How Peloton constructed sweat addictive enough to IPO

It induces lazy people like me work out. That’s the genius of the Peloton bicycle. All you have to do is Velcro on the shoes and you’re trapped. You’ve eliminated option and you are able to exert . Through a succession of savvy product design choice I’ll break down here, Peloton removes the friction to getting fit. It’s the leader in a motion I call “pushbutton health.” And this is why I guess Peloton will be a big success no matter what short-term investors do when it IPOs this week after raising $994 million in venture capital.

Peloton

The bike

Basically, Peloton is a $2,300 stationary bike with a tablet stick to the front. The $40 per month subscription unlocks thousands of live and on-demand video cycling class, where instructors positively yell at you. When you think you’re tired already, they look into your eyes, tell you” you got this ,” the soundtrack crescendos, you crank up the resistance and you pedal harder at home. The resulting endorphin hurry-up is addictive, and you find yourself persuading friends they need a Peloton too.

That viral loop, which adds to its 500,000 subscribers, is how Peloton plans to raise ~$ 1.16 billion going public this week at an ~$ 8 billion valuation. Its revenue doubled this year as it began to dominate the connected exercise equipment market, though loss quadrupled as it burned cash to become a household name. But after riding 110 of 150 days I’ve been home since buying its bike, I’m confident in the company. Whatever it expends now to build its lead will likely be paid back handsomely by its increasingly handsome customers who can’t bear to clip out. Here’s why.

Peloton

Peloton class are recorded in front of a live studio audience of riders

The brilliance of this bike

The Shoes – Usually the activation energy to start a workout necessitates dragging yourself to the gym or suiting up to face the elements outside. That can be daunting enough that you rarely do. But once you slip into the Peloton bike shoes, you can hardly walk usually, which means you can hardly procrastinate. You’re home, so you don’t even need clothes. Merely a few Velcro straps and you’re over the hump and resigned to exercise.

The Clips – Home gym equipment reduces the barrier to entry but also the barrier to exit. You can tell yourself you’ll keep doing push-up decides or squats or jumping rope, but you can stop any time. Yet after you’re clipped into the Peloton bike, you’re almost assured to keep pedaling until the instructor gives you that end-of-ride congratulations.

Peloton

Just put the shoes on and you’ll exercise

The Schedule – You can get a sweat in just 10 or 20 minutes running hard on a Peloton. Combined with zero commute, that means you’ll practically always be able fit in a ride regardless of how busy you are. No more” I don’t have time to make it to the gym so I’ll only skip out .” When my calendar gets crunched or I dawdle a little before deciding to ride, classes as short as five minutes ensure there’s no weaseling out.

The Instructors – I wish I had these coach-and-fours to motivate me through sorting email. Peloton’s 20+ teachers range from hippie-dippie gurus to no-nonsense trainers that fit your personality type. You find yourself craving your favorite’s special brand of relentless positivity. I burn far more calories in a shorter time than exercising solo because they inspire me to push a little harder or they slacken their countdown to add a couple all-out seconds to the end of a sprint. They’re even becoming celebrities, with bankers lining up for selfies during Peloton’s IPO road show. Sick of them? You can always Scenic Ride through video of some of the world’s prettiest bike paths.

Peloton

Peloton instructors( from left ): Alex Toussaint, Emma Lovewell, Cody Rigsby and Leanne Hainsby

The Intimacy – You’re eye-to-eye with those instructors as they stare into the camera and out of the giant 22 -inch Android screen bolted to your handlebars[ Update: Not an iPad. I was being facetious ]. That makes intimacy despite them broadcasting to thousands. Even in person, a SoulCycle coach across the room can feel farther away. You’re largely guided by audio cues, but their gaze obligates you to perform. Peloton almost feels like FaceTime, and that’s a sense of connection many long for more of these days.

The Pavlovian Response – Your brain promptly begins to associate the sounds of Peloton with the glowing feeling of finishing a workout: The rip of the Velcro shoe straps, the click of clipping into the bike, but most of all the instructor catch-phrases. You get hooked on hearing the bubbling British accent of “I’mmmm Leeaannne Haaaaainsby” as she introduces herself, Ben Alldis’ infectious” You get 5, you got 4…” countdowns or Emma Lovewell reminding you to” Live, learn, love well .” That final “namaste” followed by wiping down the bike and jumping in a cold shower sorts a ritual you’re inclined to repeat.

Peloton

Eye-contact with the instructors generates an intimate bond

The Soundtrack – Popular anthems are more than simply a pump-up accompaniment to Peloton class. Your pedaling pace is often pegged to the tempo, with sprints starting when the beat drops-off. As your legs tire, you feel obliged to maintain your speed so you don’t fall behind the drums. You can even search classes by music genre and preview each’s playlist. Peloton has paid out $ 50 million in royalties for its music, and faces $300 million-plus in lawsuits for copyright infringement. But having the best tunes to bike to might end up worth the penalty because it helped Peloton race ahead in a lucrative market.

The Bike as Decor – Most home exercise equipment objective up in a closet or as a garb rack. By designing its bicycles for beauty, Peloton coerces you to place them conspicuously in your home. You might have watched the hysterical Twitter thread parodying these best practices, but it’s funny because it’s true. You’re a lot more likely to ride it if it’s central to your home( ours is between our bed and the doors to the veranda ), and you’ll be embarrassed if guests ask about it and you haven’t hopped on recently.

” A good place for your Peloton bike is between your kitchen and your living room facing the cactus garden so you always remember virtual spin class” –ClueHeywood on Twitter

The Network Effect – Many of these smart product design moves is likely to be copied by challengers. But by amassing a community of 1.4 million members to date, Peloton benefits from social features and economies of scale. You can ride together with pals over video chat, send each other digital high-fives or race and compare achievements. Each friend that joins Peloton is one more reason not to sign up for a competitor. The whole concept of virtual personal develop is being legitimized. And the cost of producing more class gets spread wider as membership grows.

The Shared Accounts – Peloton has even built in a way to feel noble about your sanctimonious proselytizing about how it” jumpstarted your metabolism .” Each $39 on-bike subscription lets unlimited accounts on up to three devices, so you can hook up some friends if you convince them to buy the big-budget gadget.

Peloton

High-five fellow riders as you virtually pass them

The Growth Hacks – Peloton streaks are for adults what Snapchat streaks are to kids: a clever style to reward consistent usage. But beyond the achievement badges displayed on your profile, you’ll get in-ride leaderboards full of people to proudly pass, progress bars to fill by pedaling and kilojoule output high ratings to beat. Peloton induces workout a game you want to win.

The Shoutouts – Yet Peloton’s most explicit levering of our psychology comes from the in-class name-drop shout-outs teachers devote. Whether mentioning the screen names of a few participants at the start of a session or congratulating users making their 50 th, 200 th or 500 th ride, the recognition pushes people to join the dozen live-streamed classes each day that add importance to the on-demand catalog. Proof it runs? People strategize to ensure their 100 th ride is a long live class to maximize the chance of a shout-out.

Peloton

A free cult shirt after your 100 th ride

The’ Transcendence ‘– Peloton minimizes the isolation from working out at home. In fact, its whole product enables people to feel ” glamorous” and “manifested” yet nonchalant in ways going to a sweaty gym or utilizing a personal trainer can’t. It’s like being able to buy a little piece of the smug gratification and in-group affiliation of going to Burning Man. That’s why the company even sends you a free “Century Club” t-shirt when you reach your 100 th ride. You’re meant to feel cool sharing that you “Peloton, ” using the startup’s name as a verb.

Peloton

Conspicuous Self-Actualization

Still, Peloton has plenty left to optimize. There’s room to expand use of its camera to offer premium one-on-one coaching, head-to-head racing, group video chat with friends and augmented reality filters to build people feel comfy on screen and take shareable selfies. A wider range of intense but short class could appeal to overworked professionals who picked Peloton precisely because they don’t have an hour for the gym.

Novelty could come from celebrity guest instructors, or themed class for pre-gaming for a night out, fans of a particular artist or songs about a certain topic. And it should definitely have some iconic sounds like an om or singing bowl chime that play before each class to center you and after to release you.

Most excitingly, the Peloton screen has the potential to be a platform for exercise-controlled gaming and apps. Whether pedaling to escape zombies chasing you or piece together a puzzle, maintaining an output level to keep your cross-hairs locked on an foe airplane as you dogfight, or making a garden bloom by growing each flower during a different interval, Peloton could evolve riding to be much more interactive. Apps could offer training simulators for different sports focused on sprints for basketball or marathons for soccer. Or just put Netflix on it! By opening up to outside developers, Peloton could build a moat of extra experiences competitors can’t match.

With the strengths and opportunities of its core product, Peloton is poised to absorb more of your fitness period and money. It’s already branching out with yoga, meditation, lifting, bootcamp and jazzercise class you can do standing next to your bike( or without one) on its $19 per month app. Its second contraption is a $ 4,300 treadmill.

From there it could break into more of the “pushbutton health” business. I categorize these as wellness products and services that rely on convenience instead of your will power. Think delivery health food instead calorie-counting apps that are a chore. My pushbutton regimen includes Peloton, six salads per week fell off in batches by Thistle, monthly packages of Nomiku vacuum-sealed meals that RFID scan into its sous vide machine and a Future remote personal trainer who nags me by text message.

Peloton

It’s easy to get hooked on the positivity

Peloton could easily dive into selling meal kits, personal educate or a wider range of workout clothes to compete with Lululemon. If it’s the centres of your fitness routine, the company could become a gateway to new health products it owns or partners with.

I’m bullish on Peloton because I’m betting people are going to stay busy, lazy and competitive. It offers the effectiveness of a spin class but with scheduling flexible. It removes every excuse for staying on the couch. And in an age of visual communication where many seek to share both the journey to and the destination of an Instagrammable body and the discipline to get there, Peloton provides conspicuous self-actualization through consumerism. Plus, finishing a ride feels damn good.

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