Homespun

It’s 9:30 on a Thursday morning in July, and Candace Ryan is getting ready for her second workout of the day. Already dressed in spandex from a 6 a.m. visit to the gym, Ryan wraps her blond hair in a tight bun before clipping her white and orange spinning

Peloton’s stationary bike is a thing of beauty, but how far can it go?

The machine is a $ 1,995 Peloton. Its frame, matte black with splashes of orange, is made of ultralight carbon steel and aluminum. Unlike the hard, chafing seats on most stationary bikes, the Peloton saddle is remarkably comfortable. The bike forgoes a chain for a rubber belt, making it almost silent. And instead of relying on friction to create the tension that simulates hills, the Peloton uses magnets. It feels like pedaling through butter. As Ryan pumps away in her reverie at her Shelter Island, N.Y., summer home, a leader board displayed on the 21.5-inch waterproof Android tablet affixed to the bike shows the progress of 81 other Peloton riders around the country, synced in a virtual pack. Three-quarters of the way through her ride, Ryan is battling for the top position with Jose59 and Battishill, the usernames of two men she’s never met, who are also riding alone at home. “All right, Candace!” a disembodied woman’s voice encourages from the tablet. Ryan, 41, laughs and pedals faster.

The voice is Christine D’ercole’s, an instructor leading the group from a studio in New York City. There, she’s lit up on a stage like a contestant on American Idol. Cameras pan across the room as she shouts at her riders, who watch her through the tablets on their bikes. As everyone pushes through sprints and climbs to Ellie Goulding and the Dave Matthews Band, D’ercole offers spacey motivations: “The only weight we need to lose is the negative thoughts in our head.” A few riders are actually in the studio with her, but most are connected remotely, and D’ercole talks to them as if there’s no difference.

Ryan finishes third, trailing Jose59 and Battishill. “They came out of nowhere,” she says afterward. “I don’t care, as long as I’m hanging with the boys,” she adds a little unconvincingly. Ryan is used to finishing at the top. She shares the Peloton bike, along with another at her home in New Jersey, with her husband, an analyst on Wall Street. Paying a flat $39 monthly fee, she works out with Peloton around 15 times a week, logging on to as many as four classes a day. After a ride, Ryan often joins riders on the Official Peloton Rider Facebook page, a private group with more than 3,000 members, where they share stats, thank instructors for a “beautiful ride,” and plan their next workout.

Thanks to die-hards such as Ryan, Peloton’s stationary bike has become not just a vehicle for a grueling workout and a social networking device but the latest status symbol for the conspicuously fit. Peloton expects to make $50 million in revenue this year and has raised $120 million in financing, including a $75 million round in early December, largely from private equity fund Catterton. The company says it’s sold almost 20,000 bikes since January 2014. Although it has only about a third of the riders of its nearest spin- cult competitor,

Soulcycle, it earns almost half as much. Soulcycle declined to comment, citing a silent period ahead of an initial public offering that could value the startup at as much as $900 million. But in filings, Soulcycle, which hosts its rides on-site at its branches, mentions going after the “at-home” audience, too.

Peloton, Soulcycle, and another cycling startup, Flywheel, are riding a boom in boutique fitness—chains that charge exorbitant fees for a specific type of workout, from hot yoga to barre, a ballet-inspired fitness regimen. In 2014 boutique studios made up 41 percent of industry revenue, up from 22 percent the year before. Indoor cycling is particularly in vogue, and Peloton’s classes rank among the toughest, its bike among the most coveted.

On a recent Thursday, Peloton’s co-founder, John Foley, sits in the company’s New York headquarters, a typical startup

space with exposed duct work and A class at the

hardwood floors. He’s wearing hotPeloton studio

pink Nike Pegasus sneakers and in New York fitted jeans, and his navy polo shirt is snug around his biceps, toned from regular workouts and sun-kissed. “I’m kind of an informal guy,” Foley, 44, says. “I’m not a corporate dress-in-a-suit-to-try-and-impress-people-withmy- organized-thought guy.” Later, trying to help a writer, he adds: “You can call me a douchey business guy” who’s “so poor that I can’t afford anything.” He then ignores a question to check his buzzing iphone. “One of my investors just texted me,” he says, grinning. He shows off his iphone’s screen, which features a picture of a bike with a sweaty towel draped over the handlebars. The caption reads: “On the bike, bitch.”

or Soulcycle—he can’t remember which—in 2011. As a father of two, he says he no longer had time for his favorite classes. “When we were sans children, we found time to go to yoga, spin, and work out,” Foley says of himself and his wife, Jill, a former actress and lawyer who now runs Peloton’s retail arm. But with kids, “it becomes a lot harder to get in fitness in general, especially boutiquestyle fitness. It was kind of a frustrating thing, because we loved it.”

Spinning isn’t particularly convenient. You can’t simply drop into a class. Studios run on a schedule; the most popular sessions sell out within minutes. And you can’t just hop on any indoor bike. Most require special shoes with metal clips that hook into the pedals, and a class is nothing without a tailored playlist and an instructor you want to look like or date. Even so, the activity had always appealed to Foley because of its efficiency: A challenging 45-minute class burns from 400 to 600 calories, and most sessions deliver a full- body workout by including pushups on the handle bars, crunches, and even weightlifting.

After going to what he calls a “s - - - t y public school” in the Florida Keys, Foley work- studied his way through an engineering degree at Georgia Tech. He spent five years in operations at Mars, the candy company, before landing at Citysearch, the proto-yelp, which eventually merged with Ticketmaster. For the next 15 years, Foley helped start various companies— Evite, Pronto, Proust—at Ticketmaster’s parent at the time, IAC. He also spent two years as president of e-commerce at Barnes & Noble before his 2011 epiphany in the saddle: People would pay to

re- create the cycling class experience at home. Fo le y and three co- founders, all of whom have tech backgrounds, worked on the bike’s hardware and software for two years before the first unit shipped in January 2014. It was designed by Eric Villency, a kind of Jony Ive for stationary bikes, who also designed the silver or yellow bikes used in Soulcycle studios. Instead of charging a premium for the bike, Peloton offers it at cost and makes money on subscriptions. For fitness credibility, Foley hired Marion Berrian Roaman, the grande dame of pumping it on a stationary bike. Roaman, 43, ran a cycling studio in East Hampton, N.Y., for more than 15 years before selling her business to Flywheel in 2013. She joined Peloton as the first bikes were shipping and spent a little more than a year as the chief content officer and general manager of the company’s New York studio. (Roaman has since left the company. “I got them started, got the studio up and running, and it was just the right timing,” she says.)

Roaman helped recruit some of New York’s best spin instructors. Peloton won’t say how much it pays its instructors, but it claims to offer two to three times more than competitors and has turned its staff of 12 into fitness celebrities. ( Soulcycle’s instructors make upwards of $ 125 for a 45- minute class.) “It’s different than teaching anywhere else,” says Lisa Niren, a former Flywheel instructor who jumped to Peloton in 2014. “People always sort of look at fitness instructors, idolizing them. This is on a whole other level.” Fans have recognized Niren on the street and asked to take her picture. When she worked at Flywheel, she got Starbucks gift cards from adoring fans; at Peloton, someone gave her an Apple Watch.

“People used to go to church on Sunday—that was their weekly ritual and their community,” Foley says. “Most 25-year- olds aren’t relating on that platform, but it’s ‘I’ll see you at the studio.’ ”

This year’s indoor cycling may be last decade’s Zumba, or Tae Bo, or Jazzercise. The crazes fall as fast as they rise. Nordictrack, the ski- inspired machine with more than $450 million in sales at its peak in the mid-1990s, filed for bankruptcy in 1998, though the brand is still around. Even networking online while sweating has precedents, going as far back as rowers and runners logging miles into bulletin board systems via handset modems in the salad days of the Web. But social networking probably wouldn’t have saved Nordictrack, and it might not guarantee Peloton’s survival either.

Foley, of course, says he isn’t worried that Peloton will have the half-life of a step class. “Once you discover the Peloton bike, 10 years from now, are you going to go back to the old world where you have a bike staring at the wall?” he asks. Men’s Health this year crowned the Peloton bike the best cardio machine in its annual fitness awards—not that it mattered much to Foley. “I wasn’t even excited about it, because of course it’s the best cardio fitness machine in the world,” he says. “The bar is so low.”

Peloton and other cycling shops aren’t selling a workout so much as a lifestyle, which devotees can purchase in the form of branded clothing, accessories, and even food. Soulcycle’s online shop is extensive, offering leggings and muscle tanks with its signature skull and crossbones logo, along with backAt work in packs, infant onesies, and the same

grapefruit- scented candles that the studio

perfume Soulcycle studios. control room Soulcycle took in $112 million in

revenue in 2014. Foley says Peloton will be bigger. “We’re not trying to be better than Soulcycle,” he says. “We are better than Soulcycle.” Peloton’s demographics skew slightly older and wealthier than Soulcycle’s; the average person who buys its bike is 46 and married with kids. Couples often share the bikes, which is one reason Peloton claims more riders than bikes sold. Peloton has 12 showrooms for its bikes in upper- class enclaves such as East Hampton and Newport Beach, Calif., where prospective riders can see the machine and buy branded gear.

Foley prefers to compare Peloton to consumer-product giants such as Tesla, Nest, Gopro, and Apple. Actually, not Apple. “You’re going to think I’m a total douche for saying this,” he says. “I used to say we want to be the Apple of fitness. I’ve stopped saying that. We are five times better in the category. Apple’s not five times better than its competitors. We want to build the biggest consumer-products brand in the world. We’re going to make Apple look small-time.”

company’s fans almost match him for zeal. Peloton’s most direct line to its customers is the passionate, obsessed Facebook group, where bike owners and those considering the plunge spend their days and nights. “I’m on it [Facebook] all the time, constantly, all day,” says Laura Pugerude, 48, who cycles in her home in Chantilly, Va. “Most of the time, if I pick up my phone I have notices.” Ryan, known as the group’s unofficial president, spends hours each week commenting on fellow riders’ workout stats and chatting about everything from leggings to playlists.

In June she helped organize an in-person ride in New York City with a popular instructor, Jennifer Schreiber Sherman. More than 20 people from as far away as Virginia, Ohio, and Wisconsin, showed up. Members gush about Peloton in a way that the uninitiated would consider intimate or obsessive or embarrassing. One apparently addicted woman talks about taking a “spiritual break” from the bike. Another admits to crying during a ride.

“It reminds me a little bit of what we see with Crossfit or some of those programs, just in terms of the community around it and how people really can get kind of fanatical,” says Alexis Conason, a psychologist who specializes in body image issues. “It can take on almost a cultlike quality for certain people. It’s creating a culture of normalizing behaviors that wouldn’t be normalized in other communities.”

Members of the Facebook group celebrate “hat tricks,” or three rides in one day. Every few weeks, the group will offer members a challenge, such as who can log the most miles in 10 days. Pugerude, who typically rides two or three times a day, won that one, riding almost 675 miles. On the last day she did nine rides.

“I think that’s pretty aggressive,” Foley says. “Some people are addicted to working out.” Investors are drawn to the brand specifically for that online community, he says, and it provides Peloton with insight into its clients’ psyches, behaviors, likes, and dislikes. But sometimes, Foley says, “it’s a bit of a liability.” When instructor Niren, for example, left the company, the Facebook page erupted. “Every once in a while there is negative energy,” Foley says. “For the most part, these groups self-moderate. If people are beating an issue into the ground, they will be voted off the island. Everyone wants this place to be a positive, supportive, encouraging, optimistic place.”

After securing its most recent round of funding, Peloton is set to double both its engineering staff and its retail locations within the next year. It just opened a second cycling studio in Chicago. The company plans to offer classes in other languages from the New York studio in 2017 so customers around the world can log on. And the company will go public someday, Foley says.

Getting up from a conference table, he sketches the next few years of his life: He’ll use the money from the IPO to kickstart a campaign to become president of the U. S. This country could use practical politicians, Foley says.

In the meantime, Peloton’s obvious challenge is to attract more riders like Ryan. She started working out after the birth of her second child, when she weighed more than 200 pounds. Now she’s cut. Starting from her shoulder down to her wrist, each section of Ryan’s arm has its own line of definition. On Facebook, she’ll occasionally post a sweaty, post-peloton selfie. Even though she’s never met most of her fellow riders, she thinks of many of them as friends. “I got to know the people, and I got to see their profiles,” Ryan says. “Maybe because we’re all sweating, you feel like she showed up as much as I showed up. It puts us all in the same place. It’s a good place. It’s a really good place for a lot of people.” <BW>