The New York Times consultation covers a number of topics, from how he showed concern in the new job, to how his view on the company differs from John Foley ’ south, how he can lead Peloton and more. The integral interview is worth a read, but we wanted to highlight a few finical items from the part .
inaugural, Barry McCarthy talks about what makes Peloton special – whether it ’ s the bicycle or the software – and what he wants to focus on moving forward. He said :
The magic trick doesn ’ metric ton happen in the sheet alloy. It needs to be good enough, but it ’ s not sufficient. If it ’ second equitable NordicTrack, you ’ re not winning. The magic trick happens on the screen. That ’ randomness where the drug user know is, right ? It ’ s the music. It ’ s the instructors. It ’ s all the social aspects that we have entirely just begun to develop — and that ’ s where we ’ re going to spend our money.
today, it ’ s a closed platform — but it could be an open platform and separate of the creator economy. What other apps would you put on it ? Could it be running an app store ?
He recognizes that it ’ s the instructors, music, and classes that make Peloton magic – while acknowledging at the same time that hardware has to have a certain horizontal surface of quality .
Barry mentions that “ all the social aspects that we have only barely begun to develop ” is where they are going to spend their time & money. It remains to be seen if this could allude to creating Peloton ’ s own social platform, as to date all social aspects take place in Facebook groups. Or, it could refer to new initiatives like the approaching “ Fitness Flipped ” Peloton podcast which is getting fix to be released .
He besides notes that he is looking at opening up the Peloton platform. One frustration to many members is that while Peloton has an unofficial API, they haven ’ thymine opened it up to developers and allowed others to enhance the Peloton experience .
It sounds like Barry is thinking about taking it one level further, and allowing other companies to have their own apps or add-ons running on your Peloton filmdom itself, without requiring hacks or workarounds. Peloton Lanebreak, which was just released this week, could already be laying the foundation for this – as it ’ s a separate app & plot within the Peloton platform .
While this change to open up the Peloton platform would be a benefit to Peloton members and give them more choices, it would besides help Peloton ’ s bottom line – as one would expect they would operate like to the way Apple & Google ’ s app stores solve and take a 10-30 % cut of revenues & subscriptions that were made on the platform & memory.
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Another thing Barry is looking at is changing the current price Peloton model – where you pay in full for the Bike or Tread up front .
Interviewer: How are you planning to change the price exemplary to strike the right counterweight between gross from subscriptions and products ?
Barry: Selling subscriptions with a actually depleted entrance price. Playing around with the kinship between the monthly recurring tax income and the upfront cost to find some sweet spot in the consumer measure suggestion that gets people to buy into the exploiter experience and affords you a in truth good margin.
Interviewer: So rather of selling a motorcycle outright at more than $ 2,000 and then selling a subscription, you ’ re thinking of selling the unharmed thing as a subscription, say $ 150 or $ 200 a calendar month — like a high-end gymnasium membership ?
Barry: It ’ s credibly, alternatively of $ 39, it ’ sulfur possibly $ 70 or $ 80. And then the upfront price is dramatically lower .
Peloton ’ s pricing model has been the lapp since it ’ sulfur Kickstarter days – after your motorcycle is paid off, you pay $ 39/month for your subscription .
This is the irregular interview in a course he has mentioned he is looking at the price structure. In end week ’ s interview with the Financial Times, he said “ that “ an wholly different pricing social organization ” could replace the $ 39 monthly subscription fee which has been static since the company sold its inaugural bikes via Kickstarter. ”
Barry besides spoke reasonably pragmatically about the troubles the caller has faced over the last several quarters, but why he thinks it is fixable :
I know subscriptions. I know consumer-facing businesses. I know growth. I know founders. I surely know business models. And I know from my experience that merchandise commercialize equip is the hardest thing on the satellite to find. And once you find it, it ’ s about impossible to screw it up no matter how heavily you try. And arguably, we ’ ve try reasonably hard hera, but the customer love is precisely off the charts. The monthly churn is less than 1 percentage .
You can read the stallion interview with Barry McCarthy, Peloton ’ s raw CEO, on The New York Times .
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