Peloton Is Worth $4 Billion - And What Does That Have To Do With Us

Posted February 25, 2019

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In 2012, John Foley, an e-commerce executive at Barnes & Noble made an inteesting observation.

His in-person exercise classes at the gym were a whole lot more rewarding and fun than when he was working out alone at home.

He wanted to figure out a way to bring the 'feel' of the class into his home work outs.

With an initial investment of $400,000 and a series A round of $3.2m, he founded Peloton. The idea behind Peloton was simple.  You could particiapate in group classes from your home by being connected, via a screen and a video camera on your home work out bike.  You would feel as if you were in a class, with an instructor leading you, but you would also get to know your classmates. And, it would happen in real time. It was as much a social event as a workout. 

The concept worked incredibly well. Today, the company, only 7 years old, is valued at $4 billion and still growing fast.

What Foley discovered is what we would call 'connectivity', the sense of being wiith other people, of belonging to a group.  

No one likes to work out alone (or eat alone or study alone or do anytihng alone for that matter). Foley was able to marry video streaming technology to exercise work outs and solve the 'alone' problem without the need for physical real estate (or asking people to drive to a gym at a specific time).  Now, with Peloton, you have all your friends and your gym class in your bedroom (or living room or wherever).

It was a seminal discovery.

But what does it have to do with us?

The advent of 5G is going to change everything. It is going to 'Peolotonize' the world. 

Quaalcom CEO Stephen Mollenkopf says that 5G is going to rival electricity for the impact it is going to have on society.   

5G will not only allow super fast downloads - you will be able to download the entire movie Roma in 3 seconds, it will also allow astonishing real-time connectivity. That is, you will be able to be in a virtual room with many other people, all sharing a real-time experience.

This is what has made Peloton so successful so fast. They were there first with exercise bikes.  (They don't use 5G yet, they are hard wired, but the concept is the same).

What Peloton discovered for working out is going to be applicable to pretty much every human activity from school rooms to dining out to game playing to social events and so on.  

And all of it, all of it, is going to revolve around real-time video.

And video is what we do.