👉 Background: Peloton is the fitness company known for that super fancy exercise bike and treadmill which first started way back in 2012. During COVID, Peloton's valuation jumped to just under $50bn USD. Then vaccines hit the world and Peloton came hurtling back to earth.

👉 What happened: After struggling for the past few years, Peloton could be gearing up for a comeback after its results exceeded their guidance on all metrics - across profitability, growth as well as a trim in ad spend.

👉 What else: This is largely because Peloton began outsourcing the production of its bikes and treadmills. And it’s now mainly focused on selling its software (ie subscriptions) rather than hardware.

What's the key learning?

💡When you own the supply chain from end to end, you stand to gain the most, but also lose the most.

💡When Peloton launched, it manufactured all of its bikes and treadmills in the USA, produced all of its own content and it sold all of its products directly through its website. But when the going got tough, they were left with over $1.4 billion worth of unsold bikes — that’s a lot more than the $19 million they were sitting on just two years ago.

💡Peloton has de-risked its business by outsourcing its production to Taiwan and outsourcing its distribution by selling through Amazon and Costco. And now, it’s focusing on nailing its subscription offering.