[HN Gopher] Peloton - A call for action [pdf]
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Peloton - A call for action [pdf]
Author : a-bit-of-code
Score : 311 points
Date : 2022-02-10 09:07 UTC (13 hours ago)
(HTM) web link (www.blackwellscap.com)
(TXT) w3m dump (www.blackwellscap.com)
| rvz wrote:
| Where this road is going, it looks highly likely it is going to
| Amazon or even Meta.
| fossuser wrote:
| Peloton is a great product and Foley built it up from nothing,
| what's the point of keeping all that voting power if you don't
| use it to tell these private equity groups to fuck off?
|
| I hope they don't sell.
| jmeister wrote:
| I don't understand the disproportionate hate Peloton gets. They
| have a fanatical costumer base.
|
| From past experience with similar attitudes towards fancy gyms,
| fitness products and basically anything catering to the rich, hot
| and fit, I can only think of one cause: _ressentiment_.
| willis936 wrote:
| That was rough. I have similar vibes from the investor call a
| week after Cyberpunk 2077 released but even that was much more
| generous.
|
| It all seems like well-earned criticism. As someone with no stake
| I am happy to see the consumer-hostile behavior of the treadmill
| murder machine incident be given its own slide.
| lbriner wrote:
| The question it begs is if the CEO is not the right-person for
| the job (which they don't appear to be) then why keep him on as
| executive chair? That sounds like dragging things out for the
| sake of it, if he doesn't add anything useful, buy him out and
| send him somewhere else, it sounds like his experience is not
| really needed any more?
| andreareina wrote:
| Because buying him out would be expensive. Much cheaper to
| convince him to step aside.
| muh_gradle wrote:
| A lot of Peloton in the news lately. Is there anyone that owns a
| Peloton machine that can comment on what they like and dislike
| about Peloton? Have you guys noticed a decline in the product,
| software, classes?
| ath0 wrote:
| One and only one data point: the handle allowing the chair to
| move forward and back broke 2 months ago, about 6 months out of
| warranty. (Great for my partner, who now has exclusive use of
| the bike in her position... not so good for me.)
|
| Support originally wanted to charge me $250 for replacement and
| service. A few YouTubes and a second call, the service person
| admitted that a $5 part would probably do the trick.
|
| It's taken two full months from that support call to get the
| shipping notification on that part.
|
| Other than that, though - my experience with the bike and
| classes has been positive.
| lghh wrote:
| Bike+ owner.
|
| > like and dislike about Peloton
|
| Likes: - It's soooooo easy to just get on it and ride. One of
| the core tenets of habit-building is to make a habit easy to
| do. I can't imagine an easier way to exercise than sitting on a
| bike that's a few feet from my bed. - The classes are all high
| quality. The instructors are charismatic and varied. There are
| a lot of them and they all have their own personal style. You
| can find the 2-3 that work for you or hop around. I only
| actively dislike 1 or 2, but I get why others could like them.
| - The classes extend beyond the bike. I like taking their
| stretching classes and my wife takes a strength class nearly
| every day. - The powerzone classes are great and a perfect
| example of something that can't easily be reproduced by
| competition that doesn't fully integrate hardware, software,
| and content. - People complain about the subscription cost, but
| $40 a month is less than the ~$100 a month we were spending on
| 2 memberships to the only gym in a 15-minute driving radius to
| my house.
|
| Dislikes:
|
| - Delivery was a NIGHTMARE. Just absolutely terrible. It'd take
| me 30 minutes to type all the pain we went through for
| delivery. - Literally nothing else.
|
| > Have you guys noticed a decline in the product, software,
| classes?
|
| Nope, not at all. In fact, they recently added some boxing
| stuff which is a new class type for them.
| a_humean wrote:
| I have a family member that owns one and I've tried it a few
| times recently. The bike hardware is very good, the instructor
| content is very good, the software is decent. No noticeable
| decline in software or content.
|
| Overall cost compares pretty well to a gym, PT, or class
| subscriptions esp if you live in an expensive area.
|
| It does feel like a potentially valuable company that is just
| being run badly, but also could face competition. It also does
| feel like a company that could work well within a larger
| fitness or content company.
| jankyxenon wrote:
| I'm a satisfied customer - one of my favorite products. Based
| on that I would assume there's a solid business here. Did the
| valuation get too far from fundamentals - I dunno and I don't
| care as long as they stay in business.
| m4tthumphrey wrote:
| See my response in another thread:
| https://news.ycombinator.com/item?id=30260468
|
| TLDR: I love my Bike+ as does my partner. It's well worth the
| monthly fee (and this document seems to imply that its too
| cheap!). Is the bike itself worth PS2250? Probably not in
| theory but it is to me.
|
| Further elaboration: The tech is interesting. It's very
| polished but there is SO much room for additional reporting,
| functionality etc. I have actually played abit with the
| unofficial API and theres lots of data available.
| soheil wrote:
| "I'll go sometimes months without talking to our CTO, which as a
| CEO of a technology company, that's kind of rare."
|
| I can't not read this as a joke.
| lelandfe wrote:
| While a brutal dressing down of the company, I have to admit that
| this is one of the most nicely made decks I've ever seen.
|
| What is the reasoning behind them sharing this publicly, I
| wonder?
| wackget wrote:
| Are we calling slideshows "decks" now?
| TheHypnotist wrote:
| yes
| lelandfe wrote:
| The way I learned it, decks are slideshows that are
| information-dense and can thus be read independent of a
| presentation. But Googling it just now reveals that they're
| interchangeable words.
|
| So... yes.
| z3c0 wrote:
| And here I was thinking my boss wanted to battle me in
| Magick.
| sails wrote:
| Increase short interest I guess? Presume they have a massive
| short position.
| rjtavares wrote:
| No, they own 5% of the company. The deck is not a take down
| of the company, is a take down of the CEO.
| sails wrote:
| Interesting, thanks for clarifying!
| oceliker wrote:
| Based on their press releases, it sounds like they actually
| hold significant stock, hence the urgency to do something
| about it I guess.
|
| https://www.blackwellscap.com/pressrelease/blackwells-
| capita...
| celticninja wrote:
| They want to improve the price as they hold the stock,
| probably want to offload it and are hoping a CEO change will
| lead to a price bump.
| rjtavares wrote:
| They're an activist fund. They own 5% of the company, and want
| the CEO removed.
|
| https://www.reuters.com/business/retail-consumer/activist-bl...
| atupuxi wrote:
| rjtavares wrote:
| > Q: Is there anything about being CEO that you don't like, that
| you like to delegate?
|
| > A: Finance. Our CFO does 99% of finance. I engage because I
| want to know how we're doing. But to say I don't add value to her
| operation is an understatement. You can also say the same with
| technology. Our CTO doesn't get any help from me. I'll go
| sometimes months without talking to our CTO, which as a CEO of a
| technology company, that's kind of rare.
|
| Wow...
| baxtr wrote:
| I am not so sure why this sounds odd. All successful startup
| that I have seen, had a great builder and a great seller. A
| CFO/COO running internal operations and finance is great to
| have. So since he is not the builder and obviously not the
| CFO/COO, he could still be a very successful CEO by being the
| seller, who is advocating for the company on the market. Think
| Steve Jobs. Wasn't the CEO of Peloton not that kind of guy?
| Aromasin wrote:
| Steve Jobs was one of the most micromanaging CEOs I've read
| about. He overruled many CTO decisions during his time at
| Apple, both at the founding of the company and upon his
| return to the company years later, so I wouldn't use him as a
| comparable example. You'll rarely find a good CEO that isn't
| intimately aware of the current actions and goals of each
| other executive. What you're describing would be the role of
| a CMO, which Foley is not.
| quesera wrote:
| > He overruled many CTO decisions during his time at Apple
|
| That is not micromanaging.
|
| That's the CEO's job. Take input from whatever valuable
| sources you have, and _decide_ on behalf of the entire
| organization.
|
| Steve Jobs was a lot of things over the decades. But a
| micromanager, he was not.
| mizzao wrote:
| I can't tell if this is just humility / delegation coming off
| poorly or an actual disengaged CEO.
|
| I also think it can be helpful to self-deprecate a bit as a
| leader but I'm not sure why all these statements got published
| in public.
| ansible wrote:
| At the very least, it shows poor communication skills.
|
| If you have a fantastic CFO, that's great. Just say that.
| "I'm very confident in person X." or "We have a great team
| who's been doing a great job." Things like that.
|
| You don't say: "I don't add any value." That makes you sound
| like an empty suit.
|
| Also the "I haven't talked to my CTO in months" sounds really
| bad. How the eff are you planning new product launches?
| Shouldn't the CEO at least be aware of any ongoing issues
| with current products? Talk about the plan to reduce hosting
| costs? Anything? WTF
| q-big wrote:
| This might be a cultural bias, but for me (being German)
| what the CEO said sounds much more honest and trustworthy
| than what you suggest.
| alisonkisk wrote:
| adrianomartins wrote:
| One might ask, if the CEO does 1% of finance, and 0% of
| technology, what does a CEO do? Office, HR, comms management?
| anthony_r wrote:
| The main job of the CEO is to manage the board of directors
| (i.e. the shareholders). And the main job of the board of
| directors is to decide when to fire the CEO.
| ansible wrote:
| > _The main job of the CEO is to manage the board of
| directors (i.e. the shareholders)._
|
| Uh, no. Dealing with the board is indeed part of the job
| for the CEO, but a relatively small part unless you're
| doing poorly.
|
| The CEO is also managing the direction of the company, and
| managing the top-level managers of the various departments.
| The CEO has to fight the fires, and allocate limited
| resources to where they are needed across all departments.
| darkerside wrote:
| You're right, but I think parent was joking
| anthony_r wrote:
| Half-joking, but yeah. "Managing the board of directors"
| of course means keeping the board happy, which is done by
| what ansible wrote. Not just directly trying to talk them
| out of firing the CEO.
| skrebbel wrote:
| Marketing and sales
| andi999 wrote:
| Isnt that called 'business development' at the C-level?
| johannes1234321 wrote:
| How can you do Marketing without looking at the curre t
| development to Merker the new features?
|
| How can you do sales without feeding customer feedback back
| into development?
|
| How can you do all that without looking at the numbers to
| see what you can afford?
| masklinn wrote:
| > How can you do Marketing without looking at the curre t
| development to Merker the new features?
|
| Marketing shit that's not out is just barely better than
| marketing shit that's not even planned.
|
| > How can you do sales without feeding customer feedback
| back into development?
|
| Surely you have normal channels for doing that and it
| doesn't require the CEO to talk to the CTO?
| pmontra wrote:
| I've seen many times sellers selling things that didn't
| exist yet. Maybe a term describing that is Market
| Development. It doesn't end well every time but there is
| usually time to cope with customers after they signed a
| contract.
| skrebbel wrote:
| I don't know anything about Peloton, but my impression is
| that they're selling a way of life much more than a
| device with a particular set of features.
|
| On the CEO level, marketing and sales might very much be
| all about mood, positioning, culture etc and very little
| about the display pixel density or the logistics.
|
| I'm not saying that this is sensible, I'm just saying
| that lots of companies are run this way and a CEO saying
| they don't sync with tech nor finance every day doesn't
| necessarily disqualify them.
|
| This guy built a pretty big company pretty fast so he's
| gotta have done _something_ right. Maybe let 's not go
| all-in with an activist investor's cherry-picked quotes
| of an uncommonly honest/humble CEO.
| indigochill wrote:
| In the startup I worked at in college, one of the most
| visible jobs our CEO did was talking with investors to get
| the next round of funding. He was also the top-level business
| strategy guy (for an example in a more mature company, look
| at the difference Nadella made to Microsoft's strategy
| relative to Ballmer), although implementation details were
| delegated to other roles (that he was responsible for
| hiring).
| willcipriano wrote:
| "Well--well look. I already told you: I deal with the god
| damn customers so the engineers don't have to. I have people
| skills; I am good at dealing with people. Can't you
| understand that? What the hell is wrong with you people?"
| raverbashing wrote:
| As much as we make fun of the new Agile/Startup/SV world,
| it looks like I'd absolutely dread work on a 90's Software
| company (though granted this is exagerated for comedic
| purposes).
| skywal_l wrote:
| "Office Space" reference for anyone wondering[0]. Another
| Mike Judge's gift to us.
|
| [0] https://www.youtube.com/watch?v=hNuu9CpdjIo
| Salgat wrote:
| It's funny, before I starting working as a developer I
| thought this guy was useless, but now I understand how
| valuable not having to deal with the customers actually
| is.
| [deleted]
| spookthesunset wrote:
| It's also one of those jobs that is hard to measure the
| performance of.
| tootie wrote:
| The deck also calls out another interview where he said he
| does very interviews (meaning hiring decisions). The deck
| also calls out that he gave an executive role to his wife.
| helsinkiandrew wrote:
| He's the Chief Enthusiasm Officer:
|
| > Peloton has been horribly mismanaged, with unbridled
| enthusiasm taking the place of disciplined leadership
| eigart wrote:
| Amazing. I just hope Matt Levine (of Bloomberg's money stuff)
| has seen this deck today.
| hhmc wrote:
| It was in the newsletter 2 days ago
| eigart wrote:
| Thanks, I missed it. Here it is:
|
| https://www.bloomberg.com/opinion/articles/2022-02-08/pelot
| o...
| 0898 wrote:
| He covered it a couple of days ago.
| EMM_386 wrote:
| It's here:
|
| https://www.bloomberg.com/opinion/articles/2022-02-08/peloto.
| ..
| onion2k wrote:
| As someone who's been a CTO at times in the past, I wish I'd
| worked with a CEO like that. There are few things worse than
| having a leadership team who don't trust you to deliver the
| tech that drives the company's ideas.
| wink wrote:
| I mean I get the sentiment but months? Which kind of company
| size are we talking? I'm not saying you should talk to your
| CEO every week, but twice a year sounds really weird to me.
| Ensorceled wrote:
| At a tech company? Definitely the CTO and CEO should be
| talking every week.
|
| Months is VERY weird.
| spookthesunset wrote:
| I mean you are both part of the executive team. The CEO is
| an immediate part of your working group. You probably
| should be talking almost daily at times.
|
| It would be like the product manager never talking to their
| team's engineering manager. The two are tied at the hip--at
| least in orgs I've worked at.
| doctor_eval wrote:
| Although I agree with the other child posts here, I also
| agree with your sentiment. As a CTO, an interfering CEO is
| worse than one who doesn't engage at all. But ideally it's a
| collegial relationship.
| smoyer wrote:
| Having your CEO change course every two months is definitely
| worse - just let me finish something! (it was a hardware
| company so there's not really such thing as a pivot)
| arethuza wrote:
| I've had experiences like that both as CTO and Director of
| Engineering - I vividly remember one exchange when I'd been
| at a company for a month or so:
|
| CEO: How are you fitting in?
|
| Me: Good, I've got a good handle on where we want to take
| the product.
|
| CEO: I know you don't.
|
| Me: OK, care to explain?
|
| CEO: I've just changed the vision for the product!
|
| This was also a company with a significant hardware
| component.
| llampx wrote:
| How do you make sure you are aligned and that you both see
| the problems, challenges and opportunities that one party
| sees?
|
| This looks more like a traditional company than a tech
| company, which is not helped by it being based in NYC. The
| CEO and CFO are probably buddy-buddy while the CTO is an
| outsider "geek."
| rjtavares wrote:
| Of course overly managing the CTO is also bad, but would you
| really like to "go sometimes months" without talking to the
| CEO? Especially during a pandemic in which your product
| becomes the hot new thing?
| parkingrift wrote:
| It would be absolutely alarming to go even a week without
| speaking to the CEO in some capacity. How can you have a
| strong leadership team if they aren't communicating?
| nraynaud wrote:
| yeah, on the surface it is a bit weird, Peloton has capital
| intensive hardware, there should be some interaction as to
| how much capital is allocated to the technology, product
| releases etc.
| vishnugupta wrote:
| >> I'll go sometimes months without talking to our CTO,
|
| > ...leadership team who don't trust you ....
|
| When did _talking_ come to mean having trust issues!!?
| kumarvvr wrote:
| To me, that seems to give off the vibe that he was confident in
| the business, basically striking a golden goose. And wants to
| not interfere with it.
|
| It could also show apathy and lack of concern because he wants
| to cash out.
| Aeolun wrote:
| Kind of hard to see why someone would have invested in this
| rocketship in the first place.
| adrianomartins wrote:
| Well, that's a type of deck that I never seen before. The amount
| of times and ways they leverage the actual bad state of the
| company to make it look like a worthwhile investment is
| astonishing.
| JohnJamesRambo wrote:
| So many words trying to obfuscate the simple fact that "We are a
| treadmill maker trying to masquerade as a tech company."
| greggsy wrote:
| In the case of Juicero, being a 'tech company masquerading as a
| juice company' is and order of magnitude worse
| dehrmann wrote:
| I get that, but when a lot of what they sell is the
| subscription, and streaming content still takes some work, I
| think there's a non-trivial amount of tech that makes that
| happen.
| adrianomartins wrote:
| A treadmill maker trying to get users to pay monthly
| subscription to use it...
| mschuster91 wrote:
| The subscribers aren't subscribing for using the treadmill,
| they are subscribing for fitness courses and the likes.
|
| Which... isn't a bad business model _per se_ IMO. With the
| current trend of "self improvement", there are enough people
| willing to pay lots of money, for everything from gym
| memberships to individual personal trainers.
|
| The issue is: this is _not_ going to be an exponential-stock-
| growth-style business model, as many seem to expect. There is
| no hope for the usual "undercut the competition in pricing
| and establish a monopoly that can be used for rent-seeking
| afterwards" VC model, no hope for a make-everyone-filthy-rich
| acquisition by an established market player, at best this is
| going to be a steady, "boring" cash cow.
|
| (Note, I don't hold any stakes in Peloton or competitors)
| dmamills wrote:
| > With the current trend of "self improvement"
|
| Expecting long term income from trend followers.
| sideshowb wrote:
| Aren't gyms generally famous for cashing in on people who
| sign up for memberships they never actually use? Seems like
| a genius plan to disrupt that tried and tested business
| model with a more efficient alternative where users buy the
| gyms for you so you don't need to maintain them.
|
| (unless you want your job to be meaningful or something)
| smorgusofborg wrote:
| I think Richard Simmons already brought us this
| disruption, and you can pay what you want at the closest
| yard sale!
|
| The slide deck is comical in its defensiveness of the
| company itself, how does one compare video remote classes
| with boutique classes that had better have 8- students to
| explain $300/month?! Or is this people in LA assuming
| their local phenomenons are normal?
| sideshowb wrote:
| _Second hand kit_? Aren 't _you_ and your _goals_ of
| _self improvement_ worth _more than that_? ;-)
|
| I do agree on costs, though. I'm a pretty keen cyclist
| (outdoors) and dabble in running. I have tried various
| fitness apps like Strava out of curiosity, even played
| around trying to analyze my own gps traces in Jupyter to
| figure out my aerobic threshold. But I don't see any of
| the apps as worth paying a subscription for [1].
|
| [1] Except maybe trailforks, if I'm on holiday in an area
| I don't know that has unofficial mtb trails well
| documented on that platform. But now they've made it
| proprietary I'm far less inclined to contribute my own
| trails to the database, so go figure.
| jasondigitized wrote:
| You don't need any of their hardware. A large portion of the
| courses are exercises that need nothing but a floor. The
| quality of the classes is very good. Its a SaaS media company
| with an optional hardware upsell.
| mdoms wrote:
| This is not a core part of their business and never will be
| because there is an unlimited amount of this content
| available for free on Youtube.
| auggierose wrote:
| Is that similar to a video store masquerading as a tech
| company? Or a book store masquerading as a tech company? Or an
| apple masquerading ... Oh wait, that actually IS a tech
| company.
| brailsafe wrote:
| Treadmills are a uniquely obtrusive, pointless, and expensive
| product
| Larrikin wrote:
| I dislike running outside and live somewhere that is
| freezing cold almost half the year.
|
| I use my treadmill daily. Even if I'm not doing a proper
| guided run workout, I'll just hop on the treadmill and walk
| for a couple hours while watching TV instead of just
| sitting on the couch. It's easily the best purchase I made
| during the pandemic. I'm not convinced the expensive
| peloton machines are worth it, but I'm rarely going above 9
| mph so my basic one with a TV in front of it and the free
| peloton subscription provided by my insurance has served me
| very well.
| brailsafe wrote:
| Well, that's more or less what I was saying in a sense,
| though I'm a little surprised that anyone would prefer
| that experience to running outside, supposing it wasn't
| mid-winter. I personally would prefer to spend the money
| on snowboarding or something, or living somewhere without
| winter, or somewhere more interesting to run, but I'm
| sure there are circumstances that you favour living in
| that place for.
| CamperBob2 wrote:
| It sounds like you're fortunate enough to live in an area
| with good outdoor air quality. There are _many_ places
| where aerobic exercise without a good HEPA filter in the
| room with you is almost certainly a net negative for
| health and longevity.
|
| Also, as others have suggested, Peloton is really a
| social network... or at least they should think of
| themselves that way, if they want to make money. Arguably
| they shouldn't be in the hardware business at all. They
| are trying to run two radically different businesses,
| each of which is hard enough on its own.
| CamperBob2 wrote:
| You've never owned, or likely even used, a really good one.
|
| I don't know if Peleton makes good ones, but Precor
| certainly does. That said, it was weird of Peleton to
| overpay for a company that makes expensive fitness
| equipment purchased largely by gyms, who probably aren't
| purchasing much of anything these days.
| jacobmartin wrote:
| What makes a good treadmill good?
|
| Genuinely curious as I've (in my limited experience) only
| ever seen them intermittently used a handful of times and
| then forgotten about. My dad used to buy up used ones for
| a pittance for their motors which he used for hobby
| projects, and most of the time they looked unused except
| for some dust or dry rotting.
| brailsafe wrote:
| It's not a personally derived anecdote, just an
| observation. I just don't see people who aren't
| sufficiently motivated enough to go for a real bike or
| workout at a gym changing their mind because they
| consoomed a new $$ one. I do know some people who do, but
| they basically have no choice in the matter but to do
| something in winter.
|
| It's like buying an iPad pro and expecting yourself to
| find an interest in illustration.
| dlp211 wrote:
| You aren't just buying an indoor "replacement" of an
| outdoor activity. You are also purchasing a coach/work
| out buddy. It's this latter part that is the
| differentiator between a normal indoor trainer/treadmill
| and what Peloton sells.
| brailsafe wrote:
| Right, because treadmills are exactly a boring
| replacement for an outdoor activity, and you need to
| augment that to convince people it's different and you
| should consoom their version.
| elzbardico wrote:
| They may be boring for you, because you have your own
| experiences, your own inclinations, your own way of
| seeing stuff.
|
| It's perfectly reasonable to believe that there must be
| people for which treadmills are incredible.
|
| I like riding and running outside, sometimes really early
| in the morning when the sea is good for surfing. But I
| can understand people who would consider the few miles I
| have to run or ride to the beach utterly boring to ride
| or run a few days a week.
|
| Other than the different asshole drivers trying to kill
| me from time to time, there isn't much variety in my
| outside rides tbh. I can understand someone preferring
| riding a Peloton bike under nice air-conditioning, with
| their favorite music in the background, under the
| watchful eyes of their cat, while watching they kids
| playing outside.
| elzbardico wrote:
| People are motivated by the most diverse stuff you can
| imagine.
|
| Sometimes people watch a movie that makes them cry and
| they decide to learn guitar just like the girl with
| cancer in movie.
|
| Or they decided to buy a really expensive bike and now
| this is a big motivator for them to ride everyday.
|
| Or sometimes people live in a cold place, they are shy
| and have feelings of inadequacy and won't feel good in a
| gym where they think people will judge them.
|
| Or maybe they are from a minority and kind of don't feel
| welcome at the only gym in the backwards small town they
| live.
|
| Of course this is a personal anecdote, but I found in my
| life plenty of people who were never motivated enough to
| go to a gym, to learn surfing, to practice jiu-jitsu
| until they become.
|
| Change the environment, nudge a factor here and there,
| tweak an incentive here, and maybe you just did enough to
| motivate someone.
| jdrc wrote:
| I kind of agree it's time to depedestalize "tech"founders.
| Every company is a tech company and their bosses can be just
| as scumbags. The religion that worships infotech as
| inherently unevil and idealistic needs to die.
| FabHK wrote:
| Beautiful word you coined there, btw: "depedestalize".
| Maybe "depedestal" is enough, but at any rate, one knows
| exactly what's meant.
| olliej wrote:
| The fawning over Steve Jobs (and I don't mean apple coolaid
| folk) is always bizarre, and I think really drove a lot of
| the "super star ceo" nonsense these days.
|
| I'm not saying he didn't save apple or whatever, I'm just
| unconvinced that being that particular model of arrogance
| was necessary part of said "saving". Obviously we can't
| roll back time and replace him with an identical clone with
| the only difference being that he didn't shout at people or
| have personal vendettas against other people.
|
| I don't recall similar stories about Bill Gates, and yet MS
| clearly did well.
| scarface74 wrote:
| You mean you shouldn't admire a CEO who took a company
| from near bankruptcy in 1997 to the most valuable company
| in the US in 2011?
| esics6A wrote:
| Wall Street thought he was a loser too after we was fired
| as CEO of Apple and just another dumb founder and he
| should sell his company to IBM. This story repeats again
| and again. Steve Jobs proved them all wrong and now
| everything Apple does is brilliant and they should buy
| Peloton.
| scarface74 wrote:
| Jobs was never CEO during his first tenure.
| jdrc wrote:
| You should also admire the boy who took his dorm-gossip
| php script and made it the world's biggest media empire
| ChrisMarshallNY wrote:
| Steve Jobs was, quite likely, one of the biggest jerks in
| Silicon Valley history. I've worked with two people, over
| the years, who worked closely with (or directly under)
| him, at one point or another, and they both _loathed_
| him. I mean _serious_ hate. It was pretty shocking, as
| they were very calm, likable folks, otherwise.
|
| He was, unquestionably, a true visionary, though, and his
| obsessive, brutal management style, allowed him to
| implement his visions, with little interference. It
| reminds me of the "bad guy" in _Braveheart_ , Edward
| "Longshanks" the First. He was a complete bastard, but he
| also unified a lot of what is now Britain.
|
| Steve Jobs was also an outstanding persuasive speaker. He
| could not only convince you that the world was flat, but
| sell you First Class tickets, on a boat to the edge. The
| "RDF" was real.
|
| But so many people think that dressing, and acting, like
| Steve Jobs will somehow allow them to channel him _(see:
| "Cargo Cult")_. They get the "asshole" part down, but
| can't quite synthesize the "visionary" part.
|
| It's a bit ironic that Tim Cook is sort of the polar
| opposite of Jobs. It seems to me, that he's actually a
| rather decent chap (as much as any CEO can be).
| indigochill wrote:
| > I don't recall similar stories about Bill Gates
|
| I don't know about yelling and vendettas, but he has a
| checkered relationship with the open source/hobbyist
| community because he imposed proprietary licensing on his
| BASIC implementation despite the computer hobbyists of
| the time working more on a FOSS model. When hobbyists
| copied his software despite the license, he wrote an open
| letter claiming they were stealing from him. However, the
| rampant copying also meant Microsoft Basic became the
| most popular variant which solidified Microsoft's market
| lead.
|
| https://en.wikipedia.org/wiki/Open_Letter_to_Hobbyists
| TheRealWatson wrote:
| I think the point is more about people who worked with
| Gates not having that many bad things to say about him. I
| used to follow MSFT news very closely during the Gates
| era and invariably you'd hear stories how people at the
| company genuinely liked him.
| olliej wrote:
| I know plenty of people who argue about whether Netflix is a
| tech company - certainly their infrastructure is non-trivial
| but are they meaningfully different from HBO?
|
| For Amazon though, it's incorrect to refer to them as a
| bookstore - AWS is a huge portion of their revenue.
|
| On the other hand you have Google and Facebook that people
| call technology companies, but their core business is
| advertising.
|
| I think at this point "tech" in "tech company" doesn't mean
| technology, because otherwise surely Lockheed Martin,
| Raytheon, etc would surely be tech companies?
| sksksk wrote:
| I think of "tech" companies as companies where you've got
| large fixed costs to build out and maintain the product,
| but the marginal cost of your product is very close to
| zero.
|
| So Facebook and JCDecaux are both advertising companies,
| but only Facebook is a "tech" company.
|
| Lockheed Martin is a tech company, but Google is a "tech"
| company.
|
| I don't think it's a great term for that kind of company.
| kristopolous wrote:
| In spirit it's to take big bets on things that may not
| work; the transistor radio, the microprocessor. The
| eventual goal is to push forward something potentially
| for the social welfare such as say a logarithm table or
| star catalog in an earlier time.
|
| Companies like Uber or Netflix don't do this. They're
| platform for rent-seeking of services or durable goods
| (or perhaps call it "assisted living for people under
| 60")
|
| Tech investing (big bets in say, a new solar panel
| manufacturing technique) has really been replaced with
| very conventional investing that uses technology (a
| platform to say rent panels out and have the rental fees
| paid by the power sold back to the utility company).
|
| Sand Hill Road has lost its mojo. I'm part of the
| problem. The rentier multisource funding model sounds way
| more attractive to me then some technical way to reduce
| manufacturing costs by say 80%.
|
| Our minds have been polluted. We need to get back to the
| fundamentals and avoid the lemon squeezing extractive
| stuff. That's not how we move things forward and it's
| part of the reason many people have lost faith in
| capitalism; it's become too much a siphoning of the
| commons instead of a servicing to it. It needs a
| reorientation.
| scarface74 wrote:
| How is Netflix "rent seeking?" They pay up front to
| either license or produce shows.
| kristopolous wrote:
| It's an academic economic term. Economic rent isn't the
| same as the common term. Taking a back catalog of content
| and charging for the right to view is a form of academic,
| economic rent. Licensing models, such as a video store,
| are frequently used as examples of rentierism.
|
| I've got zero interest getting into one of those internet
| "debates" where a bunch of people extremely unfamiliar
| with concepts flex their knowledge to show me how "wrong"
| I am. No interest
|
| Have a good day and forget about it
| scarface74 wrote:
| > Rent seeking (or rent-seeking) is an economic concept
| that occurs when an entity seeks to gain added wealth
| without any reciprocal contribution of productivity.
|
| Are you really saying that Netflix offers no
| "contribution of productivity."? Or that they don't have
| any added value.
|
| If you had said that the 30% App Store fee is "rent
| seeking", I would agree with you.
| kristopolous wrote:
| Sorry, I've got lots to do today. Have a great day
| scarface74 wrote:
| Yes because you're the only person on the internet who
| knows economics
|
| FYI: I have an MBA that I never used...
| kristopolous wrote:
| Thus you show your hand. Your intentions are purely
| hostile, insincere, argumentative and spiteful. You've
| got exactly zero genuine interest. You are simply
| trolling. I've seen enough attacks in defense of
| ignorance to know not to play. This is my final reply.
| Further baiting will be ignored
| hvidgaard wrote:
| There is two sides to Netflix. One is the content side,
| which is much like HBO, and the other side is the
| infrastructure side, which without a doubt is a tech
| company. They could contract out their infrastructure and
| they would surely not be a tech company, but as long as
| they develop that, they are a tech company in my book.
| dagw wrote:
| Does HBO develop its own steaming infrastructure?
| scarface74 wrote:
| They use BAMTech, now owned by Disney.
| lancesells wrote:
| I think of tech companies whose main purpose is to sell or
| make software for businesses and people. Netflix is a media
| company. Tesla is a car company. Apple is both a consumer
| device company and tech company. Peleton is a fitness
| company.
| vishnugupta wrote:
| haha your comment reminded me of this incredibly well made
| video[1]
|
| The punch line "we are not a window blinds company; we are
| privacy company" takes the cake!
|
| https://www.youtube.com/watch?v=Hv6EMd8dlQk
| leathersoft wrote:
| Haha, damn, that's perfect!
| usrusr wrote:
| They are a realtime content company that just happens to use
| technology in the same way a tv station is not a theatre
| troupe. Did they ever try to give the impression of being a
| tech company?
| my_usernam3 wrote:
| CEO quote from the link....
|
| > which as a CEO of a technology company
| usrusr wrote:
| Heh, now they really convinced me that he need to be
| removed
| Cd00d wrote:
| I think they're actually a media company that happens to make
| hardware.
|
| The loyalty of their customers is a result of the high-
| production value streamed and recorded classes and the
| celebrity appeal of their instructors.
| swagatkonchada wrote:
| "tech company" is an obsolete term now. all companies are tech
| companies
| q-big wrote:
| > "tech company" is an obsolete term now. all companies are
| tech companies
|
| Just have an ear what many employees talk about at the water
| cooler or coffee machine:
|
| * technology (in the engineering sense): tech company
|
| * software: software company
|
| * something else: ... company (for example finance company)
|
| In other words: Is producing software the actual goal of the
| company or a means to an end?
|
| * If software is in the opinion of most employees the actual
| goal of the company: software company
|
| * Is software a means to the end of producing engineering
| products: tech company
|
| * Is software written for high-frequency trading: finance
| company or investment company
|
| etc.
| VoodooJuJu wrote:
| And HN eats it up because this company is on the front page on
| a seemingly weekly basis, so something's working for them.
| tootie wrote:
| Their stock dropped like 75% in a bull market. That's what
| gets the vultures circling. If the CEO was a weirdo who gave
| some bad interviews while the stock doubled we'd all be
| calling him an eccentric genius. It works for Elon Musk.
| thefrozenone wrote:
| > Seemingly admitting the lack of internal capability, discipline
| and experience, Foley is looking to outsiders for answers
|
| > Hiring McKinsey is a clear declaration of failure
| agounaris wrote:
| Excuse me but I don't see in there any reference to what made
| peloton stock "actually" explode which was the enforcement of
| wfh. This is a VERY biased deck.
| avs733 wrote:
| ...that's the point?
|
| they are making an argument for their point of view. They list
| specific actions and evidence to support their points. They
| don't claim to be 'unbiased'.
|
| The fetishization of objectivity and being unbiased will
| honestly be the death of the human species.
| pjmlp wrote:
| So this is the company that is supposed to rescue Stadia cloud
| services?
| aljarry wrote:
| Do I read the decks properly, or do they have only 2331
| subscribers for Q4 2021? This looks like a super low for such big
| valuations of their disruptive product.
| some1else wrote:
| 2,331 million
| a_humean wrote:
| That probably 1,000 scale. So the actual number is 2,331,000
| subscribers with a very small churn rate, which is enough to
| sustain that business and valuation.
| celticninja wrote:
| I'm assuming that is wrong. They laid of 2800 staff in Q1 and
| they all had subscriptions which were continued for 12 months
| as part of their severance.
| [deleted]
| dannyw wrote:
| Probably thousands.
| mprovost wrote:
| I rode in a live Peloton class yesterday that had more
| participants than that.
| nikanj wrote:
| But on par for Silicon Valley
| aixi wrote:
| hmmm, as a Peloton owner this would be a bit weird --- live
| classes tend to have thousand of participants, unless they are
| bots.
| Cyril_HN wrote:
| That's fascinating to see. Anywhere I can see other decks from
| different places?
| jalcazar wrote:
| I saw this a few days ago in Matt Levine's newsletter.
| esics6A wrote:
| Peloton just didn't wine and dine and wow Wall Street enough for
| them to consistently hype the stock and now it's the CEOs fault?
| Because he didn't create the "magic show" that Wall Street wanted
| to see? John Foley is a founder of the Peloton business and
| created value from nothing to a leading fitness technology
| company. Why should he have to justify anything he does to asset
| managers who have never created any value in their entire
| careers? Wall Street only destroys value and extracts they don't
| create anything.
|
| You're a founder and your business goes through a few rough years
| as you build the business and experiment? Wall Street says "quit,
| give up and sell". What a bunch of Wall Street hacks and they
| pushed out a perfectly good CEO, really sad. Just so the business
| could be sold off for a fraction of its' real value to some
| conglomerate to let it wither away and die.
| yakshemash wrote:
| Even though he is a founder, he kind of gave up part of his
| right of not having to justify anything on the day the company
| went public. And not by that much for that matter, as he seems
| to have a disproportionate voting right compared to other
| shareholders, and can still do pretty much what he pleases even
| after stepping down as a CEO. There is an option to be
| completely free from Wall Street's vagaries, and it's called
| not going public. Once you have taken in investors money, it
| seems fair to me to have to be accountable to them. The anomaly
| seems to me to be the other way round here, that people who put
| their money into the company and undeniably contributed to the
| company getting to where it is now have pretty much no say on
| how it should be managed. This lack of accountability might be
| one of the reasons why poor decision making went on unchecked
| and led to the current situation.
| roland35 wrote:
| Peloton does have a lot going for it. From everyone I've heard,
| their physical products are well made (with the exception of the
| treadmill issue..). They have extremely low churn which is hard
| to do in fitness.
|
| The main problem is that they grew too fast. All the pandemic
| sales were probably just pulled forward from future sales, not a
| sign of sustainable growth. They overcommitted and now need to
| trim back again.
| AndrewOMartin wrote:
| Agreed, apart from the fact that their treadmill kills kids,
| their products are exemplary.
| slingnow wrote:
| Exemplary? Have you even tried other stationary bikes? You
| can get a BETTER stationary bike for less than the cost of a
| Peloton bike.
| jonwachob91 wrote:
| Do you have any recommendations?
|
| Preferably one I don't HAVE to pay a subscription to use...
| fropie wrote:
| Heck, you can get a decent enough actual bike that you can
| actually ride places and a Wahoo Kickr for less.
| geodel wrote:
| I thought above poster was sarcastic.
| BoorishBears wrote:
| The fact you called it a stationary bike is kind of
| telling.
|
| There's two kinds of people:
|
| People who actually know what equivalents to Peloton
| hardware cost
|
| ... and people who think the hardware is overpriced
|
| -
|
| Powered slatted treadmills started at around $15,000 when
| the original Tread launched at $4,000
|
| Spin bikes _can_ be $200... they can also be well over
| $2000, and the Peloton has more in with the over $2,000
| models than the $200 Alibaba special.
| tootie wrote:
| That's part of the criticism. The investor group was upset that
| the CEO built up way too much production infrastructure for
| what should have been viewed as a temporary bump in demand.
| Peloton is very vertically integrated committed to a ton of
| capacity they don't need.
| klelatti wrote:
| Open question. How easy would it be for Apple to build a Peloton
| competitor from scratch? Are there any real barriers to entry?
| janekm wrote:
| From the pure technology point of view not too hard, but there
| are business and logistics challenges. Apple is highly
| optimised to hold minimum stock near the customer and use a lot
| of just-in-time delivery, but this depends on a high product
| value relative to weight and volume of the parcel. Treadmills
| and exercise bikes are only really cost effective to ship by
| ocean.
|
| It's also doubtful that the addressable market of an expensive
| treadmill or exercise product is large enough to be worth going
| after for Apple (even in the bumper year 2021 Peloton turnover
| was $4bil, not a viable business unit for Apple).
| jankyxenon wrote:
| The barriers are the investment in diverse, engaging
| instructors and developing a well integrated product.
|
| Neither are insurmountable for Apple, but then really given the
| amount of cash that Apple has - very few businesses are out of
| reach for them.
| sockpuppet69 wrote:
| enaaem wrote:
| They would probably make something like FitnessKit similar to
| HomeKit, so that your iPhone can adjust settings on your
| fitness device. Fitness device makers can then make apps to
| give you exercise programs and track your progress. It might
| already exist. I don't know.
| klelatti wrote:
| A bike that you can attach your iPad to seems like one way
| too. They probably don't want to make iBikeOS for a new class
| of iDevices!
|
| Seems to me that management bandwidth is probably the main
| issue given Apple's structure.
| pknomad wrote:
| I have my gripes about Peloton as a former employee (left back in
| November 2021), but this is just a hit piece. They're taking
| whatever facts that conveniently fits their narrative.
| jahlove wrote:
| anything specific you object to?
| polote wrote:
| It is the same thing over and over. Founders are praised when the
| company is growing, and the same founder for the same reasons are
| criticized when the company is not growing anymore.
|
| If the CEO is so bad, how did he manage to create such a valuable
| company while almost nobody on earth has been able to do it ?
| joekrill wrote:
| How? Luck, really. I think we give way too much credit to
| people for being "visionary" or talented when really the large
| part of their success is just luck (particularly around
| timing). For example, I think the situation with Peleton would
| look very different if it hadn't been for the pandemic.
| faeyanpiraat wrote:
| Yesterday's thread about this:
| https://news.ycombinator.com/item?id=30272154
| ghayes wrote:
| Seems a lot of people think this is a deck _by Peloton_ , not by
| Blackwells Capital. The title should be changed to clearly
| reflect that.
| dymk wrote:
| You'd think the first slide "PRESENTED BY BLACKWELLS CAPITAL",
| would be a tipoff
| 999900000999 wrote:
| "POOR DECISION MAKING: UNNECESSARY & EXPENSIVE OFFICE SPACE IN
| NYC"
|
| This whole report is absolutely scathing, but this particularly
| stood out to me. I've actually been in a similar situation where
| a CEO decided he was going to rent extremely expensive office
| space, in one of the most over the top pricey areas of Los
| Angeles, simply because it was close to his residence.
|
| This snowballed into other various stupid financial choices, and
| I was lucky enough to get out before the entire office got fired.
|
| This serves as a very good argument for fully remote companies.
| Get a corporate we work account for the extremely rare case where
| you need a physical presence.
|
| The brand is pretty damaged though. They had a short window where
| the Equinox crowd had nowhere to spend their exorbitant incomes.
| No shortage of cheaper alternatives exist. I suggest buying a
| used exercise bike and playing Eye of the Tiger on repeat for 30
| minutes.
|
| Infact if you don't have access to Eye of the Tiger you can just
| sing it to yourself.
|
| Eye of the tiger it's the thrill of the fight, saving money on a
| used bikes.
| dlp211 wrote:
| I think the idea is to have the office space near the physical
| studio. It's not completely irrational.
| ryandrake wrote:
| > I've actually been in a similar situation where a CEO decided
| he was going to rent extremely expensive office space, in one
| of the most over the top pricey areas of Los Angeles, simply
| because it was close to his residence.
|
| I've seen a CEO move an entire company's headquarters because
| he personally moved to a mansion on the beach, so now everyone
| needs to commute from the city across a single bridge onto a
| touristy beach peninsula every day just so CEO-man can walk to
| the office.
| fabian2k wrote:
| I get the impression they don't like the CEO very much. That was
| an impressively brutal attack on him, with probably the worst
| damage inflicted by the CEO's own statements.
|
| Blackwells is obviously not a neutral party here, there's a
| reason they created this thing. But on first glance it looks like
| a pretty solid argument that the management at Peleton is
| seriously flawed. I don't really buy the arguments on why Peleton
| is a good business and comparable to Streaming somehow.
|
| I do find the arguments around bad governance structures and
| oversight weird though, as those should have been known before
| they invested. Doesn't mean they're wrong, but obviously this
| didn't stop Blackwells from investing in the first place.
| mdoms wrote:
| > I don't really buy the arguments on why Peleton is a good
| business and comparable to Streaming somehow.
|
| The addressable market section is especially ridiculous. It
| looks at global wellbeing spending of $4.2T including $600B in
| fitness. That is not the addressable market for a device that
| is expensive, tied to a monthly subscription and takes up more
| floor space than a couch. That's not even the addressable
| market for running shoes, much less a fancy exercycle or
| treadmill.
| bla3 wrote:
| Matt Levine made the point that the CEO has enough shares to
| control the board, so the point of this deck was to convince
| _the CEO_ that he no longer wants his job. It worked: he
| stepped down, and PTON was up 5% on the news.
| usrusr wrote:
| Oh, interesting plot twist! And it makes so much sense,
| because if the potential buyers listed were the intended
| audience, the tone would seem a little condescending: too
| much "they might fall for it" badly hidden between the lines
| of "that would be a good acquisition for them"
| shmatt wrote:
| He's still the executive chairman, so the CEOs boss. The new
| CEO doesn't work for Pelotons employees or non-voting stock
| holders. He works to please John Foley and John Foley alone
|
| I worked for a company in a similar situation a few years
| back. The new CEO was fired in less than year by the old
| ceo/new chairman
| softwaredoug wrote:
| TBH the arguments are fairly compelling it should be a solid
| business. Maybe not valued what it is.
|
| Particularly the lack of churn on subscribers rings true. Their
| customers are loyal, they feel more part of a community, etc
| than your random Netflix subscriber.
|
| There's a large addressable market, as seen by Tonal and others
| coming into the fray.
|
| The counterargument IMO is that fitness is increasingly a
| fractured market between these home workout things, boutique
| gyms, budget gyms (Planet Fitness), fancier gyms, country
| clubs, people that just want to workout on their own...
| A4ET8a8uTh0 wrote:
| In my one of my MBA classes, we were discussing, whether
| Peloton's original super optimistic slides were reflective of
| reality ( most of the class agreed, it seemed more like a niche
| product rather than a gym replacement or even a $300 boutique
| training replacement as this presentation claims ) and were
| comparing it to AT&T Time Warner saga. We never touched on
| Peloton's management, but if we did, the quotes are pretty
| stunning.
|
| You absolutely do have a point about streaming, but the
| presentation argues that Peloton's assets may be valuable to
| some streaming services ( they are dying and fighting for
| content now ).
| jen20 wrote:
| > it seemed more like a niche product rather than a gym
| replacement
|
| I don't know, I have a peloton. I've never been in a gym in
| my life.
| DrBazza wrote:
| > it seemed more like a niche product
|
| Yes. The Peloton 'model' reminds me of the gym model, at
| least in the UK.
|
| You always get a bunch of people sign up in 'fat' January for
| 12 months. They go to the the gym for a few weeks and stop.
| But continue paying PS50pm or whatever for the next 11
| months.
|
| Peloton feels similar in that people are made to want the
| shiny thing in the TV adverts, find that they don't have a
| room with a view to put the bike unlike the adverts, use it
| for a few weeks, and then have to see out their subscription.
| I'm sure Peloton's insider numbers probably show a slower
| drop off, but I'd bet it's still there.
|
| There's probably a big intersection of those that have bought
| a Peloton bike as well as joined a gym but rarely used it.
|
| The free alternative of course, is go outside and cycle or
| run.
| dustymcp wrote:
| Being a cyclist All my life i never understood those bikes
| you dont get fresh air or the navigation fun of finding new
| ways to explore :)
| lghh wrote:
| My 2-cents on this as someone who owns a Peloton. Riding
| a bike is great but doing it for 30-60 minutes 5 times a
| week is a bit hard to do. We do most of our riding while
| our toddler naps. I certainly can't leave him alone at
| home to go bike. I don't live somewhere where it's safe
| to bike during the day, I certainly can't do it when
| visibility is anything less than stellar. Where I live is
| mostly flat, I can't get the type of workout riding
| outside that I can riding inside where I can more
| granularity control resistance.
|
| This doesn't replace riding outdoors, it gives you a
| consistent, reproducible, and flexible way to work out on
| terms that you can more easily control.
| spookthesunset wrote:
| It depends on the climate of where you live. Some places
| just don't have the right kind of weather year round.
| kawsper wrote:
| What weather would make your bicycle unrideable?
|
| I can only think of heavy snow if you don't have fat
| tires, or maybe sun and 40+ degrees celcius.
| mikestew wrote:
| PNW black ice. I've lost count of the number of times
| that I ended up on the ground with torn tights and a
| bleeding elbow, wondering what the hell just happened.
| Now if it is between 30F-39F, I'll just skip that ride.
| mdoms wrote:
| So yeah the two things you mentioned.
| jasonladuke0311 wrote:
| Drive around Denver for a day and observe all the people
| on cell phones swerving into the bike lanes. I wouldn't
| ride a bike around here at gunpoint.
| cercatrova wrote:
| It's right there in your house, you can hop on and hop
| off whenever you want, you don't have to finish your trip
| like with a regular bike where you'd have to bike back
| home. Lots of reasons, primarily being the convenience of
| it.
| tannedNerd wrote:
| As some who felt the same way but now lives somewhere
| with snow on the ground this of year it's nice to still
| be able to cycle without the freezing cold and ice
| patches.
| OccamsRazr wrote:
| Blackwell is engaged in activist investing. Their goal is to
| make profit by changing how the company is run. This deck is
| surely part of that campaign. Thus it may contain truths, but
| it also serves their agenda. Best to be understood in that
| light.
|
| > I do find the arguments around bad governance structures and
| oversight weird though, as those should have been known before
| they invested.
|
| Likely they knew and saw an opportunity for their investment
| strategy.
| akomtu wrote:
| I've got the impression that some big guys invested big money
| in Peloton, while its CEO with his buddies promptly sold off
| their shares while talking the talk about the bright future.
| The big guys are now trying to recover their investments.
| dijonman2 wrote:
| As someone who has been through many due diligence operations
| for either M&A or investment people lie out of their teeth when
| money is on the table.
|
| A lot of really good talkers make it up the ranks and those are
| the ones you will speak to.
|
| It takes a equally skilled but rarer archetype to navigate
| through the BS.
|
| My point is: it's a lot harder to find problems than you think.
| You find out the truth after close.
| jahller wrote:
| they obviously want to get a good ROI on their stock holdings
| and try to convince potential buyers that the company is
| amazing and just held back by their CEO (which definitely is
| not the only problem that Peloton has)
| notahacker wrote:
| Yeah. The problem is that the deck makes a more convincing
| case that the company is badly run than that Disney might get
| value from acquiring a loss making niche hardware company to
| distribute its content...
| IshKebab wrote:
| It makes the assumption that a buyer could run it more
| successfully. Which I think is fairly reasonable.
| bradleyjg wrote:
| There's a lot of room to be more successful and still
| lose money.
| notahacker wrote:
| I think it's reasonable to assume it could be better run
| (apparently the CEO, who's since stepped down, agrees!) I
| think the list of putative buyers who ought to be
| interested in it as a premium strategic acquisition is
| stretching it a bit.
| georgeecollins wrote:
| Dual class shareholder companies are a terrible idea. Even if you
| believe one person should have more control for the owners, does
| it really make any sense for that person's heirs to have more
| control? People only accept it because the management has power
| over short term investors (VCs, people who buy the IPO) and the
| long term investors-- pensions, mutual funds (aka little guys)
| get stuck with it.
| yoyohello13 wrote:
| Honestly I'm very concerned that my expensive bike will become a
| brick in the future if Peloton goes out of business.
| iamricks wrote:
| I got downvoted the other day for calling Peloton a Ponzi scheme,
| look at the "TROUBLING INSIDER SELLING AND PLEDGING" slides and
| the quotes like "We have built a team that I believe is ready to
| run a $500 billion company. Pick a number. A FAANG-style
| leadership team" that the CEO was making.
| jankyxenon wrote:
| You have to be clear if you're talking about Peloton as a
| financial investment or as a consumer product.
|
| As a product - there's real value there. If it's been oversold
| as an investment, that's a different issue.
|
| But millions of people are willing to pay $1000+ as an initial
| investment, then $40/month into perpetuity. With presumably
| good gross margin on both.
|
| That's a good business
| m4tthumphrey wrote:
| Maybe from an investment point of view but the product is still
| solid.
| T3RMINATED wrote:
| joshyi wrote:
| For sure lots of issues for peloton after those accidents with
| kids.
| rambambram wrote:
| Get a bike (or some walking/running shoes), go outside, and
| exercise. But since that doesn't require cool gear and apps...
| mysterydip wrote:
| Does anyone here actually use Peloton equipment? My spouse wants
| one of the bikes but I'm wary of having a subscription to a
| company with questionable future longevity.
| m4tthumphrey wrote:
| See previous response in another thread:
| https://news.ycombinator.com/item?id=30260468
| dymk wrote:
| Now is probably the best time to buy a bike, with the company
| down 82% since last year. Probably won't go much lower than
| that.
| jankyxenon wrote:
| Try to do a live spin class if you're not sure. Barring that -
| ride a spin bike.
|
| It's about as engaging as indoor cardio can be, but if indoor
| cardio is highly objectionable or boring for someone it's hard
| to get over that.
| dhaulagiri wrote:
| My wife has a bike and absolutely loves it.
|
| We've recently tried to purchase one of their treadmills and
| it's been a complete joke of incompetence actually trying to
| get it delivered. Combined with this news it does make us
| nervous about investing even more money into their ecosystem
| even though the bike experience has been so positive.
| catillac wrote:
| I absolutely love it. Tried it for a few days on vacation
| because the resort had a few, then started doing it at my work
| gym, then bought one. I was an athlete in high school and
| college and now in my 30s I've tried all kinds of aerobic
| fitness equipment over the years. It is the most immersive and
| exciting piece of fitness equipment I've ever used, and
| singularly the only one that has been able to keep my attention
| as a real option to train versus going outside and running or
| cycling. I have also heard very similar stories from
| colleagues.
|
| I think the people calling it a dumb treadmill or saying it can
| be replaced by YouTube and a used exercise bike are clueless.
| stefan_ wrote:
| This is a deck from a tiny activist investor that were angling to
| get rid of the CEO for a while. They are not "their investors".
| apollo1213 wrote:
| Direct link to view the pdf: https://docmadeeasy.com/v/656502559
| ltfey wrote:
| I don't know anything about Peloton or its management, but the
| main takeaway from this deck is something I already knew: (1)
| private equity guys are assholes, (2) who are obviously
| compensating for something inadequate three feet below the nose.
| nikanj wrote:
| How about we come up with a better way to insult men, rather
| than "hehehe peepee small"
| Aeolun wrote:
| We can call the thing two inch above the nose small? Or
| dysfunctional?
|
| I don't know, I don't necessarily agree with the message
| itself, but I certainly agree with the sentiment.
|
| Whoever made this deck is an asshole.
| ltfey wrote:
| nikanj wrote:
| Does your political affiliation change the size of your
| penis in any way? Why is it relevant here, aside from
| enforcing the age-old body shaming ideals that "big peepee
| good, bad peepee small, stupid man bad, bad man have small
| peepee"
| ltfey wrote:
| To be technical, I never said anything about size. I said
| "inadequate".
|
| Also, one can be opposed to patriarchy while, at the same
| time, pointing out that the men who run capitalism fail
| on their own archaic and patriarchal terms. That these
| self-asserted "leaders" fail at being what they
| themselves want to be makes it all the more probable that
| they fail at being what we in society want or need them
| to be.
| nikanj wrote:
| Sorry I misunderstood you. What did you mean by
| "inadequate"?
| ltfey wrote:
| It actually doesn't much matter. My point is that these
| people fail on their own terms.
|
| Fascism runs on a certain archaic masculine presence, and
| that is true whether we're talking about Mussolini's
| centralized variety, or the kind we see here where we
| live under the petty tyranny of a thousand employer-
| states. Toxic masculinity is at the core of old-style
| fascism and neofeudalist corporate capitalism alike.
|
| If you meet the men (and, yes, they're mostly men) in
| charge, though, they're all lethargic and unattractive
| creatures who never had to fight for anything. The system
| largely exists because they need to compensate for this
| fact--it exists both to elevate their appeal to women and
| to dimininsh that of male competitors. Pointing out that
| they fail on their own terms (old-style masculinity) is
| useful, because it discredits them and brings to mind
| questions about what they are really doing.
| nikanj wrote:
| It seems somewhat futile to say you were misunderstood,
| but then refuse to clarify.
| [deleted]
| [deleted]
| SyzygistSix wrote:
| "We had them almost defeated, at least on the cultural
| front, in the 1960s and '70s."
|
| Not even close. A relatively small amount of people with an
| outsize cultural influence were imagining a less stifling
| and less cruel world but it will take a lot more than just
| eliminating capitalism to do that, and nothing indicates
| that capitalism itself is the sole, or even main cause.
|
| "We have to remind people at every opportunity that, not
| only is capitalism not sexy, but its reason for existing is
| to funnel disproportionate sexual access to repulsive men--
| I'm talking 400-pound oil executives with body odor--who
| otherwise would be unlikely to get any."
|
| I assume it would be okay if said oil execs were fit, or
| women? As opposed to fictional non-elitist commissars? No,
| with attitudes like these, no one is any closer to
| curtailing the excesses or cruelties of capitalism and
| industry.
| kumarvvr wrote:
| Wow. That presentation is like an autopsy level of scrutiny and
| criticism. Many of the quotes look like they were taken out of
| context. I am not sure, but perhaps a bit more context than just
| the quotes would be fair.
| baybal2 wrote:
| What's up with a treadmill?
|
| Is it so special because it has WiFi?
|
| HN rules forbid shallow dismissal. I would only say, adding a
| WiFi to a random thingy is a weekend project for any engineering
| company i've worked in, in the most literal sense. Design
| injection molding enclosure, add relays, motor VFD, rpm sensor,
| wifi module, wire & screw together.
|
| I've done few project for sporting goods makers, and even no-name
| village factories in China with zero marketing probably ship more
| goods per months than this treadmill sell in a year.
| soheil wrote:
| I'm surprised by this claim "Attractive Lifetime Value Low
| churn". I thought the main reason Peloton was falling out of
| favor was the recent high churn numbers.
| WastingMyTime89 wrote:
| While I could think of plenty of adjectives to describe this
| deck, amazing would certainly not be amongst them. It's the
| traditional hit piece from activist funds. It looks pretty. It
| reads well without having to think to much because well, it's not
| heavy on substance. They want the company to be sold but they
| fail to present a convincing case for why it's the correct
| strategic decision.
|
| There is nothing on Peloton competitors, nothing on the market
| trend. They rightfully point that Peloton failed to properly
| forecast market demands but nothing on the future outlook and how
| Peloton production capacity and stock align with futur
| predictions. No real analysis of why the company which is
| profitable would be better able to produce value if it was bought
| out.
|
| My key takeaway from it is that Foley is bad at PR. Gosh, I hate
| this deck and I really hate what activist funds are turning
| finance into.
| remus wrote:
| It's interesting but I think it's important to take it with a
| huge pinch of salt. It's obviously designed as a hit piece,
| pushing their opinion the CEO needs to go, and as such is chock
| full of selective quotes and figures designed to paint one
| picture.
|
| ed: the top comment from yesterday says it better
| https://news.ycombinator.com/item?id=30272154
| brlnwest wrote:
| this was an interesting read. Never seen a doc like this before.
| s1mon wrote:
| From what I've heard, Peloton is spending way more than the
| retail price of the bikes to make them. There's certainly plenty
| of successful businesses that have some sort of loss-leader and
| then make up for it with follow-on products or services (e.g.
| game consoles and game publishing). However it seems like they
| were happily riding the huge growth in subscribers and revenue
| but not really managing costs in a way that it would ever be net
| positive.
| shmatt wrote:
| The fact is. Not every company can be a $12B company. Peloton
| might be a super successful $1B company, who slowly tries to
| creep into new areas for growth.
|
| And it sounds like Blackwell understand this, and instead of
| pushing for Peloton to focus internally on its product and get
| rid of the extra fat, they want a fast sale to a not-really-smart
| company. So they can at least get some ROI
|
| People talk about monthly fees being high or fair, thats not it
| at all, Pelotons prices for hardware and membership or completely
| fine. What they did do is
|
| * Pouring money into building their own factories (even Apple
| doesn't do this at their scale, they pay Foxconn)
|
| * Building a full fledged apparel brand
|
| * Hiring way too many engineers, FAANG level org size
|
| * Having their own warehouses and delivery full time employees
|
| No other company does this. I'm not sure what the long term plan
| was, maybe they become a white label manufacturer for other start
| ups? It failed, badly
|
| You do not need 14,000, or 11,000, or 3,000 employees to do what
| Peloton currently does (again, maybe they had grandiose plans in
| the pipeline). If we want to compare proprietary hardware +
| Android + online streaming service. When MIRROR was bought out by
| Lululemon for $500M, they had 200 employees
|
| I have a feeling no one has offered Foley more than $3B for the
| company, and i'm being generous
| missedthecue wrote:
| Why would Blackwell buy into a $12B company in order to make it
| a $1B company?
|
| It might make peleton live longer but it would lose a lot of
| money for their LPs
| toomuchtodo wrote:
| From Matt Levine's Money Stuff piece on this:
|
| > In a sense, the pitch here is straightforward. Blackwells
| does not think that Foley is very good at running Peloton.
| The stock market does not think that Foley is very good at
| running Peloton, in that the stock is down 80% from its highs
| last year and spent last week below its 2019 initial public
| offering price of $29. (It's up today.) And Foley does not
| think he's particularly good at running Peloton, at least if
| you believe the quotes that Blackwells selected here. If
| someone else takes over the day-to-day running of Peloton, or
| the process of selling it to a better owner (and Blackwells
| is also pushing for a sale), then Foley will have more money
| (because he owns a lot of Peloton stock) and also more free
| time (because he's not running Peloton). It is no fun to do a
| job that you're not good at, particularly when doing that job
| costs you money. If you can get in a room with Foley, or just
| lob a PowerPoint deck at him, and explain "hey, everyone is
| mad at you, you're not having fun and it's making you
| poorer," that's fairly persuasive and maybe he'll listen. He
| did!
|
| Sidenote: I suggest subscribing to Money Stuff. It's a free
| email newsletter, and Matt's writing is stellar.
| shmatt wrote:
| Why did any shareholder buy into the hype? When Peloton
| decided building their own personal factory in Ohio was a
| great use of money, their shareholders and fans cheered about
| how great idea it was. We're getting healthy and helping
| unemployment in the rust belt! Same for having a full time
| Peloton employee drive the bike to your home
|
| Those decisions made absolutely no sense financially, and
| were immediately shut down once the CEO changed. But when
| they were decided Wall Street was cheering them on
| dlp211 wrote:
| The factory part aside, white glove delivery is not unheard
| of in premium offerings of various items. It makes perfect
| sense to have white glove treatment for the delivery of
| Peloton devices, and you can almost always guarantee the
| customer interaction is better when your employees are in-
| house instead of contracted.
| shmatt wrote:
| Peloton is far from the only expensive product being
| shipped coast to coast. You let someone else do the work
| for you. I'm going on a whim and guessing that a Tesla
| being delivered to your door, is not delivered by a full
| time Tesla employee
|
| And to double down on that - starting 2 days ago,
| Everyone receiving a Peloton will receive it from a non-
| employee
| dlp211 wrote:
| Peloton does not use FT employees to deliver everywhere
| in the US and I know for a fact that their first-party
| delivery is a far better experience than when you get
| third-party delivery.
| ranrotx wrote:
| Their apparel brand is a joke. It's run by Foley's wife. Unless
| I messed something, what experience or qualification does she
| have in apparel?
|
| Never mind the fact that I've maybe seen only 3 people in the
| real world wearing anything that is Peloton branded (no, the
| free Century t-shirt doesn't count).
|
| Personally, I find their apparel to be a little loud and
| obnoxious, but that's just me. As a consumer, I don't see what
| value they bring to the apparel market. Nothing new, just
| branding.
| mvkel wrote:
| Any clothing with a logo on it is nothing new, just branding.
| Nike does pretty well.
| 908B64B197 wrote:
| Apparel makes sense.
|
| It's very high margin and the company is in a great position
| to market to fitness conscious people. But I don't see it
| ever being more than a side business.
| sharkweek wrote:
| Just for a counterpoint, as commented in a previous thread,
| my partner and her friends are obsessed with the culture of
| peloton and they all wear a considerable amount of peloton
| clothing. It's been a predictable gift given among her
| friends over the last 2-3 years.
| mdoms wrote:
| I just took a look at Peloton apparel and I don't see how you
| could class it as "loud and obnoxious". Most of it looks like
| pretty generic branded fitness gear. If anything it's
| especially understated compared to the competition.
|
| Considering how strong the brand is I think apparel is a
| genius idea for growth. It has just been mismanaged due to
| nepotism.
| tqi wrote:
| The HN crowd is always quick to point out that Peloton has no
| moat - its just a screen on a bike. Creating a lifestyle
| brand (ala in person fitness brands like Soulcycle or Barrys)
| is a way to address that moat, and apparel is a core part of
| that.
|
| Whether or not they were successful is an execution issue.
| ss108 wrote:
| How would having a lifestyle brand create a moat? How would
| you define "moat"?
|
| (Genuine questions, I have no position on the issue and no
| real knowledge in the area)
| PaulDavisThe1st wrote:
| IIUC, the classes/instructors are the moat.
| pedalpete wrote:
| I don't think the "building their own factories" is as cut and
| dry. Here in Australia, many of these small to medium sized
| businesses do their own manufacturing in house. I believe it
| depends on margin and volume.
|
| The examples I'm referring to are Rode Microphones, Cochlear
| hearing aids, and ResMed CPAP machines, are all manufactured in
| Australia (though I'm not sure all of their world-wide
| manufacturing happens here, they could have other factories).
|
| Would love to get the feedback from people who may have any
| idea in where and why it sometimes make sense to do your own
| manufacturing.
|
| My issue with Peleton has always been that the cost for a
| stationary bike is more than the cost of my road bike, and
| about the same prices as my mountain bike. From my user name,
| you may be able to tell... I ride, but how many people want to
| spend the kind of money Peleton is charging to ride indoors?
|
| They got the early adopters who were willing to pay the price,
| but they may have run out of consumers. I know of a few people
| who LOVE their Peleton, I don't know of anybody who doesn't
| have one that wants one.
| PaulDavisThe1st wrote:
| > I know of a few people who LOVE their Peleton, I don't know
| of anybody who doesn't have one that wants one.
|
| Bingo. The growth opportunities at this price point seem to
| be close to zero. Move the price point by a factor of 5, and
| maybe ( _maybe_ ) that changes.
|
| Meanwhile, you can pry my Racermate Computrainer from my
| cold, dead hands :)
| Animats wrote:
| _Pouring money into building their own factories (even Apple
| doesn 't do this at their scale, they pay Foxconn)_
|
| Is it possible to run a manufacturing business in the US
| without slave labor somewhere?
| parasense wrote:
| > Hiring way too many engineers, FAANG level org size
|
| Ahem... that's now FAAAN (facebook, apple, alphabet, amazon,
| netflix)
|
| I'm sorry, I hated to write this, and for what it's worth I
| didn't know what you meant by FAANG... had to look it up only
| to find the term has fallen from use.
| Avery3R wrote:
| Don't you mean MAAAN?
| dixie_land wrote:
| or MAANA
| dr_zoidberg wrote:
| You're missing Microsoft: MANAMA
| thehappypm wrote:
| I think Netflix should be removed, MAGA.
| ninjaz wrote:
| They have virtually no experience on their C-suite in managing
| complex logistics problems. The people they hire from FAANG are
| mediocre middle managers who then get titles like VP or SVP.
| They are trying to scale too fast to keep up with their
| valuation, without a clear vision.
| helsinkiandrew wrote:
| Interesting to note that the CEO (39.6%) and co-founders (18%)
| have 58% of the voting power of Peloton's stock.
| sireat wrote:
| The sad thing is that they own much less(how much?) than 58% of
| the stock.
|
| Just like FB, Google and many other companies. You can sell
| majority ownership and still hold the majority voting power due
| to dual(and triple) class shares.
|
| This is a perversion of common stocks and stockholders rights.
|
| In old days there would be such a thing as preferred stock
| which at least granted liquidation preferences to those buying
| preferred.
|
| I am still shocked that the CEO actually listened to the 5%
| holders and stepped down.
|
| As Matt Levine rightly stated, Peleton CEO could have let the
| company burn to ground and there was nothing that minority
| stockholders(which could have owned the majority of the company
| but not the voting rights) could do.
| mannykannot wrote:
| > This is a perversion of common stocks and stockholders
| rights.
|
| It is a step in the refeudalization of society.
| helsinkiandrew wrote:
| > The sad thing is that they own much less(how much?) than
| 58% of the stock.
|
| The 'special' shares have 20 votes per share - could be as
| low as 3% of the company. It's hard to see why anyone would
| invest in a company where someone who was deemed incompetent
| to be CEO but still has a massive control of the board.
|
| https://www.bloomberg.com/opinion/articles/2022-02-08/peloto.
| ..
|
| I wonder if this will be a big issue for companies that look
| floundering and whose CEO/Founders are seen to be unable to
| control it - I've seen a few articles about Zuckerburg not
| being the right CEO for FB/Meta anymore (he also has over 50%
| of the votes) - if their share price did a few more 25%
| drops...
| m4tthumphrey wrote:
| This is probably the most interesting PDF I've ever read. As a
| Peloton member, I never really gave much thought into how the
| business side of things ran - I just really enjoy the product.
|
| Seeing $PTON so low surprised me as I haven't really been
| following the news much. I just bought some shares.
| scarface74 wrote:
| I wonder how Peleton imploded while iFit (owner of NordicTrack
| and other fitness brands) has been humming along for years
| offering the same hardware+ streaming combination.
| justanother wrote:
| iFit unfortunately is not humming along. Amid plummeting home
| fitness equipment sales (particularly bikes), they postponed
| their planned IPO, laid off tons of people including engineers
| in December, and at their current burn rate, they either need
| to find new capital, slash costs to the bone, or be acquired.
| The situation there is not as dire as Peloton, but I wouldn't
| be surprised if they got acquired by end of year.
|
| The main strategic error that both companies made, was to
| assume a certain level of permanence when home-training
| equipment sales exploded during the beginning of the COVID era.
| People are now (rightly or wrongly) returning to gyms and
| buying less home stuff.
|
| I'd love to see the same company acquire both Peloton and iFit,
| and hopefully preserve iFit's library of high-production-
| quality workouts and charismatic trainers and perhaps combine
| it with Peloton's charged competitive live workouts.
| aeyes wrote:
| There are a lot of pages showing how management enriched
| themselves by selling shares and because of their RSU policies.
|
| But the whole purpose of this presentation is to get them to sell
| the company at 75$. On the most basic level this looks to me like
| this investor is salty that they didn't sell when the share price
| was high and now they want to get some of their losses back. Or
| is their argument that the CEO made false promises? You don't
| have to listen to him, the balance sheet is all you need to make
| your decisions.
| say_it_as_it_is wrote:
| This is yet another chapter in the long series of stories about
| investors who destroy the goose that lays golden eggs. The
| analysis is a "well, what did you do for us lately?" that
| disregards unsustainable, explosive growth in 2020 and an obvious
| correction 2021.
|
| Putting con-imbeciles on a board is a recipe for disaster.
| treyfitty wrote:
| I'm in awe of how many different sources a person had to sift
| through in order to get all this data. Is there software in this
| space? My naive sense is that it took months to get this deck
| together.
| danielecook wrote:
| Maybe something like this?
|
| https://www.devontechnologies.com/apps/devonthink
|
| I haven't used it personally but I think it could be used for
| this type of research.
| abliefern wrote:
| Well sure that's what analysts at these funds do, continuously
| keeping a very close eye on portfolio companies. Also: entire
| teams of interns.
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