Peloton leaders speak out on recall, Apple competition, and gym reopenings

At a TechCrunch Disrupt virtual keynote last week, Peloton CEO John Foley and Chief Content Officer Jennifer Cotter opened up to a TechCrunch’s Brian Heater about some of the trials and tribulations the company has been through over the last year. While their replies were polished and diplomatic, they did reveal some insight into the company’s growth and evolution.

On the treadmill safety recall

“From my perspective as one of the founders, the framing of the category wasn’t good enough,” Foley said. “What the category thought of as safety wasn’t good enough. And we thought, ‘Let’s just bring treads to market, from a hardware perspective, the best tread, the best design.’ But looking at the safety that’s been in the market in the category for decades, and what we learned is we need to be better. We’re better at almost everything. Now we need to be better at safety.”

Foley noted that they have added new safety features like a four-digit code to start up the device and safety instructions from Peloton’s instructors at the beginning of each workout.

“We realized last year that we now need to be better,” he said. “We need to innovate in safety. We’re excited about it. We are rising to the occasion. We’re not shirking our responsibility to be the industry leader in safety. So that’s kind of what changed is our mindset of, ‘Oh, we’re innovating on all this other stuff. Let’s also innovate on safety.’”

On competition from Apple Fitness+

“Well, from my perspective, in order to win in fitness, you need to do what’s hard, i.e. make bikes and make treadmills,” Foley said. “If we have the best bikes in the world, the best experiences on those bikes, which we do, and we continue to come down the cost curve and make it more affordable to more people, which we did. …

“If you have these platforms in your home, and with the $39 a month, you’re paying for the content. You get all of the best yoga, all of the best strength training, all the best Pilates, outdoor running, indoor running, all of the content modalities that we offer for free with the existing $39 membership that you’re already paying Peloton. We believe that you don’t need to pay another third party that has at this point inferior content, inferior software, and less vertically integrated experiences.”

Cotter added that she doesn’t think Apple has succeeded in replicating Peloton’s encouraging community.

“[With Apple], there’s no kind of pull with the community to rally to take the classes, be part of it. So I would say that’s a point of differentiation we’re pretty proud of, and you can’t just fake that. You can’t just put a bunch of classes out there and motivate a bunch of people who are not working out currently to do it.

“That’s been the experience of the fitness business forever. And so that special sauce of how we come together and talk to our community and they talk to each other and then they engage with our platform is something very special for sure.”

On whether Peloton is losing customers as gyms reopen

“A lot of journalists are asking us, ‘Was Peloton a COVID story? Are people going to rush back to the gym as soon as they can?’” Foley said. “And I think the metaphor is Netflix has done well in the pandemic, but I don’t think next month people are canceling their Netflix memberships to rush back to the movie theater. …

“People discovered that working out at home with fantastic instructors in a global community is not only a better experience at a better value, but it’s also a better location. And so that is universal. And that is undefeated.”

Foley believes the gym as a concept is not competitive with Peloton.

“From our perspective, we’re seeing more people get excited about Peloton and say, I’m not going back to the gym.’ The gym was a failed model,” he said. “It was a failed contract between the member and the business where I actually didn’t go to the gym. It wasn’t convenient. I didn’t want to go drive somewhere and shower outside my home and take that extra time away from my family or have to wake up earlier.”

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