John Foley, Peloton’s founder and CEO, is taking a unique approach to the indoor cycling market. Peloton has created a simulated class environment. Every user, in their respective homes, can log on for a ‘live’ class. “What people love about these classes is the content, the experience, not the bike itself,” he says. “I thought: ‘Wow, what if we made a bike that brought the experience home?’”

‘Wow, what if we made a bike that brought the experience home?’

Group driven fitness classes have been growing in popularity. Crossfit is an example of this, many join Crossfit for the camaraderie, not for specialized equipment. Similarly here, the bike’s color, brand, and model is somewhat irrelevant. The content, and and group activity seems to be what draws it’s users.

At $1,995 this is certainly no thrift store stationary bike, but Peloton claims that they actually make very little on the hardware itself. The majority of their revenue comes from the class subscriptions. For $39 a month, users have access to all of Peleton’s on-demand classes, as well as their live classes. The screen on the bike is where you can see the instructor and your personal statistics. It also gives you the capability to audio and video chat with the instructor, and other people taking the class.

I’m curious to know how much infrastructure had to be implemented to allow the in-class-chatting. And more importantly, will that work pay off for the users? The idea of FEELING like you’re in a real class is great, but in practice, you’re still in your gym shorts in your living room. I bet, if Peloton released a version lower cost subscription that was limited to a one-way video stream, they may be able to attract more users.