The trouble is, Peloton believed the story around it a little too much.

And it didn't entirely recognize the market opportunities around it.

So Peloton was founded in 2012 by John Foley, who was a former Barnes & Noble executive.

It raised a total of $4 million that year in angel investments and a Series A round.

The next year, it raised $300,000 in a Kickstarter campaign to try and bring its project to life.

Soon after, Peloton started shipping bikes, and it opened its first studio in New York City, too.

I want to welcome you to Peloton Studios New York.

It's kind of part of that cohort of boutique spin brands like SoulCycle or Flywheel that were popping up all over the place during that time.

But Peloton's whole shtick, of course, isn't people going to a studio to ride.

It's the bikes that are at home, with tablets attached where people can stream classes.

Peloton's sales took off.

Its instructors, like Robin Arzon and Cody Rigsby and Allie Love, became stars.

Get off the couch and move your ass.

Do 10 squats.

They amassed thousands of followers on social media and appeared regularly on talk shows.

Rigsby was even on Dancing with the Stars.

Peloton has also inspired some copycat connected fitness products.

Think of Mirror, which is what it sounds like, a mirror that hangs on your wall, but also it's for fitness, or Tonal, which is for weight training.

In 2018, Peloton expanded its offering and launched a treadmill to go along with its bike.

Let's row, baby.

Yes.

Let's get it, Peloton.

And nowadays it has a rower, too.

Peloton was so popular that it grew to have 1.4 million members and was valued at $8 billion when it went public in the fall of 2019.

A couple of months later, Peloton made a splash after its holiday ad went viral.

It is a husband giving his wife a Peloton bike for Christmas, which seems nice enough, I guess.

First ride.

I'm a little nervous, but excited.

Let's do this.

Then she spends the entire year making these pain-looking selfie videos of herself on the bike and kind of puts them together into a video for the next Christmas.

And there was quite a bit of backlash around that.

It's not great to think that a husband is kind of giving his wife something so that she can be thin and fit.

And Peloton had to do a little bit of cleanup after that.

Peloton's big break came with a pandemic and the onset of COVID-19.

Everybody's stuck at home, the gyms are shut down, and a lot of people are sitting around to think, oh, I might as well get a Peloton.

Its sales surged by 200% in November 2020 compared to the year before.

And it had its first billion-dollar quarter the last three months of that year.

Obviously, with that big surge in demand, Peloton had to try and react to meet that demand.

And a lot of customers were complaining at the time that they were waiting months and months for the bikes.

So what Peloton did, naturally, is to invest in its supply chain and in manufacturing in an attempt to catch up and meet that demand.

Peloton's stock price exploded during that time, too.

Its market cap peaked around $50 billion in late 2020.

Like Zoom and Clorox, it was a solid stay-at-home bet for Wall Street.

The story around Peloton was really exciting, kind of going from zero to 100 very fast.

It's an appealing narrative.

It's hot, right?

But the problem is sort of that Peloton believed the story a little bit too much.

It really bought into the narrative, and it didn't really see that it wasn't really real, and that's kind of how it landed where it is today.

Peloton eventually caught up on the supply side.

The problem is that by the time it did, the demand wasn't really there anymore.

The COVID vaccines had come out, a lot of gyms were opening back up, and people didn't want to work out at home anymore.

People were happy to leave their homes.

COVID also pulled forward a lot of demand for Peloton's products.

That means somebody who maybe would've bought a bike in 2022 or 2023 did so in 2020.

There's also just a limited number of people who will ever buy a Peloton at all, especially given how expensive they are.

The basic bike now, and it's cheaper than it used to be, is $1,500.

Before, it was $2,000.

The treadmill is $3,000.

And again, these are the basic levels, so the fancier ones are even more.

This is a really big investment, and as we know with a lot of fitness products, a lot of us have a lot of aspirations about going to the gym and getting fit, and we fail at those, and then we wind up with expensive stuff that we don't want anymore.

And even if you really are a huge Peloton fan, you're not gonna buy six bikes, right?

You're gonna have one bike, maybe you'll get a treadmill, but you're not buying a bunch of equipment.

Peloton paused production in early 2022 in an attempt to control costs.

By the end of June, its full-year net loss was $2.8 billion.

Peloton has also seen its fair share of leadership shakeups.

John Foley, who'd led the company for its entire existence, stepped down as CEO in February of 2022.

He handed control over to Barry McCarthy, who'd previously done stints at Spotify and Netflix.

McCarthy's out now, too.

He left in 2024, and a pair of interim CEOs took over for him.

Business-wise, Peloton just hasn't been able to find its footing.

Its stock price has plunged, and its market cap is under $2 billion.

Remember, at its peak, it was valued at $50 billion, so 25 times that.

The company has had to issue recalls for both its treadmills and its bikes.

It's done layoffs, and some of its star instructors have headed for the exit.

I am moving on from Peloton.

I'm choosing to close my chapter at Peloton.

It's time to take a break from teaching at Peloton.

Peloton's had some weird PR debacles, too.

If you think back to late 2021, when And Just Like That premiered, which is the revival of Sex and the City.

In the very first episode, Mr. Big dies while on a Peloton bike.

Also not a great look.

And after that, Peloton again tried to do some cleanup with an ad featuring the actor kind of making light of the situation.

But pretty soon after that, he was hit with sexual assault allegations.

And so, again, kind of an unfortunate oops for Peloton.

But Peloton isn't a lost cause.

It has about 3 million paid subscribers who all give it $40 every month.

That's a great business model.

Holding on to those subscribers isn't an easy task, though Peloton is doing a decent job.

Still, given the state of its finances and debt, it's not clear Peloton can make it work.

A lot of Peloton's problem, at least according to some analysts, is that it's investing in the wrong places.

It really, again, to get back to this idea that it believed its own story, it's been really focused on investing in marketing and in growing its customer base.

And a better strategy might be to focus on the people who do have it and do like it and its user base and really cultivating those people.

Again, it has a lot of subscribers.

It also wants to keep those people around.

And it does have a fair amount of churn.

It does lose subscribers sometimes.

But it's done so far a pretty decent job of holding on to people.

I think another thing to think about is that Peloton's story would look different if the pandemic hadn't happened, if you hadn't seen this giant surge in the middle, if you hadn't seen that stock pop.

You might look at Peloton today and say, this doesn't look so bad.

And they might not have also made some of the investments that have come back to bite them.

There's also a reality that fitness trends are constantly changing.

We tend to treat fitness like a fad or like fashion.

Three, two, alternate, and one.

If you think back to Taibo in the 90s or the Thighmaster in the 80s, a lot of those fads have come and go.

And it's hard not to look at Peloton and think that's probably where this is headed.

I will note here that Taibo does still exist, which most people don't know.

People also get bored with workouts.

They're kind of looking to do a new thing all of the time.

And even if you really love Peloton and you think the instructors are super fun and entertaining, you just don't want to be on a stationary bike forever.

For people who do really love Peloton, you don't have to worry that your favorite instructor is going away tomorrow.

There's always speculation that maybe a bigger company would buy Peloton or maybe private equity would swoop in.

It's not going under tomorrow.

And I do think also the good news is if you don't have a Peloton and you've been thinking about buying one, it's not the worst time to buy.

The bikes and treadmills are cheaper than they used to be.

Peloton's mistake is that it got too high in its own supply and it sort of believed the hype around it a little too much.

It thought it would grow forever.

Now it's come back down to earth, and that come down feels like a crash.