Yesterday, Zwift announced a sweeping workforce reduction and key leadership changes. They issued the following statement:
We shared with our team this morning that we are making a reduction in force. This was difficult news to deliver and we regret having to part ways with some incredibly talented and passionate people. Their contributions to our mission were substantial and we’re grateful for their work.
Eric Min will continue as sole CEO and Kurt Biedler has chosen to resign. Zwift remains a healthy, global business with a passionate community. We have seen accelerated growth over the last year but in the current environment, we must focus on sustainable and efficient growth. Zwift will be more agile and focused on delivering great things for our community.
They also posted a forum topic on the workforce reduction with a few additional details.
Past Layoffs
This is the fourth substantial workforce reduction we’ve seen at Zwift.
- March 2020: long-time Zwift executives including Mike McCarthy and co-founder Scott Barger leave the company, along with several key high-level employees including the Director of Global Business Development and VP of Digital Commerce.
- May 2022: 150-worker, 20% reduction with a “pause” on hardware projects and a refocus on core software, including co-founder Jon Mayfield returning to leadership.
- March 2023: 80-worker, 15% reduction with heavy cuts in Marketing, Creative, and People Teams. Heading into this reduction we saw the hire of Co-CEO Kurt Beidler (ex-Amazon), Mike Lusthaus (also ex-Amazon) as Chief Technology Officer, and former Director of Product at Meta, Manlio Lo Conte, as Chief Product Officer. Not long after the reduction we saw the exit of some long-time Zwift executives.
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What’s Next?
Zwift isn’t offering much detail beyond their press statement, but the statement itself tells us this latest reorg is about two things: co-founder Eric Min returning to the helm, and rightsizing the business for sustainability.
Kurt Beidler coming on as Co-CEO in December 2022 was big news, and strong platform usage for 2023 was supported by a respectable number of game updates released at a steady cadence. But his choice to resign clearly shows that the board’s unconventional decision to go the co-CEO route hasn’t worked out as planned. The good news is that Zwift co-founder and avid Zwifter Eric Min seems very well-positioned to strongly guide the company’s vision and culture.
Zwift says they “remain a healthy, global business” but also, “in the current environment, we must focus on sustainable and efficient growth.” Their forum post expands on this by saying:
The business is healthy and our community is growing. At the same time, growth has not rebounded at a fast enough pace to justify all of the investments that we have been making. As a result, we are taking action to become leaner with a continued focus on delivering great experiences for our community.
It’s no secret that the indoor cycling space has struggled since Covid highs (Saris being sold in bankruptcy and Peloton’s stock dropping 97% from Covid peaks are two examples). In an environment where investor capital is drying up, Zwift must forecast cash flow years into the future and rightsize their staff now in order to reach profitability.
Can a “more agile and focused” Zwift deliver more for the average Zwifter? Time will tell. Zwift can say anything they’d like, but in the end they must deliver innovative features, much-needed game improvements, and compelling content on a stable platform to remain viable long-term. Here’s hoping that’s exactly what happens.
Your Thoughts
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Yet another reason why they shouldn’t be letting the Zwift “Rowing” module gather dust on a proverbial shelf instead of releasing what is apparently a fully written, working, and tested module that isn’t being used SOLELY because their pre-release user survey asked (quite obviously!) the wrong questions to users about potential pricing options.
There is a HUGE indoor rowing community whether they be Concept2 rowers or other products, and they have been crying out for a Zwift-style ‘rowing racing’ platform, it is literally money being thrown down the drain every week they don’t release it…and that decision was made under Eric Minn’s leadership, so unfortunately he’ll likely continue to make the same mistake going forwards (along with other mistakes!)
They’re now a company that has chosen to “focus on software” but seems unable to actually noticeably develop their software.. 😬😬
I’d say there’s more runners than rowers out there, and the running side hasn’t seem the same take up as cycling. Rowing already has other digital platforms. Just my option but you don’t have many folk having a c2 at home compared to the volumes of cyclist with a turbo at home. Would the volumes be enough to warrant the maintenance on it even if it is ready to release?
Yes there are more runners, but there are also plenty of amateur running events put on throughout the year. Whereas in the UK alone there are reportedly over 500,000 people who rowed last year and most of those will be amatuer rowers without access to a single local rowing race event they can take part in, there are some pretty active Concept2 communities who’ve for years been calling for some kind of app/program to let them race each other remotely, and the recent EXR app implementation of “racing” has been widely criticised as being pretty useless and not actually a racing option, so the field is still (just about) open for Zwift to jump in and profit from the interest.
Don’t get me wrong, I agree that the Zwift Running module has been rather pushed to the background, but it is free and does get access to all the same roads as cyclists do – whereas I wouldn’t expect the Zwift Rowing module to be released without a fee. I’d be surprised though if they released it for say $5.99/mth that there wasn’t a significant take-up.
But do Zwift care about the racing community whom they regularly state are the significant minority of users?
As a rider, rower, runner, I can understand why their is limited uptake as a runner. There are far too many dumb treadmills out there, and that takes away from the “joy” of Zwift (I run at 5-10% inclune on a ‘mill). Also, I will think nothing of going outdoors and running in the worlds worst weather, but would stay on my indoor bike unless the weather is good.
I think that there might actually be enough indoor rowers to actually hit critical mass for making a case for releasing/maintaining a row module. Currently there is EXR Game (similar to Zwift with limited courses, row only) and KinoMap (ride, run, row) as well as apps to connect a rower to Zwift as a bike or treadmill simulation. Both EXR and Kinomap are a little less expensive than Zwift. Then there are the trainer led rowing apps (including one new player with a 22″ monitor add-on for the C2). Also, most indoor rowers are not outdoor rowers, unlike runners. I’m just afraid that Zwift might have already missed the boat.😀
I attend a high end gym with Technogym Excite 9000 treadmills. Incredible machine, cost over £10,000 each, has bluetooth and is not dumb. But still not Zwift compactable. Technogym and Zwift have to set this up for it to work and I wish they would.
Hardly surprising… Runners have been poorly treated in Zwift
Running was ahead of its time. To date, treadmills have been constant speed, so the terrain of Zwift is essentially meaningless. The new Kickr treadmill, on the other hand, which adjusts speed and slope dynamically based on the terrain and on runner speed (based on proximity sensor), could be game-changing for Zwift running.
I think most people who are interested in Zwift-style rowing are using EXR, which has been adding features and maps for quite a while now.
Possibly we have different definitions of ‘huge’.
As a Zwift cyclist and runner I can confirm the running side is already massively underutilised even though it’s free and there are undoubtedly more runners in the world than rowers (I think I see two of my ~100 Strava friends rowing, and even them not as much as they cycle and run). It’s not a bad experience either, other than its underutilisation. It’s like cycling on RGT was, it’s fine, it’s just a little lonely. I’d be very surprised if Zwift could steal more than a handful of rowers off the competition
OK so this message is over a week old but maybe someone will read it. I suggest we start a rowing club on zwift. Evidently there is software out there which allows you to connect a rowing machine to zwift and use your power output to control a bike. We could then create events where all participants would connect in this manner, ( perhaps enforcing the hand cycle). Personally i not too concerned that the graphical representation would be incorrect, rather i be excited by the community/competition aspect.
Too much low hanging fruit on the table with Zwift. Something deeply wrong over there – they should be chasing all kinds of customers, not this narrow focus on roadies who want to do traditional interval training and races (of which I am one).
There’s gamification, deep RPG elements, live classes etc etc that they should doing. They’ve done the whole roadie thing well, so maybe move on already and go in more directions?
All the steering stuff is pretty weak, but if they use the code they’ve got to create game modes from it then it could be worth their efforts.
Bit disappointed to see Min still there. He was the right guy at the time, but it’s clear someone really bold is needed for the next chapter.
Couldn’t really disagree more. That kind of overreaching is the only thing that could kill a solid proposition like Zwift. Investing in stuff that won’t move the dial, burning cash for little extra revenue. Cash is king, stick to the core business and they’ll be fine.
The core business is already fine. That’s not interesting. What is interesting and I think the OP here was talking about was, was how do you grow the business beyond that. Look at Peloton’s numbers compared to Zwift – those aren’t even ‘cyclists’. Millions of people buying expensive indoor tech at prices many cyclists get sticker shock at.
The point is clearly that there are far larger markets out there than ‘road cyclists’ and Zwift is well positioned to capitalise on this – but they will need bold leadership to do so.
Their hardware efforts might look like a poor decision in hindsight, but that’s only because of global market disruption really. They can get back into this later.
Either way I think something bold and gamified will come at some point and it will be so addictive and fun, Zwift will be left wondering why they didn’t have the nous to think of it first.
Agree. It gets risky when you become an Octipus
In your concluding paragraph about things they “must deliver” you didn’t mention smart trainers. With virtual shifting coming to Wahoo trainers, and the companies patching up their differences, why should Zwift stay in the smart trainer business? And if they don’t, was it a strategic blunder to get into the trainer business in the first place? They could have worked with Wahoo, not enriched the lawyers, and kept their software focus all along.
Don’t forget that Zwift’s foray into the Smart Trainer market is what lead to a major reduction in pricing on mid-level trainers for everybody. Wahoo certainly wouldn’t have brought down their prices anywhere near this much if competition hadn’t foced them into it, and it was them that brought the legal case in the first place in hopes of maintaining those high prices
they won’t stay in the hardware market. 100%
I agree, I’d expect them to start pulling out and then selling off remaining Zwift Hub stock once the virtual gearing stuff starts being brought to other trainers. But the foray they made has definitely brought benefits…although their “Tron Bike” debacle was a bit of a money pit by the sounds of it
Nonsense. As the pandemic was ending sales of anything “indoors” related tanked. As such, all smart trainer mfgrs. had a glut of inventory. Saris had to sell their company they had so much inventory. That’s what brought prices down.
The attempt to develop their own high-end smart trainer was obviously a horrific mistake that they acknowledged way too late. Also very bad timing but we can’t blame Zwift for that. Had they managed to have the trainer out before the pandemic, things would look very different today.
Buying 3rd party hardware to release the Zwift Hub was absolutely genius though. They were able to undercut Wahoo’s price point so significantly that it threatened their core business and forced them to the negotiations table. There, Zwift was probably able to mostly dictate the terms.
I’ve always thought it would have been smart for Zwift to invest in Wahoo but strong-arming them was certainly the right approach from a business perspective.
They need to knock the useless steering on the head and concentrate on core cycling.
Steering in “not a part of cycling” shocker.
Respectfully disagree. Steering improves Zwift immeasurably.
Steering is great; especially racing on routes like RGV.
Steering is fantastic and I appreciate having the controls close at hand.
“Steering is great!” (those who have access to it and don’t mind another expenditure). “Steering sucks!” (those who do not have access to it or refuse to buy an add on feature).
Personally, I doubt I’ll ever buy it as it feels too much like a video game add on (I do like gaming, btw). That said, I’m sure I’ll complain the times not having steering costs me a race, lol.
I bought the steering addons and have access to use them but I don’t like them, I don’t want to have to worry about steering most of the time. Seems like annoying thing I don’t want to have to be bothered to have to do. Doing Repack Rush is fun for the odd bit of fun, but most of the time I don’t want to do that.
I agree. I have absolutely no interest in steering whatsoever. Not having to steer or brake is the point. If I want to do those things I’ll ride outside
You guys realize you don’t HAVE to steer right?
The steering will slightly adjust your path to stay on a wheel but riding solo your avatar is in the middle of the road, just like before.
For me, I rarely use the steering, but it’s more convenient to give out loads of ride ons, choose direction in the road and use PU from the controllers than from the companion app.
Yes, I realize we don’t have to use steering, what would make you think we don’t understand that? I have the controllers, but they are not on my bike, don’t find them useful. The companion app is easier for me, and the keyboard is pretty easy to access to.
I have the steering, and when it actually stays connected I use it all the time, hitting the “Z” button makes giving ride-ons so much easier (and that’s about all I use it for)
Not wishing to stray too far from the subject of this thread…I haven’t bought the steering hardware because its another connection and another thing to get sweaty. I rarely wear an HRM for the same reason. I would love Zwift to continue…I don’t really care about anything except more interesting routes and would love a Paris-Roubaix and some more real-world courses. I also like TOW/TOZ series. I do race but am effin’ hopeless. If I had one beef, its not with Zwift per se, but Zwiftpower categories. I am Cat B currently but its not right for me when racing. I want a C+ or a B-, something like that? That’s just me venting, sorry 🙂
I keep hoping that Zwift will take care of some of the seemingly simple low-hanging fruit out there, prioritizing it over the grand sweeping improvements for a while. Things like being able to organize our garages, change our jerseys/bikes/helmets/etc. from the companion app while not in-game, customizable HUDs, being able to block other users, tagging and notifications within ride comments, and on and on. I feel like those things would help retain current users and make the game more intuitive for new users.
New roads and worlds, virtual shifting, Zwift Games, pack dynamics, and the other bigger things are great, but making the quality of daily use of the game better would be a better priority at this time, in my opinion.
Yeah, there’s definitely a decent amount of low-hanging fruit that they could, and probably should, work on making improvements on
The problem is those are improvements for people already using the product. Those improves will do little to bring in new users.
I think they need to be thinking about holding on to the existing user base—most of whom are not elite level professional riders but recreational club-level folks.
Zwift is not the only game in town for virtual cycling these days and other options have been gaining ground pretty rapidly in terms of capabilities. I spread my indoor riding between two platforms these days just to make up for Zwift’s shortcomings .
And, it appears to me that a vast number of the subscribers are 50 plus and I am guessing they don’t ride outside a lot and generally when they do they are alone or with one or two people and probably ride on bike paths and trails for safety reasons.
I certainly fit the “over 50” description but I lead 50 or so outdoor IRL rides for my local bike club a couple of times a week during the spring, summer, and fall. My usual number of participants will be between 6-10–mostly all also over 50. No one in my circle of cyclists is anything more than a recreational club rider looking for fun and some fitness. Several of my “regulars” are also Zwift users and our club has designated Zwift as its platform for virtual indoor cycling during inclement winter weather. I’ve led or co-led several of these virtual rides and it’s interesting to contrast the differences in skills needed for each type.
As you suggest, safety (and convenience) drive a lot my use of indoor cycling. Having been hit by a car and injured sufficiently to be hospitalized once while riding alone, I now mostly restrict my outdoor rides to the groups that I lead.
What is your other platform of choice? And your initial comment is spot on.
I split my time between Zwift and Rouvy. The latter has a far greater variety of available routes (and they’re all real places) so the boredom factor doesn’t come into play. It’s not nearly as “social” a platform as Zwift, but I’m personally much less interested in that aspect of the software anyway. The staff is also considerably more responsive to user requests for tweaks/upgrades, which is a relief after my nearly eight years of frustration with a number of the “improvements” made (and not made) to Zwift. It might not be everyone’s cup of tea, but depending on what you want out of a fitness platform, it’s worth a look.
But existing users tell non users how good things are in game now!!
It’s not easy to stimulate growth in this area when you get to a certain subscription level. I’m part of a group of 10 friends who cycle and beyond my partner and myself, I’ve been able to only convince 1 other group member to buy a trainer and Zwift. Affordability is key and things are heading that way albeit very slowly. Virtual shifting will also help as you can then have any old right-sized frame sitting on the trainer all the time. No fuss with cassetes and gearing. Maybe the future lies with pushing the game paragdim even more… I’d love a world builder editor.
such a pity to see a very exciting concept go to waste. instead of platform expansion (roads) and athlete expansion (running + rowing) they decided to waste resources on (a) hardware, (b) non value-added stuff like in-game bikes, shop, garage, road surface and (c) tiny worlds tailored to uci events
imagine they cut all the crap and just expanded the 2 main worlds plus added running (properly) and rowing (finally).
zwift is still the top player in the market but this is really only cause all the competition sucks ever harder.
Agree. Plus imagine if Zwift pioneered a brand new eTriathlon format of Row, Bike, Run which would be doable at home or easily organised as an eSports Event format in pretty much any kind of large open building!
There’s really nothing wrong with the running side (and I use it more than the cycling at the moment) other than the lack of people using it. Hardly anybody does duathlon so why do you think loads of people are desperate to do a non-standard triathlon. I’m lucky to have a smart trainer and treadmill, how many people have all 3!
I would cut the advertising budget. How much is celebrity branding, MVdP, LCB, ? A
Yes. They are a marketing first company not a product first one.
“But his choice to resign clearly shows that the board’s unconventional decision to go the co-CEO route hasn’t worked out as planned.”
That basically never works out. Probably >90% of the time the “old” CEO either leaves the company after a while or is CEO in title only. That’s why the outside world was pretty surprised by the developments at Zwift. We can assume that Kurt Beidler wasn’t interested in the job if he wasn’t given full control.
“Can a “more agile and focused” Zwift deliver more for the average Zwifter?”
I’m biased on that one because our business does consulting on transformation into agile development but my answer would be a clear “yes”. Every business that’s like Zwift benefits from an agile / design thinking focused approach.
If I see that much of high level managers leave the company, I’m starting to have doubts about internal health/ environment/ atmosphere on the workfloor.
As a Sauce user, it really is a striking comparison how much development occurs there by one person (plus a couple mod devs doing things in their spare time) vs the pace at which software development occurs (or doesn’t occur) by Zwift itself with infinitely greater staff and resources.
Look at what Indievelo has accomplished, with a very small team.
Twitter/X has its own problems, but over a year ago they cut 80% of their staff and the platform continues to function.
It’s not about numbers of devs; it’s about having the right ones.
We’ll note that prior to it being taken over by Zwift, the small team that developed zwiftpower did a good job adding features etc.
Zwift has not done much with it since. And we keep hearing horrific (IMHO) rumours about them taking it “in house”. Making zwiftpower look and feel like the Zwift website would be the death of racing (again IMHO) on Zwift.
Zwift Power 100% needs to be brought into Zwift.com the fact that users of Zwift still don’t need to opt into Zwift Power is ridiculous. A racer should not have to go offsite to find actual results. Zwift Power should have been rolled into Zwift.com within 3 months of Zwift taking over and every single Zwift user should have been made to be a part of the rankings. The last race I did on Zwift (Sunday Canada vs The World) there was 44 people in my race and 25 in the results of Zwift Power.
Totally agree. I can’t think of another sporting race IRL or virtual or gaming platform that has two sets of ‘results’ for the same thing!
It’s noteworthy that the biggest series on zwift run their own results calculations (WTRL, FRR, for example). Getting a newb racer up to speed with sign up for zwift, now sign up for zwiftpower, now get a wtrl account, etc. shows how crazy their platform structure is.
You might want to rethink your twitter/x comparison, if you only bar is “continues to function” that is a very low bar. Twitter has lost at least half it’s revenue https://www.reuters.com/technology/us-ad-revenue-musks-x-declined-each-month-since-takeover-data-2023-10-04/
And also having a single vision and working solely towards that vs. a shotgun approach with flavor of the day prioritization.
On reflection, and assuming no major unheard of problems, this seems most consistent with positioning the company for a sale with an experienced team over top the founder CEO. It’s possible they have a couple of suitors at the moment and this was going to need to happen with either one.
Or going public.
Kurt leaving is the end of that road. The exit, from the perspective of those who had enough leverage to require he be installed in the first place, have left now is a sale. He will have gotten their numbers and projections together and it’s hard to IPO if you will never be profitable.
Can’t imagine they’d go public, and as a CFO, I’d fight tooth and nail against the idea. I don’t need the added regulatory / disclosure headache and 10% increase in direct/indirect costs just for an ego trip for senior management.
Yes. Cut the costs, get operating income up, prepare for a sale. Post-pandemic consolidation is very likely in this industry.
Don’t count out oil money and MyWhoosh as a possible Zwift buyer. The LIV golf tour taught us a valuable lesson.
Perhaps Eric Min should go.
Bingo….Ive been watching him with this company for a while. These hardware missteps and large personnel reductions smell of poor management.
Who knew, when people were complaining about constant pairing issues and problems with the companion app, they were talking about the co-CEOs!
Agree, been on Zwift since beta, and if there is one thing that seems to be holding zwiff back its Eric, the user list of bugs, fixes and developments that have been passed or done half arsed is proliferate. Kurt’s arrival seems to bring an up shift in resolving issues and moving the product forward. Think we can all expect this to stall now.
The wrong co-CEO got the chop. Min has been utterly incompetent. He appears to see himself as a wheeler-dealer who is only concerned with external deals. He has never focused any effort on development unless it is making a tiny, useless world for a deal with UCI. There are so many easy product requests that have been outstanding for years and years. He has let the product rot on the vine. He is lucky none of the alternatives that have sprung up have been able to garner enough user base to reach critical mass.
After several reductions and on distance from the pandemic this reduction could be related to the upcoming MyWoosh.
It’s free and they won the UCI which must be a pressure. But I hope a good pressure to stay focused and effective.
Personally I subscribe to both plus Xert. I see them as a great combination..
Bingo. It’s clear to me why this is happening. And I think I see where they are going. The roads ahead are rough, but that never stopped those with the skill and ambition from taking them on.
Great, so smaller staff probably means even slower development of new roads. Which is always thing the biggest factor that pushes me to the edge of finding other alternatives.
They should hire the Zwift Source developer. Microsoft Flight Simulator was in a position where individuals were developing free software that was streets ahead of the stuff provided by Microsoft. Microsoft hired them. It’s widely regarded as one of the best decisions they’ve made and its impact on the software is hard to overestimate. You don’t need big teams to develop good software. You just need good developers.
As someone who casually trials Zwift for a few weeks once a year at the beginning of every indoor cycling season hoping to find something different and compelling enough to subscribe, it just seems like pretty much the same exact experience every year.
I use Trainerroad for my structured training plan and always hope Zwift can add a layer of entertainment on top of those workouts, but I get bored with it and end up switching over to a mix of Youtube (lots of cycling related content there), Netflix, music, podcasts, etc. as they are more engaging than Zwift. Maybe there are lots of great changes appreciated by current users, but to this non-subscriber, it seems like the exact same experience as 2019-20…
I’d say I felt similar some years ago… and I’d trialled zwift a few times returning to sufferfest.
However; when we had lockdown and other stuff felt repetitive I tried again – then started to get engaged. Learning the nuances of the platform, the user experience back then was dire – still plenty to fix now – but I suspect for new riders its much better.
Then I started to properly understand the racing aspect… and now love it. Spending far more time on it then could ever previously imagine.
Stuff that may appear a bit naff (say the climb portals) can be highly motivating.
If all you care about is doing your structured training plan then I can see zwift not being that exciting for you. If you stick to a structured workout that means that group rides and races are not available to you, which are a huge part of the social experience of zwift. So that leaves solo rides on the terrain…but you don’t really care about slope changes since the structured workout is your focus, so zwift is basically just a fulgas video for you, but much less realistic. If you want zwift to be more engaging I suggest trying a group ride or a race, but if you are happy with you structured training and that keeps you motivated you can stick to that if it’s working well for you.
there is some basic financial math regarding Zwift: their user base is most likely in the 500k-1M users max. Each user is probably subscribing for 6 months average (at the most), which gives max 90 USD/year/user. Hence their revenues probably fall in the range between 50-100M (including sales of HW, etc). They probably have an EBIT in the low single digit or worse. This is a far cry from the unrealistic expectations of few years ago (remember that they got several round of PV funding for hundreds of millions). The reality of the cycling industry is that most companies are max 100M revenues and there is simply not enough user base to justify certain levels of R&D and marketing expenses (I expect that TdF Femmes will be the next expense to be cut). Colnago sold 14000 bicycles last year… not millions. To close about Zwift, they tried hard to expand the user base to more casual users (female users, runners, etc) but obviously did not work out… their competitors have much lower fixed cost (Rouvy, TR) OR unlimited funding (MyWhoosh, etc). The cake is too small…
It’s been clear they need a bigger cake for a long time, and an obvious cake is the insurance/healthcare sector who might be able to readily use the data on users which is the actual asset that previous investment levels
Concept2 if they knew that by turning on rowing they could convert a non-zero percentage of Zwift users (indoor enthusiasts with space and equipment budgets and without machines) and, let’s say best case would double their yearly sales — so they might pay, what, 200M?
The hundreds of millions is for data sales and synergies, like better shaping of your premiums and better challenging of payouts where pre-existing conditions can be raised.
We’re all spending hours each week feeding cardio and skeletal/muscular sensors that give information about instantaneous aerobic and anaerobic body functions be it lungs heart circulation instantaneously and over weeks and months and years. Your 10 week streak is also Zwift’s 10 week streak of data on you and goes straight into the prospectus. Zwift can probably know you have a health condition before you do, and make a very good guess on your health condition to come and that of those people closely related to you.
One might also want to think about the reason the reaction time sensor and games (sorry, ‘steering’) was the first new hardware rolled out in a while.
this is a potential pathway only available in USA… European market has GDPR rules which would block any usage of such data. By the way, selling data of 200K/300K users would not bring revenues anywhere close to the level needed to sustain the hype in this sector (seems unreal that Peloton reached 50bn$ capitalisation…same as Honda or ENI…). It is a sort of dot.com bubble and reality has caught up
GDPR blocks without consent use.
Zwift can position itself as a healthcare service — it’s already on its way to doing so and this message can fit in well with some of the insurance companies ‘we’re on your side actually’ type messaging.
‘We can tell you how your heart and lungs and joints are doing. We can look for neurodegenerative diseases and eyesight problems and general decline in cognitive rates. We can get you the doctors appointments and pills you need before you even know you need them…’
The global healthcare insurance market is more or less US$3 trillion with a T. It’s not selling the data once. It’s developing the data pipeline to make consistently better bets with the Ts.
Maybe there’s a reason Zwift Play rollout in some jurisdictions didn’t seem to be a priority!
Personally, I’m surprised they haven’t gone after Spin Classes for additional revenue. With the right hardware and software offerings, it’s practically a business in a box.
They could sell buttons and apparel too. Or yeah, they could choose to move into the same sector Soulcycle and Peloton are failing to make money in.
Roberto’s right, the pie isn’t big enough.
Min’s valuation is he says a billion. Hundreds of millions in investment from people who are going to want 50-to-1 type returns.
Like it or not, it has been understood for some time that the only viable path forward for Zwift is one where they sell their users. It’s not a fun and popular and feel good idea but it’s the one that happens to be true.
Uses might be with users implied or express consent (people willing give up all sorts of data all the time, for example for a photo of themselves as a cat), or it might be in jurisdictions where it doesn’t matter or it’s not clear, or it might be in sectors or for uses that would be hard/impossible to audit or trace.
An insurance company denying coverage, for a range of arguable/probable reasons, to somebody with potentially millions in hospital bills and a limited time horizon probably doesn’t have to worry very often about a massive legal challenge from them or their estate.
I would be shocked to see Zwift having a positive EBIT. Which isn’t an issue at this point with a decent amount of VC backing.
FWIW, the indoor cycling market might not be huge but it’s not as small as you think. Peloton sold roughly 2.5mil units of its original bike in the US/Canada alone. The issue for Zwift isn’t the overall size of the cycling market but the rather small subset of people their product appeals to.
Same thing applies to brands like Colnago. If you want to compare their numbers: Bentley sells roughly the same number of cars per year. Giant manufactures more than 6 million bikes a year. Overall bike market is roughly 150mil unit per year which is twice as much as the number of new cars sold per year.
I am totally 100% in agreement with you… both on EBIT and potential total “fitness” market. if they are in the black with all those marketing expenses, it is already a miracle. About the overal market, the fitness industry for the “masses” goes on from fad to fad and Peloton was one of them… probably most Peloton users already moved on to padel or else… the sticky “hardcore” cyclist are maybe less than 1% of the market. Zwift tried desperately to appeal to more casual users (women, etc) but honestly speaking… their product is terribly repetitive and boring. It is better than staring at a wall like I was doing 30 years ago, but for a casual user, they can easily do their 30 minutes ride simply watching Netflix or TV, without paying 15$/month to look at some avatars moving.
DC Rainmaker just posted that the number of layoffs is >100 so at least 20-25% of the workforce. That’s significantly more than the 35 people mentioned in the early reports.
Let’s pray for the best but at other companies that’s the point where highly qualified employees start looking for alternatives. Something that already happened at Peloton.
Also obviously sucks for investors who bought into Zwift at a $1bln valuation of which maybe $100-200mil are left right now. Still way better than Peloton that crashed from $50bln to $1.5bln.
Is that why my race points increased, dropping me 6,811 places?
I don’t think there is any magic formula that is going to gain significantly more subscribers. Zwift probably has about as many users as they are going to get. I think the company sees that and needs to get costs lower to be profitable with current revenue
I moved to Rouvy recently. I prefer AR over VR, I find real routes far more interesting and engaging and they feel closer to IRL when climbing. Rouvy also did a great job with the user interface
Agree! I tried Rouvy a few years ago in the face of my mounting frustrations with Zwift. I now divide my time between them. It’s a bit costly paying for both but it improves my indoor cycling experience considerably. I now use Zwift almost exclusively for group rides (don’t race and have no interest in doing so). If I’m looking for longer rides (>25 miles) I opt for Rouvy. More routes, much greater variety of scenery and terrain. I also agree that the staff seem much more responsive to the user base.
RIP any future innovations, especially in racing. This news forced me to install MyWhoosh. As a long term user I do not give a flying fcuk about virtual cogs or any current buzz. I would like to see some real development to get features that a long overdue.
In my experience, a company downsizing and becoming more agile is to increase cash flow to make them more attractive to prospective buyers. Will that follow at Zwift as well? Will we see a change of ownership on the near future? Only time will tell. I love the platform so I’m hoping it doesn’t happen.
Or it’s because they are bleeding cash and sense that investors don’t want to put more in.
Zwift needs to focus on core cycling experience. Dump running and rowing. Those activities don’t benefit from the virtual world nearly as much as cycling (drafting)..
Hearing about Zwift dropping yet another hardware idea and chopping lots more jobs made me worry about their sustainability from a purely selfish point of view. I would hate a world with no Zwift was my panic reaction. I do also feel sorry for people being made redundant. After the dust settled I heard things like “it’s just another tech resizing”.
Should I be worried?
7 year Zwifter here. Got stalled at level 50 for years. Tired of the cartoon environment and lack of honest racing.
First, I am not nearly the cyclist that most Zwift subscribers are. I started cycling a few years ago in order to participate in triathlons. I am however a tech guy for over 40 years. I was an executive at hardware, software and distribution companies. For the most part hardware and software companies are driven by engineering. Sure, Marketing and sales folks try to convince them that voice of the customer, customer experience, and understanding the demographics of the users is the real key to success, but when it comes down to it the final decision always seems to rest with engineering. And they are enamored with what they think is right and or cool.
My problem is in believing that “Zwift” understands who their customer is and what drives them. In the past 3-4 years I have never heard from anyone at Zwift to see what I liked about the product or what I would like to see in the future. No surveys, nothing. There is lots of noise around the Zwift community about all sorts of things, but for the most part it is just that. Customer noise is not actionable. Data is! How many people subscribe who are over 50, what are their needs / wants? What are the differences in the various markets etc. etc.
Why doesn’t John race? Well, I will tell you. The system is not designed for him to ever be competitive. No age-based competition and the banding (A,B,C,D) doesn’t make sense. (just my humble opinion) but I am guessing others feel the same. Great for training, but not much fun.
I am guessing you get my drift here. I could write a book on this, but I won’t. And, if Zwift would like to know how I feel, all they have to do is ask. I am a big Zwift fan. I enjoy good quality gamification. I like the community, but the company needs to refocus on the market and the customer wants and needs. Thats where growth and profit come from.
A proud member of The Herd.