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It has been 6 months since our initial call on PTON and so much has happened in the story. Overall the growth in the business has been better than we expected, mostly in the current quarter where guidance was for an acceleration due to gym closure demand as we expected a big slowdown.  Covid-19 has potentially changed the home fitness and connected fitness landscape permanently. And despite a vast number of trialers of ‘digital-only’, the management team seems to acknowledge what we thought all along, that the value/profit opportunity here is nil due to lack of differentiation vs competitors at all different prices.

That means to us the Peloton stock call for the long term is all about the bike business and bike opportunity, and given what we see as the addressable market and hungry competitors coming for a share of the investor appetite for connected fitness, we struggle with how PTON can grow into this valuation.  Fitness has always been a ‘fad’ prone business. Many Peloton users today are likely ones that did P90x, Crossfit, Yoga, and Orange Theory in the past.  People like to try the new thing that makes for better results and a more fun/interesting/compelling way to get in shape.  Even the CEO of PTON talks about full body boot camps as the best overall workout, not an indoor cycling bike with some free weights, perhaps suggesting changes in the future.  Peloton will have to keep its current customers engaged and draw in millions of new subs to support the current market view of its value.

So perhaps the Peloton call is more about the ability of the company to understand where the industry of home fitness and connected fitness is going, and be on the cutting edge of innovation, creating the next big thing in home fitness every few years and consistently enhancing the customer value and experience, much like Apple in personal electronics circa 2000 to 2010.

For that reason we are hosting a thought leader call with an innovator in the home and connected fitness space, POWERbahn. POWERbahn was founded in 2004, and has been providing patented technology, licenses, firmware, and prototype development services to the fitness industry since 2005. POWERbahn's clients have included household brand names: Nautilus, Schwinn, StarTrac, and Bowflex. The company has pioneered smart exercise technologies, such as smart bikes, which connect fitness equipment to virtual content and GPS course profiles so that users actually feel what they’re seeing on-screen.

Join us for a discussion on the future of home and connected fitness.

Key Topics include:

• Discussion of key innovations in home fitness equipment
• The viability of subscription models in connected fitness
• Potential new competitive threats within the connected fitness space including ones that could bypass music costs
• Moats for Peloton and key competitors including patent landscape
• What might the future of connected fitness look like

Call Guest Speakers

Scott Radow:

• Founder of POWERbahn and Music Synchro 
• 10+ years experience in commercial fitness, consumer fitness, and cycling products
• Clients: Nautilus, Schwinn, Stairmaster, Bowflex, StarTrac
• Motion Control Firmware (Virtual Reality, Newtonian/Classical Mechanics, Music Synchronization)
• Inventor, U.S. and international patents
• Silicon Valley veteran, successful exit, employee #7
• Road Cyclist Cat 3

Marc Radow:

• Registered Financial Advisor, FINRA qualified
• Hedge Fund Portfolio Manager, Veni Capital Mgmt
• Gym Owner
• Hospitality & Entertainment Mgmt, 30 years
• Consultant: IP, Licensing, Global Distribution

POWERbahn Background:

POWERbahn was founded in 2004, and has been providing patented technology, licenses, firmware, and prototype development services to the fitness industry since 2005. POWERbahn's clients have included household brand names: Nautilus, Schwinn, StarTrac, and Bowflex. POWERbahn pioneered smart exercise technologies, such as smart bikes, which connect fitness equipment to virtual content and GPS course profiles so that users actually feel what they’re seeing on-screen.

This IP helped found the smart bike market segment, which is overtaking antiquated bikes and fitness machines offered by the fitness industry. POWERbahn has licensed smart bikes to commercial brands, and it is considering expanding its licensing operations in commercial and residential markets.

POWERbahn is now introducing quantum leap technology that fuses its connected fitness/smart technology to the entertainment industry. This quantum leap is Music Synchro™, which connects music and music videos to exercise machines by controlling resistance as a function of music beat so user cadence stays in sync with musical beat. Music Synchro™ turns machines into interactive entertainment and social networking touch points. 

Music Synchro™ is patented globally, and POWERbahn will be a technological leader in the next generation of connected fitness equipment.