Most pivot stories are told as moments of insight. A founder stares at a whiteboard, sees the thing nobody else sees, and turns the ship. Payal Kadakia’s version is less romantic and considerably more useful: she got the answer from the people who were cheating her product.

Two failures, one unchanged premise

Kadakia is an MIT graduate in operations research and economics who worked at Bain and then in Warner Music Group’s digital strategy group, and who has run The Sa Dance Company, a contemporary Indian dance company, alongside all of it. That last detail is not decoration. The company she eventually built exists because she could not easily do the thing she cared most about.

The first attempt was Classtivity, founded in 2010 with Sanjiv Sanghavi. It was an OpenTable for fitness and leisure classes: a beautiful, comprehensive directory of what was happening near you. It attracted plenty of traffic and almost no bookings, which was fatal, because the business model was built on bookings. Kadakia later described the pre-pivot number to TechCrunch as “such a low number that it’s not even worth sharing”.

The second attempt was Passport: $49 for ten classes at local boutique studios inside a thirty-day window. It worked, in the narrow sense that people bought it. By September 2013 it had logged more than 20,000 reservations — a spectacular improvement on nothing. But Passport was designed as a sampler, one class per new studio, and it was engineered to push you onward. Users refused. They found a studio they liked and wanted to go back, so they signed up again with fake email addresses to keep returning.

That is normally filed under fraud, or churn, or a support ticket. Kadakia filed it under research.

The cheating was the roadmap

There is a specific discipline in reading abuse as a feature request, and most teams do not have it. The instinct when customers circumvent your rules is to tighten the rules — verify emails, cap accounts, patch the hole. The alternative instinct is to ask what the hole is for.

What the fake accounts were saying was blunt. The product Kadakia had built assumed the problem was discovery. The behaviour said the problem was actually the recurring friction of going: the paying, the booking, the deciding, every single week, forever. People did not need help finding a new studio. They needed the ongoing act of attending to stop being a series of small purchases.

In September 2013 Classtivity announced ClassPass, initially the same ten classes restructured as a monthly recurring subscription. Kadakia’s stated reasoning was not visionary; it was mechanical. The previous model, she told TechCrunch, “had too many barriers”. The company also dropped leisure classes entirely and pointed itself at fitness. The version that broke through set the price at $99 a month for unlimited classes, capped at three per studio — a rule that finally let members return to what they loved while keeping the marketplace intact. Classtivity took the name of its own product and rebranded to ClassPass in January 2014.

What actually stayed constant

It is tempting to call this a company that changed direction three times. It isn’t. The directory, the sampler pass and the subscription are three business models wrapped around one observation that never moved: adults abandon the physical things they love because the logistics defeat them. Kadakia has framed her own standard in exactly those terms, saying she was not finished “until I knew we were getting people to go to class”.

That is a harder metric than page views, and it is the reason the first version’s traffic did not comfort her. Vanity numbers are dangerous precisely because they are real — Classtivity genuinely had visitors. It just had them doing the wrong thing.

Where it ended up

The trajectory afterwards is the part that gets quoted. Kadakia handed the CEO role to Fritz Lanman in March 2017 and became executive chairman. In January 2020 ClassPass closed a $285 million round led by L Catterton and Apax Digital that took it past a $1 billion valuation, operating in 28 countries. Mindbody acquired it in an all-stock deal in October 2021, alongside a $500 million investment led by Sixth Street. In June 2025 the group consolidated under a parent brand, Playlist, spanning Mindbody, Booker and ClassPass. This March, Playlist completed a merger with the German fitness technology company EGYM valuing the combination at $7.5 billion, with $785 million in fresh equity.

The transferable part

Founders are told to listen to customers, which usually means running interviews and reading survey responses — the things customers say when they know they are being watched.

Kadakia’s third version came from the opposite source: what people did when they thought no one was looking, in a way the product explicitly forbade. Workarounds are the highest-signal feedback a company ever receives, because someone went to the trouble of expending effort rather than simply leaving.

The failure to avoid is not building the wrong product twice. It is patching the exploit and never asking what it was telling you.

This is an editorial profile assembled from public reporting and company announcements. Sources: Forbes (2016), Forbes (2020), TechCrunch (2013), TechCrunch (2021), TechCrunch (2026), PR Newswire — Playlist, payalkadakia.com, Wikipedia — ClassPass.