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One startup is learning the hard way that it takes much more than rapid growth and a dedicated user base to build a sustainable company.
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Fitness class startup ClassPass rocked its subscribers Wednesday with news that the business is axing its unlimited tier, which allowed people to attend as many fitness classes as they wanted for $190/month.。

SEE ALSO:Salary or equity? This website wants to help you understand startup job offers。

Instead, the startup is now moving users over to a new plan called "Core" that offers 10 classes a month for $115. Naturally, ClassPass subscribers are mad as hell about the change. The company's Twitter feed has been flooded with users threatening to leave and complaining about the change.。

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Making matters worse is that this is the third time since 2015 the company has messed with its subscriptions. Initially, unlimited plans cost $99 a month. Last summer, the company raised its prices to $125 a month and then to nearly $200 a month earlier this year. 。

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ClassPass CEO Payal Kadakia admitted as much Wednesday, writing in a surprisingly frank letter to customers that there was a "fundamental problem," with the company's business model. Kadakia noted that the unlimited option was originally intended as a limited time promotion, but its popularity caused them to rethink the original idea — even if the financials of it didn't add up.。

I focused on nurturing that spark assuming we’d figure out the business model as the company continued to scale.。

"The promotion was a spark – it didn’t just help launch ClassPass, it helped ignite something truly special in our community," she wrote. "I was so taken aback by the promotion’s success I focused on nurturing that spark assuming we’d figure out the business model as the company continued to scale."
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"The truth is there is a fundamental problem with the Unlimited plan. It can’t be a long-term membership option because it doesn’t align our business with our promise. What kind of business would we be if we wanted our members to work out less to reduce costs?" she wrote. 。

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