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134: The Peloton Commercial Everyone Is Talking About And Our Interview With Aly Orady

TCO 134 | Peloton Commercial

 

Peloton may have earned its reputation in the fitness industry, but another product is competing its way to American homes. Tonal claims itself as the world’s most intelligent home gym and personal trainer and is ready to move you with its awesome techie features. Here to impress Crystal and Tom O’Keefe with this product is Tonal CEO Aly Orady. Aly points out what sets their equipment apart from Peloton and shares how their incentivizing strategy can transform the way people engage with it, thereby transforming their lives for the better. Crystal and Tom also share their thoughts on the controversial Peloton commercial and how it has affected the company’s integrity.

Listen to the podcast here:

The Peloton Commercial Everyone Is Talking About And Our Interview With Aly Orady

What do you have in store for people?

We’re going to talk about the Peloton commercial. I know you’ve heard it to death, but we’re going to talk about it anyway. We’re also going to talk about all the new stuff that happened with Peloton. They added a bunch of things. Tom found an article we’re going to discuss. We’re going to touch on the stock market. We’re also going to include a little message that we received. We’re going to talk about an update on Tonal, how that’s been going and some other new things that Peloton is doing as far as giving. The new collection dropped. We have a former instructor update that we’re going to touch on. We have The Clip Out challenge. You’re going to pick a square or two, so you may want to pay attention.

Before we get to all that, shameless plugs. Don’t forget we’re available on Apple Podcasts, Spotify, Google Play or wherever you get your podcasts, you can find us. While you’re there, be sure to subscribe so you never miss an episode. It makes it nice and easy so you don’t have to remember because remembering gets harder the older you get. Also, you can go to our Facebook page, Facebook.com/theclipout. Like the page and join the group so you can converse a little bit more easily. Check out our website TheClipOut.com, where you can sign up for our weekly newsletter. It’s where you’ll get all the show notes, links and videos and all that stuff just sent straight to your inbox so you don’t have to comb through the Facebook page to find some stuff that’s maybe 3 or 4 days old. There is all of that. Let’s dig in.

Let’s talk about the commercial now. We talked about it when we came out. You liked it. I was a little bit more lukewarm on it. For a lot of reasons, people are now vilifying it.

That is all the accurate information. I have to say, this is not my favorite Peloton commercial ever, but the reaction that it’s gotten, it’s not deserving of that. Although I find it fascinating that this commercial came out and all of a sudden, it goes viral. It’s like, “What took you so long?”

It took that long for it to reach the critical mass of frequency to people, see it a couple of times, and they’re like, “Wait a minute.”

An overview in case you somehow missed this commercial. The commercial we’re talking about is the commercial in which the woman gets a Peloton Bike for Christmas from her husband. She does a year-end review. She documents her experience. Her first live ride, her first shout-out, getting her milestone ride, getting up at 6:00 AM and things like that. She presents it all in a video form to her husband to say thank you for the amazing gift that she got. Apparently, all of that boils down to she’s been kidnapped, her husband beats her and makes her lose weight.

Even though she’s already thin.

She’s already thin so what the hell did he get her a bike for? It’s funny. People are all up in arms like, “Peloton doesn’t get it. They’re so focused on weight.” They never said the change was about losing weight. Never did they say that you added it.

People are used to when they see a fitness advertisement for product or fitness equipment, it’s about weight loss. That’s the intention. That’s a fair thing for the consumer to assume. If they’re going to send a message that your transformation isn’t just on the scale, then they need to do better storytelling. There needed to be some acknowledgment that she had requested the bike.

I do totally agree with that. I think there’s Peloton shorthand for those of us who are going to have a bike. We know that that woman was excited to get the bike because she wanted the bike.

You know why she was nervous to get on the bike where she was nervous about a live ride. That’s something that you see repeated time and time again on the OPP. People talking about being nervous getting on a live ride. They’ve had the bike for six months and they still haven’t done one. That’s a common occurrence. If you’re not already in the world of Peloton, someone saying they’re nervous about getting on a spin bike or a stationary bike sounds ridiculous.

I do feel that Peloton missed some of those moments of storytelling. As a person who owns the bike, it was very easy for me to fill in. That’s why I did like the commercial. It wasn’t my favorite, but I certainly didn’t hate it. I get why people did. I get why they feel Peloton didn’t tell the whole story. I think that there were other ways to go about this. I think that they could have described it and I think the Peloton now knows that they need to pay a little more attention to that. However, the real victim here is the poor lady in the commercial. Now, she’s a meme on the OPP. Everyone is like, “I lost my shoes,” and they have that fearful look in her eye or whatever. “I’m about to do power max ride for the first time,” and that look is on her face. It makes me sad because, as you’ve said a million times, Tom, she had to have been so excited to get this job for Peloton. Now it’s turned into, “Can she even walk down the street?” It’s everywhere.

I know I have to translate everything into pop culture and nerd and I picture someone to be like, “I got cast in the new Star Wars project. It’s so exciting,” and then it’s the holiday special featuring songs like What Do You Buy A Wookie When He Already Has A Comb? That would be sad.

The thing is that there’s so much happening here. They’re saying the stocks have taken a hit because they had this horrible ad and there’s so much backlash about it because they lowered the price, which we’ll get to. That’s another subject. The price has dropped. Here’s the thing. The entire stock market was crap. Regardless of your political affiliations, the stock market was affected by the fact that the president said, “We’re moving forward on trade, putting all that stuff in place,” embargoes or whatever he’s doing. The point is the entire stock market took a huge dive that day, not just Peloton. It has continued to slide. The rest of the stock market hasn’t gone as bad. I also think that it’s very possible that after they see all the sales that occur, it’s going to go right back up. It is a blip. This is nothing. Peloton in the long run I believe will be the better for this. I don’t know if you want to jump into their response.

They were hoping it was going to blow over.

No, I disagree. I think they were like, “Let it go. Let it run.” There’s no such thing as bad press and this is a silly thing and it’s everywhere. It would not surprise me if it shows up on Saturday Night Live.

It was on Jimmy Fallon.

It’s been on NBC. It’s been on Entertainment Tonight or whatever. It’s literally been on everything.

Even we were interviewed by our local NBC affiliate. They came out to the house and did a thing.

As soon as we see it, we’ll post it out there. Be nice because I was wearing workout clothes on camera. I’m a little vulnerable with that. It was right after Thanksgiving. It is not my best moment.

TCO 134 | Peloton Commercial

Peloton Commercial: Besides weight loss, Peloton promotes strength, fitness, and stamina.

 

We’ve never told this story, but in this news piece, I revealed that I bought you the bike without you asking for Christmas. I ordered you to start a podcast and document it all. It was me. I apologized.

Thanks a lot, Tom. Peloton’s response to this whole thing was basically like, “You guys misunderstood. We’re sad that you misunderstood and fitness is important to us.” It was pretty short. They didn’t have a lot to say and they didn’t say who said it. It was a spokesperson for Peloton. I feel like this has been taken way too far.

People for years have been wanting them to do something, a campaign similar to like what Dove does. Maybe this will the impetus for them to do that.

It will be interesting to see what Peloton does with it. Consistently, Peloton has taken what members have said and they have listened to that advice. It doesn’t always take the form that we would like. It doesn’t mean that you get exactly what you want because there’s a bunch of us, but they do listen and they do make changes based on it. I am very curious to see what they do with their next ad.

In the midst of all this hubbub, there was actually a positive article in Forbes.

It’s a smart article. I enjoyed it, not just because I agreed with it, but it does help. It was from Forbes, like Tom said and it’s called, How the Peloton Ad Radically Changes the Conversation About Mental Health and Being the Boss of Your Own Life. I feel like this article sums up the real feelings that Peloton was attempting to say. There are so many things that can happen from this bike that aren’t weight loss. They’re being stronger, being fit, being able to have stamina to ride for 50 miles, 100 miles, 200 miles and thousands of miles in one year. Also, what can never be ignored is mental health. Anxiety, stress, depression, all of those things have been shown to be improved over and over again by exercising. I truly believe that this bike, that exercise in general makes me a different person. I do not feel settled when I don’t exercise at all. I’m sure you noticed.

No, you’re always charming and delightful. Are there fluctuations? I was unaware.

You look like the terrified lady in the ad. I thought that this article summed all of that up very nicely.

I concur. I like the one line they had. It says a lot about the people that they view exercise as punishment. I do, but it is interesting that the tone of so many people is like, “How dare someone exercise.” I get it’s also the mentality of their perception is that the husband is making her or there’s some passive-aggressive act of here’s a piece of exercise equipment. It does say a lot about how people view exercise.

It also says a lot that they’ve never tried it because that is how I felt about exercise most of my life. That’s it. Peloton doesn’t feel like that. Peloton is different. It’s like if you guys would just stop bitching long enough to try the product, maybe you might feel differently and you too would get the commercial. We all agree the commercial could have been done in a clearer way, but no one’s trying to fat shame, hate shame or anything, least of all Peloton. They would never do that. This is not who they are.

All of that eclipsed the fact that they have lowered the price for Peloton Digital.

It’s a big drop. $19.99 was the price and now it dropped to $12.99. Some facts that not everybody is aware of because not everybody has been around the entire time. The interesting thing is Peloton Digital used to be $13 and then it went up to $19.99. Now, it’s returning to the price. The other thing that I don’t think a lot of people understand is that at $19.99, you could have multiple accounts on it. No more. Now, it’s cheaper, but it’s per person. You and I could have had one digital account for $19.99. Now, we each have to have a $13.

What happens if someone was doing that already? What if it’s a couple, they got to buy two now?

I think they have to buy a single one. I did not see any notification of that. I saw your price is lowered.

If they had an option where like, “You can save the $20 level and have multiple accounts.”

They didn’t go into that. I haven’t seen any complaints about that. What I have seen is a lot of complaints about, “Are you kidding me? I pay $40 for my bike and these people get to have all the same content for $13?” I would say, “You also get all of the metrics and you get all of the software updates. You get it not only for the bike, but you get it for the tread. Let’s not forget, now it’s unlimited. Before, you could only have four accounts. Now, it’s unlimited. If we had ten people living in this house, ten people could have accounts.” It says unlimited now.

It’s a different product. It’s like complaining that Netflix charges you $9.99 a month to stream, but you can have the DVDs mailed to you for $8 a month.

If you’re a person who is a single person in your home, you own a Bike, you don’t own a Tread and you’re not using any of the other content other than the Bike, I can see where you’re a little frustrated. You’re paying $40 and you don’t have anyone to share it with, but the Bike itself would personally for me be worth it. I’m still good with paying the $2,000 for that because I love having the metrics live. Not everybody cares about that. If you don’t, there are bikes out there that go for it and you can use the digital membership and that’s fine. I love having live metrics. I love having my heart rate showing up and being able to high five my friends right on my screen. I find all of that integration worth it to me.

Has there been any insight as to why they lowered the price?

No. There are theories, but they are just theories. People theorize that they want to make it more attractive to basically get you as a gateway drug into the rest of the products.

That’s what I was thinking is that I wonder if they had some data that showed them that people that subscribe to digital eventually ended up going, “I’m using this. I want the real thing,” and they’d buy a Bike and they upgrade. I’m wondering if they realized that they weren’t stair stepping people as quickly as they used to because the barrier to entry got higher.

I’m curious to see because they did not address this on the last stockholders’ call. I’m surprised they didn’t. They talked a lot about digital subscriptions and how it was bringing in new users. What they did not talk about was they were planning on lowering the price. Now, it’s going to be another three months before we get the feedback and why they did that. The other theory of why the stock price has dropped is because they lowered the price. From a shareholder’s perspective, that sucks. They’re punishing Peloton by selling off their shares. We’ll see because also, at the same time all of this is happening, they also made some other major changes. Those major changes are now there is an Apple Watch app that people have been asking for forever. There is a Fire TV app. I’m going to start with the Fire TV app. It means if you have a Fire Stick, you can use the Peloton app on whatever TV that you have that with.

Peloton buyers who are frustrated with their purchase are those who are not using the product. Click To Tweet

That’s a good clarification. When I hear Fire Stick, I think it means you need penicillin.

People seem to be very happy with that so far because now they don’t have a mirror to their TV or cast. They can simply use their app to do yoga or whatever on the TV. That’s great. However, the Apple Watch, people are not as happy about. I asked some people because over in the Peloton Data Junkies group, I needed them to explain to me why they didn’t like it. You can use it with non-Peloton apps, so you can run outside, get your data, you can run on a non-Peloton Tread, but you can’t use it on the Peloton Tread. It’s still not giving people what they want and when you use it outdoors on a non-Peloton run, you still have to take your phone with you.

A lot of Apple Watch apps, from my understanding, you don’t need to have your phone with you when it’s running on your watch and the Peloton one, you do. People are frustrated saying, “The technology is there, why aren’t you using it?” I say, “It sucks, doesn’t it? Join the Android club. I’ve been there for a long time.” I say that jokingly. They’re not quite as happy with how that turned out. My greater point is all of this happened in one week. You would think that even if shareholders were upset about the price, they would be like, “They dropped these other things that everybody’s going to love.” It is down overall. It reached a high at 37 and now it’s like the last time I checked, it was down to 31-something.

I will check the stock ticker at TheClipOut.com and it’s at 31-31.

That’s what it closed at on Thursday, December 5th. It’s been a rollercoaster week for Peloton, but it’s still trading higher than the IPO. To me, that’s still great. That’s a win. It’s going to be fine.

I did some show prep. I found an article on the internet about fitness.

Tell us about this article.

I thought you read it. I just read the headline.

Don’t worry. One of us actually did the work. This article, it’s from StudyFinds.org and it talks about the age in which many people give up working out. On average, what would you guess would be the age that people would be like, “I’m too old to work out?”

I would think if you’re already doing it, if you’re already an exerciser, it’s part of your life, that it would be in your 60s that you would do it. Once you’ve made it part of who you are, you would keep doing it until there was some major medical issue that sidelined you.

That’s the interesting thing. Two in five respondents admit that they feel too old to get back in the gym. That is 41 years old. The survey of 2,000 adults found out on average the age in which the survey felt too old to work out regularly was 41.

It also is interesting to me that age was one of the obstacles. The most common barrier was not having time, which if you had a Peloton, wouldn’t be a barrier anymore. Peloton is changing the world one exercise at a time. In our interview later with Aly, he’s going to talk about how Peloton opened the door for connected fitness and it is a game-changer. It’s completely changing the landscape and I find that interesting and that it’s coming from someone else who has started a company doing the exact same thing.

The interview is with Aly Orady, who is the CEO of Tonal and he’s also a Peloton user. He’s got a Bike. He got a leaderboard name, which he will reveal in the interview so you can follow him if you’d like. He has great things to say about Peloton as well. His fitness journey is fascinating. The work that went into Tonal and the thought process, I found it very interesting, which is says a lot considering it’s about fitness and it’s me.

I was surprised by how interested you were. I loved the product to begin with, but like many of you, that second fee, I’m not too sure about it.

I thought he had good answers and we will wait and let him explain it to you. I thought he has some good answers. He’s not explaining the price, but explaining the value. That’s the important thing. I was like, “That’s a good point.”

Back to other stuff. There was an interesting article on CFO Dive. I don’t know what KPIs stands for.

Key Performance Indicator.

Which ones the Peloton people track?

Jill Woodworth, who’s their CFO, talked about how they focus on three KPIs or key performance indicators. They were doing a panel discussion and it was hosted by The Wall Street Journal. That’s where this all came from. They focus entirely on their members, which I don’t think shocks any of us. They focus on their strategy. They want to know what things do our members like, what intensity and which instructors. If the engagement is going up, then that means the customers are happy. Also, they test everything before they give it to users. They can track how often one of us is using it. They can right off the bat tell us what works and what doesn’t. They can tell each other what works and what. They’re not going to tell us anything. It goes away or they change it. That’s why. Even though they have all these other things that they’re looking at, that’s what they’re focusing on. What are we using? What do we like? Besides that, the other big thing is churn. They’re looking at all these other things. They’re tracking all these other things, but they’re saying that the bottom line, these three things are the things to focus on. I say, “It’s working.”

We had a real nice voice message.

We had a Facebook Message. She left us a voice clip.

It’s from a Susan Burton Dunton. She took a German ride and told us all about it.

TCO 134 | Peloton Commercial

Peloton Commercial: With Tonal, everything is digital and automated and there are coaches in all workouts.

 

“Hi Crystal and Tom. I’m Susan Burton in Austin, Texas. I’m an OJ from 2014 and my leaderboard name is SusanATX. I’m calling you all to let you know that I finished the 45-minute premier ride with Irene. I have to say even though it’s in German, I didn’t understand everything, of course, but I still got a good workout. I could still make out what she was trying to say and accuse it. About midway through the ride, she said she was going to switch over to English and she took the time to thank some of the American instructors. It was sweet what she had to say. She switched back over to German for the rest of the class. Anyway, I loved it. She was very comfortable in front of the camera. She had a great presence and great energy. I want to encourage everybody to jump on and give her a try. I’m thinking if we ride with her enough, we can all learn to speak fluent German. Check this out. This is a count down from three, drei, zwei, eins. If you’re not into it, don’t care about it. Go on there to look at her because she is smoking. Sending you all love from the heart of Texas where we got the best barbecue, Tex-Mex, and live music. Bye now.”

How can they do that if they would like to?

You can do it in a couple of different ways. It’s basically you just need to get a voice clip to me. You can do that through Facebook Messenger by pressing the little microphone. It will say press and hold to record or you can send it over like an mp3 player. Use your voice recorder on your phone and send that on an email. Honestly, anything that gets to an MP3 works.

We had a couple of celebrity Peloton sightings, so let’s rank these people so they feel bad about themselves. We’ll start with Molly Sims who is the editor of O Magazine, Oprah’s magazine.

I was sent an Instagram post where you can see in the background, she has both the tread and the bike, and that was in Health Magazine. In the O world, we found out that Gayle King has a Peloton Tread on her list to ask Santa for.

Do you think there’s any skirmish between Gayle and Oprah? Oprah put a Flywheel. Oprah had a Flywheel on her Oprah’s Favorite Things list. Now, Gayle is wanting a Peloton Tread. Has there been a falling out?

No, I think it’s just that Oprah sells the list. It’s like we put this stuff on a list that people pay for and then there’s a list of what you actually want. I think she and Gayle are dead on. They would agree that Peloton is way better.

Also, Alanis Morissette.

She’s doing a 25th-anniversary tour.

That means she’s playing the whole thing from start to finish.

No. She came off the latest album. She’s doing her old hits and she’s playing some of her latest songs.

As a concert promoter, I love it when they play new songs. It’s great for beer sales.

They will do that, I’m sure. I hope that I get to go to. Tom, I want to go to Molly Sims.

My goal is to get all put together for next year. I’ve been gathering them.

The new holiday collection is out. You don’t need the Alanis tickets for Christmas.

No, that’s not true, Tom, because I use referrals.

You don’t need the Alanis tickets. You’ve got all the stuff that’s there. Can you use referral codes for Alanis tickets?

No.

I can see the sad puppy dog face she’s making.

It’s holiday collection, I was a big fan and I didn’t even get all the things I wanted. I held back, believe it or not. I got a green outfit. It’s like emerald green and it’s gorgeous. I had to get that. I had to get the white shirt that matched it perfectly. I also had to get the Peloton pajamas. They look cozy, although they are ridiculously expensive. That was a lot. I also got a whole other outfit that was pink and gold. It’s like the sunrise one. I got a shirt to match that too. I also got a decal and some earrings. It’s going to be lots of packages. Maybe I don’t need those Alanis tickets.

It all comes full circle. Finally, we have a Steven Little sighting.

For a while, he’s been teasing about, “I’m coming back.” Everyone’s like, “Here we go again. What does this mean this time?” What it means is he’s completely out of the fitness game.

A lot of movement is through cuing and through a learning curve. Click To Tweet

He’s not doing it professionally.

It’s not quite the same, Tom. I’m sure he still works out, but now he is selling real estate in Florida, so he’s got his own website, StevenLittle.Raveis.com.

He came from the world of real estate. He’s done this before. I know people loved Steven Little. There is a great deal of passion there. People like to know where the instructors that are no longer with Peloton have landed and what they’re up to.

That reminds me, I also have an update on Nicole Meline. She has a brand-new journal that’s out called The Aspire Journal and it’s a great way to keep track of your personal and fitness goals all in one place. You can find that on her website. You Google Nicole Meline, it will pop right up.

Joining us is the CEO and Founder of Tonal, Aly Orady. How is it going?

Thank you for having me. It’s going great.

Thank you for taking the time to do this. This is cool.

We’ve never had someone with their own producers setting things up and an engineer and it’s very fancy.

We’re excited to be here and we were in the production business and so maybe we overdo things sometimes.

We’ll take overdo as opposed to underdo any day. Tell us what exactly sparked the idea for Tonal for you?

It was a personal struggle, to be honest. If you rewind and look at my background, I’m not the person who should be the CEO of a fitness company. My first job out of college was working for Hewlett-Packard on their supercomputing lab, where I was designing computer chips and I worked there for a couple of years. Being in Silicon Valley, I went to a bunch of startups and was building telecom gear and video, on-demand gear. The things that bolt to a Verizon cell tower, Comcast data center. I started working on even heavier equipment, like the stuff that might go into Goldman Sachs data center to crunch lots and lots of numbers.

I then built a company in Silicon Valley. I sold it to Samsung. When I was 35 years old, I hit this breaking point with my health where professionally I was having a blast. It was doing great but by that point, I had Type 2 diabetes. I had sleep apnea. I was overweight. I had been overweight my entire life actually since I was a kid and I’ve struggled with my weight. It felt like I was heading to a point where if I didn’t do something about it, it was going to be like that for the rest of my life. My health is just going to continue to degrade. Quite frankly, when I saw my doctor and he was getting louder and louder.

He sat me down. He’s like, “You have to do something about this.” He started getting personal. I woke up one morning and I’m like, “I’ve got to do something about this.” I quit my job and said, “If I make something my full-time job, I succeed at it. When it’s not my full-time job, it always falls to the wayside. I’m going to make this my full-time job.” I spent about nine months getting to fitness and I lost about 70 pounds. I completely reversed the sleep apnea. I got diabetes very well under control to the point where my test results might argue that I’m not actually diabetic.

I got that all under control. Along the way, the first thing I did is I started doing a lot of cardio and watch what I ate. I’d go to the gym and hop in a cardio machine and I lost a lot of weight in the first four weeks, and then I plateaued. I was reading a lot, trying to figure out how to break through this plateau. I looked over and all the personal trainers were over in the weight room. I started to read more about strength training and quickly realized that strength training helps you build muscle. The most you build, the higher your basal metabolic rate and the easier it becomes to burn fat as opposed to cardio, which if you do too much it, you can burn muscle in the process, which reduces your basal metabolic rate and makes it harder for you to lose fat.

It’s ironic. I started figuring out how to strength train, which turned out to be hard. After doing this for about nine months, I got comfortable with it really. I got addicted to it. I loved it. I was getting up every morning at 5:00 and heading to the gym because that’s when I could be there and not have anyone else in my way and get it done well. I came to a point where I lost all this weight and I was thinking, “I’m going to have to get a job and probably have to commute and have a family, have kids, and have all of these responsibilities in life at some point. I can’t keep coming to the gym every day at 5:00 in the morning.”

That clearly is not realistic. I’m staring at this giant piece of equipment at the gym and I’m thinking to myself, “How can I shrink this down to something I could fit in my one-bedroom apartment in San Francisco?” That light bulb moment was when I realized that the reason this machine is so big is that it relies on big metal plates and gravity to generate resistance or generate force. If I could use electricity instead, I might be able to shrink it down. I went home. I ordered some parts. I strapped it into my kitchen counter and about three months later, had our first working prototype.

It wasn’t very good. Let’s call it a proof of concept. It was like the flux capacitor moment. It didn’t go below 25 pounds. It didn’t go above 40 pounds. Now, Tonal goes from 5 all the way up to 200. It only did one exercise. You couldn’t do full body, but it was enough to prove that this could be a thing, that this could work. The rest is history. Along the way, I also realized that the challenge with strength training, in general, is not just getting the equipment in your house. We’ve always been able to stick a stationary bike and the corner or a treadmill in the basement, but strength training takes up your whole garage.

I didn’t have a garage. Shrinking down equipment was huge. The other one is I was walking around the gym with a sweaty, crumpled up piece of paper in my back pocket. Strength training has always been analog. It’s never been digitized. You’re taking notes half the time. I’d finally graduated. In strength training, you jump in ten-pound increments. You might graduate from the 40-pound dumbbells with a 50-pound dumbbell and then I’d come back the next weekend, forgot that I graduated and I instinctively pick up the 40-pound dumbbell again. That’s what it’s like in the world when you had to rely on your memory. With Tonal, it’s all digital and automated.

You have coaches that guide you through all of your workouts. You have AI that keeps track of how much weight you should lift on every single exercise, adjust the amount of weight depending on how many reps you’re supposed to do, decides when it’s time for your way to go up. It goes up in one-pound increments. You’re not waiting six weeks to graduate from 40 pounds to 50 pounds. Pretty much every week, you’re bumping up by a pound or two on all of your movements. It’s also more motivating and it’s more fun than it’s in your home and there aren’t other sweaty people stealing your equipment from you. It’ great.

I would think that when you jump up but your only option is jumping up by ten.

It’s intimidating.

TCO 134 | Peloton Commercial

Peloton Commercial: As you get more proficient at moves, the amount of instruction decreases.

 

There are probably times when you’re not quite ready, but then how do you get ready unless you make the jump?

What I always struggled with was I would be good about going to the gym, let’s say three times a week, but then something would happen. I could only go one time a week. I’m like, “Should I go back a pound or do I pick up where I left off? I certainly can’t up to my weight at this point.” It was that struggle of never knowing where it’s good to be picking up or I would just forget. I would lose the piece of paper. The piece of paper was gone.

Now, that we’ve been at Tonal, it took us 3.5 years of product development to get Tonal to market. Those first three months were like the very beginning. Along the way, some of the things that we’ve learned are number one, most people have terrible strength training routines. A lot of times, people tell me they’ve been following the same routine since college or that they just downloaded something off the internet and they’ve been using it for a few years. You’re not supposed to do that. Your body gets used to it and you’re supposed to switch up your routine every 4 to 6 weeks.

The other thing we realize is most people lift the wrong weight. They lift too little weight, and then they’re basically doing cardio instead of strength training and don’t even realize it or they lift too much weight and then their form suffers. They don’t get the benefits and that increases their risk of injury as well. Nailing how much weight should I be lifting is super important to get the results that you want and to have it be fun and not get yourself injured. Also having a good routine is super important. The vast majority of people have no idea how to program a good routine. That’s why coaches are so important.

When you’re looking at most cardio instruction, group fitness or even Peloton, the instructors are there to motivate you. Most of what they’re doing is they’re motivating you. They’re entertaining you. They’re keeping you engaged or getting you to push yourself harder. We, for the most part, know how to cycle. We know how to run. We’ve been doing those things since we were children. Strength training is less intuitive. When you’re with a personal trainer, the education burden is a lot higher. That’s a lot of what we’re doing with Tonal as well. We’re teaching people this new thing. When someone’s new to it and they’re learning how to strength train or someone who’s been doing it for a few years, but could be doing it way better with help, we’re also helping them achieve that as well.

To that point, something that I keep seeing come up over and over again as I talk about my journey with Tonal is that people ask, “What about the form aspect of using the Tonal?” Because you’re not able to get the feedback to say, “My back’s not perfectly straight.” I’m listening to the cues, but people worry that they aren’t going to know what form to use. Is that something that you think a lot of people struggle with or do you think there’s just a little bit of a learning curve? What do you think about that?

We think it’s a learning curve. In the early days, we went through 3.5 years of product development and in two of those years, we had people working out on Tonals regularly. In the final year, we put Tonals in 25 homes for an entire year and tracked 50 people as they worked out on these things. Somehow, they all managed to keep it a complete secret. We were in a building with fogged out windows and no one knew what we were working on. These 25 people were kind enough to keep it off social media and completely keep it quiet until the day we launched and announced the company. We learned a lot.

That’s a bigger achievement in the machine itself. You got 50 people to exercise and not share it on Instagram. What’s the secret?

How do you know someone’s going to be running a marathon? Have a 30-second conversation with them. They will bring it up. They totally kept it a secret. We learned a lot and one of the things that we learned is people learn how to do yoga off of YouTube. With a lot of the cueing that we give and a lot of the instruction, we were teaching people how to move properly. They’re learning how to do it. There is a learning curve. A lot of it is people coming to our communities. We have a bunch of these Facebook groups that are formed and sometimes people go there and ask questions. A lot of times, our coaches are filming supplementary videos and throwing them on social media to dive a little deeper. Here’s the other piece, which maybe you haven’t experienced yet. We have a lot more of this coming. The smart handles that you can use to turn the weight on and off with a click of a button. They also have accelerometers in them where we can measure your movement in three dimensions.

We’re crunching a bunch of that data. We have some of it, but as you get smarter, as our algorithms and our software get smarter and smarter, you’re going to hear better and better, more personalized cues specifically for your form. I don’t know if you’ve noticed, but sometimes when you hear Tonal say things like, “Three reps left to go,” or “Last rep, good job,” that’s not prerecorded stuff. That’s personalized to you and happening at the moment that you are at three reps left to go. There are other things you might have heard some of our coaches say like, “Remember to move at a slow and controlled pace,” or “Try going a little deeper into your squat.” That’s all based on the data and the measurement that we have of what you’re doing. While we do believe that a lot of movement is through cueing and through a learning curve, we also are working on all of these avenues of personalized intelligence and personalized cueing for every single person.

People are getting more feedback than they realize, that’s crazy.

I logged into one of our communities one morning and one of our users said, “The first time that it said three reps left to go and I had exactly three reps left to go, I thought it was a coincidence, but by the third or fourth time, I was starting to wonder.”

I thought like it would automatically happen when you got down to three reps. Not every time, but just to keep you engaged. I thought that was an automatic thing. That’s fascinating. It’s cool.

It’s personalized. There’s a lot of personalization in programs. The pacing is personalized. The thing if you’re running or cycling or doing cardio types of activities, that’s usually interval-based. You’re doing something for 30 seconds at a time. In our high-intensity workouts, which are more like conditioning, the workouts are interval-based. When we’re doing stuff that’s more personal training type of content where we’re trying to help you build muscle or hit a specific goal that’s based on strength training, it’s important that you’re hitting rep targets rather than time. It’s important that you do six reps. It will take one person twenty seconds, one person 40 seconds to do that same thing.

Our videos speed up and slow down to match the pace of our users so that if one person needs a little bit of extra time, they won’t feel like they’re falling behind and they won’t rush into strength training, which is a great way for someone to get injured. We don’t want them rushing. We also won’t finish their reps and then sit around waiting for the video to catch up with them. My worst nightmare, pick up their phone and start texting a friend and then you’re no longer working out. Those are the things that you’re trying to avoid. The pacing is personalized. As you get more proficient at moves, actually the amount of instruction you hear will decrease. We say it’s like having our personal trainer and there’s a lot of technology in there that is trying to get people a more personalized experience.

I have noticed that the Tonal business model is similar to the Peloton business model. Was that on purpose or was that something that evolved?

When I started Tonal, one of the big questions you ask yourself is, “Who are you going to sell this to and for how much?” A lot of people look at the Peloton business model and they’re like, “This is a subscription model.” What you do is you sell someone a piece of equipment and then you get to collect membership dues for a long time. Hence, it becomes a profitable business. That’s not how I see it at all. What you’re doing is foregoing the profit you would have made on the bike, or in our case, the Tonal on day one. You’re foregoing that profit by keeping the price of that equipment as low as you can. You’re spreading that profit over the course of the next couple of years. As people pay these membership dues, that’s when you collect the profit.

Like Peloton, we make no money, no profit off of the Tonal. We make all of our profit off the membership. What that allows us to do is to keep the price of the Tonal low so that it can reach as many people as possible. Fitness equipment is expensive and for a lot of people, it’s prohibitively expensive. If you go on Google and type in the word functional trainer, which is the class of equipment that that Tonal is, you’ll find that most of the equipment costs way more than Tonal and it isn’t affordable. What that does is it limits your market size and limits your ability to impact people’s lives. The lower you can keep the price, the more people you can reach and the more lives you get to impact. In return for that, what we elect to do is use a subscription model where we spread the membership dues over for the course of the next few years. When I looked at Peloton, what appealed to me about the model is you can reach a lot more people and impact a lot more lives. All you have to do is be willing to wait longer to get that profit. It’s a great model.

Can I ask, or maybe you haven’t calculated this or maybe you don’t want to say, but if you weren’t doing this model, how much do you envision the Tonal would cost?

If it wasn’t the membership model, the alternate route that I considered was to go to market with a product that costs $9,995, believe it or not. In all fairness, if you were to compare the Tonal and its capabilities with all the other functional trainers on the market, it would totally be a fair price.

Let me ask you this because I have no frame of reference. What does a functional trainer cost?

They cost anywhere from $5,000 to $8,000.

The lower you can keep the price, the more people you can reach and the more lives you get to impact. Click To Tweet

That’s right in line. Honestly, as a consumer, I would prefer this model not just because of the lower cost. Although you could argue over the life of using it, you might end up paying more. I would prefer this because I feel now the company is incentivized to continue creating content and servicing the product in a way that if it was a onetime transaction, they’re not.

It makes it so that we want to make people as successful as possible. Fitness women vendors have for years sold equipment to people and then they don’t use the equipment. Fitness women vendors have no reason to care. For us, we wake up every morning, we check our metrics, like how many people worked out. If someone isn’t working out, we call them. What this does is it allows us to reach as many people as possible. With the financing programs with $149 a month, it makes it much more affordable for a lot more people as well. That’s a great way to expand reach. When you ask the question, “Why this business?” it was about reaching as many people as possible at the end of the day.

Along those lines, one thing that stood out to me is that Tonal’s monthly subscription price is $50 a month. Peloton is $40 a month. How do you explain to customers that difference? I totally get what you’re saying about the cost of a functional trainer, but on the other hand, you could make the argument that for Peloton, that’s for their Tread content, their Bike content and their yoga, etc. I’m sure you have a reason for that, but that’s the big holdup that I hear from people is, “I don’t want to have two fees.” I’m curious what your thoughts are on that.

The $49 a month versus $39 a month, there’s a little bit of nuance in there. One is we’re replacing personal training and personal training sessions cost way more than studio classes. That’s one reason we charge them. Also, the $49 a month includes sales tax and the $39 a month doesn’t. It does even that out a little bit. In terms of the two subscriptions thing, one of the things that we’ve heard a lot from people who own Pelotons and I think you’re aware there’s some overlap, is they say that once I got my Tonal, I finally canceled my gym membership. They had their Peloton Bike for their Tread, but they kept the gym membership and they kept paying for it because that’s where they would go to strength train. Now they got a Tonal and they’re replacing that gym membership they paying for with the Tonal. For a lot of folks, that evens out. In people’s minds, they think of the products as complimentary and they think of their budget for strength training as different from their budget for cardio.

The other thing is we help people achieve goals. We’re not just interested in how often someone works out. We’re interested in whether or not they achieve the goal that they want. Our programs are designed around certain goals. We have a four-week weight loss programs. We have a twelve-week muscle-building program. We have programs to help people get stronger. We have programs to help people train for running a 5K or get ready for ski and snowboard season. That’s the powerful thing about strength training is personal trainers can use it to help you achieve all sorts of different goals. It’s like a Swiss Army Knife if you have an expert who knows how to create the programming. For us, we were delivering not just workouts, we’re delivering outcomes and that’s how we think about it. At the end of the day, if you stack up the value of having a gym membership and having a personal trainer help you figure out what programs you need to follow in order to achieve a goal and teach you form, $49 a month is a steal.

I’m curious too about vertical integration or your supply chain. Does Tonal keep everything in-house or do you find yourself having to outsource a lot of things? I feel there’s a lot of technology involved. I’m curious how that works for Tonal.

We keep almost all of it in-house. Clearly, there are things that we outsource like manufacturing and logistics but all of the software, all of the content production, the programming, the curriculum, all of that stuff is done in-house. We spun up a second studio in Hollywood. We now have one in San Francisco, where we film daily and the second one in LA. It’s trying to crank up the amount of content and the variety. It’s a very poorly kept secret that yoga is about to launch on the platform. In addition to the strength training content, we have a lot of this high-intensity content. It’s hit conditioning types of workouts which are interval-based to keep your heart rate up for 20, 30 or 40 minutes, depending on the type of session you’ve chosen. Of course, all the more traditional strength training stuff, which is very programmed for specific goals and outcomes. We do all of that in-house and it’s keeping us busy.

Have you ever considered some bundle for Peloton users to offset that maybe sticker shock of having two monthly subscriptions?

We see the products as complementary. I think a lot of our existing customers do too. Frankly, even if we were to consider something like that, it takes two to tango.

We get that question so much. Many people are interested. A lot of people that are interested also buy, but the initial reaction from people is, “I don’t want to have a second payment per month.” Obviously, we’ve talked to a lot of people that have gotten past that and are very excited to have both. From my own experience, I can absolutely say that it is very complimentary. I would agree with that.

I’ve been surprised since we started talking about it how quickly people seem to have gotten past it. I thought that there would be more resistance and I’m sure that there are still some out there. Some people, it’s just not in their budget and there’s nothing you can do about that and we understand that. I was surprised how many people were like, “You got me.”

Once someone has been in one of our programs for a couple of weeks or has gone regular with it and worked it into their fitness routine, they do fall in love with it. It provides a structure to people’s fitness lives because it’s not one-off workouts. It’s a program that does change the way people think about fitness. No one who’s had the product for a long time comes back and was like, “This is way too expensive.” In fact, they’re usually saying the opposite like, “This is well worth it.” On the financing programs, we worked pretty hard to roll out a 36-month financing program. We rolled that out and it brought the monthly payment down to $149. That was to make it more affordable for more folks. Health and fitness is an investment in oneself and it’s for the full household. It’s generally not just for one person, multiple people are using it. I hope you both try out the partner workouts that we have now, so two people can share a Tonal and work out at the same time. Those are fun and you guys can poke fun at each other, which I know you both love to do.

I don’t know whatever will it take to get Tom on a workout, but I did try the partner workout with a friend of mine who came over. We did a workout together and it was awesome. I loved it. Tom, he’s anti-exercise.

It’s my personal mission to get Tom to do a workout. I bet this is the thing that could break him and get them working out regularly. Let’s see if we can pull that off.

He did do a dead lift. When we got the Tonal set up, I was like, “Here. Try this.”

I was testing the resistance aspect because it makes that popping sound when you turn it on. The first time we turned it on, we were like, “Did we break it?”

When you turn it on, it goes through a quick calibration. The resistance, when people touch Tonal for the first time, the thing I most often get is, “This is heavy,” or “This can get heavy.” We say 200 pounds, but people look at it and it’s small and it’s sleek. They underestimate it and don’t realize 200 pounds is enough force to pick you up off the ground. A lot of people comment about how smooth it is. I don’t know what your experience was, but that’s what we hear most often.

It’s incredibly smooth. Our fifteen-year-old has been using it. He’s excited to do strength training. It’s cute to see him do it as well.

If he gets too ripped, I might not have the choice. I have to start doing it to keep them in line.

We’re going to crack you one way or another, Tom. Do you want me to partner workout with you?

The readers would kill me for all this and you’re like, “No, you’re out.”

The whole reason you’re here is to be the anti-workout. I finally cave and it’s not a Peloton. I wouldn’t feel too guilty. Now, he wants to make it happen.

TCO 134 | Peloton Commercial

Peloton Commercial: Tonal is a program that changes the way people think about fitness.

 

Do you have any partnerships that you would like to see? I understand Tonal is completely separate from everything else. It has its own unique values, but I also can’t help but wonder if there are things that you see the bigger picture that you want to do with Tonal? That might be a joint partnership or a joint venture with anybody out there? Have you ever considered anything like that?

Nothing that we’re ready to talk about yet. Some of the things you would probably guess on your own. We’ve already started putting Tonals in a couple of hotels and those pilots are going well. We’re going to be doing a lot more of that. Some of the other things that we’re excited about are ones that you probably wouldn’t necessarily guess but potentially some stuff with physical therapy. Some of the more inspiring stories that we hear online are folks coming to us, saying that they’ve had back pains for years and after X weeks on Tonal, their back pain is gone for the first time in their lives or they feel themselves get stronger.

We released a program to help people who have shoulder pains manage that shoulder pain and that’s getting good reviews. The thing about strength training is it’s powerful. I didn’t realize this, but one in two Americans suffers from some musculoskeletal pain, back pain, shoulder pain and neck pain. Strength training is the only way to treat those things. If you go to a physical therapist, they will have your strength training too. There’s no drug. They’ll give you painkillers, but there is no drug. Strength training is the only way. I don’t know that those are necessarily partnerships, but they’re things that when we think about all the ways that we can improve people’s lives, it’s an area we think a lot about. The more places we can get Tonals, it makes it accessible to as many people as possible. We like hotels and we’re also thinking about other places where we can get Tonal so that we can touch more and more lives, which is what we care about.

Why do you think that this is all happening now in terms of what they’re terming connected fitness? It seems like it’s having a moment and taking off.

It’s a confluence of a bunch of things. One is technology. If you rewind the clock, if John had tried to start Peloton ten years earlier, the computing system, the tablet that’s built into the Peloton wasn’t ready. The internet wasn’t ready for that streaming. That was a big part of it, the technology getting to that point. If we had tried to build a Tonal ten years earlier, it probably would have cost twice or three times as much as it does now. As technology has advanced, the cost of the components have come down and made these price points more realistic. The second one and I have to give gift credit to the entire Peloton team. They proved something that no one else had known before. People have always looked at home fitness equipment and assume that it’s going to start collecting dust after six months.

The fact that they figured out a model that aligns the incentives of the equipment manufacturer and the member so that you keep working to make sure that your members are using the product day in and day out for years, that is powerful. It transforms the way people engage with fitness and as a result, that transforms people’s lives. I think that the proof point has brought a lot of investment to this industry. There’s us doing strength training and I think we’re the only ones doing strength training, but we’ve also seen a lot of other equipment hit the market in the cardio side. There are other bikes and other treadmills and rowers. There are all sorts of stuff out there. It was all sparked by what Peloton did. They had a lot of trouble raising money from investors. We had a lot less trouble and the credit goes to them for that.

That would open the doors for you. I didn’t think about that, but that does make sense. Do you see Tonal as being a direct competitor to Peloton or not?

I view it as extremely complementary. At the end of the day, people need to do both. You need to do strength training, you need to do cardio. I own a Peloton Bike. I’m a fitness fanatic. I use both products now. In my case, my core, my program is on Tonal and that’s what I’m following and I complement it with cardio. You need both and I view them as very complementary.

Would you like to share your leaderboard name with our readers?

It’s BeYourStrongest. It’s also Tonal’s tagline.

She can make fun of you. Hers is ClipOutCrystal. We’re doing the same thing.

It’s great because you clearly believe in that too. That’s important to you. That’s perfect for a leaderboard name. That’s awesome.

A lot of us have Pelotons at work and it’s complementary. We have bikes, we have treads. John says it’s the best cardio machine on the planet. Tonal is the best strength training machine on the planet. It’s full-body workout in something the size of your TV and it’s the most advanced piece of strength equipment ever created. We wholeheartedly believe that it’s the best strength training machine on the planet, just as John believes that the Peloton is the best cardio machine on the planet.

Speaking of Peloton, why does Tonal not have live classes? I think I know the answer to this, but I’m curious if I’m right.

It’s the personalization. Peloton is a group fitness experience and group fitness instruction is, by definition, one instructor speaking to 30 people or 3,000 people. With Tonal, it’s all very highly personalized. That video you’re watching, we didn’t point a camera at someone for 40 minutes, record a 40-minute video and then play that back to you. The way that video is playing back to you is highly personalized. We have software AI getting in under the hood and mucking with the video and we’re switching the audio around to make you hear the things that are personalized to you. We’re stretching the video so it gets shorter and longer to accommodate your pace. Once you’re doing all that mucking around under the hood with AI, like a game engine, you can’t go live. For a lot of our more personalized content, it’s not live. It’s on-demand. For a lot of the other stuff we have around the conditioning, high-intensity interval content, the yoga content, we do intend to eventually go live with that stuff when the time is right.

That’ll be interesting for people to have different options so you can have multiple different levels of doing your strength training, but then doing yoga live. I think that’ll be a good mix for people.

We spent a lot of time grappling with this question in the early days and we interviewed people and we’re like, “Why are you so excited about live?” It turned out that as we pushed on it, they were more excited about fresh. What’s important is not the fact that it’s truly live. We find that I think only about 12% of riders are alive in Peloton rides, if you’re looking at it as an example, the vast majority of people aren’t live. Why do you care about so much live? What they cared about is the fact that they always knew that every time they were going to step into a workout, it’s going to be a fresh new experience. It’s not like a DVD where you just keep playing the same DVD over and over again. That’s what we prioritize. That’s why we film every day. That’s why we spun up a second studio. It’s about creating as much fresh content as we can for folks. One day we will go live but the freshness is what we live and die by.

I thought it was cool that you guys added a bunch of new moves to the move library. It didn’t even occur to me that you could. One day, I was on Facebook and I was like, “We added all these new moves.” I was like, “That’s amazing. I had no idea.” I didn’t know I was missing any, but this is cool.

That was coming from our community. They were telling us, “We’re like cables, functional trainers, cable trainers like what Tonal is, except the other ones are analog and run on big metal plates. Ours is digital and runs on electromagnetics. Functional trainers can be used to do a very wide variety of things. They’re the most versatile strength training machines, which is why they’re used by a lot of pro athletes and Olympic coaches and things like that. It’s called functional training. First of all, members of our community, we’re starting to do things that we didn’t have in our library. They started sending us emails saying, “Can you add this? Can you add that?” At some point, we aggregated everything that folks had requested and added them to our library, which also meant we had to teach our AI how to select weights for all of these movements because that’s an important part of it.

We added them all in. The other thing that we released is a workout builder. If someone wants to create their own workout and not necessarily follow one of our videos, then they could just pull out our mobile app, create the workout on the mobile app where you select the movements you want and set how many reps do you want it to and how many times and all that stuff. Walk up to a Tonal and you can literally run through your own workout and we’ll run you through it and automatically select the weights for you and decide when it’s time for you to lift more weight or less weight all automatically. That’s been well received. It was like a party in our community the day we released that.

I am still intimidated to try anything like that. Plus, I’m doing a program, but I thought that was cool that you could put anything you want in there and then it shows up on the machine whenever you got. That’s awesome. Kudos. I like that a lot.

At the moment, you guys only ship to the US. Is it difficult to get into other countries? Are you planning to branch out or are you focused on the States for now?

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International is something that every company aspires to, obviously including Tonal, but right now, we have so much work to do in the United States. We had our first huge holiday season getting through Black Friday and Cyber Monday, which was on fire. We have to do that again and get ready for that next level of expansion. We’re now up to six retail locations. There’s a lot of work to do right here at home. We’re definitely prioritizing that.

I know that’s not an easy process to move into other countries. It’s a lot of logistics. I can’t even imagine.

With the machine going 100 pounds per arm or 200 pounds total, what percentage of people need more?

Like a bodybuilder or somebody who lifts heavy, are they still able to use?

Would a pro athlete need something that was weightier or could they utilize this?

Tonal goes up to up to 200 pounds or 100 pounds per arm. The resistance that comes out of Tonal, it’s a pure resistance. A 100-pound dumbbell or a 50-pound dumbbell, any dumbbell for them, the faster you move, the lighter it gets. This is why on a bicep curl, you could pick it up, swing it. When it’s down by your knee and by the time it’s up to your chest, it’s super light. Tonal isn’t like that. It’s 50 pounds of resistance the entire time through your entire range of motion, no matter how fast you’re moving. You pick up a 50-pound dumbbell and you can do bicep curls relatively easy compared to a Tonal. You set it to 50 pounds and do way harder. It’s because of that no momentum, no inertia aspect to the way that our system works.

Our 200 pounds is way heavier than a regular 200 pounds. What we engage in is mostly functional training, which is a multi-joint movement, full body. For most people, getting up to 200 pounds is hard and it takes a long time. It took me two years of training on Tonal before I maxed it out on one movement, which is the dead lift. Even at that point, you have other levers to pull. You can do more sets, you can do a slower tempo. You do 200 pounds and you’re going up, down. That’s not as good as four seconds up, four seconds down. There are a lot of levers that you can pull to stretch that weight.

It’s generally on 1 or 2 movements. Pro athletes use functional trainers for a lot of his functional training, multi-movement and velocity-based training. When you’re doing that type of training, you’re generally not doing heavy weights. You’re generally in the 30 to 70 range and not pushing it. Olympic lifting, which is the stuff you see the big guys at the gym doing, you’re manipulating momentum more than pure resistance. It’s a different style but it’s also way more injury prone and it’s not something we would be pushing for people to do in their homes alone without having a workout buddy there. It’s a much more appropriate form of training for the home. It’s super versatile. You can drive a lot of outcomes with it.

That’s what we want, is versatility in a small and safe footprint. You’ve seen on the Tonal. The arms are all the way up overhead all the way down to the ground. You can do everything from dead lifts, squats and bench presses. You can turn the weight on and off, which allows you to do movements. Most people wouldn’t do on a cable train or you wouldn’t normally use a cable trainer to do a bench press with a bar. Getting underneath the bar with the load on it is hard. For us, you can turn the load off, get into position and hit a button.

It turns it on. You do your bench press. When you’re done, you hit the button, it turns it off. If you want a buddy there to spot you, Tonal will spot you. When you start struggling, it will begin to reduce the weight like a spotter who’s there to help you out get those last few reps. It was designed to be a system that’s versatile, that would allow you to do a lot of things in the comfort and convenience of your home. There may be people who go to the gym and do 600-pound squats and they’re happy doing that. That’s fine. For the rest of us, there’s Tonal.

Tell us about the Tonal community. Are you growing the community? Do you think that the Tonal community is as involved as the Peloton community? As you mentioned, there’s a lot of overlap.

There are three communities now that have formed and they’re all super vibrant. One of the things that I like about the community is people are going deeper on what they’re talking about. There’s a lot more education. Strength training is a meatier topic. Every day, there’s something new and people are asking interesting questions. It’s vibrant because of that. I enjoy that and I follow all the communities and I read as many posts as I can. That’s been great for us. People are being supportive of each other. People are trading phone numbers and texting each other for accountability and all that stuff. It’s exciting. For people who are thinking about even buying a Tonal but haven’t yet, a lot of times, they’re going into the community to ask questions about the product. People who’ve had the product and can share real-life stories, not information off our website, which is pretty standard. What is it like to have this product in your home? They’re going to the communities and real people are sharing real stories and it’s helping people make decisions about whether or not this is the right thing for them.

Personally, what’s your favorite feature on Tonal?

I’ll pick two. My favorite two features are number one, turning the weight on and off. It’s magical the first time you feel it. I love that feature and it allows you to do things that you would never dream of doing. We have Paralympians training on Tonal. I got an email from one of them and he said, “This feature allows me to do things I could never imagine doing otherwise.” It makes the system twice as versatile and it’s powerful. I love that feature. The other feature I love is the AI that chooses how much weight you should lift. Here’s a real story. We spent probably about a year developing and training this AI.

For the first year, we had Tonals and everyone in the office was working out on Tonals and following the programs, but we all had to manually choose our own weights. It would remember how much you lifted and pull up the same weight the next time, but you had to decide how much you wanted to start with and when it was time to increase the weight. We turned this AI on and the first time I walk up to it, it basically brings up a number for my squat, which is double what I had been squatting for the year prior. I was in the middle of the workout and I hit pause. I ran over to the engineer or one of our physiologists. I’m like, “You’ve got to come and check it out. This is a bug. It’s having me lift twice as much weight as I’ve ever lifted.”

They looked at me and they’re like, “How’d you know it’s wrong? Do it and see what happens.” I totally did it and I had no idea I had been lifting half as much. I’m the CEO of a fitness company and I had no idea I was squatting half as much weight as I should have been for a whole year. It’s such a powerful feature. Even in our communities, there’s this love-hate relationship where every time your weight gets upgraded, where we’ve decided next time you’re going to lift more weight, you get this chime. Some people are like, “I hate that sound.” It’s so awesome. It’s so powerful.

You should have a ringtone where people can pick their sound where they could make it something really mean.

There are those GPS on the market where you could reprogram them to have like Samuel L. Jackson’s voice.

If the weight, instead of going up, if it decides you needed to go down in your weight, it could do like a sad trombone or the losing sound from The Price is Right.

Do you have any fun stuff that you can tell us about that’s coming out for tips for the future?

I already spilled the beans on yoga. What we spend a lot of our time working on is intelligence. A lot of what we’re doing is trying to make the products smarter, more intelligent so that weight recommendations are better. The cueing that the feedback that you’re getting is more relevant to you. We have better insights and personalization. That’s where we spend a lot of our energy and that’s about making our workouts as effective as possible. I did spill the beans in one of our communities that we’re working on leaderboards. I’ll go ahead and spill the beans a little bit more publicly here. The leaderboards are going to be a fun thing. We’ve been running leaderboards internally at Tonal. A lot of that is about learning what the right type of leaderboard is. A good leaderboard promotes good behavior while a bad leaderboard can encourage people to do bad things or root against each other. We’re trying to make sure that we nail it before we roll it out to the community so everyone’s a big, happy family.

That’s got to be a rough leaderboard to calculate. You probably can’t go as simple as like, “Who’s lifted the most,” because that’s not fair or even equitable.

TCO 134 | Peloton Commercial

Peloton Commercial: Tonal is the best strength training machine on the planet.

 

Another example of the leaderboard that we killed. Do we have streaks in our system where it’s like, “How long have you gone without missing a workout?” Every week your streak gets longer. If you’re going to miss out, you get that doomsday push notification on your phone, which says you’re about to lose your streak. People come back and work out, which is great. That’s what we want for them. We had a leaderboard where streak length was how you ranked on the leaderboard. The longest streak was further up. The only way to advance on that leaderboard is if you knock someone else off and you’re rooting against people. We’re killing that and we can’t have that. We’ve got to be rooting for each other here, not against each other.

You’d have people go into each other’s houses and taking them out so they can’t do their workout.

Turn off their notifications.

“I’ll buy you a two-week vacation to an island where there are no Tonals.”

Do you think that this is the only product that you guys are envisioning selling or do you have thoughts of other things?

When we think about adding new products to our product line or expanding our offering, it’s about the content. Right now, the Tonal piece of hardware we built is probably the most versatile piece of equipment ever created. It can do so much, way more than even any functional trainer because of the advanced weight modes we have and the fact that you can turn away on and off, which allows you to get into position for more movements. When we think about expanding our offering, it’s about more intelligence and having more content. The way we added yoga, the way we added these high-intensity conditioning types of workouts, that’s where we’ll be adding more stuff. Take the platform that we have and make it deliver more stuff. That’s how we think about that.

If somebody just got their Tonal. It’s day one, what’s your biggest piece of advice for them?

Download the mobile app and take the strength test because that’s how we figure out. When you create your account, we ask you for your goals. We ask you for some basics, the same thing as a personal trainer would ask you. We make you take a strength test. When you take that strength test, that’s what feeds that initial data into our weight recommendation engine. We can choose weights for you when you do all of your movements and then get into a program. Don’t be shy if two weeks later, you’re like, “I’m not digging their programs.” That’s totally cool.

We find that people who have the mobile app and are in a program, they’re the ones who work out most consistently. When you click that join program button, you’re making a commitment. This is a four-day a week program and it helps people stay on track. Get in the community. The communities are awesome. They’re filled with wonderful people. Those are all the things that I would say. Invite a friend over for a partner workout too. We were surprised at the uptake of that feature. We thought some people would dig it and it’s something people love, way more than we anticipated, which has been fun to watch.

I could see why because it allows you to workout together. Most people are not going to have two Tonals hanging on their wall, so that’s great to be able to do that workout together. I wouldn’t know what that’s like with my partner.

Thank you so much for taking the time out of your schedule to join us. This has been a lot of fun and very educational.

Thank you so much for having me. It’s always fun to tune in and I’m happy to be a guest.

Is there anywhere people should go and look for you on social media that you would like to be seen, followed, liked or whatever they do on the internet machine there?

They can find me on Twitter. I’m @AOrady. I’m on Instagram @AOrady. I’m also on Facebook. People know that I’m in the communities and they often tag me in posts, so they can find me on social media. I’m not that active. I’m not the person tweeting twelve times a day. People can follow me in case one day I start tweeting or spill the beans on an upcoming Black Friday sale or something. I don’t know how other CEOs do it where they’re tweet storming all day long. I have customers to take care of and employees to care for. It’s a full-time job.

What do you have in store for people next time?

We’re going to talk to Janet Barr. We get to hear all about her amazing cookies. She is still selling them. It’s @SweetTooth out on Instagram. You should check it out. There’s even a code on the JSS Tribe right now if you’re in the JSS Tribe.

Here’s what you need to know. We all know how poorly I eat. When I tell you a cookie is good, it’s good. That’s all you need to know. That’s what people have to look forward to. Until then, where can they find you?

People can find me at Facebook.com/crystaldokeefe. They can find me on Twitter, where I suddenly got active, Instagram, the Bike and the Tread @ClipOutCrystal.

You can find me on Twitter @RogerQBert or on Facebook at Facebook.com/tomokeefe. You can find the show online at Facebook.com/theclipout. While you’re there, like the page and join the group. While you’re in front of your internet delivery device, be sure to subscribe to our newsletter at TheClipOut.com. Thanks for tuning in and until next time, keep pedaling.

Also, running.

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About Aly Orady

TCO 134 | Peloton CommercialBased in San Francisco, Aly Orady is a 20-year silicon valley veteran, engineer and serial entrepreneur. Aly started his career at Hewlett-Packard’s Computer Systems Laboratory designing super-computers, followed by technical leadership roles at a series of startups, including Kealia, Inc. (now Sun/Oracle). Armed with an M.S.E.E. from Stanford, and a B.Eng. from McMaster University, Aly founded Pano Logic where he served as the company’s Chief Technology Officer and oversaw core technology development, architecture, and patents. As Pano Logic’s founder, Aly also served on the board of directors and has filled a broad array of functional roles including product management, go-to-market planning, business development, and manufacturing operations. Aly’s technical expertise includes cloud, virtualization, enterprise management, networking, and computer architecture. In 2015, Aly went on to found Tonal, a stealth startup with an innovative approach the fitness. Stay tuned.

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