And if the company isn’t doing well, I’m getting replaced anyway. So it’s pretty cut and dry. And if I don’t do well — and there’s a change — maybe at that point the business gets sold.
What would you do if someone gave you a deal offer you couldn’t refuse?
My guess is we were most at risk before I came. It was your best shot at acquiring at a bargain-basement price. If we’re able to re-accelerate the growth and articulate a vision that investors find compelling, then it would be a much bigger price.
Do you think you’re going to have to raise more capital?
The answer is maybe. But we need a little more context to have insight into that answer. Regardless of what the strategy is, you need a capital structure to support it. So now if it becomes this enormously capital-intensive business, because you’re giving away a $2,000 bike and then recouping it over time, you can absolutely raise capital around it.
It would be some combination of debt, equity — mostly debt like we used at Netflix, because the bigger the subscriber base gets, the more predictable the revenue stream gets. And the more predictable the revenue stream gets, the more leverage you can put on it.
Are you going to hire anyone to help with the supply chain?
Definitely. For the next couple of weeks, we’re going to get a bloody nose because of the move to third-party distribution. We had 10,000 people scheduled to receive bikes from Peloton, and we moved them over to third parties. Ten thousand people are getting rescheduled. Plus, some of those 10,000 are going to get rescheduled again. So we need to up our comms game. And then, make sure that we’ve got people with the appropriate level of experience and expertise.
Would you consider joint ventures?
Yeah, I would. Which ones? I don’t know. Should we do something with Amazon? Should we do something with YouTube? Is it Nike? Should we do a co-branded thing with Adidas and with retail? There’s a big opportunity in apparel — we do $250 million revenue in apparel. John’s wife is no longer running apparel for us, by the way: not an employee of the company anymore, which is something he fixed before I joined.
How often do you and John talk?
Well, I haven’t been keeping track. So far, I’ve talked to him three times today.