This was just the CEO pulling the rip-cord on his Golden Parachute while the company can still make the payout.
He knew the company was screwed, and it's entirely the fault of top leadership. they chose to make their own performance bonuses a priority over long-term business survival, by recklessly expanding during Covid; a strategy that literally everyone could have told them would not be sustainable.
I think the leadership has done an amazing job. They made something out of nothing. Selling exercise bikes for 100's of percent of markups, and then charging the clowns that buy them a subscription fee.
> they chose to make their own performance bonuses a priority over long-term business survival, by recklessly expanding during Covid
There was never going to be long term survival. Peloton was the latest 'as seen on TV' level of product, and once their 15 minutes of fame burns out, the name will be sold off to license cheap products.
Amazing how little respect the leaders of a company seem to have about their workforce. It looks like leaders can never be honest towards their employees.
"It is not easy to say goodbye to valued colleagues and friends, each of whom have made important contributions to helping build Peloton into the company it is today. Decisions like these were not taken lightly, and we will work hard to assist impacted teammates with their transitions."
It was probably a lot easier than their valued golden parachute.
What are the long term prospects of a company like peloton? It's a bike + an iPad. Both components are commodities, and the price-insensitive segment of the market is too small to sustain a big business.
It's easy to hate on management, but the business doesn't make sense and management can't fix that. Peleton was going to crash from the covid-fueled mania, and it was going to crash hard. Inevitable.
The hardest thing to realize starting a company is realizing when you are no longer sufficient to run the company. It's a big difference from starting something small to running something huge. It took Steve Jobs 10 years from being forced out from Apple to returning wiser. Some people can adapt and learn but from what I have seen, most people can only be good at small or large, but not both.
Didn't Jobs bring in Sculley himself before getting ousted? It's not as though he was removed for any particular disaster, it was a coup.
He returned and continued doing exactly what he had done before. Investing tons of resources into new products that have cutting edge features bundled into an aesthetic package.
It's a point that people often forget. Going from 0->1 is a very different skill than 1->100 or bigger. Anyone who has started a company or been part of a small company then acquired by a larger company has felt this. It's also one of the reasons why so many acquisitions fail.
When there are layoffs and the CEO keeps his job people complain, when there are layoffs and the CEO leaves people complain. I think the takeaway is that people just like to complain
People complain because they were paid like employees but they were treated like contractors. The rest doesn't change their situation: the jobs are not back just because the CEO left.
> TOKYO – Nintendo CEO Satoru Iwata is to take a 50 percent pay cut for five months to atone for losses at the game giant, while other senior executives, including Mario creator Shigeru Miyamoto, will forego 20 to 30 percent of their salaries.
People (the workforce) complain about the total lack of respect and honesty. They couldn't care less if the CEO was on or off the company after such disasters, because the CEO usually has plenty of money to sustain his family for a decade without worrying too much. The workforce usually does not have that luxury.
I think when the CEO keeps his job people complain, when he leaves with a golden parachute people complain because they want him to be be punished/have skin in the game if he's going to lay off lots of people.
It is genuinely difficult to suddenly lose your job and reallocate all your time and energy on new projects, I don't see anyone wouldn't complain about that.
> Foley never seemed to fully understand the responsibility that comes with leading people. He never seemed to understand what it means to be accountable.
What does accountability even mean? You can drive a company into the ground, destroy the livelihoods of thousands, and make off with tens of millions of dollars. With no consequences whatsoever. What would accountability even look like under the system we have?
There’s no way silicon valley would have realized the importance of the content in the equation. The talent is absolutely a huge part of the success. There are multiple huge facebook and ig groups for some of the most popular instructors. It’s a moat.
I started out with a different bike but eventually bought a peloton because the community and integration was so much better than bike + tablet.
Plus I love stretching, yoga, pilates, meditation.
During cancer I couldn’t ride. But those chair and standing yoga classes made an enormous difference in my state of mind and health.
I wish it wasn’t so hard for a few folks here to see that passion and emotion for a brand has value.
That said, there are enormous opportunities in front of Peloton. It’s time to get some Silicon Valley leadership in there to apply product led growth initiatives.
> Foley never seemed to fully understand the responsibility that comes with leading people. He never seemed to understand what it means to be accountable. As a result, he's out of a job.
> The problem is, a business is more than just an idea.
> Sure, every business starts with an idea, but a business is a product, and manufacturing, and supply chains, and financial reports, and customer service.
> Once you involve other stakeholders, you become accountable. You become accountable to your customers, shareholders, and employees. That's a difficult thing for a founder who is used to exerting complete control over the thing they're building.
That's something I've said for a long time, after an argument with a "startup founder" who wanted me to code their entire website (from scratch!) with no help for a grand total of 2% equity (they got the remaining 98%, obviously) within basically no outside pay.
I tried to get a bit more equity before I signed [1], explaining that it seemed like I would be doing the lion's share of the work, so I felt I deserved at least 10-15% equity. The "founder" then told me that they deserve most of the equity because they had the "idea" for this startup, and I told them that everyone has ideas! Ideas are useful and necessary but also extremely cheap and unspectacular. No one gives a shit about your "idea", at least not until you've actually done some actual work to objectively prove that the idea is good.
[1] I was still somewhat young in my career and the red flags that I have now had not been fully developed.
Right, and if someone else thinks they can do a better job they're free to start their own company or acquire a stake in one.
Also, why are stakeholders being infantalized like they're some completely naive and innocent bystanders? Customers presumably are not forced to buy what you're selling, shareholders know their capital is at risk, and employees get paid every month. Are we supposed to be everyone's psychologist and finance advisor as well? Everyone's making their own decisions.
Although you may not have been implying it, saying the capital is being "lit on fire" makes it sound like the money vanishes into thin air, when that's not technically the outcome.
Even if the capital is given to/spent by a failing company, that money is at least still mostly spent on either materials or labor, which means it ends up back in the economy but somewhere else.
Obviously not the most efficient use of that capital if its being invested in poor companies, but it's not vanishing into thin air.
Peloton has always struck me as being the latest in a long line of fitness gadgets, from Nordic Track through Tae Bo DVDs and Bowflex. It was inevitable that the fad would end. The CEO rationally followed his incentives: lean into the fad, boost short-term profit at the expense of sustainability, and get that stock price up. Then quit and go buy an island somewhere. HIS plan worked perfectly.
I was hoping for more from the article. It lacks pretty much any detail that might actually prove to be a lesson.
It cites a layoff, a change in the stock price, and a few assumptions about how Foley generally isn't good at their business operations. Then it goes into vague platitudes about how a business is more than an idea. It doesn't mention anything of substance.
How do these golden parachutes (including the Wikimedia ones) make any sense in terms of incentives? Why would you want people to get a bonus for leaving? Fine, there's a negotiation with the high level employees and they ask for these things, but why not just give them more of something else instead? Like the usual things that reward tenure.
Because if you want someone with skill to enter and run (or recover) your company, he won't do it for the sake of an adventure. He usually gets offered a big reward for achieving a goal he cannot fully judge yet, and a small compensation in case he fails (and ultimately leaves).
If such a person chooses the "golden parachute", the "golden rocket" he had to commit on hiring was maybe unachievable in first place...
This is what happens when you people are too young to have seen the Rocky movies. Rocky doesn't need an expensive bike + subscription. He uses his body and public parks to grind himself into fitness.
This is a company that wouldn't have existed on this scale without the pandemic events and i don't think that leadership has done business-wise anything wrong except from a moral/ethical standpoint.
[+] [-] valdiorn|2 years ago|reply
He knew the company was screwed, and it's entirely the fault of top leadership. they chose to make their own performance bonuses a priority over long-term business survival, by recklessly expanding during Covid; a strategy that literally everyone could have told them would not be sustainable.
[+] [-] linuxftw|2 years ago|reply
> they chose to make their own performance bonuses a priority over long-term business survival, by recklessly expanding during Covid
There was never going to be long term survival. Peloton was the latest 'as seen on TV' level of product, and once their 15 minutes of fame burns out, the name will be sold off to license cheap products.
[+] [-] b3lvedere|2 years ago|reply
"It is not easy to say goodbye to valued colleagues and friends, each of whom have made important contributions to helping build Peloton into the company it is today. Decisions like these were not taken lightly, and we will work hard to assist impacted teammates with their transitions."
It was probably a lot easier than their valued golden parachute.
[+] [-] eduction|2 years ago|reply
“You’re not taking responsibility!”
[CEO lays people off and does resign]
“You’re shirking responsibility in order to get your bonus!”
[+] [-] tough|2 years ago|reply
Or go home with a big paycheck in this case
[+] [-] gizmo|2 years ago|reply
It's easy to hate on management, but the business doesn't make sense and management can't fix that. Peleton was going to crash from the covid-fueled mania, and it was going to crash hard. Inevitable.
[+] [-] ProjectArcturis|2 years ago|reply
[+] [-] coldcode|2 years ago|reply
[+] [-] valianteffort|2 years ago|reply
He returned and continued doing exactly what he had done before. Investing tons of resources into new products that have cutting edge features bundled into an aesthetic package.
[+] [-] matwood|2 years ago|reply
[+] [-] tough|2 years ago|reply
[+] [-] fourseventy|2 years ago|reply
[+] [-] GoToRO|2 years ago|reply
[+] [-] lnsru|2 years ago|reply
[+] [-] PartiallyTyped|2 years ago|reply
https://www.hollywoodreporter.com/lifestyle/arts/nintendo-ce...
People actually liked that and respect them a lot more. Is it symbolic? Given their wealth, yeah.
But the problem is the golden parachute, a slap on the wrist and lots of money to leave.
[+] [-] b3lvedere|2 years ago|reply
[+] [-] rendaw|2 years ago|reply
[+] [-] ethanbond|2 years ago|reply
[+] [-] ignoramous|2 years ago|reply
Context matters though: Peloton is going to save $800m/yr in expenses by laying off 20% of its workforce. It is a viable bet to take in this case.
[+] [-] hobs|2 years ago|reply
[+] [-] wahnfrieden|2 years ago|reply
[deleted]
[+] [-] ChrisMarshallNY|2 years ago|reply
Seems to be a lot of that, going around.
[+] [-] rjbwork|2 years ago|reply
[+] [-] nhylated|2 years ago|reply
https://www.businessinsider.com/slides-major-peloton-investo...
Edit: link to original slide deck from Blackwell Capital if you want to skip the BI article - https://www.blackwellscap.com/wp-content/uploads/2022/02/BW_...
[+] [-] JCM9|2 years ago|reply
[+] [-] lotsofpulp|2 years ago|reply
I cannot blame those who were able to cash out.
[+] [-] paulcole|2 years ago|reply
Charging a lot (and not making a lot) for something people probably won’t use for long isn’t a winning bet IMO.
[+] [-] melindajb|2 years ago|reply
I started out with a different bike but eventually bought a peloton because the community and integration was so much better than bike + tablet.
Plus I love stretching, yoga, pilates, meditation.
During cancer I couldn’t ride. But those chair and standing yoga classes made an enormous difference in my state of mind and health.
I wish it wasn’t so hard for a few folks here to see that passion and emotion for a brand has value.
That said, there are enormous opportunities in front of Peloton. It’s time to get some Silicon Valley leadership in there to apply product led growth initiatives.
[+] [-] shp0ngle|2 years ago|reply
I don't know if that is a good credential honestly, given how much money Spotify poured into podcasting with not that much return.
This is about the old CEO though, the article is from 2022
[+] [-] golemotron|2 years ago|reply
He quit. That's accountable.
[+] [-] ceejayoz|2 years ago|reply
[+] [-] whereistimbo|2 years ago|reply
> Sure, every business starts with an idea, but a business is a product, and manufacturing, and supply chains, and financial reports, and customer service.
> Once you involve other stakeholders, you become accountable. You become accountable to your customers, shareholders, and employees. That's a difficult thing for a founder who is used to exerting complete control over the thing they're building.
[+] [-] tombert|2 years ago|reply
I tried to get a bit more equity before I signed [1], explaining that it seemed like I would be doing the lion's share of the work, so I felt I deserved at least 10-15% equity. The "founder" then told me that they deserve most of the equity because they had the "idea" for this startup, and I told them that everyone has ideas! Ideas are useful and necessary but also extremely cheap and unspectacular. No one gives a shit about your "idea", at least not until you've actually done some actual work to objectively prove that the idea is good.
[1] I was still somewhat young in my career and the red flags that I have now had not been fully developed.
[+] [-] Satam|2 years ago|reply
Also, why are stakeholders being infantalized like they're some completely naive and innocent bystanders? Customers presumably are not forced to buy what you're selling, shareholders know their capital is at risk, and employees get paid every month. Are we supposed to be everyone's psychologist and finance advisor as well? Everyone's making their own decisions.
[+] [-] grantsch|2 years ago|reply
It's been like a race to light capital on fire across every industry up to now
[+] [-] KoftaBob|2 years ago|reply
Even if the capital is given to/spent by a failing company, that money is at least still mostly spent on either materials or labor, which means it ends up back in the economy but somewhere else.
Obviously not the most efficient use of that capital if its being invested in poor companies, but it's not vanishing into thin air.
[+] [-] ProjectArcturis|2 years ago|reply
[+] [-] joecasson|2 years ago|reply
It cites a layoff, a change in the stock price, and a few assumptions about how Foley generally isn't good at their business operations. Then it goes into vague platitudes about how a business is more than an idea. It doesn't mention anything of substance.
Works for the clickbait though.
[+] [-] mhb|2 years ago|reply
[+] [-] ceejayoz|2 years ago|reply
[+] [-] rickdeckard|2 years ago|reply
If such a person chooses the "golden parachute", the "golden rocket" he had to commit on hiring was maybe unachievable in first place...
[+] [-] CerebralCerb|2 years ago|reply
[+] [-] keeptrying|2 years ago|reply
When choosing a company you are defacto making a heavy bet on the CEO whether you like it or not. Especially in a Down economy.
The only way to really understand this is to try to start your own company. It’ll be come instantly clear to you.
[+] [-] dahwolf|2 years ago|reply
Cost: zero.
Fitness outcome: tons better than you.
[+] [-] siva7|2 years ago|reply
[+] [-] saos|2 years ago|reply
I mean.
anyways is this a new round of layoff for them. I know they’ve done a few I’m the past
[+] [-] michaelsbradley|2 years ago|reply
[+] [-] EvmRoot|2 years ago|reply
How is that possible?
[+] [-] unknown|2 years ago|reply
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