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NYLP: Welcome to the New York Launch Pod, the New York Press Club award winning podcast highlighting new start-ups, businesses and openings in the New York City area. I’m Hal Coopersmith and in this episode we are going back into the world of boutique fitness as we speak to Helaine Knapp, founder of CityRow. We first spoke to Helaine in 2015 when CityRow was new and fitness studios around New York City and the country just weren’t as common. So more than three years later, how has CityRow thrived in a more competitive environment? Here’s Helaine.
Helaine: What we’ve built in our programming is really smart and is backed by science and that is why we’re here and that’s why we continue to kind of take the position that we take as the leader on the rowing category both in studio and at home.
NYLP: In this episode we discuss the world of boutique fitness, what keeps people coming back to CityRow, how Helaine’s business is expanding, not just around the country but also to your home and a whole lot more. It’s on a show we call “How You Doin”?
NYLP: You were one of our first guests on Episode 5 which I recommend everyone go back and listen to and it was in 2015. A lot has happened to CityRow. You had one location at the time and now you have two in New York, you’re expanding nationally, you have a CityRow at home, CityRow Go and we’re going to talk about all of that. But I want to know how the boutique fitness world has changed since 2015 because even though three or so years doesn’t seem that long, it seems like a lot has happened in the boutique fitness world.
Helaine: You’re absolutely right. First and foremost, thank you for having me back after I think almost 3 years, it feels like 10 and also 1 at the same time.
NYLP: You’re always welcome back.
Helaine: Thank you I love being here so in the past 3 years the boutique fitness space has completely exploded. There is a spin studio on every corner. There are places to do 15 million different kinds of yoga and CityRow has been part of that boutique fitness explosion. I think for our category specifically when I was on here back in 2015 we were the only rowing studio. We’re the first of our kind and since I came on we’ve seen tons of competition copycats across the country which sure might be kind of annoying, but I think it’s great that means that there is proof of a category right, a rising tide lifts all ships, so it’s been a really fun category to be a part of and boutique fitness is just continuing to explode. I’ll talk about the at home market but it is growing the trends are going to continue to see it grow both at home and in studio.
NYLP: What has all that additional competition meant for CityRow?
Helaine: I think that there is a little bit more discerning going on from consumers. They know that there are a million different ways to work out and so they’re trying to evaluate which ones they want to actually invest in and put their body through and so we’re seeing people start to peel back and feel like is this really good for my body. Is this smart, is it really fun, do I love the instructor and we’ve also seen with more competition is the bottom kind of falling-out? I’ve seen studios close and that’s also like in a booming category because we’re also coming into it, it’s a passion category people love fitness in their personal life, outside of work and they’re diving in. It means that some people at the bottom aren’t really making it.
NYLP: One of the things that’s endemic to this boutique fitness world is that you pay for each class and an entrant that has been a part of the boom is ClassPass. How has that changed the business?
Helaine: ClassPass itself has changed quite a bit since it started. I have not been the biggest fan of them from the beginning because I think that there has been some confusion for the consumer where they’re at right now, I think is actually where they should be. It is transparent to the consumer what they’re getting, off peak times, they can’t get into every class and it’s been an interesting all access path in a lot of boutique fitness worlds. It’s become the standard on some level very curious to see how it grows and evolves, as more and more competition enters the marketplace and people are starting to think about how they can create their own version of a class pass so we’ll see, but in three years ClassPass itself has seen quite a bit of change.
NYLP: For people who don’t know ClassPass, you’re paying a monthly subscription and you’re gaining access to classes.
Helaine: I would say about 90% of boutique fitness studios are part of ClassPass and on the studio side, you get to choose which classes and how many spots you want to offer so friends since our Union Square location, which is in a very transient urban area, doesn’t have showers. Our [12:30] classes have never been super strong and I’m always going to put a handful of ClassPass spots in there. You’re never going to see a class pass by in the 6:30 p.m. Tuesday, so it’s a value to the studios when it’s used properly.
NYLP: How has your participation in ClassPass changed over time?
Helaine: It’s a good question. In the beginning I hated them.
NYLP: Hated them.
Helaine: I hated them. This was a company that was owning my consumer in my mind, and they had the relationship with the consumer and I want the relationship with the consumer, I want to own their journey, I want to be the one to solve their problems and it created a lot of friction. I still prefer to have the clients direct to us so on some level, you see them as a competitor but at the same time if you look at it as a marketing channel, to open up the door to welcome in new people then I think you can win with them and it’s also a big awareness tool for opening a new markets.
NYLP: Talk about expansion of the fitness world. You had one location when we first spoke to you and now you have two in Manhattan. What was it like making that jump from one to two in New York, what does that mean for you?
Helaine: Totally different experience. The first one, 15th floor of an office building in Union Square. I did very little work up front and it was just let’s see if this thing works. Second one was
co-op building Upper East Side, ground-floor, 600k worth of work and I had to, without permission, cut a 35 square foot hole inside of the building to put a louver. Last-minute, like 3 or 4 days before opening so it was insanely stressful from a build-out perspective and also a marketing perspective. We had a really big audience in Union Square and we had to figure out how to replicate that on the Upper East Side, so we learned a ton.
NYLP: What are some of the things that you learned?
Helaine: Local marketing is important. Obviously, to be honest, opened the first location, just really naive and I had a great following an awesome PR, had a great email list from about a year’s worth of buzz and we just opened our doors and it just worked. Two years later didn’t work that same way. We had to actually go out and market and do partnerships and learn how business across the country open a new store but as we prepare for scaling franchising if we hadn’t gone through that we would be nowhere.
NYLP: You beat me to the punch for my next question. You’re preparing to scale and franchise across the country what were some of the things you learned in New York with the second location that you want to take across the country?
Helaine: We learned at times it’s been a second location this summer we also opened a third location in Ann Arbor, Michigan which is our first outside of New York learned a ton there that is actually a prototype store. So part of why we opened in Ann Arbor that’s where are franchising partner is based on we want to open a store that was indicative of what one of the future Studios to look like. Union Square like I said I did nothing. I put up like $50,000 to build-out. Upper East Side is too big too expensive and this one’s just right and so we learned a time through building out that that process were now also operating it from 600 miles away so we’re learning how to communicate, what the right hires are, what the right P&L should be without local marketing plan should be in the more creating that the platform in the programs with our partner on how to teach franchisees.
NYLP: So you’re going across the country and is it the same demand for boutique fitness in Ann Arbor, in other cities I don’t know Los Angeles, Austin, Texas, Denver, wherever you’re thinking about expanding I just named the cities. I just named those cities.
Helaine: Those are great cities.
NYLP: They’re all wonderful cities.
Helaine: We have about 35 franchises sold to-date and they’re across the country Denver, Portland, Dallas, Chicago, New Jersey, Detroit, LA, San Fran, you name it we’re going to be there. I would say that in some cases there’s more demand because there’s less already. There’s an Orange Theory in every single town, but unlike New York City, where there are 700 boutique fitness studios within the 5 boroughs, there might be three, four or five and so the franchising model allows us to have a really big footprint really quickly versus corporate store openings and I’m excited about that because a city like Ann Arbor can support a CityRow. It doesn’t have to just be a downtown Chicago or San Fran.
NYLP: Why can a smaller town or smaller city support a CityRow?
Helaine: The future of a CityRow footprint and it’s not that different than what we have in New York. It’s 15 to 20 spots. We’re not putting 50 bikes in a room. And so that means a footprint of about 16 to 1800 square feet you can fit right in the strip mall. The location that we’re opening in Dallas is a perfect box in like a Whole Foods anchored location in Allen, Texas and it means we can actually put these in more cities versus having one in each big city.
NYLP: You mentioned that you wanted the franchise model because you could grow faster. Why is that a good thing for your business?
Helaine: About 2016 after we opened our second location, I was taking a step back and figuring out where and how I want to grow the company, both digitally and from a retail footprint. I had LOI’s and letters of intent out for spaces on the upper west side, Tribeca and then I was exploring an opportunity in both Boston and D.C. Big initiatives from a corporate perspective on how to roll those out. And what I couldn’t get over and would actually drove me to exploring franchising was how to incentivize a general manager to want to wake up at 5 in the morning when there was a VIP coming in or who’s going to race over there when you know a crazy woman throws a brick through the window, which by the way happened in the Upper East Side.
So I couldn’t get over that and I also know that I quit my fancy job to wear leggings every day and I just wanted to give people the opportunity to do that as well.
NYLP: Let’s talk about the brick. That’s crazy that was certainly not something I read about or ever heard about.
Helaine: Well, you’re clearly not reading all of my Instagram stories. Oh yeah it was a year-and-a-half ago and an insane woman on the upper side. If you live on the Upper East Side you know there’s a spitting lady or there used to be. Apparently was just down like some kind of crazy bender, took a brick and through it through the glass on the Upper East Side.
NYLP: Was on an anti-rowing crusade.
Helaine: At [4:45] in the morning.
NYLP: Just before 5 when you’re getting to the studio.
Helen: Primetime.
NYLP: So you have franchised so that you are incentivizing the franchisee to wake up, to open the studio to cater to those VIPs. How are you selecting the franchisees and how do you ensure that they choose the right instructors and deliver a consistent class across different cities?
Helaine: You and I don’t know a whole lot about franchising but the good thing is that a lot of people out there do and so I partnered with a company called Franworth out of Ann Arbor, Michigan. I went to the University of Michigan undergrad and it’s my alma mater and they’re basically franchising ninjas. The CEOs have basically a 10 for 10 win rate, think Dominos, Krispy Kreme, Ducks, Hoods, bought Title Boxing Club about 5 years ago and has grown that and partners with emerging brands very selectively so there are about five brands under their portfolio and they bring the franchising expertise to the table, we bring our marketing PR product to the table and together we build out the systems and processes of what is auditioning inspectors look like. We’re going to train them in Ann Arbor, what is that 3-day training look like and so they’re really bringing all that expertise and not only how to had to find the right franchisees but how to train the franchisees to find the right instructor so there’s a balance between corporate franchisee and processing.
NYLP: What does that training look like? You’re bringing instructors across the country for 3 days, teaching them the CityRow way, what exactly is that?
Helaine: We know that what happens in those 50 minutes is magic.
NYLP: Magic.
Helaine: The magic is in the programming but it’s also in the delivery so we probably spent the most amount of time on this piece of the puzzle and it involves an audition process of what the franchisee goes through in our local market. Here’s 20 people who want to audition, let’s whittle it down to 5 or 6, let’s take them through a two-week pre-training intensive and they’re going to fly to either Ann Arbor or New York and do three days with any in-person, learning the magic, getting to experience class from the best-of-the-best and then they’re going to go home and bring it to their local market with continuing education as well.
NYLP: So someone who wants to audition for CityRow is obviously going to be listening to this podcast. What makes a good CityRow instructor?
Helaine: You have to be a performer on some level. You don’t have to be classically trained but you have to love being in front of a room and listening to the clients, reading what they’re not telling you and understand the why behind our products. If you know why customers are coming in you can communicate that in an effective way and they’ll come back.
NYLP: In addition to franchising nationally, you’ve also launched CityRow Go. Why did you decide to do that because you’re expanding nationally and now you want to be in people’s homes as well?
Helaine: We are. CityRow Go launched on November 8th. It was about the same time I start considering franchising. I knew we had to go at home. Peloton blew open the door in 2016. I saw the early numbers in traction and knew we had a rabid rower population at home, people that had machines, that we’re coming in being like, I have a machine and don’t know what to do with it and for years people across the country if it can I livestream into your classes. I have a rower at home. We also have a great relationship with our manufacturing partner, Water Rower. So we started the innovation and R&D process into what a custom CityRow Go go machine would look like by Water Rower and we are building an app. With a tag partner called Jacked, they’re down here actually in FiDi and we built an app, we launch it in beta in March exclusively with the Water Rower community. We have as of end of November, a thousand paying users, most came from beta. We’re allowing people to not only buy a new machine and experience a connected experience, ala Pelotone, but also if you were a rower at home, whether it be a Concept 2, or a Water Rower or any other machine, you can also take classes at home and follow along. So it’s a very widespread approach to be able to introduce people to stay right across the country welcome them into the family and also provide an even more robust national presence for our franchisees.
NYLP: Well a thousand before you even launch is a huge number. How are you able to get all those people? Was it exclusively through the Water Rower community?
Helaine: We put up a waitlist block on and had people sign up for the waitlist. We offered it to the Water Rower community as well to join the waitlist so they’re building that up from about you know February, March and then added 100 people at a time. With a really high retention rate and that was before we even had the Bluetooth connectivity to the app.
NYLP: So you’re looking to grow CityRow Go and you’re looking to grow nationally. Do you worry about the in-person classes around the country competing with in-home or vice versa?
Helen: A lot of people would think that. I think that even some of our closest partners and friends think that as well. The reality of it is people workout at home because they cannot physically get to a studio because of their calendar, because of location, even have a kid and they can only work out during those hours. In-studio is always going to be the optimal experience. If you were looking for a group fitness, the energy, the pushing yourself further, you’re always going to go into a studio. If you can’t do that or maybe you’re just someone who doesn’t like group fitness, like working at home, maybe you’re shy, maybe you’re new to a fitness routine, at home is going to work for you. What I’m really excited about is that we are not only going to be able to tap into the I think 4.4 million people who are rowers, but we’re going to tap into this the 7.7% of the $81 billion fitness bucket to try CityRow Go so we’re going after not rowers, we’re going after fitness buffs, that’s a much bigger category. Welcoming them to CityRow. When a CityRow opens in their area, you better believe we’re going to tell them about it and give them their first class free, so it’s more of a national brand lift and we’re going to figure out, I actually already have a few different ways of how franchisees are going to benefit from CityRow Go. Gold unlimited members will have free access to the app.
NYLP: 4 million rowers in the United States?
Helaine: People are rowing.
NYLP: 4 million people are rowing in the United States.
Helaine: About 1 million have rowers at home.
NYLP: 1 million have rowers at home. So what’s the goal for CityRow Go? Obviously you must have set a goal for getting in people’s homes, do you have that?
Helaine: We do. I want to capture a chunk of that million. I want to go after people who already have machines. I also want to go after people that have at home workout experiences and start to target not necessarily people that already have a Peloton, but people that are looking to make a purchase. This rower takes up a lot less space. It’s very efficient what you can do in 20 minutes, it stands up against the wall and we’re already seeing really early strong traction for purchasing. This is an expensive product so it’s great.
NYLP: How much does it cost?
Helaine: It’s $1,395 for the machine and then the subscription is $180 annually or monthly for $19.
NYLP: One of the things that I want to talk about is something that you said in the first episode and I want to play back this quote.
Helaine: I really do think that we stand alone in our offering. There are dozens and dozens of boutique fitness studios on every block in Manhattan and what we bring to the table is unique. You’re getting cardio, you’re getting strength training and the way that we’re delivering it to you is low impact, it’s safe, it’s smart, there’s a thousand ways to get a good workout, but there are only so many ways to do it that’s going to keep your body really safe for today and set it up to be, strong for life.
NYLP: Given that there are a proliferations of rowing classes, there’s another at home rower, there are more people doing at home online fitness. How does that stay true what you said?
Helaine: I love hearing myself talk from 3 years ago. First and foremost that was great.
NYLP: What a flashback.
Helaine: Oh, Helaine 2015. It stands exactly the same. I think I have figured out what I was talking about in 2015 was our secret sauce in our programming and that what CityRow really is, is that we’re not a rowing studio. We’re a smart fitness concept, that’s my why, that’s why I started CityRow. I needed something that was going to deliver results, be really high intensity, also low impact and being a category where everything is really sexy and cool and sleek. But the reason that we win and we will head to head all the time against other franchises, is that what we’ve built in our programming is really smart, it’s backed by science and that is why we’re here and that’s why we continue to kind of take the position that we take as the leader on the rowing category both in studio and at home. We haven’t changed our why. When we go at-home, they’ll be a wide variety of CityRow classes, they will all stay true to our mission of form first, preparing your body to work out, and at the same time keeping it really fun. I love that there are other rowers out there I love that there are other rowing fitness franchises, again a rising tide lifts all ships, but we will always be our product first.
NYLP: What are the things that you think about when building up that product when building at that forward thinking fitness that you talked about, that other people are not doing and there’s big money behind it. You mentioned some of the big names are even more active, Peloton, what you mentioned this other rowing classes, True Rower what are you doing that they’re not?
Helaine: We are always going to be an interval based rowing solution. We happened to use rowing because it’s the smartest piece of cardio equipment out there and it’s total body, the goal will be to deliver results. Be really fun, athletic, exciting, dynamic and scalable. Our classes are for all fitness levels, that is a really hard and challenging thing to do. Annie, our head of programming, master trainer, always said it is really easy to make something hard, is very hard to make something challenging and all CityRow classes are challenging for all fitness levels as we continue to evolve the company both in studio and we think about what our new classes are going to be over the coming years as well as at home, we’ll always stay true to our mission of form first, product first, your body first, and thinking about how we can always get smarter about preparing you to perform because we sit at a desk all day and so afterwards before you can go crush something you have to prepare your body for it and it’s something that we don’t want to do is figure out how to sneak it in.
NYLP: So obviously you are getting a lot of wonderful press in terms of what you’ve built, what you talked about. One of the things that got a lot of national attention, even more than New York Launch Pod, if that’s believable, is the Today Show did a whole big feature about you and CityRow, what was that like, how did that come to be?
Helaine: I’m still reveling in that moment. Our PR girl said “Helaine got to be honest I don’t think it gets better than this”. I said so where do we go from here? It was actually an inbound request. We obviously I think we have a very strong name across the country as who we are and myself being a strong New York City-based founder and this amazing fellow entrepreneur Maddie reached out, we totally hit it off, she was putting together a cool series called Meet the Boss, all female entrepreneurs that were featured during week in March and I was really lucky enough to be picked as one of them it was a whirlwind, picking the date it was so nerve-wracking I don’t think I ate for a week because I was so nervous. It was insane. Savannah was one of the coolest people ever met and I totally get why she is at the forefront of the Today Show, she immediately put me at ease and it was a really easy interview and then to be honest, I had a lot of fun. A lot of fun.
NYLP: Well one of the Today Show cast, Al Roker, I think is a regular at CityRow.
Helaine: Al Roker. He’s great. He loves CityRow, we love him and his son is also fantastic.
NYLP: Well it doesn’t get any better than the Today Show, but is there anything else that CityRow fanatics can look forward to?
Helaine: Yeah there’s a lot on the horizon. We are probably going to launch about 20 studios this year across the country. So first probably Dallas, Denver, Portland, so be on the lookout in those cities. We also opened a retail Collective pop up here in New York at 11 Bond Street as part of the Showfields Collective so definitely come check us out there and see CityRow Go and then would love to offer any first-time clients their first class free with a code NYLaunch.
NYPL: First class free for New York Launch Pod listeners. That is phenomenal.
Helaine: A $32 value.
NYPL: That’s across the country?
Helaine: Across the country.
NYPL: Across the country everyone. That is a wonderful note to wrap things up on. Helaine Knapp, thank you for stepping back on the New York Launch Pod and sharing your time with us.
Helaine: Thank you for having me again. I can’t wait to see number 3
NYLP: I can’t wait to see what number 3 holds. How do people find out more about you and CityRow?
Helaine: CityRow. com or words @CityRow on Instagram, @HelaineKnapp. And check out CityRow Go, check out a studio near you and I hope you all try rowing.
NYLP: If you want to learn more about the New York Launchpad you can follow us on social media at NY LaunchPod and visit nylaunchpod.com for transcripts of every episode including this one, and if you are a super fan, Helaine are you a super fan?
Helaine: Of course.
NYLP: Helaine is a superfan and you are too, all super fans should leave reviews on iTunes and Apple Podcasts. It does help people discover the show and it is greatly appreciated.
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