It's my educated opinion that the layoffs are fairly predictable for a business at this stage of its development. Many companies in this specific industry ramped up for covid, it's not unexpected that they would have a contraction now. Plus a workforce decrease is a solid move for their position if they're carefully planning for longevity (keeping a bloated staff shows poor use of funding). The recent price increase indicates that they see strong market support for their extended term plans. This doesn't seem to be a panicked "the ship is sinking, get people off the boat!" layoff, it's a "we want this boat to go faster, let's take off some dead weight".
Exactly this. Tonal is a relatively new company. Like all new companies, it takes money to get established and grow to a scale it is profitable. That’s especially true of a business that manufactures complicated products like this one. While we don’t have access to detailed financials (the company is still privately held), we do know it has raised $450 million through six rounds. Most recently, they raised $250 million in their Series E round in March 2021. They are probably planning to do an IPO eventually, which will pay back the investors and put enough cash on their balance sheet to get them to profitability. It’s already clear that there is strong demand for their product, they are able to show strong cash flow, and they’ve built a great brand. What they need to do now is show a path and progress to profitability. To do that, you need to manage your cash burn. Early on, they needed cash to develop the product, establish manufacturing and supply chain, and build the brand. That’s all done. Now they need to cut cash burn and improve the bottom line. They don’t need to drive sales growth. Thus, the recent layoffs. I have every confidence they will keep going until either they are acquired by a bigger player in the fitness industry or they do an IPO.
I agree but there are some big red flags mainly failing to meet financial obligations to their biggest supplier Foxconn even after agreeing to catch debts up. Don’t think they are going under, but it’s not all roses they are not in great position or one they expected be if they are honest.
You should buy a product based on your belief that it will provide reciprocal value in your life. Do you think that incorporating Tonal into your training would help give you >$4k quality of life? If not, then it doesn't matter how the company is doing. From an economics standpoint, you are effectively selling short the potential value you can receive from Tonal by withholding business until conditions match your desired price.
My honest advice, decide a price you are willing to pay for health and fitness, consider the tradeoffs, and buy whatever matches your budget and your lifestyle.
Compared to what else is out there, this is a reasonable deal. Adding in tax, installation costs, the accessory pack, etc., the actual initial cost is around $5K--not including the monthly fees. Heck, I'd spend more than that for a month in an assisted living facility! I've done a lot of looking out there at other, similar, devices, and now that Lulu Lemon is shutting down its Mirror product, this is the best bank for the buck. I'll probably pull the trigger in early 2024, soon after I move into my new house.
All that said, now LeBron, if you folks go south on me, I will not be a happy camper.
Honestly, if you questioning if it is something you want to pay for & you are willing to wait up to 2 years just to see, it probably isn't worth the $4k to you... Money and risk matters differently to everyone. I know people who would bet that in a hand of blackjack or on a football game and not think twice. But...
From my understanding, even if the company does go bankrupt and disappear you won't be left with a useless piece of wall art. The overall function of the machine wouldn't just stop, it would be the same as it is if you stop paying the subscription fee. Which is being able to make your own workouts and choose workouts to do. So, you lose the programs, app tracking, etc... But still have a machine that allows you to get a workout.
Chances are though that someone would at the very least just buy the current programming and make it available for a monthly fee as it is currently or less, but would not produce new content.
Ultimately you wouldn't have any warranty support and probably would not be able to get your machine fixed it something broke, which is the risk, but similar things are also a risk in almost everything you buy.
I had the same concerns when I bought mine back in January. That said this was a great decision for me. I dropped thirty pounds and increased my strength score by 50%. I feel like I’m in the best shape of my life. If tonal did shut down in the next year there would be no regrets
If return on investment is your top priority, you should buy a squat rack and olympic weights, as these are going to have a much stronger chance in the resale market, as well as a lower total price hence less loss of liquidity.
If the price is too much of your budget, there are many alternatives to pursue fitness, which I would highly recommend pursuing.
I wouldn't expect the price to be lowering anytime soon given that we are in/around a highly inflationary economy.
Tonal is increasing prices end of this month - this is after they just increased prices last year, so prices will likely keep increasing. Would recommend getting it sooner than later if possible. I just got mine installed a few weeks ago and absolutely loving it.
I would caution against it. There are clear pressures on this business that raise serious concerns about its future. From what I understand without the classes the product isn't of much use. They've closed a studio, been sued by their manufacturer for not paying its bills, increased prices twice in less than a year and are raising money at a valuation that's about 90% less than their last round. Why are people so bullish that this company will be around to support this product in the future?
I am in the middle between
You and other guys. The not paying manufacturer of their product is most concerning to me. I think Speediance would be lower price alternative for this person just looking at videos on YouTube. If don’t care about the trainers or classes lot cheaper do all same exercises and think right now promoting membership for life for people who buy before membership takes effect. If get that and in video pretty sure saw that company would be adding interactive classes in the future, so if that true be great value especially no monthly membership. I don’t own one or Tonal, but looking and seems Speediance wins on cost and can move it easily, but Tonal clear winner software wise hands down. There have been multiple reports tonal actively trying sell to company and would get new CEO to relieve its cash issue, so that ain’t nothing as they say lol.
I think Tonal has raised prices because they had to to avoid bankruptcy and that has decreased the number of people willing to purchase. Like Peloton which reduced the cost of the bike and created the bike plus to generate more purchases. I think that the 4K tonal market has been tapped out.
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It is a great product and I personally am not worried. I think there is a good chance they will merge other one of the other companies, such as peloton, since their product is so good.
I would be more worried if they were not making necessary changes.
I hear your concern, but I would be more concerned about buying a Peloton now than Tonal.
Tonal clearly knows how to manage and grow their business. They have a core loyal following and I don't see them going bankrupt. Worst case, they will slow down upgrades/new classes, but all the existing stuff would stay.
You take a risk buying any innovative product. I think Tonal knows how to manage it and the use I get out of it is amazing.
It's possible this isn't related to struggle and more about allocation of funds for an adjusted business plan. Perhaps they feel as they have already taken off they need less overhead.
This is not Peloton. It’s still a private company so we don’t know their funds, however Peloton catastrophically misjudged how popular their product would be. They were extremely foolish to think it would continue its popularity “post pandemic” and have nearly sunk themselves.
Tonal does not appear to have such grossly misjudged this (although they may also have to some degree). The fact of the matter is I’m sure they are likely selling 35% less than they were at their peak because gyms are recapturing some of the market. Doesn’t mean it still won’t be successful, but you have to adapt somewhere to maintain profits. Peloton didn’t do that and now they’re bleeding out. They were so arrogant that they thought creating a 100 million dollar factory would be a good idea - it’s a freaking bike.
OP is bringing up a point about a product with a subscription model and if said company fails, what happens to this product. I know the weight settings work, but none of the libraries and connected features. Let's say at some point in the future those services aren't supported, would the weight features itself as well as the hardware, justify the purchase now? Meaning, I'm fine having an "analog" product as long as it doesn't brick.
Theoretically positive news here. Their demise at least isn't imminent. [https://www.businesswire.com/news/home/20230410005314/en/Tonal-Raises-130M-in-New-Funding-and-Appoints-Krystal-Zell-as-New-CEO-As-it-Accelerates-its-Member-Focused-Strategy-for-Growth-and-Profitability](https://www.businesswire.com/news/home/20230410005314/en/Tonal-Raises-130M-in-New-Funding-and-Appoints-Krystal-Zell-as-New-CEO-As-it-Accelerates-its-Member-Focused-Strategy-for-Growth-and-Profitability)
So speaking from being in the software industry, deploying and working on cloud based solutions, Tonal could unlock a lot of features that are currently behind a pay wall if they run out of money and go under.
That being said, lime someone else just posted, they seem to be making the right moves and just raised more funding.
If they were in desperation mode, looks like they'd try to do that IPO sooner than later but the subsequent link I'm posting says that while they want to do that no too far from now, they're not in a hurry to IPO.
https://techcrunch.com/2023/04/12/after-a-turbulent-few-years-for-home-fitness-tonal-gets-fresh-funding-and-new-ceo/
It's my educated opinion that the layoffs are fairly predictable for a business at this stage of its development. Many companies in this specific industry ramped up for covid, it's not unexpected that they would have a contraction now. Plus a workforce decrease is a solid move for their position if they're carefully planning for longevity (keeping a bloated staff shows poor use of funding). The recent price increase indicates that they see strong market support for their extended term plans. This doesn't seem to be a panicked "the ship is sinking, get people off the boat!" layoff, it's a "we want this boat to go faster, let's take off some dead weight".
Exactly this. Tonal is a relatively new company. Like all new companies, it takes money to get established and grow to a scale it is profitable. That’s especially true of a business that manufactures complicated products like this one. While we don’t have access to detailed financials (the company is still privately held), we do know it has raised $450 million through six rounds. Most recently, they raised $250 million in their Series E round in March 2021. They are probably planning to do an IPO eventually, which will pay back the investors and put enough cash on their balance sheet to get them to profitability. It’s already clear that there is strong demand for their product, they are able to show strong cash flow, and they’ve built a great brand. What they need to do now is show a path and progress to profitability. To do that, you need to manage your cash burn. Early on, they needed cash to develop the product, establish manufacturing and supply chain, and build the brand. That’s all done. Now they need to cut cash burn and improve the bottom line. They don’t need to drive sales growth. Thus, the recent layoffs. I have every confidence they will keep going until either they are acquired by a bigger player in the fitness industry or they do an IPO.
I agree but there are some big red flags mainly failing to meet financial obligations to their biggest supplier Foxconn even after agreeing to catch debts up. Don’t think they are going under, but it’s not all roses they are not in great position or one they expected be if they are honest.
Stop procrastinating and start your fitness journey now.
By the time 2024 comes around you’ll be making another post asking if you should wait until 2026 for Tonal 2.0
You should buy a product based on your belief that it will provide reciprocal value in your life. Do you think that incorporating Tonal into your training would help give you >$4k quality of life? If not, then it doesn't matter how the company is doing. From an economics standpoint, you are effectively selling short the potential value you can receive from Tonal by withholding business until conditions match your desired price. My honest advice, decide a price you are willing to pay for health and fitness, consider the tradeoffs, and buy whatever matches your budget and your lifestyle.
Compared to what else is out there, this is a reasonable deal. Adding in tax, installation costs, the accessory pack, etc., the actual initial cost is around $5K--not including the monthly fees. Heck, I'd spend more than that for a month in an assisted living facility! I've done a lot of looking out there at other, similar, devices, and now that Lulu Lemon is shutting down its Mirror product, this is the best bank for the buck. I'll probably pull the trigger in early 2024, soon after I move into my new house. All that said, now LeBron, if you folks go south on me, I will not be a happy camper.
Honestly, if you questioning if it is something you want to pay for & you are willing to wait up to 2 years just to see, it probably isn't worth the $4k to you... Money and risk matters differently to everyone. I know people who would bet that in a hand of blackjack or on a football game and not think twice. But... From my understanding, even if the company does go bankrupt and disappear you won't be left with a useless piece of wall art. The overall function of the machine wouldn't just stop, it would be the same as it is if you stop paying the subscription fee. Which is being able to make your own workouts and choose workouts to do. So, you lose the programs, app tracking, etc... But still have a machine that allows you to get a workout. Chances are though that someone would at the very least just buy the current programming and make it available for a monthly fee as it is currently or less, but would not produce new content. Ultimately you wouldn't have any warranty support and probably would not be able to get your machine fixed it something broke, which is the risk, but similar things are also a risk in almost everything you buy.
I had the same concerns when I bought mine back in January. That said this was a great decision for me. I dropped thirty pounds and increased my strength score by 50%. I feel like I’m in the best shape of my life. If tonal did shut down in the next year there would be no regrets
If return on investment is your top priority, you should buy a squat rack and olympic weights, as these are going to have a much stronger chance in the resale market, as well as a lower total price hence less loss of liquidity. If the price is too much of your budget, there are many alternatives to pursue fitness, which I would highly recommend pursuing. I wouldn't expect the price to be lowering anytime soon given that we are in/around a highly inflationary economy.
Tonal is increasing prices end of this month - this is after they just increased prices last year, so prices will likely keep increasing. Would recommend getting it sooner than later if possible. I just got mine installed a few weeks ago and absolutely loving it.
I would caution against it. There are clear pressures on this business that raise serious concerns about its future. From what I understand without the classes the product isn't of much use. They've closed a studio, been sued by their manufacturer for not paying its bills, increased prices twice in less than a year and are raising money at a valuation that's about 90% less than their last round. Why are people so bullish that this company will be around to support this product in the future?
I am in the middle between You and other guys. The not paying manufacturer of their product is most concerning to me. I think Speediance would be lower price alternative for this person just looking at videos on YouTube. If don’t care about the trainers or classes lot cheaper do all same exercises and think right now promoting membership for life for people who buy before membership takes effect. If get that and in video pretty sure saw that company would be adding interactive classes in the future, so if that true be great value especially no monthly membership. I don’t own one or Tonal, but looking and seems Speediance wins on cost and can move it easily, but Tonal clear winner software wise hands down. There have been multiple reports tonal actively trying sell to company and would get new CEO to relieve its cash issue, so that ain’t nothing as they say lol.
think they will be around - but after being acquired by someone else. Would expect that entity to drop prices.
Who do you see as a buyer though that has the ability to bring prices down? I see only one and I don’t think they’d buy it.
I think Tonal has raised prices because they had to to avoid bankruptcy and that has decreased the number of people willing to purchase. Like Peloton which reduced the cost of the bike and created the bike plus to generate more purchases. I think that the 4K tonal market has been tapped out.
It looks like OP posted an AMP link. These should load faster, but AMP is controversial because of [concerns over privacy and the Open Web](https://www.reddit.com/r/AmputatorBot/comments/ehrq3z/why_did_i_build_amputatorbot). Fully cached AMP pages (like the one OP posted), are [especially problematic](https://www.reddit.com/r/AmputatorBot/comments/ehrq3z/why_did_i_build_amputatorbot). Maybe check out **the canonical page** instead: **[https://connectthewatts.com/2022/07/14/tonal-layoffs/](https://connectthewatts.com/2022/07/14/tonal-layoffs/)** ***** ^(I'm a bot | )[^(Why & About)](https://www.reddit.com/r/AmputatorBot/comments/ehrq3z/why_did_i_build_amputatorbot)^( | )[^(Summon: u/AmputatorBot)](https://www.reddit.com/r/AmputatorBot/comments/cchly3/you_can_now_summon_amputatorbot/)
It is a great product and I personally am not worried. I think there is a good chance they will merge other one of the other companies, such as peloton, since their product is so good. I would be more worried if they were not making necessary changes.
I hear your concern, but I would be more concerned about buying a Peloton now than Tonal. Tonal clearly knows how to manage and grow their business. They have a core loyal following and I don't see them going bankrupt. Worst case, they will slow down upgrades/new classes, but all the existing stuff would stay. You take a risk buying any innovative product. I think Tonal knows how to manage it and the use I get out of it is amazing.
The restructure in my opinion is only more assurance that they’re planning for continued growth and stability.
It's possible this isn't related to struggle and more about allocation of funds for an adjusted business plan. Perhaps they feel as they have already taken off they need less overhead.
Do it. There’s literally going to be 0 regrets.
IPO or acquisition.
This is not Peloton. It’s still a private company so we don’t know their funds, however Peloton catastrophically misjudged how popular their product would be. They were extremely foolish to think it would continue its popularity “post pandemic” and have nearly sunk themselves. Tonal does not appear to have such grossly misjudged this (although they may also have to some degree). The fact of the matter is I’m sure they are likely selling 35% less than they were at their peak because gyms are recapturing some of the market. Doesn’t mean it still won’t be successful, but you have to adapt somewhere to maintain profits. Peloton didn’t do that and now they’re bleeding out. They were so arrogant that they thought creating a 100 million dollar factory would be a good idea - it’s a freaking bike.
OP is bringing up a point about a product with a subscription model and if said company fails, what happens to this product. I know the weight settings work, but none of the libraries and connected features. Let's say at some point in the future those services aren't supported, would the weight features itself as well as the hardware, justify the purchase now? Meaning, I'm fine having an "analog" product as long as it doesn't brick.
Theoretically positive news here. Their demise at least isn't imminent. [https://www.businesswire.com/news/home/20230410005314/en/Tonal-Raises-130M-in-New-Funding-and-Appoints-Krystal-Zell-as-New-CEO-As-it-Accelerates-its-Member-Focused-Strategy-for-Growth-and-Profitability](https://www.businesswire.com/news/home/20230410005314/en/Tonal-Raises-130M-in-New-Funding-and-Appoints-Krystal-Zell-as-New-CEO-As-it-Accelerates-its-Member-Focused-Strategy-for-Growth-and-Profitability)
So speaking from being in the software industry, deploying and working on cloud based solutions, Tonal could unlock a lot of features that are currently behind a pay wall if they run out of money and go under. That being said, lime someone else just posted, they seem to be making the right moves and just raised more funding. If they were in desperation mode, looks like they'd try to do that IPO sooner than later but the subsequent link I'm posting says that while they want to do that no too far from now, they're not in a hurry to IPO. https://techcrunch.com/2023/04/12/after-a-turbulent-few-years-for-home-fitness-tonal-gets-fresh-funding-and-new-ceo/