The Economy

The ladyfriend bought one about eight months ago. I wasn’t on board with the purchase of a basic asf thing, but whatever. It’s in the basement so I never think of using it. I had a feeling it might become an albatross.

 

Figured this was a good place for this.

 

Brought up a couple pages back.

 

So much competition in that space now. Peloton got caught by the other smart spin bikes and treadmills.

 

I had a bad feeling when I bought the wife a piano that it would be a novelty for a month and then gather dust. Happy to say I was wrong and that she plays almost every day (though never the songs I tell her I want to hear).

 

Peloton has an issue even beyond the cultural fad dying out: what happens when a product built to last for a decade reaches all the people who want one? You can add monthly services, additional products like treadmills, and add-ons like water bottles and modded seats, but the fact is the thing is not going to break. There’s no incentive to upgrade a bike or a treadmill. You just use one until it breaks. And unlike treadmills — of which I’m on my fourth of my lifetime — bikes don’t break.

(It’s an issue we face where I work: If you build a medical chair that lasts 30 years — and look at one the next time you’re at a medical specialist and consider that it might be from the 1980s — what do you do? We started gathering data from patients as they sit on that chair and sell it to the medical industry. I wonder if Peloton’s next step is using the data from those bikes and selling it to the medical/fitness industry or researchers.)

 

Wasn't Peleton's business based on the subscription model, though? Its problem would be if people stopped handing money over every month.

 

It's both.

They sell the bike and they sell the subscription.

As Hermes said, they've sold most of the bikes they're likely to sell by now. So the stock price slides to reflect that.

 

But it was not going to sell bikes ad infinitum. The problem wasn't building bikes that last too long, it was a shorter term mistake in projecting growth in sales.

 

Let’s go, Brandon.

The factories, called fabs, will employ 3,000 workers at an average salary of $135,000 per year.

https://www.dispatch.com/story/busi...es-licking-county-jersey-township/9173472002/

I am giggling at the thought of Nerk being the new Silicon Valley.

 

I don’t think building bikes that are too good is the main problem with their business. I was just pointing out that it’s an inevitable problem with a business like that. You just need to have a plan (and investors needed to price that into their consideration when buying it) once the hardware is bought.

Every time I build a $10,000 medical chair with heated leather upholstery, I understand that that hospital or mini clinic isn’t going to need another for a long time and that the growth of healthcare will subside when the Boomers die. So I have to understand my job is probably not safe in the long term.

Like Peloton buyers who think they’re gonna become ripped on their Peloton, investors and Peloton’s people overestimated what they would actually do.