Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. We've been looking forward to this
Speaker 1: conversation because when it comes to understanding the startup world,
Speaker 1: how online and tech are reinventing so much of what
Speaker 1: we do and how we do it, this next guest
Speaker 1: definitely comes to mind. Co founder of PayPal, was CTO
Speaker 1: of the company, was chairman of Yell for about eleven
Speaker 1: years from its founding days. Was on Ya, who's board
Speaker 1: founder and CEO of Slide, which was sold to Google.
Speaker 1: We're talking about Max Levchin, who today is founder and
Speaker 1: CEO of a firm. He joins us on the phone
Speaker 1: from San Francisco. Max, delighted to have you here with us.
Speaker 1: First of all, tell us a little bit about how
Speaker 1: you're doing, your family, your employees. How's everything going? Great?
Speaker 1: Great to be with you. Thank you. You know, I
Speaker 1: have to say, knocking on woods, we've been extremely lucky
Speaker 1: a firm transitioning to our from home seamlessly, almost almost perfectly, really,
Speaker 1: and we've been able to support our partners and our
Speaker 1: customers and our employees throughout this fross us generally without
Speaker 1: too many crazy fire drills. So I'll then I feel
Speaker 1: very lucky and certainly aware of companies where those sorts
Speaker 1: of people already took place, And you know, I think
Speaker 1: some of this is just getting started too well. And Max,
Speaker 1: it's interesting. I mean, it comes at a fascinating time
Speaker 1: for you where there's so much momentum around what you're
Speaker 1: doing at a firm and you have this pretty incredible
Speaker 1: window into consumer spending. First of all, remind us exactly
Speaker 1: how a firm works, and then we'll get into sort
Speaker 1: of what you're seeing through some of that data. Sure,
Speaker 1: a firm serves primarily a young, younger audience, as in
Speaker 1: our customers are primarily millennials and Gen xtas and so forth,
Speaker 1: and we're really a credit card alternative. You would find
Speaker 1: this if you're buying a Peloton or shopping at Walmart
Speaker 1: dot com and really every fortuna between. We are there
Speaker 1: in the checkout page, sometimes on the product age where
Speaker 1: if you don't use your credit card and would like
Speaker 1: to pay for an item or I am time with
Speaker 1: a great degree of simplicity. Everything is clearly priced, there
Speaker 1: are no feed of any kind. They're not even a
Speaker 1: late fees. So it's a product that really built on
Speaker 1: this idea that if we communicate very clearly to our
Speaker 1: customers what it takes to pay something over time, they
Speaker 1: would choose us over credit cards and work at it
Speaker 1: for eight years. At this point, we have many thousands
Speaker 1: of merchants that work with us, and many, many, many
Speaker 1: millions of customers billable dollars these transactions that we processed,
Speaker 1: and so we do see demand in retail, primarily online,
Speaker 1: although we have a meaningful presence of offline as well,
Speaker 1: And so you're right, we have some some fascinating status
Speaker 1: for reserving. Well, let's get into that. Tell us about
Speaker 1: because you know, Jason and I have talked about just
Speaker 1: kind of on our own world what we're spending money
Speaker 1: on right now, and earlier we talked about, you know
Speaker 1: that millennials in particular might stop with all the experiences
Speaker 1: and they're gonna be spending on their home and other
Speaker 1: things because that's going to be the world we're living
Speaker 1: with and and you're not gonna be able to travel easily.
Speaker 1: What are some of the data points that you guys
Speaker 1: are seeing about where people are spending their money, right Yeah,
Speaker 1: so you pretty much nabled it to have to say
Speaker 1: I think that the headline is exactly right, millennials, and
Speaker 1: we're not just starting monials like many of our customers
Speaker 1: are so on the younger side. But everyone has sort
Speaker 1: of turned inwards. So if you are setting up your
Speaker 1: home office, your home jim, your home restaurants, or your
Speaker 1: at least the kitchens part of your home restaurant, that
Speaker 1: is growing off the charts. So just give you some
Speaker 1: stats of office sales that we are processing. Is up
Speaker 1: um overall homewears from mattressists, furniture to the decoration, you know,
Speaker 1: everything that you might have once you have to make
Speaker 1: your home nicer, you ab, but there's some segments that
Speaker 1: are just incredibly high demand right now. So the kitchen supplies,
Speaker 1: for example, are up. Apparently everyone has to baker and
Speaker 1: make their photo starters, and so sure enough, there's lots
Speaker 1: and lots of things that you need for that, including breadmakers,
Speaker 1: which is one of the top categories apparently, uh of fitness.
Speaker 1: You know, as you bake you need to burn the
Speaker 1: calorie suit, so across the board, you know. Obviously, Peloton
Speaker 1: is a one of the policy traded companies that that's
Speaker 1: not extordinarly well in that category with Mirror an tonal
Speaker 1: and all these other merchant partners of ours are all
Speaker 1: reporting huge growth the overall categories of the hundred and six,
Speaker 1: which is you know that that's an incredible growth. Give
Speaker 1: then how big it already is? Um. I can sort
Speaker 1: of go on on on the sort of the losers
Speaker 1: on the other side, or portioned ones are also quite predictable. Um, clothing,
Speaker 1: you know that we need to wear pants on zoom,
Speaker 1: and so most you know what most people seem to
Speaker 1: be not shopping for for fashion? Um Uh, there's actually
Speaker 1: just footnotes. I'll come back to that in a second.
Speaker 1: But clothing is down, travel decimated, really a decimating sense.
Speaker 1: But let's jump back into our conversation now with Max
Speaker 1: leve Chind. He is the CEO of a firm, co
Speaker 1: founder of PayPal, a stalwart of Silicon Valley. We want
Speaker 1: to talk with him more expansively about some of his
Speaker 1: experience and what happens next. But Max, before we leave
Speaker 1: a firm, I do want to ask you. This has
Speaker 1: brought into sharp relief a lot of trends within buying
Speaker 1: and retail and merchants, so many things. I do wonder
Speaker 1: from your perspective, what does this accelerate or what does
Speaker 1: it accentuate. I guess when it comes to the future
Speaker 1: of buying from the merchant side of things, lots of
Speaker 1: different things. It could be a multi hour at this point,
Speaker 1: because what's the most important thing? Then I didn't just
Speaker 1: be the the your your conversation about the Olympics. I
Speaker 1: think every major retailer with a significant presence offline is
Speaker 1: going to have to reinvent themselves from both logistical and
Speaker 1: reusef management perspective, where showers are gonna become warehouses and
Speaker 1: front of the house is going to become film into
Speaker 1: the house, and so there's just lots and lots of
Speaker 1: major movement that I take with especially for folks with
Speaker 1: large real estate holdings. And then while they're doing this,
Speaker 1: they're gonna have to retool themselves for existence that involves
Speaker 1: by line, pick up and store, by over mail of
Speaker 1: return and store. There all these new problemies that used
Speaker 1: to be exceptions are now going to be front and
Speaker 1: center because people are not going to be comfortable walking
Speaker 1: around a large store with a salesperson in their face.
Speaker 1: And so as this takes place, I think it's going
Speaker 1: to create massive opportunities for people that create software that
Speaker 1: run the service systems and connect the dots between different
Speaker 1: warehouses and fulfilling pipelines and things like that. So I
Speaker 1: think that's probably the thing that I'm hearing about more
Speaker 1: and more in just the last couple weeks. Yeah, that
Speaker 1: makes a lot of sense, right. Crisis creates, you know,
Speaker 1: certainly disruption and innovation and because you kind of have
Speaker 1: to figure out a new way to do it, and
Speaker 1: you have to do it fast if you're going to survive.
Speaker 1: I do wonder to max when you look at specific
Speaker 1: retail categories, like I look at big department stores, are
Speaker 1: people going to want to go back? And I know
Speaker 1: that's easy for me to say because I live in
Speaker 1: an urban environment and I have lots of options, but
Speaker 1: I do wonder. And you know, if you're out in suburbia,
Speaker 1: that's where you go to, you know, if you want
Speaker 1: to go to a brick and mortar. But I do
Speaker 1: wonder what your thoughts on about, you know, like department
Speaker 1: stores on the other side of this, who are already
Speaker 1: in a beaten down state. I think the we C
Speaker 1: will absolutely go out of business. I don't I don't
Speaker 1: think that's a that's a question at this point, the
Speaker 1: strong ones will innovate. I think it's an opportunity for
Speaker 1: those that want to double down on if it's good
Speaker 1: retail and create the impression, hopefully the reality of safety.
Speaker 1: You know, maybe instead of having a physical sales person,
Speaker 1: you'll have an you know, iPad on wheels, rolling around
Speaker 1: whether you're in a store and telling you where to look.
Speaker 1: You know, I think the physical distancing and concern for
Speaker 1: just personal safety is going to prevail. But it's not
Speaker 1: as though we aren't going to get out of the house,
Speaker 1: especially as soon as we're allowed to do so. It's
Speaker 1: just we're going to take places where we feel safer,
Speaker 1: we feel like we aren't likely to get what we
Speaker 1: need fulfilled, and not expose ourselves anymore than we absolutely must.
Speaker 1: It's just, you know, trips to the grocery stores have
Speaker 1: never really ended because people need to eat. People are
Speaker 1: going to go buy pants again. They're just going to
Speaker 1: be true stores where they feel the safest and that
Speaker 1: they're going to get in an out and get things
Speaker 1: done right. Max, I do want to. I mean, especially
Speaker 1: given your experience and history, and you know you're there
Speaker 1: on the front lines of Silicon Valley, You've watched, I'm
Speaker 1: sure with great interest. Is we have all of us
Speaker 1: as a society sort of wrestle with technology over the
Speaker 1: last few years and the role that it plays and
Speaker 1: the good and the bad. I do wonder how this,
Speaker 1: in your estimation, this pandemic has changed our relationship with technology.
Speaker 1: What do we know more about, what do we think
Speaker 1: more about as we go forward, especially given what you
Speaker 1: just said as it relates to brick and mortar and
Speaker 1: sort of that physical experience. I think everything, all the
Speaker 1: choices we have to make are brought into sharper relief,
Speaker 1: and I think right now we are in this extreme
Speaker 1: triage mode where you know, give have a video conference
Speaker 1: and company that has a well known, retly significant security bug,
Speaker 1: and everybody says, well, that's a real problem. But I'm
Speaker 1: still going to get on my call right now because
Speaker 1: I have to run my business started to do this
Speaker 1: or that, and so many choices that we make are
Speaker 1: going to be extremely utilitarian and far less theoretical. Yes,
Speaker 1: I care about my privacy. No, I'm not going to
Speaker 1: hang up because I need to finish this negotiation or
Speaker 1: this contract. As we sort of get into a little
Speaker 1: bit more normalcy or get used to the new normal.
Speaker 1: We are going to get back to sort of a
Speaker 1: little bit more navel gazing and questioning. You know, are
Speaker 1: we making the right trade offs? That said, I think,
Speaker 1: you know, even the conversation around will Google an Apple,
Speaker 1: there's a property working on to trace contact. They're gonna
Speaker 1: be a major privacy violation or not. I think in
Speaker 1: the world where we're canceling Olympics, which to me is
Speaker 1: a sort of cornerstone events that defined society because we
Speaker 1: just can't guarantee safety, I think we should double down
Speaker 1: and leading to technology that will allow us to enable
Speaker 1: such events again. So I think in that sense, I'm
Speaker 1: a big technology bowl. That said, I think over time,
Speaker 1: as we get used to things, we will probably start
Speaker 1: questioning some of the decisions we're making. Well. And that's interesting.
Speaker 1: So what are some of the big technology things that
Speaker 1: you think will be kind of part of our normal
Speaker 1: world that allows us to get back to normal, I know,
Speaker 1: you know, beyond masks and social distancing. Um, what do
Speaker 1: you anticipate. I think it's could be all kinds of
Speaker 1: really amazing innovation. I think things like contactless ways of
Speaker 1: opening doors, ways of clearing security, ways of not having
Speaker 1: to take your mask off to identify yourself. Ways to
Speaker 1: make sure that your privacy is in fact preserved when
Speaker 1: you are being alerted about being too close to someone
Speaker 1: who's later on been diagnosed, Things like tracing locations to
Speaker 1: make sure that you're actually honest about your quarantine. There
Speaker 1: are all sorts of things that are going to make
Speaker 1: us uncomfortable from the privacy point of view, but are
Speaker 1: going to be very very powerful as far as alant
Speaker 1: of society too. Feel that things are a little bit
Speaker 1: safer in a sort of different side of the spectrum.
Speaker 1: I think news and radio and all the content that
Speaker 1: we have to consume, even the notion of truth in
Speaker 1: the content we received from the various forms of ways
Speaker 1: is going to really matter. People are hungry for you know,
Speaker 1: it is a vaccine story that I just heard about
Speaker 1: real or does that be the first? So there's a
Speaker 1: lot of societal impact that I'm seeing that technology I
Speaker 1: think has an important responsibility, let alone the right to
Speaker 1: play it. I have to say I just talked talked
Speaker 1: with a major PR executive who said facts need to
Speaker 1: be put into the bloodstream because we've just gotten to
Speaker 1: a point where there is a lot of misinformation and
Speaker 1: I think it just you know, pivots well off of
Speaker 1: what you just said. I think we are extremely extremely
Speaker 1: hungry for honesty and clarity, and epidemiologist's job is to
Speaker 1: tell you very uncomfortable things that you really really have
Speaker 1: to believe when you can't see them. Right. I think
Speaker 1: that's that that status that is what we have to
Speaker 1: enable at this point. Right, all right, Well, we've really
Speaker 1: enjoyed this. Thank you so much for spending some time
Speaker 1: with us. Matt ledged left Chin excuse me. Max Levchin
Speaker 1: is the chief executive officer of a firm co founder
Speaker 1: of PayPal. He joined us on the phone from San Francisco. Uh,
Speaker 1: you can see why he's been so success in all
Speaker 1: of these technology companies because he's always thinking around the
Speaker 1: corner in many ways, Carol, and understand the implications of
Speaker 1: where we are. And I think the one of the
Speaker 1: most important things he said was sort of differentiating between
Speaker 1: this triage moment and then when we get on the
Speaker 1: other side, are able to take a breath and figure out,
Speaker 1: you know, what are we doing, what are we comfortable with,
Speaker 1: what are we not comfortable with? That's going to be
Speaker 1: critical here, well, in technology as simple as opening doors
Speaker 1: and things like that. So I love it. You're listening
Speaker 1: to Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: on Bloomberg Radio. All right, you are listening to Bloomberg
Speaker 1: Business Week. Well, our previous conversation. I love it when
Speaker 1: it happens like this sort of tease us up for
Speaker 1: our next conversation in many ways. Um, another guest, very
Speaker 1: familiar in the tech world and now in the fitness world.
Speaker 1: We're talking about Fritz Landman. He is the CEO of
Speaker 1: class Pass. Jonius on the phone from Montana and Carol.
Speaker 1: In our conversation with Max left and he talked about
Speaker 1: at home fitness booming. He mentioned Peloton and obviously fitness
Speaker 1: very close to the heart for you and me, both
Speaker 1: on the boutique side and on the in home side. Fritz,
Speaker 1: great to have you with us, such a timely conversation.
Speaker 1: We really appreciate it. Great to be here. Thanks for
Speaker 1: having me. First of all, I gotta ask you, what's
Speaker 1: it like in Montana. I trust your well, your family's well.
Speaker 1: Give us a sense of it because you are in
Speaker 1: a very different place than we are here in the
Speaker 1: Tri State area. Yeah, class Pass has distributed across New York,
Speaker 1: San Francisco, and Montana here in the United States, as
Speaker 1: well as London, Singapore, embarrassed international cities. We have a
Speaker 1: big office here. It's been a great place to be honest,
Speaker 1: to be experiencing this catastrophe and this this pandemic because
Speaker 1: first there's natural social distancing, and second the governor, Governor
Speaker 1: Bullocks was extremely proactive in shutting down schools uh and
Speaker 1: then eventually shutting down the state, you know, even including
Speaker 1: our our partner gyms and fitness studios and restaurant on twitch.
Speaker 1: Has led to this Montana having the lowest per capita
Speaker 1: rate of infection of any state in America. So it's
Speaker 1: been a good place to ride, ride things out to
Speaker 1: able to go hiking and fly fishing and stuff like
Speaker 1: that on the weekend. Yeah, right, So kind of a
Speaker 1: much more normal life than what some of us have
Speaker 1: been living through. What you call it normal, I mean
Speaker 1: my my wife, you know, as our four year old
Speaker 1: toddler here, and I don't think you would call it normal,
Speaker 1: but uh, And certainly running a fitness company during a
Speaker 1: pandemic is right now, anything but normal. But it's as
Speaker 1: good as one could hope for's we'll talk to us
Speaker 1: to about the usage rates and what you're seeing on
Speaker 1: your platform as more folks. We've talked Jason and I've
Speaker 1: talked a lot about it. I've done yoga classes online
Speaker 1: um through Zoom and you know, we're all figuring out
Speaker 1: how to stay fit while at home and sheltering in place. Yeah. Yeah,
Speaker 1: well it's been you know, extremely disruptive obviously. We you know,
Speaker 1: for those listeners who don't know what class passes, it's
Speaker 1: it's basically the Netflix of fitness. So you pay a
Speaker 1: monthly subscription and you can access our entire network of
Speaker 1: you know, thirty thousand different gyms and fitness studios across
Speaker 1: hundreds of cities, across thirty countries anywhere in the world.
Speaker 1: So it really unlocks access to variety. But all of
Speaker 1: those classes historically were these offline classes, right, you go
Speaker 1: to the studio, you go to the gym, uh and
Speaker 1: you go to a different places. With these shutdowns, you know,
Speaker 1: it's been devastating for our our business because over of
Speaker 1: our partners, you know, we went from having the fastest growth,
Speaker 1: you know, really robust momentum. We raised the big financing
Speaker 1: in December two suddenly we started to see the outbreaks
Speaker 1: happened to our Asia markets UM in February, and it
Speaker 1: just you know, rolled through then through Western Europe, then
Speaker 1: emerged in Seattle, in San Francisco, and then rolled through
Speaker 1: the US. Of our studio and gym partners have been
Speaker 1: forced by the government, you know, to close and and
Speaker 1: to shutter their operations for the time being. So you know,
Speaker 1: obviously it's been devastating for the fitness industry and and
Speaker 1: really all of us have had to scramble to try
Speaker 1: to pivot and try to help each other get through it.
Speaker 1: And that's why we pivoted to launching a live stream
Speaker 1: video fitness platform, and also why we launched a donation system,
Speaker 1: you know, with with matching of up to a million
Speaker 1: dollars for our customers to just donate to these studios
Speaker 1: and gyms to help them get to the other side
Speaker 1: of this disruption. So hopefully they you know, a lot
Speaker 1: of them are now monetizing video workout through class paths
Speaker 1: to our customers who are using Zoom or Instagram Live
Speaker 1: or YouTube lives um and a lot of our customers,
Speaker 1: you know, are just donating to these studios to help
Speaker 1: them get through it, right, Because I mean, I think
Speaker 1: it's it's easy to forget for its to to some
Speaker 1: extent for a lot of folks out there, that many
Speaker 1: of these are just straight up small businesses. They gotta
Speaker 1: pay rent, they've got a small uh staff, you know,
Speaker 1: often contractors or you know a small number of full
Speaker 1: time employees. What are you hearing at least at this point,
Speaker 1: you know, six seven, eight weeks in, depending on on
Speaker 1: where you are about how generally people's ability to to
Speaker 1: sort of hang on it at least to now what
Speaker 1: sort of rates are you seeing and people just saying,
Speaker 1: you know what, I'm out? Great question. You know, that's
Speaker 1: probably the single biggest question for our business. You know,
Speaker 1: Question one is probably how how many of our customers
Speaker 1: will move to these video workouts and then stay there
Speaker 1: once these markets come back. And question two is really
Speaker 1: how many of our partner Jim's and fitness studios can
Speaker 1: get through these periods of shutdowns given that you know,
Speaker 1: I saw report saying the average retail business only has
Speaker 1: a month of cash you know, on the balance sheet. Um,
Speaker 1: and you know, really we've been encouraged to be honest,
Speaker 1: now it's too early for us to celebrate, but we
Speaker 1: have been encouraged by the fact that here we are
Speaker 1: between you know, five and eight weeks into the shutdown,
Speaker 1: and you know, out of our thirty thousand partners, it's
Speaker 1: been in the tens of digits, not the hundreds or
Speaker 1: even thousands, which is or tens of thousands, which is
Speaker 1: what we were worried about. That shoe could drop any day,
Speaker 1: and so you know, it's too relate to declare victory
Speaker 1: and success there. But we've been encouraged by you know, one,
Speaker 1: our partners have moved very aggressively, including on some really
Speaker 1: painful cost cutting measures, right, so they've moved aggressively in
Speaker 1: terms of launching these live streams and now class passes,
Speaker 1: sending out material revenue to these to these partners, and
Speaker 1: they're having their instructors give these classes from home or
Speaker 1: from their apartment or uh, you know wherever um and
Speaker 1: we've been able to get a pretty big audience. You know,
Speaker 1: over two thirds of the thousands of partners who have
Speaker 1: launched these have started seeing reservations and revenue from from
Speaker 1: live streaming. So we think that's helping. We think you know,
Speaker 1: obviously our donation program and also asking our customers and
Speaker 1: their own customers to buy gift cards and advantage. You've
Speaker 1: seen many people do that for the restaurant industry. And
Speaker 1: then you combine that with UH, with with the stimulus,
Speaker 1: and you know, internationally it's a Western Europe. The stimulus
Speaker 1: packages have been very strong UH and in the US
Speaker 1: they've been very aggressive and fast. We've been pleasantly surprised there.
Speaker 1: I think globally there's still they're still waiting to shake
Speaker 1: out to see how big of an impact is that
Speaker 1: many have UM. A lot of our partners have had
Speaker 1: problems accessing the stimulus, figuring out how do you even
Speaker 1: apply for it? You know, don't know where they are.
Speaker 1: But but so far, so good, you know, knock on
Speaker 1: wood work, cautiously optimistic that most of them will survive
Speaker 1: as the federal government step up and say to these folks,
Speaker 1: hey basically put your business in the mode. You are
Speaker 1: listening to Bloomberg Business Weeks to with us. Fritz Lanman,
Speaker 1: CEO of Class Pass, on the phone from Montana. So, Fritz,
Speaker 1: I do wonder, you know, on the other side of
Speaker 1: this wherever that maybe what does this look like to
Speaker 1: to some extent, especially as people get used to working
Speaker 1: out at home, maybe more so than they did before.
Speaker 1: Carol and I are, as I said at the top,
Speaker 1: like big fans of boutique, but also big fans of
Speaker 1: working out at home. A minute, and I do wonder
Speaker 1: what's sort of permanently different or at least different in
Speaker 1: the short to mid term once once new normal sets in.
Speaker 1: It's a great question. And uh, you know one that
Speaker 1: the team and I are are asking each other, you know, constantly.
Speaker 1: I think, I think our expectation is that the future
Speaker 1: is heterogeneous. Right, you have both digital options and you
Speaker 1: have real world options. From the real world standpoint, you
Speaker 1: just you cannot be the immersiveness, the sense of community,
Speaker 1: the sense of accountability of being in that studio, having
Speaker 1: an instructor, having all of that specialized equipment. You know,
Speaker 1: most people cannot afford to have wait system, a treadmill,
Speaker 1: um you know, a boxing bag, right, so all of
Speaker 1: that gear of a plauates reformer machines. So there's a
Speaker 1: level of immersiveness in offline. But I just don't believe
Speaker 1: digital is anywhere near capturing. And I say this is
Speaker 1: a happy consumer of digital products myst ALP, including my
Speaker 1: own livestream classes, the advantages digital have is obviously there's
Speaker 1: no geographic constraints, so now I can take classes in London.
Speaker 1: And indeed, many of our customers, about half the thousands
Speaker 1: of customers who are taking these livestream classes, are taking
Speaker 1: them in cities outside of their own city, and I
Speaker 1: think tend to fifteen percent so far, or even taking
Speaker 1: them from other countries, which is pretty cool. So you
Speaker 1: have that advantage, and you have a big convenience and
Speaker 1: and tend to have a price advantage. And one interesting
Speaker 1: thing we're seeing is it seems like digital it's easier
Speaker 1: to unlock that social experience with your friends. So in
Speaker 1: offline workouts, people tend to build a community with strangers
Speaker 1: and they become a part of their sort of fitness
Speaker 1: social group. UM with online or digital, at least on
Speaker 1: our platform, it's very easy for you to invite college friends,
Speaker 1: you know from a different town, or people who used
Speaker 1: to work with their high school buddies or whatever to
Speaker 1: join you for a workout, and it's a great way
Speaker 1: to kind of socialize. So our anticipation is that the
Speaker 1: future is going to be both. UM. This pandemic probably
Speaker 1: did accelerate the trial, at least if not persist an
Speaker 1: adoption of digital, you know, as an experience. But we
Speaker 1: do not think, uh, the offline world is going away
Speaker 1: anytime soon because it's just such a more immersive experience.
Speaker 1: We think most people will will mix and match well.
Speaker 1: And I do wonder if it you bring in different
Speaker 1: audiences as a result. Is it just a case of
Speaker 1: the existing folks who were going to offline classes are
Speaker 1: now also doing online or did you bring in different
Speaker 1: audiences because uh, you know, in that for jim owners
Speaker 1: or fitness centers and for you guys, you know, that's
Speaker 1: a way of expanding really your potential user base and
Speaker 1: your revenue base. Absolutely, yeah, absolutely, I mean we we
Speaker 1: have free audio and video workouts in our app, and
Speaker 1: you no longer have to be a subscriber to use
Speaker 1: class Pass for it's live live streaming. It's it's pay
Speaker 1: as you go. So we've certainly seen an influx of
Speaker 1: people just downloading the app to access our free runs,
Speaker 1: our audio coaching that you can go to the park
Speaker 1: and go for a workout um or you're in your
Speaker 1: garage or whatever, or those who want to actually do
Speaker 1: take a live stream. It's certainly opened us up to
Speaker 1: an expanded audience. And I think you know what makes
Speaker 1: class pass magical, not only is the fact that you
Speaker 1: can access these different varieties. Right, So one day I
Speaker 1: can do boxing, the next day I can go to
Speaker 1: a traditional gym and hit a treadmill or weightlifting, and
Speaker 1: the next day I can do some recovery, do some yoga. Right,
Speaker 1: that same heterogeneity, that same ability for me to figure
Speaker 1: out the routine that works best for me. And offline,
Speaker 1: we see that applying to digital experience as well. Sometimes
Speaker 1: maybe I'm okay doing a video on demand class not live.
Speaker 1: Sometimes I want that live coach, feedback and interaction intensive
Speaker 1: community from a digital livestream. Or maybe sometimes I'm okay
Speaker 1: going to the park and just having an audio coach
Speaker 1: in my ear, no video whatsoever, coaching me on a
Speaker 1: run or or on a workout. So we really think
Speaker 1: the future is everybody figures out the optimal routine for
Speaker 1: him or herself. But one thing I will say is
Speaker 1: there's nothing like the efficiency of having a coach there,
Speaker 1: right totally. The biggest fitness results have always become from
Speaker 1: those who are able to afford personal training. If everyone
Speaker 1: could afford personal training six days a week, everyone would
Speaker 1: be in a lot the best. That's that's realistic for
Speaker 1: most of us, right, that's unrealistic. So so we think
Speaker 1: a lot of it's going to just be budget based.
Speaker 1: You know, people will go offline as much as they
Speaker 1: can afford, because that is going to be the best experience,
Speaker 1: you know, and then the augment or supplement with online.
Speaker 1: All right, we really appreciate the time. Thank you so much.
Speaker 1: Fritz Landman is the chief executive officer of Class Past
Speaker 1: joining us on the phone from Montana. Certainly someone we
Speaker 1: want to keep in touch with. Carol. Can I just
Speaker 1: say what I love? I love what he said about
Speaker 1: you know, it's now it's easy to invite on a
Speaker 1: in an online class like your college roommates. Total world
Speaker 1: and I've done that. You know, people have gone to
Speaker 1: on a yoga retreat who are all over the country,
Speaker 1: all over the world. My yoga teacher has recreated that
Speaker 1: through zoom and so here we are all all together again.
Speaker 1: Normally we see each other like once a year. So
Speaker 1: think about the options of what you can do. I
Speaker 1: even thought, oh we could I could just host a
Speaker 1: family event, you know, like it's just um, well, and
Speaker 1: I know that this is a quasi competitor to to
Speaker 1: class past. But remember when we did Peloton Homecoming last year.
Speaker 1: You had all these people coming to New York for
Speaker 1: the first time, meeting each other. You know, these communities
Speaker 1: that they created sort of unwittingly. Uh. And and clearly
Speaker 1: there were some situations whereas family getting together, but you know,
Speaker 1: it's sort of the strangers plus the family. And and look,
Speaker 1: I do hope that on the other side of this,
Speaker 1: from a personal perspective, people do appreciate fitness and wellness
Speaker 1: a little bit more because health is at the core
Speaker 1: of all this. And I do you know, getting aside
Speaker 1: worry about like the quarantine fifteen and things like that,
Speaker 1: and sort of the mental health and the physical health. Uh.
Speaker 1: That can be really troubling in a time like this.
Speaker 1: So good to catch up with Fritz Landman.