By Stephen Nitkin, Founder of Cyc
I am fortunate to have been involved in launching a number of successful start-ups, including Marquis Jet and Tequila Avion. Along the way we have built a loyal group of investors who are always asking what’s next. These very same investors provided much of the seed capital to get Cyc off the ground.
Cyc has continued to attract capital from other investors as we have grown. This is a result of an extremely positive response to the Cyc method, our strong class and online following, and our unique de-risked expansion strategy. Our investors are drawn to the shop-in-shop concept we are pioneering, spending much less than our peers on opening studios and returning invested capital more quickly.
At the onset, our first two Cyc locations were stand-alone studios in smaller markets where boutique fitness classes generally cost less than what you see in NYC. We did incredibly well there, particularly with the young professional community, and quickly received many requests to open in NYC. We believed that Cyc would thrive in this market, but also realized there would be higher costs associated with opening in Manhattan that would ultimately impact our class price. We were committed to serving NYC’s young professionals, but knew that they didn’t need to choose from another $40 spinning studio. Needless to say, we were determined to come up with a way to offer a superior experience at a more reasonable price.
One day I said to my partners, “What if we opened up in a gym?” The idea being, we could cut our build-out costs by 60-75% (in NYC) by opening in an existing facility where we would not have to pay for things like lockers, showers, HVAC, and soundproofing, and pass the savings along to our riders.
Over the next few months we met with various gym owners to explain why they should let Cyc take over their spin program. It was definitely a challenge as it was an entirely different model for the big box gyms that offer indoor cycling programs to their members. Howard Brodsky, CEO of DavidBartonGym, took a chance and we opened Cyc in their flagship Astor Place location. He believed that we could, in fact, bring in tens of thousands of riders into the DavidBartonGym and ultimately create a successful and mutually beneficial partnership.
The rest, as they say, is history. Based on the success of Astor Place, we signed a larger deal with the DavidBartonGym to open in more of their locations, and this past summer expanded with them in their brand new Boston location in the Back Bay. We also grew our gym partnerships to include others like The Forum Athletic Club in Buckhead.
Gyms are just one of the many avenues we are exploring at Cyc. This summer we also expanded our shop-in-shop footprint to include hotels, and opened in Row NYC in Hell’s Kitchen. They are incredible partners who share our vision in wanting to bring fitness to hotel guests, which includes booking through the hotel and charging rides directly to rooms.
Now, as we continue to grow we are looking for more strategic investors. In all our meetings I always keep in mind something a smart guy told me when I was looking for funding for my first venture: “If I am intrigued by something, I will think about it. If I am interested, I will pursue it. If I am compelled, I will do something about it.” We believe we have something very compelling here at Cyc.
Stephen Nitkin is Founder and CEO of CYC. He was a Founding Member of Marquis Jet, which cumulatively generated $4 billion in revenue and ultimately sold to Berkshire Hathaway's NetJets Inc. in 2010. He served on the Company's Executive Management Committee, had daily operational responsibilities, and was consistently one of the top three sales producers.
Prior to that, Stephen was also a Founding Member and former head of business development for eSuperstars, a high-end corporate hospitality and entertainment business. He was also a Founding Member and former COO of Alphabet City, a production and distribution company specializing in sports compilation CDs that combined popular in-arena music with memorable "play by play" calls from team history. Alphabet City was acquired by Robert Sillerman's SFX Entertainment in 1998.
Stephen serves as a member of several corporate and charitable boards, including: Jack Martin Fund at Mt. Sinai Hospital, Surprise Lake Camp, and Jam Master Jay Foundation. Stephen received his BA from the University of Maryland.