Yoga Vida Goes Fourth - Wiser and Stronger Than Ever
November 28, 2016
Someone once said, “be brave or you’ll lose your luck,” and Mike Patton clearly took that lesson to heart. As the stock market was crashing in 2008, and people were running for cover, 28-year old Patton left his job at Bear Stearns and jumped head first into the incredibly unpredictable yoga business. Over the past 8 years, as studios were closing around the city, Patton has opened four (!) recently a Dumbo location and a Tribeca studio that is opening today. (Get over to 416 Washington Street (entrance on Vestry) where they will be giving free classes all day long!
But as the saying goes, he was not only brave but also got a little lucky along the way – it
didn’t hurt to have his partner Hilaria Thomas, then an unknown yoga teacher who passed out pamphlets when they were just starting, hook up with our favorite SNL comedian, Alec Baldwin. Still it wasn’t easy, and Patton sat down to give YogaCity NYC’s Jim Catapano the tough truths on what you need – and don’t need – to make an operation like this successful.
“My first piece of advice is that if you’re in this for the money, get out!” says Mike. “It’s a hell of a lot of work. The good news is that at the end of the day, we’re helping people. That feels good. It’s an additional form of payment that I certainly didn’t feel when I worked in a bank. That said, this is a really hard industry. It’s a service-oriented business – and you’re dealing with talent. Much like a broadcasting station that deals with the talent of their news anchors, people want to follow teachers.”
Many contemplating opening a studio – including Mike – don’t figure this into their preliminary budgets. “Retention has cost us probably 5 times more than we thought it would in any original budgets we did.”
And while studio owners may generally set out to provide the best class at a reasonable price, the rising cost of real estate in New York City means drop-in rate increases are largely inevitable. “There are unexpected expenses, and the real estate tax goes up so fast,” notes Mike. “But we’re surviving, and hopefully these two expansion studios will create a bit of buzz.”
It is also clear that Mike had intelligently kept his eye on his primary market – students and faculty in the area. Even though prices at the Vidas are competitive, for the academic population, they are $12.50 for a student, teacher, senior or veteran – and go down to around $6.50 per class if you sign up for a yearly membership.
Keeping prices reasonable isn’t easy, says Mike. “For some of the small mom-and-pops, if this real estate trend in New York continues, I don’t know how they’re going to afford to open a yoga studio. They’ll have to charge $40 for drop-ins. I think that’s what a lot of the boutique studios have done.”
Another big influence to New York’s yoga market is ClassPass. Yogis can buy a pass to a bunch of different studios, and get cheaper classes, with ClassPass taking a cut of the money – and yet it does attract new clients to studios. “It’s an interesting strategy,” says Mike, “but places are in a lot of trouble if 80-90% of their revenue is coming from ClassPass. We try to keep ClassPass a smaller percentage of our business, but nearly everyone has been almost obligated to join ClassPass. At the end of the day they’re still introducing students to Yoga Vida and for that we’ve very grateful, but at the same time for every person they’re introducing to us they’re also cannibalizing multiple students of ours who used to pay for ten packs and now go through ClassPass. There’s less stickiness,” or loyalty on the part of students to the studio.
If your studio is struggling, many believe that teacher training programs are the answer. True? “It’s a terrible idea,” says Mike. “You need a tremendous amount of volume or a name to be even able to have training programs. We’ve recently focused a lot more of our attention on 300-hour modules because the 200 hours have become rather saturated in some ways, though I think there’s still a lot of opportunity within the 200-hour program.
“Over the next five years I’m expecting to have less revenue from 200- and 300-hour teacher training as a percentage of our overall revenue,” opines the former Wall Street executive, whose business acumen clearly still helps him make decisions. “In my opinion yoga is growing a little slower than it was 3-4 years ago. There’s so much more boutique fitness out there now. Probably 90% of the people that practice yoga in New York, or even America, view it as exercise; and now there’s so many other forms of competing exercise, many of which are under the ClassPass umbrella. So yoga has even more competition.”
Everything is constantly in flux, he says. “So it’s up to us to adapt, and have some conviction and integrity on certain things that will prevent us from doing something just to attract some very short-term growth or asset. But at the end of the day, if you’re not changing with the times, it’s going to be hard to stay relevant. If we’re trying to build a business in a community that’s going to be around for 30-50 years or more, we have to dig deep and understand who we are, and not try to be something we’re not.”
So, the ultimate question: is this a good time to open a studio in NYC?
“I think it’s becoming harder and harder to be different,” says Mike. “When we opened 7 years ago, we were the lighter, affordable, more accessible yoga studio. Most of the other options had some dogma associated. Now there’s maybe 5 other studios within 5 blocks doing similar things—following the trends; Bob Marley in the background, DJs and disco balls. Depending on how specific your niche, you’re going to be limiting your sustainability in the market. And as my dad used to tell me, don’t skate to wear the puck is; skate to where the puck is going.”
Looking back on his decision to quit Wall Street, which ironically is now doing better than ever, does he think he made the right decision? “It’s probably one of the best decisions I ever made in my life,” he says. “But if you’re expecting it to be this warm, big cloud of snugly happy yoga people and be easy and you’ll make a bunch of money and make the word a better place – you may be in for a surprise. We’ve seen some pretty ugly things. It’s easy for people to hide behind ‘yoga is my life, I’ve come to this to help people,’ and then they make decisions that are in direct conflict with that.”
Mike also acknowledges that NYC is a challenging place to open because real estate has become so expensive: “So if you’re looking at a secondary market that’s underserved, that’s where I would focus more of my attention. I do think there’s opportunities in small pockets.” Good advice – and you can’t fault his credentials.
--writer Jim Catapano
--illustrator Sharon Watts, for more of her work, click here