{"id":1256,"date":"2015-10-04T20:58:32","date_gmt":"2015-10-05T00:58:32","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/tribe-vibes-the-cult-of-soulcycle\/"},"modified":"2015-10-04T21:01:16","modified_gmt":"2015-10-05T01:01:16","slug":"tribe-vibes-the-cult-of-soulcycle","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/tribe-vibes-the-cult-of-soulcycle\/","title":{"rendered":"Tribe Vibes: The Cult of SoulCycle"},"content":{"rendered":"

Clad in $150 worth of Lululemon gear emblazoned with the word \u201cWARRIOR\u201d and a yellow spoked wheel, you enter a dark room full of stationary bikes and clip your $3 rented cycling shoes into the pedals. You place your $2 SmartWater in the cupholder, inhale the invigorating grapefruit scent from the $42 Jonathan Adler candles at the front of the room, and start pedaling. This moment has been days in the making: last Monday at exactly 12pm, you frantically signed online and handed over $30 to reserve this very bike you\u2019re sitting on. What made you devote all of this time and money for the opportunity to ride a bike that goes nowhere for the next 45 minutes? The answer is scrawled across the wall in bright yellow text: TRIBE. Each of the 59 bikes surrounding you are occupied by similarly dressed riders, all moving their bodies in perfect sync to the beats pumping through the stereo system. As the resistance increases and the pace gets faster, the pack of riders around you motivates you to push harder. The inspirational monologue from the instructor at the front of the room creates a meditative calm, but it\u2019s the collective energy of each person in the room that creates the value. It\u2019s also the reason SoulCycle had over $100M in revenue last year, 72,000 rides per week, and 30% of the weekly rides reserved within the first 15 minutes of availability in the frenzied \u201cMonday at noon\u201d weekly reservation experience. The most prevalent criticism of SoulCycle is that it is a cult, but this is perhaps the highest compliment for a business built on network effects.<\/span><\/p>\n

According to the Prospectus from SoulCycle\u2019s impending IPO, <\/span><\/p>\n

\n

\u201cThe experience is tribal. It is primal. And it is fun\u2026 Our riders feed off the group\u2019s shared energy and motivation to push themselves to their greatest potential. In becoming part of our community, our riders are instilled with greater awareness of not only their bodies but also their emotions. We believe this awareness leads to healthier decisions, relationships and lives. We are not a business that values only transactions, rather we create a community that cultivates and sustains relationships. Our immersive culture of inspiration and empowerment contributes to the engaged and connected rider base in each of our studios.\u201d <\/span><\/p>\n<\/blockquote>\n

Because the class community is so critical to the experience, ensuring classes are filled is immensely important. In popular locations and with popular instructors, this is a boon – classes sell out immediately and this perceived demand makes the experience very compelling for new customers. In some locations, customers pay thousands of dollars for early access to classes. Instructors build relationships with the customers and encourage customers to build relationships with each other. However, the inverse consequence of these strong direct network effects is more concerning. Participating in a class with only a handful of fellow riders truly feels like a subpar experience and the studios employ many creative promotions to fill the less popular classes. For example, they offer discounts if you \u201cdouble-dip\u201d and ride again right after finishing class, provide free breakfast burritos, and provide a free class if you fill up a Soul Bingo card by riding with several of the less popular instructors.<\/span><\/p>\n

The business implications of this run from their growth and retention strategies to their merchandising and technology strategies. First, since their value proposition is directly tied to the number of customers in a given location, is it important to only open new locations and offer new classes where there is enough demand to fill the class. One way to create this demand is to advertise, which they manage to do cheaply and effectively with their merchandise. In addition to their spinning classes, SoulCycle also sells trendy branded apparel and accessories, which their loyal customers gladly purchase for obscenely high prices to show off their exercise obsession, which in turn drives new customers to the studio. They have built a sleek booking platform via their website and an app that reminds riders to reserve their classes for the week every Monday at 12pm. Lastly, SoulCycle has built a solid presence via their instructors on social media including Twitter, Instagram, and Spotify which serves to attract and retain customers. As long as SoulCycle can continue to control these direct and indirect network effects, their cult should continue to grow.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

The most prevalent criticism of SoulCycle is that it is a cult, but this is perhaps the highest compliment for a business built on network effects.<\/p>\n","protected":false},"author":158,"featured_media":1257,"comment_status":"open","ping_status":"closed","template":"","categories":[543,398,26,389,541,542],"class_list":["post-1256","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-cult","category-direct-network-effects","category-fitness","category-indirect-network-effects","category-soulcycle","category-spinning"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/competing-with-network-effects\/","yoast_head":"\nTribe Vibes: The Cult of SoulCycle - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/tribe-vibes-the-cult-of-soulcycle\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tribe Vibes: The Cult of SoulCycle - 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