Ready for the Ride: Peloton & Total Addressable Market
Peloton’s new CEO, Barry McCarthy, was recently interviewed in the New York Times (Read the article here: https://www.nytimes.com/2022/02/19/business/dealbook/barry-mccarthy-interview-peloton.html). The authors asked Mr. McCarthy if he thought that everyone who needs a workout bike already had one. They questioned where else a company making stationary exercise bikes can go (…an ironic question for a bike product that literally can’t move). The Times wanted to know what Mr. McCarthy thought Peloton’s total addressable market (TAM) was. Mr. McCarthy ducked the question and said that one can’t know what the market share is as the product is still being developed. Apparently, Mr.McCarthy sees just about anything under the sun as being part of Peloton’s future. If he could, he probably wouldn’t rule out NFTs, crypto, a social network, and electric vehicles. In this defense, that’s sort of his job to boost the stock price and help the company recover: in the last year, its valuation went from $35b to $11b.
The question about TAM got me excited because, unlike Peloton, I think that Bridge has a huge TAM, and we’ve just scratched its surface. I envision our TAM for retailers as:
All gift shops
All kitchen shops
All jewelry stores
All florists
All furniture stores
Then, imagine all these types of shops in: Australia, New Zealand, the UK, and other countries.
The good news: I’ve not lived up to that. Aka: Our future is still ahead of us. We have just been prepping for longer than we expected. In hindsight, that’s just made our product better and more prepared for growth. Down the road, we’ll forget about the extra year or three when looking at Bridge in 2042.
McCarthy says in his interview that the magic of Peloton "happens on the screen." In other words, he’s saying that software is the key part of Peloton’s growth. McCarthy notes the digital: music, instruction videos, and social aspects. I’d agree with him that software is where it's at: we have a burgeoning digital platform--sans a clunky bike. We use videos and social to engage with our members. I’d like to find a way to use music. Imagine a dramatic Hans Zimmer Dark Knight soundtrack when you first log in. (Can you tell that I’m anticipating the new Batman movie this Friday?) Bridge could add a ‘bike' down the road via an iPad-like POS device. Sometimes analog, physical devices are needed to grow and expand software realms. Proof: Right now, I’m using a physical keyboard to type this. Shopify has used its dummy POS terminals running its software to build an empire.
In 2011, when the Facebook article was written, we had about 37 stores using Bridge Store. I worked on Bridge part-time. Today, we're approaching 1,000 Bridge Store clients, and we have a team of coaches and techs. I believe we're ready for the total addressable market. If we were on a stationary bike, it would be time to pump up the music and lean in.