Peloton Confidentially Files Statement for Proposed IPO
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Ignoring the all-weather cyclists it'd also be interesting to know how many ride into the shoulders of the season. Most of the folks I ride with have $5000 bikes and they may ride from March to November here in Philly depending on really bad conditions.
I also own a Kickr at home. My spare mountain bike is mounted on it year-round. Through summer, I do the 30-minute workout program on TrainerRoad (rainy days or when I work late, but I try to do most riding outside).
My issue with Peloton isn't the money. As noted, like many cyclists, I have several expensive bikes. It's the lack of specificity for actual cycling. And the subscription is just ridiculous, when Zwift and TrainerRoad are $15/month for similar software.
The site is still at MVP stage so I welcome any feedback on viability, usability, copy, anything that can help me improve it. I want to make it easier, cheaper (free!) and more fun for people to get their workout done from pros to beginners. I also want to help promote the work of the athletes + producers and give kudos to the brands that support that content production instead of buying display ads based on behavioral tracking!
One cool feature apart from the filter is that if you sign up (free, just username/password) you can bookmark favorites onto a personal playlist page to return to later. Another attempt to reduce the friction between thinking about a workout and getting it done.
FYI there are quite a few free guided workout videos on YouTube (GCN is my favorite so far) that are great when you need to do interval training. They are super engaging and high quality. For aerobic base training (lower intensity but longer duration) I like inspiring documentaries or sports events and podcasts or audiobooks for runs outside. I'm adding more to Slipstream every day.
I work out of home and this is the only way I get consistent exercise. My fitness has gone up tremendously as has my quality of life. It's all about what motivates you to take your health seriously... this bike does it for me and a lot of other people. It's really hard to put a price on that.
Much cheaper purchase and fun enough that I can enjoy playing it for hours a day. I have an (admittedly shitty) exercise bike, and will probably be using that a lot less now.
If anyone's looking for a home fitness gadget, give that a look. I'm told BoxVR is a better workout than Beat Saber but I haven't bought that yet.
That's an absurd claim by your apple watch. An hour of expert level beat saber is closer to 360 calories.
EDIT - did a comparison against Runner's World's calorie burn calculator, and the calories/hour burn rate lines up with a leisurely 11:30 minutes/mile pace based on my weight.
It honestly seems about right.
This source puts 6 Kcal/min on the low end of the range for an idealized 60 Kg individual, but your estimate is close.
tl:dr; 6-8 Kcal/min (360-480 Kcal/hour) for a 60 Kg individual
Inputs are: 1 mile, 11:30 minutes/mile, 210 lbs weight
Gives back 159 calories for a 1 mile run, 829 calories per hour.
My Beat Saber workouts yesterday tally up at 830 calories per hour and the amount of sweating felt in the ballpark of running an 11 minute mile. I don't think the watch's estimates are that outlandish.
https://www.runnersworld.com/training/a20801301/calories-bur...
Again factoring in that I weigh 210 lbs, their calculator also says a marathon would be upwards of 4100 calories for me. 1900 calories clocks in at less than half of a marathon.
But I’d pretty surprised if you did it without training to build up to it. You could have developed the aerobic capacity through other activities, but I’d have thought various muscles would be unprepared and would be giving you rather strong pain signals. If you nevertheless pushed through that, I’d think you’d be SORE AF today and barely able to move.
Or maybe your activity confused the calorie model your Apple Watch uses.
Not that it isn’t great exercise.
>According to the Cleveland Clinic Center for Consumer Health, a runner who weighs 130 lb. will burn 2,224 calories during a marathon, a 165 lb. runner will burn 2,822 calories and a 210 lb. runner will burn 3,593 calories.
https://www.livestrong.com/article/302836-how-many-calories-...
Regardless, my main takeaway is that I’m going to burn more calories with this than I was without it.
I've only gone running once this spring so I don't have a huge dataset (lots of walking and exercise bike instead), but the one run I did was a 10:30 mile. So I'm not especially fast, but 11:30 is a slow pace for me and feels reasonable as a beat saber equivalent workout.
Downside, the Quest's foam face-interface gets absolutely drenched in sweat. I need to get a sweatband and a wipeable pad replacement as soon as VRCover catches up on their backorders.
Even as an exercise bike owner who can hop on that for a workout whenever I want to, I've never gotten home from work and said "You know what I want to do? Exercise bike for more than two hours."
Compared to half an hour of exercise bike and two hours of Overwatch, I think this will be a huge deal for fitness.
It was a good chunk of my evening and my arms are pretty sore today, so I don't plan on doing that all the time. But I'll absolutely do it more often than I run/bike 1900 calories.
Average calorie burn was 830 calories/hour, which they say is equivalent to me running at an 11:30 minutes/mile pace.
In terms of effort expended, important to note that this was three sessions over the course of the evening, adding up to 1900 calories and 2 hours 17 minutes.
So it was something like running 4 miles 3 times with an hour and change break in between, which is probably an easier feat than doing it in one shot.
My arms are still sore and I don't plan on doing that every day, but it was definitely a workout.
I don't trust that at all. Apple Watch will give you several "active" calories a minute sitting still if you start an "Other" workout.
Or weather wise, anywhere in the northern US where it's cold and snowy for from November to February.
I live in the mountains of Colorado, but will always prefer exercising outdoors, even in winter. I tend to modify my exercise for the time of year and weather. In winter it tends towards running and skiing. Summer is for biking (and more running). I like to have variety of activities (helps to build up a diverse set of strength) and the simplicity of walking out my front door. (Without a monthly fee)
Exercise bike was a game changer last winter in terms of getting me to stick with regular workouts.
And while I don't really don't enjoy riding stationary bikes, there is some appeal to getting in a fake ride on a stationary bike in my living room when it's 35 degrees and raining outside. Or 90 degrees and high humidity.
I have way more than $2k in outdoor gear, because my favorite exercise is trail running and climbing mountains. If riding an indoor bike was my thing, I would seriously consider a Peloton.
He's just explaining that there is a market. It's probably an enthusiast market as well as wealthy people that can make this an impulse buy, but the opportunity for growth is to convince a much more general market to finance the bike and justify the monthly costs like they do their cable/streaming bills.
I understand you didn't want to interview for the job, I get not wanting to work on a product you don't care for... I just think your other comments made little sense and seemed more inflammatory than anything.
"The market seems to just be people already really into cycling" This is not true, I see tons of people that are just getting into spin/cycling for the first time. I think the primary customers are people that don't mind using a bike, need to be motivated and have busy lives.
We'll see what happens, but I think there's a lot of growth to be had, especially if they try and compete with Tonal.
A $2000 Peloton that you can train in for recovery or when the weather is bad? That's a bargain by comparison.
A lot, myself included. My wife and I gave it to each other for Christmas one year, right before our daughter was born.
At the time when we were new parents, it was perfect. We could exercise quietly without waking either the baby or each other, all without leaving the house.
Now that our daughter is older, we still use it albeit more infrequently in the summer when we both like to go out and run. However, the digital classes offered in the app are great for running & training. For me personally, it was easy to get stuck in a rut of just plodding along and not really improving my fitness. Having the coaches in your ear telling you what to do works well for me.
1.) It's way easier to get started up without the faff of setting up your trainer. If you have a dedicated bike+trainer this is less of an issue, but that is going to cost a fair amount (something like $1-1.5K) and take up about as much space, and not be anywhere near as seamless.
2.) The coaching you get is extremely rich compared to TrainerRoad and Zwift, both costing $15/person/month. So if you have 2 people on the same account you pay a bit more per person and get better coaching. They are also branching out into strength and other types of video coaching as part of the package.
I initially thought it was useless if you had a trainer for the bike, but I see the appeal now. If the app worked with my wahoo trainer, then I'd very likely buy the service and have it work with my existing equipment.
In contrast to your POV, I know dozens of people who do already have Pelton subscriptions, or plan to get some. My office is planning to get 2 or 3 bikes for our exercise room.
Peloton is too expensive to see startup-type growth much longer, but they've got something better: actual revenue and a path to profitability (if they're not already there).
Apparently, somewhere around 400,000: https://secondmeasure.com/datapoints/peloton-subscriptions-d...
Tons of them.
I've had a bunch of setups where you could plug in your road bike into a stationary setup, with virtual screen and everything, but the hassle of setting it up was always just a little too much friction.
It'd be the logical N+1 addition to my stable of more expensive road, cross and mountain bikes.
You have no idea how much people are willing to spend on their cycling hobby.
If I want a one hour work-out, going to the gym adds 2 times 10 minutes to go back and from. The bikes may already be taken. Music is blaring out of loudspeakers. There's no training included.
This is not about being lazy, it's about being rich enough to trade time and convenience for money.
$1000 bike. $1000 trainer. $15/month for Zwift or TrainerRoad.
And you can take the bike outside when the weather is nice.
Or, for a bike enthusiast (or anybody who already owns a bike), the bike is already there. So, it's just the trainer.
When it did work, the tires on the road bike slipped when putting on high power.
In the end, even if it wasn't a huge inconvenience, the hassle of using the system was sufficient friction to stop me from using it, just like the overhead of going to a gym.
There is a large market for tailor-made solutions that are perfect for just one application. (See also: iPad, bike GPS computers, 10 different categories of mountain bikes, ...)
Maybe I'm just lazy after all...
But it still illustrates how something like Peleton can be appealing for many.
I agree with an earlier comment that their target market is the same as meal services, and the value proposition is debatable.
In an age when wealth is highly concentrated among a few people, you can make a lot of money selling those few people absurdly overpriced luxury goods.
Are there lots of them? Not really. But they have all the disposable income, so...
Difficult for you, maybe. How else do you expect them to find the top 0.01 percent of the candidate pool they're looking for?
You can stream Yoga classes if you want. I also don't have to be around germ infested sick people in the winter and wait on equipment.
But as $life_happened and I stopped teaching and moved away from my friends, I really started hating everything about the gym and having to work around the gym schedule. There are times I hang out with my wife until she goes to sleep and then work out after 9PM.
I'm not sure how much staying power they have. More people seem to like the idea of excerise rather than the exercise itself. Maybe I'm missing something..
I'm surprised that they haven't expanded into rowing, seems like an even better fit. Personally, I think you're better off joining a gym and going to spin class if you don't have good roads near you.
Oh, and seeing that they have packages with bundled cycling shoes did make me cringe. That's when you need to go to a bike shop and get some that fit (cycling shoes are designed to be stiff so they don't 'wear in' to the same degree as other footwear.
I'm just gonna drop a shameless plug here and note that I recently joined the team at Hydrow; rowing is our business and our machine feels really good--the quality of the product was a nontrivial part of why I signed up.
I definitely lol'd. Half gayness notwithstanding, this is like an upscale caricature of a normal evening in my house and lot of households.
"Spend $2k on our bike and for just $40/mo you can get in shape while you ignore each other"
You could say Pelton is SoulCycle for people who want to save money and time.
That's some quality entertainment right there. Thanks for that.
But now I get it. He is a busy professional who would not always have time to go to the gym. He is also a bit of a special case as he legally blind and could walk fast to exercise but could never ride a regular bike. This being said he has lost a decent amount of weight.
Part of it is the instructors, they do a good job of making you feel connected to the Peloton community. You see their friendly faces (who of course are all good looking) every day encouraging you . The instructors get followed on social platforms and there are active FB groups where users talk about their own lives and trade/sell Peloton gear. I half joke it is like a good cult.
He has a few friends with accounts and they use his bike and chip in for the monthly fee. This lead to one couple to eventually buy their own.
As a side note, the music lawsuit they are facing is a big deal, it is a major part the experience. It doesn't work without the music. So they have to settle that.
Would I buy the bike for $2k+? No. but I can see why people do. This isn't Juiceroo.
You are dead on with the point about the instructors. My wife hated biking but they have Pelotons in her work gym, and she loves them, and talks about the instructors like they are real people.
People are fitness crazy right now. Crossfit gyms are $100-200 a month, Rogue has whole website of fitness equipment, you could easily spend $4,000 outfitting your house. And how many of us own a $600 blender?
The whole point of the instructor is to instruct you and encourage you to work harder. They are there to keep you focused on the task. Never once felt like these people are virtual drill instructors, which insinuates a demeaning, impersonal experience.
That’s because they are real people! Working people who are doing a job, not actual friends of course. But still: real living, breathing, actual human beings.
Although I do wonder if buried somewhere in the business plan is the expectation of replacing them with AI-equivalents that don’t cost as much & don’t require pesky things like holidays or sick pay.
I actually think that's a small price to pay for how many people are taking their class. 1 instructor can draw 10k participants for a single ride.
i seriously thought everyone was pulling an inside joke and i just didnt get it. i looked at the website, a $600 blender??
All the bike’s electronics do is detect the resistance level (you have to set the resistance yourself, mind you) and the RPM. Combined with a bluetooth heart rate monitor, they give you some charts and graphs. You can do this all yourself with an app and a bike that costs a third as much.
It’s mostly just an overpriced android tablet. Kudos to them to following the Dyson and Beats by Dre model of margin-building to the letter.
Their greyhat astroturfing campaigns on social media are second to none, though. I might buy their IPO, although I staunchly advise my friends and associates to avoid their products.
I personally love the music (classic rock and EDM for most of my classes) but that's personal preference, and haven't had any issue with video stream.
For reference, a trainer costs about that much a quarter.
The bike itself is well made - heavy, easily adjustable, zero wobble even with a heavy guy on it.
The classes are superb - I had never done a spinning class before and I was quickly hooked. The combination of music synced to the workout cadence and a live human (and leaderboard) make me want to compete and thus push a lot harder than if I was solo.
[1]: https://boingboing.net/2017/04/05/diy-peloton-for-introverts...
https://itunes.apple.com/us/app/peloton-digital/id792750948?...
I myself was pre-diabetic from the standard western diet of 2000kcal+ daily refined carbohydrates, and have pulled back from the brink by going LCHF.
Don’t dismiss it without a little bit of experience. It’s a growing movement, and it isn’t a fad. It has provided real results and real improvement to many, many people, and has spawned dozens or hundreds of successful small businesses.
I'd be interested in any sources that support that diet for anything other than weight loss - I was under the impression it led to pretty poor health outcomes (apart from bmi/diabetes management)
There is lots of published info about it. Here’s a good starting point:
But, I suppose the real question is, how many do they actually need in order to be profitable? If 1 person in 1,000 is enough, which would be 300,000+ people in the U.S., then maybe they could do all right.
Now, if some VC fund threw 50 billion dollars at them and insisted they try to grow to Facebook size, then this will never work.
But I can't help but think a lot of people would be better off with a real bike, a smart turbo trainer and an iPad to access a variety of training programs (i.e. Zwift TrainerRoad). Less lock in, the ability to ride outside, and all possible for a similar price to Peloton bike.
As a cyclist I've also heard the power-meter readings from Peloton aren't as accurate as those from a Wahoo or Tacx turbo trainer.
Still congratulations to Peloton on the success and getting so many people exercising at home.
This is the reason I don't see this as a good long term investment. The market seems to be people who are already really into spin classes and pay the premiums they demand. To them, having their own equipment and a lower monthly fee will seem like a good deal. But your average gym-goer won't be willing to drop thousands upfront and more per month just on a nice exercise bike.
You've got to set up your bike, pair your Bluetooth accessories and get the app running. Something that often takes a few tries on my setup.
Additionally, now that it's summer and my bike lives in the garage, there are times when I would have gotten in a workout on Zwift, but I didn't want to deal with the hassle of bringing my bike in and setting it up again.
Nevermind the cost. By the time you've got a wheel-off smart trainer, HR sensor and cadence meter, plus some kind of stand for your iPad or laptop, you're probably pretty close to the price of a Peloton.
Right now, the market seems to be pretty divided, where cyclists looking to train indoors are gravitating towards Zwift/Smart Trainers, while people looking for spin classes at home, or just an easy at home cardio workout are gravitating towards Peloton.
I'm not likely to switch platforms, but I definitely understand the unique appeal of the Peloton.
The website, Slipstream https://slpstream.com is a human-curated (high quality only) aggregator/reviewer of the best content for treadmill/indoor bike workouts.
Inspiring documentaries, guided workouts (I've used the GCN ones for several years and love them), podcasts...
There's a filter so you can find what you need fast and if you register (free, username + password) you can bookmark your favorites and save them to a playlist.
My goal is to reduce the friction between wanting to workout and getting it done. To flip the switch from a chore to something you are excited to get to.
I'm trying to prove product market fit right now so would love any feedback :)
The class content is good. It's available anytime. Our friends have one so we can do rides together. And we're not paying $300/mo to Flywheel anymore.
Unfortunately we don't have a solarium to put it in, so we are really rubes.
Anyone who has bought one can comment on what the alternatives we're when you purchased? The way they position the financing makes it feel like a monthly membership fee to a gym or something.
[1] https://www.amazon.com/dp/B07988PF5Z/ref=sspa_dk_detail_3?ps...
The company was started with the insight that working out at home is a much more pleasant and effective activity than going to the gym.
Pelotons business model is what I think Apple will eventually be forced to adopt. They sell a very expensive, thin-ish margin hardware product and up-sell you on their software + content + some merchandise. The hardware lock-in is real!! They also have a scarily obsessive, loyal and rich fan-base.
I wound up recording a dozen or so of the workouts so I can watch them on my phone without a subscription. The bells and whistles of heart rate and pace are meaningless to me.
To me, heart rate and pace are the whole point and the music and instructor are the meaningless bells and whistles.
I love a good spin class, but like my setup just as much. I can also take my bike off the trainer and ride it outside.
I was at hotel not long ago that some Peletons in the fitness room and I was blown away. The bikes are super nice. The classes felt like I was in a spin studio. I debated purchasing one, but decided I'm already spending enough on fitness at the moment.
I got hit by a car training for triathlon outdoors and now I do basically all my cycling indoors.
[0] I went with: https://www.amazon.com/gp/product/B07FCJH59R/
[1] https://www.amazon.com/Wahoo-Cycling-Cadence-Sensor-Bluetoot...
[2] https://www.amazon.com/Wahoo-TICKR-Heart-Monitor-Bluetooth/d...
I’m not their target customer but I do really enjoy the product.
[1] https://play.google.com/music/m/Dmjr6m5i4h3j6gaysgjd47ryhci?...
Rough quote from when I listened a week or two ago:
"If I could get someone to ride the bike, there was about a 50% chance I could get them to buy it"
Also rough quote:
"People would ask what would happen if we went out of business. Since it was a subscription, there was an annuity value in keeping the platform going. Whoever ended up with our assets after a bankruptcy could use those revenues to spin up an instance of AWS to host the videos. I had a whole line ready to go about it."
First, the business model. They sell you a $2000+ bike, which includes a year of live classes with some of the best spin instructors in the world. Afterwards, you pay for a $40/month subscription in perpetuity to make your $2000 investment more than a boring (although very high quality) stationary bike. Whether you're hooked on the (excellent) service or not, if you're the kind of person who's willing to drop $2000 on a bike, you're very, very likely to be the kind of person who's willing to pay just $40/month to make sure your bike retains its value (i.e., access to live classes), even if you're not using it that much. Doesn't hurt that in-person spin classes regularly cost $30-40 for a single class.
I imagine Peloton's subscription churn is extremely low. This is excellent, and I'm jealous.
But, growth.
How big is the market of people who are willing to spend $2000 on and have space for an indoor bike? What happens when Peloton captures nearly all the market? What happens when a lower-priced version of Peloton comes in and eats their lunch at the "bottom end" (so to speak) of it?
Once you've effectively exhausted the market for selling new bikes (when new customer acquisition slows), you've got three options: find a new market, sell new things to your existing customers, or charge them more for the same things.
Peloton's already doing the first two. They're trying to show investors that they can cross-sell and/or establish new markets: they sell a $4000 treadmill. (My theory about the treadmill is that nearly 100% of its purpose is to show the market that cross-sell is possible — I have doubts about whether they're selling). I have extreme doubts about the viability of this. I mean, how many workout machines are you going to put in your house? Rough estimate: this segment is no more than 10% of Peloton's existing customer base.
In addition to all this, they could (obviously) also raise prices, but at $50-60/month for the subscription, you start to put those great churn numbers at risk.
Either way, really interested to see what they do.
The first time I heard about the prices people were willing to pay for spin class I thought it was joke.
Turns out there really are (a lot) of people out there that will pay $40 to have someone periodically yell at them for an hour.
I'm not saying it won't work. I'm saying it's possible to be both healthy and not financially inept.
They know exactly what to say and when to say it to help you push hard at times when you're feeling ready to give up (at scale — they can't see you if you're not in the studio). They choose fun, energetic songs to keep you motivated throughout. They order their playlists in such a way that you push yourself just past your limit and have just enough time to rest.
Being a good instructor is like being a good comedian or even stage actor, where you're feeling the energy of the audience and optimizing for a given outcome. In comedy, it's laughs. In fitness, it's energy. In either case, people come back wanting more.
My wife and her girlfriends used to be Peloton bunnies - one of the ones that you see in a studio in some of the ads. Two years ago classes were super hard to get into. They had the best instructors ( Peloton would overpay to steal the ones with following from Soul Cycle and FlyWheel ). The home invasion week got housewives from Midwest show up in classes with fifteen outfits because they thought they were going to be on TV or at least seen by the people at home. It was buzzing. Bikes were selling like hotcakes -- no discounts, no promos no anything.
Two years later, she barely goes there once a month. Classes now are meh. The studio is losing its luster. Home invasion week has classes available. There are discounts and specials on bikes, not to mention a talk of a bring your own bike option. Her friends that had the bikes at home sold them.
And competitors. Mirror showed up. Rumble showed up. FlyWheel and Soul Cycle are nibbling at its feet. Instagram is full of Pilates and Barre at home channels.
It is BlueApron all over again.
Investors, founders, and early employees will make a bunch, but it's hard to see Peloton as a company that'll be with us in the long term.
"6079 Smith W! Yes, you! Bend over! You're not trying!"
The business is real and lucrative and profitable. This is already so much better than say Uber. But the equities market demands perpetual growth and I'm not seeing enough audience for this in the future, who have not already bought it. In other words I feel it would be a very nice private company but it might struggle a bit as a public one.
[1] https://www.crunchbase.com/organization/peloton-interactive