Why RacePass will fail.

When ClassPass was introduced,  I was one of those excited consumer! I thought it was brilliant. I used to take a lot of Bikram Yoga Classes, from a studio run by a local family. I would pay about $20 per class. There were lot of these ‘small boutique style studios’ all over Orange County, where people liked the classes, but it was very one note for a monthly commitment, and it was also expensive.

ClassPass built a platform, and partnered with these studios, and each studio got to enforce their own restrictions on how one can use a classpass, but as a consumer, I got what I wanted out of ClassPass – a subscription service, where I got unlimited classes at various local Studios which I wouldn’t have otherwise be able to go to. It was also a huge win for the fitness studios, as they got to invite more people to visit them, still control the margins of profit!

Now, RacePass that got introduced few weeks ago, claimed to model after ClassPass, except, what worked for ClassPass may not really work for RacePass. Atleast from what I see. And here is why.

RacePass is taking a fixed amount from users and offer them to sign them upto X number of races part of the package, regarldess of the amount it costs. As subscriber of Racepass, a $195 gets you 3 races of your choice – like a buffet, and ability to cancel the races atleast 14 days in advance, and not lose your credit. As a runner, this has everything I would love, no online registration convenient fee, a single website to sign upto races, and imagine being able to cancel a  race and still get to keep my money! – amazing right – because it is.

Now, let me break this down to see how it will work out for RacePass. To make a 25% profit on $195,

  1. RacePass needs to pray to god that people sign up for 3 races, that cost them say – less than $147.
  2. and also they need to hope that the person doesn’t cancel the registration 14 days in advance, because even tho the subscriber don’t lose money, Racepass will be losing money on such registrations.
  3. Those who run half marathons and marathons – we do run like every other weekend. We could easily find 3 races that costs about $400, and register through RacePass and save about $200. that is an extra $200 expense on RacePass, (with them not having any relationship with race directors).
  4. SInce there are no limits on how many times you can  cancel race registration, you could ideally register for races and cancel them after few days, and you keep doing that with your subcription, RacePass would have already lost over 1000s of dollar.

They already stopped selling the unlimited passes. But I don’t think they will be open long enough with the current model for other two subscription options.

Now, does Race Directors need RacePass? – One could argue, this might bring new runners, but Remember, if you get access to 10 runners, through racepass, that otherwise wouldn’t have run at your race, you also opening yourself to the risk that you need to have partnership with racepass to allow them to cancel registration last minute(14 days in advance), and also give them better rate. Its a risk a race director would need to take. Unlike a ‘fitness boutique’ that has classes everyday all day every month, most races are one time a year. Once the race is over, people go work on the next race in next town. Will it be profitable at the end? Is it worth It?

What worked for ClassPass, wouldn’t work for Racepass’s hostile approach to race subscription. Rock N roll already has unlimited access to their races for $499 which gets you pretty much all their races. You could plan better and pinch pennies and use coupons and save great deal on race registrations as well. At the moment, as exciting as it sounds for me as a runner to use racepass, I don’t really know how they will make money unless they start to buy races and race companies and start offering it part of their Platform!

They claim over 5000 races, bus tabout 2300 of them are in LA/SF area.

 

racepass race counts

I still can’t believe Runner’s WOrld would endorce them even if it is to just publish their PR news. I am also very much surprised how people associated this service to ‘Google’ as the business is registered to a residential address and Google has nothing to do with this race.

The founders of this service who kind of ran a local 5k a decade ago, has no idea of this running and racing and if they need someone to talk to I am here with all my unsolicited opinions like I always do!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s