Classtivity Case Study Assignment
This is an individual assignment, however you can discuss it with classmates BEFORE WRITING YOUR PAPER as noted below.
A few months after launching a new fitness technology product, the small staff of Classtivity has gathered on a Saturday in April 2013 to decide the future of the company. After executing a difficult product pivot from a fitness class search engine to a month-long fitness pass valid at different New York City fitness venues, Classtivity is finally generating revenue and enthusiasm among customers.
But cofounder and CEO Payal Kadakia has some doubts about this approach. While customers seem to love the offering, the fitness studios are less enthusiastic. Efforts to get customers to return to the studios after their monthly passes expire are not working as hoped. Kadakia and her team are split over the right course of action going forward, but ultimately the decision is hers: continue to iterate on the current product of pivot once again to a new business model.
You have been hired by Kadakia to answer the following three questions.Your answers to these 3 questions should be roughly 1500 words in total. You can decide how much space to dedicate to each question, but focus as much as possible and analysis and recommendations.
(1) The first pivot from the search engine, called Classtivity, to the monthly passes, known as Passport, seemed like an obvious choice. Describe a series of experiments and / or MVP tests that the team might have conducted that could have saved them 18 months of work building the search engine?
(2) Evaluate the Passport’s early results (case Exhibits 3, 6, and 9). Assess the unit economics. How would you assess the value proposition for the user and the studio? How sensitive are the unit economics to your assumptions? For example, if you wanted a 3X customer lifetime value (LTV) to customer acquisition cost (CAC) and assumed 20% conversion, what price would you need to charge if churn and class usage is similar to the Passport.
(3) If you were Kadakia, would you pivot away from the Passport? Does it have to be an either / or decision or can Classtivity continue the Passport while experimenting with a subscription offering?
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