Impossible Labs, like most good hackers, seeks input from a large number of diverse sources to uncover the most elegant solutions to complex problems. They leverage the power of numbers compared to the traditional approach of only seeking solutions from within. Small-thinking managers dismiss concepts with the not-invented-here mindset while sophisticated hackers solve the world’s biggest challenges by proactively seeking external insights.
THE NETFLIX OF FITNESS
Yony Feng is exactly what you’d imagine when thinking of a whiz kid software engineer. After earning both his Bachelor’s and Master’s degrees in Computer Engineering from the Georgia Institute of Technology, he quickly moved to the heart of Silicon Valley. In high demand for his masterful computer skills, Yony served in senior positions for both Cisco and Skype as he continued to hone his craft. This top-notch engineer is curious, articulate, and whip-smart, with the insightful wisdom of a Zen monk.
With his highly coveted talents being courted by the top technology powerhouses of Silicon Valley, why the heck did he upend his family, relocate to New York, and take a gig at a fitness bike company? Well, Peloton ain’t no ordinary fitness company. In fact, calling them a fitness company is kind of like calling Apple a phone company.
Part stationary bike manufacturer, part content producer, part tech company, Peloton is hacking home fitness. With Yony leading the charge as Chief Technology Officer, they are poised to become the “Netflix of Fitness”: delighting customers, building a rocking company, and making society healthier.
“Going to a spinning class at the uber-trendy Soul Cycle or Flywheel Sports is a fantastic experience,” Yony told me. “But these classes are expensive, rarely convenient, and not available in many parts of the world. Home fitness bikes may function well, but the shared experience is lost with traditional alternatives.”
Yony and his team set out to replicate the energizing experience of a live class that interacts with both the instructor and fellow cyclers. Peloton offers a premium stationary bike for home use that has a gorgeous built-in screen. The bike and accompanying technology are connected to the cloud, allowing riders to participate in dozens of live classes each day. Riders are sweating along with the instructor in real time, while seeing how they stack up to fellow cyclists in an interactive leaderboard. Compare your performance across the world, or limit your competitive set by age, gender, or geography. If you don’t see a live class that fits the bill, you can choose from over 4,000 pre-recorded rides. The high-definition content streams to your screen, while your bike updates itself automatically. Adjustments such as level, tension, and resistance change as you ride, all controlled by the software.
I spoke with a Peloton customer who exhibited cult-like fervor for his machine. “I get an incredible experience, just like at class,” he beams. “But it costs less, saves me time, and I get to do my workouts on my own terms.” This loyalty is echoed in the company’s growth, which experienced a 5x boost in revenue from 2014 to 2015 and is forecasted to triple sales in 2016. Peloton has sold over 40,000 bikes to date, shipping to each of the 50 states and 22 countries. They’ve raised over $120 million of venture capital and are well positioned to be the breakaway leader in a whole new category of home fitness and content delivery.
To achieve such remarkable success, Yoni embraced mindset #4: Quantity Is a Force Multiplier. He explained that high-volume, rapid experimentation is their secret ingredient, which has led them to develop products that make customers fall in love.
“We conduct tons of experiments to improve the riding experience,” Yony explains. “We carefully study how our suite of products, technology, and content make our customers feel. In order to have riders truly feel like they are in class, we are constantly fine-tuning the experience. We test dozens of seating options, handle bar styles, and pedal choices. We test sound, lighting, and music. We bring in riders to our New York Studio and experiment with tiny fluctuations, such as the angle of the screen, to improve the overall experience. ”
Yony’s inner-hacker has stepped into the spotlight. Rather than the traditional new product approach – launch big and launch final – Yony lives in an ongoing state of hacker flux. A massive number of experiments, testing and controlling even the smallest details and then refining along the way, has been the underpinning of Peloton’s success. They hacked their way into a crowded and highly competitive market, and at this rate, will continue to hack their company to ever-expanding success.
COMPETENCE IS THE ONLY CREDENTIAL THAT MATTERS
With heavy metal music blaring in the background, Gordon Freeman barely made away with his life. The violence of the authoritarian police state became unbearable, requiring Gordon to use every available technology to protect himself and ensure survival. The problems all date back to the accident at the Black Mesa Research Facility that Gordon led, where an experiment on an alien crystal sample went horribly wrong.
The Video Game: Half-Life 2
Game Developer: Valve, LLC
Estimated Game Revenue: Over $700 million
The adventures of Gordon Freeman have been the fancy of gamers since the original Half-Life shipped in 1998. The 2004 sequel described above won 39 “Game of the Year” awards and was named “Game of the Decade” at the 2012 Spike Video Game Awards. It is considered to be one of the greatest video games of all time.
Valve, LLC, the company behind Half-Life, Counter-Strike, and Day of Defeat is valued at over $2.5 billion. In addition to producing their own games, the company developed Steam – an online gaming distribution platform (think iTunes for video games). The company has zero debt, no outside investors, and has higher per-employee profit than Google, Microsoft, and Apple. Valve was able to build one of the most successful gaming studios of all time by embracing the principles of hacking.
We can easily conjure up images of the prototypical progressive company: people with funky titles, a foosball table in the break room, and a juice bar lurking somewhere. But Valve takes progressive to a whole new level. The company is the living embodiment of core hacking principle #5 – Competence Is the Only Credential That Matters.
Gabe Newell is technically the CEO, but he has no direct reports. In fact, no one works for anyone at Valve. There are no bosses, managers, or leaders. There are also no titles – everyone’s job is simply to contribute as much value as possible. Much of their non-traditional, hacker philosophy becomes clear when reading their crowdsourced employee handbook, “A fearless adventure into knowing what to do when no one’s telling you what to do.”
Gabe founded Valve in the Seattle area in 1996, setting out to make great games and an even greater team environment. Coming from Microsoft’s rigid policies and complex hierarchies, Gabe was determined to use a radically different approach. He wanted to create a culture that fostered greatness, creativity, and impact by removing any and all structures that could hamper innovation.
“When you’re an entertainment company that’s spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value,” Gabe declares. So Gabe created “Flatland,” a completely flat organizational structure where nobody reports to anybody
