This is a thought experiments about what I’d do if I were suddenly put in charge of a different company. Today’s experiment: Peloton.
I love the product. My wife and I both probably come across like we make affiliate $$ with each new bike or tread we’ve recommended.
It’s no secret they’ve had some issues in the last year:
www.telegraph.co.uk/business/…
They clearly thought the Pandemic was going to be a game changer for the industry rather than the small accelerant it ended up being. They built too much hardware and couldn’t sell it. You can find used bikes for sale on Craigslist by the dozen. (Which I do recommend picking up if you haven’t tried. )
Why I’d take the challenge
The hardware is solid. I’ve owned a bunch of home gym equipment and the bike, tread, and rower are all well designed. You pay more, for sure, but they are solid. I’ve never been worried about breaking them with hard work.
The software is well integrated with the hardware. Incline and resistance can auto-adjust with the online classes and the leaderboards help to keep competitive people engaged.
The content is top notch. It’s well produced and the instructors each match up well with different demographics and workouts.
They have a pretty good brand.
But this isn’t mean’t to be a love letter.
What they need to do
Realize the real money is in the subscription software. The hardware is just expansion revenue.
Yes - I just told you how great the hardware is… but I started with Peloton using my own bike on an indoor stand and just a monthly subscription to the classes. The hardware was expensive and I had to be convinced I’d get value from it first. The home page doesn’t even suggest that you can just download the app and start working out today… it’s even Fremium! Hell - even write content about how to setup your own poorleton. www.cnet.com/deals/diy… Go ahead and sell a branded bike stand with minimal integration.
Start onboarding non-hardware people into the strength, yoga, meditation, and other classes without the hardware. It’s an on-ramp that people may eventually leave for a Bike, Tread, or cheaper Guide (https://www.onepeloton.com/guide). Some people may never leave the low level subscriptions.. but it would still be profitable. Make it a priority on the website.
Then expand the app. If people are starting without hardware the app should become more holistic with fitness. The instructors are always talking about diet, drinking water, sleep tracking, mediation, etc anyway… Add those things to the app. Let me use it to track my calories and then offer diet classes like Noom does. Expand the monthly challenges to diets, overall fitness, and weight loss goals.
Go further with the outdoor and audio only classes for people that want to trail run, hike, or cycle in the real world. Augment their realities.
The guide hardware looks cool, but what can it do that a modern iPhone on a Peloton branded mount connected to your TV can’t do? Start there and then upsell to the dedicated solution for people.
Then become the fitness social network. They are so close and don’t even realize it. You can already sort the leaderboard by location if you try. Why not make that more obvious?
First start pushing the “local leaders” and the make it easy to join peloton fitness clubs that meet in person and online for group training. Doing this will make the experience more sticky and help people create bonds around shared goals that are much stronger and healthier than typical “social networking”.
Make it the best platform for personal trainers. Personal training is big business. Peloton hardware and software is great at tracking progress towards fitness goals… especially after you expand the app as I suggested.
Instead of competing against personal trainers… make it a tool for them and democratize the personal training industry. Now you could get a personal trainer from Peloton that’s local.. or from anywhere across the world. Start with allowing them to make 1:1 training connections and eventually let them upload their own classes, guides, and programs that they could charge extra for. The equipment (and app) already all has a microphone and a camera set for live 1:1 connections.
Let them charge what they want, run the billing for them, and take a small cut. Become the App Store for personal training. While you are at it let people connect with nutritionists for diet analysis and personal plans since the app will make it easy to track food intake now.
Without doing the last step you make it too easy for someone to copy you. All the other fitness brands are catching up on first party content so you have to look past that and get all the personal trainers talking about signing clients up from Peloton so be generous with them as partners. Cody and his friends are great celebrities, but not as connected to people as an army of personal trainers could be.
Now the hard stuff.
Break into gyms. Beat the MindBody, Sugarwods, etc at their own game. You’ll do it because you are also going to offer free equipment and local broadcasting, recording, and streaming for their group classes so gym members can go in person or take the class online if they’d like. Most gyms I know are still hacking together zoom password solutions for this.
Random feature: create gym mode for the hardware. Today if you go into a hotel you have to sign into your account. Let the hotel sign in and have a local leaderboard like old school, stand up, arcade games.
Then let the peloton affiliated gyms and members compete against each other in worldwide annual challenges borrowing from the CrossFit games.
About the hardware and other expansion revenue
It’s great, but obviously you still want to be the leader here. Tweaks to the existing hardware will be good while you build out the software platform. Can’t do it all at once right.
They aren’t thinking holistically enough about fitness hardware. Things that could be connected to the ecosystem, cheaper than what they sell today, and offer people another on-ramp to the platform.
Start with a Peloton smart scale for measuring progress in weight and body composition. $150 and comes with a 3 months free app subscription.
Cobrand with an existing fitness wrist watch company and make the software integration seem less. Or build a lower cost fitness band alternative with motion, heart rate, and step tracking for people not into the Apple Watch scene. The Amazon fit watch is $29. There’s room there.
Sport specific equipment and training modes in the app. Hello Dribble Up. The leader is coming for you. dribbleup.com/hp/defaul…
The Peloton + Box subscription should also come with a monthly/quarterly fitness box of accessories, supplements, recipe cards, etc.
Finally - they could learn from Roku. Why isn’t the peloton software the standard used on any fitness device with a screen? Just like there are multiple manufactures producing ROKU TVS there should be multiple companies producing Peloton connected hardware to help assume some of the hardware risk that, until today, Peloton has been taking on all itself.
Ok. That was way longer than I thought it would be. Let me know what you think.
If you were the Peloton King or Queen for a day what direction would you give the company to get back on track?
