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Wahoo has had a busy year by anyone’s standards. Multiple product launches, updates to existing offerings, and acquisitions have all had me writing some variation of this intro on an almost monthly basis.
It’s not all been plain sailing, though. Unfortunately, Wahoo announced a round of layoffs earlier this year and has twice had its debt ratings downgraded by Moody’s and S&P Global Ratings due to weaker-than-expected demand, higher costs, and increased competition, as reported by SGBMedia. That mention of increased competition was even before Zwift announced its entry into the trainer hardware market with the exceptionally priced ZwiftHub and the legal battle that looks set to ensue between Wahoo and Zwift.
CyclingTips recently spoke with Wahoo founder, Chip Hawkins, to discuss Wahoo’s direction, those product updates, and where he sees indoor training heading in the future. Understandably, any chat on the Wahoo vs Zwift lawsuit was off the table for legal reasons, but he offered plenty of hints as to what is on the way for Wahoo training products and Speedplay pedals.
Hawkins laughs off my suggestion that it’s been a busy year for Wahoo as “the understatement of a lifetime”. He explains busy periods usually come in “fits and spurts,” but the brand has been extra busy of late and still has more “super exciting stuff” in the pipeline.
The extensive list of updates and new products of late is a sign to me the brand synonymous with indoor trainers is morphing into a software developer, with its hardware offerings almost entirely a driver for its Wahoo X subscription service. While Hawkins suggests that is a fair assessment, he is quick to point out Wahoo’s software developers have always outnumbered any other staffing group, and from trainers to smartphone apps, it has always had a strong focus on software development.
He suggests the dual software and hardware approach also just makes much more sense for Wahoo given, as Hawkins suggests, there are no other brands that currently offer both an indoor and outdoor training ecosystem. “For me, it’s always been looking at my pain points and trying to solve them,” he says. “My pain points often tend to resonate with other people’s pain points.” Hawkins points to the recent inclusion of voice chat on the Wahoo RGT as one such pain point, the addition of which has improved the indoor riding experience.
That said, Hawkins openly admits audio is a “silly addition in some ways”, but suggests its inclusion could be game-changing, with it’s true potential lying longer-term.
My mind wanders a little as I think of the countless “game-changers” that have come and gone over the years, but Hawkins quickly snaps it back to the cold van I’m having this meeting from, telling me, “you can think of that (RGT audio) as the first move for us. We have audio in RGT now, what about audio for mixing indoor and outdoor?” Hawkins seems genuinely excited for what’s to come, suggesting something is very much in the works. “There’s a lot of cool places we can take that, which I’m excited about, and we are looking at.” As if to light the touch paper, Hawkins continues, explaining, “there are other places we haven’t even brought out yet that will add to that.”
“Other places”. Is Hawkins suggesting we could soon combine the virtual and real worlds for our bike rides? What does that even mean? “Yes and no”, seems to be the gist of his response, suggesting “pieces of that could work … but it’s not a major push for us right now.”
Not a major focus, but is it on Wahoo’s radar? He suggests a single indoor and outdoor ecosystem could open up possibilities for riders around the globe to connect during virtual and real-world rides with a connected headset. My mind automatically assumes the goal is improved social connections, but Hawkins suggests the possibilities also extend beyond that and perhaps into one-to-one coaching around the world, etc.
Reading between the lines, plus Hawkins’s willingness to indulge the idea, suggests to me this is more than a hypothetical conversation. I hone in on the mention of a “headset”. Is a Wahoo headset – or perhaps a “Hedst” – on the way? Are we talking VR? Hawkins pretty much quashes that theory. He openly admits he doesn’t know where VR is going but suggests it could follow a similar path to 3D TVs, which died a quick death after launching as the next “game-changing” technology.
“It’s so awkward and weird that I’m afraid it’s never going to catch on, and we’re at the extreme edge of that,” Hawkins says. “Like, it’s awkward and weird to us sitting on a sofa, jump on a bike, even indoors, and it takes it to a whole other level of awkward and weird.”
So if not VR, has indoor training now fully matured? Are the current offerings as immersive or real as we will ever have? It’s an emphatic “no” from Hawkins, who suggests there are opportunities to bring “immersiveness” to “a whole other level.”
Hawkins is very careful in choosing his words but suggests it’s “easier than many might think” to improve the overall realism, aerodynamics, and drafting physics in a virtual world. Hawkins explains Wahoo has an advantage in making that possible in developing both the hardware and the software, and claims Wahoo is about to make huge strides in realism and drafting with something that will “blow people’s minds” in the not-too-distant future.
With all this development, though, is there a risk Wahoo could – or perhaps already has – spread itself too thin? While the updates of late offer genuine improvements such as the addition of Wi-Fi and Easy ERG to its Kickr and Kickr Bike, the new range of products isn’t pushing the limits of technological development either. Arguably, the sometimes relatively minor updates are at odds with the mind-blowing steps forward Hawkins hints we might soon see from Wahoo.
To be fair, it would be perfectly understandable if the challenges of simply meeting demand during the pandemic detracted from the brand’s ability to fully develop new products. Likewise, from the outside looking in, it sure seems like indoor trainer sales could only have declined once the world “opened up again.” Has that forced Wahoo to take this new training partner path?
In putting this to Hawkins, I ask him if the huge upsurge in demand for trainers during the pandemic had delayed or forced the move into an improved software offering and subscription model we are seeing now. While acknowledging the pandemic did increase trainer sales, Hawkins claims Wahoo’s data suggests the number of “serious cyclists” – riders training for an hour or more three or more times per week – who owned an indoor trainer pre-pandemic was around 8%, and while that number grew rapidly over the past three years, Hawkins is confident it could still be as low as just 15%.
If that 15% figure is accurate, and especially given everything that has happened over the past few years, perhaps the remaining 85% will never delve into indoor training.
Hawkins doesn’t see it like that. He sees a return to the more typical 1-2% increase per year, but turns the spotlight on himself and Wahoo, explaining “the more compelling we can make it (indoor training) with cool products, with marketing, with referrals from friends who are indoor cycling, the more we can continue to grow the category, not just for us, but for everyone.”
On the product innovation side, Hawkins explains it’s always a balance between driving for updates and new features just because it’s cool and honing in on the features that will matter most to the most riders and doing those well. Hawkins is with many of us. He describes himself as the “totally nerdy and gadgety rider” and points to aero sensors as a good example. While briefly mentioning Wahoo is investigating the technology, he admits to “really struggling to understand how we can present that and build something that would be meaningful to non-time triallists or record-chasers.”
Clearly, hardware is still and will remain a key focus for Wahoo as it builds its subscription offering. That makes sense – I can see how a Wahoo ecosystem that complements its own indoor and outdoor offerings could prove attractive to a rider investing in either space. But what then of those concerns from Moody’s and S&P?
I’m a bike rider and tech writer, not a markets expert, but those downgradings seem bad. Hawkins admits as much – “they look bad” – but he claims the reality is much brighter. He explains these reports don’t have full visibility of what Wahoo is doing, and the debt ratings are assuming Wahoo is standing still, not reacting to the changing market. They aren’t accounting for the push into the training platform and subscription model almost the entire conversation has focused on to this point. “You adapt and innovate and do what you need to do to make the business successful, which we’re doing,” he says.
Interestingly, though, Hawkins admits Wahoo didn’t expect trainer sales to drop drastically post-pandemic. As such, looking at the brand’s performance relative to its forecasts even a year ago, the business is not in the greatest space on the revenue side, but Hawkins explains everyone at Wahoo is hunkering down, innovating, and in for the long haul.
Of course, it is easy with hindsight, but it seems there should have been some expectation trainer sales would dip somewhat dramatically. Hawkins suggests it’s not actually that clear-cut. He points to the trainer and head unit registration numbers, which he claims haven’t fallen, as evidence the demand is still there. But the supply is also there now, which was the main challenge during the pandemic when everyone wanted a trainer there and then.
In fact, Hawkins claims the underlying demand Wahoo is seeing through registrations is actually up this year over last year. Much of those sales are through retailers and are effectively Wahoo’s inventory from last year and represented in last year’s revenues. That’s good for consumers – more supply coupled with similar or less demand, means deals at the checkout. But seemingly, the demand and discounting those reports refer to aren’t actually reflective of the brand’s current position.
My time with Hawkins is fast running out so I’m keen to move the conversation along and get to my beloved Speedplay pedals. As many will now know, Wahoo acquired the pedal company, updated the design, launched a new range, and brought us a Speedplay-based power meter. However, the brand hit a stumbling block along the way, with many customers experiencing a lateral play issue plaguing many of the pedals.
Hawkins admits Wahoo underestimated the sheer number of pedals affected by the issue, which hadn’t shown up in its developmental testing. Furthermore, Hawkins explains that the first fix Wahoo implemented did not “completely eliminate” the issue, even though the company thought it had. In promising news, though, he explains Wahoo “went back and re-engineered it (the design). And the fix in place now does completely eliminate (the issue).”
So far, the pedals delivered to me in August or September seem to confirm Hawkins’s claims with zero issues so far. While that is still just two to three months of riding, it is much longer than many of the previous Wahoo Speedplay pedals I previously tested had lasted. “We fixed it,” he says. “Unfortunately, it took us longer, and it was a bigger issue than we realised at first, but it’s fixed now.
“We’re in it for the long haul … and we’re doing some other cool stuff with the pedal like we’re not sitting on our laurels. [There’s] some really cool stuff with Speedplay I can’t wait to get out.”
“Would that happen to include an offroad pedal?” I ask. “Er, ah, it might” comes the response. While Hawkins understandably can’t provide much detail, he has good and bad news for Speedplay Frog fans. Any Wahoo offroad offering will not build or lean on the Frog design; the demand was simply too low. But Hawkins does recognise the loyal fan base the Frog pedal does have and says he would be happy to sell the tools to one of the internet forum Frog fans: “If I could help these riders make their own pedals, I’d be happy to.”
I make that two or three promises of new products or updates coming from Wahoo in our short 30-minute chat. Clearly, Wahoo has no intention of taking its foot off the pedal just yet. It seems safe to assume the next 12 months could be both hugely exciting and important for Wahoo Fitness.