We got to talk with our founders John Foley, Tom Cortese, Graham Stanton and Yony Feng about how the Peloton team carries out one of Peloton’s values, “Operating With a Bias for Action.”
Did launching Peloton feel like a huge risk or was there a big part of you that knew it would work?
Tom: My dad called me at one point when I was thinking about joining and I had a few other opportunities that were a little more legitimate compared to a start-up. I was telling my dad about another great job offer I received but I told him I was going to pass and still join John and the Peloton team. He then asked, “What chance do you give Peloton for succeeding?” and I said “30%.” He immediately asked me, “Well, why aren’t you taking the other job!?” and I said, “…that’s the whole point. We think that as we add to the team, we can grow that 30% and then the upside will be so massive if it actually does work.”
John: The reason why I gave Peloton more than a 30% chance was that every piece of this was controllable. It’s very simple: Are we building something that people will want and will we be able to market and sell it? I liked our chances once we pulled the thread through on the technology, making sure that the thesis worked with early software and content prototypes.
Speaking of risk, one of our early angel investors used to text me inspirational things and one day he texted me a quote that read, “Risk is the tariff paid to leave the shores of predictable misery.” Of course there’s risk but what is life without taking those risks, right? If you don’t take a risk, you’re going to be a drone and have a job that you complain about like many Americans. So the risk was part of the fun and part of the journey is taking that risk.
Yony: I think it’s kind of the lack of fear. You just say “I’m going to give it my best shot and I’m not really concerned about failure because I’m just going to give it my all.” There are new challenges every single day especially when you launch a platform. I anticipated the challenges we had on the software side but you have to not give up and keep pushing on it. You’re not going to think about failure because at that point you’re too busy to even consider it. There’s really no other concept in your mind other than to get everything right and get it launched.
John: I think that’s why we’re sitting here because of the people we surrounded ourselves with. We kept saying, “Failure is not an option, we are going to succeed, and we’re going to build one of the most special brands in the world.” What is going to surprise a lot of people as we continue to grow is that we’re just getting started. When we say we’re going to create the most special brand I still think we like our chances. We haven’t accomplished yet what we set out to accomplish; we’re still in the first inning of a business-building journey that is going to really surprise people.
Graham: It didn’t feel like there was a risk for Peloton. There were a few of us on the seed investor list whose $25,000 check was basically our life savings and I remember thinking, “This is the easiest investment I could make.” I knew most of the team already, it was a good product and I felt people would like it. I didn’t know if a few thousand people would like it or a few million people would like it but it was going to be a good product and a good business. It was purely an execution risk but I knew I was working with a group of people who are not going to let that be the problem.
What past failures did you learn from when forming the idea of Peloton?
John: I was seeing that the fun had been squeezed out of consumer internet by Google, Facebook, and Amazon and we were looking around trying to see where the next big opportunities were. Unfortunately, investors weren’t excited about a company building its own hardware; they were still looking for the software companies, the pure consumer internet companies. So, that was one of my learnings, saying, “Okay, this sounds hard, but it’s controllable.” No one is going to tell us that if we build the right product that someone is not going to buy it. We can market wherever and if we build something that people want, I’m confident that we’ll be able to sell it. While hardware – and retail stores for that matter – is tough, it helps you control your own destiny. Most investors did not see that, but we saw it.
Tom: To Graham’s point, we knew we had a business that could be built. How big could that business be? We weren’t sure but we used everything we knew about making great products that consumers love. We knew we could power that with an actual business model so that we had something that could sustain.
Graham: The companies that I had previous positions at had a natural ceiling for innovation, whereas Peloton from the beginning felt like something that could grow and ultimately be the premier fitness brand in the world. There was definitely a path there even if it wasn’t clear at first.
Yony: Mentally, I was very much prepared to put in a lot of hard work into Peloton. My previous opportunities trained me to know that I was going to have to work that hard.
What are you still learning today from the journey of Peloton?
John: We’ve created a great product, a great platform and we’ve sold a bunch of bikes. Now, we think, how do we build a very special, global brand? We’re past the scrappy entrepreneurship phase of Peloton and moving quickly into building a big sustainable, massive organization that includes different challenges, equally as hard, but that’s the big opportunity. We can’t be the guys who created the Peloton bike, we’ve got to be the guys who built a massively disruptive fitness technology company. That’s our ambition.
Tom: That’s where the company culture comes into play. We’re now taking into consideration everything that we think propelled us forward in the first 4 years and institutionalize it so it can propel forward the whole company for the next 4 years. It’s very important to us to feel passionate about Peloton and operate with our most important principles at our core.
Yony: I actually think the goal hasn’t changed which is focusing on the deliverables and what you’re getting done at the end of the day. The big learning for me is: don’t sweat too much and be receptive of new processes. Try to maintain that same goal at the end of the day which is deliverables and what you want to achieve. Keep your mind open to all kinds of innovative ways of doing things. Don’t be closed or quick to judge on approaches. I think it’s important to look at the results.
John: Sounds a lot like, “don’t let perfect be the enemy of good.”
Tom: Right. And it’s not about accepting imperfection. There are certain things you have to have hard lines about that are impactful to the member experience that you just can’t surrender on but then other things that you knew you shouldn’t stress over incredibly that you can catch up on down the road.
How do you see this value, “Operate With a Bias for Action”, integrated throughout each team at Peloton today?
John: “Bias for action” and “putting points on the board every day” go hand in hand with autonomous teams. If you don’t have autonomy, there are processes that get in the way of putting things into action. I think culturally, we as the leadership team give our teams autonomy to operate and support to fail so that they can put something up good every day and they’re not nervous that they’re going to get beat up for it not being perfect. We have a culture of support and autonomy so there’s nothing in the way of you acting on something.
Graham: We like to hire people who know how to focus on action and results. People aren’t scared to take a chance and fail sometimes.
Tom: We had a sign in the first office that said, “we always test in production.” Don’t just ponder, consider, and wonder what the results might be. Test and learn! The other piece of that is intellectual honesty and default to transparency. The people who demonstrate both of these will have an easier time in taking action on something. They’re not afraid to take the action and know that it may result in a bad outcome and I’m equally not afraid to go in front of the whole group and say, “Hey guys, I felt really strongly about this thing and I was wrong – here are 5 reasons why.”
John: We like operators who do things. We have people who are smart strategists who are also operators so a lot of it is about who you hire. A bias towards action is hard to teach. My good friend Rob Bernshteyn has said, “I like people who wake up in the morning and want to tear down walls with their face.” It’s that style of “don’t take ‘no’ for an answer, find a way, don’t wait for tomorrow, get it done right now,” type of operators who make Peloton a fun place to work. When you do a lot today, your job is definitionally different tomorrow. Hence the more dynamic you are, the more you love working at Peloton.
Since launch day, the team has come a long way by putting ideas into action. Take a look at some of our first studio and bike tests below as well as our Kickstarter campaign from 2013 here.
Interested in putting things into motion at Peloton? Check out our list of open positions here.