September 26, 2022

unic power

health life

Thomas Alomes | Peloton’s similarities with WeWork are uncanny but the plight of connected fitness is greatly exaggerated

6 min read

Technology is being used to realise a holistic approach to health and wellness, covering physical activity (or inactivity), nutrition, sleep and mental health. Devices, platforms and apps that provide coaching, tracking and insights about users’ activity to help achieve fitness or health goals are gradually becoming ubiquitous.

Following the Covid-induced boom in connected fitness and health over the last two years, 2022 has seen a natural fragmentation and correction of the market into more distinct segments, each with their winners and losers.

To illustrate the development of the market and the trends continuing to drive it, we’ll take a deeper look at two of the household names in the broadly defined connected fitness and health market: Peloton in the at-home connected fitness category and Whoop in wearable continuous health and fitness monitoring.

Peloton – the WeWork of connected fitness?

The rise and fall of WeWork is well documented, to the point it even has its own Apple TV drama series aptly titled ‘WeCrashed’. WeWork, for a time, convinced investors and the market in general that it was a fast-scaling tech company which dabbled in real estate (rather than the other way around). Furthermore, it was riding a macro growth trend of coworking supposedly killing the traditional office setup.

Eventually, WeWork’s internal mismanagement – including the founder appointing unqualified family members to run business units – combined with the survival of its incumbent competitors led to a crash in valuation, from a high of US$47 billion to the current valuation of US$5.1billion. This resulted in WeWork’s investors forcing out the founding leadership team and a reset of the business.

Peloton was considered the darling of the booming connected fitness market during the Covid-necessitated shift to at-home workouts. It was positioned as a fast-scaling tech company disrupting the traditional fitness industry, riding the unstoppable macro trend of digitising the at-home fitness experience that would supposedly kill traditional gyms.

But guess what?

The internal mismanagement – including the founder appointing unqualified family members to run business units – combined with the survival of gyms as its major incumbent competitors led to a crash in valuation.

Peloton was trading at US$162 a share with a market cap of roughly US$45 billion to start 2021, after its stock soared more than 440 per cent in 2020. At the time of writing, that has plummeted to US$12 a share at a market cap of around US$4 billion. This resulted in Peloton’s investors forcing out the founding leadership team and a reset of the business.

Whoop’s success story

Now let’s compare the cautionary tale of Peloton with the ongoing success of Whoop. At a current valuation of US$3.6 billion and continuing strong growth, Whoop is – to my mind – the quintessential success story for a sports tech unicorn. It’s making the most of major trends in the industry without over-extending itself.

Let’s break down some of the successful elements at play:

1. Democratisation of elite tech: Recent technology developments, including breakthrough in batteries, have enabled smaller and cheaper hardware units that can be provided to a mass consumer market rather than only elite athletes. Whoop began by targeting elite athletes, before progressing to the “prosumer”, and is on track for mass market adoption.

2. Controlling healthcare costs: Just as individuals are being more active in their own health journeys, employers are understanding the health of their employees should be their priority. In the US this is driven by spiralling health insurance costs and lost productivity due to illness. Whoop employees receive cash bonuses for hitting their sleep and recovery scores each month. It’s an opt-in program that incentivises employees to be healthier and well rested, which means less missed sick days and more productive outcomes when they’re at work.

3. Athlete biometric data: Last month I examined the use of athlete biometric data to improve the broadcast experience. Whoop has been a key player in making this a reality.

4. Athlete investors: Individual athletes are seen as part of the emerging creator economy whereby athletes can directly connect with their audiences and put their brand to work with investments, rather than just endorsements. Whoop understands the power of the athlete and has a series of high-profile athlete investors who also act as brand ambassadors, including Patrick Mahomes, Rory McIlroy, Kevin Durant and Justin Thomas.

Connected fitness is not dead

Just as the death of gyms was greatly exaggerated, so too is the death of connected fitness. There has been a necessary market correction but ultimately the way we live, including how we exercise, has changed forever.

People are returning to work in-person at the office but still using video calling and team collaboration tools popularised during the remote working period. People are returning to exercise in-person in the gym whilst also using new connected fitness devices at home and social fitness platforms to stay connected to their community.

The adage “hardware is hard” still rings true. Earlier this month, connected fitness maker Wahoo and biking simulator Zwift both announced a round of layoffs to mitigate the normalising connected fitness sales. Zwift also cancelled its previously announced smart bike and trainer hardware plans, citing ‘the current macroeconomic environment’ as the reason for the decision.

It will be interesting to follow Peloton and its contemporaries as they navigate what businesses like theirs can offer users in the “new normal”. Early indicators are that social and community elements combined with the creator “talent” in their trainers and coaches hold the answer to differentiating these connected fitness providers.

According to a 2021 report by the World Federation of the Sporting Goods Industry and global consulting firm McKinsey, digital fitness companies which offer an engaging and inspiring community element have been the most successful. During the pandemic, community-focused fitness apps experience four times growth over tracking and training centric apps.

Wearables – platform integrations

There will be a natural limit to how many devices people will wear and how many apps or platforms they use in order to understand the data these devices generate.

Exercise tracking and social-sharing platform Strava is the largest sports community in the world with 99 million users on its platform. In 2021, activity on Strava reached record levels with 1.8 billion activity uploads, 20 billion miles covered across all activities and two million new members joining per month. Strava’s success has been driven by its ability to collate and share data from different tracking devices, such as smart watches, bike power units, and its smartphone app.

In the same way, health and fitness wearables that can become the user’s platform of choice for collating and understanding all their health data will capture and retain the most users. Users are literally choosing their OS for life.

Whoop founder Will Ahmed predicts there will be a future where “every human one day will be wearing technology that measures their health and works to improve it. The low end versions of this tech will present data, the premium versions of this tech will coach you on it.”

It appears to be a battle between Apple, Amazon and Whoop for who will dominate the health and fitness wearables platform market. With no love lost between Amazon and Whoop, stayed tuned for the heavyweight title fight to realise this future of connected health and fitness.


Thomas Alomes is a sports tech subject matter expert passionate about positively impacting sports through innovation. As the SVP, Head of Market Insights at STWS, Thomas provides best in class consulting and strategic advisory services to vendors, governments, major events, sports tech investment funds and fast-growth sports innovators globally.

Thomas is also the founder and director of Sports Innovation Texas, a not-for-profit realising the potential of the region to be a global innovation hub for sports innovation, business, and technology.

Thomas serves as an advisory board member of SXSW and chair of the commercial leadership board of the International Sports Technology Association (ISTA). Thomas also serves as a mentor for a range of preeminent sports tech accelerators as well as guest lecturing to MBA programmes and contributing author.

Thomas Alomes | Peloton’s similarities with WeWork are uncanny but the plight of connected fitness is greatly exaggerated

Copyright © All rights reserved. | Newsphere by AF themes.