Peloton, the company behind the connected indoor bike that provides access to live and on-demand group fitness classes, says its socially connected experience is changing the way people get fit – and the startup even calls itself the future of fitness.
Investors seem to agree. In May, Peloton closed a $325m Series E round, reportedly valuing it at $1.25bn — which means it officially became a unicorn, or a private company valued at more than $1bn, and joined the ranks of tech elite like Uber, Airbnb, Pinterest, Spotify and Lyft.
In a statement, chief executive John Foley said the financing would allow Peloton to expand its product and content offerings and open new showrooms as it “[continues] to innovate the experience we offer our members at every touchpoint”.
Peloton is indeed growing – it boasts 200,000 bike owners and 20 US showrooms, as well as a deal to put bikes in Westin properties.
Even Mary Meeker – of Peloton investor Kleiner Perkins and annual Mary Meeker report fame – said, “We believe Peloton is the leader in a new business that has significant potential – Physical Interactive Media.”
So what’s all the fuss about? The Drum asked Graham Stanton, Peloton co-founder and senior vice president of performance marketing, for his take on the growing connected fitness brand:
1. Where did the idea for Peloton come from? Where did the name Peloton come from and what’s Peloton’s brand story?
The idea for Peloton was born when our founder, John Foley, and his wife, Jill, both became addicted to high-energy indoor cycling classes. They loved the classes, but they were frustrated by the hassle of working their schedule around the studios and, on top of that, the best classes were always sold out. John’s background was in internet businesses and he knew the right technology could solve both problems. Peloton has proved his hunch to be right.
As for the name, the main group of riders in a bike race is called the peloton. The riders draft off each other and are able to ride faster and for longer than they could by themselves. Like racers in a tight pack, Peloton home riders support each other and draft off the energy of everyone else in the class, despite being in a remote location. We accomplish this through our motivating instructors, the real-time leaderboard and social media, which has helped this community grow together as well.
2. This sounds kind of like SoulCycle at home – is that right? How do you distinguish your brand from something like SoulCycle?
Our product is high-energy indoor cycling at home. The purpose of all the technology is to take the world’s best cycling classes and bring them home.
Brick and mortar boutique fitness brands have done great things for the larger fitness world and we feel any brand helping people get fit is a great thing. SoulCycle, in particular, has its unique style, and while we admire what they do, we don’t seek to replicate them. We strive to serve as broad of an audience as possible and to have the world's best content for indoor riders of all styles.
3. Do most Peloton customers spin from home? If so, can you talk about how you build/engage a community remotely?
As we have over 500,000 riders nationwide, the in-studio audience is a critical but a small part the total. And the bulk of our tech platform is there to simulate the experience of the local cycling studio for this large group.
We do this through the in-class leaderboard, which shows everyone currently taking a class and everyone who has ever taken it as if they were still there live. It’s a simple concept, but it really drives home that Peloton is a group experience.
We also do what we can to support the Peloton community beyond class. Our Facebook Rider group is 37,000 strong…and we host numerous events for riders at our showrooms across the country and we have the Home Rider Invasion (an annual event where home riders gather at a showroom) here in New York City, which is the event of the year for the most passionate Peloton members.
4. What is the target customer for this $2,000 bike?
Peloton is for people who are driven in their lives. Whether or not they're actual athletes, our members are athletes at heart. They know that if they can show up for their 6am class, they can do anything. This turns out to be a large portion of the population.
At $2,000 and $39 per month, the Peloton bike can be economical when compared with high-end gyms and fitness studios. Our research has shown that there are tens of millions of Americans who spend more on fitness than the cost of a Peloton bike when averaged over three years.
5. How do you appeal to these consumers? I don’t think I’ve ever noticed Peloton ads – where are you doing outreach?
I'm encouraged to hear you haven't seen our ads. It confirms our belief that we still have a lot of room to grow.
We run a decent amount of TV ads for a company of our size, over 100 GRPs in our high season. And we also do extensive Facebook and general digital advertising.
It's tricky to convey all of what Peloton is in a 30-second TV spot and it's harder still to capture it in a Facebook newsfeed post or a display or print ad. So our goal in our advertisements isn’t to sell the product. Our goal is to get across enough of the energy and overall experience to encourage someone to learn more by seeking us out on the web or in a showroom or by talking to a friend who has a bike.
And, in fact, our most important acquisition channel is word of mouth. That's one reason why we put so much effort into supporting our community of Peloton members.
6. How would you describe Peloton’s brand personality?
Peloton is for the people who are driven and we try to convey to these people that we’re a brand who understands them and their goals, without taking ourselves too seriously.
Importantly, Peloton is fun and we aim for that to come through in all of our messaging.
7. I’ve read that you consider yourself on par with big names in tech – can you explain that a bit more?
Internally, we are a tech company first and foremost. Outwardly, we focus on the product, the experience and the community, but everything comes together because of serious technology we have behind the scenes.
We have roughly 80 engineers today and are looking to double that within a year. It's a lot of engineers for a small startup, but it's a small number compared to what the tech giants have, so we can be a lot more selective about who joins the team and ensure we are bringing in only the most talented engineers and, across the company, people who are passionate about what they do.