The only possible strategy when the truth is coming.
A fitness device platform complemented by an app teaches us that no business is perfect. Acting in the present is all you can do to address the situation immediately.
I admire Peloton. I promise you, even today at its worst. The fitness products company has increased results during this pandemic. And not because their exercise bikes and treadmills are pretty good, which they are, too. But because of its business model. Creating an application to multiply products and services for the same user seems to be one of the great strategic games of product and service platforms these days.
We call them complementary products. Like the razor and razor blade effect or printer and ink cartridge, lowering the price of one product to increase the cost of the other is perfect for your company. Products that sell just because they are cheaper or better have their time counted. Those that are leveraged win. If you multiply products like the iPod, Canon or HP printers, Wilkinson or Gillette razors, or the Kindle with the Amazon store, fine. But if you multiply users by network effects like What’s App, Facebook, or Amazon Marketplace, it’s even better. Now, if you combine both effects. Multiplying services and products and multiply connected users like Tencent’s WeChat or Amazon AWS, wow, are you surprised that Amazon is in all these models, well, hugely better. Peloton was getting there, good-enough products.
Complimentary service to product sales like the app and multiple users communicating from home without meeting at the gym.
Everything was going perfect, yes, perfect. Until a 6-year-old boy got entangled under a Thread+ treadmill until he suffocated. A terrible event is a double tragedy, both for the family and for the company, which is currently suffering its biggest crisis since its inception.
Never mind that you sold 125,000 treadmills for $2,500 at $4,300 each, have 1.7 million subscribed users between $12 and $39, multiply that, and you get quite a few million. Never mind that you saved the product safety commission in the face of a few thousand lawsuits. If a child dies under your wheels, you have no way of getting back to where you came from. Were you at fault? You had to make decisions about usability and safety. It should never have happened. So many things were done pretty right, and some could have been better. Too much space close to the ground and lack of rear protection. Now it’s all too easy. A child not 6 years old should not have gone through there, but it did. Everything is late now.
According to Washington Post, there have been 22,500 injuries in the US from treadmills and 17 deaths from 2018 to 2020 alone. But there was always a responsible party at the gym. At home, the responsible party is the company that markets it — tough luck.
So when a company goes public with strength like Jessica Alba’s Honest Company with its fluttering butterfly. Or UiPath with its RPAs, even with a big super-safe merger like Tesla and Boston Dynamics would be.
Tesla and Boston Dynamics Announce Merger
Our Country is Saved!
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No matter which of the above three stages you are in, I think about which Mac Donald’s ice cream machine might be the one that brings you upside down. If the milkshake machine fails you at the beginning, Mac Donald’s would not have started. Still, if the ice cream machine fails you now, you move on. However, even if they are different, the complications are still huge. They are magnified from one original restaurant to the current 13,000 real estate company that sells burgers and ice cream.
When your company achieves Peloton airspeed, which would drive the Honest Company or any other company crazy. The world looks like the perfect place because it looks like strategic perfection. I don’t go into whether you do an excellent service to Humanity. A Harvard study casts doubt on health apps as improving health for individual people, although I think they do help. You make so much every second that if you dawdle to pick up a $100 bill, you are losing profit, so as much as you want, you can be in almost everything but not everything. Really, can we control everything, or just how we react to what happens to us? Peloton responds well, recalling all Tread + tapes, moving them to other locations in homes, or refunding the money. They have learned from the great James Burke of Johnson&Johnson and the Tylenol crisis in 1982.
The proper reaction to a terrible accident does not guarantee success. Still, it allows you to keep fighting to avoid disaster.
If you don’t, you disappear, no matter what your personal feelings are at the end of the day.
As a business model case study, Peloton is a compelling case to study. Its current crisis can be part of the history of how to overcome accidents, like J&J or Boeing with the 737 Max. Maybe we will understand the importance of people who think about everything and not indifferent company silos every day. We will remain attentive, and we will also talk about what we see. For the moment, just a personal reflection. When the world is falling apart, there is no point in beating the bushes to improve the past, nor is there any point in panicking about the future.
The average person has about 6,200 thoughts a day.
Not all of them are good. Some can even do a lot of harm. So focus on the present, on what you can do very well now. The past is there to learn how to improve the future. But the only time you can maneuver is in the present.
How to Stop Spending So Much Time in Your Head
The answer to your problems is in the “here and now.”
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Because that is where the only opportunity to do something lies, it seems so simple that almost everyone ignores it. Why is that? Well, simply because it’s too obvious. I don’t want it to sound like mentalism, but it’s the only way to keep your mind still from those 6,200 thoughts. Real-life, what you have to do now, is what happens while those thousands of studies are flying through your head. So forget them all, don’t be about anything else, and attend to reality. In Peloton, the family has had the loss, the distressed users, the frightened workers.
In your case, it’s called present.
It’s the only way I know to start.
Thanks for reading
Rafa Areses