NEW YORK, Nov 9 (Reuters Breakingviews) – Peloton Interactive’s (PTON.O) founders are climbing back up on their bikes. John Foley and two others are starting a new direct-to-consumer custom rug business. With WeWork founder Adam Neumann also recently scoring funding for a new idea, second chances are in vogue. It may fail, but then again attempting wacky ideas is the way entrepreneurs succeed.
Foley and friends received $25 million to set up Ernesta. It’s a tough time to embark on a retail venture dependent on discretionary income. Still, bespoke rugs aren’t mainstream. People can choose standardized carpets online or ultra-high-end weaves from stores. In that sense, it’s like Peloton’s take on home exercise gear: a fancier version of an existing product, with added convenience.
More important is that Foley’s ideas aren’t fundamentally terrible. Peloton’s shares cratered after the virtual fitness company was overambitious during the pandemic, but it grew admirably. And that’s not unlike WeWork, which grew too quickly and sought too high of a valuation, but did reshape the temporary rental market.
Ernesta seems at least to have more modest expectations. It pegs the addressable market for rugs at $120 billion by 2030 versus the $4 trillion wellness market Peloton touted in its initial public offering documents. (By Lauren Silva Laughlin)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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