It's interesting that you mentioned Community as a highlighted area of improvement, especially around "what users want," and the communities/channels they engage in. Just saw a talk by David Packles (Director of Product at Peloton), where they talk about how they are utilizing these channels for insights for building new products. (https://www.youtube.com/watch?v=1-KatWuirn4)
Seems like they're addressing the "what users want" part, but I agree that continuing to build and foster relationships with customers is important, instead of just looking into the fishbowl.
A couple things I'd consider with Peloton based on myself as a customer...
1. Lean in to the scenic rides/runs/etc. more as well. I like the classes but sometimes I just want ride by myself and the digital content could ultimately be cheaper to create.
2. Lean in to tracking fitness that happens outside the house. I'd never buy the Tread because running inside too boring for me and it's way too expensive. However, capturing my time outside running (which you can do), kayaking, SUPing, etc. gives a better overall idea of my fitness. I might even consider an acquisition of a company like Strava which already does a lot of this and merge the products.
Really good, well-written article! Here are my thoughts:
1. The Flywheel for PTON is complex and doesn’t show the relative importance of certain components over others. For example, customers may value hardware more than data or talent. Does that make certain pieces of the flywheel more critical than others?
2. The monthly workouts per subscriber stat is interesting, but could certainly be biased in a couple ways. First, COVID may be contributing more to the stat than the product/service. Secondly, the stat doesn’t say much about the duration or quality of the workout. And lastly, it’s measured for “connected subscribers.” How many subscribers have disconnected or disengaged? Is PTON actually seeing a smaller group of exercisers become power users as opposed to a growing group of exercisers engaging more?
3. The talent strategy you propose is interesting. Lots of upside, but it could come with downside too. Celebrities are not infallible; they can become controversial and take polemic stances, forcing the company to distance themselves from (e.g. cancel) the celebrity. Celebrities also come with leverage. The less fungible they become, the more leverage they command. It’s likely that PTON’s cost structure can’t afford to pay a group of celebrities millions of dollars. And even if they can afford it, are customers going to be loyal to a PTON celebrity? Or to something else, like a type of workout?
Thanks Addison! Hope all is well with you :) My thoughts:
1) I think of the flywheel as a system. If the flywheel is accurate, then if any one piece stops working, the whole system breaks down. My goal is to get better at understanding these flywheels as I write these articles..so I really appreciate the feedback!
2) There's some pedantic terminology in the Peloton filings that answer your Qs. The most recent quarter ended at the end of March, so COVID was only a slight factor there. Re: connected subscribers, this is defined as subscribers who have an account tied to a hardware device. The distinction is against digital-only subscribers. It COULD be that new users work out more, and since PTON is growing quickly, that is skewing the numbers, but overall this metric includes all bike and tread owners (if I understood it correctly).
3) For sure. You could argue it multiple ways. My argument is that the content in and of itself is not unique enough as is today, and my hypothesis is that this shows up in the digital only content. So the question I am trying to answer is how can a non-hardware workout compete in a very crowded market. For PTON, I think they can leverage existing assets to do so--talent yes, but also community and data.
Good stuff! As a Peleton owner (stock and bike) I agree with your thoughts on Talent and Data. They have a lot of potential in those areas that they haven't taken advantage of. I think a big piece that you left out is the big C. I would imagine that Covid is the primary reason for the increase in monthly rides.
Thanks for reading Sam! Great point and definitely something I should have clarified: the most recent quarterly report is as of end of March, so only a couple of weeks in to the pandemic. I expect to see the trend continue in the next report spanning April-June, which comes out in about two weeks.
Thank you! And great question - I need to learn more about it - it's not clear to me exactly what changes with this 'partnership' - are there just going to be more 'Beyonce' classes? or will Beyonce actually come teach a class? Unclear from that Press Release..
It's interesting that you mentioned Community as a highlighted area of improvement, especially around "what users want," and the communities/channels they engage in. Just saw a talk by David Packles (Director of Product at Peloton), where they talk about how they are utilizing these channels for insights for building new products. (https://www.youtube.com/watch?v=1-KatWuirn4)
Seems like they're addressing the "what users want" part, but I agree that continuing to build and foster relationships with customers is important, instead of just looking into the fishbowl.
A couple things I'd consider with Peloton based on myself as a customer...
1. Lean in to the scenic rides/runs/etc. more as well. I like the classes but sometimes I just want ride by myself and the digital content could ultimately be cheaper to create.
2. Lean in to tracking fitness that happens outside the house. I'd never buy the Tread because running inside too boring for me and it's way too expensive. However, capturing my time outside running (which you can do), kayaking, SUPing, etc. gives a better overall idea of my fitness. I might even consider an acquisition of a company like Strava which already does a lot of this and merge the products.
Really good, well-written article! Here are my thoughts:
1. The Flywheel for PTON is complex and doesn’t show the relative importance of certain components over others. For example, customers may value hardware more than data or talent. Does that make certain pieces of the flywheel more critical than others?
2. The monthly workouts per subscriber stat is interesting, but could certainly be biased in a couple ways. First, COVID may be contributing more to the stat than the product/service. Secondly, the stat doesn’t say much about the duration or quality of the workout. And lastly, it’s measured for “connected subscribers.” How many subscribers have disconnected or disengaged? Is PTON actually seeing a smaller group of exercisers become power users as opposed to a growing group of exercisers engaging more?
3. The talent strategy you propose is interesting. Lots of upside, but it could come with downside too. Celebrities are not infallible; they can become controversial and take polemic stances, forcing the company to distance themselves from (e.g. cancel) the celebrity. Celebrities also come with leverage. The less fungible they become, the more leverage they command. It’s likely that PTON’s cost structure can’t afford to pay a group of celebrities millions of dollars. And even if they can afford it, are customers going to be loyal to a PTON celebrity? Or to something else, like a type of workout?
Thanks Addison! Hope all is well with you :) My thoughts:
1) I think of the flywheel as a system. If the flywheel is accurate, then if any one piece stops working, the whole system breaks down. My goal is to get better at understanding these flywheels as I write these articles..so I really appreciate the feedback!
2) There's some pedantic terminology in the Peloton filings that answer your Qs. The most recent quarter ended at the end of March, so COVID was only a slight factor there. Re: connected subscribers, this is defined as subscribers who have an account tied to a hardware device. The distinction is against digital-only subscribers. It COULD be that new users work out more, and since PTON is growing quickly, that is skewing the numbers, but overall this metric includes all bike and tread owners (if I understood it correctly).
3) For sure. You could argue it multiple ways. My argument is that the content in and of itself is not unique enough as is today, and my hypothesis is that this shows up in the digital only content. So the question I am trying to answer is how can a non-hardware workout compete in a very crowded market. For PTON, I think they can leverage existing assets to do so--talent yes, but also community and data.
Good stuff! As a Peleton owner (stock and bike) I agree with your thoughts on Talent and Data. They have a lot of potential in those areas that they haven't taken advantage of. I think a big piece that you left out is the big C. I would imagine that Covid is the primary reason for the increase in monthly rides.
Thanks for reading Sam! Great point and definitely something I should have clarified: the most recent quarterly report is as of end of March, so only a couple of weeks in to the pandemic. I expect to see the trend continue in the next report spanning April-June, which comes out in about two weeks.
Great write-up. Curious to hear your thoughts on the recent collaboration with Beyonce. Does this help improve the talent and community pillars?
https://investor.onepeloton.com/news-releases/news-release-details/beyonce-and-peloton-team-unprecedented-partnership
Thank you! And great question - I need to learn more about it - it's not clear to me exactly what changes with this 'partnership' - are there just going to be more 'Beyonce' classes? or will Beyonce actually come teach a class? Unclear from that Press Release..
General question: What is the difference and similarities between the flywheel and the network effects?
Hi Mithun--it's a good question! Network effects is one type of flywheel. I write a little bit about this here: https://theflywheel.substack.com/p/the-flywheel-2-zooms-meteoric-rise.
In that article I link to a great piece by Max Olson that describes 5 other types of flywheels (in addition to network effects). https://futureblind.com/2019/08/03/advantage-flywheels/