What would it take for Peloton to survive entirely on its own, to not become Peloton Prime (Amazon), Peloton+ (Apple), or Pelotown (Nike)?
Eric Min, the CEO of virtual cycling platform Zwift, says Peloton mistook a temporary increase in demand for an established trend. “When a company ebbs and flows like that—not just the stock, but more like people’s habits—you have to consider how you’re going to sustain a business through changes in consumer behavior.”
Peloton customers might not necessarily want to create their own videos as much as they want to just follow along with Cody, or Ally, or Emma . But Min’s comment points to what may be one of Peloton’s vulnerabilities: its relatively limited line of products. Peloton sells a couple of bikes, one treadmill, and two subscription tiers. Recently, it started selling a $90 heart-rate band, and said that a $495 Kinect-like fitness tracking camera, called Guide, will be shipping this April.
Apple already has an Apple Watch Connected program that rewards customers when they use their Apple Watch at certain gyms. But “at what point will Apple partner with a big fitness chain to offer a reduced membership and say, ‘You can have it both—you can access a physical gym and then do the at-home stuff when it works better for you’”? Gillett says.
Etuk also believes that Peloton got caught up in what he calls the “sugar rush.” This is something that his own startup experienced at the start of the pandemic, when gym owners were scrambling to get their services online and FitGrid experienced a “staggering” increase in sign-ups. He says he told his own team to stay focused and keep their cash burn relatively stable.
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