Unconventionals Podcast | Season 6 Episode 1

Peloton and the Fitness Experience That Won’t Quit

Peloton is becoming one of the hottest brands in fitness, and it all starts with an extraordinary experience.

Stripped down, the company sells you a cycle in your home and spinning classes delivered through the internet. But it adds up to something new and different: an addictive fitness regimen that almost no one who starts wants to stop. In this episode of The Unconventionals, we talk to founder Tom Cortese to find out how Peloton got there. The company stitched together several business models—talent management, logistics, software, hardware, internet content—to deliver an experience that makes you “want to want to work out.” Peloton has also figured out how to engage their “crazies”—their most loyal customers—to spread the word and grow the business. There is a tribal, family element that gathers around each Peloton instructor, to the point where many fans have opened Facebook groups for their favorite coaches and many coaches have their own clothing lines. You’ll hear the customer perspective directly from PJA’s own Jeff Porzio. He’ll help us understand how the company has earned a Net Promoter Score of 91—we can’t find another company that comes close.

Video Highlights

PODCAST TRANSCRIPT

Jafeela Lahey:
Next, on PJA Radio's, The Unconventionals.

Tom Cortese:
We have about 10 riders who have sent us photos of the Peloton corporate logo permanently tattooed on their body, sometimes right along with their user name. This has become a real part of everyone's everyday life.

Mike O'Toole:
That was Tom Cortese, co-founder and chief operating officer of Peloton. We talked to Tom at the Peloton headquarters in New York City. Peloton is, and I'm quoting the company here, a world-class studio cycling experience in your home. Now if I strip it down to its essentials, Peloton customers buy a bike, and they pay a monthly subscription that connects them virtually to 12 instructors in all the spinning classes they need. But, honestly, these descriptions don't really capture the company. What makes Peloton unconventional and tattoo-worthy is the experience the company has created. It's a different, more addictive way of getting fit. Peloton found a gap in the market and put together a business that is part fitness company, hardware maker, media, software, logistics, and Tom made sure that I wouldn't forget logistics, and talent management. No they figured out how to harness the energy and passion of their fans and we like to call them crazies, who are happily spreading the word on Peloton, because of what the Peloton experience means to them.


A word about crazies, for full disclosure Tom wasn't completely comfortable with the term, and I get it. Crazy can be pejorative, right? As in clinically insane, or out of control, or destructive. That's not what we mean. Crazies in the Unconventionals world are people who take a risk, try out a company who's doing something different and convince others to do the same. Companies like Warby Parker, GE or Peloton, are successful in large part because they figured out how to make common cause with people who love what they're doing. We'll talk to Tom about Peloton customers, but we also wanted to hear about the company directly from a user. We didn't have to go far. In fact, I first heard about the company from people here at PJA. Jeff Porzio run digital operations for us, and along with his wife, he's a Peloton customer. Yeah, he's a little crazy. He doesn't have tattoos, but Jeff recently went to New York City on his own dime to join a Peloton class in studio, and he calls this a pilgrimage. So, if you were going to introduce Peloton to me, or to a friend, what would you say?

Jeff Porzio:
Shit man, you know it's hard to define Peloton in a way that I think everybody who uses Peloton would agree on. For me, personally, Peloton is an experience, an accessible experience that allows me to really focus on my health. It's more than on online spinning class. It actually bothers me when people kind of synthesize it to that. Yeah, there's a bike, yeah it's powered by the internet, it's connected, but it's way more than that for me. It's really fueled by the community that participates in it, as well as the personalities, and the instructors that guide it.

Mike O'Toole:
Tell us about a memorable ride or two that you've had.

Jeff Porzio:
One ride that sticks out to me, and it happens to be my highest number that I have yet to beat, and it was the day after the election. It was the morning after the election. It was that Wednesday morning.

Mike O'Toole:
I remember it well.

Jeff Porzio:
You know, without even really being conscious of it, like I destroyed my 45 minute best. Another ride that was pretty memorable for me was actually with my favorite instructor, Alex Toussaint, that's my guy. I didn't even realize it was my 50th ride. A lot of people keep track. I didn't realize it was my 50th ride until he called it out about half way through the ride "Jeff Porzio in Boston, keep doing your thing man! I like that!" It's a shot of adrenaline. At that time, there was maybe 600 people in that particular live ride, and that kind of recognition is extremely motivating.

Mike O'Toole:
How do you like characterize yourself? Are you like a super user? Are you a middle of the road guy?

Jeff Porzio:
I'm definitely not a super user. The super users on Peloton, they are another level.

Mike O'Toole:
Fifty rides, though, and you sound a little-

Jeff Porzio:
Fifty rides and growing. You know, like I'm riding more often every month since I've purchased the bike. So, I'm confident that however long it took me to get to 50, it will be less than that to get to 100. I feel life I'm a middle of the road guy, you know father of two. Just trying to do something for my health, not trying to join a Tour de France team, but having fun and participating in a community that I have come to really enjoy and respect.

Mike O'Toole:
Some of my favorite moments from The Unconventionals are when I've talked to founders about getting funding early on. What makes The Unconventionals interesting is they figured out something new. A new way to meet a gap in the market. New means untested and risky, and funders like to invest in proven models, so there's tension there. As much as the fitness market is crawling money and business, there are gaps everywhere. We join gyms we don't use, we have fitness trackers that don't talk to each other. The bottom line, we don't exercise enough, and we aren't fit enough.

Tom Cortese:
My wife and I have two kids. John Foley who's CEO and founder, same wife and two kids. We live in New York City. We work a ton, but we want to see our kids, we want to love our families. We want to do the things that you're here to do in life. What you find is there's not enough time for fitness. You see this happening for folks all across the country, all across the world. It's tough to get to a gym. If you leave the city and move to the suburbs, some of the best instructors don't necessarily come with you. So you have a convenience problem, you have a cost problem and a you have a talent problem. We thought, well if you take everything that we've learned about the magic about the connected internet, the connected world that we have today, and we applied that to fitness, can't we have a better, more convenient, more engaging product? That's sort of how Peloton was born.

Mike O'Toole:
Fetching multiple insights there, right? So it isn't just about it's convenient 'cause it's in your basement, as opposed to the gym a mile away or a couple of blocks away. It's also about the talent. So that makes you an interesting business, but tell me about when you told that story in the beginning, especially for funders, what were those conversations like?

Tom Cortese:
We got tons of interest. A lot of folks would say to us, "When you build it, I want one." Or "Yeah, you know, I had the same idea." Something I think a lot of folks run in to. I think the trouble was, a lot of people had a difficult time wrapping their head around, how are a bunch of consumer internet software people who are building this company, going to go and develop the many verticals required to pull all this together. Right? So we are equally a media company, a talent management company, a software company.

Mike O'Toole:
Equipment company.,

Tom Cortese:
Hardware company, yeah, and a logistics company. We happen to have a retail footprint as well as an e-commerce footprint. Any one of those things could be someone's entire business. We were going out to the investor community saying "Don't worry. We can do them all." People just said, "I'll believe it when I see it."

Mike O'Toole:
Was there advice like, "Hey great idea, but lose the bike. Don't try to do the bike." Or "Forget about the monthly subscription." Like what kind of advice were you getting?

Tom Cortese:
Of course, nowadays it feels like a lot of folks want to invest in a pure software play, so like why not be the cable company fitness media, why not create the pathways to move this content all around to other people's equipment, beaming out of someone else's studio. We thought about it and it seemed like not a terrible path to pursue, and we did. We were open to how are we going to piece this together in the beginning. So we went to some of the top fitness companies and tried to pitch the idea that way. We went to some of the top equipment companies, tried to pitch the idea that way, and it turns out that all those folks thought we were equally crazy. They all slammed the door in our face as well.


On top of that, there wasn't really any piece of equipment out there, especially in the indoor bike category, that was a clear winner. There certainly wasn't any that had the type of interconnectivity that we were seeking. There certainly wasn't any that had the type of tablet computing that we were seeking. We wanted the same experience that you have on your iPad, and the fitness industry just wasn't doing any of that. So there wasn't an existing hardware platform. There wasn't a content platform. There wasn't a fitness company out there that was daring enough to partner with a bunch of busted dudes who had a good idea. So, slowly but surely we sort of realized, we just have to do this on our own. We have to do all these pieces in order to make the great experience, and it was the best decision that we made.

Mike O'Toole:
'Cause you control all the elements of your success, I suppose, right?

Tom Cortese:
We control the end to end user experience. That's what's important. We think about crafting an experience for you in your home, we don't think about creating a piece of equipment. We don't think about creating software. We think about what's it like to wake up in the morning and want to work out? How can I make this enjoyable? How can I have a fun start to my day? By crafting a bike that is designed for your home. We were able to think about the home user. We were able to think about ... I was able to think about my kid sleeping in the next room, and you know, we live in New York City so I was able to think about the woman who lives the apartment below me, who doesn't like when I make too much noise. Then you extend beyond the equipment, now to the software. It needs to be an easy process to get through. I'm not building this for-

Mike O'Toole:
Your IT guy.

Tom Cortese:
Exactly. We knew that if we could just look at that end to end user experience, for us, we were sort of the primary user, we knew that we could craft something that didn't yet exist.

Mike O'Toole:
So it really was based on you had an idea of an experience, and then that meant you were going to be in a bunch of different businesses.

Tom Cortese:
Exactly.

Mike O'Toole:
As an aside, there's a clue here to finding a Darwinian gap for your own business idea. Define a unique experience and don't be afraid to stitch together different business models to make it happen. It's like what Rachel Shechtman has done at STORY in New York. She wanted to use retail to tell stories, which meant she was creating a store mashed up with a gallery combined with a magazine. That's what makes her business so interesting. As for the Peloton experience, it can be a little hard to capture exactly what it is, and you heard that in Jeff's pauses. I asked Tom to define the experience, and he said "It's designed to get folks to want to want to work out." He acknowledged that that was a little bit of a funny phrase, but he's on to something, because think about it. Getting fit and being healthy are consistently the most common New Year's resolutions, and for many of us, 43% according to one recent survey in England, those resolutions last less than one month.

Tom Cortese:
Sometimes when we talk about this I like to rewind it back to 1980. (music playing) If you look at fitness content of yesteryear, it was great. I know it was great for my folks when the first VHS tape from Jane Fonda came out, that they were able to put in their VCR and do their aerobics class at home. What's interesting is that the content side of fitness, for home fitness, really hasn't evolved from that moment in 1980. What's happened is it's changed medium. So it's the same content from VHS to DVD. They probably got a laser disc at some point, to streaming apps. Now you can probably get it on your smart TV, right?


So it's changed medium over time, but it hasn't morphed into something more and hasn't adapted to the capabilities of today. So, what we hone in on is the ... we see ourselves as the first modern interactive media company. Period. So you've got this massive HD video of the live instructor. It's a real, live, raw, energetic class coming from our studio here in New York City, broadcast to homes everywhere. So you see the folks in the front row. They're not actors, they're not staged. They want to be there. They paid to be there in our studio, to struggle along with you, and you see that Jess King starts her ride with a face full of makeup and 30 minutes into a 45-minute ride, she's a hot sweaty mess. There's a big guy on the front row who's hunched over, feeling the pain, and you feel his pain, and maybe Jess King shouts out to me and says, "Hey Tom in Brooklyn. Thanks for being here for the third time this week. You're nuts."

Mike O'Toole:
Yeah.

Tom Cortese:
People hear that shout out and it's an immediate connection, seeing the people stream through the leaderboard, seeing their user names, their pictures. As you start to take the same types of classes, day after day, week over week, you start to see those same names, or same faces, you start to build this whole fitness community that you didn't have before. It's in some ways a support group, in some ways a competitive fitness group to pull you along. Kind of however, whatever suits you, whatever motivates you. We're consistently working on new features to bring more interactivity and more connectiveness to the experience. (music playing)

Mike O'Toole:
Give me your best Alex, like Alex is in your head. He's-

Jeff Porzio:
Oh he's (clapping) "Look good, feel good, do better!"

Mike O'Toole:
Coming up, find out why Peloton thinks it has the 12 best spinning instructors in the entire world. (music playing)

Jafeela Lahey:
You're listening to The Unconventionals, a podcast produced and distributed by PJA Advertising. We're always on the hunt for great business stories. Not about share price, or scale, but the element of surprise. To find out how to apply the best practices and behaviors of companies like GE, Warby Parker and Big-Ass Bands to your business, visit our website agencypja.com. For academic sponsors, a center on global brand leadership at Columbia Business School, which turns the research of academia's foremost thinkers on branding into practical tools and insight for real world application. Learn more at globalbrands.org.

Mike O'Toole:
Jeff, let's talk about the talent. Tell me about your favorite instructors.

Jeff Porzio:
So when I first got my Peloton bike, I started like I would imagine like everybody else. You start with the beginner rides and you start to try different teachers and see what the different personalities and the different styles are. I didn't get very far before I found Alex, and Alex is my guy. Alex Toussaint; he's my man. Shout out to Alex if you're listening. His style just matches my style. His music selection kind of matches my very eclectic but rooted in hip hop music style. Yeah, I've just kind of become exclusively this Alex guy that over 90% of my classes are Alex, but when I went to an in studio ride, because of personal scheduling issues, I couldn't do Alex's ride and I had to do Robin's ride. It felt like I was cheating on Alex. Like Robin's cool; I love Robin. She has an appreciation for hip hop, too, and she's fun, but she's not Alex.


So I felt bad and a little bit guilty but I got over it pretty quickly. What was great about that experience is that when I cheated on Alex with Robin, you know I got to really appreciate what Robin brings into her classes and her style, and what she kind of, how she motivates and encourages and does shout-outs and all of that. Then I began to appreciate how different instructors, the different styles plus the different class types, that I can start to navigate my experience around that. So yeah, you know what, maybe I'm an Alex guy but at the end of the week I need a Robin ride, because of like the way kind of things happened, or vice versa.

Mike O'Toole:
So give me Robin in six words. What is she? Like what's that experience?

Jeff Porzio:
Okay, if motivation could be like a swift punch in the gut, that would be Robin.

Mike O'Toole:
Awesome.

Jeff Porzio:
Like Robin, she's the real deal. She's no bullshit, like super empowering. She's the type of person that at the end of her class, you feel like you can go out there and just take on Mike Tyson.

Mike O'Toole:
All right, Alex is six words.

Jeff Porzio:
Alex is cool. Nobody can clap to a beat like Alex. Alex is rhythm. Alex is cool. Alex is fun and-

Mike O'Toole:
Give me your best Alex, like Alex is in your head, he's-

Jeff Porzio:
Oh, you know, he's (clapping) "Look good, feel good, do better!" You know, always clapping. For a guy like me that just loves the music, loves the energy, love the rhythm, I mean Alex is my boy.

Mike O'Toole:
If you think about the hottest brands in fitness, CrossFit, Tough Mudder, and more to the point here, SoulCycle. These are high energy, highly social experiences at the core. SoulCycle is a retail model. They've got around 100 locations, a rabid fan base, including some A-listers like Lady Gaga, David Beckham, and Michelle Obama. Part of a great retail experience is you know what you're gonna get, whether you're in Manhattan or San Francisco, your SoulCycle class will feel consistent and familiar. Peloton has to recreate the energy of an in person experience in its virtual model. They do that through the interaction of the community of riders, but also through the instructors. Ask anyone who does yoga, or spinning classes so much of it comes down to a great instructor. Peloton's virtual model gives it an advantage here.

Tom Cortese:
When you're building a single-presence, brick and mortar, part of what is appealing to customers is consistency. So what folks like SoulCycle have done is created a clean, clear to understand, consistent approach to a workout, and you'll find that same workout instructor to instructor, location to location. For us, we saw a much broader opportunity. We cast our instructor base, so that we have not only the 12 best instructors on the planet, but 12 very different instructors. We cast for different characters, for different times in your day, for different moods and for different types of people. I think that's a lot of fun and that's what the Peloton platform allows us to do that a brick and mortar's never gonna be able to do.

Mike O'Toole:
Where people are after the consistency of a SoulCycle or Starbucks, right? So tell me about great talent. You say, you made that claim that you've got the 12 best instructors on the planet, so that's a big claim. So who are these people and how do you get them? How do you know they're the best?

Tom Cortese:
We look at fitness as a primary quality, an entertainer as a very strong secondary quality. You can't really lose that secondary quality, 'cause that's what's gonna make me enjoy being on that bike everyday.

Mike O'Toole:
Right.

Tom Cortese:
If you are in fitness, if you're a fitness instructor, there is no better job on the planet. So, we create the demand for this job by reducing supply; there's 12 slots.

Mike O'Toole:
So you're not looking to go from 12 to 20, it's 12.

Tom Cortese:
It's 12 for cycling.

Mike O'Toole:
Yeah.

Tom Cortese:
That allows us to pay significantly more than anyone else in fitness for these instructors. And if we're going to pay significantly more than anyone else in fitness for these instructors, well you better be the best. We are a software company at our core. So we have access to an incredible amount of data, and we share this with our instructors, and they compete on this internally with one another.

Mike O'Toole:
Interesting, so what are some of those KPI's for an instructor? What are you looking at?

Tom Cortese:
Well, so there's watch time. There's total number of workouts per day, per week, per month, and then there's overall ratings. So at the end of every class, we have nearly 100% compliance with our rating at the end of class. So, riders if you get through a 45-minute class, and then we ask you to rate the class, almost 100% of folks will rate that class. Folks are rating the classes, they're taking the classes, they're participating in the classes, they're connecting with one another in the classes. We see all that data and we use all that to determine how to improve our programming and which instructors are performing.

Mike O'Toole:
So, these 12 have followings, right? How do you balance that? So they have their own brands, and their own following, and then Peloton has its own. Do you see those things as reinforcing each other? Or how do instructors help Peloton and vice versa?

Tom Cortese:
So we embraced, from day one, that each of our instructors would be their own brand. We think that there's a great opportunity for mutual benefit, for Peloton as a platform, and instructors as a brand. So if you want to be the biggest brand, as an instructor in fitness, we are going to give you the loudest, broadest platform to achieve that goal. In the same way that YouTube has a platform, has crafted a whole new layer of celebrities that wouldn't have come into existence before YouTube.

Mike O'Toole:
Yeah, and how do instructors help Peloton grow?

Tom Cortese:
Well, if you buy a Peloton bike, a few months into riding, if I asked you what do you love about your Peloton bike? You're not gonna tell me anything about the bike. You're not gonna tell me that it's great software. You're not gonna tell me that it's a great piece hardware. You're not gonna tell me how amazed you are at the stream quality. All the things that are really hard by the way.

Mike O'Toole:
No credit.

Tom Cortese:
Right. What you're talk to me about is that you love coach Jen Jacobs, or that your husband is obsessed with Alex Toussaint. That's what you're gonna talk about and that's your connection to the brand. I think that's really important, that the rest of the stuff melts away and that you have that amazing connection to these instructors, and then secondarily to the community of riders that brings it all together for you.

Mike O'Toole:
Yeah. All of this adds up to a surprisingly sticky experience. Tom actually likens it to an addiction a couple of times in our conversation. For marketers, the holy grail of measuring a customer experience is net promoter score.  The concept is super simple. It's based on the answer to one question. On a scale of one to ten, how likely is it that you would recommend the company to a friend or colleague? Anyone who answers nine or ten is a promoter. Answer six or fewer and that means you're a detractor, and detractors get subtracted from your score. Net promoter score is measured on a hundred point scale. Pretty great companies like Amazon, and Netflix and Apple score in the 60s.

Tom Cortese:
You don't have an interactive platform unless you have people. So, first we built the platform and thankfully, the people came. Thankfully we've created, and we continue to refine, a product and platform that people love. I don't know if you're familiar with new promoter score.

Mike O'Toole:
Yup.

Tom Cortese:
We're consistently polling our net promoter score. Our net promoter score is 91. That has blown away anyone who has come through these days. That puts us in a whole nother category of consumer product. For reference, the iPhone, which is one of the top rated products, top NPS scores is somewhere in the 60s. We have about ten riders who have sent us photos of the Peloton corporate logo permanently tattooed on their body, sometimes right along with their username. This has become a real part of everyone's everyday life.

Mike O'Toole:
So you have ten people who have tattooed the logo on their bodies, that's amazing. All your fans have some passion for the brand, I imagine. Can you take the 30% that you'd say are really, "They're the ones who drive our business" who are they? Describe them a little bit. How often do they work out? I'm also interested, how do they help spread the word? 'Cause people love to spread the work for something they love, right?

Tom Cortese:
Yeah, absolutely. We have riders who are hyper-addicted to the platform. There's probably no better addiction in life than fitness. I would say that that top core tile of rider is riding four, five days a week. If you push into that top 5% of riders, we had somebody who achieved their 100th ride in something like three weeks. I remember doing the math. You had to take like four rides a day in order to achieve it, but this person just sort of set the goal and went for it, and made it happen. So, what's great about the platform is that people love using it. If people didn't love using it, we wouldn't have a business. We're hyper-focused on learning from the data, learning from talking to our customers, to understand what is it that motivates you to work out? How can we do better? How can we do more of that? We'll just continue to iterate and evolve to ensure that this doesn't become like our gym membership, where you pay in and never go. So I doesn't become like fitness equipment of yesteryear where you purchase it, you use it for five days and then give up on it.

Mike O'Toole:
Right. Well, and I ... and so don't share anything you can't share, but there's gotta be some percentage of riders, or customers, who buy the bike and have the best intentions on January 1st, and by March 1st, they're not using it anymore.

Tom Cortese:
I also never know what I'm not supposed to share, but you would be shocked how few people give up on their Peloton. Now I would say that a big part of that success story is the community, the instructors, the quality of product, and then on top of that you're making a $2,000 investment in your health. It's not just you. It's you and your spouse. In a lot of households it's you, your spouse, your high school age son or daughter, who are collectively taking advantage of this platform and when you're whole household is taking advantage if this platform, for 39 bucks a month, you're just never gonna stop subscribing.

Mike O'Toole:
So in your early days, when you're just building customers, what were some inflection points, or points where you knew this was going to work?

Tom Cortese:
You know, in the earliest days, when we sold the first 200 bikes through a pre-order over multiple months, where now we do that in half a day, we hadn't even finished building our New York City studio. So, we were sill operating out of our prototype studio, which was the back half of our office. So our office was, call it 1800 square feet, split half where you had five engineers on one side of the wall and then massively loud music on the other side of the black Kmart curtain that we stapled up to the ceiling. We didn't even have enough inventory of our bikes to put into that prototype studio, because we needed to seel everyone that we could make at the time. So we bought really cheap $300 indoor bikes off of Amazon that were gonna fall apart any minute. We spray painted them black. We packed them in this little space, and we were running the classes.

Mike O'Toole:
I want to interrupt for a second. I love the picture he paints here. It feels gritty and honest. It's a start-up in its awkward start-up phase. What's important here is that early customers didn't care. They loved the company anyway. They saw through some of the growing pains to the promise and potential. These early customers are critical. So leadership consultant out there named Derrick Silver, and he calls them first followers. You should check out his video. It uses a guy dancing in a public park to illustrate the concept. He's by himself for a while doing his crazy dance, it's kind of cringe-worthy, but finally another guy gets up to join him. The second guy is key. He makes it okay for everyone else to join. First followers, think Peloton's early customers, publicly show everyone how to follow. If you're trying to do something new in your market, you should be thinking more about how to engage your first followers, and dreaming about the days when everyone has gotten on board.

Tom Cortese:
I mean, the production quality coming out of that first prototype space was a two out of ten. It was a massive eye-opener when we sold those first bikes, we let those customers know, hey your first six months we're not gonna make you pay for a subscription service because we're gonna be streaming out of this space that we're less than proud of, so bear with us. When you see those early riders writing in, calling us, and saying how much they love the experience, just out of that shit box, you knew that we were on to something. You knew that the instructors has created some magic on that screen that the small tidbits of interactivity that were available even then, were resonating, and so just building on that step by step, with each new rider has been massive.

Mike O'Toole:
So in those early days when you had people writing in and calling, and saying we understand it's not polished yet, but we love it. Were there also early customers recommending it to other people? Were they helping you actually grow the base?

Tom Cortese:
What we saw early on here in the New York suburbs, we started to see more bikes developing in this area and we're based here, so we sold first to our family and friends, sold to their family and friends. So you literally were able to look at the shipping map and see the viral growth. The next thing we did is we said, okay, "How can you multiply that faster?" So that's when we had the idea to go and put a brick and mortar showroom. At the time, we looked at it as a pop-up. So we thought about it and we signed a four month lease in a high-end mall in one of the nicest suburbs surrounding New York City area, Short Hills, and that store is sill there today. It was supposed to be a four month pop-up. That store is still there today, 'cause what we found is now when you're at the office, at the water cooler and you're talking about this great Peloton bike and you can't quite explain it, 'cause nobody really believes you that you can be that passionate about something in the fitness category. You say just go to the showroom. Get on the bike, put the headphones on and see what happens. When you sit people down on the bike, they put the headphones on, then they get it, and inevitably take one home.

Mike O'Toole:
It sounds like that wasn't maybe a part of your start-up thought, but now it's important. Is that retail presence gonna continue to grow? Do you have a sense of split between retail versus e-commerce?

Tom Cortese:
We're probably not gonna become one of the world's largest retailers, but we see the showroom concept as an important part of our business. Even if he vast majority of our transactions will happen through our e-commerce platform, just that ability to go and see and touch, interact with the product is really helpful. It helps us to multiply growth even faster in key markets. So we're in about 20 markets today. You can expect to see that footprint grow over the next 18 to 24 months, maybe to about double that. I'm not sure that we need to be on every corner in America, but we've seen people drive a hundred miles to go to the showroom, just to see and touch the bike, just for that last "All right am I really doing this?" Then they say okay, and pull the trigger.

Mike O'Toole:
One of the hallmarks of unconventional companies is that they pursue a mission, not just a market. I asked Tom what Peloton's bigger purpose was. He talked about how he's been involved in consumer internet software businesses his entire professional life. Sometimes these technologies are applied to frivolous ends. Tom loves the fact that Peloton is about genuinely improving someone's life. We asked Jeff the same question. Beyond any single ride, what is Peloton mean to you? What kind of impact has it had on your life?

Jeff Porzio:
Oh, a huge impact. You know, I think about my health and fitting in exercise way more often than I used to. There's kind of only one other time in my life really made me focus on my health. There was the day that I was diagnosed with cancer, which kind of obviously shifted all focus on health, and it might sound corny and heavy and maybe BS, but having a Peloton bike allows me to focus on my health way more than any gym membership ever did. Way more than any sports league ever did. So, like I can't picture myself not being a Peloton member. I'm kind of all in. (music playing)

Mike O'Toole:
Thanks to Tom Cortese for his time and thoughts. Thanks to Laura Petro, Peloton's marketing coordinator for making this happen. And a special thanks to Jeff Porzio for his perspective as well. You're listening to the Unconventionals. We're always on the hunt for great business stories. If you have one, we'd love to hear from you. This is PJA Radio. (music playing)

Jafeela Lahey:
The Unconventionals is written and produced by Mike O'Toole and Reid Mangan, with Graham Spector. Production and technical direction by Reid Mangan. Additional media by Anthony Gentles and Ryan Dough. Our executive is Phil Johnson with PJA Advertising and Marketing. I'm Jafeela Lahey. To listen to more episodes of The Unconventionals, visit agencyPJA.com/theunconventionals. (music playing)

THE UNCONVENTIONALS
THE UNCONVENTIONALS

Discover more incredible stories of counter-intuitive moves that paid off big.

EXPLORE

NEVER MISS AN EPISODE.

Subscribe on iTunes now.

NEVER MISS A STORY

Brand for change

Life is too short to build an ordinary brand. Get ongoing perspectives on marketing that creates your highest value opportunities.