Private company Peloton hit the fitness industry by storm in 2012 with its unique niche as a purveyor of stationary at-home bikes. It streams 12 hours of live cycling classes a day, and connects riders with more than 4,000 on-demand classes.
Just five years later, the company now has over 200,000 riders around the world, and zero competition.
However, co-founder and CEO John Foley told " Mad Money " host Jim Cramer that he expects the competition to come rolling in. The term "peloton" refers to a group of cyclists that ride closely together to save energy.
"Right now there is no competition. Peloton is the only game in town. But because it is so good, because it is so coveted, because the consumers love it, we expect competition to come from all angles," Foley said.
Foley started as an engineer for Mars in 1990 and later held positions as the CEO of Evite.com, co-founder and CEO of Pronto.com and President of BarnesandNoble.com.
He said he was inspired to create Peloton after he and his wife became addicted to instructor led group fitness classes. However, with kids and a busy career, time to go to those classes became limited.
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Instead, he and his team built a technology enabled platform that allowed users to consume the content on their own schedule and location. The key to its business model is that Peloton does not make a lot of money on the bikes that it sells. Instead, the company makes its money from the $39 a month subscription fee.
"We are not going to be a stationary bike company. We are going to be a disruptive company," Foley said.
Cramer is always pointing to the stay-at-home economy as a theme built to last. This refers to the shift seen in the market, where stocks that cater to people at home are the ones that succeed, such as Netflix (NFLX) and Amazon (AMZN).
He attributed its success to tapping both the stay-at-home economy with the trend of healthy living.
And while some may fear competition stemming from a SoulCycle or Flywheel, Foley said it is technology that distinguishes it away from these popular cycling studios.
"We are a very, very hardcore technology company. We make a tablet computer better than Apple (AAPL) … We are as hardcore of a tech shop as anything in New York City right now, so if SoulCycle or Flywheel were to try and reinvent themselves as somebody who can compete with software engineers at Google (GOOGL), than maybe they can come after us," Foley said.
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