When I am not at the plate for Upper Hand, I am a dad, husband, runner, and an early-adopter who loves to try the latest and greatest technology on the market.
From my first ride in a Tesla to downloading beta versions of Apple software, I can never get enough. I’m always listening to what others think about the next trend, because I love the dialogue. (“Do you see a fad or the future?”)
Which brings me to a prediction about the exponential impact of Peloton in the race to dominate the sports and fitness market.
There is a new race, begun by Peloton, to the middle of a Venn diagram created by the intersection of video on demand (also referred to as “digital”) and in-person fitness.
The fastest company to the middle of that Venn diagram, “the X-Factor”, will lead the fitness market over the next decade. Which begs the question: “How does the in-person fitness side of the market compete and win in the face of Peloton’s disruption to the industry on the digital side?”
Put another way, as reported in the article Phillip Mills On Demand in Club International Business Magazine from August 2019, the founder of Les Mills said, “Those who can bridge the gap between the digital and physical worlds, offering an integrated fitness experience, will enjoy the best of both.”
This is definitely not the first time multiple markets have collided to produce an entirely reshaped market landmass. Apple led a similar transformation in the consumer electronics market.
Where Mac products were the technology (e.g. fitness equipment), Apple eventually turned to software as the way to maximize value creation. The X-Factor in the example of Apple, is the consumer experience driven by “connectivity” across these two product lines.
Peloton is Apple’s business protege in this regard, as they have transformed the sports and fitness industry as a software company selling equipment. Or as an equipment company selling software.
On a trip to Napa Valley where my company Upper Hand was sponsoring the Safeway Open in 2018, I was at dinner with Todd Linden. Todd at the time was acting CEO and Chairman of Paysafe North America, and throughout the evening he raved about the impact a bike called Peloton was having on his physical health.
Always interested in hearing what consumers think about sports and fitness, I listened up. Of course I appreciated how he finally found a way to get a consistent workout during a crazy work schedule, but what was different about this testimonial from others I had heard over the years was the passion and loyalty to the content. The instructors, the workout, the music.
The last time I had experienced a workout that seemed to rival what I was hearing from Todd about Peloton was at Barry’s Bootcamp in the Gulch neighborhood in Nashville, TN. And while I was then an avid member of OrangeTheory, one of the largest studio chains in the world, I felt it was time to really try to understand the phenomena surrounding Peloton. So when Peloton launched the digital app a month later, I joined.
It was after just one week of using the app that I thought, “this changes everything about the fitness market.”
My early-adopter mindset and passion for technology was lit. I could not stop thinking about Peloton. I wanted to know what other people were saying to validate my hypothesis about the collision coming in the fitness industry. So I went to Reddit, seeking to answer the question “Is Peloton as good as the experience you get at all the other in-person options?”. Essentially, how well does Peloton address Xponential CEO Anthony Geisler’s key drivers to the fitness boom, outlined as the Three C’s: consistency, community and constraint.
What I found was a fitness movement that is challenging the way we have all thought about fitness for decades. It was the same feeling I got a decade ago when holding someone’s iPhone for the first time. You not only want it, you need it!
When asked if they would buy the Peloton again:
When asked about switching from in-person studios or health clubs to Peloton:
The cult-like following you hear about and feel when asking someone why they like Peloton became evident immediately.
So in the face of exponential market disruption, how does an in-person fitness business like a SoulCycle beat Peloton?
You know as well as anyone that running a business is hard work. Managing schedules, hiring and training staff, monitoring KPIs…you’re faced with unique challenges day in and day out. At the end of the day, the businesses that continue to not just survive, but thrive, are the ones that achieve profitability. So, what’s the secret to a profitable sports business?
There are a number of ways you can grow your sports training business – you could expand your offerings, hire additional coaches and staff, or open a new facility or additional location. Regardless of what your expansion goals are, here are a few signs you may be ready to start a conversation about taking the next step.