The Peloton may not make much sense to people living in pleasant cycling meccas on the West Coast, but east of the Rockies the weather is a lot worse and being able to spin indoors is huge.
No, it turns out women don't buy carbon bikes, a standalone trainer, wrench a cassette on it, put the bike on, hook up a tablet somewhere, install a power meter, ... it's the ole "rsync is superior to Dropbox".
New Yorker here. If I had the space I’d totally get one of these.
I think its a mistake to think of a spin bike as a bike. There is peddling, and you can get most of the same experience out of a turbo, HR, PowerMeter, but then you are also putting the frame and peddles through really weird force profiles as you spend time bouncing between the front and back of the bike.
I mostly ride PowerZone, for which a turbo, hr and power meter would be perfect, but if you like the ‘dance’ classes you might want to look for a more ridged machine, you really have to be able to trust that its not going to break on you.
What? You need to visit some more cities. Just because bikes & cars co-exist in a city does not make them bike friendly.
Obviously there are way more bike-friendly European cities but as far as US cities go NYC doesn’t seem that bad to me (I don’t live there, but have noticed all the new cycle paths when I visit occasionally over the years).
45 mins on the peloton is a completely different thing to even 45 minutes out in the country.
In the risks section, Peloton says that their revenue could decline due to changes in credit markets and decisions made by credit providers - a.k.a. if a bunch of people start to default on their expensive luxuries.
"In the future, we cannot be assured that third-party financing providers will continue to provide consumers with access to credit or that available credit limits will not be reduced. Such restrictions or reductions in the availability of consumer credit, or the loss of our relationship with our current financing partners, could have an adverse effect on our business, financial conditions, and operating results."
For what it’s worth, according to the S-1 they stopped bundling the subscription as part of the bike financing in 2018, so people are just financing the bike alone now.
You pay for the phone over 24 months but they “bundle” the cost of an additional line. You would pay for the cost of the line over 24 months but no one would call that “interest”. You could buy the phone outright and just use it over WiFi just like you can use a Peleton without the subscription. But, in both cases, it reduces the functionality of the product.
In fact, if people are making use of that option unusually often, economists get worried. Prior to a recession, consumers often feel more confident (and take on more financial obligations) than they have the resources to keep up with.
The equation has changed more recently as smartphone innovation has really slowed and very incremental. In either case you can just keep you phone for 18 mo and buy it outright.
I have a 128GB iPhone 6s from 2015 that my son is still using and will at least get the current version of iOS through September 2020. Phones have been “good enough” since the 2013 iPhone 5s.
People have been getting “free phones” with a contract at least since the mid 90s when I was selling them at Radio Shack.
As you said, very clever.
In this particular cycle, more companies seem to be using this profitable business model: charge huge margins for your product and sell it on credit. Bikes, SUVs, higher education (phones, too, but that's not new). When the economy hits a blip -- say, due to a trade war -- people start losing their jobs, default on the loans, and things spiral down.
(To be clear, I'm not saying it will happen soon. It might, and probably will take years and be a mild pop.)
It sounds like you are stereotyping Peloton purchasers into one group, then assuming that the majority of them can't afford nice things.
What if you look at it from the flip side and say "people buying $2.4k in-house bikes have a lot of money and all is well in the world"?
https://www.marketwatch.com/story/us-consumer-debt-is-now-br...
Interesting, but lots of wealthy people do finance their purchases, especially if they are active investors.
Someone elsewhere in the thread mentioned that the Affirm rate is de-facto 0% if you factor in the subscription for the full-term. Taking that as fact (apparently it's changed now, so can't 100% confirm), you'd have to be pretty anti-debt (or lacking in cashflow) to pay in full on that rather than earn interest on the balance for 3 years if you intended to book the subscription anyway.
The wealthy borrow in order to get tax-advantaged liquidity (borrowing against, instead of selling their securities which attracts immediate tax obligations). I'm also certain the wealthy are not borrowing at 27% APR - they'll likely get a 5% APR loan from a bank and use a small fraction of it to buy the Peloton bike in cash.
I did not mean to do that. In fact I was on the brink of deleting my comment, to avoid this exact misunderstanding.
I wanted to point out that getting expensive things on credit is risky for most people who cannot afford to buy them straight out.
I wouldn't interpret this behavior as success per se. I think a significant motivating factor for going public now would be to provide liquidity for your existing investors (and yourself as the founder) before a recession hits.
If you've had significant capital tied up in a company and you're worried a recession is on the horizon, then this is a great time to push your company to go public. If you wait much longer then you risk either:
1. Going public in a recession and losing some of your potential gains.
2. Waiting an unknown amount of time for the economy to rebound and to pull your cash out then. This assumes the company weathered the recession well AND given you the same or better gains than investing in something else during that time.
TL;DR: Going public now is a much safer time for investors to divest than closer to or after the coming recession.
But don't worry, it's different this time. ;)
The trick here is fooling common investors into into without realizing it is a luxury market.
Basically, there is a small but lucrative market. You know that you have to milk it while you can and move on.
This kind of startup, exploit this small market mostly to inflate the numbers. Probably they already have 100% of their real market cap, but they will claim that they can still expand to billions of people that pay $5/mo gyms all around the world and only increase their growth (when they very might be already at 100% and realistically their future growth is zero ...or until the pile of money they get runs out)
...a funny exercise: search for the first anecdotes from the first clients of juicero here on HN ;)
On a personal level it would be a stretch for me to spend $2200 when I could get a used airdyne and an ipad for less than half.
I’ll probably end up buying a Mid range NordicTrack stationary bike ($1800) within the next year to go along with my NordicTrack treadmill and elliptical. I don’t currently subscribe to IFIT, but I might seeing that I could potentially use it across three pieces of equipment.
The IFIt modules are an optional piece for the elliptical and treadmill and I believe it is built into the elliptical.
As far as cost, between the cardio equipment I have (and plan on purchasing), the kettlebells, weight bench, weight bars, tv, wall mount, AppleTV, etc, by the time all is said and done, I will have spent close to 8 grand.
It’s well worth it for the convenience of just being able to go to the spare bedroom and workout anytime that we want to while catching up on TV or in my case watching technical videos without having to go through the ceremony of going to the gym.
The one argument in its favor is that youth sports are usually very heavily subsidized by masters sports. So if you weren't on a varsity sports team in high school or college and didn't learn how to work out properly, then it's easily 5x more expensive to do so as an adult. So maybe there is some value in having someone to teach you how to do basic cardio.
Peloton addresses two real needs in the exercise marketplace: home-based classes, and high-quality exercise machines. It simply combined both into one product.
There is huge demand for the former, especially from white-collar workers with high demands on their free time, and a a fair amount of demand for the latter.
At $2000, a Peloton bike is $1000 to $2000 cheaper than the cheapest carbon-frame bike I could find on Google, and more than $3000 cheaper than a racing or tri-bike. For indoor use, you'd also need a trainer, adding another $600-$2000 to the cost (depending on the trainer you get).
Generally, the people I know that have carbon fiber frames also have several other bikes, each for a different niche, and the Peloton would slot right into the indoor spin use case.
At $2000, a Peloton bike is $1000 to $2000
cheaper than the cheapest carbon-frame
bike I could find on Google
Unless of course you're ignoring every sub-$4000 bike as "bad cheap carbon" but that's not what your post says :)
Of course, if you're buying a bike exclusively to use on an turbo trainer, I'm not sure I see the logic to getting a carbon frame anyway - it's not like the weight or bump handling makes any difference.
[1] https://road.cc/content/buyers-guide/254002-13-best-carbon-f...
True, REI has the Synapse on sale for $1700 right now not including delivery. Once you add a trainer of the equivalent functionality as the Peloton trainer, you're looking at $2500 spent. Add in a screen, and you're looking at $2700 for a small screen or $3500 for a similar-size screen as on the Peloton.
I suspect people are overestimating this part of Peloton's market. All the people I know who spin value being a part of the community: the camaraderie of working out with other people, chatting after the class, etc etc. It's more like going to church than going to the cinema.
I think exercise bikes and treadmills are dreadfully boring, but what Peloton offers is exactly targeted at that problem. Adding an array of things to do and a social aspect has to be a big deal, and if that's all packaged together in a high end package that "just works", and works really well - that seems like a winning formula.
There's a lot of fitness subscription services out there, but there's more money to be made on hardware in general. So as long as there's a market for people to pay two grand for a stationary bike and whatever dollars a month for a subscription, it's a winning business model. I'm guessing it stacks up against the SoulCycles of the world very nicely.
It's a lot more convenient to exercise in your living room than go outside or go to the gym.
I thought Guitar Hero was stupid and people should just buy a guitar, but people loved it.
I am surprised that people are willing to spend 2x-10x as much as competing products when you look at the total cost.
But as far as spending more than the functional equivalent, do you have the cheapest house that would give you shelter? The cheapest car? The cheapest phone?
I loved teaching classes with 50+ people and was completely comfortable. But I hate interacting with large groups in more social settings.
Not to mention that when I want to go out and ride I don't need to detach my bike from the trainer, or when I want to get a workout I don't need to attach my bike to the trainer. As somebody that is primarily a bike commuter, the accessibility alone is worth having 2 bikes. And if you are going to have 2 bikes, why not buy an indoor bike that is specialized for the task.
"For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem. From Windows or Mac, this FTP account could be accessed through built-in software."
No, it isn't just an ipad slapped on an exercise bike. And no, the patent system is not at fault here. There are dozens of competitors in this market. But Peleton won it.
Nah it’ll never catch on /s
You're already $400 behind the cost of a Peloton, which is only $2000...
If you have access to wholesale prices for these parts, sure you could build your own Peloton at home. But using off-the-shelf parts you're just wasting money.