The Holy Grail of brand building is achieved when your startup crosses the language chasm from noun to verb. To ride share is to Uber. To send cash to friends is to Venmo them. And to ride in a virtual environment with friends and/or strangers from all over the world on a real bike attached to a trainer that transmits actual power output (watts) to the software, which is technically a game, on pretty much any computing platform, such that you’re truly working out and even competing at a pro level…is to Zwift.
Founded in 2014 by a group of entrepreneurs and game developers from both Los Angeles, California, and London, England—some of whom were also cycling enthusiasts—Zwift debuted in 2015. Following steady year-over-year growth, the COVID-19 pandemic gave the company a massive tailwind as consumers sought home-based fitness alternatives and flocked to cycling for both exercise and recreation. This led to a monster $450 million funding round in September of 2020, in which both Amazon and Specialized Bicycles participated.
Personally, I’ve been a Zwift user—a Zwifter—since the company launched to the public. It played a central role in my 2018 recovery from a broken leg, and it’s a constant in my training regimen, especially during Park City winters. So I welcomed the opportunity to talk with Zwift co-founder and CEO Eric Min about the Zwift story and where it goes from here.
Co-Founder and CEO, Eric Min
Rob Reed (RR): Can you tell me the Zwift Genesis story?
Eric Min (EM): I had spent a career working in the finance industry, building trading apps for many years. My last company was doing exactly that, serving the commodities markets. My partner—we’re still partners in Zwift—and I decided to exit that business and we wanted to do something completely different. What we loved about our business was that it was technology driven, it was cloud based, it was a subscription business. We wanted to apply that business model toward something else that was more impactful and meaningful for us personally.
We thought, “Let’s leave the enterprise world and focus on a consumer business.” We decided what the pillars of the business were, but we didn’t know what problem to solve. Then we spent the next few months just trying to understand, okay, well, I was looking at education, or healthcare, I was looking at hospitality. None of them really passed the sniff test. The one that I tried to stay away from was anything to do with cycling because that’s just too close to my own passion, right?
Really, it was in the absence of a better idea, I called my partner one day. I said, “Look, I think there’s something in it about riding with other people virtually, and turn that into a very social experience.” Because living in London, I was already doing a lot of indoor riding. I tried all the different products that are out there. They were all very different. Some are very focused on structured training. Others were trying to create this simulation, but none of them was about creating communities and bringing various activities onto a single experience, a video game.
I threw the idea out to my partner. His response was, “Look, if we can create a business that would benefit the wellness for millions of people, that is something I can get behind.” He is not a cyclist. The idea was born in November 2013. I said, “Okay, I think this is a reasonable idea.” Neither of us were game developers, so I started Googling. We needed to bring someone into the team that actually knows how to do this.
The first Google hit I get is Jon Mayfield and his little home project. He’s one of my partners today. He had created this video game for himself, because he was dissatisfied, like I was, about all the indoor training tools. None of them were engaging enough. He decided, because he was a game developer, to build his own, which was a single-player experience. Really basic, but of all the different commercial products that were out there, his had the most potential.
We exchanged some emails. We had a call and flew out to California from London to knock on his front door. We met him and he gave us a demo. He didn’t actually expect us to show up, because I think a lot of other people within the cycling community, where people had heard about his game had reached out to him about, “Hey, let’s do a startup together.” I don’t think anyone actually flew to his home. He took us much more seriously. Within a couple weeks, he came on board as a partner. The four of us started the business together. That was January or February of 2014.
RR: I think I became a user in 2015, maybe.
EM: Well, you’ve been around a very long time then.
RR: I was looking for the same solution. Indoor cycling has always been just so monotonous. It was just necessary to keep up with your training.
EM: That’s a double-edged sword for us. In the beginning, we struggled to convert people who had experience with indoor cycling. For them, it was just an awful experience. We converted them last, actually. People who’d never done much indoor training, we converted them faster, because they had no prior knowledge.
RR: No preconceived notions. Yeah.
EM: Exactly. Once you get to a certain state and momentum, and that fear of missing out, then you start getting everyone else. In the beginning, it took really the early adopters who were willing to try something different. From the very beginning, it was a community. I mean, when we had 15 riders, they all knew each other by their first name. That was the first semblance of a community.
RR: When you guys were getting started, were you like, “This thing has multi-billion-dollar potential.” Did you know that from day one?
EM: When you put it in the context of we can build something that can go really mass market and it extends beyond the cycling industry, then it’s a very big market. I think, back in the ‘50s, every home had a stationary bike. You bought a house and there’ll be some crappy stationary bike in the basement. Everyone has one of those. I used to have one of those, back in the ‘70s or the ‘80s. Then it faded away. I think that trend is coming back. I do believe that every home is going to have some home fitness equipment that is connected.
RR: Oh, yeah. Absolutely.
EM: This is really early days in terms of connected fitness devices in every home.
RR: Well, it’s interesting, because people understand what Peloton is. But I actually struggle when people are like, “Oh, you’re a big cyclist. Do you do Peloton?” I’m like, “No. I do the hardcore version of Peloton.” Then I try to explain to them what Zwift is. It ends up taking me a long time to explain. What is your “Here’s what Zwift is” description?
EM: Zwift is really, if you want to combine fitness and gaming, where you can exercise with a community, which is global, that’s what it is. I think Peloton is very different. What’s confusing is the name that they took as a business. It’s amazing that they managed to secure that.
RR: Which was pretty brilliant. Yeah.
EM: Apart from that name, it’s actually a very different experience. It is challenging. We certainly don’t spend the marketing dollars that Peloton does. It’s become very mainstream to most. I think, when you think about fitness and gaming, Zwift is pretty unique. There aren’t too many games like Zwift, so it’s harder to explain. Whereas, if you explain to someone, well, Peloton is like spinning. People are like, “Oh, I get it.” There’s no other reference to Zwift, so we have to spend more time explaining what that is.
RR: Yeah. I have to explain what a power meter is. They don’t know what that is. You have to go into that. Like, “Oh, wait. How do you move through the game? How does the game work?” You have to get really technical, right?
EM: It does help when we say Zwift has elements of Esports. I mean, Esports is helping to promote Zwift, in many ways. Esports is also a powerful marketing tool for us. It’s not just Zwift. It’s happening, whether it’s NBA, whether it’s driving games, whether it’s football, FIFA, there are Esports versions. The only difference, though, with Zwift is that Zwift is a physical Esport. It does take a lot of cardio and power and a lot of sweat. That’s how we differentiate ourselves from traditional, pure Esports. That’s what makes us, I think, a true sport.
It is now officially a discipline in the world cycling body. I think that’s where we differ. Our broader vision and mission is to get as many people to get inspired through these incredible events and athletes that compete on our platform, all the way to people who just want to connect socially and get some fitness. We think of Zwift as having three very unique experiences. We have something for Compete, and Esports is part of that. Compete is not just about the pro level of the sport, it’s all the way down to the grassroots level.
We also have Training. A vast majority of our customers show up for Training. We’re trying to make that training something that’s also very social. Then finally, it’s about Exploring. An example of Exploring is going out there and collecting all the badges, tons of badges, dozens of badges that you can collect, route badges.
RR: Yeah, that’s the gamification.
EM: Yeah. It’s very different from spinning is my point.
RR: The distinction I draw is the Peloton just replicates a studio cycling environment in the home. I’ve always looked at Zwift as trying to replicate, as best as possible, the outdoor riding experience, but indoors. It also sounds like, maybe that’s where it started, but you’re almost transcending that and it’s becoming its own thing, not just a replication of outdoor.
EM: Right. We’re definitely not, and we certainly don’t talk about ourselves being, a simulator, where we’re trying to literally simulate outdoors. There are elements of simulation that we do. For example, we have Alpe d’Huez, which we call Alpe du Zwift. While the GPS coordinates and the actual terrain is replicated, the experience, I mean, we don’t pretend that if you do it virtually, you’ll get the same time as when you do it in the real world. There’s so many factors that go into your performance, and we don’t even try. We’re not trying to simulate, but we are bringing some of those elements in, but we want to create our own unique experience.
RR: Let’s talk about mountain biking in Zwift, because I tried the one route in Watopia now, or are there more?
EM: There’s a little bit more. Well, we just had some expansion back in December. There’s some more dirt patches. I would say that more trails are coming for sure.
RR: I think there’s just not enough for me to, I don’t know, because there’s another piece of hardware that makes it work.
EM: We’re a firm believer of giving you more ways to engage with the game. I think this is where hardware is important. Those additional controls that give you that immersive experience and engagement is something that’s lacking at the moment. That’s part of what we’re trying to solve with some of our hardware investments. There are definitely opportunities, and some of our partners are already investing in that. That’s all part of the longer strategy, because I think, as we go broader beyond outdoor cyclists, and those who love riding, or who have cycled in the past, but for whatever reason, don’t anymore and find that they’re very open to doing something indoors. This is where I think adding additional levels of engagement through hardware is something that is going to be important to the experience.
RR: Is that how you expand and own more of the virtual cycling stack?
EM: It’s been public that we’re investing in hardware. What we want to do is just make it very easy for prospective customers to just come and buy Zwift. At the moment, there is friction, but it’s incredible how many customers actually do get on to Zwift, given the friction we do have. You have to have your own bike. You have to have the trainer, and you have to get a device and then there’s Bluetooth. It’s quite confusing for some, but they stumble through it…through the community and with our support, where they figure it out.
As we grow beyond the core audience, they won’t have the patience to do that. We need to deliver a very seamless, simple experience, like a Peloton. They just want to buy Peloton, it shows up it just works. In fact, the delivery guys don’t leave until your account is activated.
RR: Let’s talk about some numbers. Are you publishing monthly active users yet?
EM: We’re not, but I can tell you a couple of tidbits. We’ve had over 3 million accounts created on the platform. We recently peaked around, I think 45,000 simultaneous users, but hundreds of thousands of customers are using Zwift on a daily basis. Our business has doubled in the last 12 months. Many digital businesses have in this environment. The level of engagement has really skyrocketed on the platform.
Again, it’s definitely a credit to the current environment. I think it’s creating opportunities for people to try something that they otherwise wouldn’t have tried. Then they’re finding that this is an experience that they want. From that perspective, it’s accelerated the growth for us. The biggest challenge is just the shortage of hardware. I mean, it is so hard to find hardware to get onto Zwift. Part of that is just sheer demand, but the other is the supply chain issues, and Brexit.
It’s all backed up. Hopefully, all that will get itself sorted over the next few months. Really, at the moment, that’s our biggest concern is that our growth will be affected by the lack of equipment that you need to get on to Zwift.
RR: Then you’ll just get another shot, as soon as the supply chain is sorted out. All that pent-up demand will arrive eventually.
EM: We’re getting drip fed by our partners who are making the hardware. It’s just a challenging environment. I don’t think it’s any different for Peloton. I’ve heard months, you have to wait three or four months for a Peloton bike now. It’s just the current situation, but it should get better over the next few months.
RR: The levels that you can get to in Zwift, is 50 the cap? That’s the highest level right now?
EM: Yeah, it is the cap. What level are you?
RR: I’m level 40, 41, I think.
EM: Okay. It takes a long time to get from 41 to 50.
RR: I’m sure. It’s not linear, right?
EM: It gets geometrically harder.
RR: What percentage of the community is at 50? Is that like 1%?
EM: Seven-tenths of 1%. It’s quite hard to get there. Of course, once you reach level 50, it’s quite an accomplishment, because you’ve really invested a lot of your time and effort. Hopefully, you’ve been rewarded with fitness and mental benefits and social connections and all that. Don’t worry, by the time you get to level 50, there will be more levels. We’re just trying to think about a new reward structure. Our team, our designers are thinking about what that might be, that it might need to change from what it is today.
RR: Then what percentage are competing in races?
EM: About 25% of our customers are taking part in events now. Some of those events are rides, others are races, but let’s say about 25%.
RR: Yeah, that seems a pretty –
EM: About 75% are doing some workouts.
RR: 75% doing the workouts? Wow. Yeah, that’s good. That was a big step for me, I remember, when I ventured into that area of the experience.
EM: There’s a quite a lot of people who are just going on Zwift and just free riding, and riding with the bots, the pacer bots.
RR: Yeah, I noticed that. Is that pretty new? Was that a new feature?
EM: It’s relatively new. We decided to throw it out there and see how the community respond to it. It’s been really positive. There’s so much we can do with the pacer bots that could get integrated into meetups, for example. Maybe one day, you’ll have your own personalized pacer partner.
RR: Your AI alter ego.
EM: Yeah. It can interact with you, because it knows a lot about your riding habits. Maybe you go fast on the flats and you go slower on the hills. It would know all that and try to encourage you to do more. There is a ton of scope there. Our designers are just having fun thinking about what the possibilities are. None of this will happen overnight. I think the first thing is, yeah, making sure that we build what’s going to be a home run.