Opinion
Foley: Hardware is not inherently harder to build than software
“I would say hardware isn't hard. I Tom Cortese, my co-founder who runs product development and is our product visionary I try to pin him on what's harder, software or hardware, and he'll go back and forth on different months and oftentimes he'll say software i…”
Insight
Foley: Complex hardware serves as a long-term competitive moat
“Hardware can be hard, but to an ambitious group of people like the Peloton founders and now the Peloton team You know, it's a competitive moat over time, which is which is why I think our investors are excited about it at this point.”
Insight
Foley: Raising Peloton's price above $1,200 increased sales velocity
“We started pricing it at 1200 dollars, because it was just over 1200 dollars was our cost, and we're like, let's price it at cost, because we have the subscription digital content business model that comes afterwards, so we don't need to make any money, and we…”
Prediction Not checkable as stated
Foley: Peloton will be one of the special companies of our generation
“I think if we do it well, this will be one of the special companies of our generation.”
Opinion
Foley: Peloton's addressable market is massive, not small as investors thought
“I was so excited to show that Peloton is an awesome business and the total addressable market is massive. It's not small as some of the narrow-minded investors thought.”
Opinion
Foley: Business school is wasted on individuals with existing elite access
“For a lot of people that I've connected with that are educated in the north, northeast or lived in New York City or San Francisco or have parents who have A little more access to the world of business business school could be a waste of time and a waste of mon…”
Opinion
Foley: Fitness Equipment Industry Was Incredibly Dopey With No Tech or Design
“The fitness equipment category is incredibly dopey. No tech, no design, and just, it didn't feel like there was a bike that met the bar of the, of quality that we wanted.”
Assertion Not checkable as stated
Foley: 400 institutional investors rejected Peloton before 100 angels gave $10M
“We have a hundred angels to get the first ten million, but in order to get a hundred angels at my success rate, I probably pitched 3000 people. And then the fourth, the 400 institutions that all said no.”
Opinion
Foley: Venture capitalists focus on minimizing risk rather than taking it
“You think venture capitalists, you know, want to have a vision and take risks, but you're absolutely right, guy. They minimize risk, and you get it if they're shepherding your capital. They want minimal risk”
Disclosure
Foley: Peloton amassed a 300-person cap table across its first five rounds
“The Series E, I mean, the date was two years ago, effectively, when investors started to really see it, and we actually turned down, I mean, for the first five raises, we took every dollar we could from anybody.
And that creates a cap table of 300 people, inst…”
Insight
Foley: Investors avoid hardware because logistics limit scaling speed
“The problem with hardware is that investors are nervous about it. Investors shy from things that require hardware because then you have to have logistics and you have to have manufacturing and you have to figure out how you're going to sell these things and it…”
Assertion Not publicly verifiable
Foley: Peloton spent $50M each on New York and London studios
“We have these fancy studios in New York and London, and we've spent, you know, fifty million dollars a piece, I believe, on these two studios, so real investments.”
Insight
Foley: Fitness instructors matter more to customers than the studio
“Sometimes you're say yoga, Your yoga instructor is more important than the yoga studio. If your yoga instructor went to a different studio, you might follow him or her, and so the content really is, is important”
Insight
Foley: Pure Software Companies Are Easiest to Build and Fund
“A pure software company is easiest to do, and it's easiest to raise money for. Every venture capitalist is looking for the next Instagram platform. Where you put 250,000 dollars in, and 18 months later it sells for a billion dollars.”
Insight
Foley: Relying on Third-Party Hardware Cycles Makes Products Obsolete
“I don't want to be that company that looks so dumb, because your product is made irrelevant based on some other company's hardware cycles. And so I said, I think you've got to make the tablet.”
Assertion Not checkable as stated
Foley: Early Peloton team got kicked out of Flywheel and SoulCycle
“Well, we all of us very quickly got kicked out of Flywheel and SoulCycle.”
Assertion Supported
Foley: Half of Peloton's 200 Kickstarter buyers were existing investors
“And 200 people I guess we raised 300,200 people bought, and a hundred of them were investors.”
Assertion Not checkable as stated
Foley: Peloton converted 50% of mall shoppers who tested the bike
“Generally, if I could get somebody on a bike, honest to God, I got to a point where it was There's a fifty-fifty chance that you're gonna buy the bike, even though you just heard of it.”
Insight
Foley: Telling People You're Launching a Startup Creates Accountability
“Putting the energy out there and telling other people gets a little, gets the momentum going and holds you accountable. And I thought that was a, that was an important thing for me having the courage, which is basically, I just, I had to deliver on my promises…”
Assertion Partly supported
Foley: 60% of Peloton demand occurs between Thanksgiving and late February
“We have a uniquely seasonal business where I think we've said 60% of our demand is between Thanksgiving and the end of February because of holiday sales and the cold winter months.”
Assertion Not checkable as stated
Foley: Peloton delivery wait times peaked at 10 to 11 weeks
“Yeah, I think it's spiked at 10 or 11 weeks in some markets, and I think we're down to six or seven weeks in most markets at this point, and as we continue to build capacity in our manufacturing pipeline and supply chain we're able to you know, meet the demand…”
Disclosure
Peloton invested hundreds of thousands into home studios for fitness instructors
“With our instructors, we sent, you know, a couple 100,000 dollars of hardware and software into a few of our member, or a few of our instructors' homes and set up a, an ad hoc television streaming studio.”
Assertion Supported
Foley feared vilification over Peloton's massive profitability during the pandemic
“And the third earnings call, We were profitable and growing tremendously, but it was this new world order, to your point, Guy, and it was all of a sudden, oh gosh, we don't want to be vilified for being profitable.”
Insight
Foley: HBS showed no one is significantly smarter than anyone else
“It did in many ways changed my trajectory, because it gave me the confidence to know that no one is that much smarter than the next person, and everyone's trying to figure it out, and so it was a transformative opportunity for me to go.”
John Foley