Peloton

**Ben Gilbert** (0:00)
Ride to Greatness.

**David Rosenthal** (0:03)
We're not here to work out, we're here to outwork. I said that to Jenny the other day, and she was like, what are you talking about? Outwork.

**Ben Gilbert** (0:14)
just internalize all the Peloton instructor slogans. David, just make sure you live, learn, love well. See you next time. Welcome to season 10, episode 2 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

**David Rosenthal** (0:55)
And I'm David Rosenthal, and I am an angel investor based in San Francisco.

**Ben Gilbert** (1:01)
And we are your hosts. Well, listeners, we have been waiting to do a Peloton episode for a long time, just searching for that right moment. We didn't do it at the IPO, and then there was the big stock run-up, and we thought about that, and we got a zillion listener requests, and of course, the pandemic hitting, and David and I both becoming customers, and these crazy commercial, and somehow none of these ever felt like the right moment. So we figured, well, how about this wild company changing news? We just scramble over 24 hours to prep and have done basically nothing in the last 24 hours except learn everything we possibly can about this company that we are so intimate with already.

**David Rosenthal** (1:42)
Well, I mean, anytime Barry McCarthy gets involved, like we were texting, Ben texted me the news and I was like, that's it, we gotta do it. Emergency pod, Acquired superhero, Barry McCarthy, literally writing again.

**Ben Gilbert** (1:59)
Yes.

**David Rosenthal** (1:59)
Oh, just so excited.

**Ben Gilbert** (2:01)
And you know, there's this fun thing too, of like, I've seen articles that are like John Foley stepping down as CEO. Technically, technically, people are saying he's staying involved. He's staying very involved and we'll definitely dive into sort of how this duo is going to conquer the road ahead together.

**David Rosenthal** (2:20)
Indeed.

**Ben Gilbert** (2:21)
Well, first, we want to say we're recording this on February 9th. And that is important because yesterday, February 8th was the day that the news broke about all of the Peloton stuff. Today, February 9th was Barry McCarthy's first day in the CEO seat. And I think he frames this better than we ever could have in his email to the company this morning.
He wrote, and now that the reset button has been pushed, the challenge ahead of us is this. Do we squander the opportunity in front of us, or do we engineer the great comeback story of the post-COVID era? I am here for the comeback story.

**David Rosenthal** (3:00)
We are here for the comeback story.

**Ben Gilbert** (3:02)
Indeed. All right, well, we spent the last 24 hours getting everything in order, all of our thoughts. I've done 167 workouts since January of 2020, when I got my Peloton bike to make sure we are as knowledgeable as possible. This is a great time to tell you about one of our very favorite companies, crusoe.

**David Rosenthal** (3:22)
So crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners, and literally crusoe's data centers are nothing but racks and racks of A100s and H100s. And because crusoe's cloud is purpose built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (3:47)
Yes, we talked about that on our ACQ2 episode with crusoe CEO, Chase Lockmiller.

**David Rosenthal** (3:53)
The other element that makes crusoe special is the environmental angle. crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (4:11)
Yeah. obviously, it's a huge benefit for the environment and for customers on costs since crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. These lower energy costs get passed on to customers.

**David Rosenthal** (4:27)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS, and Google, and Azure, who need to build their data centers close to major traffic hubs where the Internet happens because they are doing everything in their clouds.

**Ben Gilbert** (4:44)