I interviewed Zwift CEO/Founder Eric Min in TechCrunch, discussing the virtual cycling company’s product evolution, numerous potential revenue streams, and Olympic esports ambitions.
Interactive fitness startups are a hot trend right now, following Peloton’s mainstream breakthrough. As it’s preparing to IPO, other “Peloton for X” startups like Tonal, Mirror, and Hydrow are raising substantial sums. Scooter Braun and Rumble are teaming up for a boxing one called At Home 360.
These combine the upfront purchase of workout hardware with monthly subscriptions to access live-streamed or recorded workout videos. It’s a smart business because it taps into “content as a utility”…content that is framed as a providing concrete outcomes in areas where we are used to spending a lot of money (health, education). The hardware purchase creates a sunk cost bias that makes customers resistant to stop subscribing.
What Zwift is doing taps into what I consider a bigger, more defensible opportunity however: fitness-gaming. Cyclists can put their bike on a trainer at home (which makes it stay in place) and ride with other players inside a virtual course where their characters’ looks, movements, and power corresponds to their own.
Because users are represented as players within a social game, there is the benefit of network effects, opportunity for in-game commerce and an audience viewing the competition.
In Zwift’s case, it’s developing a full-force virtual cycling league that involved real like pro cyclists and that he aims to get included in the Olympics as a cycling event. (Read the interview here)