Agreed. The Hare and Hounds races are really fun.
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I love that you phrased it that way as I said the same thing about Zwift workouts.
If both workouts and racing feel like after thoughts what are they actually focused on? 
Steve - that was an interesting point of view - glad I read it before you deleted it 
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Someday I’ll write my magnum opus that someone can take and go raise $20M from a16z for a Zwift competitor that will systematically dismantle their entire business, but frankly I just haven’t had enough coffee today.
I don’t want to get back into the games business. I just want products and businesses to work the right way.
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Not likely that AH would enter at this late stage given the status of both Peloton and Zwift. A much more plausible scenario would be a PE buyout of an existing firm and move it in a different direction.
As for Zwift, KKR knows how to do their due diligence. Any weaknesses that have been discussed in this forum - whether management team or product/experience - are likely well understood by KKR and the entire investment team (new and existing). We shouldn’t be surprised with forthcoming leadership announcements in addition to future product/partnerships. This is the major leagues.
I’m not suggesting that I personally could tell tell you the Zwift leadership and product deficiencies. I just believe, based on my experience of having raised $225M from 30 Sand Hill Rd venture groups over 8 rounds of financing, that it unlikely that KKR (and fellow investors who participated in the round) would write a $450M check without such due diligence.
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I’ll just say this and take my exit from this thread, since I’ve been pretty negative about Zwift for a while, and I’m getting a little salty discussing it at this point.
I want to love their product. I want to feel like it’s worth the money. I want to feel like I am supporting a great group of people that are building something fun. I want to feel about Zwift the way I feel about Nate and the TR crew (which is that they care deeply and even if they make mistakes, they will get fixed)
But I don’t feel that way about Zwift. I don’t believe they will fix their problems. And every action they’ve taken in the past several years continues to tell me that as a customer, they don’t care and they aren’t committed to building things the right way.
And that bums me out.
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amen to that.
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My exact issue with zwift. I cannot treat it more than a discraction and the only place where I can own SL7 Tarmac with DT Swiss 1100 PR 
I cannot develop any emotional relation to the Zwift other than something I like to watch during long intervals.
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If you look hard there are lots of other formats - iTT, TTT, APR style racing, points racing, team points racing, masters racing. Some of the other forms are so much fun!!
I haven’t read the entire thread - but I think a couple key points are being missed in what I did read. First, all competitors are a threat. That is nothing new and a product of free markets. It is what will cause Zwift, TR, Peloton and the like to create new products that benefit their consumers.
Second, OP discusses funding and plans for innovation and how that might be a threat to TR. However, TR is also innovating and improving at a pretty fast pace. Since the pandemic they have introduced a lot of additional features. I also think they are expanding very quickly given that when I first signed up (almost 1 year ago) I didn’t know anyone who had heard of TR and now products explicitly say they are compatible with TR.
The only threat to TR, in my opinion is complacency. If they fail to innovate they will get left behind eventually.
This is a good take, IMO. Dismissing any other company (be it Zwift, Peloton, whatever) as “not a threat” is a dangerous thing to do, and I’m sure @Nate_Pearson and the team are keeping a close eye on developments. That being said, TR has a found a good niche, and they’re serving their well-defined market segment in a great way, so as long as they stay focused and continue building/improving the product to gain/retain market share in this segment, they’ll be fine.
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The analysis is consistent with many comments made previously in this thread in several areas. The only initial “surprise” to me in the article was that KKR’s representation is out of their European operations. But thinking about it, this is likely due to Zwift’s earlier lead investor, Highland Capital Europe, relationship to KKR Europe.
The only area that I think Eric isn’t analyzing it the situation well is valuation. With 2.5m accounts opened since 2015, Zwift probably has 1.0-1.5m subscribers today (just a guess). Given Peloton’s 3+M subscriber base and $25B market cap as a reference points, I would guess that, even discounting valuation for being a private company, the post money valuation is closer to $3-4B.
Good thread. Here are the mission statements (as far as I can tell) from each company. Your interpretation probably determines how much overlap you see between the three but personally, I see little overlap between TR and Peloton.
TrainerRoad: Everything You Need to Be a Faster Cyclist. Use science-based planning, training and analysis tools to increase your performance with cycling’s most effective training system.
Zwift: TRAIN AT HOME. The app for riding, running, and training with your community.
Peloton: Peloton uses technology and design to connect the world through fitness, empowering people to be the best version of themselves anywhere, anytime.
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I don’t know about that . . . several weeks after Peloton launched their $19.99 Digital Subscription offering (later reduced to $12.99) Nate commented that Peloton cost $2,500 and therefore was not price competitive. I think one of the values of the Forum to the TrainerRoad team is to keep an eye out on market developments as well as our analysis of such. Then it is up to the TR team to decide if it is useful input. Most certainly, from my own experience, I found customer feedback extremely valuable whether on products/services that we sold or those of our competitors.
Zwift are going after the fitness market. Their new competition is Apple fitness. Zwift want to go into multi sport offerings. Rowing is next.
I want Zwift to deliver virtual racing but I just don’t think it will get their. They are jack of all trades unlike TR who are a master of one.
If you want to train to get faster on your bike you go on TR. if you want to get fit, socialise, pass the time away and burn some cals, go on Zwift.
TR have results. Zwift have adverts!
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So much money into new avenues when money could be invested into the program to develop proper power profiles, categories, racing, virtual worlds etc.
I think Zwift is going to lose the “eRacing” battle to Fullgaz and RGT, their worlds are realistic and by dam RGT worlds are dam near real, with the bike leaning into corners, the real roads. Then again the people using Zwift and racing is probablly a minotority of the total user base
For anyone with an interest in business, it be investments, case studies - you guys doing a business degree, this is a gold mine for strategy, finance and marketing! - or the commercial side of cycling, cycling in general and the Zwift investment is very exciting to follow. The cycling market is most likely growing so fast that most players try to get a larger share of a growing wallet rather than stealing customers from one another (blue vs red ocean). Some general observations of mine:
- Bikes are getting more and more expensive; compare the price of S-Works Tarmac SL7 to the original SL from 2006; even price adjusted there is a big gap.
- There are now bikes for so many niches: Aero (Venge), climbing (the new Spec bike), allround (Tarmac), endurance (Roubaic), time trial (Shiv), gravel (Diverge), cyclocross (Crux), mountain bikes (Epic), offroad endurance, electric bikes, and what not.
- There are lots of vertical integrations; Wahoo acquiring Sufferfest and Speedplay, Garmin acquiring Tacx, Metrigear and others, bike brands producing/labelling more of their bikes’ components under their own brand name, and now Specialized joining the Zwift investment.
- Technology playing an increasing role; how many gadgets do you carry while riding now, how much data do you record, and what tools do you use to store/analyze the data - compared to 10 years ago?
- Indoor cycling has gone from spending time on a 200 USD dumb trainer while watching DVD’s to building dedicated pain caves with smart trainers and a host of subscription-based services. Competitions on Zwift were already taking place before Covid-19, including support from various national cycling federations, and Covid-19 has most likely accelerated both the desire to compete and providing a tool for training.
KKR’s track record for picking investments with an impressive ROI is solid, and they do their due diligence, so I’d say that’s a stamp of quality from a financial point of view. I would be surprised if they haven’t already considered most of the points raised in this thread. Zwift has potentialy several sources of revenue: The monthly fee charged to its users (and they are apparently planning a tiered pricing plan), product placements within the game, advertising during their many competitions, providing a platform for sanctioned/official rides, etc., and if they integrated hardware, then that’s another host of revenue streams. The crux is ramping up the number of users fast enough - clearly cyclists alone aren’t enough, as Zwift also allows for running and apparently is working on rowing. Perhaps cross country skiing too?
For all its faults, Zwift does a lot of things well, and the entry barrier for those unfamiliar to sports is very low: Connect your bike or treadmill (or rowing machine) to the app and ride/run/row along in a virtual world in whatever pace you want, either full blast in a race or as a way to make 45 minutes on the trainer less dull.
Compare that to TR, which focuses on cyclists who are driven to tangible improvements and where you quickly get into terms such as FTP, w/kg, sweet spot, structured training, etc.
Zwift appeals to a broad audience - perhaps too broad, as they may be a “jack of all trades, master of none” - while TrainerRoad is crystal clear. An analogy that may apply here, is the car industry: The Volkswagen Group own multiple brands catering to very different segments - Seat, Jetta, VW, Skoda, Audi, Porsche, Lamborghini, Bentley, Bugatti, MAN, Scania. General Motors, Ford and Toyota are in a similar position. And then you have the niche brands that cater to a much narrower audience, such as BMW (driving experience), Tesla (high end EV), Volvo (safety). Both succeed and provide a healthy ROI for their shareholders, but they do so through different strategies.
I believe everyone stands to gain from Zwift succeeding and there certainly is both money and room enough in the market for several players. My guess is that Zwift will probably be the most common introduction to indoor cycling for people who may otherwise not fancy indoor riding, and those who take their training seriously, will at some point consider Trainerroad.
For my part, I do my serious training with Trainerroad, but I enjoy the odd Alpe d’Zwift and Ven-Top to test my form.
@Nate_Pearson, stay true what you guys believe in, there are clearly more than enough of us who appreciate your “master of one” approach!
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