q

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