It has been dubbed “The Apple of Fitness,” and it’s gathered a galvanized following to match. Peloton is flipping the fitness industry on its head by giving people a radically different way to get in shape.
Peloton was created to address the pain-points of its two parent markets. Traditional in-home exercise bikes were convenient, but they didn’t offer the motivation of working out in a coached group. Spin classes had the group and the coach, but they weren’t at all convenient.
These pain-points excluded swaths of people who saw the value in spin class, but couldn’t attend. There was a huge market waiting to be invented: a spin solution for hyper-driven, affluent professionals who wouldn’t mind paying a premium price for fitness and convenience.
Peloton, which started in 2012 with Kickstarter funding, found a way to bring the motivation and high energy of a spin class into customers’ living rooms. Their strategy was deceptively simple: design an exercise bike with the fit and finish of an Italian sports car. Then stream live workout sessions to a built-in tablet for $39 per month. Finally, foster a supportive culture (emphasis on “cult”) around the program, and—voila!—hundreds of thousands of people are lining up to buy the bike.
These days, Peloton is no longer a startup—it is the premier option, dominating a new, high-growth market that its creators could have only dreamed of back in 2014 when they were selling their first bikes. It has recently been valued at $1.25 billion, making it a unicorn amongst startups.
Peloton’s market reflects so many cross-industry trends, it’s amazing someone didn’t think of it before. But that’s usually how Market Invention works, isn’t it?
The streaming-subscription trend, the trend towards fitness with a “tribal” or quasi-spiritual twist, the trend towards luxury athletic options, the trend towards staying home, the rise of media and product convergence: Peloton taps into all of them. And they aren’t stopping at a $2,000 bike.
Enter the Peloton Tread, a treadmill that may have you breaking a sweat from the pricetag alone: $4,000. Set to be released this fall, they’re already available for preorder, and the company is hoping to revolutionize in-home treadmills in the same way that they did exercise bikes. While Peloton’s bike competes with spin class establishments like SoulCycle, the treadmill will take on boutique fitness clubs like Barry’s Bootcamp by offering a combination of cardio and strength training.
If the treadmill does half as well as the bike, Peloton has another smashing win on their hands. While the company’s leaders believed deeply in their concept from the start, executives still express surprise at just how quickly Peloton has taken off and how loyal the fanbase has already become.
“Members were showing up with the logo tattooed on their body,” said Brad Olson in an interview with Sara Ivry of Adweek.
Competition is coming, though. The traditional spin class Flywheel has launched its response to Peloton: an eerily similar at-home bike, equipped with a tablet that streams live classes, charismatic instructors, and real-time leaderboards. There are also a number of businesses taking advantage of streamed video classes without any proprietary bike. These programs, like The Pain Cave, offer cheaper subscriptions and encourage members to use whatever exercise bike they already have.
Peloton, though, is still dominating. The immoderate loyalty of their fans, along with their position as Market Inventors and first movers, has given the company a firm hold on their market. Mortimer Singer, again in Ivry’s Adweekarticle, seemed to think the alternatives pose little threat to Peloton.
“Where there’s Coke, there’s Pepsi,” Singer, the CEO of Traub, said. “I think that there will be over time some consolidation in that space. But for the time being there’s a lot of room to grow.”
It seems like the company is here to stay. I’ve met too many people who are head-over-heels in love—not with their exercise bike, but with their Peloton—to imagine the brand going away any time soon. It’s a brand at the intersection of real innovation, addictive culture, and beautiful product. It’s a case of Market Invention at its finest.
About Trevor Stauffer
Trevor unites a passion for clarity with a love of beauty in his approach to writing.
His academic mastery of great writers gave him a strong foundation in classical writing skills, and his time teaching English in Spain taught him to strip language down to a basic, universal essence. For Trevor, writing isn’t just about communicating well – it’s about communicating beautifully.