Can Peloton Kill Gyms? (NASDAQ: PTON)

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We’ve loved the feedback over the last week with our latest two episodes on Roblox and Fintech ETFs. If you want to see us deep dive with more guests, let us know! We’re heading in for a wet summer here on the east coast of Australia and have been deep in HBO’s Succession as a way to keep us entertained during the wet weekends.

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As always, we’ve released two podcasts this week:

In today’s newsletter:

  1. Peloton and Jobs to be Done
  2. Portfolio Updates

Source: Financial Times


Peloton and Jobs to be Done

Peloton has landed in Australia! Want to guess where they’ve opened their first showroom? You probably guessed it - it’s in Bondi. The famous US fitness company has made its way to the lucky country in an attempt leverage its playbook to capture the fitness market here in Australia.


The fitness market in Australia is incredibly competitive and Peloton is competing with a range of players including:

  • Technology enabled fitness players - these are companies like Peloton who have created hardware such as Lululemon’s Mirror to offer home workouts integrated with their hardware. These players are the direct competitors to Peloton
  • Home fitness apps - Players like Sweat (made by Kayla Itsines) and Centr (made by Chris Hemsworth) leverage influencers or celebrities to sell fitness subscriptions to home workouts. Other players such as Adaptiv Fitness offer a variety of classes, and even players like the Australian Defence Force have their own fitness app to engage users in ADF-like home workouts
  • Social media led workouts - There are thousands of YouTube channels and Instagram accounts offering short (and long!) videos, tutorials and workout routines to follow, all free of charge
  • Gyms and gym classes these come in many shapes and forms including speciality and boutique gyms such as Barrys and F45, Crossfit, climbing gyms and traditional weight and exercise gyms
  • Playing sport or going for a walk - the ‘low tech’ alternative to working out: just going for a walk, kicking a ball around or exercising in the park
  • Your couch or bed - Yes, Peloton is also competing with inactivity

It’s incredibly important to think about this broad competitor set for Peloton because of the jobs-to-be-done framework which we’ve written about before. As a customer, you are looking for a way to stay fit, healthy and active and there are a number of ways you can do this. The challenge with Peloton is not only competing with this broad competitor set, but also competing with the decision not to do something.

Generally with any job-to-be-done, you need to get the job done (hence the name). But with something like fitness that is so routine based and dependent on fitness become something you have time and energy for, you’re also competing with the choice to not do anything. Peloton is also competing with the decision to watch tv or sleep in an extra half an hour.

This lies the danger with Peloton as they look to scale globally. They have shown strong growth and are offering valuable content to their subscribers. They have a premium brand but they are competing in an incredibly saturated market with a large spectrum of of customer motivations (people have different workout goals and reasons for exercising).

As Peloton continue their entry into Australia, it’ll be interesting to see how they compete, particularly as the country continues to emerge from the lockdowns and further reduce restrictions - do people still want to be working out from home?

If you believe this vision, then Peloton might become one of the biggest companies in the world.


Portfolio Updates

Just one update today - we’re discussing Mesh for Teams by Microsoft.

As more and more companies push into the Metaverse, Microsoft this month released their vision for the Metaverse - Mesh. If you think about it - enterprise is one of the best use cases for the Metaverse. We all spend hours a week on video calls on Teams or Zoom, but online collaboration is not as seamless as in-person collaboration (yet).

Mesh is solving for this by creating an online environment where users can ‘feel like they’re all in the same place’.

There’s a lot of speculation that Microsoft will be one of the major winners in the Metaverse, particularly in the enterprise space. If you believe this, they may be a hot company to look at closely.

Closing Remarks

Our latest episode on Peloton dives deep into the hardware, their subscription business and their high production quality classes - definitely check out the latest episode here!

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