Peloton, the once poster child of home-fitness, is in big trouble and something needs to be done before this company disintegrates into obscurity. As a long term user and self confessed “fan boy” I want to offer my suggestions, from a Chief Technology Officers point of view, to what could be done to improve this health platforms future.

State of affairs

Let us poke into the latest quarterly earnings report to see what company a new CEO will be inheriting.

• Quarterly subscribers are down by 75K to 2.98M
  • Subscriber count in 2021 Q4 was 2.33M and 2.9M in Q4 2022
• Revenue $643M – down 10% from previous quarter ($717M)
• 18% reduction in quarterly costs

To visualize how the company is shrinking, the graph below shows sales growth for the last 4 years (red is bad btw).

The stock price, while soaring to ridiculously high levels during COVID, has never recovered even to its initial levels of $20-$35 a share, instead hovering around the $4-$7 mark.

In conclusion, the company is not even treading water, but slowly collapsing.

It has tried a number of things, including offering its bikes on Amazon (both new and second hand), increasing its apparel line (every Peloton user has to endure their weekly please buy our t-shirts emails), introducing new machines (the rowing machine is a mere snip at $3,295), creating a rental and lease program to help finance the machines and finally in a last ditch effort, penalizing the second hand market by requiring a $95 transfer fee.

The company is desperate and with rumors swirling that they will be increasing their monthly $44 membership, something has to be done. A company cannot grow by cutting costs and squeezing their existing user base.

Let’s put on our Chief Technology’s hat to see if we can open up new opportunities and revitalize this once beloved platform.

The Platform

Peloton is both a hardware and software company, building a complete ecosystem around it’s core bike, treadmill and rowing machines. The bike, coming in two editions (the primary difference being the resistance changes automatically as per the instructor on the Bike+) is the bread’n’butter of Peloton and is what it’s really known for.

Every Peloton has its beautiful large touchscreen, front and foremost, within arms reach, directing each session, with a wide range of real-time metrics while it streams either live or prerecorded classes, complete with music.

Each session collects a lot of data, with both the website and the bike offering you historical overviews of how well you are doing. There is a “community” of sorts, where you can thumbs-up a fellow rider for encouragement, and follow along as to which classes they have done.

There is a world around finding, filtering and scheduling classes from their extensive 10+ year catalog. The UX here is beginning to show its age with features (like bookmark) taking way too many clicks to be actually useful.

They have only recently introduced an “Entertainment” section, offering Netflix, YouTube TV, Kindle, AMC and Amazon — nothing more than apps that takes over the complete experience. Very much an after-thought with no real product management on how best to integrate. They have tried games, but that is a novelty that lasts about 2 minutes. They also have ride along scenic rides, which is a complete nonsense, as you are just watching a video of someone else ride with the pace not changing no matter your own speed.

Officially there is no API to interact with the platform. The closest you can get is downloading a CSV file from their website of all your previous rides (which if you do upload it here for a whole host of insights).

The software is wanting. It feels like the Product Management group has either been disbanded, or has been staffed with graduates who lack experience. The rides can be extremely buggy, especially if your network is going in and out, so QA has most likely gone the same way as the Product Management group – or maybe someone has said we can cut costs and just let the developers be their own QA.

Some good news. From a hardware perspective nothing really needs to be radically changed, it feels sturdy and of a high quality. Sitting on it, and pounding on it for an hour, you don’t feel it’s about to collapse at any point. Building the platform around Android was a great decision by the original architects and offers the best life line going forward. They have a closed hardware environment, so like Apple, they only need to support their own devices (contrast this to Microsoft who has a wide range of varying hardware to try and make Windows run on).

Open up

The Peloton experience is good, but it could be a lot better. After riding for a while you will start to notice the little things that could be improved. Take a moment to trawl through the r/pelotoncycle subreddit and you will discover many a thread dedicated to riders wish lists. Lack of ideas is not what is holding this platform back.

So if Peloton isn’t going to keep pace, then the next best thing they could do is to open up the platform, create an official API, and allow the community to develop their own apps that can loaded. Create a full AppStore experience, allowing Peloton to validate and certify apps (much like Apple and Google do) and let the community innovate.

Would iPhone would be as popular as it was without it’s app store? no in case you were wondering.

There are a number of integration API’s Peloton could open up enabling access to the following areas:

• Class Scheduling
• Post ride data
• Private Groups (allow the camera to be displayed for in-class chat)
  • Warm up lobby
  • Cold down lobby
• In-ride augmentation
  • Access real-time cycle metrics
  • Custom Widgets
• Custom Class Session
  • Open up gaming
  • AI assisted classes
  • Integration to the Zwift platform

Users would still have to subscribe to their monthly fee, but it would no longer be limited to what Peloton develops. I like riding to their classes, but I would love to have a widget on the side, with say Netflix or Plex streaming something I want to watch, while I listen to the instructor’s instructions.

Widgets are not a new concept inside of Peloton – attach an external heart monitor and you will see a new small square pop-up in the top-left.

Peloton could take either an Apple or Google attitude. Apple, they would limit all of this to only their hardware family of bikes, treadmills and rowing machines. Going a step further they could explore the Google/Android way, opening up their software platform to other bike manufacturers such as Nordic, Zwift, Schwinn, Life Fitness to integrate.

If Peloton was to open up it’s platform, it could slowly get out of the costly hardware business and focus on content and data – infinitely cheaper and a lot less hassle. They could allow others to focus on producing a range of fitness equipment to suit a range of budgets. Peloton could define a minimum hardware requirement to support their eco-system, but ultimately it would be down to the hardware manufacturer to compete properly like they do with the Android platform.

App developers could earn money from selling their apps if they wanted, with Peloton taking a slice of that action too. I can imagine a whole rich world of apps popping up from games, data augmentation, widgets, podcasts, AI assisted training sessions, learning, video conferencing (imagine taking a Zoom/Teams call will cycling or running).

It is limitless as to what the community could contribute.

The Future

There is always talk of Peloton being bought, with the likely suspects of Google (to augment FitBit), Apple, Amazon as contenders who could easily put the purchase on their company credit card. Others such as Nike or Samsung would probably also kick the tires. Given how cheap the stock is, price is not holding a potential buyer back.

Peloton has created a significant, largely affluent individuals (given the high cost of entry) paying user base. They have bootstrapped a very rich hardware platform, that is just screaming out for innovation.

Peloton (and the new CEO along with their CTO) has a decision to make – do they want to be known as the Nokia of the home-fitness market, or can they innovate and be known as the Apple/Google of home-fitness?

I sure hope they open it up, because while I am enjoying my Peloton experience, I am getting increasingly jealous of some of the features on offer from competing (and much cheaper) platforms.

Peloton – your move.