This is Jesse Pujji, and today we’re breaking down Peloton. Peloton was founded over ten years ago with the idea of making the best in-person gym classes available at home. By delivering eye-catching hardware and compelling content, it has since become the largest interactive fitness platform in the world with over 6 million members. Peloton’s rise has not been without challenges, however, and the business’s economic model is under debate as we speak.
To break down Peloton, I’m joined by my brother Vinny Pujji, partner at Left Lane Capital, a growth-stage investment firm focused on consumer businesses. We discuss Peloton’s success in creating a new fitness category, the impact of the pandemic on its financials, and why it may make sense for Peloton to build its own music label. Please enjoy this breakdown of Peloton.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Show Notes
[00:03:37] - [First question] - What Peloton is and what they do
[00:04:59] - How most consumers experience their brand
[00:05:40] - Their customer base and the size of their business today
[00:06:22] - The founding story and what lead to Peloton
[00:10:10] - What business they started with and how they’ve expanded their offerings
[00:12:03] - Complexities of direct to consumer hardware distribution
[00:13:01] - Scope of the global fitness and wellness market writ large
[00:14:42] - Unit economics of Peloton’s business
[00:19:03] - Contributing factors that draw on their cash and working capital
[00:22:46] - What would solve their current liquidity problem
[00:25:11] - Their latest treadmill product and their subscription product
[00:26:22] - Thoughts on why management has struggled with their forecasts
[00:29:44] - The competitive landscape as it exists today and how they compete
[00:33:16] - Whether or not Peloton will experience a boom and bust cycle
[00:35:18] - What Peloton does very well that separates them from their competitors
[00:36:52] - Gamifying fitness and incorporating a live feature
[00:38:59] - How music plays into their business and its role in their future
[00:41:45] - Whether they are a subscription or hardware business
[00:43:59] - What has to go right in order to scale their market cap in the next decade
[00:45:08] - Their approach to marketing and what drives their engine
[00:47:17] - What will have gone wrong if Peloton doesn’t survive the coming decade
[00:50:28] - What can we learn from Peloton
