Speaker 1: So, Garrett, you were recently a witness to an exciting
Speaker 1: bicycle race. Yes, so picture this Eight cyclists in sleek,
Speaker 1: colorful spandex Some are warming up, dialed in with headphones,
Speaker 1: shutting out the noise around them. Some are conferring in
Speaker 1: low whispers with their coaches. As the start approaches, they
Speaker 1: settle into their seats and clip into their pedals, and
Speaker 1: then the gun goes off and the cyclists start peddling furiously.
Speaker 1: Spectators are cheering, but the riders aren't going anywhere because
Speaker 1: they're on stationary bikes. This race is being held on Swift,
Speaker 1: which is somewhere between a video game and a home
Speaker 1: workout system. So I'm here in Soho in New York
Speaker 1: City at the Swift Super League event. We have one, two, three, four, five, six, seven,
Speaker 1: eight riders live on stage. You can kind of hear
Speaker 1: them in the background there. And this is you at
Speaker 1: a recent Swift competition. Was it like while we were
Speaker 1: in a whitewash room in a basement in the Lower
Speaker 1: East Side of Manhattan with about a hundred other people
Speaker 1: packed in a few journalists, tech investors, and a bunch
Speaker 1: of cycling enthusiasts up on a big screen is the
Speaker 1: virtual course. It's kind of funny because the course they're
Speaker 1: racing on is actually set in New York, or a
Speaker 1: very futuristic version of New York, a bunch of skyscrapers
Speaker 1: that don't exist right now, and elevated glass highways, but
Speaker 1: still doing a couple of loops through Central Park. So
Speaker 1: in a world of peloton success and the ubiquity of
Speaker 1: soul cycle studios, I guess nothing should surprise us. But
Speaker 1: it is a little odd to think of spectators gathering
Speaker 1: to watch racers cycle on their stationary bikes. Of course,
Speaker 1: a lot of people used to think the idea of
Speaker 1: watching anyone play video games what's crazy. I think the
Speaker 1: comparison to video games and e sports is a really
Speaker 1: apt one. You know, E sports tournaments now fill huge stadiums,
Speaker 1: They get broadcast on ESPN, players signed multimillion dollars sership contracts.
Speaker 1: Now Swift is still very niche, but one day it
Speaker 1: thinks it's stationary cycling competitions will become so popular that
Speaker 1: people will pay to watch them. This week, Garrett explores
Speaker 1: the curious world of Swift. Not only does he spend
Speaker 1: an afternoon in a sweaty room watching racers furiously pedaled
Speaker 1: in nowhere, but he spends a month trialing the technology himself.
Speaker 1: By fusing video games with exercise, Swift is pushing the
Speaker 1: limits of what the sport of cycling could actually be.
Speaker 1: I'm Brad Stone and I'm Garrett VNC and you're listening
Speaker 1: to Decryptive. Oh it's February twenty two and I'm going
Speaker 1: to set up Swift on my bike so I can
Speaker 1: train inside my apartment and never have to go outside.
Speaker 1: I'm based in New York, which is pretty cold the winters,
Speaker 1: so I decided to use with to get rid of
Speaker 1: bad weather as an excuse not to train. That's how
Speaker 1: most people use WITH. They sign up for a fifteen
Speaker 1: dollar a month subscription and train at home. First things first,
Speaker 1: we're gonna put the bike onto the trainer. I had
Speaker 1: to go to the bike store and get a very
Speaker 1: fancy axle to fit my bike and fit the trainer
Speaker 1: without damaging the bike. So again, and Garrett, I think
Speaker 1: you need to walk us through this strange pastime some
Speaker 1: more so you're doing this in the middle of your
Speaker 1: living room exactly. Well, I mean, so first, I have
Speaker 1: to have a bike, which I already had a normal
Speaker 1: bike you can use outside. I hooked it up to
Speaker 1: something called a trainer. Essentially, it's this heavy metal roller
Speaker 1: that attaches to the back wheel. It puts friction on
Speaker 1: that wheel, kind of simulating the resistance that you'd usually
Speaker 1: get from the road. Okay, I think I've set it
Speaker 1: up here where it's nice and tight, But you know,
Speaker 1: the last thing I want to do is bend my
Speaker 1: carbon fiber frame here, which again, once I had attached
Speaker 1: a trainer, I added a speed sensor. It's this little
Speaker 1: sensor about the size of a coin. It measures how
Speaker 1: fast your wheel is spinning, so it can transfer that
Speaker 1: into the game. But there's nothing that's new about these
Speaker 1: devices that turn your bike into a stationary bike. Right,
Speaker 1: You're right. Cycles have been training indoors for years. The
Speaker 1: racing crowds with the difference the races they've come to watch.
Speaker 1: All assot that gets you nowhere. The excitement mounts of
Speaker 1: the first item is announced. This clip is from the
Speaker 1: nineteen forties, covering something called roller racing, where the bike
Speaker 1: is mounted on top of a series of rollers. Today,
Speaker 1: the more common design is to fix your rear wheel
Speaker 1: to a single roller, but it's pretty much the same idea.
Speaker 1: Cycling has been a big sport in Europe for some time,
Speaker 1: and now it's growing in popularity in the US as well,
Speaker 1: and it's more people get into competitive cycling. Training indoors
Speaker 1: has become a bigger part of the sport. Okay, so
Speaker 1: we're Swift come from essentially a couple of startup guys,
Speaker 1: John Mayfield and Eric men They got board of staring
Speaker 1: at the wall while training at home on their own bikes,
Speaker 1: so they got together and started building up video games
Speaker 1: so they could watch their avatars racing on a computer
Speaker 1: or TV screen while they biked. That's what became Swift.
Speaker 1: The faster you bike in real life, the faster avatar goes.
Speaker 1: It's got this social component too. You can see other
Speaker 1: people doing laps around you, all right, Actually, you can
Speaker 1: see how hard the other riders are pushing, where they're
Speaker 1: from their stats getting passes, and feel too good. I mean,
Speaker 1: the people around me, they're not like not being past
Speaker 1: like crazy again, I feel like I'm in a pretty
Speaker 1: average space here. Someone just saying p wreck zoom passed
Speaker 1: me kind of plan differently that, but I'm riding with
Speaker 1: a few other people just passed the Brazilian So once
Speaker 1: you started training, what was it like? It can get
Speaker 1: pretty intense. You don't have any of the distractions of
Speaker 1: being outside. It's just you and the bike, so you
Speaker 1: can push yourself pretty hard. The roots are all pretty impressive.
Speaker 1: They're trying to give you something to look at, so
Speaker 1: you're cycling up these beautiful mountains, through coastal towns, even
Speaker 1: in underwater tunnels. So normal cycling, I think, has a
Speaker 1: bit of a reputation of being expensive, but this virtual
Speaker 1: version doesn't seem cheap either. Just to get started, you
Speaker 1: needed a bike plus all the accessories that you talked about.
Speaker 1: It's definitely not a cheap hobby, is it right. I
Speaker 1: already had the bike, so I didn't have to pay
Speaker 1: for that, but I had to get a trainer, which
Speaker 1: I got second hand for about fifty bucks, and a
Speaker 1: speed sensor which set me back another sixty although if
Speaker 1: I wanted to, I could have pushed all of that
Speaker 1: to more than a thousand dollars if I wanted to
Speaker 1: get one of the fancier setups. And that's not counting
Speaker 1: for all the stuff that you know you want to buy.
Speaker 1: Once you start biking and in the future, they could
Speaker 1: do a lot of in game content, such as, you know,
Speaker 1: buying special jerseys or special bikes to show off in
Speaker 1: the game. So, in other words, just like kids are
Speaker 1: spending hundreds of dollars to look cool in video games
Speaker 1: like Fortnite, grown adults could be doing the same thing
Speaker 1: to show off in front of their virtual training partners. Yep,
Speaker 1: that in game content is a huge potential revenue stream.
Speaker 1: So what are some of the other ways that Swift
Speaker 1: makes money from this? So there's the monthly subscription we
Speaker 1: talked about, that's fifteen bucks a month. Then there's the
Speaker 1: money they could make if they put up billboards within
Speaker 1: the game itself. They're not really doing that yet, but
Speaker 1: I did talk to the CEO and he says it's
Speaker 1: in the works. Cyclists are generally a pretty wealthy group
Speaker 1: of people, so advertisers want to reach them. It doesn't
Speaker 1: sound like a bad business. Investors have already poured quite
Speaker 1: a bit of money into the company. Swift recently raised
Speaker 1: million dollars, valuing the company at around six hundred million,
Speaker 1: and the company says more than a million people have
Speaker 1: tried it out. At peak times, ten thousand riders are
Speaker 1: on the Swift universe at the same time. And we
Speaker 1: should say fitness startups are hot right now, like Peloton,
Speaker 1: which sells a two dollar stationary bike and then churches
Speaker 1: you another forty dollars a month to stream exercise classes.
Speaker 1: And Peloton is aiming to go public this year at
Speaker 1: a potential valuation of eight billion dollars. But when Swift
Speaker 1: went to raise money, they didn't just pitch themselves as
Speaker 1: an exercise company or a fitness startup. They wanted to
Speaker 1: be part of the one billion dollar and growing esports
Speaker 1: industry as well. And that's where these big competitions come
Speaker 1: in the kind that we heard about at the start
Speaker 1: of the show. Yeah, the league started popping up as
Speaker 1: soon as people started raising each other on the platform,
Speaker 1: But now Swift is trying to professionalize it, bringing those
Speaker 1: leagues into its system and turn that into another source
Speaker 1: of revenue. More on that after the break. To learn
Speaker 1: more about the Swift competitions, I decided to actually attend
Speaker 1: one myself in New York City, the one we heard
Speaker 1: at the start. I wanted to match my quirky homeworkout
Speaker 1: experience with this big picture potential for Swift to be
Speaker 1: a cultural phenomena on Garrett, I'm really hoping you were
Speaker 1: one of the eight cyclists up on stage. I definitely
Speaker 1: was not. I am not that fast. These guys are
Speaker 1: all people who are either current professionals or you know,
Speaker 1: almost made it into the pros and sort of working
Speaker 1: the way back up into it through Swift. We had
Speaker 1: the real life racers, but they were also about fifty
Speaker 1: cyclists beaming in virtually from around the world. There was
Speaker 1: this big screen showing the virtual racers. The crowd didn't
Speaker 1: really seem to know where they should be watching, whether
Speaker 1: the big screen or the guys actually sweating it out
Speaker 1: in front of them. I'm kind of imagining these big
Speaker 1: colosseums that usually find in Asia where people gathered to
Speaker 1: watch a League of Legends or StarCraft. So was it
Speaker 1: a little bit like that. Yeah, it kind of felt
Speaker 1: like that. It felt maybe sort of as the version
Speaker 1: one point oh of what that could be or what
Speaker 1: it could look like. I talked to one of the racers.
Speaker 1: His name is Adam Zimmerman. He's been making waves and
Speaker 1: Swift lately. So last year he won this race among
Speaker 1: all the top American amateur Swift users, which got him
Speaker 1: a spot in this rand new pro league tell us
Speaker 1: more about that. Well, it began this year and it
Speaker 1: has real pro teams from Europe competing in it, so
Speaker 1: you know they're serious. Adams a really good cyclist. He
Speaker 1: tried to actually go professional as a road cyclist but
Speaker 1: never quite made it, so Swift is a bit of
Speaker 1: a second chance for him. He was at the race
Speaker 1: I went to and he said he thinks Swift is
Speaker 1: building mass appeal for spectators as well as regular users
Speaker 1: like me. The best analogy I can make is online dating.
Speaker 1: When when it first started becoming popular in the early
Speaker 1: two thousands, uh, it wasn't socially acceptable for for people
Speaker 1: to meet online, and now over time people have gotten
Speaker 1: used to that and now it's not a big deal.
Speaker 1: He also explained why as an athlete you might actually
Speaker 1: want to compete in it. If they did give me
Speaker 1: a pro contract to raise the sports, I would do
Speaker 1: that because of the easy convenience. I can travel to
Speaker 1: an event like this, but for the most part, I
Speaker 1: can raise out of my living room, spend time with
Speaker 1: my wife and my pops, and have my family around
Speaker 1: and not have to live out of a suitcase like
Speaker 1: um in real life. Professionals. So Swift, let's Adam be
Speaker 1: a professional athlete as well as a guy who works
Speaker 1: from home exactly. Swift is betting that if high profile
Speaker 1: cyclists start competing like people who are professional athletes who
Speaker 1: already compete in the big traditional road races, it will
Speaker 1: pull regular people like me to pay fifteen dollars a
Speaker 1: month to subscribe and use it at home. Kind of,
Speaker 1: if it's good enough for them, it's got to be
Speaker 1: good for me. I would imagine though that the cycling
Speaker 1: traditionalists may look at this a little bit skeptically. Has
Speaker 1: Swift actually been able to attract high profile cyclists, I
Speaker 1: mean they have pulled in some of those professional teams
Speaker 1: from Europe. These aren't necessarily names that you know a
Speaker 1: regular person who only knows three or four cyclists in
Speaker 1: the world would know, but they are real professional cyclists
Speaker 1: and kind of surprisingly, some cyclists might even be able
Speaker 1: to make more money racing on Swift then in some
Speaker 1: of the most prestigious real life cycling races, especially women.
Speaker 1: For example, Swift held a tournament last year at the
Speaker 1: same time as a Tour of Flanders, which is one
Speaker 1: of the big road cycling races in Europe. The woman
Speaker 1: who won this WIF trace made seven thousand, eight hundred dollars,
Speaker 1: while the real world professional just took home four d
Speaker 1: I have so many questions about this, Garrett. So it was,
Speaker 1: first of all, where where does the prize money come from?
Speaker 1: Some of the league's you know, offer sponsorships. Swift right
Speaker 1: now puts up the money for itself. But you could
Speaker 1: obviously see any kind of thing that works in real
Speaker 1: world sports working here and Swift as you've described that,
Speaker 1: they're simulating these these incredible race courses with hills and
Speaker 1: mountains and tunnels. So how are how are they simulating
Speaker 1: the climbs? So the actual trainer, that that piece of
Speaker 1: machinery that you hook your bike into, it can communicate
Speaker 1: with the software and what it will do is when
Speaker 1: it senses you're about to go up a big hill,
Speaker 1: it will add resistance. So it just becomes a lot
Speaker 1: harder to actually get the same power out of your bike.
Speaker 1: How are the cyclists comparing the simulated experience to the
Speaker 1: real thing. Of course, it's it's different, And you know,
Speaker 1: I had some interesting conversations with some of them because
Speaker 1: in a in a real world race, there is a
Speaker 1: certain element of technical skill. You know, how fast can
Speaker 1: you go down a hill without flying off the road?
Speaker 1: Can you dodge around some of your competitors without falling
Speaker 1: over or knocking one of them over? So, of course
Speaker 1: this is very different. But when you look at the
Speaker 1: way the technology is developing, some of the trainers are
Speaker 1: actually starting to you know, move around, you know, simulate
Speaker 1: inclines by actually pushing the front of the bike up.
Speaker 1: And some of the conversations I was having just casually
Speaker 1: when I was at this event, people were sort of
Speaker 1: speculating about what the future could look like and maybe
Speaker 1: at some point, you know, you'll have VR a R
Speaker 1: some kind of special suit that makes it actually feel
Speaker 1: like you're on a real bike might become indistinguishable from
Speaker 1: actually being outside. So what are the old school cyclists
Speaker 1: think about this? Are they are they excited about what
Speaker 1: it means for the sport. I mean, opinions are pretty
Speaker 1: split when it comes to this, but there are some
Speaker 1: people in the sport who think that it needs a
Speaker 1: bit of a reset. I chatted with christ And Armstrong,
Speaker 1: who's won cycling gold medals for the US at three
Speaker 1: different Olympics. She's one of the most decorated US cyclists
Speaker 1: in history. When you think about the sport like the
Speaker 1: Super Bowl, or you think about the gaming that's going
Speaker 1: on virtually and all the different fans and all of
Speaker 1: the views and all the eyes on that cycling doesn't
Speaker 1: have it. If they don't have it, they have it
Speaker 1: at the tour in France, those numbers are gone down,
Speaker 1: and they definitely don't have it in the women's cycling,
Speaker 1: and so a lot of times the women cyclings inside
Speaker 1: show them in And I think one of the most
Speaker 1: important things is that it doesn't have a lot of money.
Speaker 1: It doesn't have the viewership, doesn't have the TV time
Speaker 1: that a lot of the larger I call them balsmorees
Speaker 1: have in America, and so it's really hard to compete
Speaker 1: against that. And so I think that um the e
Speaker 1: spore platform can really reset that. Like Christen said, cycling
Speaker 1: isn't particularly lucrative from most athletes, whereas E sports is
Speaker 1: already a billion dollar business exactly. I also talked to
Speaker 1: Swift CEO Eric men at the race that I was at.
Speaker 1: Now he really believes that swift has the potential to
Speaker 1: become a real spectator sport, just like the sports it's
Speaker 1: it's no secret that it's very difficult to commercialize professional cycling,
Speaker 1: but you know, putting in on a new platform like this,
Speaker 1: UM that is more tuned to the changing audience. UM,
Speaker 1: I think there's a real opportunity for us to commercialize it. Uh. Certainly,
Speaker 1: the cost that we're putting on a drift event is
Speaker 1: far cheaper for far more cost effective and closing down
Speaker 1: roads of major cities or so. I think there are
Speaker 1: lots of opportunities around selling tickets. Arena Garrett, you have
Speaker 1: a pretty finely tuned filter for startup spin. When you
Speaker 1: hear Eric men talk like this, UM, do you believe him?
Speaker 1: He seemed pretty excited about it. He told me in
Speaker 1: vision stationary cycling becoming an Olympic sport sometime in the future. So,
Speaker 1: of course I'm skeptical that might be a bit of
Speaker 1: a stretch, but at the very least, he says cycling
Speaker 1: is ready for a serious shake up. I think of
Speaker 1: cycling sometimes it's like cricket. It is very difficult to
Speaker 1: explain to someone what is actually going on. UM. So
Speaker 1: we need to experiment with formats where someone can just
Speaker 1: drop in and no exactly who's winning and who's not winning.
Speaker 1: So Eric is experimenting with new formats for races. Like
Speaker 1: a lot of traditional road cycling races in Europe are
Speaker 1: pretty long, they take place over many days and for
Speaker 1: the uninitiated it can be hard to follow. So was
Speaker 1: he changing any minds in the traditional cycling world. Well,
Speaker 1: he definitely is when it comes to training. At least
Speaker 1: a few really high profile professional cyclists are singing the
Speaker 1: praises of Swift, like Matt Hayman. He is a serious
Speaker 1: legend who just retired from pro cycling. In he won
Speaker 1: the Perry Robe, which is one of the most important
Speaker 1: races in cycling. It's this brutal two one day race
Speaker 1: with some stretches on cobblestone roads. Now Matt won the
Speaker 1: race just six weeks after breaking his arm in a crash.
Speaker 1: He trained on Swift because he wasn't supposed to be outside. Well,
Speaker 1: I used to be a traditionalist and I used to
Speaker 1: say our training wars, but you know, the last two
Speaker 1: two or three years, it's really changed my way. I
Speaker 1: mean there was a point there when my arm was
Speaker 1: actually healed and I told my coach, I'm actually getting
Speaker 1: more quality work done on being more effective time effective
Speaker 1: and efficient um and now being retired as the flip side.
Speaker 1: You know, I've got a family, I've got I can't
Speaker 1: go out for four or five hours on my bike,
Speaker 1: so you know it's it. Um. You know, it really
Speaker 1: did change change that whole indoor training thing. And it
Speaker 1: used to just be a you know, a stop gap
Speaker 1: when when you couldn't find it, you couldn't get out
Speaker 1: because it was raining. And now it is actually not
Speaker 1: only are people racing on it, but it is a
Speaker 1: really a great way to train. But for now it
Speaker 1: will be going too far to say that the pro
Speaker 1: cycling world is intimidated. For most people, Swift is still
Speaker 1: a training platform, not a race. So Garrett, how is
Speaker 1: your personal swift training going? It's been going okay, It's
Speaker 1: been pretty fun. I ordered a bunch of white towels
Speaker 1: so I can mop up the sweat from my floor
Speaker 1: and from my bike, which I didn't have to do before.
Speaker 1: I did run into one problem though, What was that
Speaker 1: My downstairs neighbor kept texting me asking what the noise was.
Speaker 1: She thought there was an earthquake going on. That's that's funny.
Speaker 1: And how about is a spectator? I mean, I don't
Speaker 1: know about you, but I'll tune into the tour to
Speaker 1: friends every every now and then um. And one of
Speaker 1: the things that I like about it is the unpredictability,
Speaker 1: the crashes, the near misses, the incredible feats of endurance
Speaker 1: to play out over the course of weeks, and these
Speaker 1: are things that Swift doesn't or can't replicate. I think
Speaker 1: it's very similar to the sports in this that when
Speaker 1: you watch an e sport going on and you don't
Speaker 1: actually know how to play the game or play the
Speaker 1: game yourself. For me at least, it's extremely boring. But
Speaker 1: once you've actually played that game, you know how challenging
Speaker 1: some of the things are that the players are pulling off.
Speaker 1: You start to kind of get hooked. And so cycling
Speaker 1: is all about wattage, how much energy you can produce
Speaker 1: with your legs, how much power you can put out
Speaker 1: into the bike, And when you're watching a Swift race
Speaker 1: on your computer, you can see what all the athletes
Speaker 1: are producing and kind of compare it to what you
Speaker 1: you know, measly human are capable of doing, and it's
Speaker 1: pretty impressive to see what they can do. So if
Speaker 1: the Swift was to prove the viability of the sport
Speaker 1: and the and the quiet, the skeptics. Do you think
Speaker 1: they'll have this course to themselves. I mean, what is
Speaker 1: the stop, say a Peloton from getting into this. That's
Speaker 1: a great question. I mean I think you probably see
Speaker 1: some people who get really fit on their Peloton bikes,
Speaker 1: maybe jumping in and competing on swift. But what the
Speaker 1: market that they have really dialed into is that that
Speaker 1: kind of person who is into cycling, that that person
Speaker 1: who has their own bike, likes the right outside in
Speaker 1: the summer, maybe gets kind of nerdy about the Tour
Speaker 1: de France, and a lot of people who go on
Speaker 1: Peloton are just you know, they don't know much about cycling.
Speaker 1: They probably don't even have a bike that they want
Speaker 1: to ride outside. They just want to get fit. Do
Speaker 1: you find yourself cycling outside less? I mean, the whole
Speaker 1: reason I wanted to try this out was so that
Speaker 1: I wouldn't have to cycle outside in the dead of winter.
Speaker 1: You know, sometimes it's just me being a baby and
Speaker 1: I don't want to be cold, and sometimes there's actually
Speaker 1: inches of snow in the park where I usually ride.
Speaker 1: But now that spring is coming, I'm finding myself being
Speaker 1: called to be outside again. So first big biking out
Speaker 1: of the season. I'm outside. I'm in Prose Park. Blossoms
Speaker 1: are everywhere, people are biking, people are running. It's just
Speaker 1: great to be outside. I'm still getting past though. There's
Speaker 1: some fast guys out of here. And that's it for
Speaker 1: this week's episode of Decrypted. Thanks for listening. Have you
Speaker 1: tried swift or watched the sports? You can write to
Speaker 1: us at Decrypted at Bloomberg dot net or I'm on
Speaker 1: Twitter at G E R R I T D and
Speaker 1: I'm at Bradstone and please help us spread the word
Speaker 1: about our show by leaving us a rating or a review.
Speaker 1: Where ever you'd like to listen to podcasts. This episode
Speaker 1: was produced by piore Coakari and Lindsay Cratterwell. Our story
Speaker 1: editor was Aki Ito. Thank you also to Ann Vandermay
Speaker 1: and Emily Abuso. Francesca Levi is head of Bloomberg Podcasts.
Speaker 1: We'll see you next week.