Why I can't laugh at 1Fit's collapse

I followed the news of 1Fit's collapse with a lot of empathy and compassion, because I saw my own business failure playing out in real-time.

Their model: RM125-200/month for unlimited gym access. My model: RM100/month for unlimited car washes.

Same same but different. Both equally unsustainable.

Here was my "brilliant" strategy:

• Sell RM300/3-month unlimited packages

• Or better yet, RM1,200/year packages

• Cash upfront! Wah, so smart!

• Then upsell coating/tinting during visits

The theory: Get them coming more, make money on upsells.

The reality: They came alright. For their free washes. Upsells? "No thanks boss, just the wash."

Do you know what happens when unlimited package customers show up?

Every single visit COSTS you money.

• Labour: RM20

• Materials: RM15

• Utilities: RM10

• Opportunity cost: Could've served cash customer

Package customer pays: RM0 (already paid upfront) Walk-in customer pays: RM100 (profit RM55)

So every package redemption = RM45 loss + RM55 opportunity cost. That's RM100 gone. Per car. Per visit.

The more successful your package, the faster you die.

1Fit discovered this too late. Customers using the service 20x/month? That's success for customers. Death sentence for business.

The package trap is seductive because:

• Big cash injection upfront (syok!)

• Looks like recurring revenue

• Competitors doing it too

• Customers love "unlimited"

But here's the brutal math nobody calculates:

If customer uses service 10x, you need 10x the margin to break even. No business has 10x margins. Especially not service businesses.

"Okay lah Kon, what about bundles then?"

Tried that too. "Buy 10 washes for RM800!"

Same problem, different packaging.

• Customer expects steep discount

• You pray they space out visits

• Still losing on every service

• Still hoping for magical upsells

Here's the lesson 1Fit learned too late:

Every customer must be profitable from Day 1.

Not profitable after upsells. Not profitable if they don't show up. Not profitable "on average."

Profitable. Period. From their first transaction.

My business now?

Every interaction makes money for BOTH sides:

• Customer wins: Gets massive value

• I win: Make profit immediately

• More they engage = More we both gain

No hoping they don't show up. No praying for upsells. No package mathematics.

Just clean, simple, profitable exchanges.

Want to discover how I build businesses where customer success = my success?

Where more usage means more profit, not more losses?

Reply "MUTUAL WIN" and I'll share my framework for building businesses that profit WITH customers, not despite them.

Because any business model that hopes customers don't show up...

Isn't a business. It's a ticking time bomb.

1Fit just proved it. Don't be next.

Always cheering you on,

Kon

P.S. My old customers who paid for my packages? Still holding on to the list to refund them after I make back my money.