Sweat Equity


It’s no secret that fintech is a significant and growing presence in wealth and asset management. However, as many robo startups can attest, the market is also intensely competitive and the formula for success elusive.

We would like to step out of financial services for a moment to offer an example of a tech company with a product/service that we think illustrates many of the core success drivers of a client-facing technology solution like that of most robos.

Peloton Cycle is a New York-based startup (“Silicon Alley” in VC parlance) that is redefining the fitness technology category with its interactive, communal spinning classes. By combining its $2,000 stationary Peloton Bike, with multimedia-rich live and on-demand spinning classes, Peloton transcends the traditional fitness category by offering an unparalleled immersive experience in the comfort of your own home. The company sells directly to consumers online and through its 50 U.S. retail locations rather than through intermediaries like gyms or hotels. Industry insiders point to an impending IPO although the company hasn’t disclosed timing for an exit.

We believe the following are key drivers of Peloton’s early success:

A rich customer experience – Many companies may claim to provide this, but Peloton is walking the walk. With its feature rich bike, high-definition monitor, streaming video and hipster-inspired music accompaniment, the experience is more akin to a rave on wheels than a spin class.

Convenience – 24/7 access with no drive time and no trade off in quality relative to the experience in the finest fitness centers.

Seamless integration with supporting technologies – Peloton combines all the features found in top cycling computers from Garmin and Polar, smartphone apps such as MapMyRide, and multifunction activity trackers such as FitBit.

Product choice customization – Users can select from dozens of spin instructors, each offering a different cycling experience, personality, and motivational approach to suit a variety of personal tastes.

Interactive and community-based – Riders can communicate with one another and track their progress, goals, and standings against the larger group of riders.

Competitive pricing – Over time the Peloton experience ends up costing much less than a high-end gym membership.

We believe robos that can deliver on these drivers have the best chance of carving out a space in the highly competitive B to C robo-advisory space.