Best Self or Best Company? Peloton Searches for a Voice

9 Pages Posted: 7 Sep 2020

See all articles by Meghan Murray

Meghan Murray

University of Virginia - Darden School of Business

Abstract

Peloton had redefined many things about the boutique exercise experience, bringing it into members' homes and eliminating per-class fees of roughly $34, instead charging $40 per month. Rather than chatting with a pal beside the gym locker for a few moments before class, customers had Peloton's online community of hundreds of thousands of people who interacted with one another digitally throughout the day. The instructors themselves were part of Peloton's cult following. They were expected to lead and inspire, not just teach a class, and each had a large social media following and minor celebrity status. The company was poised for an IPO in 2019 by identifying a new opportunity in a constantly evolving fitness space, by defining its business broadly, and by capitalizing upon the energy of celebrity and personality that online communities could bring to a brand. But how could a business built on a social community pivot to a position in the public marketplace?

Excerpt

UVA-M-0977

Oct. 29, 2019

Best Self or Best Company? Peloton Searches for a Voice

Cycle with a DJ

It wasn't often that a fitness club could justify the hassle and expense of hosting a class with a live DJ. But by spring 2019, it had become a core element of Peloton's cycling studio, with riders relying upon the energy of a DJ's music two-and-a-half times every month, on average. Peloton had redefined many things about the boutique exercise experience, bringing it into members' homes and eliminating the per-charge class fee of roughly $ 34 to instead charge $ 40 per month. Unlike common rhythm-based classes, Peloton used metrics to drive motivation at any given moment. Rather than require customers to get to a particular studio at a specific time to join 30 other acquaintances, they could select from a library of thousands of classes at any time. Yet these customers didn't miss out on socializing with their friends by exercising at home. Rather than chatting with a pal beside the gym locker for a few moments before class, customers had an online community, created by Peloton, of hundreds of thousands of people who interacted with one another digitally throughout the day.

Cofounder and CEO John Foley encountered difficulties in creating a business model, raising capital, and designing a product—difficulties shared by many start-ups. But Peloton evolved from a struggling idea in 2012 to a company valued at over $ 4 billion that was poised for an initial public offering (IPO) by spring 2019. It did so by identifying a new opportunity in a constantly evolving fitness space, by defining its business broadly, and by capitalizing upon the energy of celebrity and personality that online communities could bring to a brand.

. . .

Keywords: corporate communication, public relations, social media, marketing, IPO, strategy, management, initial public offering, influencer culture

Suggested Citation

Murray, Meghan, Best Self or Best Company? Peloton Searches for a Voice. Darden Case No. UVA-M-0977, Available at SSRN: https://ssrn.com/abstract=3682608 or http://dx.doi.org/10.2139/ssrn.3682608

Meghan Murray (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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