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7 key business lessons from Peloton’s breakout year

February 10, 2021, 10:00 AM UTC

How to classify Peloton? 

A wellness company, of course. There’s also hardware (you plug the bike or treadmill into the wall). Software (there’s an app). And a content recommendation engine (“Pop rides you’ll love!”). Talent management (Cody Rigsby’s got 561K Instagram followers, Ally Love 559K). A community platform (high five, #PelotonMoms). Logistics, apparel, retail, media, entertainment, we could keep going. 

So Peloton is a complicated company. Yet perhaps no other brand has met this past year of curveballs better: a global pandemic, civil unrest, a historically divisive election. Sure, it’s been a bumpy ride, from commercials called sexist to ongoing delivery woes underscoring said success. But much of Peloton’s reckoning and transformation have taken place in the public eye, which makes stealing from its playbook all the easier. Seven elements of that strategy worth considering: 

You can’t fake commitment

It’s hard to fake a commitment to diversity. But Peloton’s instructors, many of them people of color, have always talked about their backgrounds, their struggles, their upbringings—a lot (more on that later). The company’s fastestgrowing demographic in terms of subscribers is under the age of 35 (one of the most diverse populations in the U.S.) and earning under $75,000 a year. 

A breakout Peloton moment came in February 2020 when Tunde Oyeneyin and Alex Toussaint teamed up for a special Black History Month ride. The banter, camaraderie, and respect between the two was evident (Toussaint: “You ain’t playin’ today”). Months later, in a world protesting the death of George Floyd, they used their platforms once again and, in doing so, forced both the company and its customers to confront racism head-on. 

“I understand for some of y’all, I’m the one person from the African-American community in your household,” Toussaint told riders. “My responsibility is to let you know there’s other individuals like me, who talk like me, who walk like me, who provide light to this world, man.”

“What part did I play in this?” Oyeneyin asked riders to ask themselves. “As a company, as a brand, we have put our stake in the ground. I ask that we move together.” 

This is what it looks like to be a talent-led company. As corporate America scrambles to diversify its workforce, Peloton has outlined its path to becoming an anti-racist company.

“In the post-pandemic world, every CEO and every leader needs to be out in the world in radical action,” says Laura Kriska, a cross-cultural consultant and the author of a new book, The Business of We, “so they can build relationships that can be meaningful.”

So many companies in one 

Silicon Valley’s mantra and advice to founders is to focus on one thing and do that one thing really well. But for a company to tackle big problems (like, say, people are unhealthy and unhappy), sometimes you have to straddle multiple identities and excel at all of them. 

In fact, this is Peloton’s big disruption in a crowded arena of niche products: spin class, yoga, Pilates, running, walking, toning. It offers them all in the convenience of your home, private instructor included via screen.

“The Valley didn’t see what was happening in New York City with the boutique fitness movement,” founder and CEO John Foley said in an NPR interview

Interviewer: “What did you guys know about TV production?”

Foley: “Zero.”

Peloton figured it out, though, with testing around pricing and manufacturing, setting up four bikes against a curtain in a 2,000-square-foot office, visits to the nearby B&H Photo Video store to ask questions on live production. 

Being scrappy does not mean forgoing a big vision.  

Bring your whole self to work 

Peloton instructor Matt Wilpers is from Georgia, and his mom occasionally joins his rides. Ally Love grew up going to church and was once in a bad car accident. Jess Sims played basketball in college and used to be a teacher and principal in Harlem. Cody Rigsby loves Britney Spears and has more thoughts on high heels than an entire issue of Vogue magazine. 

By sharing such details and opinions, consistently, constantly, instructors remove the distance between themselves and end users. They exude vulnerable leadership. During the pandemic, that has made all the difference in establishing connectivity. It also has put very human faces on the brand, which most instructors extend with an active social media presence. 

Community is everything 

Peloton’s user experience is sleek and easy to navigate. But it’s constantly pushing customers to connect—to more content, other users, beating your personal record. There are high-fives you can give each other, groups you can join with hashtags like #GermanLadies and #PelotonGolfers, #Vets and #BlackGirlMagic. They are intentionally intersectional, and instructors occasionally chuckle as they encounter new ones (#CrazyFitAsians).  

Through the pandemic, even as instructors are no longer flanked by live, in-studio riders around them, Peloton’s offerings have subtly shifted to assure users they are never alone. It might tell you how many others are currently taking an on-demand class, or ask if you want to wait five minutes to start with a group. After 100 workouts, you get sent a T-shirt as part of the “Century Club,” and, if you’re lucky, an instructor might give you a shout-out during a live ride. With 3 million users, making each feel your company is vested in them as individuals is no small feat. 

Distribution matters as much as content 

Much of Peloton’s marketing comes from word of mouth and social media. There are Facebook groups, Slack channels through users’ workplaces, fan followings on Instagram, Twitter trends over something sad an instructor might have just said about COVID

This was true before the pandemic but especially true now, with the back orders proof of what hype and endorsements among friends can do. While many brands are still trying to be mobile first, Peloton has done one better and captured that tough-to-fill space between IRL and virtual engagement. After a day of meetings on Zoom, working out on Peloton even with an on-screen instructor feels an odd respite. 

Omnichannel experience 

The word “omnichannel” is like the buzzword of the pandemic economy. It basically means that you are meeting your customers where they are, among multiple platforms and channels, in a seamless manner. A series of pre-COVID moves to the Peloton app helped create a more attractive proposition, in terms of price and range of offerings. It also created a legitimate omnichannel experience as you might hop on the bike, cool down using the app on your iPad, track progress on your digital watch, and encounter instructors serendipitously while scrolling your social feeds.

Indeed, you don’t even need to have the bike to be a customer; as more people work out at home, the offerings (guided running, walking, or meditation) are helping expand its customer base and ubiquity. 

Going global as a deliberate strategy 

Peloton is available only in the U.S., Canada, U.K., and, recently, Germany. Besides delivery challenges, this is one of its severe limitations (I’m literally picturing a bhangra or Bollywood workout getting me into the Millennium Club much faster). 

However, the company’s global ambitions are manifested in other ways: music selections, the backgrounds of instructors, and the languages they speak. The slow rollout around the world appears deliberate, especially as Peloton struggles to meet demand in current markets. Here, too, there’s a lesson, compared to the one-size-fits-all global strategy of pre-pandemic times. 

London-based German instructor Irene Scholz gets rave reviews from American users, commended for straddling multiple cultures. She’s clearly mastered the company’s signature motivational tone, saying in a group “All for One” ride amid the summer of protest: “Open your heart. Even though we’re flying, we open our hearts.”

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