Has Peloton created a new category and Bees and Butterflies working in harmony. Issue #002.

Newsletter • 7 min read

Topics covered in this week's newsletter. What impact has being home-bound had on how we stay active and how we work? Has Peloton created a new category? What's the future of the workplace? And, some interesting ideas that are totally worth your time.

Has Peloton created a new category and Bees and Butterflies working in harmony. Issue #002.

For a long time, I've held the belief that products, services and businesses can do a lot more to be customer-centric. A term that is commonly misused and the topic for a future newsletter.

Last week I hosted a digital talk focused on customer-centricity. There were two talks about understanding the human motivations of staying fit and adapting to remote working. They both used Jobs to be Done (short explainer video here) to focus on the outcomes for people, rather than business-focused outcomes. Jobs thinking - putting the human first - can create extraordinary opportunities for business success, as you'll discover in the two case studies below. This is my perspective from Alan and Yann's research which can be watched in full here.

Has Peloton created a new category?

Better understanding what motivates people to stay fit and healthy is an important topic. Pre-pandemic much of the developed world were tackling an obesity crisis. Post-pandemic, that crisis may have gotten worse with many people facing much lower activity levels. One of the success stories during the pandemic has been Peloton whose revenue nearly tripled in Q3 2020. Peloton is an expensive product, and inaccessible for most people, but using Jobs to be Done we can deconstruct what makes it successful. In his talk, Alan Klement shows why people are adopting this new fitness phenomenon. You can watch Alan's presentation starting at 3 mins 22 seconds here.

The key takeaways:

Alan's research approach was interesting. He aimed to understand which factors drive the adoption of Peloton's products and services. His research covered these 8 areas:

  1. Catalysts: How are needs created
  2. JTBD Construction: What needs were attached to Peloton
  3. Choice set construction: What other brands did customers consider
  4. Trust building: Factors that increase and decrease customer trust
  5. Imagining use: How different customer types visualise using and identifying with Peloton
  6. Novelty assessment: Why this is new or different
  7. Information foraging: Where customers get their information about Peloton
  8. Willingness to pay assessment: Drivers of adopting Peloton

Having reflected on Alan's research, here are my three key takeaways.

Peloton is creating a new category

Research finding: recent purchasers of Peloton did not consider purchasing any other brand. During the lockdown, many Peloton buyers thought about their fitness options as: "get a Peloton bike or do nothing".

My perspective: this is an enviable market position. A position they've attained because they've understood the human motivations around staying fit. Peloton has not just focused on the features and functions of the physical bike. They have also created an experience that is fun, social and community-driven.

Peloton, Community Experience

The bike represents hard work. The Peloton experience represents encouragement and progress on one's fitness goals.

Peloton is differentiating through experience design, both physical and digital. However, Peloton has also carved out a new market by executing, what Rory Sutherland calls, a psychological moonshot. A psychological moonshot is reframing your weaknesses as positives. Not through technological innovation but using human psychology and design thinking. For example, Sutherland says (referring to the Uber visualisation of the taxi's location on the map):

“The Uber map is a psychological moonshot because it does not reduce the waiting time for a taxi but simply makes waiting 90% less frustrating”

Peloton's weakness is the price. The bike costs c.$2,000, whereas regular exercise bikes on Walmart start at around $150. Peloton's psychological moonshot is reframing its competitor not as exercise bikes but as private studios, as seen in this advert.

Peloton, Advert, Psychological Moonshot

The market positioning Peloton has created for itself is a cheaper, more convenient version of a private studio. When Alan asked Peloton buyers what else they considered it's unsurprising they said, "nothing". There is nothing else that recreates the live spin class, in the comfort of your own home, without losing all the social and community benefits.

Jobs to be Done thinking helps reframe market categories to create differentiation. Peloton has achieved this, not only through great product innovation but also through clever marketing and psychological moonshots.

Experience is a big driver of adoption

Research finding: The shift to the digital economy has been about rethinking how products and services should work and delighting customers with new experiences. Peloton has done just that with both hardware and software. The challenge they face is that adoption is driven by customers experiencing the benefits first hand. How does Peloton get its products in front of potential future customers?

My perspective: It's clear that Peloton is aware of this challenge because it has recently announced the opening of its new showrooms. Scaling a retail presence is expensive, slow and hard. The question is: where is the attention and presence of their customers and how do they reach them?

Gyms are an interesting player in the growth equation for Peloton. From a Jobs to be Done perspective, they are a competitor. Alan's research showed that gyms closing was a catalyst for Peloton adoption. But gyms could be a distribution channel as well. Gyms have lots of exercise bikes and if they were Peloton bikes the number of people experiencing them would increase. Gyms could also act as a reseller. They have salespeople as part of the gym staff and they would be encountering potential customers at the point of greatest delight.

There are plenty of interesting options for Peloton to drive up trial usage of its products. But, undoubtedly, social distancing during the pandemic is going to be difficult to workaround.

Platform and partnership opportunities

Research finding: Alan listed that one of the need patterns was that trainers didn't know the people using the gym or attending a fitness class.

My perspective: There are all sorts of interesting partnership ideas for Peloton. They could create a platform for Gyms or fitness studios to offer branded content that connects the fitness programme at home and in the gym.

Research finding: Alan, talked about Peloton inspiring its customers to invest in a home gym setup.

My perspective: Peloton has already expanded into treadmills and some basic accessories. There's room for product diversification here. If gyms become too much of a competitive threat then a Peloton platform would work great for personal trainers. They could continue to offer in-person training but with a remote training plan using shared digital programmes, social features for encouragement and real-time data for performance measurement.

The pandemic has made us all very aware of our habits and routines. By understanding the real human motivations behind how people stay active, even when their life routines completely change, Peloton can drive a win/win outcome for both their growth potential and their customers' health and fitness.

The future of the workplace

The pandemic changed how we work overnight. Pre-pandemic, I spent much of my time travelling the world but now, I'm working from a makeshift desk at home.

Yann's research investigated the pains of the new home office workers? It was a qualitative and quantitative study of office workers in Germany and Switzerland, his full presentation can be viewed at 46 minutes 35 seconds.

Yann uncovered two segments of workers. I really love the metaphor he used here; Bees and Butterflies.

"Bees work in a structured way and know in the morning what they want to achieve during the day. Their desk is tidy and they work on one thing at a time. They end their day at a certain time and suffer if something doesn't go as planned"

Compared to...

"Butterflies work on several tasks at once. They are creative and communicative and are inspired by others. Yet they are dedicated and always manage to complete their tasks"

For Bees working from home is perfect whereas for Butterflies working from home is hard. Indeed, Yann's data shows that when working from home Bees are much more fulfilled than Butterflies as an average across all Jobs to be Done.

Key findings

Research finding: "100% remote working is an illusion. Butterflies suffer too much and Bees become too disconnected."

My perspective: I identify with being more of a Butterfly and I certainly do not want a 100% remote working environment. The interesting nuance here is that the office is not only for Butterflies. Whilst Bees love the home office, 100% remote working can cause team alignment issues. This will affect Bees' productivity in the long-term without an in-person working environment.

What's clear, is that pre-pandemic levels of office-based work can affect productivity, especially for Bees. The two different spaces offer very different pros and cons. Finding the right balance, and recognising that balance will be different for different types of employees, is important.

Research finding: Yann goes onto to recommend that the nature of the office environment needs to change. It needs to be designed for "human connection and collaboration".

My perspective: this is an important point and would be, in my perspective, a welcome change to the open-plan set-up which tries to fulfil both productive and social Jobs to be Done, but in reality does neither particularly well.

The remote working debate has the potential to become quite divisive. What I've learnt listening to Yann's research and thinking about my own experiences is that we need to recognise the variety of outcomes different people have in their job roles. With increased awareness, people will be able to empathise better with the needs of their colleagues working environment preferences.

Yann wrapped it up nicely:

"Bees need to recognise that informal exchange is not an inefficiency. Why not see it as an alignment tool"


"Butterflies need to recognise that internal projects and topics are sometimes boring. But they also build a common identity"

Ideas worth your time

  • Psychological moonshots. I mentioned this concept in connection to Peloton. The idea is from Rory Sutherland and his book Alchemy. I listened to a podcast recently that reminded me I hadn't read it. The podcast, "Invest Like the Best" is an interview with Rory and a great introduction to some of his key ideas.
  • Nudging behaviour. Staying on the behavioural sciences, the use of nudge theory in the service design and marketing can be very powerful. But having the desired effect is contingent on understanding the customer's need. I think there's a strong connection between Jobs to be Done theory and how to effectively execute behavioural techniques like nudge theory. Colin Strong, an applied behavioural psychologist, looks at the effectiveness of nudge theory when applied to snacking in his latest newsletter, which is definitely worth following.
  • Demand Side Sales. I'm interviewing Bob Moesta about his latest thinking about applying Jobs to be Done thinking to sales. You can sign up to the live event here.

Until next week!

← Customer-centrism is a broken buzzword. We need to move on. Issue #003.
Post-COVID Jobs to be Done →

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