🏋️ Cult.fit | Acquisition Project
🏋️

Cult.fit | Acquisition Project

Girls do it - so do boys - EXERCISE!


Understanding Health and Fitness in India


Here are two questions:

Do you spend hours and hours scrolling through your phone but often end up saying that I have do not have time to exercise?

temporary-blindness-phone-1492425361.jpgDo you feel like you should be leading a healthy life but do not have the motivation?

main-qimg-afe46a5e86d5192b88c35aaa0a7357b2-lq.jpegHave you ever thought why you feel so demotivated to work out? Maybe, the reason could be that India as a society has never had the culture of "staying fit" or "working out" or "exercising". If a person who is in a good shape decides to sign up for a Zumba class - they will often be posed with an age-old question "kyun khatam hone ka irada hai kya?".

oh-yeah.gifWhen they do decide to do some physical activity - they really don't know where to start from. The fear of the unknown is real.


Times are changing - or are they?

Some stats to give you an overview of the current state of the health and fitness point of view of India (Source):

  • 45% of the respondents say that they want to lead a healthy life.
  • It has been found that 64% Indians don't exercise.
  • 31% of these users face a lack of time due to which they are unable to work out.


What our users have to say?

After having spoken to 10 users in the past one week, I understood two things:

1. The main motivation to engage in a fitness activity has been to keep moving after a long day at work and remain fit.

2. The main demotivation has been not knowing what to do at the fitness centre or the cognitive load of having to decide what to do there.


The Cult.fit Experience 🧘

A fitness activity can be a scary experience to step into. The main reason - you have no idea what you are going to do. You wouldn't know what weight you should be picking or what you have to do with the weights or which part of the body should you be focusing on.

For the uninitiated, welcome to "Cult.fit" - a fitness revolution. It was born with the intention of "making health easy". They want to enable people to work on their physical as well as mental health. In order to offer this ease, they do two things -

  1. Offer time flexibility.
  2. Design workouts for you and you can choose them basis the goal you may have.


PMF Check

Cult.fit claims to be the largest fitness chain in India with more than 1 lac monthly active users on its platform (Source). As a matter of fact, they also observed an increase in the people adapting their online platform during the pandemic. However, Naresh Krishnaswamy - the Business Head at cult.fit - says that this growth was artificial since everything was shut down. He estimates that the online user base may not go back to that level. Nonetheless, the trends do indicate that while people are using the offline facilities 3 times a week, they may resort to the online platform 2 times a week - considering they may have time or flexibility constraints at that point of time.

The company lost a major chunk of its revenue owing to the COVID-induced lockdown. However, it managed to gain back 34% of its revenue in FY22 - and it indicates that an increasing number of people are resorting to using the facilities at cult.fit.

cult.fit financials.png

Framework

Cult.fit

Tech-enabled Product

Yes, check.

Achieved PMF

Cult.fit generated a revnue of Rs 2.16 Billion in the fiscal year. (Cult.fit: revenue 2022 | Statista)

Hence, check.

What funding stage are they at

Series F

Repeat Usage of the Product

Monthly, 3-monthly, 6-monthly and annual subscriptions

What is the user journey like

  1. They discover cult.fit.
  2. They experience the ease of fitness with the mix of flexibility in choosing their time to work out (Yes, the AHA moment).
  3. They brag about it to their friends and ask them to try it out as well.

Product ready for acquisition

Yes


Who are the Ideal Consumers for Cult.fit?

I spoke to 10 odd users in the past one week to understand what their approach is to working out and staying fit. They all had different priorities in their life with respect to their fitness. Here is a detailed document about the conversations I had with them - Cult.fit - ICP - Google Sheets.

Basis the discussion - I came up with the following ICPs:

a. Destined Exercisers: These folks have a health issue that can be addressed via regular exercise. (However, this issue is not very severe like the likes of heart disease etc. A few examples could be - PCOD, A higher haemoglobin level from the standard levels, etc). They have the ability to pay for these services; however, they are majorly lacking the guidance to exercise and is the pain point that needs addressal.

b. Passionate Fitness Enthusiast: This persona actively works out and they understand what works for their body and what doesn't. They are up to date on their nutrition needs and how their workout should work. The main pain point that they face is when they move out of their city of residence - they aren't well aware about the new facilities available around town. For the same reason, they will explore all the options available and finally settle for the one that works out the best for them.

c. Try-it-out Fitness Peeps: These people are working hard and as much as they would love it, they are not getting the chance to play hard. They want to ensure that they do something through the day that makes them break a sweat or two. However, timing is always a constraint for them because they are never really sure when is it that they would be getting free from their workplace. A close second pain point for them is the fact that since they did not have an active routine in place before - they have little to no understanding of how to navigate the fitness space.

d. Inactive Amigos: There is a certain set of people who get excited about working out - one fine day - and then they decide to purchase a subscription for a fitness routine. However, the lack of motivation in them gets the better of them and they decide to abandon the routine, altogether, despite having paid for it upfront. The Inactive Amigos are this exact persona - they lack motivation, will, time and the awareness about working out.


ICP1

ICP2

ICP3

ICP 4

Cohort Name

Destined Exercisers

Passionate Fitness Enthusiast

Try-it-out Fitness Peeps

Inactive Amigos

Age

30-35

25-32

20-30

18-35

Gender

All

All

All

All

Marital Status

Married/Single

Single

Single

Single/Married

City

Tier 1/Tier 2

Tier 1/Tier 2

Tier 1/Tier 2

Tier 1/Tier 2

Employment Status

Employee

Employee

College/Employee

College/Employee

Income Range

20 - 35 LPA

15-40 LPA

0-20 LPA

0-40 LPA

Profession

Mid-senior professionals, senior professionals

Mid-senior professionals, senior professionals

entry level, mid-senior professionals, students

entry level, mid-senior professionals, students

Companies

Fintech, Startups, FMCG

Fintech, Startups

FMCG, Fashion, Apparel

Student, FMCG, Fashion, Apparel, Startup, Fintech

Brands

Rely on established and premium brands - Blissclub, Nike, Old Marigold, Levis, Skechers, Samsung

Dont have brand preferences - Nike, Zudio, Adidas, Kate Spade, UCB, HRX, Roadster

Experimental with brands - Nike, Adidas, Phool, Taavi, GoPro, Azorte

Not into brands as such

Living With

Family/Partner

Flatmates

Flatmates

Flatmates/Family

Frequently used Apps

Social - Instagram, Facebook, LinkedIn

Shopping - Amazon, Flipkart, Nykaa, Ajio

Payment - PhonePe, Gpay

OTT - Amazon Prime, Netflix etc

Business - Zoho, Slack

Social - Instagram, Facebook, LinkedIn

Shopping - Amazon, Flipkart, Nykaa, Ajio

Payment - PhonePe, GpayOTT - Amazon Prime, Netflix, Hotstar

Sports streaming - Cricbuzz Travel - Skyscanner, booking.com

Music - Spotify, YT Music

Social - WhatsApp, Instagram, Facebook, Shopping - Myntra, Nykaa

Payment - PhonePe, Gpay

OTT - Amazon Prime, Netflix, Hotstar

Travel - Skyscanner, booking.com

Music - Spotify, YT Music

Social - WhatsApp, Instagram, Facebook, Twitter

Shopping - Myntra, Nykaa

Payment - PhonePe, Gpay

OTT - Amazon Prime, Netflix, Hotstar

Travel - Skyscanner, booking.com

Music - Spotify, YT Music Editorials - Reddit, Quora

Preferred Content

Non fiction, Inspirational, Art, Cooking, News, Business podcasts

Nutrition, Sports event coverages, News, Mystery

Drama, Travel, Informational, Comic, Podcast

Drama, Comedy, Mystery, Thriller

Hobbies

Cooking, taking care of kid, reading, meditation

Engaging with nature, sketching, playing sports

Cooking, listening to music, travelling, reading books

Reading, listening to podcast, understanding new concepts, hanging out with friends

Time vs Money

Time- They can spend on fitness apps that help them save time

Money- Time spent exercising is not wasted but they need the ROI

Money and Time - They will check for offers because they are trying the fitness journey out and want guidance so that they dont waste time

Time- They can spend on fitness apps but they dont get the time to step out to workout

Time spending habits

Most time spent on work, reading or cooking

Work, exercising, entertainment and catching up with friends

Work, travelling, exploring new places, art, chilling with friends

Work, reading, hanging out with friends, studying

Money spending habits

Rent, food, investment and clothes

Shopping, travel, fitness and ad-free subscriptions

Gadgets, travel, food, shopping

Gadgets, food, shopping, travel, rent

Fitness Goals

To remain healthy to keep the health issues they are facing at bay

I know what works for my body and I want to continue to do that

Be active without having to spend too much time

I want to work out but I am not motivated because of there is nobody to push me to workout and I dont have the time


Ideal Customer Prioritization Framework

The Rationale Behind Prioritization

The following are the reasons why ICP 1 and 3 have been prioritized and why ICP 2 comes in as a close (?) second:


Metrics

ICP1 (Primary)

ICP2 (Secondary)

ICP3 (Primary)

ICP 4

Persona

Destined Exercisers

Passionate Fitness Enthusiast

Try-it-out Fitness Peeps

Inactive Amigos

Ease of Adoption - Need- Awareness - Willingness to try

- Need: They need a fitness routine because of their health - HIGH

- Awareness: They are aware of the various fitness options available - HIGH

- Willingness to try: They want to try things out to figure out the best solution for them - HIGH

- Need: They don't need a fitness routine because they have other ways to engage in keeping their body active - LOW

- Awareness: They are aware of the fitness options available - HIGH

- Willingness to try: They can try the fitness facility if they do not have their sports or running activity grounds at their disposal - MEDIUM

- Need: They need a fitness routine because they have desk jobs and are looking to figure out ways to keep themselves active - HIGH

- Awareness: They are aware of the fitness options available - HIGH

- Willingness to try: They can try the fitness facility if they do not have to spend too much time to travel and they have the correct guidance available - HIGH

- Need: They dont pay much attention to fitness and are usually demotivated about working out-

LOW

- Awareness: They are not aware of the fitness options available - LOW

- Willingness to try: They will try the facilitiy if they are motivated but they mostly would not want to keep coming - LOW

Usage Frequency

4-5 times a week - HIGH

Everyday - HIGH

3-4 times a week - MEDIUM

1 once a week or two weeks - LOW

Potential to Pay - Appetite to Pay - Willingness to Pay

Appetite to Pay - Yes

Willingness to Pay - Yes

HIGH

Appetite to Pay - Yes

Willingness to Pay - Yes

HIGH

Appetite to Pay - Yes, with offers

Willingness to Pay - Yes

MEDIUM

Appetite to Pay - Maybe, with offers

Willingness to Pay - NO

LOW

TAM Size

HIGH

MEDIUM

HIGH

HIGH

Distribution Potential

HIGH

MEDIUM

HIGH

LOW

  1. Ease of Adoption: ICP 1 and 3 are chosen as primary ICPs because of their ease of adoption and inclination towards working out.
  2. Frequency of Usage: They have a medium-to-high usage frequency which indicates that they are truly able to derive value out of the product and experiencing their AHA moments. Once they do that, these cohorts have shown indication of referring the product to their friends and family - which indicates that these cohorts have a strong word of mouth and retention. This, in turn, contributes to scalability of the business.
  3. Total Addressable Market: ICP 1 has a high TAM. How? A study by Indian Council of Medical Research indicated that Indians are an increased risk of non-communicable diseases owing to their lifestyle (Explained | Are non-communicable diseases increasing in India? - The Hindu). The doctors usually recommend these individuals to work out to remain fit and healthy. According to the report, on an average 25% of Indians are exposed to these diseases. Let's assume, 30% of these individuals decide to work out religiously - so the TAM for this segment would come to roughly 10.5 crores. (This is in broad terms, a deep dive into this in the TAM calculation segment).
  4. Total Addressable Market: ICP 3 also has a high TAM considering there are approximately 45% Indians who realize the importance of working out, according to a Mintel Research. Pessimistically, we can assume 8% of these individuals do workout - the TAM roughly comes to 5 crores. (This is in broad terms, a deep dive into this in the TAM calculation segment)
  5. Appetite to Pay: ICP 1 and 3 have a strong willingness as well as appetite to pay and would be easier to acquire because of their intent to be on the lookout for a fitness journey.
  6. Distribution Potential: Since these ICPs are present in tier-1 and tier-2 cities, they will be easier to capture because of the presence of cult.fit fitness centers across 130+ locations in India (Source).
  7. ICP 2 is given second priority because of the ease of adoption, frequency of usage and willingness to pay. However, they can also be ruled out because their TAM is quite small - considering the number of people who actually actively workout in India. Also, they will easily substitute cult.fit with a better alternative (according to them) - as soon as they have access to it.



Consumer Journey and AHA Moments 💡


Journey for Destined Exercisers
  1. They find out that they have developed PCOD.
  2. The doctor recommends that they should work out regularly.
  3. They realize that they want to work out but they realize that they don't know where to start from.
  4. They talk to their friends about their willingness to workout/they Google about fitness centers near them.
  5. They discover cult.fit.
  6. They go on to seek more information about it from friends/cult.fit/online forums.
  7. They decide that they will take a trial class to understand how cult.fit is going to help them in their journey.
  8. They go on to the app and see that there are so many options available at different time slots. They also observed that there are so many centers available around them in Indore.
  9. They go ahead and book a class for "Strength and Conditioning" for 6 pm at the nearest center.
  10. They get to the class by 5:55 pm and see that the doors close at 6:02 pm sharp. They are impressed by the discipline (moment of delight).
  11. The class is led by a trainer, and it concludes within 50 minutes.
  12. They feel that because of a guided group class, they could workout efficiently (AHA moment).
  13. They decide to book another class.
  14. They finally decide to take a subscription of the class!


Journey for Try-it-out Fitness Peeps
  1. After a day at work, they come home and realize they have really been up to nothing but work.
  2. They decide that they want to work out.
  3. They think of exploring options to solve this problem.
  4. They hear about cult.fit from their colleague.
  5. They explore cult.fit in detail and read reviews about it.
  6. They decide to go to the centre to know a little more about the offering.
  7. They find out that it is not JUST a gym. They offer many other classes like Aerobics, Dance etc. with their Elite Pass (moment of DELIGHT).
  8. They also see that the facility is so clean as opposed to the other gym that they have tried out in the past (moment of DELIGHT).
  9. They decide to take a trial class and download the application.
  10. They check out the class timings and see the variety of timings available. They think they can pick one whenever they get free from work (AHA moment).
  11. They pick the 8 pm dance workout class. They are also delighted to see that the center is right next to their office (moment of DELIGHT).
  12. The 50-minute guided routine helps them break a sweat and break from the day's slump (AHA moment).
  13. They go to the application to check the calories that they have burnt and feel satisfied about the workout. They think that I have to spend roughly 2 hours to burn similar number of calories at the gym.
  14. They decide to buy a subscription basis the most lucrative offers available at cult.fit.


Understanding the Market

A detailed calculation of TAM, SAM and SOM can be found here -TAM Calculation - Google Sheets and the snippets of those can be seen below:

TAM Calculation

TAM calculation corrected.png

SAM Calculation

sam calculation.png

SOM Calculation

SOM Calculation.png

Business Opportunity

Business opportunity .png


Channels Prioritization Framework

To understand which channels are working the best for cult.fit, I conducted an analysis on Similarweb to understand the distribution channels that are working quite effectively for cult.fit and which ones can be harnessed effectively:

marketing channels - distribution -  cult.fit.png

As we can see, "direct searches" are the top traffic source for cult.fit. "Organic Search" comes at a close number two. Also, referrals are not being utilized to their best capacity - given that 10/10 users say that its their friends who referred them to cult.fit. Also, according to a study quoted by The Indian Express - people tend to trust their friends when it comes to weight-loss over celebrity faces (https://indianexpress.com/article/lifestyle/life-style/people-trust-friends-when-it-comes-to-weight-loss/#:~:text=Advertisement-,When%20it%20comes%20to%20joining%20a%20weight%2Dloss%20programme%2C%20people,successful%20person%2C%20the%20findings%20showed). This can be extrapolated to the generic fitness programmes as well.

  • Given that "Organic Searches" are performing well for cult.fit and they have a medium scalability, we would be doubling down on this channel.
  • I would be detailing out a referral programme - given the pivotal role it plays in the acquisition of new users in the health and fitness industry.

Channel

Cost

Flexibility

Effort

Lead Time

Scale

Organic/SEO

Low

Low

High

Medium

Medium

Referral

Low

High

Medium

Medium

High

Paid Ads

High

High

Medium

High

Medium

Product Integrations

High

Low

Medium

Low

Low


🫂Building a Referral Design for Cult.fit

A step-by-step guide for cult.fit referrals:

What is something people absolutely love?
  1. The schedule flexibility
  2. Group workouts
  3. Professional instructors
  4. Variety of workouts
  5. Ability to track the milestones they achieved with each session
What is the platform currency?

platform currency .png

Who will we ask for referral?
  1. A new user who has successfully completed 3 classes in the week of their sign-up. The success of their classes can be validated by the feedback form that is floated after each class. After the completion of three classes in which they have given a rating of greater than 6, they will get the following prompt. cult.fit referral.png
  2. Customers who have extended their subscription.
  3. Customers who shared their milestones with friends/on social media.
How will the user discover the referral programme?
  1. The users will discover it post giving feedback for their classes, given that their feedback is greater than 6.
  2. The users who have already purchased an annual membership and have completed 2 weeks with cult.fit will also receive a referral framework after booking their classes. class book.png
  3. The users can also find the referral button on their home screen to enable easy transfer of the download link to their friends/family. referral on home page.png
  4. The user can also find their referral link in the profile section as well. referral link.jpg
How will the referrers share their referral code?

Since our ICP is most active on WhatsApp as a channel to communicate with their friends - it makes sense to leverage it for referrals.

The referral flow is going to look like the following - however, the messaging has been changed to include the "AHA Moments" or "bragging points".

revised messaging flow .pngThe initial message was "Click on my referral link for EXTRA Rs 500 OFF on your cultpass purchase. (link)".

This has been revised to "Hey, break free from your boring gym workouts and the hassle of missing fitness routines because of tight schedules! Purchase your 1st cultpass with Rs500 OFF now! (link)."

How will referrers track their referrals?

There is a referral tracking mechanism that has been set up by the brand and it looks like as shown below: referral tracking.pngWhile the referral tracking mechanism has been set up - we need to solve for what stage the referee is in. For example, if they have taken a trial class - it should clearly indicate here because it will help build trust with the existing user.

How will users see the landing page?

Currently, the landing page looks like the following:

image_123986672 (1).JPGThe experience on the page needs to be enhanced by showing motivating quotes or a testimonial or the glimpse of a live session to make the conversion even more seamless.

How will we motivate users to refer more?

The current problem with the referral design is that it expects the users to convert within 15 days. However, after having spoken to 10 users - it was found that customers take a minimum of one month's time to convert to gather information via friends or the experience via the trial. Hence, the user referral links may not work effectively.

Another problem statement is that the users can only refer a maximum of 10 users post which the referral programme stops functioning. This can be solved via a tiered referral approach:

  1. After having referred 3 friends - you get an extension of 45 days.
  2. After having referred 6 friends - you get a coupon code worth Rs1000 to purchase a piece of equipment from the store.
  3. After having referred 9 friends - you get a month's access to cult.transform (a platform for tailoring the nutrition and workout for people according to their fitness requirements).
  4. After having referred 12 friends - you get 3 months' access for free!


Organic Content

The efforts for this channel would be focused on generating search intent and buying intent. We will have a look at search intent first and then move on to buying intent.

What content can we dive into?

SIMILARWEB SOCIAL MEDIA CULT FIT.pngSince YouTube has served as a prominent channel to fetch traffic, we will be building on content buckets which we can dive into to improve the search intent for the users:

  1. Inspirational Content - This is where users will speak of their transformative journey after having worked out with cult.fit.
  2. Celebrity Coaches and the BTS - Since cult.fit has onboarded celebrity coaches in the past - they can feature the "Behind the Scenes" with them where cult.fit interiors and logo are prominently visible for a seamless integration.
  3. Expert Tips - These videos can cover various content types - "the common mistakes people make while working out", "busting myths", "best fitness routines for arms" etc. This will help generate trust in the product.
  4. Mindfulness Meditation - Various formats of meditation can be distributed across YouTube to generate more interest in the brand owing to the growing interest in the meditation category.


Search Intent

This can be achieved by Search Engine Optimization for the following keywords to obtain users with low effort and to observe a quick turnaround time for the outcome -


Search Volume

Effort to rank on first page

Time to get an outcome

Search Result to Click Rate

Average Conversion Rate

Potential Visits

Potential Monthly Sign Ups

Use Case

Gym near me

300k - 1.5m

Low

Medium

100%

2.40%

300k - 1.5m

7200 - 36000

Use Case

Dance classes near me

118k - 300k

Low

Medium

64%

2.40%

75520 - 192000

1500 - 5000

Use Case

Zumba Classes near me

30.3k - 70.8k

Low

Quick

100%

2.40%

30.3k - 70.8k

720 - 1700

Use Case

Fitness classes near me

851 - 1.7k

Medium

Quick

100%

2.40%

851 - 1.7k

20-40

Use Case

Aerobics Classes near me

4.3k - 6.5k

Low

Quick

100%

2.40%

4.3k - 6.5k

100 - 150

Use Case

Dance studios near me

4.3k - 6.5k

Low

Quick

94%

2.40%

4000 - 6000

96 - 144

Brand

cult fit

30.3k - 70.8k

Low

Quick

17%

2.40%

5000 - 12000

120 - 300

Brand

Cult fit near me

30.3k - 70.8k

Medium

Quick

100%

2.40%

30.3k - 70.8k

700 - 1700

Brand

cult fit packages

871 - 1.7k

Low

Quick

100%

2.40%

871 - 1.7k

20 - 40

Competitor

Golds gym near me

11.5k - 30.3k

Low

Quick

100%

2.40%

11.5k - 30.3k

270 - 700

Competitor

fitness first

1.7k - 2.9k

Low

Quick

64%

2.40%

1000 - 2000

24 - 50

Use case topic

Home exercises to lose weight

2.9k - 4.3k

Difficult

Quick

88%

2.40%

2500 - 4000

60 - 100

Use case topic

Full body workout at home

1.7k - 2.9k

Difficult

High

100%

2.40%

1.7k - 2.9k

40 - 80

Use case topic

Workout at home

4.3k - 6.5k

Difficult

High

88%

2.40%

3700 - 5700

85 - 140

The keywords that must be focused on are highlighted in green -

focus keywords.pngThese keywords are essential in bringing the consumer to the awareness and consideration funnel wherein they would be able to find out the best gyms (i.e. cult.fit) out there for them and find enough information about it to reach the consideration stage.

How did I arrive on these numbers? An external research from Moz helped me and to go through this process you can refer the link here:

https://docs.google.com/presentation/d/1tO_6HoC83IWYNBClPDJ2pzfqiuzcZJsKAerAiHYTCPw/edit?usp=sharing

(Link to the sheets - Search and Buying Intent - Google Sheets)


Content Loops

After having spoken to the users, it was found that all of them are active on Instagram and this channel can serve as a great space for acquisition. How?

🪝Hook: The milestones that each user has achieved.

Generator: Cult.fit would be the generator since they would have access to this data and they can collate it in a shareable format which leads to an increase in the number of shares by the consumer.

🗯️Distributor: The distributor will be the end user who will be able to share it on their Social Media handles (Instagram or WhatsApp). Why will they do it? Just to show that they are proud about themselves.

content-loop-1.png

cult.fit content loop.png

Another loop that cult.fit can work on is an extension of the tonality that they are trying to adapt. While the tone of voice of the fitness industry has always been motivation and inspiration heavy, they are trying to double tap on their key message "making health easy" by bringing a comical twist to it.

HD paseena.png

🪝Hook: Since cult.fit has access to the user data - they can share mind-boggling workout routines that people have. For example: a person did 3 back-to-back classes on a weekend. ✨Generator: This could be adapted in a meme format saying "bas bhai, social life hai ya nahi teri?" and be posted on Cult.fit's social media handles so that people can just have a good laugh about the fun content that they are posting.

🗯️Distributor: If people truly enjoy the content buckets, they will go on to share it on their social media handle and build their social capital around being first movers in identifying the best memes and sharing it first.

The suggested content buckets for YouTube can also be amplified on their Instagram handles so that the distribution of the content increase. Since this content will be branded with the cult.fit tonality - it will help improve the platform's awareness and will help acquire users in the awareness segment of the marketing funnel. Thereby, helping improve the overall absolute figures of the consideration and conversion segment of the funnel.


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