{"id":6720,"date":"2015-12-09T23:29:28","date_gmt":"2015-12-10T04:29:28","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/spinning-and-winning-how-peloton-is-revolutionizing-fitness-technology-and-everything-in-between\/"},"modified":"2015-12-13T13:19:30","modified_gmt":"2015-12-13T18:19:30","slug":"spinning-and-winning-how-peloton-is-revolutionizing-fitness-technology-and-everything-in-between","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/spinning-and-winning-how-peloton-is-revolutionizing-fitness-technology-and-everything-in-between\/","title":{"rendered":"Spinning and Winning: How Peloton is revolutionizing fitness, technology, and everything in between"},"content":{"rendered":"

Peloton <\/strong>(noun) \u2013 the main group of riders in a bicycle race[1]<\/strong><\/a><\/em>\u2026 \u201criders in a peloton work together, conserve energy, and perform better because of one another\u201d[2]<\/a><\/p>\n

https:\/\/www.youtube.com\/watch?v=otHP3ldbjJE#action=share<\/a><\/p>\n

\"Founder<\/a>
Founder Yony Feng and his team\u00a0inspect a bike prototype. (Source:\u00a0<\/strong>www.pelotoncycle.com\/company<\/figcaption><\/figure>\n

Introduction: <\/strong>In 2012, John Foley and three co-founders started on a journey to \u201ccreate a new concept in fitness\u201d that would \u201ccreate a world-class indoor cycling experience on your time, and in the comfort of your own home\u201d.[3]<\/a> Just three years later, news outlets like Biz Journal and Bloomberg Businessweek are speculating on the IPO of the young and fresh-faced Peloton (who just received their second round of funding of $75 million from PE fund Catterton) and what the future looks like for this Fitness, Tech, & Media company.<\/p>\n

Peloton sells its state-of-the-art indoor bikes (complete with 22-inch screen, about the size of 4 iPads) to customers for at-home use, but they are no ordinary pieces of fitness equipment! Unlike your typical stationary bike, riders clip into their Peloton and can access both live streaming and an extensive library of on-demand spin classes, broadcast from Peloton\u2019s brick and mortar cycling (AKA spinning) studio in Manhattan\u2019s Flatiron district. In addition, Peloton operates twelve retail showrooms across the U.S., a number they hope to double by the end of 2016.<\/p>\n

Competition, value proposition, & business model: <\/strong>Foley chose to found Peloton\u2019s flagship studio and headquarters in \u201cSilicon Alley\u201d knowing that New York City is the \u201cmedia mecca of the world\u201d. A skeptic of Peloton\u2019s decision to launch in 2012, in New York City no less, might point to an immensely crowded and competitive boutique fitness market, lead by industry beast SoulCycle, which is soon expected to IPO for almost $1 billion.[4]<\/a> However since January 2014, Peloton has sold and installed approximately 20,000 bikes in homes in twenty-two countries, separating itself in both value proposition to its customers as well as its operating and business models.[5]<\/a> Bikes cost riders a lofty price of $1,995 and Peloton charges a $39 per month via a subscription model, which costs the customer approximately $2,500 in the first year of use but only $468 (12 months x $39) in years after.[6]<\/a> Peloton is expected to book $50 million in revenue in 2015, a five fold increase from its 2014 revenues.[7]<\/a> In founding Peloton, Foley sought to capitalize on several realities:<\/p>\n