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Peloton is a $20B compay.
But CEO John Foley had trouble raising money in the early days.
For years, thousands of investors told him no.
This is the story of how he persisted, disrupting the fitness industry in the process.
A thread
But CEO John Foley had trouble raising money in the early days.
For years, thousands of investors told him no.
This is the story of how he persisted, disrupting the fitness industry in the process.
A thread
1/ At 19, Foley got a job at a manufacturing plant in Waco, TX making Skittles, Starburst, M&Ms, and Snickers.
For 6 yrs, Foley played Willy Wonka, overseeing 200 people making 6M Snickers bars/day.
He thought heâd stay in Waco forever.
For 6 yrs, Foley played Willy Wonka, overseeing 200 people making 6M Snickers bars/day.
He thought heâd stay in Waco forever.
2/ At 25, Foley made the jump to tech.
In â96 amid the dot com boom, he joined Citysearch.
A stark contrast to making candy in Waco, he loved working w/talented people on challenging, motivating projects.
After two years, he went on to Harvard Business School.
In â96 amid the dot com boom, he joined Citysearch.
A stark contrast to making candy in Waco, he loved working w/talented people on challenging, motivating projects.
After two years, he went on to Harvard Business School.
3/ Post HBS, Foley accepted a job at BMG Music, signing a lease in NYC.
It was 2001. The recession and Napster crushed the music industry.
His role at BMG was eliminated before he started.
Jobless for months, Foleyâs brother-in-law hired him at Ticketmaster.
It was 2001. The recession and Napster crushed the music industry.
His role at BMG was eliminated before he started.
Jobless for months, Foleyâs brother-in-law hired him at Ticketmaster.
4/ Fast forward to 2010, Foley joined Barnes & Nobel.
Trying to compete with Amazon proved to be futile.
Heâs 40 years old. Anxious. Wanting to prove himself.
Fortunately, he had an idea.
Trying to compete with Amazon proved to be futile.
Heâs 40 years old. Anxious. Wanting to prove himself.
Fortunately, he had an idea.
5/ Boutique fitness and studios like SoulCycle were booming.
But Foley knew: studio classes werenât scalable. The best time slots and top instructors were sold out.
What if anyone could take class w/a great instructor at prime time? He thought.
But Foley knew: studio classes werenât scalable. The best time slots and top instructors were sold out.
What if anyone could take class w/a great instructor at prime time? He thought.
6/ Peloton is born
Foleyâs vision:
- Bike w/a big screen
- Best-in-class instructors
- Leaderboard for motivation
- Convenience of at-home workouts
"I think you can digitize that experience, and build a hardware and software platform for consuming fitness content at home."
Foleyâs vision:
- Bike w/a big screen
- Best-in-class instructors
- Leaderboard for motivation
- Convenience of at-home workouts
"I think you can digitize that experience, and build a hardware and software platform for consuming fitness content at home."
7/ Friends & family
With his wifeâs blessing, Foley recruited cofounders and raised Pelotonâs seed round.
A friends and family round, Foley raised $400K @ $2M post from 8 angels.
The plan: combine an off-the-shelf tablet w/an exercise bike.
If only it were that simple...
With his wifeâs blessing, Foley recruited cofounders and raised Pelotonâs seed round.
A friends and family round, Foley raised $400K @ $2M post from 8 angels.
The plan: combine an off-the-shelf tablet w/an exercise bike.
If only it were that simple...
8/ Fun fact!
Foley tried to partner w/SoulCycle & Flywheel.
Soul passed. But $PTON had an agreement w/Flywheel.
Flywheel bailed.
The Peloton team was banned from Soul/Fly classes.
Fast forward: Flywheel's at-home bike failed. And Soul launched a Peloton lookalike.
Foley tried to partner w/SoulCycle & Flywheel.
Soul passed. But $PTON had an agreement w/Flywheel.
Flywheel bailed.
The Peloton team was banned from Soul/Fly classes.
Fast forward: Flywheel's at-home bike failed. And Soul launched a Peloton lookalike.
9/ New plan!
Pelotonâs bike would be scratch-built.
But thatâs expensive. They needed more money.
Foley was in his mid-40s. Had two kids.
He hit the fundraising trail to keep his business afloat.
Pelotonâs bike would be scratch-built.
But thatâs expensive. They needed more money.
Foley was in his mid-40s. Had two kids.
He hit the fundraising trail to keep his business afloat.
10/ NO!
From 2011-14 Foley pitched 3,000 angels & 400 firms.
Almost everyone said no.
Eventually, he raised $10M from 100 angels.
Tiger Global was the first institutional investor earning $1.4B at IPO.
From 2011-14 Foley pitched 3,000 angels & 400 firms.
Almost everyone said no.
Eventually, he raised $10M from 100 angels.
Tiger Global was the first institutional investor earning $1.4B at IPO.
11/ Kickstarter!?
Far from a sure thing, Peloton launched a Kickstarter.
It flopped. 200 people bought bikes. 100 were investors. And they raised $300K.
The price? $1500.
Everyone thought it was too expensive.
Far from a sure thing, Peloton launched a Kickstarter.
It flopped. 200 people bought bikes. 100 were investors. And they raised $300K.
The price? $1500.
Everyone thought it was too expensive.
12/ The price is right!
Post-Kickstarter, $PTON launched a website.
The bike was priced at $1200.
Now, the product looked cheap.
They increased the price and sales increased!
Post-Kickstarter, $PTON launched a website.
The bike was priced at $1200.
Now, the product looked cheap.
They increased the price and sales increased!
13/ Momentum builds
Peloton landed Robin Arzon, an instructor who has come to define the brand.
They began selling $2000 bikes at a mall kiosk in NJ.
Filming classes in their office, they grew the workout library.
It was working.
Peloton landed Robin Arzon, an instructor who has come to define the brand.
They began selling $2000 bikes at a mall kiosk in NJ.
Filming classes in their office, they grew the workout library.
It was working.
14/ By 2015, things were looking up.
That year, Foley raised $100M+ in funding.
More classes led to more engagement and more sales.
More traction = more investment.
The company raised nearly $1B in all by 2018. https://twitter.com/JoeVennare/status/1299387847846301699?s=20
That year, Foley raised $100M+ in funding.
More classes led to more engagement and more sales.
More traction = more investment.
The company raised nearly $1B in all by 2018. https://twitter.com/JoeVennare/status/1299387847846301699?s=20
15/ IPO!
In Fall â19, Peloton went public raising $1.16B w/a $8B market cap.
A major milestone, critics still questioned the companyâs staying power calling $PTON a fad.
In Fall â19, Peloton went public raising $1.16B w/a $8B market cap.
A major milestone, critics still questioned the companyâs staying power calling $PTON a fad.
16/ COVID-bump
A year and a global pandemic later, Peloton has a market cap of $20B.
Heading into an earnings call, all signs point to a massive quarter.
Looking ahead, Foley hopes to dominate the connected fitness category he helped pioneer.
A year and a global pandemic later, Peloton has a market cap of $20B.
Heading into an earnings call, all signs point to a massive quarter.
Looking ahead, Foley hopes to dominate the connected fitness category he helped pioneer.
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Sources:
https://www.npr.org/2019/04/05/710439824/live-episode-peloton-john-foley
https://www.bloomberg.com/news/articles/2019-09-12/peloton-founder-goes-from-kickstarter-to-a-450-million-fortune
https://www.wsj.com/articles/take-a-ride-with-peloton-ceo-john-foley-1541431221
https://www.npr.org/2019/04/05/710439824/live-episode-peloton-john-foley
https://www.bloomberg.com/news/articles/2019-09-12/peloton-founder-goes-from-kickstarter-to-a-450-million-fortune
https://www.wsj.com/articles/take-a-ride-with-peloton-ceo-john-foley-1541431221
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