First, a warning from history. Four years ago, a startup named Juicero briefly lit up Silicon Valley, raising $120 million in seed capital for its big idea: a WiFi-connected cold-press juicer that inexplicably cost $400 (£310). Here was a solution in search of a problem, which, schematically, can be represented thus:
Solution: Spend $400 making sure your juicer has WiFi
But to those in the white heat of the Juicero boardroom, the folly wasn't immediately apparent. Back then, Doug Evans, the company's founder, would go around comparing himself to Steve Jobs. He wanted to be the Apple of apples. "There are 400 custom parts in here," Evans told tech site Recode. "There's a scanner; there's a microprocessor; there's a wireless chip, wireless antenna…"
Fundamentally, the Juicero paradigm was a subset of a broader Silicon Valley corporate strategy, which can be shown as:
(Ordinary Thing From The Present) + (Silicon Chip)
Doug's reasons for adding the silicon chip didn't exactly zing off the page. Juicero, he said, was: "The first closed-loop food safety system that allows us to remotely disable Produce Packs if there is, for example, a spinach recall. In these scenarios, we’re able to protect our consumers in real-time."
Unfortunately, Juicero never lived long enough for Doug to see the promised land of his first emergency spinach recall. In 2017, the company was pulped when someone worked out you could squish the pricey fruitbags they sent you just as easily with your bare hands.
How could so many Stanford MBAs get it so wrong? Could it be that the people leading our tech revolutions weren't nimble seers after all, but instead ovine, craven and gormless herd animals – the kind of people Nassim Nicholas Taleb might describe as "IYI" (Intelligent, Yet Idiot)?
Lessons were learned. Ponderous features in Fast Company magazine dissected the Juicero disaster as a kind of controlled explosion, a mini-crash that could help prevent a bigger one. Surely Silicon Valley wouldn't fall for the same hoopla again?
Come with me now, on a journey to the headquarters of Peloton. A breathless feature in Bloomberg Business Week situates the company in fine style: seven floors of an office building in Manhattan's Flatiron district… Free beer and kombucha… Catered lunches arrive every Thursday… A pool… Shuffleboard. This is startup culture as cargo cult: first, laden yourself with the trappings, then beckon skywards to providence.
Peloton is an exercise bike with an iPad built into it. Sorry, I mean: Peloton is a "technology, media, software, product, experience, fitness, design, retail, apparel [and] logistics company" – because that is literally how they bill themselves. And Peloton will happily bill you, the customer, for £2,000 per exercise bike with iPad built into it. That's right: £2,000.
Peloton is already big; celebrity fans include Michael Phelps, Michelle Obama, Hugh Jackman and Ellen DeGeneres. The company raised a billion dollars in a funding round earlier this year, an amount that takes its current market valuation to $8 billion – twice that of the New York Times.
In fairness, it is a good exercise bike. I know this because I went to their airy showroom in east London and clambered aboard. It's smooth, like cycling on molten glass, or gliding on the shiny pink backs of a thousand baby mice. "You're getting a lot of power out of that!" the sales assistant coos. "Peloton's like one big family. We regularly have people from all over the world just stopping by the shop. At the broadcast studio in New York – people drive for hours just to attend a class there. Some people hop on planes!"
At the centre of the Peloton universe is the iPad on your bike (imagine!), beaming out live transmissions from this NYC HQ. Sexy instructors with "bags of personality" lead spinning classes in real time, giving shout-outs to Pelotonians around the world. Their goal is to make a wide range of people who've parked an exercise bike in their living room feel like they are, in fact, part of a virtual family. They say things like: "Hey, Jim in Schenectady, it's your hundredth ride. Congrats!" They invoke the grim mantra "no rider left behind", as if riding a bike with an iPad attached to it is akin to trench warfare. They bathe you in the therapeutic psychobabblings of the North American mass fitness industry, never missing an opportunity to pipe out a cheery "… and don't forget to check out the beyond the ride content".
Back in London, the saleswoman pushes some buttons. "You get to high-five people." This she does by clicking names on-screen. Sure enough, soon she's received some high-fives back. I don't mention that this is like my other favourite failed startup: Yo, a social network where all you could do was send one message, and only one word: "Yo."
You'd think a company selling two-grand exercise bikes would be profitable. But no: Peloton still managed to lose $196 million in the year to June. It has 500,000 subscribers, which represents a loss of $392 per customer. How do you charge two grand for something and still book a $400 loss per head? Especially when it also flogs them a $40-a-month subscription package. That's right: in keeping with modern startup grammar, Peloton isn't actually selling you the hardware. Really, it's selling you a recurring-billing software subscription that authorises you to watch their content.
Peloton is often called "a cult" by its detractors, and it is often called "a cult" by its fans. Everything's "a cult" these days. LuluLemon, SoulCycle, Bikram, Crossfit: if you want to shed some love handles in 2019, you basically need to do it while under the influence of a sinister subset of society trying to control your mind. Call me old-fashioned, but whatever happened to a punchbowl of LSD and some group sex?
But the real problem with Peloton – apart it being the latest displacement activity of the urban bourgeoisie who drown their existential questions in nifty-idea Kickstarters – is that Peloton is a cult without a fortified compound.
Robert D Putnam's prophetic 2000 book Bowling Alone could hardly have predicted how depopulated our street-level world would have become by 2019. Gig venues are shuttering. Cinemas rustle with tumbleweed. The high street is gasping its last. What does it say that the gym – AKA "the new nightclub", © every lifestyle journalist of the past two years – might now find itself subject to the same forces of atomisation?
Either way, don't worry if Peloton's bike doesn't sound like your bag. Lately, the company announced it's diversifying into treadmills. No, sorry, I misread that. They are "reimagining the treadmill for the 21st century". Now, you can run in a group, alone.
Of course, if you hate running so much that you need a $4,000 treadmill to motivate yourself to do it, maybe running's not for you. In fact, it might even be said that your problem is deeper than mere personal fitness. Way deeper. In fact, you probably need a WiFi juicer too. Yeah – that's it.