The New Way to Exercise

Peloton is a fitness company that creates a workout experience for customers by providing exercise equipment and live streaming technology. It was founded in 2012 in New York City and since then has dominated the fitness market growing to a current valuation of over 4 billion dollars. The company currently offers customers two equipment options of either a state-of-the-art cycle bike or treadmill both with an attached HD screen. The equipment allows users to connect with live streaming or on demand workout classes in the comfort of their own home. There is one in-person studio in NYC where users from around the world can connect to one of 14 live classes per day or users can choose to utilize the over 10,000 on-demand classes stored through the system and accessible anytime. With the on-demand classes, users can pick from a variety of trainers, music types, class lengths and intensities to customize the right workout for them.

Peloton is marketing towards a luxury brand consumer base. They do not have stores but "showrooms" where interested customers can get a tutorial of the equipment. The cycle bike costs around $2,500 when including all of the accessories needed, such as the cycle shoes, and the treadmill costs around $4,200 with delivery and set up. New owners of the bike must then become subscribers paying $39 per month to access the classes. 

Once a member, Peloton users enter their personal data into their profile such as age, height and weight, and the bike/treadmill tracks output during each workout in order to calculate total time working out on the equipment, total calories burned, etc. as the user participates in more classes. The company’s competitive advantage is that it takes cycle classes and other exercising into the home while keeping the community and competitive aspect of working out. It does this by providing customers a live leaderboard for every class allowing users to compare their workout achievements to others. This feature updates and compares users in real time so the customer always knows where they stand. Peloton also provides a gamification aspect where users can win badges and keep track of how many rides they have done. Users often like to tell others how they have ridden “100 rides in 3 months” keeping them competitive and motivated to ride more.

Peloton generates lots of data through their operations in large part due to the technology they have designed and developed for their bike, but also in regards to both the live streaming and storage of classes. To manage this, Peloton uses Amazon Web Services (AWS) and Loggly to store data and manage any technical problems that may arise, respectively. AWS provides continued efficiency and flexibility for Peloton as it continues to grow and become more customized. Loggly is meant to allow cloud-based companies to better manage the massive amounts of information they carry; for Peloton this is specific to each rider’s “personal best” scores, preferred classes, and body measurement/weight information. This special program is an extension off of AWS that gives Peloton an extra hand when it comes to development operations.

I think this company is fascinating as they are changing the way people exercise while gaining so much data and analytics about how people exercise. There is a drastic increase in Peloton users and a recent decrease in the number of new Soul Cycle members, studio cycle class. They are a relatively new company, founded in 2012 and have grown drastically in the past 7 years and has nearly doubled their user base in the past year. Using advanced technologies and services, Peloton has created the feel of a live cycle class in the home with its live classes and leaderboards.

Questions:

1) Do you think Peloton is changing the way people will exercise or do you believe it is a fad for the times?

2) Peloton is considered a luxury product. Considering the price and features included would you buy a bike or treadmill and become a member or opt to stick you old gym membership?

3) In the past, treadmills have been mocked as glorified coat hangers. If a subscriber, would the monthly fee motivate you to utilize your Peloton equipment? Why or why not?