Peloton - the entire history and strategy behind America's trendiest workout

1. BGBen Gilbert0:01

   Ride to Greatness? [chuckles]

2. DRDavid Rosenthal0:03

   We're not here to work out, we're here to outwork. [laughing] I said that to Jenny the other day, and she was like: "What are you talking about?" [laughing] Outwork!

3. BGBen Gilbert0:14

   Just internalize all the Peloton instructor slogans.

4. DRDavid Rosenthal0:17

   Oh, so great.

5. BGBen Gilbert0:18

   David, just make sure you live, learn, love well. See you next time. [upbeat music]

6. SPSpeaker0:24

   Who got the truth? Is it you, is it you, is it you? Who got the truth now? Hm. Is it you, is it you, is it you? Sit me down, say it straight, another story on the way. Who got the truth?

7. BGBen Gilbert0:41

   Welcome to Season 10, Episode 2 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.

8. DRDavid Rosenthal0:55

   And I'm David Rosenthal, and I am an angel investor based in San Francisco.

9. BGBen Gilbert1:01

   And we are your hosts. Well, listeners, we have been waiting to do a Peloton episode for a long time, just searching for that, that right moment, you know? We, we didn't do it at the IPO, and then there was the big stock run-up, and we thought about that, and we got a zillion listener requests, and, of course, and, uh, the pandemic hitting, and David and I both becoming customers, and these crazy commercials. And, and, like, somehow none of these ever felt like the right moment. So we figured, w- well, how about this wild, company-changing news we just scramble over 24 hours to prep [chuckles] and have done basically nothing in the last 24 hours except learn everything we possibly can about this company that we are so intimate with already?

10. DRDavid Rosenthal1:42

    Well, I mean, anytime Barry McCarthy gets involved... Like, we were texting, w- uh, Ben texted me the news, and I was like, "That's it. We gotta do it. Emergency pod." [chuckles] Acquired superhero, Barry McCarthy, literally riding again.

11. BGBen Gilbert1:59

    Yes.

12. DRDavid Rosenthal1:59

    Oh, just so excited.

13. BGBen Gilbert2:01

    And, you know, there's this fun thing, too, of like, I've seen articles that are like, "John Foley's stepping down as CEO." Well, yeah, technically, technically. Th- people are saying he's staying involved. He's staying very involved, and, uh, we'll definitely dive into sorta how this duo is gonna conquer the road ahead together.

14. DRDavid Rosenthal2:20

    Indeed.

15. BGBen Gilbert2:21

    Well, first, we wanna say, uh, we're recording this on February 9th, and, uh, that is important because yesterday, uh, February 8th, was the day that the news broke about all of this Peloton stuff. Uh, today, February 9th, was Barry McCarthy's first day in the CEO seat, and I think he frames this better than we ever could've. In his, uh, email to the company this morning, he wrote: "And now that the reset button has been pushed, the challenge ahead of us is this: Do we squander the opportunity in front of us, or do we engineer the great comeback story of the post-COVID era? I am here for the comeback story."

16. DRDavid Rosenthal3:00

    We are here for the comeback story.

17. BGBen Gilbert3:02

    Indeed. All right, well, we spent the last 24 hours getting, uh, everything in order, all of our thoughts. I've done 167 workouts since January of 2020, when I got my Peloton bike, to make sure we are as knowledgeable as possible. And first, we wanna introduce you to our presenting sponsor, Vanta, the leader in automated security and compliance. Now, as you know from the Taylor Swift episode, we are huge fans of Vanta and their approach to the whole compliance process. They do SOC 2, HIPAA, GDPR, and more, and we've got CEO and co-founder Christina Cacioppo back with us today. So Christina, last time we talked about, a little bit, the origin of SOC 2 and how it's administered. What's the checklist?

18. SPSpeaker3:47

    One of the interesting things about SOC 2 is, is folks definitely refer to it as having a checklist, but there isn't really one. So if you go to the AICPA website, and you look up the standard itself, it's really high level. Uh, it has things like... w- and written in more complicated, you know, compliance speak, but basically says, you know, "Hey, do you have, you know, systems in place to control how data is accessed in your company?" Right? And then that can be implemented any number of ways. So actually, in the early days of Vanta, when we talked to engineers who knew compliance, or actually when we talked to investors who are engineers, they basically told us, they're like: "How do you automate that?" Right? Like, "That's, that's too high level to be able to, uh, automate," which they're correct. Uh, one of the things we did with Vanta was just break down those high-level statements into specific things that could be automated and a company could implement. Um, this obviously helped us actually build software for a category that never had software before, but it also helps companies, because we realized one of the reasons smaller companies didn't pursue these certifications earlier, even though they helped them grow, was they just didn't have the time, bandwidth, attention to figure out what those things meant.

19. BGBen Gilbert5:04

    What are the most obvious, no-brainer things that should be a part of that?

20. SPSpeaker5:08

    So it's really, really high level, a SOC 2 or a compliance certification is trying to figure out if you are kind of running a reasonable organization that protects data, and so you can kinda break it down into three pillars. One is cloud infrastructure. Do you have your AWS, GCP, Heroku, whatever you're using, is it set up reasonably, right? And that can mean one of, you know, hundreds of things, but just, do you lock all your doors and windows? Uh, one is around laptops, [chuckles] like devices employees are using. Uh, you know, are those reasonable? 'Cause they often have customer data on them or access, you know, websites that have all of the customer data. And then the final one is employees themselves, so the accounts they use, their own practices, um, how they're trained and onboarded. Uh, you know, again, that gets broken down, but just three pillars: cloud infrastructure, devices, and employees.

21. BGBen Gilbert6:00

    ... Our thanks to Vanta, the leader in automated security and compliance software. If you are looking to join Vanta's two thousand plus customers to get compliance certified in weeks and instead of months, you can click the link in the show notes or go to vanta.com/acquired for a sweet, sweet ten percent discount. Other things, you all know the drill by now. If you wanna join the Slack, you should: acquired.fm/slack. You should listen to the LP Show to get the nerdier stuff, like our updated thoughts on the markets, and a little bit less us and a little bit more the excellent NZS Capital guys. We talk about all of that and semiconductors in our latest episode. You can search Acquired LP Show in any podcast player, or you can become a member at acquired.fm/lp, uh, if you want those two weeks earlier or to join our LP-only Zoom calls, one of which is tonight, if you are listening the day that this episode comes out. So LPs, excited to see you in there.

22. DRDavid Rosenthal7:00

    The LP Show has been on fire recently. We've got, like... I'm just so pumped about the guests we're getting and-

23. BGBen Gilbert7:06

    10K Diver, that was really fun, too. Pseudonymous interview.

24. DRDavid Rosenthal7:10

    We've got some great founders coming up.

25. BGBen Gilbert7:12

    Yep.

26. DRDavid Rosenthal7:12

    It's awesome.

27. BGBen Gilbert7:13

    Uh, listeners, as you know, this is not investment advice. [chuckles] Uh, very much-

28. DRDavid Rosenthal7:17

    [laughing]

29. BGBen Gilbert7:17

    ... not investment advice this time.

30. DRDavid Rosenthal7:18

    It may be product advice, though. I, I've got some- W- I definitely wanna discuss Peloton's product lineup 'cause I have some thoughts.

Episode duration: 2:22:03