Man.
You should come out clean if you are a peloton investor.
Because if you are not… that would be a weird…
2 Likes
We are in full agreement. The issue for TR is that “Most people” does not equal “All people”. That difference between the two #s (All - Most) is where there is threat and/or opportunity.
I guess the point is:
The pie is big enough for TR and Peloton to exists.
There is no real overlap (except a few exceptions)
Peloton users could become TR users with time.
TR will more than likely never be Peloton BIKE users.
Do they have a time machine?
I have no doubt that they will continue to retain a high percentage of their users once we actually do get to a post-pandemic world. The question is more about what their future growth rate will look like…it is going to plateau and investors don’t like growth plateaus.
And of course none of that has anything to do with whether Peloton is a threat to TR.
2 Likes
In industry vernacular, Nate has built what is known as a “lifestyle business” - one that is self funded such as to allow the founder/CEO to have total control over the business direction and decisions. It has many advantages as a result. Such businesses survive well when markets are small and fragmented and where growth is limited. To date, from an income standpoint, Nate is probably doing just fine.
However, when markets grow fast and become large, particularly those with attractive gross margins and profitability, they attract investment capital and talent. This is taking place in a major way in indoor exercise in general, including in cycling. Peloton and Zwift are the two notable examples. In the tech industry, 1000s of lifestyle type businesses went bankrupt that didn’t change their business model - either raise serious venture capital or become acquired. The idea that TR is immune to competition from well funded firms in adjacent businesses (i.e. Peloton and Zwift) doesn’t make sense to me.
3 Likes
I dont think anyone has suggested TR is immune to competition. Thats just crazy talk.
There are several dimensions of their opportunity for sustained growth over an extended period of time, perhaps not at 100% year-over-year as they have done so over the past 6 years, but quite significant.
Yes and no. Their addition of a high quality strength offering (instructors, programming, experience) and attention to the dual cardio/strength may attract a more fit/athlete segment.
A lot of Peloton users about to lose 150w on their ftp 
5 Likes
Why a threat?
Negotiate coach-led, (Chad T.?) TR programs on the Peloton in a partnership.
Zwift is rumored to be tinkering with mechanical engineering…for their own proprietary platform(s) perhaps? (Leaving this for another topic). They’ll need good “nested” apps too.
Peloton’s a great bike with interesting programs. Wife and family love it. New version seems to have nice improvements from what I’ve read…but not enough for us to upgrade.
I like TR much better on my rollers or MP1-mounted RB or MTB (Tacx NEO), because I can use my MTB/RB. Looking forward to trying an outside workout!
Sometimes I’ll hop on Peloton, but haven’t found many classes I like…a little too enthusiastic for me, perhaps I just like old fashioned pain, or quiet recovery. After riding the MP1, I’m kind of screwed…am now contemplating a DIY e-motion box for my Kreitlers. Even the “static” Peloton can’t compare.
Family seems to show curiosity towards my contraptions, but haven’t made the leap yet. I tell them about the science of getting faster with TR. I’ve already lost them halfway through the word “science“…if TR was on the Peloton too, they would probably try a block, not asking questions & just following instructions. Then they would see the value that we TR users already know.
2 Likes
Fully agree. Although Zwift is a lot more of a threat to TR vs Peloton.
The TR target customer segment pretty much falls entirely within the Zwift target (although Zwift appeals to a broader set of segments). Eg if TR did not exist, most of us would be using Zwift (many already do).
The TR target customer segment overlaps to a much smaller extent with Peloton target segments. If TR did not exist, I don’t see many of us using Peloton instead.
3 Likes
Perfect!
And Ive been talking to a friend of mine.
I think peloton will be in trouble once smart bike prices drop to 2500 or less.
Once that happens there is no reason for anyone to pay 40$ a month to them, when they can get a smart bike and pay 12!
even if there are 2 users, you be better off having 2 accounts!
of hell…you can have Peloton, TR AND zwift for what a peloton bike subscription would give you
Well, it depends on what you mean by “trouble”. Setting aside their stock price (which I think will be very volatile), I think Peloton has a pretty sound business model. Many of their users are loyal to the Peloton community, not the bike hardware.
Sure, their growth will slow, but that is something Peloton can / should be accounting for as they plan their investments, OpEx, and hiring.
3 Likes
I’d make the same counter-argument as I have been making re: Peloton and TR. Different audiences and different desires.
Peloton is about exercise, classes and the social aspect of it. Smart bikes are about training for cycling. Is there some overlap? Sure…but smart bikes aren’t going to be a major threat to Peloton.
1 Like
Fair…trouble is probably not the right word.
But it would be harder to grow and probably to keep people.
Oh…I know… but a person wigting its options see a smart bike and a peloton at the same price, why would you go to peloton and pay 40 when you can get a smart bike and pay 12 a month (or whatever is their actual price) and get the cycling classes.
Thats how I feel as someone that got back into cycling by taking spin classes at the gym. If my wife wanted a Peloton (and I didn’t have a Kickr), I’d be inclined to buy pedal power meters and use it too. Might even join her and do a class every now and then.
A weight lifter at work bought a Peloton, lost weight, and after a month or two is now doing Peloton’s Power Zone training, here is a quote from some messages we exchanged about his progress:
“Started power zone training and doing some different pedal drills finding new leg muscles lol. I did the first lesson of the power zone program and it was single leg drills focusing on using the heel for hamstrings and the toe for quads and being able to feel the difference through the stroke.”
So maybe Peloton is slowly working on improving classes for cyclists, I dunno 
An old spin instructor that started doing triathlons told me Christian Vande Velde has classes and she likes them. She started off as a gym rat, and got into cycling and I helped her setup TR which she enyoyed and used for a year to prep for a full IM (Arizona). While she liked TR, the all-in-one aspect of Peloton won her over (no Peloton equipment, she uses Cycleops trainer with her bike and Peloton app).
2 Likes
My daughter bought a peloton earlier this year and I’m sure she’s a typical a customer. Here’s how works. She was paying about $110 a month for a gym membership and classes. She was an accomplished swimmer and runner in school and is the kind of late 20 something who can do a half marathon "for fun’ but has no time for serious competition at this point in her life. She just wants to be fit.
Even before Covid, her work schedule is making it difficult for her to make it to the classes she wanted to take at the gym. She’s been thinking about getting a peloton then once Covid hit the day her gym closed, she she went online, clicked a few boxes and a week later new peloton was delivered to her house. No money down financed for $49 a month. Even with the additional $40 subscription, she still saving $20 a month over gym membership and now she’s doing highly engaging spin classes five days a week on her schedule with some yoga and strength workouts too.
And, the bike actually looks nice parked in the living room bay window in her small condo.
Try matching that purchase experience plus the on line classes buying any other smart bike or a smart trainer plus a bike.
6 Likes
Fair.
I am not the target of peloton bikes.
But, they are doing great… so good for them.
Overall, you provide a very good high level analysis. Thank you. Under the covers I would add the following:
Zwift is a serious direct threat to existing TR users. We’ll see what happens post-pandemic, but as one data point, I have observed an 80-90% drop off of postings of TR workouts on Strava by our club (200 members). And conversely, Zwift ridership has exploded - both racing and group riding. Much of this was inevitable (need for socialization during the pandemic), but IMO TR has done a poor job at defending/providing additional value the high end of the market to retain and/or attract customers (e.g. WC is outdated; workout search is weak; metrics need much improving, etc).
Regarding Peloton (and this is key): the threat is not so much of existing TR users (a relatively small user base) moving to Peloton. However, the threat is of new potential customers joining Peloton vs considering TR. A year ago I would guess that it would be 10 to 25:1 in favor of Peloton; today perhaps 50-100:1. While I think TR did a very good job with addition of Plan Builder for maintaining existing customers, I think the dual combination of the weak on-ramp entry experience to TR and Peloton’s strength addition and focus on the dual cardio/strength combo work very much favor a fit/entry-level athlete choosing Peloton over TR (presuming they have even heard of TR).
1 Like
Don’t forget that $40 a month pays for the whole family. That is approx 2-5 people who can take spin, strength, HIIT, running, yoga, stretching, and meditation classes all for a combined $40. That is crazy cheap and all on one bike. Compare that to a family worth of gym memberships or bicycles and trainers or yoga classes, etc. Most people I know who use TR also have Zwift, TrainingPeaks, Strava, Sworkit (or whatever for strength), etc. And that is one of each for 2-5 people.
Yes, the bike is expensive, but the membership is downright cheap in my opinion.
3 Likes