While Peloton uses gamification (streaks, leaderboards), Ergatta built actual games with avatars and opponents. This strategy targeted an underserved psychographic of introverted, competitive users who research showed were not motivated by class-based fitness. The deeper engagement of true gaming created a strong product-market fit.
Ergatta's "North Star" was never to be a hardware company, but the leading provider of gaming content for all cardio equipment. They built their own rower first to prove the model in a whitespace market. This success enabled their true, more scalable strategy: licensing that proven content to giants like iFit.
Ergatta's high retention isn't just from hardware lock-in. A key factor is the "virtue element" common across fitness: customers are reluctant to cancel subscriptions because it feels like giving up on their aspiration to be fit. They keep paying in the hope they'll start using the equipment again next month.
To launch their high-ticket rower, Ergatta's founders focused on their core strengths: software and marketing. They consciously decided hardware manufacturing was "off-piste" from their strategy. Instead of hiring a co-founder for this, they used expert advisors, allowing them to stay capital-efficient and focused on creating value through content.
Reflecting on raising $35M, Ergatta's founder suggests taking less capital might have been wiser. While tempting to raise as much as possible, large funding rounds lock the company into a specific financial trajectory and set of expectations. Raising less money can preserve crucial optionality and flexibility for the business's future.
Ergatta had pitched major fitness companies for years with no success. The opportunity for their transformative licensing deal with iFit only arose after the post-COVID market downturn led to a change in CEO. The new leader was more open to innovation and partnerships, demonstrating how industry shifts can unlock previously closed doors.