A Lesson in Word Choice: The Peloton IPO
There are certain news items that garner lots of attention. One of those items is IPOs.
The debut of a company on the public markets has always created a public spectacle of sorts; even more so when the IPO landscape is robust. For companies preparing to go public at such a time, there are two key considerations to keep in mind: first, expect lots of media coverage and second, proper planning is required to approach said coverage.
Peloton’s recent filing of its IPO is one of the latest in a craze of public debuts. As such, their Form S-1 was certain to generate a number of headlines. And that it did. The focus, by most media, was not on the filing itself but rather the company’s choice of words.
Widespread coverage presents its own unique set of challenges. The most difficult of which is speaking to the vast audience that comes with that media presence. When you’re speaking to a target audience, it is easy to identify the verbiage that best resonates. But when an audience expands, and includes more diverse perspectives, language must be adjusted to resonate with all of those varied perspectives.
In this sense, the Peloton IPO filing failed. Their co-founder and CEO decided the best way to describe their company in an investment-related filing is with the following statement: “On the most basic level, Peloton sells happiness.”
A snippet of the resulting media coverage, is as follows:
“Behind the easy-to-parody language, the new IPO candidate is a cultural touchstone and a real business.” (Recode)
From one of Fortune’s newsletters:
Fortune
Or this from Advertising Age’s newsletter:
Ad Age
The line became the headline for the story, more so than any other quote from the entire filing (which is over 100 pages). This story was bound to generate a ton of coverage. But because of this word choice, the headlines were dominated by one line rather than Peleton’s business prospect or its success as a company.
“Happiness” is controversial in this respect for two key reasons. One, it’s not easy to draw a straight line from Peleton’s business of exercise bikes and live class model to happiness. And two, happiness means so many different things to so many people. It is something many would claim costs no money at all. It’s a word that evokes a range of philosophies, emotions and opinions. Happiness may be universally sought after, but how it’s obtained is not. And thus it was not the best choice for this filing with the SEC.
Peloton’s CEO may have intended to communicate something profound and relatable, but instead it caused — as Advertising Age put it — a lot of “eyerolls.”
By contrast, when Google filed its Form S-1 in April 2004, the co-founders’ letter cited the following description of the company: “Our goal is to develop services that improve the lives of as many people as possible — to do things that matter.”
Which is a more well-received description?
The point here is simple: if faced with the choice, be more a la Google and craft a mission statement with language that nearly everyone can get behind.
While it’s no revolutionary idea that word choice matters, it is something that’s overlooked or dismissed as unimportant. This example proves the contrary. Don’t let poor word choice hijack what could’ve been a well-received, positive story.