It may have been yoga, but Matthew Capizzi was much more exhilarated than relaxed.
Between sun salutations and downward dogs, the Carnegie Mellon University graduate student — the only one in class — peppered the instructor/owner with non-meditative questions.
“How do you price? How do you market?” he asked.
The 2013 exchange was the genesis of Zenrez, an online service that provides fitness buffs with last-minute deals on group fitness classes. It’s an all-around win-win; studios fill empty spots with revenue-generating customers, and fitness buffs enjoy flexibility and great values.
The company’s platform integrates with studios’ management software, enabling precise, real-time scheduling and Zenrez’s technology optimizes the price of each class based on demand.
“The studios are getting repeat business, unlocking customers they normally couldn’t cater to and driving significant additional revenue.”
“No one’s doing anything like what we’re doing,” explained co-founder Noah Tovares, who earned his master’s degree at CMU in mechanical engineering in 2013. “In early conversations the studios referenced Groupon, and there were horror stories. They were getting pennies on the dollar. It didn’t turn into repeat business and flooded classes, disrupting their studios.”
And unlike ClassPass, a popular site that requires membership, Zenrez is a pay-as-you-go model, making its profit only on commission when people book classes.
“The studios are getting repeat business, unlocking customers they normally couldn’t cater to and driving significant additional revenue,” noted co-founder and CEO Capizzi, who earned his MBA from CMU’s Tepper School of Business in 2014. “And as customers get more into a consistent workout routine they can easily transition into studio class-pack or membership. With ClassPass, that issue can create a lot of friction.”
San Francisco-based Zenrez operates in seven cities. They’ve already raised $4 million, have 12 employees, and booked more than 75,000 classes at 250 studios. The plan is to keep expanding into metropolitan areas nationwide.
Capizzi’s interest in yoga occurred while taking operations management courses during his first year of business school at CMU’s Tepper school. Determined to succeed as an entrepreneur, he chose Tepper because it was “one of the best business schools and CMU also being one of the best technology schools in the country.” As a former biotech product manager, Capizzi understood he’d need a diverse team. “CMU’s really good at creating that interdisciplinary culture which is a necessary ingredient for building great products,” he added.
Chatting with the studio owner that day, he realized his Tepper schoolwork could be directly applied.
“Her answers were so basic,” said Capizzi, “I knew there was a smarter, much more sophisticated and proven way to manage this type of business.”
There was no turning back. Capizzi spent every spare moment that summer meeting with studio owners.
He arrived back at CMU in the fall of his 2nd year stating, “I’m starting a company. It’s called Zenrez,” — a portmanteau of ‘Zen’ and ‘reservation.’
As a James R. Swartz Entrepreneurial Fellow at the Tepper School, Capizzi had many business resources available to him, such as advanced courses in operations management and entrepreneurship, mentoring and networking potential with investors and founders of alumni startups.
“With all the resources at CMU, I was able to get Zenrez far enough along before I graduated for me to feel confident to take the risk of focusing all my energy on Zenrez fulltime,” he said.
Reaching out to CMU’s Human-Computer Interaction Institute, a multidisciplinary, collaborative program, Capizzi connected with Arthur Hong. A designer and software engineer, Hong, who earned both a bachelor’s degree in business and a master’s degree in HCII from CMU in 2013, had committed to another Bay Area startup. But, Capizzi’s idea resonated with the dancer and fitness enthusiast. Hong worked with Capizzi part-time through the remaining school year, and by August left his new job to join Matt and his brother Joe as a co-founder.
“It was the best decision of my life,” Hong said.
Zenrez hit the ground running with a few studios immediately after graduation, as Tepper offers entrepreneurs like Capizzi the ability to complete their capstone projects developing startups in Silicon Valley. Hong tapped his CMU training in contextual design and quickly immersed himself in the environment taking a bunch of yoga classes. A walking Zenrez advertisement, he is now a yoga instructor himself.
One year later, Tovares joined the founding team. He also had been a Swartz Fellow and he and Capizzi had stayed in touch.
“Matt eventually convinced me that Zenrez was the opportunity of a lifetime,” Tovares said. “I jumped on board.”
Top photo: The three Zenrez cofounders — (l-r) Hong, Capizzi and Tovares — find time to be users of the exercise-booking service that their company provides.