Welcome to Becoming the Boss, our series celebrating small business owners who have made the transition from solo-entrepreneur to employer. Check back periodically for new installments.
Peloton co-founder Tom Cortese has always been an athlete. From mountain biking to marathon running, Cortese is constantly on the move. So when he and John Foley, Peloton’s CEO, decided to start a business that brings the excitement and sense of community of spin classes into the home, it was a perfect fit.
The Peloton Bike is an indoor cycle that allows users to join virtual fitness classes from the comfort of their living room. Users can sign up for live rides with real instructors throughout the day, compete with other riders, and participate in on-demand classes that fit into their schedules. The bike is mounted with a television screen that includes a webcam, so riders can keep track of their goals and keep pace with an instructor.
Cortese and Foley launched the company in February 2012 after starting two other businesses together. They wanted to revolutionize how people work out in their homes, and Cortese said he wanted to offer an alternative to what he considered “ugly, uninspiring” bikes and treadmills on the market.
“When I walk into a gym or a boutique fitness class, there’s an instructor and friends and it’s social and it’s exciting and I’ve got to get there at 6 a.m.,” Cortese said. “How do you take all of that proven power, and bring it to the privacy, comfort and convenience of your own home?”
Cortese is now working with his team of about 300 employees in New York City to help make Peloton a household name in fitness. In an interview, Cortese discussed the most exciting aspect of hiring his first employees, what he looks for in new hires, and his advice to aspiring business owners.
How is working for a health and fitness startup different than launching a venture in other sectors?
I can tell you that compared to health and fitness, all spaces are going to be different.
Health and finesses spaces are going to be different from the pure software plays of the world. There are a lot of entrenched players in health and fitness, especially in the fitness equipment category. Most fitness equipment comes from one of three players who have been in the industry for many decades making the same stuff, and they’re sort of entrenched in their ways and their style and everything.
We were able to bring a very new attitude coming from a different business sector into a fitness sector; we were able to bring some of the energy and excitement. I think compared to other pure health and wellness businesses, because we bring over some of that software startup world excitement into this world, we have a different approach and we attracted a very different employee.
What’s your favorite part of running a business?
What’s most exciting is the fact that we’ve shifted from just building out a product to building out a real company with a real culture with a real life of its own. There was a long stretch when there were less than 10 of us in the company, so we were all very connected to what was going on. Now we have almost 300 employees around the country, and there’s no way just one of us could know everything that’s going on.
Because folks are given the entrepreneurial leeway to go and run with their task, it’s like this living breathing organism that’s self-sustaining. That’s what’s truly exciting; we have a genuine business that operates itself on a daily basis just pumping out amazing stuff.
When and why did you hire your first employee?
We started the business in January 2012, and we opened our first very tiny little office space at the end February 2012, just two of us sitting in that office for a long period of time. We slowly hired until we got to about 10 people. We were hiring as we grew from an idea to a funded idea, then to a funded idea with a prototype, and then to “we now actually needed to build the thing.” As we moved into that building stage, it was important that we find folks in a particular area who could come and join the team and help accelerate that growth.
I have to admit in the moment it was like, ‘thank god someone is here to help.’"
Peloton's Tom Cortese on hiring his first employees
What does it mean to you to be an entrepreneur and to be creating a job not only for yourself but for other people, too?
We get folks to start their morning off with an exciting and engaging workout, which will make them feel better, give them more energy, connect them to other folks in our community. We think we really get to bring happiness. On that side it’s important to us that we’re building a product that has genuine value to folks and is a societal good.
Similarly, building a company with the right policies and the right culture is also a wonderful societal good. We want our employees to experience the right work-life balance, and we want to be able to employ the right number of folks to get this job done. We think that too is a societal good.
What was the most exciting part about bringing on your first employees?
I have to admit in the moment it was like, "Thank God someone is here to help."
Generally, in the moment it’s always “thank you for being here, thank you for having the skills you have, thank you for contributing to our business, thank you for helping us to grow, thank you for helping take some of the load off the rest of us so that we can create the type of scale that we want in this business.”
It’s a very thankful experience.
What’s the most challenging part of managing employees?
We’re all people and we all have our prickly sides, and every once in a while those come out, and every once in a while folks will butt heads. So the challenge of just ensuring that folks have the right pathway to resolution. We make sure all those processes and goals and high level project management aspects are in place as some of the less sexy part of running a business but also one of the important aspects.
What kind of skills and characteristics are you looking for as you build your team?
Well, we look for a host of different skills depending on the job, and folks should come to our website to see all that’s offered. If there’s a skill that folks have that doesn’t seem to be reflected in one of our jobs, we’re always open to folks making a pitch for why they belong or how they can add value. Maybe it’s something we aren’t seeing.
Collaboration is an important aspect in any hire in any part of the organization. We’re a company that does more than we should be able to do on a daily basis, but we do it because we have the type of people who look at challenges with great excitement, not fear.
What are some long term goals for Peloton?
Broadly, we expect to be a household name and we expect to be known for having some of the most exciting, engaging and forward consumer products in the fitness space.
What advice do you have for aspiring business owners?
Don’t think about how hard it’s going to be because that would be terribly demotivating. One thing we say all the time is that if at any point along the way we stopped and thought about how enormous the challenge ahead of us was, it could have demotivated us.
When folks are training for a long distance run like marathon or an IronMan one of the pieces of advice is taking it mile to mile or station to station. Taking that approach to building a business, not overwhelming yourself with the enormity of the challenge, will probably be helpful in the long run.