1 00:00:00,000 --> 00:00:05,600 Disclaimer, all these thoughts and opinions are our own and our guests and do not belong to any entities we're involved in. 2 00:00:05,600 --> 00:00:11,800 Also keep in mind we are active college students so any of this does not reflect active investment advice or counsel. 3 00:00:11,800 --> 00:00:14,800 Yo Crockett, what would you do if you had a billion dollars? 4 00:00:16,200 --> 00:00:17,600 I like where this is going. 5 00:00:17,600 --> 00:00:18,600 Um... 6 00:00:19,600 --> 00:00:21,600 I don't know, are there any caveats? 7 00:00:21,600 --> 00:00:25,000 Yeah, one big one. You ended up losing 87% of it. 8 00:00:26,000 --> 00:00:28,400 Alright, I don't like where this is going anymore. 9 00:00:28,400 --> 00:00:32,400 Well what's your next move you think? You had a billion dollars and you lose 87% of it. What do you do next? 10 00:00:32,400 --> 00:00:40,400 I gotta get that money back. Probably like, I don't know, going to finance, boring job, investment banking, something like that. 11 00:00:40,400 --> 00:00:43,400 Um, I don't know, do you have any suggestions? 12 00:00:43,400 --> 00:00:45,400 Yeah, what about, you know, selling carpets? 13 00:00:46,400 --> 00:00:47,400 What? 14 00:00:47,400 --> 00:00:50,400 Yeah, you know, carpets, rugs. Every house needs a carpet, no? 15 00:00:50,400 --> 00:00:52,400 I feel like this is going somewhere. 16 00:00:52,400 --> 00:00:53,400 Yeah, it's going somewhere. 17 00:00:53,400 --> 00:00:54,400 I feel like this could make an interesting episode. 18 00:00:54,400 --> 00:00:55,400 I think so too. 19 00:00:55,400 --> 00:01:05,400 Alright guys, welcome back to Uninvested. Today we're going to be talking about John Foley, who is the ex-CEO of Peloton and his new venture, which sells custom carpets. 20 00:01:05,400 --> 00:01:06,400 I'm Sahil Seth. 21 00:01:06,400 --> 00:01:07,400 I'm Crockett Calloway. 22 00:01:07,400 --> 00:01:08,400 And this is Uninvested. 23 00:01:08,400 --> 00:01:10,400 Welcome back everyone. 24 00:01:10,400 --> 00:01:20,400 Real quick in the beginning, thanks for the support on all the new social media channels. We've been trying to load up our Instagram, our YouTube is growing, our TikTok is growing actually. 25 00:01:20,400 --> 00:01:28,400 Yep, follow us at un.invested on Instagram. We're posting funny short clips from the videos, got some memes up there. 26 00:01:28,400 --> 00:01:29,400 Our memes are good. 27 00:01:29,400 --> 00:01:30,400 All the good stuff. 28 00:01:30,400 --> 00:01:37,400 Pretty good. And thank you again for the Spotify and Apple Podcast listeners for tuning in. Shout out to you guys, we never forget about you. 29 00:01:37,400 --> 00:01:46,400 But let's get back to this. So, the idea today is John Foley, ex-CEO of Peloton and his new venture, which includes selling carpets? 30 00:01:46,400 --> 00:01:55,400 Yeah, so it's called Ernesta. It's a new venture. So, for those of you who know the ex-CEO of Peloton, Peloton has gone through a pretty, you know, they've gone through a lot of turmoil. 31 00:01:55,400 --> 00:02:02,400 Why don't we talk about that first, you know, the rise and fall of Peloton, you know. Sounds similar to when we talked about Adam Newman, you know, the rise and fall of WeWork. 32 00:02:02,400 --> 00:02:05,400 This is not as bad, but I will say it's pretty bad. 33 00:02:05,400 --> 00:02:07,400 Yeah. Let's give, I mean, I can give some background, right? 34 00:02:07,400 --> 00:02:08,400 Yeah, for sure. 35 00:02:08,400 --> 00:02:20,400 I assume most of the people listening, you guys know what Peloton is, the at home fitness bike and online fitness program company. 36 00:02:20,400 --> 00:02:23,400 During the pandemic, they were huge. Let's give some background, right? 37 00:02:23,400 --> 00:02:25,400 They got treadmills. They got treadmills. 38 00:02:25,400 --> 00:02:28,400 They got treadmills too, but I feel like they're known for the bikes and the shoes. 39 00:02:28,400 --> 00:02:30,400 Everyone likes to flex about them when you have them. 40 00:02:30,400 --> 00:02:31,400 Yeah. 41 00:02:31,400 --> 00:02:35,400 It's a big part of it. I don't know. I've never been on one, so have you been on one? 42 00:02:35,400 --> 00:02:41,400 Yeah, I've been on one once, but I've never done it with like where you like have the giant screen, watch like the videos and like follow along. 43 00:02:41,400 --> 00:02:43,400 It's usually like a normal like stationary bike. 44 00:02:43,400 --> 00:02:47,400 Well, maybe it's good that we haven't used them because they're going through some stuff. I'll walk you through the background for the listeners. 45 00:02:47,400 --> 00:02:50,400 So, the year is 2012. 46 00:02:50,400 --> 00:02:59,400 Five people come together and they found Peloton. Those people include John Foley, who we're highlighting today, Hissow Koushi, Tom Cortese. 47 00:02:59,400 --> 00:03:00,400 I have the names up here. 48 00:03:00,400 --> 00:03:09,400 Graham Stanton and Yoni Feng. That last guy, Yoni Feng, he like met the rest of them because one of his roommates worked at the company where all the other founders worked. 49 00:03:09,400 --> 00:03:14,400 They worked at IAC, which was a software and internet services company. 50 00:03:14,400 --> 00:03:16,400 So they're like working like SaaS software center? 51 00:03:16,400 --> 00:03:19,400 Yeah, basically. It still exists. Like their stock is up as of today. 52 00:03:19,400 --> 00:03:23,400 So, you know, this company still exists, but they all quit IAC. 53 00:03:23,400 --> 00:03:26,400 2012, they come together. They found Peloton. 54 00:03:26,400 --> 00:03:33,400 They in 2013 go on Kickstarter and they released their first early bird bike. 55 00:03:33,400 --> 00:03:36,400 Their like most expensive version was fifteen hundred dollars. 56 00:03:36,400 --> 00:03:39,400 Really? Which I think that's like cheaper than it's like two thousand now. 57 00:03:39,400 --> 00:03:41,400 I think the cheapest version is like two thousand. 58 00:03:41,400 --> 00:03:43,400 Yeah, probably something crazy like that. 59 00:03:43,400 --> 00:03:51,400 So, right. Humble beginnings. In the beginning, it said that Foley let the other guys kind of I think there's an exact quote. 60 00:03:51,400 --> 00:03:58,400 The other guys took it, ran with it and built it while I was gone. And what he was gone doing, this is Foley in this case, was fundraising. 61 00:03:58,400 --> 00:04:07,400 So he was leading, going out to investors. We've talked a lot on the show about there's the idea that, you know, investors have to pitch VCs just as much as VCs have to pitch. 62 00:04:07,400 --> 00:04:10,400 Excuse me. Investors have to pitch founders just as much as founders have to pitch investors. 63 00:04:10,400 --> 00:04:14,400 And so he was kind of the point man going out and pitching Peloton. 64 00:04:14,400 --> 00:04:16,400 He was pitching or was he getting pitched to? Was he like? 65 00:04:16,400 --> 00:04:17,400 Probably a bit of both. 66 00:04:17,400 --> 00:04:20,400 Yeah, I don't think Peloton was that big, you know, like it is now. 67 00:04:20,400 --> 00:04:23,400 Especially. No, you're definitely at that point wasn't that big. 68 00:04:23,400 --> 00:04:29,400 But, you know, the point is from a financing perspective, he was the guy going out and trying to raise capital on their behalf. 69 00:04:29,400 --> 00:04:33,400 So they start shipping their bikes in 2014. Again, slow rise. 70 00:04:33,400 --> 00:04:36,400 Twenty eighteen, they start to pick up a lot of momentum. 71 00:04:36,400 --> 00:04:41,400 As of twenty eighteen, they'd raised more than half a billion dollars in VC funding. 72 00:04:41,400 --> 00:04:46,400 The five hundred and fifty million in VC funding that put them at a valuation of four point one billion. 73 00:04:46,400 --> 00:04:54,400 That's crazy. All that funding, like even before the pandemic, everyone stuck at home and like essentially forced to use, you know, home exercise units like a Peloton. 74 00:04:54,400 --> 00:04:56,400 They were already the market was already primed. 75 00:04:56,400 --> 00:04:59,400 They were already like there was a rising interest in at home work. 76 00:04:59,400 --> 00:05:02,400 So COVID was like a gift to them almost. Oh my. It was like the layup. 77 00:05:02,400 --> 00:05:04,400 They like really just fast tracked them. Beyond the layup. 78 00:05:04,400 --> 00:05:08,400 So so here's the thing, Sahil, and like you pointed out, it's a brilliant segue. 79 00:05:08,400 --> 00:05:10,400 COVID happens, right? People can't go outside. Yeah. 80 00:05:10,400 --> 00:05:17,400 I'm sure many of our listeners know this Peloton skyrockets to a point that actually in twenty nineteen they IPO. 81 00:05:17,400 --> 00:05:19,400 Yeah. An IPO is an initial public offering. 82 00:05:19,400 --> 00:05:23,400 So that's when me and Crockett go out. We could become, you know, owners of Peloton now. 83 00:05:23,400 --> 00:05:26,400 Yes. So now at this point, you can buy a share of Peloton. 84 00:05:26,400 --> 00:05:31,400 It's what's known as it's now a public company before it was a private company because anyone can go out. 85 00:05:31,400 --> 00:05:36,400 They IPO at thirty dollars a share. That means you can buy one share of Peloton is thirty dollars. 86 00:05:36,400 --> 00:05:41,400 I know there are some like Schwab lets you buy half shares and like you can buy like Robin Hood. Right. 87 00:05:41,400 --> 00:05:43,400 You can buy like a fraction of a share. Yeah, exactly. 88 00:05:43,400 --> 00:05:47,400 So you could go put a dollar into into Peloton. You wouldn't own much of it. 89 00:05:47,400 --> 00:05:51,400 But they started off in COVID. Thirty dollars a share at the height of COVID. 90 00:05:51,400 --> 00:05:53,400 They're trading at one hundred and seventy one dollars a share. 91 00:05:53,400 --> 00:05:57,400 Yeah. And that's that's what John Fowler becomes the billionaire. He gets the B. Yes. 92 00:05:57,400 --> 00:06:01,400 He hits the one B, which is which is where intro came out in the beginning of this. 93 00:06:01,400 --> 00:06:03,400 Even before that, they'd hit unicorn status. Right. 94 00:06:03,400 --> 00:06:08,400 Unicorn status again is a startup valued at least a billion dollars. Four point one billion dollar valuation. 95 00:06:08,400 --> 00:06:11,400 So they're doing really well. Right. Since then. 96 00:06:11,400 --> 00:06:14,400 And by the way, we just noted like COVID was a prime time for them. 97 00:06:14,400 --> 00:06:19,400 Right. Because it's just it's it's everything Peloton will want. There's online classes. 98 00:06:19,400 --> 00:06:21,400 You have a perfect at home workout machine. 99 00:06:21,400 --> 00:06:24,400 You can brag to your friends about these awesome things you're doing at home. 100 00:06:24,400 --> 00:06:29,400 And suddenly they want to up their like in-home workout space. It's perfect. Yeah. 101 00:06:29,400 --> 00:06:32,400 And since then, how have they done so? Yeah, I know. 102 00:06:32,400 --> 00:06:38,400 I think people were like, do I pay two thousand dollars to get a bike that doesn't move, 103 00:06:38,400 --> 00:06:44,400 that sits in my house, but you know, I could go outside and run, you know, just as good going to bike outside. 104 00:06:44,400 --> 00:06:47,400 It's nice. And I feel like, you know, after a couple of people really cooped up. 105 00:06:47,400 --> 00:06:49,400 So it's like, I don't want to spend more time at my house than I have to. 106 00:06:49,400 --> 00:06:55,400 If I go to a gym, finally, I might as well just go out and get myself a membership, which is exponentially cheaper. 107 00:06:55,400 --> 00:06:58,400 Maybe like thirty dollars a month. I like a lot of gyms. 108 00:06:58,400 --> 00:07:01,400 They can get more expensive, but nowhere touching two thousand dollars. 109 00:07:01,400 --> 00:07:06,400 So it's almost like you can tell the future because that's exactly what happened with Peloton. 110 00:07:06,400 --> 00:07:09,400 They ended up their stock ended up taking at one point. 111 00:07:09,400 --> 00:07:14,400 Their stock was trading at like six dollars and sixty cents a share. 112 00:07:14,400 --> 00:07:17,400 Mind you, like I just said, they IPO to thirty dollars a share. 113 00:07:17,400 --> 00:07:19,400 At one point, they were at one hundred and seventy dollars. 114 00:07:19,400 --> 00:07:23,400 So you can one share is one hundred seventy dollars. You're going down to six dollars. 115 00:07:23,400 --> 00:07:27,400 These days, they're consistently trading below their IPO price. 116 00:07:27,400 --> 00:07:34,400 So they're less than thirty dollars just this year. Companies laid off reportedly more than five thousand employees. 117 00:07:34,400 --> 00:07:37,400 They lost their top four executives. 118 00:07:37,400 --> 00:07:41,400 I mean, that's nowhere near what Metta just Facebook Metta, whatever you want to call them, just laid off. 119 00:07:41,400 --> 00:07:46,400 Eleven thousand people. Yeah. Just, you know, one weekend and then Twitter the weekend before. 120 00:07:46,400 --> 00:07:50,400 Everyone's here. That's here. The thing is like everyone's going through tough times right now, especially. 121 00:07:50,400 --> 00:07:56,400 But I think when you look at Peloton, like this is a business who made their profits off the pandemic that, you know, 122 00:07:56,400 --> 00:07:59,400 obviously, covid still going around. There's no denying that. 123 00:07:59,400 --> 00:08:03,400 But the height of their success, the environment that they operated in is gone. 124 00:08:03,400 --> 00:08:05,400 Metta is just like, look, crypto is here to stay. 125 00:08:05,400 --> 00:08:07,400 And if he's here to stay, the metaverse is here to stay. 126 00:08:07,400 --> 00:08:10,400 They're just going through tough times, especially given like the recession. Yeah. Fair enough. 127 00:08:10,400 --> 00:08:13,400 Would you blame Foley like you think it's his fault? 128 00:08:13,400 --> 00:08:15,400 Do you think it's just like, you know, company blew up? 129 00:08:15,400 --> 00:08:19,400 Look, you know, got too big or I think he had a little bit of poor leadership there. 130 00:08:19,400 --> 00:08:25,400 You know, I don't think he really had that, like took full advantage of that growth and like anticipated for the downturn. 131 00:08:25,400 --> 00:08:28,400 No, I think you're right. Like there's room for foresight. 132 00:08:28,400 --> 00:08:33,400 There's room to look at his own success, be aware that the pandemic is what's contributing to it. 133 00:08:33,400 --> 00:08:37,400 Yeah. And maybe make like a strategic pivot. 134 00:08:37,400 --> 00:08:41,400 What is it? Just for our listeners, what is a pivot in the VC and entrepreneurial space? 135 00:08:41,400 --> 00:08:44,400 Like define pivot. Well, pivot can be in celebrate things. 136 00:08:44,400 --> 00:08:48,400 You know, it could be changing of ideas, changing the business, really just a change. 137 00:08:48,400 --> 00:08:54,400 We'll call pivot a change. But specifically Foley had a very big pivot in what he's doing with his life. 138 00:08:54,400 --> 00:08:57,400 He had a life pivot. What's that? 139 00:08:57,400 --> 00:09:01,400 So now he's going to see he just started this company, Ernesto. So he quit. 140 00:09:01,400 --> 00:09:03,400 So he's done. Yeah, he did quit. 141 00:09:03,400 --> 00:09:06,400 We came under a lot of scrutiny. It wasn't like, you know, putting on my own accord. 142 00:09:06,400 --> 00:09:11,400 It was like people are like, listen, like this company is failing. We need new leadership. 143 00:09:11,400 --> 00:09:16,400 So he quits. And by the way, he's not quitting it like just any time. 144 00:09:16,400 --> 00:09:22,400 There's reports right now that like Nike, Apple, Amazon are interested in actually purchasing and buying out Peloton. 145 00:09:22,400 --> 00:09:26,400 Right. So he's like he's feeling a lot of external pressure at this point. 146 00:09:26,400 --> 00:09:28,400 He's a hard and entrepreneur. He's a hard and leader. 147 00:09:28,400 --> 00:09:33,400 Actually, before he had left ISE to go found Peloton, he was the president of Barnes and Noble for a little bit. 148 00:09:33,400 --> 00:09:36,400 Oh, wow. I didn't know that. Yeah. So he so he's he's a hard and leader. 149 00:09:36,400 --> 00:09:38,400 He's he's no newbie. So he's well. 150 00:09:38,400 --> 00:09:42,400 So it's like a founder and like a proven CEO. Yes. OK. Well, proven. 151 00:09:42,400 --> 00:09:46,400 I mean, prove scale company. Well, I mean, what does he prove exactly? 152 00:09:46,400 --> 00:09:48,400 Yeah. I mean, we could say like Adam Newman is proven. 153 00:09:48,400 --> 00:09:52,400 They're able to scale it, but, you know, consistency was that they will call it. 154 00:09:52,400 --> 00:09:59,400 So so he leaves just like Adam Newman at his which we'll talk about in a second. 155 00:09:59,400 --> 00:10:03,400 He leaves and he found Ernesta. What's the current status there? 156 00:10:03,400 --> 00:10:07,400 So this raised twenty five million dollars in a series day. 157 00:10:07,400 --> 00:10:13,400 So basically like one of the first big funding rounds will call it by a lot of his old investors that invested in Peloton. 158 00:10:13,400 --> 00:10:17,400 So he kind of used his network, used his connections to get more money for his new idea. 159 00:10:17,400 --> 00:10:26,400 This is kind of brings back to that point about Adam Newman of these venture capital firms really having faith in these founders, knowing the team itself, not just the idea. 160 00:10:26,400 --> 00:10:31,400 You can have a great idea, but these firms also have to have a lot of faith in the people backing the idea. 161 00:10:31,400 --> 00:10:35,400 And that's that's also the role of like an active investor. 162 00:10:35,400 --> 00:10:41,400 It's like you back the person, you back who they are, you back the concept that this person is going to go on to do bigger and better things. 163 00:10:41,400 --> 00:10:44,400 Yeah. And they're going to keep being successful and entrepreneurial. 164 00:10:44,400 --> 00:10:47,400 And you stick with which is what which is what, for example, a true venture is doing. 165 00:10:47,400 --> 00:10:55,400 Exactly. True Ventures in addition, you know, both the both the people that, you know, love those companies were early in on Peloton. 166 00:10:55,400 --> 00:10:59,400 You know, their series B and C round. So they're very accustomed to Jack Foley. 167 00:10:59,400 --> 00:11:01,400 They have a lot of faith in him. They think he's going to scale his business. 168 00:11:01,400 --> 00:11:09,400 But, you know, it's kind of hard to imagine that this custom rug idea in like this recessionary environment got twenty five million dollars. 169 00:11:09,400 --> 00:11:11,400 There's got to be something more to it. There's got to be something special. 170 00:11:11,400 --> 00:11:20,400 Look, are people like to get more context what the company does essentially instead of, you know, going to like Home Depot Lowe's buying like these generic carpets they sell in bulk. 171 00:11:20,400 --> 00:11:25,400 You know, you know, it's like going to a pottery bar and getting like a specialty rug for your house instead. 172 00:11:25,400 --> 00:11:31,400 And the idea is that they're all they're all a custom cut. Right. Yeah. So they like whatever that means. Yeah. I don't know. 173 00:11:31,400 --> 00:11:36,400 They buy like they like lots of carpets, I guess, and cut them and do everything themselves. 174 00:11:36,400 --> 00:11:42,400 But I don't know. Makes me think like, is that the number one people are like worrying about now? Like gas prices are really high. 175 00:11:42,400 --> 00:11:48,400 I think you're going to save to buy gas for your car rather than buy a new rug, especially like for first time homeowners. 176 00:11:48,400 --> 00:11:52,400 Well, what I'm curious about, too, is we keep questioning like whether or not this is a good idea. 177 00:11:52,400 --> 00:11:58,400 How can you justify pivoting from like a massive like something in the fitness industry, which is like a booming industry? 178 00:11:58,400 --> 00:12:01,400 Yes. That's tech slash tech industry. Right. 179 00:12:01,400 --> 00:12:06,400 I think there's got to be another angle on this carpet. Like what is their next product? Like are they trying to sell something else? 180 00:12:06,400 --> 00:12:10,400 This is just like the beachhead product for those of you that don't know. 181 00:12:10,400 --> 00:12:17,400 The beachhead is like kind of like how you enter the market, how you like grip your customers before, you know, selling them something else, selling them more products, really like hooking them in. 182 00:12:17,400 --> 00:12:22,400 Because what I have a hard time forgetting about right now is, look, he was the president of Barnes and Noble. 183 00:12:22,400 --> 00:12:28,400 Barnes and Noble is a B2C business. B2C means business to consumer. And so you're a business, you're selling things to consumers. 184 00:12:28,400 --> 00:12:35,400 Other other types of businesses are like B2B. You're a business who sells a product to another business like software or something like that. 185 00:12:35,400 --> 00:12:40,400 So we use B2C, business to consumer at Barnes and Noble. Then he goes to Peloton. That's a B2C business as well. 186 00:12:40,400 --> 00:12:45,400 He knows the space. Yeah, direct to consumer. He's selling just to consumers, not to other businesses. 187 00:12:45,400 --> 00:12:51,400 Direct to consumers. So he obviously knows like the times when B2C businesses work, when they succeed, the team you need. 188 00:12:51,400 --> 00:12:57,400 So he's clearly seeing some. And so Ernest said this rug business, the carpet business, it's a B2C business as well. 189 00:12:57,400 --> 00:13:02,400 So he's clearly seeing. So he knows the space. He knows people. He knows how to sell retail. 190 00:13:02,400 --> 00:13:08,400 It's a very different product, you might say, but same industry will call it. It's also like an at home industry too, right? 191 00:13:08,400 --> 00:13:12,400 Yeah, exactly. Just like Peloton. It's like big assets, expensive assets. Rugs aren't cheap. 192 00:13:12,400 --> 00:13:17,400 You know, when I first rented out, when I first rented this place, I had no idea how expensive rugs were. 193 00:13:17,400 --> 00:13:25,400 Much more expensive than I initially thought. So it makes me think this is like this is gold undercut the rug market and sell like mass amounts of cheap prices. 194 00:13:25,400 --> 00:13:34,400 I guess, but still like it's not like he will. His claim is like pitches is like people are going to protect the hardwood, hardwood floors under number one assets. 195 00:13:34,400 --> 00:13:43,400 No one asked it being their home. But I don't know the future. I see people buying homes less and less, you know, interest rates touching right around seven percent. 196 00:13:43,400 --> 00:13:48,400 Only going to climb, you know, the Fed, the people that control the interest rates are just saying, you know, they're not slowing down at all. 197 00:13:48,400 --> 00:13:54,400 They want to slow down spending and they're going to keep raising the interest rates. And that means buying a home ultimately is more expensive. 198 00:13:54,400 --> 00:13:59,400 They cut like for every dollar you put on your home, it's more than just that dollar. You have to pay that interest rate on it. 199 00:13:59,400 --> 00:14:03,400 So then. OK, so my question to you is that this is just speculation. Yeah. 200 00:14:03,400 --> 00:14:07,400 So in a time when people are concerned about their home value, they have less purchasing power as well. 201 00:14:07,400 --> 00:14:10,400 Like, do you want to be upping the value of your home by purchasing a rug? 202 00:14:10,400 --> 00:14:15,400 Because now you're making this space nicer, like if you're buying a place where they're not, you're buying a place with or without furniture. 203 00:14:15,400 --> 00:14:18,400 If you're showing a house and there's a nice rug in the house, home value goes up. 204 00:14:18,400 --> 00:14:24,400 Or is it that like maybe this is dangerous because you're already worried about the amount of money you have, you worried about your home value. 205 00:14:24,400 --> 00:14:28,400 Why are you going to go spend money accessorizing your house? Exactly. That's what my thoughts. 206 00:14:28,400 --> 00:14:31,400 That's exactly my thoughts. Why would I go buy? It just seems extra. 207 00:14:31,400 --> 00:14:38,400 There seems to be like no demand there for carpets, like as people have less demand for spending carpets going to go right down with it. 208 00:14:38,400 --> 00:14:42,400 It's not like carpets have this steady inelastic demand that's going to be persistent over time. 209 00:14:42,400 --> 00:14:46,400 I feel like one of the first things to go in this room is going to be the carpet. It's not going to be the couch. 210 00:14:46,400 --> 00:14:51,400 It's going to be the furniture. It's going to be the first thing we're selling when our house goes under is we're selling our carpets. 211 00:14:51,400 --> 00:14:55,400 Yeah, like none of you can see the carpets, but you can all see the couch if you're watching, of course. 212 00:14:55,400 --> 00:14:59,400 But I mean, this makes me think too, right? Is like we keep going. 213 00:14:59,400 --> 00:15:01,400 We have so many questions for him at the end of the day. 214 00:15:01,400 --> 00:15:04,400 There are VC firms that just raised twenty five million dollars for him. 215 00:15:04,400 --> 00:15:06,400 So we must have picked something special to someone. Yeah. Right. 216 00:15:06,400 --> 00:15:09,400 Because you can be an active investor, but the end of the day, you're going to you're going to question things. 217 00:15:09,400 --> 00:15:15,400 You're going to do your due diligence. You're not just going to accept his idea for a just like a completely. 218 00:15:15,400 --> 00:15:17,400 Your custom rug business. Right. 219 00:15:17,400 --> 00:15:22,400 The other thing I keep thinking about is he had a little bit of foresight when he was doing Peloton. Right. 220 00:15:22,400 --> 00:15:25,400 Like he must have explored this market of people increasingly doing at home. 221 00:15:25,400 --> 00:15:27,400 Yeah. Fitness industry itself. 222 00:15:27,400 --> 00:15:32,400 He knew he he had ideas that people didn't have about like where space was going. Yeah. 223 00:15:32,400 --> 00:15:38,400 Is there a certain direction that like the rug market is going? 224 00:15:38,400 --> 00:15:42,400 I wonder what like the average lifespan of a person buying a rug is. 225 00:15:42,400 --> 00:15:46,400 Do you buy a rug keep that for the rest of your life? Like a custom rug? 226 00:15:46,400 --> 00:15:49,400 Mm hmm. Like how long do you keep like a custom rug? 227 00:15:49,400 --> 00:15:51,400 I would imagine you keep it up. Right. 228 00:15:51,400 --> 00:15:53,400 That's like you're customized. You're putting value into it. 229 00:15:53,400 --> 00:15:55,400 Like but then you don't have a lot of repeat customers. 230 00:15:55,400 --> 00:15:58,400 I mean, I guess you buy a rug for like every room in your house. 231 00:15:58,400 --> 00:16:00,400 But that customer is not coming back. 232 00:16:00,400 --> 00:16:03,400 You don't really have to like sell something like we're like Peloton. 233 00:16:03,400 --> 00:16:06,400 You have two thousand dollars. Super high churn. Right. Yeah, exactly. 234 00:16:06,400 --> 00:16:11,400 And let me. Yeah. So churn, by the way, in entrepreneurship in VC is. 235 00:16:11,400 --> 00:16:12,400 So there's retention and churn. 236 00:16:12,400 --> 00:16:15,400 Retention is the people that stick with your business and keep doing it. 237 00:16:15,400 --> 00:16:17,400 Churn is the people that churn out of your business. 238 00:16:17,400 --> 00:16:19,400 Yeah. And they're no longer customers to your business. 239 00:16:19,400 --> 00:16:24,400 And so when we say that they have intense churn here, it's like you're buying a rug once. 240 00:16:24,400 --> 00:16:26,400 And then you never buy from them again. You're never using this business. 241 00:16:26,400 --> 00:16:30,400 Unless it's like a subscription, you know, like you you pay 30 bucks a month to keep your rug. 242 00:16:30,400 --> 00:16:35,400 Yeah. And then as soon as you don't pay the 30 dollars, someone knocks at your door, pulls the rug out of your house. 243 00:16:35,400 --> 00:16:37,400 Yeah. I mean, what's crazy to me is they don't even have like a product. 244 00:16:37,400 --> 00:16:42,400 They haven't even established like maybe they've gotten like deals in contracts that can make cheaper rugs. 245 00:16:42,400 --> 00:16:47,400 But it's not like they have listed a rug, shown a physical product, having a custom rug that is cheaper. 246 00:16:47,400 --> 00:16:50,400 I mean, what happens when you go on the website right now? Like what's the website? 247 00:16:50,400 --> 00:16:52,400 Yeah. The website does have like any information. 248 00:16:52,400 --> 00:16:55,400 Just like, oh, join our newsletter, you know, sign up for your information. 249 00:16:55,400 --> 00:16:58,400 News will launch like in the spring or something. Right. 250 00:16:58,400 --> 00:17:03,400 I mean, there's pretty much nothing. Which I mean, you know what this exactly reminds me of? 251 00:17:03,400 --> 00:17:08,400 Speaking of nothing on it, we have talked about in a previous episode is Adam Newman. 252 00:17:08,400 --> 00:17:14,400 Yeah. Right. Like, Adam Newman, founder of WeWork, like we talked about in a previous episode. 253 00:17:14,400 --> 00:17:17,400 We can we can roll the clip for everyone listening. 254 00:17:17,400 --> 00:17:25,400 Adam Newman, famed and somewhat failed CEO, has just had a massive recent 350 million dollar investment 255 00:17:25,400 --> 00:17:33,400 backed by his same former lead investor, Anderson Horowitz, for his new company, which people are widely speculating about. 256 00:17:33,400 --> 00:17:37,400 Yeah. So so there you heard it. Adam Newman, extreme parallels here. 257 00:17:37,400 --> 00:17:42,400 He goes on to found his next real estate venture and there's no information on it. 258 00:17:42,400 --> 00:17:45,400 And there's very little information about Ernesta here, too. Exactly. 259 00:17:45,400 --> 00:17:51,400 Like are they operating in stealth or like are they just still too early for any product to be out there? 260 00:17:51,400 --> 00:17:54,400 I don't know. Because at the end of the day, right, like you're a new founder. 261 00:17:54,400 --> 00:17:58,400 You want a certain degree of stealth, especially when you're you have so many eyeballs on you. 262 00:17:58,400 --> 00:18:00,400 Yeah. Like John Foley does here. 263 00:18:00,400 --> 00:18:02,400 Like people know he has good ideas. 264 00:18:02,400 --> 00:18:07,400 It's he's clearly afraid that like as soon as he releases any information, it's going to get copied, 265 00:18:07,400 --> 00:18:09,400 which happens with every single business out there. Exactly. 266 00:18:09,400 --> 00:18:15,400 What do you see is like the differences between what he's doing versus what Adam Newman has also done? 267 00:18:15,400 --> 00:18:18,400 I don't know. I mean, there wasn't really that much like press on. 268 00:18:18,400 --> 00:18:23,400 If you're not really following like V.C. News, like you would have no idea that the ex-CEO Peloton is starting to start. 269 00:18:23,400 --> 00:18:28,400 You know, but I guess like that's twofold just because the amount of money he raised was three hundred million dollars. 270 00:18:28,400 --> 00:18:35,400 And Peloton, unlike we were, didn't like lose people billions at the top of the people lost a lot of money. 271 00:18:35,400 --> 00:18:39,400 But it wasn't like a complete failure like we work is today. 272 00:18:39,400 --> 00:18:47,400 But I guess the parallels would be like between the two people themselves just like using their like charisma to go out and give themselves a second chance. 273 00:18:47,400 --> 00:18:51,400 But I don't know, are they owed that? Like do they have the ability? Like should they get this chance? 274 00:18:51,400 --> 00:18:57,400 Look, I I deaf. OK, in my opinion, I think this is really different than we work. 275 00:18:57,400 --> 00:19:00,400 I think that John Foley is is owed this experience. 276 00:19:00,400 --> 00:19:05,400 He can continue on. He can continue on and like found a new venture. 277 00:19:05,400 --> 00:19:11,400 It's very different than Adam Newman, like Adam Newman made a lot of poor leadership decisions in we work. 278 00:19:11,400 --> 00:19:20,400 Of course, then, like even if if it was heavily like dramaticized and there was we crashed, like even if that stuff wasn't completely true, 279 00:19:20,400 --> 00:19:24,400 that's how people see him now. Right. And you can't help but like changing people's minds. 280 00:19:24,400 --> 00:19:32,400 John Foley didn't make any like direct like maybe he didn't have the foresight to anticipate that the end of the pandemic would also lead to kind of a decline in Peloton. 281 00:19:32,400 --> 00:19:37,400 But like that's something a lot of people could have made a decision like to do the exact same thing. 282 00:19:37,400 --> 00:19:39,400 He's just doing the best he can. I don't know. 283 00:19:39,400 --> 00:19:44,400 It's like that's so he didn't do like promise anything like fake dreams. 284 00:19:44,400 --> 00:19:49,400 I think at the end of the day, this is a lot just more interesting to me than it is like scary. 285 00:19:49,400 --> 00:19:53,400 Like Adam Newman stuff scares me scary like giving him three hundred million dollars. 286 00:19:53,400 --> 00:20:01,400 Scary. Yeah. Terrifying. This is this is just you're having nice active investors stick with you, giving you another twenty five million dollars. 287 00:20:01,400 --> 00:20:06,400 He made a safe exit from the company. It wasn't a contested exit from the company. 288 00:20:06,400 --> 00:20:10,400 Maybe the like the status he left Peloton was contested. But yeah, it feels pretty. 289 00:20:10,400 --> 00:20:13,400 Yeah. I mean, twenty five million like to us, that's like a lot. 290 00:20:13,400 --> 00:20:16,400 That's a lot of a lot of money. But like to these firms, you have to think about it. 291 00:20:16,400 --> 00:20:19,400 They have to like they have to spend all the money in their funds. 292 00:20:19,400 --> 00:20:24,400 They have to like deploy that capital, we'll say, and give it to entrepreneurs. 293 00:20:24,400 --> 00:20:30,400 You know, they have billions of dollars to get twenty five billion like is a big check size, I'll say. 294 00:20:30,400 --> 00:20:35,400 But, you know, in the grand scheme of things, they're allowed like they have the ability to take that bet. 295 00:20:35,400 --> 00:20:39,400 Right. It's also like it's a big check size. We don't know what kind of valuation they have yet. 296 00:20:39,400 --> 00:20:50,400 So it could I don't know, it could really be anything at this point. But what we'll do is like look, we'll probably continue to post updates about this on our on our Instagram and all of our social. 297 00:20:50,400 --> 00:20:56,400 They're expected to launch or Nessa officially in the spring. So yeah, we'll keep up. 298 00:20:56,400 --> 00:21:01,400 They may we'll do an update episode on how our nest is doing. Maybe if it's cheaper by our custom rug, who knows? 299 00:21:01,400 --> 00:21:06,400 Oh, maybe we should do an Arnessa review. Oh, yeah, that'd be fun. We'll get like a little uninvested rug or something. 300 00:21:06,400 --> 00:21:12,400 Let us know. Give us a give us a comment in the YouTube or on the on the Instagram or any of our platforms and a little bit of review on it. Yeah. 301 00:21:12,400 --> 00:21:16,400 Good stuff. For sure. Well, hope you guys enjoyed the episode. 302 00:21:16,400 --> 00:21:21,400 Sorry to John Foley for getting the rug pulled out under him. No pun intended from Peloton. 303 00:21:21,400 --> 00:21:36,400 But as always, I'm so Sahil, I'm Crockett Calloway, and this is Uninvested. Thank you.