Michael and Johnny look at Peloton, what led to its success, and try to figure out how this exercise company has become so successful before and during the time of country-wide lockdowns.
In the News of the Week, we look at the US government’s upcoming anti-trust investigation into Google, the latest tech corporate takeovers of Facebook acquiring Giphy and Uber attempting to merge with Grubhub, and finally Twitter’s announcement that employees may work from home forever!
Recorded Date: Sunday, May 17, 2020
Ideas of the Week:
- Johnny: “We should use data”
- Michael: “Make a fitness tracker”
Time Stamps
- @00:01:20: Google Anti-Trust Litigation
- @00:09:25: Corporate takeover - Uber of Grubhub, Facebook of Giphy
- @00:13:16: Main Topic - Peloton
- @00:21:10: Why is Peloton Successful?
- @00:46:02: What does the future hold for Peloton?
- @00:53:38: Is Peloton Recession-proof?
- @00:59:65: Verdict - Rich Tech or Poor Tech?
- @01:03:00: Ideas of the Week
Highlights
- America is not breaking up any of the tech giants
- Advertising has always been a richest 3 horse race - Before Google, Facebook, Amazon, it was CBS, NBC, ABC that dominated advertising (TV), and before them newspapers
- Peloton is in the very rare position of having 5 co-founders who remained with the company until its post IPO (2012 - 2019) with one cofounder leaving in early 2020
- Peloton’s stay at home stock has doubled since mid-March going from ~$19 to ~$48
- Peloton did everything they tell you not to do in entrepreneurship school - they built their own bikes, their own tablets and record their own content leading to a very high upfront cost
- Rise of Soul Cycle led to the rise of Peloton
- The convergence of fitness, social community and internet has led to the current Peloton moment
- Why doesn’t Peloton have more competitors?
- Can SoulCycle compete with Peloton?
- Is Peloton the Apple of Spin Bikes?
- Peloton hit all the right waves at the right time - people’s sense of fitness community merged with technology
- Peloton spent on marketing in 1 quarter what Disney spent on advertising Avengers Endgame!
- They spent on marketing in 2020 quarter 1, what they spent during the entire year of 2017
- If there was a single company that represented 2010 - 2020, it’s Peloton
- Is Peloton a mass-market product? Will they go downmarket with a more affordable product?
- Can they learn from Fitbit’s failure and evolve into more areas?
- You can have the money to buy all the weights you want, but if Amazon cannot fulfill them, you are stuck
- Peloton is now part of our remote company starter kit
- Rich Tech: Fitness, Media
- Poor Tech: Manufacturing, Non-wealth generating
- Verdict: Peloton is a Rich Tech
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