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Welcome to the Tony Robbins podcast.
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This episode is brought to you by Business Mastery, the event that has helped thousands of entrepreneurs overcome obstacles and achieve tremendous growth in their business.
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So if you re hungry for growth, not just in your business, but as a leader, this is the event for you.
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What you re about to hear is actually an interview that took place at a recent Business Mastery.
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As Tony Robbins talked to John Foley, the founder and CEO of Peloton, about how he created explosive growth in his company.
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Find out more at TonyRobbins.com slash Business Mastery.
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That s TonyRobbins.com slash Business Mastery.
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We hope you enjoy this episode.
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the next person we re going to share with you, and I m just grateful that he d be willing to take his time, because I love to bring true entrepreneurs, not people that are born in the Lucky Sperm Club, people that started with nothing and had a vision and fought through every obstacle to make it happen, and then everybody sees them now and sees them as an overnight success.
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But John is the founder and CEO of Peloton, ladies and gentlemen.
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Give it up for John Foley before you meet him in a moment.
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And what I love about him is here s a guy with super humble roots.
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You know, his dad was a pilot, his mom was a homemaker down here in Florida, and he didn t have somebody sending him to college.
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I see kids today sometimes and I...
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own was going to send me to college.
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I mean, you ve got to work for it.
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He worked half-time.
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So he d go to school half-time, work half-time, pay for it.
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And he s somebody who, you know, he had some great CEO corporate jobs, but something inside him said, I want to do this on my own.
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I have a vision I want to make happen.
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I want to change this experience of fitness in people s homes.
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And he got over 400 no s from VCs.
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After being in the technology business, I m sure some part of him, we ll find out, must have thought, this is going to be easier than it was.
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But you ve heard me share all the stories of people over the years.
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You know, the ones that have made it almost always have seen 300, 400, 1,000 no s before they got the first yes.
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And then all of a sudden they re this overnight success.
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And we all talk about here about really being successful in wintertime.
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If you can do well in winter, you can do well in every season, financial season.
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And this little company called Peloton has grown geometrically in winter.
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Like, it s not just a winter company, but holy cow, they ve had quarters where they ve done over 200% more than the previous quarter.
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The company today is, I think they said, is projected to do 4 billion in sales by the end of the year.
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It was 1.7 last year.
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They re valued at $32.4 billion.
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They ve had a million people train in a single day.
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They ve had 23,000 people go to one class.
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And they ve got 3.6 million members around the world.
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So let me introduce you to this amazing soul, John Foley.
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John, it s really a pleasure to have you here and a privilege to have you.
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Thanks for joining us.
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Super fun to be here, Tony.
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And the inspiration is coming from your community.
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It s incredible.
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I was on for the last half hour.
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It s so fun to see you and see the faces and the energy of all the people.
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So thank you for tuning in.
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Our pleasure.
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And listen, you ve built in one of the most amazing communities in the world.
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But I d like to start with your roots, if I may, because big dreams start with people who have those dreams but won t let anything stop them.
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And you come from some very humble roots.
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I read, I don t know if it s true,
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You know, I put you through college, but you were also working like at a Skittles factory.
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Will you tell us a little bit about your history, your background?
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And did that, how did that inform your vision of business and life and what it takes to succeed?
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Yeah, like you, Tony, I m not a young entrepreneur anymore.
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So, 70s and 80s when you went to work to pay the bills and my dad, to your point, was an airline pilot for Delta.
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He worked at the same company for 35 years after graduating the Naval Academy and fighting in the war.
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And so, in the mid 80s when I was thinking about college and so few people in the Florida Keys went to college.
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So, I was one of four or five people who out of 100 who went to college in my high school.
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And he just wanted me to go to college, but it was all about, I went to Georgia Tech, which is called the North Avenue Trade School.
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It s going to college so that you can get a job.
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It was very, you know, hand to mouth colleges to educate you to get a job.
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And so engineering at Georgia Tech had a, there was a co-op program where I did go to Waco, Texas.
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six months a year, and I eventually was responsible for Skittles and Starburst manufacturing for North America.
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But it was great experience, industrial engineering, and you re right, I was able to pay my way through college.
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And, you know, it s a twofer.
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You get a lot of money in college, you get to pay, you have a little change in your pocket vis-a-vis other college kids, which I generally didn t.
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And then you also graduate with two and a half years of incredible engineering work experience.
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So it was good.
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I mean, it wasn t as quite as fun as another college experience, but it was certainly commercial and fruitful.
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Well, it set you up for success later on in life, having to push through that.
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How important is hunger for someone to be able to convert their dream into reality?
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As you deal with so many people, and now you ve got some CEO experience, tell us a little about your view of what it takes to be successful in business, because you ve certainly built it in many businesses, but now this one being, obviously, the crown jewel thus far.
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Well, it s funny, in your intro, and I don t know whether I m a humble guy or not, but you certainly said I was, so I ll own it for a second.
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But hunger and humility are two words that you ve brought up in our short conversation, and they re two of the most important things
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we look for at Peloton employees is, and that hunger.
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I find that state school kids do better than Ivy League kids because they re hungrier and they want to prove themselves.
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And oftentimes immigrants will be wanting to prove something as well.
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And so when you look, when you think about that hunger, it s absolutely so important.
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I think it s more important than, you know, just raw intelligence, because there s a lot of smart people that kind of go sideways in life.
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But if you have that hunger and that drive, and you re going to wake up on Monday morning and
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A buddy of mine, Rob Bernstein, who runs a company called Coupa, used to say, I want to hire people that want to tear down walls with their face.
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It s like, wow, that s ambition.
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I love that.
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How, you know, in your history, who inspired you?
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Like you don t come from, you know, roots that would say you go run a $32 billion company.
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Did you have any business leaders or any individuals that were really an inspiration or role models for you early on?
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How d they impact you?
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When I was an engineer in Atlanta and then eventually a shift manager in Waco, Texas as a manufacturing plant, my dad would always say, you got to keep that job, it pays well.
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And he pictured me there for the next 30 or 40 years.
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But then I met a guy named John Pleasance, who interestingly was dating my sister, eventually married my sister.
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And he had gone to a fancy private school.
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He went to an Ivy League undergrad and then an Ivy League business school.
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And he was so fancy.
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And he saw the world through a different lens of ambition and entrepreneurship.
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And he eventually, interestingly, Tony, to your Bill Gross story, he eventually went over to a company called City Search in 1996 in Los Angeles, which was part of the Bill Gross empire at the time that I eventually joined that.
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So I m part of the Bill Gross diaspora.
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What got to benefit from his vision back then?
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That s pretty amazing.
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That s wonderful.
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I always talk about proximity is power that if you get in proximity with people with a different way of living life, a different standard of life, things can rub off on you and opportunities rub off on you.
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Tell me, um, you know, you were the CEO of Barnes and noble.com if I understand correctly, and you were responsible bringing the nook forward.
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And I know you re competing with some people that were ahead of the schedule for you at Amazon and it didn t really succeed.
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Most people have an experience like that, especially in a corporate job.
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They probably kind of hang on to it, but it seemed to stimulate your hunger to do what you really wanted to do instead.
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Can you tell me how did that shape you, if at all?
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Yeah, definitely shaped me, Tony.
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It s a good observation.
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Digital media disrupted several massive categories.
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You think about gaming when in the 80s, you went to the arcade for gaming.
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Music has been disrupted.
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There s no more CD stores, books, movies.
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And as we were
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I was at Barnes & Noble, and actually, my colleague William Lynch and Jamie Anony were largely responsible for the innovation on the Nook platform.
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But, I was certainly close enough to see digital media.
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If you can have a device in your hand and consume the content from home instead of going to a bookstore, and there s bigger selection, and the prices are better.
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It was a better consumer experience, and it was obviously
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the future.
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I looked at the same thing in a fitness class and I said, wow, you could digitize this and build a similar hardware and software platform for consuming digital media in the fitness category.
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So yeah, I was absolutely piecing together the macro digital disruption and what industries would make sense.
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And luckily I was early on the fitness vector.
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Well, you d see those insights.
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A lot of people would see those insights, but not act on them.
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What made you act on it?
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I mean, was there an aha moment for you where you went from, wow, this is really interesting, this would be a possibility to, this is my future?
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Well, I was a little, I wouldn t say arrogant, I wasn t arrogant, but I was bullish on myself that I could raise money and still afford my New York City lifestyle because people, it was such a good idea and I was such a proven guy.
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In my mind s eye, I was 40 years old and I d been in technology for 15 years and I d been running companies and I felt like such a perfect person to bet on.
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And the idea for Peloton, for me, felt like such an obvious future of fitness and such a big company in the making.
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But the VCs didn t respond to you, right?
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Is it correct what I saw?
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I saw somewhere you had 400 no s before you got your first yes.
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Is that true?
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That s exactly right.
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Well, Tony, it s 400 institutions.
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You re absolutely right.
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But there was thousands of angel investors too.
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I pitched thousands of angel investors to get a hundred angel checks for my first $10 million.
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But when I, when I pushed off of Barnes and Noble and I said, I m going to go off my own and start this company, the idea was to overcapitalize it so that I could pay myself a handsome salary and keep my kids in private school and keep the party going.
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But it was a rude awakening that,
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four years later, I still hadn t taken any money out of the company, and I was massively in debt and on a bended knee.
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It wasn t quite the trajectory that I had planned.
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The follow-up to that question is, what kept you going?
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Because most people, you know, somebody like, you know, Colonel Sanders goes and gets 1,009 no s.
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You probably know the story.
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Or Disney, 302 banks, you know, told him no.
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There s only guys like that nature, the names you know are the ones that do that.
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What gave you the capacity to keep going when you were, you know, your vision of what you thought would happen wasn t even close to true?
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Meaning people weren t jumping all over you because you had this great background.
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What kept you going and did you start with a Kickstarter or start with Angels or both?
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Yeah, we did Angels, and then we did a Series A, and then I think we were in the middle of the Series B when we launched the Kickstarter.
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And the Kickstarter was just kind of a four-minute commercial or video that we put together to tell the story.
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And we thought that as soon as people heard about Peloton, they would want one and throw money at us.
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Also flawed.
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The Kickstarter campaign was effectively a failure.
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I think we sold 188 bikes, and I knew 100 of the people.
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Most of them were in
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So, there was nothing there.
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But to your point, Tony, I got so much inspiration from our team, my co-founders.
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We saw it, we believed in it, and I think a lot of the entrepreneurs listening to this today will know that if you have
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moments of weakness.
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You need people around you that see the vision, are optimistic, and can lead for a couple days or a couple weeks as you are questioning.
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I certainly had massive inspiration from my co-founders.
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The other thing was the early folks who sampled tasted the dog food, as we talk about in technology.
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We would get them on a bike.
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My wife was one of them, but our friends would come in, put the headphones on and have them experience the Peloton bike, even in its earliest phases.
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And they would get off dripping sweat and they d say, wow, I want this.
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I love it.
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And so it was that conviction from my co-founders and from the early customers who we saw that there was a there there and we saw it clearly from day one.
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And and it was just unfortunate that the investors were not seeing it for years and years.
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Well, I m grateful you persisted because I bought 14 of these things at Christmas.
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I was really touched.
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I ll bring it up in a moment about the letter you sent out because things didn t get delivered by Christmas.
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And I always say to everybody I train, it s what you do when you fail that matters most, not when you succeed.
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Right.
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And I thought the elegant, the letter you sent out saying you re going to spend 10 times more money to give to everybody.
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A hundred million dollar investment was amazing.
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But let me come back just for a second here.
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So the company was started in 2012.
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I remember correctly.
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So it s like nine years ago, 32 billion when it wasn t working.
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And you still had the vision.
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How did you change your approach to get through to the investors?
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Or was it just pure mass, getting to enough people till you found the people that shared your vision?
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Yeah.
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I think I kept the same approach.
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I think it was just with each quarter, month or quarter that ticked by, there was more meat on the bone with, OK, we have a prototype now.
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We have a contract manufacturer now.
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We have customers now.
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We have a store now.
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Eventually, there was enough traction that we just wheeled into existence.
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Slowly but surely, investors got on board after they saw the results.
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The frustrating thing, Tony, as a subscription business, we would have a bunch of sales, and we d go to the investors who were waiting to see the sales to make sure that there was a total addressable market and that there was a product market fit, as it s called.
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And I would say, okay, great.
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We ve got these sales and they say, Oh, well come back in two years because you have a subscription business.
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We need to make sure they don t churn off.
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And I m like, come on.
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You re like two years.
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I can t, I don t have enough money to make it for two years.
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You know, it was such a frustrating reality.
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So you re, you just pushed forward.
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You kept improving.
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Give us a sense.
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I mean, it s unbelievable.
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You ve done this in nine years.
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So can you walk us through the, it took you four years to get the funding.
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Is that correct?
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Well, it took us Yeah, we did, I think, eight or nine rounds of financing.
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And so even up to last year, when we did our IPO, that was a fundraising event.
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So we ve kind of always been raising money.
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But it s interestingly, Tony, as you were talking to your community, half hour ago about the goal of growing your business 100%.
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That s, that s been our goal as well.
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We ve grown 100% every year since we launched the company.
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It is something we care about.
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Growth is in our DNA.
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In the same way, Tony, it is great to finally connect with you.
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In the way that you re trying to make people s lives better, we see that as our mission as well.
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It s not about the financial returns as much as we know that having a Peloton bike or tread in your house
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makes fitness easier and more fun and more entertaining and more accessible and more better value.
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If we have close to 2 million subscribers today, we want to have 100 million subscribers tomorrow because that s more people s lives we re going to impact, of course.
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I love your drive.
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Two things about that.
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I read somewhere, I don t know if this is true, you said,
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Are you one of 100 million subscribers?
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Aren t there 200 million people that go to health clubs?
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So you re just gonna expand the market, basically, or are you gonna steal half the health club s people?
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Which one is it gonna be, or both?
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I think, unfortunately, it s gonna be the latter, just because the model s better.
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Home is better than traveling, in the same way that Netflix, every once in a while you ll go to the movie theater, but nine out of 10, 19 out of 20 movies are consumed on a device in your home now because it s more convenient.
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and there s better selection.
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You know, when I was growing up in the eighties and the keys, you d go on Friday afternoon or Friday evening to the movie theater to meet your friends mostly.
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But, uh, there were two movies playing at the theater and at eight o clock you got to choose one of those two.
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So it s not just a better convenient from a location convenience, from a location perspective, it s a selection.
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you can wake up tomorrow morning and time shifted.
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So at 6.22, Tony, your class would start and it s going to be a 30 minute 80s hip hop ride because that s what you want.
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That s how much time you have.
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That s what music you like.
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You can pick your instructor.
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So it s not just better location and time shifted.
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The class starts when you want it, but the class is exactly what you want.
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So in that world, it s so much better than the, than the old gym model.
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So I think that there s going to be,
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downward pressure on the gym category over time, which is just an unfortunate reality of how much people like the Peloton experiences.
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It s interesting.
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We were talking about Blockbuster the other day because, as I m sure you remember, they were doing, what, $3.2 billion, and they had the chance to buy Netflix for $50,000 in the very beginning, like their third year in.
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I mean, not 50,000, 50 million, what am I saying?
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But the number for them would be like 50,000.
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It s so small.
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And I remember seeing the chairman of 7-Eleven when they brought him in as the CEO three years before they went bankrupt saying, what s everybody talking about Netflix for?
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We can do the same thing better.
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But he was from 7-Eleven, right?
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He was from a location you went to.
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And we all have those blockages in our brain.
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We don t even realize they re there.
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They re unconscious in our nature.
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Now they re gone.
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Tell me.
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I have a core belief I think that you and I share, which is I always tell people don t let perfect, because perfect is the lowest standard.
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I m concerned because it never happens.
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But don t let perfect get in the way of great.
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I think you have perfect in the way of good.
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Tell me how that s informed the way you ve made decisions along the way where you could have got stopped if you re trying to be perfect, but you kept innovating or you kept iterating to get where you want to go.
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How important is that for your business and what do you think that is for other entrepreneurs?
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Yeah, I m glad you brought it up, Tony.
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It s massively important for our culture.
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Don t let perfect be the enemy of good.
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There s another phrase in technology product development called MVP, which is, as you know, minimum viable product.
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So while you can picture this product that has all these bells and whistles and all these features, what are you going to launch 90 days from now?
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It s not going to have all that stuff.
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You ve got to distill it to something that you can get out the door and hold your head high up, and then you start to iterate from there.
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with a, especially with a software company where you can push over the air updates.
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So if you buy a by Peloton bike or Peloton tread every month, the software and the content gets better.
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So I, you know, I know I used to sell a Peloton bikes in the, in the store and mostly in short Hills, New Jersey, I would say, get the bike, trust me, the content s going to be better next year.
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The software s gonna be better next year.
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And we ve delivered on that every couple of months we launch incredible new feature sets, but that s kind of just the mentality of,
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you know, don t let perfect get in the way of getting stuff out and evolving your business and iterating and making sure that next week you re better than this week.
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You know, you built such a thriving community and there have been communities that people go to, you know, spin classes, a variety of companies without mentioning any in particular, you know them all.
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What do you think has made your community so strong?
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What have you done?
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Obviously the experience itself is useful, but what do you think has built your community to be so large and ever expanding?
2
SPEAKER_01
Well, it s a good question, Tony.
2
SPEAKER_01
When we were creating the concept of the Peloton bike, we knew that two things were true.
2
SPEAKER_01
You went to a spin and indoor cycling class because the content, and it was the instructor and the music and the lights and the entertainment and the motivation and all the stuff that the instructor created on stage.
2
SPEAKER_01
And that was kind of the content broadly defined.
2
SPEAKER_01
There was also a second vector, though, that was just as important to your point, though, and it was the social aspects.
2
SPEAKER_01
It was seeing other people.
2
SPEAKER_01
In the same way, in the dance and the energy that you had 45 minutes ago, you saw the energy of other people, and that gave you energy.
2
SPEAKER_01
And so there s kind of a communal motivation in group fitness.
2
SPEAKER_01
And when the whole class stands up, you stand up, because it s not social pressure.
2
SPEAKER_01
You don t want to be the schmuck sitting down, right?
2
SPEAKER_01
So the community, and the motivation, and the support, and the, in some ways, competition, but mostly support.
2
SPEAKER_01
engagement and interactivity with the other people, we knew that that was an important vector.
2
SPEAKER_01
So it wasn t just streaming the content.
2
SPEAKER_01
We wanted to give build social software, gamified software, so that you saw the other people, you see them on the leaderboard, you see how they re, you high five with them, you can video chat with them.
2
SPEAKER_01
But
2
SPEAKER_01
So we used to call it social software when we were building the product.
2
SPEAKER_01
And it has evolved into a very powerful community that kind of took off on its own.
2
SPEAKER_01
You know, we kind of created a few tools, but it s it s taken a whole new life and a whole new vector that we hadn t truly anticipated, to be honest, Tony.
2
SPEAKER_00
You know, one of the things we teach here is for everybody is satisfied customers go away, raving fans stay.
2
SPEAKER_00
You have a different way of languaging that I read someplace.
2
SPEAKER_00
What s your philosophy on really building that community and having those raving fans?
2
SPEAKER_00
What s your view about that?
2
SPEAKER_01
Yeah, so there s a term in our business and a lot of business called net promoter score that you know.
2
SPEAKER_01
And it s just how willing your members, your customers are to recommend your business to a friend.
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SPEAKER_01
It s very simple.
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SPEAKER_01
It s one question, would you recommend this product or this service to your friends?
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SPEAKER_01
And it s a scale of negative 100 to 100.
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SPEAKER_01
So it s a pretty big broad scale and you ll see credit cards companies or insurance companies are often like negative 20 or something.
2
SPEAKER_01
But for Peloton, we re generally in the low 90s, which means the people that discover Peloton and become members and get in our community, they are very happy and they re willing to tell their friends about it.
2
SPEAKER_01
And it s beautiful.
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SPEAKER_01
It s an important part of the efficiency of our marketing.
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SPEAKER_01
And we take it seriously.
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SPEAKER_01
We track it across all different parts of our business.
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SPEAKER_01
It s mostly, like you know, Tony, just a commitment to satisfying your members, making sure they have a great value.
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SPEAKER_01
The value that they get today is going to be better tomorrow, so you re continuing to reinvest and making them happier and making them more satisfied.
2
SPEAKER_01
Jeff Bezos with Amazon Prime that was launched probably 20 years ago.
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SPEAKER_01
Every year you got new stuff with Prime for the same membership.
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SPEAKER_01
And so people just never left.
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SPEAKER_01
And so many households in America and now the world have Prime memberships.
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SPEAKER_01
And we re trying to make the Peloton membership that same indispensable fitness subscription.
2
SPEAKER_00
Well, that s the core teaching here as well is that
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SPEAKER_00
The only way you become successful is adding more value than anyone else in the marketplace.
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SPEAKER_00
But it s adding the value the customer wants, not the customer you want to give.
2
SPEAKER_00
Because a lot of entrepreneurs, they build a product for themselves.
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SPEAKER_00
But it sounds like, I don t know if it s true, it s like, I heard, are you on the top of the leaderboard?
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SPEAKER_00
Do you use this product yourself?
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SPEAKER_00
Did I hear that accurately?
2
SPEAKER_01
I was watching some stuff about you prior this morning, and I was thinking that you re much more of an athlete than I am, and I run a fitness company, so I should be asking you that, Tony.
2
SPEAKER_01
I used to be a pretty competitive runner and cyclist, but I m turning 50 next month, and my hardcore days are truly behind me, and there s so many real, real cyclists on the Peloton leaderboard now that I m not even close to the top.
2
SPEAKER_01
I ll be lucky if I m in the top quartile.
2
SPEAKER_00
Well, I love that you took something that was a passion for you and turned on so many people.
2
SPEAKER_00
I m curious, you know, COVID for me was pretty tough.
2
SPEAKER_00
They made my job, you know, literally illegal around the world overnight.
2
SPEAKER_00
I was about to do an event for, you know, I do stadiums, usually 12,000, 15,000 people for four days and nights or a week.
2
SPEAKER_00
And then all of a sudden, people called me up saying, you re going to cancel.
2
SPEAKER_00
And the next thing I knew, I had no choice.
2
SPEAKER_00
I was being canceled literally all over the earth.
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SPEAKER_00
Australia, London, everywhere.
2
SPEAKER_00
And my first thing was, OK, well, screw it.
2
SPEAKER_00
I ll do this in movie theaters.
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SPEAKER_00
I ll only say 10 people.
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SPEAKER_00
We ll do 1,200 movie theaters with 10 people.
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SPEAKER_00
And then they shut down the movie theaters.
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SPEAKER_00
I ll do this in churches.
2
SPEAKER_00
They re not going to leave Costco open and then shut churches.
2
SPEAKER_00
And they shut the churches down.
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SPEAKER_00
But I never envisioned, I ll be honest with you, I said I d never do this in people s homes because they don t have the music, they don t have the group dynamic, you don t have a crowd of 15,000 people.
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SPEAKER_00
But as we re discovering here, we found a way to do this that s even better for many people.
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SPEAKER_00
I still love live events.
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SPEAKER_00
But, you know, we had 836,000 people do a six-day program with me a month ago.
2
SPEAKER_00
It was just like, I would normally go to, like, well, 2019 would be a typical year.
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SPEAKER_00
I went to 118 cities in 16 countries.
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SPEAKER_00
That was my life, right?
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SPEAKER_00
And I d see a quarter of a million people.
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SPEAKER_00
So I saw more in a week.
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SPEAKER_00
So my question to you is, it s like a new world to be able to do this.
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SPEAKER_00
At what point
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SPEAKER_00
Did you know this technology?
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SPEAKER_00
Did you already know it would be this size because you had been working in digitization, you know, and saw what the market was?
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SPEAKER_00
Are you doing more?
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SPEAKER_00
I mean, I read that, I think it was March, you guys trained a million people in a day.
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SPEAKER_00
I was feeling good about myself that I read about you guys.
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SPEAKER_00
When did you know that it was going to explode at this level?
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SPEAKER_00
I m curious.
2
SPEAKER_01
Well, Tony, you are exactly why I believed in Peloton, because if you want to take one of these courses that you provide, you want the best.
2
SPEAKER_01
You don t want the poor man s Tony Robbins, you want Tony Robbins, right?
2
SPEAKER_01
In the same way in New York City, we would see the top instructors at the top times at the top studios would be so oversubscribed.
2
SPEAKER_01
In New York City, within 20 seconds, they would sell out.
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SPEAKER_01
Those 50 bikes were gone.
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SPEAKER_01
But I would say maybe 5,000 people would have wanted to be in that class.
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SPEAKER_01
And it s because
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SPEAKER_01
the instructor matters, the human matters.
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SPEAKER_01
It s the reason why Tom Cruise makes $100 million a year or whatever, and there s a lot of starving actors in LA because people want the best.
2
SPEAKER_01
And so when we started the platform, we said, God, if we can allow 10 million people to take the best
3
SPEAKER_01
class at the best time from around the world.
3
SPEAKER_01
And Tony, because of the, um, the production value, the content and the cameras, and as you re seeing, you can do more with, with different production value, the content that you couldn t have done in the stadium that you can do.
3
SPEAKER_01
And there s with, with camera tricks and camera angles and lighting, and, um, you can do more and create different energy.
3
SPEAKER_01
Um, that, uh, that was very clear to me that instead of teaching 50 people in a sweaty basement, as, as the, uh,
3
SPEAKER_01
traditional indoor cycling or group fitness model had evolved to, if you can scale it via digital media, you can have millions of people in the same class, and the energy that the instructor will get, as you re seeing, I m sure it was very energizing for you to have 100,000 people.
3
SPEAKER_01
Because, you know, you re better when people are giving it back to you.
3
SPEAKER_01
And so we said the same thing with our instructors.
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SPEAKER_01
And that s one of the reasons why we wanted live studios.
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SPEAKER_01
So we ve invested $50 million in a studio in New York City and $50 million in a studio in London.
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SPEAKER_01
So that when the instructor is coaching, there s 50 or 60 people local.
3
SPEAKER_01
Yes, so that they re getting the energy from that bit from the people in the studio And then you you know you and Fiji or you in Palm Beach and me and the West Village Yes, we re feeling that energy at home.
3
SPEAKER_01
Yes.
3
SPEAKER_00
We re actually doing that here, too We have these 50 foot higher 20 foot high LED walls, but I had a 40 foot high ceiling here And so this wall lifts and then I can put 1,200 people in their lives with some similar thinking so you can have that and still have 10 or 50 or whatever number thousands people around the world and
3
SPEAKER_00
Tell me, how did you gear up?
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SPEAKER_00
You know, when you ever have a problem, you know, some people try to ignore it, some people try to blame something.
3
SPEAKER_00
Most intelligent people find a solution, but a solution s cognitive.
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SPEAKER_00
A solution s not real until you make a change.
3
SPEAKER_00
And the minute you make a change, it creates a new problem, hopefully a better quality problem, right?
3
SPEAKER_00
When you re growing as fast as you are, how the hell did you gear up for the growth you ve experienced in the last two years?
3
SPEAKER_00
What did you do?
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SPEAKER_00
And then when it didn t work, because there s some things outside your control, obviously, like COVID,
3
SPEAKER_00
You know, how have you adapted?
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SPEAKER_00
Share with us if you would, because everyone has to deal with these issues if they re successful.
3
SPEAKER_00
You know, people think if they re successful, there s no more problems, but you and I both know that s bullshit.
3
SPEAKER_00
You just have a better quality of problem, but it s still a problem if you don t fulfill your customers  needs.
3
SPEAKER_01
That s right.
3
SPEAKER_01
So we have a saying, don t use hope as a method.
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SPEAKER_01
So we are operators.
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SPEAKER_01
We act owners, in your vernacular.
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SPEAKER_01
We act like owners, and we, you know, we build stuff, and we love solving problems.
3
SPEAKER_01
Yeah, we love the operating side.
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SPEAKER_01
The operating side of Peloton has never been the problem.
3
SPEAKER_01
We also have lofty ambitions and we plan for success.
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SPEAKER_01
I often say don t plan for failure, plan for success, because they become self-fulfilling.
3
SPEAKER_01
One of the ways we were able to keep up with a lot of the crazy COVID demand was we were expecting to grow like this, and next year we expect to grow like this.
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SPEAKER_01
We re investing in supply chain.
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SPEAKER_01
When I say we re going to go from 2 million subscribers to 100 million subscribers, we have a watertight plan of doing that.
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SPEAKER_01
I m just not espousing hot air to try and create lofty goals for our team.
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SPEAKER_01
We see it.
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SPEAKER_01
We have a plan to do it.
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SPEAKER_01
We re investing in that.
3
SPEAKER_01
And so it s, again, not using hope as a method and planning for success.
3
SPEAKER_00
That s beautiful.
3
SPEAKER_00
And that type of goal has got to excite people.
3
SPEAKER_00
I always tell people, goals affect you whatever they are.
3
SPEAKER_00
And some people think, how many goals are there to get through the day?
3
SPEAKER_00
Goals like that would certainly keep your team moving, brother.
3
SPEAKER_00
That s pretty exciting.
3
SPEAKER_00
Tell me if you would, you re also, you know, one of the things I respect about you is like even this culture, everywhere we go, we look at the planet as our playground and love as our legacy, right?
3
SPEAKER_00
So we re looking to give back not as a positioning mode or virtual signaling, but just because it s what fulfills human beings and it gives you more drive.
3
SPEAKER_00
And I saw that you ve partnered, I think, with Beyonce.
3
SPEAKER_00
And you re going to be delivering, I guess, these for 10 black colleges.
3
SPEAKER_00
Can you tell us something about what you re doing in that area?
3
SPEAKER_00
And would you tell us why you think it s important for companies to have some sense of mission besides their product or service in giving back to a community of sorts, or maybe many communities?
3
SPEAKER_01
Yeah, that partnership with Beyonce is to give 20,000 free digital memberships to students of HBCUs, and that s just one part of the Peloton pledge, which was a $100 million pledge to fight social injustice in the states coming out of the Black Lives Matter movement, and we were very excited, and our team got excited, and our members got excited, and to give $100 million across the next four years was a big swing, but our board was very supportive.
3
SPEAKER_01
and our team was super energized.
3
SPEAKER_01
But you re right, Tony.
3
SPEAKER_01
I love this new world order where businesses are not only able to, but expected to be a bigger part of the fabric of the communities.
3
SPEAKER_01
And you ll know a couple years ago, Jamie Diamond, as part of the Business Roundtable,
3
SPEAKER_01
formally said that it used to be, you know, coming out of Milton Friedman 30 years ago, that CEOs and leadership teams were 100% focused or should be 100% focused on their shareholders.
3
SPEAKER_01
And a couple of years ago, the Business Roundtable said, no, that s not true.
3
SPEAKER_01
We re readjusting the expectation of businesses and leaders to include employees, to include members, to include communities.
3
SPEAKER_01
And I
3
SPEAKER_01
I love it, we wanna be an important part of the fabric and important part of the movement forward.
3
SPEAKER_01
In some ways where governments have failed us across the globe, businesses can step in and to the extent that some of the investors are wanting us to do that, I get great feedback from some of the big institutional investors now that we re public where they say, we watch what you re doing, we re seeing how you re acting on the social justice front, environmental front, all these different new vectors that you re being judged by.
3
SPEAKER_01
And it s fun, and I love that people are noticing, and I do care as a human being.
3
SPEAKER_01
Again, my dad served the country in Vietnam and went to the Naval Academy, and I have this great patriotic gene.
3
SPEAKER_01
And so it s fun that businesses are allowed to do it now, and we re definitely not going to default on our responsibility.
3
SPEAKER_00
It s something I really, again, want to encourage everyone listening because it, as I ve shared with you before, all of you here, you know, whatever your motivation, it affects you and you can t fake it.
3
SPEAKER_00
If you re just motivated for yourself, there s nothing wrong with that.
3
SPEAKER_00
You re part of life.
3
SPEAKER_00
Life gives you insights if you re trying to make life better.
3
SPEAKER_00
If you re trying to take care of your family, my experience is you get more insights, you know, because like you re supporting more of life, not just yourself.
3
SPEAKER_00
Trying to support a community, it gets higher.
3
SPEAKER_00
Trying to support humanity.
3
SPEAKER_00
I m not talking about virtual signaling.
3
SPEAKER_00
I m not saying what you say.
3
SPEAKER_00
You know what s driving you.
3
SPEAKER_00
But if you ll do that early on, Mark Benioff is a good friend of mine, John, and he came to like nine of my seminars in a row when he was still working at Oracle.
3
SPEAKER_00
He s a big guy.
3
SPEAKER_00
He was standing in the front row.
3
SPEAKER_00
And at one point he came up and met me, introduced himself, and I said, I ve seen you here a lot of times.
3
SPEAKER_00
I said, you know, are you slow?
3
SPEAKER_00
And kind of teased him.
3
SPEAKER_00
He said, no, you talk about repetitions and other skills.
3
SPEAKER_00
But that day he told me, he said, I m leaving Oracle because of you and I m going to start this company called Salesforce.com.
3
SPEAKER_00
And he said, Tony, I just got to tell you, we re going to change business around the world.
3
SPEAKER_00
And he looked at me in the face and he says, we re going to do $100 million in business.
3
SPEAKER_00
Of course, this year you re going to do $20 billion this year in business, right, with Mark.
3
SPEAKER_00
So I ve been on that journey.
3
SPEAKER_00
But one of the great things Mark did was, in the very beginning, we were talking about contribution.
3
SPEAKER_00
And Mark took it to heart.
3
SPEAKER_00
And he said, you know what I m going to do?
3
SPEAKER_00
While we re small, I m going to do things I probably won t do when I m big.
3
SPEAKER_00
I m going to give 1% of the revenues.
3
SPEAKER_00
I m going to give 1% of our stock and 1% of our people s time.
3
SPEAKER_00
And now Google has copied that.
3
SPEAKER_00
Jamie Dimon and some others have ticked on to those pieces.
3
SPEAKER_00
Mark s been a real leader in that area.
3
SPEAKER_00
But what I see in Mark is not only the impact, but the joy that it gives him.
3
SPEAKER_00
I know that it gives you, that it gives me.
3
SPEAKER_00
And I hope all of you will take that to heart.
3
SPEAKER_00
Because you ll do more for others you care about than you will for yourself.
3
SPEAKER_00
That s the nature of being a human being.
3
SPEAKER_00
That s the best part of us.
3
SPEAKER_00
Tell me, if you would, what is it that fulfills you most at this stage of your life?
3
SPEAKER_00
And how are your days filled?
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SPEAKER_00
I m curious at this stage.
3
SPEAKER_00
I mean, you ve got how many employees now?
3
SPEAKER_01
I think we have close to 8,000 employees globally.
3
SPEAKER_01
And yes, Mark has been an inspiration to me, and Mark Benioff as well, to be honest, Tony.
3
SPEAKER_01
He, 15 years ago, I believe, published how Salesforce was doing on a women in tech, black professionals across engineering roles, and just really opened the door
3
SPEAKER_01
the statistics of his company, even when they weren t perfect, even when they weren t good, he said, wow, I want to expose this and challenge other business leaders to expose it so we can at least talk about the problems and the opportunities.
3
SPEAKER_01
And so, he s been a real champion of social change and team
4
SPEAKER_00
culture, which I have been taking notes.
4
SPEAKER_00
He s obviously a visionary on that front, as you well know.
4
SPEAKER_00
I, like Mark, although probably a lot less successfully, care deeply about our culture, and I would say I m the chief culture officer, because in order to recruit and retain the best people in the world at all these fancy jobs, and if you want the best people, you ve got to have an incredible culture internally.
4
SPEAKER_00
Interestingly, in today s world order, the internal culture also permeates into the consumer brand.
4
SPEAKER_00
As you ve seen some businesses misstep with social media and with everyone having a voice with Twitter, you have to make sure that your team is incredible and your culture is incredible.
4
SPEAKER_00
and then think about your consumer brand.
4
SPEAKER_00
So it s, I m a student of all this stuff.
4
SPEAKER_00
And as we get bigger, it gets harder, especially to your point, Tony, with not your inability to travel.
4
SPEAKER_00
And I think you and I are the same type of people where we get energy from other people and we want to be in person.
4
SPEAKER_00
And so it s been, I think you and I have been kind of one arm behind behind our back is with our, with our leadership style that we adopted for decades.
4
SPEAKER_00
And so it s been a little challenging, but I m definitely looking forward to this fall.
4
SPEAKER_00
getting back in an airplane and seeing these people and visiting our sites.
4
SPEAKER_02
Me too.
4
SPEAKER_02
Eric Yon is a good friend of mine who started Zoom, and he made this possible because they used to only have 1,000 people max who could get on.
4
SPEAKER_02
So he made all these adjustments to help us make this happen.
4
SPEAKER_02
But he even said to me the other day, he said, I am Zoomed out from Eric Yon, who made $20 billion doing Zoom, right?
4
SPEAKER_02
Let s go for some Q&A here from the audience, ladies and gentlemen.
4
SPEAKER_02
John s been really wonderful with us.
4
SPEAKER_02
Who s got some questions?
4
SPEAKER_02
Raise your hand, and we ll come to you right now.
4
SPEAKER_02
Karina.
4
SPEAKER_02
Greena, where are you in the world?
4
SPEAKER_03
I m in beautiful San Francisco Bay Area.
4
SPEAKER_02
San Francisco, ladies and gentlemen!
4
SPEAKER_02
What s your question for John?
4
SPEAKER_03
Well, it s really about COVID and how it s destroyed my business.
4
SPEAKER_03
I m an event planner and wedding planner.
4
SPEAKER_03
So I m waiting, Tony, like you.
4
SPEAKER_03
But this whole move to virtual has been amazing.
4
SPEAKER_03
And I just, I m wondering how much your margins have increased.
4
SPEAKER_03
with COVID and if it was kind of this blessing or would Peloton have been this big without it?
4
SPEAKER_00
Yeah, I totally believe that Peloton is going to be one of the great consumer brands of the next couple decades.
4
SPEAKER_00
It s undeniable that COVID was tailwind for us.
4
SPEAKER_00
I mean, I don t want to be cavalier.
4
SPEAKER_00
People stuck at home and gyms closed.
4
SPEAKER_00
There s no question it has helped a man.
4
SPEAKER_00
It, to me, has been an inevitability that fitness is going to move into the home.
4
SPEAKER_00
People would rather work out at home.
4
SPEAKER_00
It s just been such a dopey category, and it was all about hardware.
4
SPEAKER_00
Going and getting on a stationary bike in your basement, staring at a wall, and listening to your old 80s mix on your headphones is just not awesome.
4
SPEAKER_00
So what we did was we took that stationary bike and brought in a community of people and all the software and all the content and the best instructors and the best music and the best programming and selection and your friends and social stuff and we ve made it awesome.
4
SPEAKER_00
And same thing with our tread, bringing in bootcamp classes into your home with the best instructors and best music on and off the tread.
4
SPEAKER_00
So to your question about margin, Tony brought up the reality that we had to airship
4
SPEAKER_00
spending $100 million bringing in treads and bikes from Asia so that we can satisfy the demand.
4
SPEAKER_00
Obviously, with commitments like that to our brand and to our members, that would otherwise have hurt margin.
4
SPEAKER_00
Luckily, the cost of acquisition went down.
4
SPEAKER_00
Some of the things went up, some of the things went down.
4
SPEAKER_00
The margin structure has increased, but we ve done some things that are pro-consumer that have taken us backwards a little bit.
4
SPEAKER_03
because I am too.
4
SPEAKER_02
We can see that, Karina.
4
SPEAKER_02
Give her a hand.
4
SPEAKER_02
How about there on room eight?
4
SPEAKER_02
Room eight.
4
SPEAKER_04
I m Michelle.
4
SPEAKER_04
I m the person of the first.
4
SPEAKER_04
I m the person.
4
SPEAKER_02
Michelle, tell us, where are you in the world?
4
SPEAKER_04
We are in Belgium.
4
SPEAKER_02
Belgium, ladies and gentlemen.
4
SPEAKER_02
Give it up for Belgium.
4
SPEAKER_02
What s your business and what s your question for John?
4
SPEAKER_04
Well, we do organic superfoods in the Amazon rainforest and we provide them in the easiest way possible to final consumers around the world.
4
SPEAKER_04
And then I would just like to say, Tony, you have really changed my life, so I m very grateful to be here and super inspired by you, really.
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I listen every day to many of your videos, and I read the book, so thank you.
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Well, thank you.
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You did it.
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I won t take the credit, but I m grateful I could help.
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What s your question for John?
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So John, we are a growing company, but still a small company.
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So our bottleneck now is actually employees.
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So we just have a few.
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And we would like to have the best team, but we don t know how to do that.
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Of course, our budget is limited.
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And I would like to know how was this experience for you to build a team with the people that you wanted, establishing a culture, and still having a budget.
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So how to pass through this?
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bottleneck that we are now?
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Yeah, that s a great question.
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I will say, and this is going to be not controversial, but something coming out of COVID that a lot of people debate, but I think spaces matter a ton.
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So I have always wanted to capitalize the Peloton business so that we could invest in physical spaces, namely a headquarters that is awesome to come to work physically.
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So, as you think about recruiting people, if you have a gorgeous office where it s open and fun and you play music and there s snacks and there s coffee and there s energy, the same energy that Tony had an hour ago, if you have a place to come, obviously you wouldn t be dancing around all day, but energy matters.
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And to me, spending the $10,000 a month or $20,000 a month, whatever space, however big you need and what the cost of space is in Belgium,
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But I think when you recruit people and you interview them in an office where they can see themselves, I ve always cared about that.
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From day one, we invested in physical spaces where we can bring everyone together, and then energy begets energy, and you can recruit more people.
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Just as one small tactic, obviously, you need to pay right, and you need to market, and get the word out on your open job recs.
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physical space to me has always mattered.
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And it s a little bit self-selecting.
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People that like coming to the office and like that energy and were turned on by your space and your vibe, then they ll join and it will, energy begets energy.
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Very nice.
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Give her a hand.
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Thank you so much.
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How about Brett Scott there, room 17.
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Brett Scott, let s bring him up.
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Brett, where are you in the world?
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Atlanta, Georgia.
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Atlanta, Georgia.
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A place John knows well.
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What business are you in, Brett?
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And what s your question for John?
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I m a real estate agent and a life coach.
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I help people get from where they are to where they really want to be.
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Very nice.
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So my question for you is more about the heart, man.
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After seeing something that you believed in so much finally succeed, can you describe in detail what that felt like?
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I would love to hear that from you.
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Or what it feels like still.
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Yeah, and funny you ask, our stock is down 10% today and I don t care about our stock, but there s still so many non-believers in Peloton.
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So many people think that it s going to be a COVID story and that in six months our sales are going to plummet because everyone who wanted a bike or a tread bought it in COVID and everyone s going to rush back to the gym and Peloton is screwed.
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To answer your question, we feel so, back to Tony s words, hungry and humble, that we re 2% into the 100 million subscriber goal.
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So we re not, we re absolutely not doing a victory dance or patting ourselves on the back.
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We re still, you know, a little pissed off, a lot of fire in our belly, a lot of non-believers and still really trying to show that this is the future of fitness and this isn t, you know,
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going the way of, you know, maybe a GoPro or a Fitbit that had collapsed and these investors, you know, study the parallels and so we re still trying to show that we are a special company and so we re, you know, I appreciate you asking about the heart and we definitely have a lot of heart at Peloton, but we re not content or celebrating just yet.
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Keeping their hunger, that s beautiful.
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That s a real entrepreneur, never satisfied.
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That s right.
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Give him a hand.
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Thank you, Brett.
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One more.
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How about Ann Farris over there, room 15?
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Tell me, where are you in the world?
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What s your business?
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I live in Costa Rica.
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Costa Rica, ladies and gentlemen!
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I m from Chicago.
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I just couldn t take that cold weather anymore.
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And what s your business?
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I have an e-commerce brand, I m about to launch a new one.
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I support new mothers and how they bond with their babies and help them feel beautiful.
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Beautiful.
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What s your question, John?
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My question was, you know, when you were starting out that Peloton, there s so much, there s so much logistics in starting that company because you have the bikes and you have the software and you have the instructors.
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So there s so many parts that have to all come together right at the beginning.
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And I m kind of feel that way in scaling my business as well, that I have so many parts to come together.
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but I don t have the funding to hire people for all of those parts.
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So I was curious if you could share a little bit of what was your journey kind of in the trenches when you were really trying to get all the pieces together to be able to launch.
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Yeah, I think it s a great question and certainly was top of mind as we were building Peloton is pick your spots.
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And to Tony s point, not letting perfect be the enemy of good.
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We partnered in the early days with some things that we now own.
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We bought some manufacturers in Taiwan.
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We now do logistics and deliveries, which we didn t do originally.
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But what we said was we need to be awesome with the software and the content and the hardware.
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Those three things were critical.
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We eventually got good at retail.
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We eventually got good at logistics.
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We eventually got good at manufacturing.
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But it was another fun thing, Tony, you ll appreciate that we said a lot in the early days is you got to rob a few gas stations on the way to the perfect crime.
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And we robbed a lot of gas stations, meaning we did things that weren t perfect that you wouldn t be proud of, but you just get through.
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But you got to focus on what s going to make your business special and what s going to resonate with the consumers and outsource and try and lean on third parties that can help you get to the perfect place.
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I think it s such a beautiful answer, John, because I think everybody here needs to remember you can t do it all.
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If you try to do it all in the beginning, you re going to fail.
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You have to figure out what is the core competency.
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What does the client really love most?
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What do they care about?
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And over-deliver that.
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And as John described, the rest you re going to try and outsource, connect.
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And eventually, as you grow and get better, you ll either own them or you ll certainly have a better set of choices.
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Great answer.
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Thank you for that, John.
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John, you ve been really generous with your time.
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I want to thank you.
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The last question I have for you is I d love to know if you had three pieces of advice to give any entrepreneur on the journey you ve been on.
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Because you ve been heads of CEOs of large companies.
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You ve built this extraordinary brand.
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And I love that you re 2% of where you want to be.
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And I love your mindset.
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But if you were going to give the two or three most important pieces of information or advice you ve ever heard or you d want to give somebody,
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The most important one, for sure, is finding partners that are high-integrity, that share your work ethic, that you like being around, that inspire you, that are good culture fits for you and the way you work.
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A lot of times, I ll see other entrepreneurs and I ll ask them who their team is, and they ve cobbled together some people, but it s not going to work because it s not the right people.
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If there s people in your company that are either dragging you down or don t feel like they fit, you ve got to solve that because you re not going to be great with people that don t fit well with you.
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Obviously, if you can, get also the right capital partners.
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I ve, through the years, misstepped and had capital partners that didn t share my vision or didn t philosophically align with me.
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or had a different investment horizon.
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They were good people, but they were thinking three years out, not 30 years out.
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To me, it s all about the people.
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Then, to your point, Tony, setting your vision high, not being your own ceiling, really defining your opportunity big.
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You might not see getting there tomorrow, but at least you
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know where you re going to be 15 years from now, and then set your next three-year plan in that direction so that if you succeed, you re getting where you want to go.
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That s beautiful.
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John, thank you.
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You ve been so generous.
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You have a beautiful heart, and you have a beautiful mind, and you ve got a beautiful company.
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You ve got a lot of fans all around the world right now, and I know it s only going to grow.
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Thank you for your time, brother.
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Hope to see you again soon.
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The Tony Robbins Podcast is directed by Tony Robbins and produced by the Tony Robbins team.
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Copyright Robbins Research International.