These guys are following the Uber business model. Burn as much cash as possible up front to generate buzz and big numbers for the IPO, worry about profitability later. The problem is that, as Uber has shown, profitability never comes. Peloton will limp around for a few years after the executives have all taken their sweet IPO money home and become a shell of what it once was. Too bad.
Peloton S-1
191–200 of 212 posts
Re: Peloton S-1
#192Earlier quoted context omitted.
I have it and I like how the whole package works together -- in particular, how certain teachers are very careful to show how to keep good form for your back etc. When I see a guy on the same exact machine as me, showing bad form like a slightly curved back or whatever with the heels, and then correcting to the proper form, referencing the same bike, on a giant Android tablet in front of me, that is very helpful. And…
Want to know another awesome product? An actual road bike. You can, like, go outside and stuff.
Not in winter unfortunately.
- All of us Canadians
Re: Peloton S-1
#193Re: Peloton S-1
#194Earlier quoted context omitted.
I have it and I like how the whole package works together -- in particular, how certain teachers are very careful to show how to keep good form for your back etc. When I see a guy on the same exact machine as me, showing bad form like a slightly curved back or whatever with the heels, and then correcting to the proper form, referencing the same bike, on a giant Android tablet in front of me, that is very helpful. And…
“You can do everything an iPod can do with a _____ for a fraction of the price.” I can’t even remember what the competitors were, because none of that matters if it’s not effortless to use.
Actually, you could do much more with non-iPod devices than you ever could with one. Beyond the price advantage, the cheaper alternatives played multiple audio/video file formats, played FM radio and did voice recordings without an additional dongle, and didn't require creating an iTunes account to do something as basic as sync album art.
Re: Peloton S-1
#195Earlier quoted context omitted.
What's amazing is that they get people to pay _more_ than they would - or would even think of paying - for a streaming service like Netflix or Hulu, but their content creation costs are obviously a fraction of what it take to produce even one show on those platforms.
I think it makes sense. Not to get too "ad-speaky", but people aren't buying something like this to be entertained, they're buying it because it promises them a better life. Peloton aren't selling content, they're selling the idea of being in shape and healthy.
Yeah. Pretty much half the economy is too.
Re: Peloton S-1
#196The Peloton "How I Built This" episode is well worth a listen for anyone interested in the company. https://www.npr.org/2019/04/05/710439824/live-episode-peloto...
Thank you for the link! this is awesome.
Re: Peloton S-1
#197Earlier quoted context omitted.
The Affirm loan product for peloton is 0% only (with no late fees in any circumstance).
Instead of $1,995 up front, it's $3,783 over 39 months due to a subscription contract bundled with the financing. This is a very clever way to claim "no interest" but actually charge 27% APR. There are absolutely customers who buy this but can't afford it.
And this is no different than the typical phone financing plan.
You pay for the phone over 24 months but they “bundle” the cost of an additional line. You would pay for the cost of the line over 24 months but no one would call that “interest”. You could buy the phone outright and just use it over WiFi just like you can use a Peleton without the subscription. But, in both cases, it reduces the functionality of the product.
Re: Peloton S-1
#198Earlier quoted context omitted.
The Affirm loan product for peloton is 0% only (with no late fees in any circumstance).
Cheap credit will not last forever..
Tell that to furniture stores that have had 5+ years of no interest financing forever. Of course they raise the prices to pay for the “free financing”.
Re: Peloton S-1
#199Earlier quoted context omitted.
People with lots of money don't buy on credit because the credit is expensive. So it really comes down to whether most purchases are on credit or not. US consumer debt peaked in 2008/9, dropped until 2014 and started rising again - it's now higher than 2008/9. https://www.marketwatch.com/story/us-consumer-debt-is-now-br...
> People with lots of money don't buy on credit Interesting, but lots of wealthy people do finance their purchases, especially if they are active investors. Someone elsewhere in the thread mentioned that the Affirm rate is de-facto 0% if you factor in the subscription for the full-term. Taking that as fact (apparently it's changed now, so can't 100% confirm), you'd have to be pretty anti-debt (or lacking in cashflow)…
> Interesting, but lots of wealthy people do finance their purchases, especially if they are active investors.
The wealthy borrow in order to get tax-advantaged liquidity (borrowing against, instead of selling their securities which attracts immediate tax obligations). I'm also certain the wealthy are not borrowing at 27% APR - they'll likely get a 5% APR loan from a bank and use a small fraction of it to buy the Peloton bike in cash.
Re: Peloton S-1
#200Earlier quoted context omitted.
That's exactly why bubbles form and lead to economic cycles: people get too confident and overextend themselves. In this particular cycle, more companies seem to be using this profitable business model: charge huge margins for your product and sell it on credit. Bikes, SUVs, higher education (phones, too, but that's not new). When the economy hits a blip -- say, due to a trade war -- people start losing their jobs, d…
> people get too confident and overextend themselves. It sounds like you are stereotyping Peloton purchasers into one group, then assuming that the majority of them can't afford nice things. What if you look at it from the flip side and say "people buying $2.4k in-house bikes have a lot of money and all is well in the world"?
> It sounds like you are stereotyping Peloton purchasers into one group, then assuming that the majority of them can't afford nice things.
I did not mean to do that. In fact I was on the brink of deleting my comment, to avoid this exact misunderstanding.
I wanted to point out that getting expensive things on credit is risky for most people who cannot afford to buy them straight out.