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Peloton – A call for action [pdf]
- aljarry 5y agoDo I read the decks properly, or do they have only 2331 subscribers for Q4 2021? This looks like a super low for such big valuations of their disruptive product.
- nikanj 5y agoBut on par for Silicon Valley
- celticninja 5y agoI'm assuming that is wrong. They laid of 2800 staff in Q1 and they all had subscriptions which were continued for 12 months as part of their severance.
- deleted 5y ago[deleted]
- dannyw 5y agoProbably thousands.
- aixi 5y agohmmm, as a Peloton owner this would be a bit weird --- live classes tend to have thousand of participants, unless they are bots.
- some1else 5y ago2,331 million
- mprovost 5y agoI rode in a live Peloton class yesterday that had more participants than that.
- a_humean 5y agoThat probably 1,000 scale. So the actual number is 2,331,000 subscribers with a very small churn rate, which is enough to sustain that business and valuation.
- willis936 5y agoThat was rough. I have similar vibes from the investor call a week after Cyberpunk 2077 released but even that was much more generous. It all seems like well-earned criticism. As someone with no stake I am happy to see the consumer-hostile behavior of the treadmill murder machine incident be given its own slide.
- iamricks 5y agoI got downvoted the other day for calling Peloton a Ponzi scheme, look at the "TROUBLING INSIDER SELLING AND PLEDGING" slides and the quotes like "We have built a team that I believe is ready to run a $500 billion company. Pick a number. A FAANG-style leadership team" that the CEO was making.
- m4tthumphrey 5y agoMaybe from an investment point of view but the product is still solid.
- jankyxenon 5y agoYou have to be clear if you're talking about Peloton as a financial investment or as a consumer product. As a product - there's real value there. If it's been oversold as an investment, that's a different issue. But millions of people are willing to pay $1000+ as an initial investment, then $40/month into perpetuity. With presumably good gross margin on both. That's a good business
- joshyi 5y agoFor sure lots of issues for peloton after those accidents with kids.
- brlnwest 5y agothis was an interesting read. Never seen a doc like this before.
- lelandfe 5y agoWhile a brutal dressing down of the company, I have to admit that this is one of the most nicely made decks I’ve ever seen. What is the reasoning behind them sharing this publicly, I wonder?
- sails 5y agoIncrease short interest I guess? Presume they have a massive short position.
- rjtavares 5y agoNo, they own 5% of the company. The deck is not a take down of the company, is a take down of the CEO.
- sails 5y agoInteresting, thanks for clarifying!
- oceliker 5y agoBased on their press releases, it sounds like they actually hold significant stock, hence the urgency to do something about it I guess. https://www.blackwellscap.com/pressrelease/blackwells-capital-continues-to-call-for-urgent-action-at-peloton-comments-on-reported-changes/ https://www.blackwellscap.com/pressrelease/blackwells-capita...
- celticninja 5y agoThey want to improve the price as they hold the stock, probably want to offload it and are hoping a CEO change will lead to a price bump.
- rjtavares 5y agoThey're an activist fund. They own 5% of the company, and want the CEO removed. https://www.reuters.com/business/retail-consumer/activist-blackwells-pushes-more-action-peloton-after-executive-reshuffle-2022-02-08/ https://www.reuters.com/business/retail-consumer/activist-bl...
- atupuxi 5y ago
- rjtavares 5y ago> Q: Is there anything about being CEO that you don’t like, that you like to delegate? > A: Finance. Our CFO does 99% of finance. I engage because I want to know how we’re doing. But to say I don’t add value to her operation is an understatement. You can also say the same with technology. Our CTO doesn’t get any help from me. I’ll go sometimes months without talking to our CTO, which as a CEO of a technology company, that’s kind of rare. Wow...
- adrianomartins 5y agoOne might ask, if the CEO does 1% of finance, and 0% of technology, what does a CEO do? Office, HR, comms management?
- helsinkiandrew 5y agoHe's the Chief Enthusiasm Officer: > Peloton has been horribly mismanaged, with unbridled enthusiasm taking the place of disciplined leadership
- skrebbel 5y agoMarketing and sales
- johannes1234321 5y agoHow can you do Marketing without looking at the curre t development to Merker the new features? How can you do sales without feeding customer feedback back into development? How can you do all that without looking at the numbers to see what you can afford?
- pmontra 5y agoI've seen many times sellers selling things that didn't exist yet. Maybe a term describing that is Market Development. It doesn't end well every time but there is usually time to cope with customers after they signed a contract.
- 5y ago
- adrianomartins 5y agoWell, that's a type of deck that I never seen before. The amount of times and ways they leverage the actual bad state of the company to make it look like a worthwhile investment is astonishing.
- JohnJamesRambo 5y agoSo many words trying to obfuscate the simple fact that “We are a treadmill maker trying to masquerade as a tech company.”
- adrianomartins 5y agoA treadmill maker trying to get users to pay monthly subscription to use it...
- mschuster91 5y agoThe subscribers aren't subscribing for using the treadmill, they are subscribing for fitness courses and the likes. Which... isn't a bad business model per se IMO. With the current trend of "self improvement", there are enough people willing to pay lots of money, for everything from gym memberships to individual personal trainers. The issue is: this is not going to be an exponential-stock-growth-style business model, as many seem to expect. There is no hope for the usual "undercut the competition in pricing and establish a monopoly that can be used for rent-seeking afterwards" VC model, no hope for a make-everyone-filthy-rich acquisition by an established market player, at best this is going to be a steady, "boring" cash cow. (Note, I don't hold any stakes in Peloton or competitors)
- sideshowb 5y agoAren't gyms generally famous for cashing in on people who sign up for memberships they never actually use? Seems like a genius plan to disrupt that tried and tested business model with a more efficient alternative where users buy the gyms for you so you don't need to maintain them. (unless you want your job to be meaningful or something)
- smorgusofborg 5y agoI think Richard Simmons already brought us this disruption, and you can pay what you want at the closest yard sale! The slide deck is comical in its defensiveness of the company itself, how does one compare video remote classes with boutique classes that had better have 8- students to explain $300/month?! Or is this people in LA assuming their local phenomenons are normal?
- faeyanpiraat 5y agoYesterday’s thread about this: https://news.ycombinator.com/item?id=30272154 https://news.ycombinator.com/item?id=30272154
- Cyril_HN 5y agoThat's fascinating to see. Anywhere I can see other decks from different places?
- jalcazar 5y agoI saw this a few days ago in Matt Levine's newsletter.
- ghayes 5y agoSeems a lot of people think this is a deck by Peloton, not by Blackwells Capital. The title should be changed to clearly reflect that.
- dymk 5y agoYou'd think the first slide "PRESENTED BY BLACKWELLS CAPITAL", would be a tipoff
- fabian2k 5y agoI get the impression they don't like the CEO very much. That was an impressively brutal attack on him, with probably the worst damage inflicted by the CEO's own statements. Blackwells is obviously not a neutral party here, there's a reason they created this thing. But on first glance it looks like a pretty solid argument that the management at Peleton is seriously flawed. I don't really buy the arguments on why Peleton is a good business and comparable to Streaming somehow. I do find the arguments around bad governance structures and oversight weird though, as those should have been known before they invested. Doesn't mean they're wrong, but obviously this didn't stop Blackwells from investing in the first place.
- jahller 5y agothey obviously want to get a good ROI on their stock holdings and try to convince potential buyers that the company is amazing and just held back by their CEO (which definitely is not the only problem that Peloton has)
- notahacker 5y agoYeah. The problem is that the deck makes a more convincing case that the company is badly run than that Disney might get value from acquiring a loss making niche hardware company to distribute its content...
- IshKebab 5y agoIt makes the assumption that a buyer could run it more successfully. Which I think is fairly reasonable.
- notahacker 5y agoI think it's reasonable to assume it could be better run (apparently the CEO, who's since stepped down, agrees!) I think the list of putative buyers who ought to be interested in it as a premium strategic acquisition is stretching it a bit.
- 5y ago
- baybal2 5y agoWhat's up with a treadmill? Is it so special because it has WiFi? HN rules forbid shallow dismissal. I would only say, adding a WiFi to a random thingy is a weekend project for any engineering company i've worked in, in the most literal sense. Design injection molding enclosure, add relays, motor VFD, rpm sensor, wifi module, wire & screw together. I've done few project for sporting goods makers, and even no-name village factories in China with zero marketing probably ship more goods per months than this treadmill sell in a year.
- remus 5y agoIt's interesting but I think it's important to take it with a huge pinch of salt. It's obviously designed as a hit piece, pushing their opinion the CEO needs to go, and as such is chock full of selective quotes and figures designed to paint one picture. ed: the top comment from yesterday says it better https://news.ycombinator.com/item?id=30272154 https://news.ycombinator.com/item?id=30272154
- helsinkiandrew 5y agoInteresting to note that the CEO (39.6%) and co-founders (18%) have 58% of the voting power of Peloton's stock.
- sireat 5y agoThe sad thing is that they own much less(how much?) than 58% of the stock. Just like FB, Google and many other companies. You can sell majority ownership and still hold the majority voting power due to dual(and triple) class shares. This is a perversion of common stocks and stockholders rights. In old days there would be such a thing as preferred stock which at least granted liquidation preferences to those buying preferred. I am still shocked that the CEO actually listened to the 5% holders and stepped down. As Matt Levine rightly stated, Peleton CEO could have let the company burn to ground and there was nothing that minority stockholders(which could have owned the majority of the company but not the voting rights) could do.
- mannykannot 5y ago> This is a perversion of common stocks and stockholders rights. It is a step in the refeudalization of society.
- helsinkiandrew 5y ago> The sad thing is that they own much less(how much?) than 58% of the stock. The 'special' shares have 20 votes per share - could be as low as 3% of the company. It's hard to see why anyone would invest in a company where someone who was deemed incompetent to be CEO but still has a massive control of the board. https://www.bloomberg.com/opinion/articles/2022-02-08/peloton-s-ceo-has-had-enough https://www.bloomberg.com/opinion/articles/2022-02-08/peloto... I wonder if this will be a big issue for companies that look floundering and whose CEO/Founders are seen to be unable to control it - I've seen a few articles about Zuckerburg not being the right CEO for FB/Meta anymore (he also has over 50% of the votes) - if their share price did a few more 25% drops...
- PhantomGremlin 5y ago
- rvz 5y agoWhere this road is going, it looks highly likely it is going to Amazon or even Meta.
- lbriner 5y agoThe question it begs is if the CEO is not the right-person for the job (which they don't appear to be) then why keep him on as executive chair? That sounds like dragging things out for the sake of it, if he doesn't add anything useful, buy him out and send him somewhere else, it sounds like his experience is not really needed any more?
- andreareina 5y agoBecause buying him out would be expensive. Much cheaper to convince him to step aside.
- klelatti 5y agoOpen question. How easy would it be for Apple to build a Peloton competitor from scratch? Are there any real barriers to entry?
- sockpuppet69 5y ago
- enaaem 5y agoThey would probably make something like FitnessKit similar to HomeKit, so that your iPhone can adjust settings on your fitness device. Fitness device makers can then make apps to give you exercise programs and track your progress. It might already exist. I don't know.
- klelatti 5y agoA bike that you can attach your iPad to seems like one way too. They probably don’t want to make iBikeOS for a new class of iDevices! Seems to me that management bandwidth is probably the main issue given Apple’s structure.
- janekm 5y agoFrom the pure technology point of view not too hard, but there are business and logistics challenges. Apple is highly optimised to hold minimum stock near the customer and use a lot of just-in-time delivery, but this depends on a high product value relative to weight and volume of the parcel. Treadmills and exercise bikes are only really cost effective to ship by ocean. It's also doubtful that the addressable market of an expensive treadmill or exercise product is large enough to be worth going after for Apple (even in the bumper year 2021 Peloton turnover was $4bil, not a viable business unit for Apple).
- jankyxenon 5y agoThe barriers are the investment in diverse, engaging instructors and developing a well integrated product. Neither are insurmountable for Apple, but then really given the amount of cash that Apple has - very few businesses are out of reach for them.
- pknomad 5y agoI have my gripes about Peloton as a former employee (left back in November 2021), but this is just a hit piece. They're taking whatever facts that conveniently fits their narrative.
- jahlove 5y agoanything specific you object to?
- ltfey 5y agoI don't know anything about Peloton or its management, but the main takeaway from this deck is something I already knew: (1) private equity guys are assholes, (2) who are obviously compensating for something inadequate three feet below the nose.
- nikanj 5y agoHow about we come up with a better way to insult men, rather than "hehehe peepee small"
- Aeolun 5y agoWe can call the thing two inch above the nose small? Or dysfunctional? I don’t know, I don’t necessarily agree with the message itself, but I certainly agree with the sentiment. Whoever made this deck is an asshole.
- ltfey 5y ago[flagged]
- SyzygistSix 5y ago"We had them almost defeated, at least on the cultural front, in the 1960s and '70s." Not even close. A relatively small amount of people with an outsize cultural influence were imagining a less stifling and less cruel world but it will take a lot more than just eliminating capitalism to do that, and nothing indicates that capitalism itself is the sole, or even main cause. "We have to remind people at every opportunity that, not only is capitalism not sexy, but its reason for existing is to funnel disproportionate sexual access to repulsive men--I'm talking 400-pound oil executives with body odor--who otherwise would be unlikely to get any." I assume it would be okay if said oil execs were fit, or women? As opposed to fictional non-elitist commissars? No, with attitudes like these, no one is any closer to curtailing the excesses or cruelties of capitalism and industry.
- nikanj 5y agoDoes your political affiliation change the size of your penis in any way? Why is it relevant here, aside from enforcing the age-old body shaming ideals that "big peepee good, bad peepee small, stupid man bad, bad man have small peepee"
- WastingMyTime89 5y agoWhile I could think of plenty of adjectives to describe this deck, amazing would certainly not be amongst them. It's the traditional hit piece from activist funds. It looks pretty. It reads well without having to think to much because well, it's not heavy on substance. They want the company to be sold but they fail to present a convincing case for why it's the correct strategic decision. There is nothing on Peloton competitors, nothing on the market trend. They rightfully point that Peloton failed to properly forecast market demands but nothing on the future outlook and how Peloton production capacity and stock align with futur predictions. No real analysis of why the company which is profitable would be better able to produce value if it was bought out. My key takeaway from it is that Foley is bad at PR. Gosh, I hate this deck and I really hate what activist funds are turning finance into.
- Aeolun 5y agoKind of hard to see why someone would have invested in this rocketship in the first place.
- agounaris 5y agoExcuse me but I don't see in there any reference to what made peloton stock "actually" explode which was the enforcement of wfh. This is a VERY biased deck.
- avs733 5y ago...that's the point? they are making an argument for their point of view. They list specific actions and evidence to support their points. They don't claim to be 'unbiased'. The fetishization of objectivity and being unbiased will honestly be the death of the human species.
- roland35 5y agoPeloton does have a lot going for it. From everyone I've heard, their physical products are well made (with the exception of the treadmill issue..). They have extremely low churn which is hard to do in fitness. The main problem is that they grew too fast. All the pandemic sales were probably just pulled forward from future sales, not a sign of sustainable growth. They overcommitted and now need to trim back again.
- AndrewOMartin 5y agoAgreed, apart from the fact that their treadmill kills kids, their products are exemplary.
- slingnow 5y agoExemplary? Have you even tried other stationary bikes? You can get a BETTER stationary bike for less than the cost of a Peloton bike.
- geodel 5y agoI thought above poster was sarcastic.
- jonwachob91 5y agoDo you have any recommendations? Preferably one I don't HAVE to pay a subscription to use...
- BoorishBears 5y agoThe fact you called it a stationary bike is kind of telling. There's two kinds of people: People who actually know what equivalents to Peloton hardware cost ... and people who think the hardware is overpriced - Powered slatted treadmills started at around $15,000 when the original Tread launched at $4,000 Spin bikes can be $200... they can also be well over $2000, and the Peloton has more in with the over $2,000 models than the $200 Alibaba special.
- fropie 5y ago
- polote 5y agoIt is the same thing over and over. Founders are praised when the company is growing, and the same founder for the same reasons are criticized when the company is not growing anymore. If the CEO is so bad, how did he manage to create such a valuable company while almost nobody on earth has been able to do it ?
- joekrill 5y agoHow? Luck, really. I think we give way too much credit to people for being "visionary" or talented when really the large part of their success is just luck (particularly around timing). For example, I think the situation with Peleton would look very different if it hadn't been for the pandemic.
- stefan_ 5y agoThis is a deck from a tiny activist investor that were angling to get rid of the CEO for a while. They are not "their investors".
- kumarvvr 5y agoWow. That presentation is like an autopsy level of scrutiny and criticism. Many of the quotes look like they were taken out of context. I am not sure, but perhaps a bit more context than just the quotes would be fair.
- aeyes 5y agoThere are a lot of pages showing how management enriched themselves by selling shares and because of their RSU policies. But the whole purpose of this presentation is to get them to sell the company at 75$. On the most basic level this looks to me like this investor is salty that they didn't sell when the share price was high and now they want to get some of their losses back. Or is their argument that the CEO made false promises? You don't have to listen to him, the balance sheet is all you need to make your decisions.
- jmeister 5y agoI don’t understand the disproportionate hate Peloton gets. They have a fanatical costumer base. From past experience with similar attitudes towards fancy gyms, fitness products and basically anything catering to the rich, hot and fit, I can only think of one cause: ressentiment.
- rambambram 5y agoGet a bike (or some walking/running shoes), go outside, and exercise. But since that doesn't require cool gear and apps...
- muh_gradle 5y agoA lot of Peloton in the news lately. Is there anyone that owns a Peloton machine that can comment on what they like and dislike about Peloton? Have you guys noticed a decline in the product, software, classes?
- ath0 5y agoOne and only one data point: the handle allowing the chair to move forward and back broke 2 months ago, about 6 months out of warranty. (Great for my partner, who now has exclusive use of the bike in her position… not so good for me.) Support originally wanted to charge me $250 for replacement and service. A few YouTubes and a second call, the service person admitted that a $5 part would probably do the trick. It’s taken two full months from that support call to get the shipping notification on that part. Other than that, though - my experience with the bike and classes has been positive.
- a_humean 5y agoI have a family member that owns one and I've tried it a few times recently. The bike hardware is very good, the instructor content is very good, the software is decent. No noticeable decline in software or content. Overall cost compares pretty well to a gym, PT, or class subscriptions esp if you live in an expensive area. It does feel like a potentially valuable company that is just being run badly, but also could face competition. It also does feel like a company that could work well within a larger fitness or content company.
- m4tthumphrey 5y agoSee my response in another thread: https://news.ycombinator.com/item?id=30260468 https://news.ycombinator.com/item?id=30260468 TLDR: I love my Bike+ as does my partner. It's well worth the monthly fee (and this document seems to imply that its too cheap!). Is the bike itself worth £2250? Probably not in theory but it is to me. Further elaboration: The tech is interesting. It's very polished but there is SO much room for additional reporting, functionality etc. I have actually played abit with the unofficial API and theres lots of data available.
- lghh 5y agoBike+ owner. > like and dislike about Peloton Likes: - It's soooooo easy to just get on it and ride. One of the core tenets of habit-building is to make a habit easy to do. I can't imagine an easier way to exercise than sitting on a bike that's a few feet from my bed. - The classes are all high quality. The instructors are charismatic and varied. There are a lot of them and they all have their own personal style. You can find the 2-3 that work for you or hop around. I only actively dislike 1 or 2, but I get why others could like them. - The classes extend beyond the bike. I like taking their stretching classes and my wife takes a strength class nearly every day. - The powerzone classes are great and a perfect example of something that can't easily be reproduced by competition that doesn't fully integrate hardware, software, and content. - People complain about the subscription cost, but $40 a month is less than the ~$100 a month we were spending on 2 memberships to the only gym in a 15-minute driving radius to my house. Dislikes: - Delivery was a NIGHTMARE. Just absolutely terrible. It'd take me 30 minutes to type all the pain we went through for delivery. - Literally nothing else. > Have you guys noticed a decline in the product, software, classes? Nope, not at all. In fact, they recently added some boxing stuff which is a new class type for them.
- pjmlp 5y agoSo this is the company that is supposed to rescue Stadia cloud services?
- mysterydip 5y agoDoes anyone here actually use Peloton equipment? My spouse wants one of the bikes but I'm wary of having a subscription to a company with questionable future longevity.
- dhaulagiri 5y agoMy wife has a bike and absolutely loves it. We’ve recently tried to purchase one of their treadmills and it’s been a complete joke of incompetence actually trying to get it delivered. Combined with this news it does make us nervous about investing even more money into their ecosystem even though the bike experience has been so positive.
- dymk 5y agoNow is probably the best time to buy a bike, with the company down 82% since last year. Probably won't go much lower than that.
- catillac 5y agoI absolutely love it. Tried it for a few days on vacation because the resort had a few, then started doing it at my work gym, then bought one. I was an athlete in high school and college and now in my 30s I’ve tried all kinds of aerobic fitness equipment over the years. It is the most immersive and exciting piece of fitness equipment I’ve ever used, and singularly the only one that has been able to keep my attention as a real option to train versus going outside and running or cycling. I have also heard very similar stories from colleagues. I think the people calling it a dumb treadmill or saying it can be replaced by YouTube and a used exercise bike are clueless.
- m4tthumphrey 5y agoSee previous response in another thread: https://news.ycombinator.com/item?id=30260468 https://news.ycombinator.com/item?id=30260468
- jankyxenon 5y agoTry to do a live spin class if you're not sure. Barring that - ride a spin bike. It's about as engaging as indoor cardio can be, but if indoor cardio is highly objectionable or boring for someone it's hard to get over that.
- say_it_as_it_is 5y agoThis is yet another chapter in the long series of stories about investors who destroy the goose that lays golden eggs. The analysis is a "well, what did you do for us lately?" that disregards unsustainable, explosive growth in 2020 and an obvious correction 2021. Putting con-imbeciles on a board is a recipe for disaster.
- apollo1213 5y agoDirect link to view the pdf: https://docmadeeasy.com/v/656502559 https://docmadeeasy.com/v/656502559
- scarface74 5y agoI wonder how Peleton imploded while iFit (owner of NordicTrack and other fitness brands) has been humming along for years offering the same hardware+ streaming combination.
- justanother 5y agoiFit unfortunately is not humming along. Amid plummeting home fitness equipment sales (particularly bikes), they postponed their planned IPO, laid off tons of people including engineers in December, and at their current burn rate, they either need to find new capital, slash costs to the bone, or be acquired. The situation there is not as dire as Peloton, but I wouldn't be surprised if they got acquired by end of year. The main strategic error that both companies made, was to assume a certain level of permanence when home-training equipment sales exploded during the beginning of the COVID era. People are now (rightly or wrongly) returning to gyms and buying less home stuff. I'd love to see the same company acquire both Peloton and iFit, and hopefully preserve iFit's library of high-production-quality workouts and charismatic trainers and perhaps combine it with Peloton's charged competitive live workouts.
- T3RMINATED 5y ago
- m4tthumphrey 5y agoThis is probably the most interesting PDF I've ever read. As a Peloton member, I never really gave much thought into how the business side of things ran - I just really enjoy the product. Seeing $PTON so low surprised me as I haven't really been following the news much. I just bought some shares.
- treyfitty 5y agoI'm in awe of how many different sources a person had to sift through in order to get all this data. Is there software in this space? My naive sense is that it took months to get this deck together.
- abliefern 5y agoWell sure that's what analysts at these funds do, continuously keeping a very close eye on portfolio companies. Also: entire teams of interns.
- danielecook 5y agoMaybe something like this? https://www.devontechnologies.com/apps/devonthink https://www.devontechnologies.com/apps/devonthink I haven’t used it personally but I think it could be used for this type of research.
- esics6A 5y agoPeloton just didn't wine and dine and wow Wall Street enough for them to consistently hype the stock and now it's the CEOs fault? Because he didn't create the "magic show" that Wall Street wanted to see? John Foley is a founder of the Peloton business and created value from nothing to a leading fitness technology company. Why should he have to justify anything he does to asset managers who have never created any value in their entire careers? Wall Street only destroys value and extracts they don't create anything. You're a founder and your business goes through a few rough years as you build the business and experiment? Wall Street says "quit, give up and sell". What a bunch of Wall Street hacks and they pushed out a perfectly good CEO, really sad. Just so the business could be sold off for a fraction of its' real value to some conglomerate to let it wither away and die.
- yakshemash 5y agoEven though he is a founder, he kind of gave up part of his right of not having to justify anything on the day the company went public. And not by that much for that matter, as he seems to have a disproportionate voting right compared to other shareholders, and can still do pretty much what he pleases even after stepping down as a CEO. There is an option to be completely free from Wall Street's vagaries, and it's called not going public. Once you have taken in investors money, it seems fair to me to have to be accountable to them. The anomaly seems to me to be the other way round here, that people who put their money into the company and undeniably contributed to the company getting to where it is now have pretty much no say on how it should be managed. This lack of accountability might be one of the reasons why poor decision making went on unchecked and led to the current situation.
- soheil 5y agoI'm surprised by this claim "Attractive Lifetime Value Low churn". I thought the main reason Peloton was falling out of favor was the recent high churn numbers.
- s1mon 5y agoFrom what I've heard, Peloton is spending way more than the retail price of the bikes to make them. There's certainly plenty of successful businesses that have some sort of loss-leader and then make up for it with follow-on products or services (e.g. game consoles and game publishing). However it seems like they were happily riding the huge growth in subscribers and revenue but not really managing costs in a way that it would ever be net positive.
- soheil 5y ago"I’ll go sometimes months without talking to our CTO, which as a CEO of a technology company, that’s kind of rare." I can't not read this as a joke.
- shmatt 5y agoThe fact is. Not every company can be a $12B company. Peloton might be a super successful $1B company, who slowly tries to creep into new areas for growth. And it sounds like Blackwell understand this, and instead of pushing for Peloton to focus internally on its product and get rid of the extra fat, they want a fast sale to a not-really-smart company. So they can at least get some ROI People talk about monthly fees being high or fair, thats not it at all, Pelotons prices for hardware and membership or completely fine. What they did do is * Pouring money into building their own factories (even Apple doesn't do this at their scale, they pay Foxconn) * Building a full fledged apparel brand * Hiring way too many engineers, FAANG level org size * Having their own warehouses and delivery full time employees No other company does this. I'm not sure what the long term plan was, maybe they become a white label manufacturer for other start ups? It failed, badly You do not need 14,000, or 11,000, or 3,000 employees to do what Peloton currently does (again, maybe they had grandiose plans in the pipeline). If we want to compare proprietary hardware + Android + online streaming service. When MIRROR was bought out by Lululemon for $500M, they had 200 employees I have a feeling no one has offered Foley more than $3B for the company, and i'm being generous
- ranrotx 5y agoTheir apparel brand is a joke. It’s run by Foley’s wife. Unless I messed something, what experience or qualification does she have in apparel? Never mind the fact that I’ve maybe seen only 3 people in the real world wearing anything that is Peloton branded (no, the free Century t-shirt doesn’t count). Personally, I find their apparel to be a little loud and obnoxious, but that’s just me. As a consumer, I don’t see what value they bring to the apparel market. Nothing new, just branding.
- georgeecollins 5y agoDual class shareholder companies are a terrible idea. Even if you believe one person should have more control for the owners, does it really make any sense for that person's heirs to have more control? People only accept it because the management has power over short term investors (VCs, people who buy the IPO) and the long term investors-- pensions, mutual funds (aka little guys) get stuck with it.
- 999900000999 5y ago"POOR DECISION MAKING: UNNECESSARY & EXPENSIVE OFFICE SPACE IN NYC" This whole report is absolutely scathing, but this particularly stood out to me. I've actually been in a similar situation where a CEO decided he was going to rent extremely expensive office space, in one of the most over the top pricey areas of Los Angeles, simply because it was close to his residence. This snowballed into other various stupid financial choices, and I was lucky enough to get out before the entire office got fired. This serves as a very good argument for fully remote companies. Get a corporate we work account for the extremely rare case where you need a physical presence. The brand is pretty damaged though. They had a short window where the Equinox crowd had nowhere to spend their exorbitant incomes. No shortage of cheaper alternatives exist. I suggest buying a used exercise bike and playing Eye of the Tiger on repeat for 30 minutes. Infact if you don't have access to Eye of the Tiger you can just sing it to yourself. Eye of the tiger it's the thrill of the fight, saving money on a used bikes.
- ryandrake 5y ago> I've actually been in a similar situation where a CEO decided he was going to rent extremely expensive office space, in one of the most over the top pricey areas of Los Angeles, simply because it was close to his residence. I've seen a CEO move an entire company's headquarters because he personally moved to a mansion on the beach, so now everyone needs to commute from the city across a single bridge onto a touristy beach peninsula every day just so CEO-man can walk to the office.
- dlp211 5y agoI think the idea is to have the office space near the physical studio. It's not completely irrational.
- gonehome 5y agoPeloton is a great product and Foley built it up from nothing, what's the point of keeping all that voting power if you don't use it to tell these private equity groups to fuck off? I hope they don't sell.
- thefrozenone 5y ago> Seemingly admitting the lack of internal capability, discipline and experience, Foley is looking to outsiders for answers > Hiring McKinsey is a clear declaration of failure
- yoyohello13 5y agoHonestly I'm very concerned that my expensive bike will become a brick in the future if Peloton goes out of business.