On a warm evening late last spring, guests gathered at a grand, beautifully appointed town house in New York City’s West Village. All the makings of a great cocktail party were in place: Champagne and sparkling water on offer from sharply dressed waiters; mini lobster rolls and filet medallions as hors d’oeuvres; lively conversation that spilled from the open kitchen into the living and dining rooms. As the party wound down, the host, John Foley, prepared a nightcap (old-fashioneds) from his top-floor bar, and as a parting gift, everyone left with one of Foley’s favorite books—pristinely wrapped in matte navy paper. Since 2012, Foley has been best-known as the cofounder of Peloton, having served as CEO until February 2022. But that night, he was publicly stepping into his new role as an interiors executive. His latest company, Ernesta, which makes designer-quality custom-cut rugs, had quietly launched in beta.
With Peloton, Foley sought to bring boutique fitness to your home via a fancy stationary bike, and now, his goal is to elevate that home with a fancy rug. “I just love spaces, and rugs are a very important part of your space,” Foley tells Vanity Fair. It’s a few weeks after the cocktail party, and Ernesta is nearing an official September 2023 debut. We’re back at Foley’s West Village home, where, alongside Ernesta senior merchant Katie DeLuca, he’s describing the company he’s setting out to build. “I’ve got a rug problem,” he jokes, adding that, over the years, he’s purchased many from more than two dozen brands and found that quality, pricing, and customer service are often dubious. “What we’re trying to do at Ernesta—what we’re doing—is bringing a designer-quality curated selection of rugs as good as exists, we believe.”
Of course, this isn’t the first time Foley has had lofty business ambitions. And his route to the C-suite was somewhat circuitous.
Born in Houston and raised in Key Largo, Florida, Foley studied industrial engineering at the urging of his father, who served in Vietnam and later worked as an airline pilot. In college, he split his time between studying in Atlanta and working at a candy manufacturing plant in Waco, Texas, where, dressed in a hairnet and steel-toe boots, he made Skittles, Starbursts, Snickers, and Twix. “I earned money six months a year, and then I went to school six months a year, so I graduated having paid my way through school and getting two and a half years of work experience.” Foley returned to the plant after college and, a few years later, transferred to Los Angeles for a role making dog food. “In tech, you say ‘you gotta eat the dog food,’ meaning you got to use the apps and the software that you create,” he says. “We actually ate the dog food; we had to taste it in order to make sure that it was good for the dogs. Swear on my life.”
In 1996, Foley’s brother-in-law, John Pleasants, recruited him to join Citysearch, a site composed of city guides highlighting local restaurants, hotels, services, and entertainment venues in various US destinations. The company IPOed in 1998. “I was such a junior guy that I didn’t have any real equity. So going public sounds like a great thing, but for me, it meant nothing.” The experience, however, did bode well with Foley’s engineering background in the eyes of the Harvard Business School admissions office. He graduated with his MBA in 2001. “It was a big deal for my confidence,” he says. “Most of the kids there were already going places in life. I was just some side door guy from Key Largo.”
Foley rejoined Citysearch, which, at that point, had been acquired by media mogul Barry Diller. He spent the next few years rising through the ranks in consumer internet, with positions at Ticketmaster, Evite, and a brief stint as president of e-commerce at Barnes & Noble. “But it was too little too late.” Amazon was already dominating e-commerce book sales. Then, in 2012, he founded Peloton.
Google Foley’s name, and among common searches that appear is: What happened to John Foley Peloton? To summarize a decade-long story marked with extraordinary highs and deeply humbling lows, Foley, a die-hard fitness enthusiast, cofounded Peloton alongside Tom Cortese, Yony Feng, Hisao Kushi, and Graham Stanton, initially raising close to $4M. The brand’s stationary bikes and, later, its treadmills aimed to bring the boutique studio fitness experience to people’s homes, complete with internet-connected tablets streaming live and prerecorded workouts from instructors who have since become niche celebrities. As the company steadily gained a cult following, lucrative investments allowed Peloton to open a studio in New York, expand to Canada and the UK, and funnel millions into marketing. The infamous “Peloton wife” commercial in 2019 did not go over well with audiences, and being on both sides of lawsuits with Flywheel and the National Music Publishers Association was time-consuming and costly. But the pandemic was a boon, with sales increasing by 66% as quarantine relegated workouts to the home. Things were good, until they weren’t. Keeping up with the demand proved to be a challenge, and amid supply-chain issues, injury-related recalls, and margin miscalculations, Foley resigned as CEO in February 2022. Seven months later, he stepped down as executive chairman. His net worth, once estimated to be north of $1 billion, reportedly declined by 87%.
“When I started Peloton, I was 40; now I’m 52,” Foley says. “It feels like I went up pretty high and came down pretty low. Financially, it’s as if those 12 years didn’t happen, and reputationally, I don’t know whether my reputation is good or beleaguered. I like to think it’s more good than beleaguered, but let’s call it neutral.”
So. What did happen to “John Foley Peloton”? The founder of a white-hot startup who finds themself divorced from the company that was their raison d’être for years has become something of a cultural trope at this point. And like other such figures, Foley has been eager to work on a second (or third or fourth) act. Foley found his route there on the floor—literally. The idea for Ernesta struck around five years ago, when Peloton was about to start its peak. “I had a friend who I tried to sell on starting this company,” he says. “I sat with him for weeks and weeks and tried to explain what this was, and he fortunately or unfortunately couldn’t get his brain around it. When I was transitioning to chairman of Peloton and realizing that there was a chance I wasn’t going to have a day job, I started double-clicking myself on this opportunity and very quickly got super excited about it.” Whereas fundraising for Peloton was a years-long process with thousands of nos, Foley secured a Series A investment of $25M after a handful of phone calls and meetings with investors he’d previously worked with. The company name was coined after two people Foley grew up admiring: Ernest Hemingway, and Bob Marley, whose middle name was Nesta. Ernesta rugs, Foley says, are elevated and understated, like a Hemingway work. Plus: “When more of your hard surfaces are covered with soft surfaces, music sounds better. So, Ernesta is kind of a nod to inspiring folks from the arts.”
The leadership team includes Peloton alums Feng and Kushi, as well as chief merchandising officer Rosa Glenn. DeLuca, the senior merchant, briefly worked with Glenn at West Elm. Earlier this year, Ernesta moved into an office in New York City’s Chelsea neighborhood; the operations arm of the business is based in the unassuming “carpet capital of the world,” Dalton, Georgia.
“There are probably 10 or 12 huge supply partners that make rugs and carpets,” Foley says. “So, we will sit down with them and they will show us a thousand different styles. The merchandising is, ‘Okay, of these thousand, we’re going to buy these 20.’” On the day of our interview, 12” x 12” Ernesta samples—all styles that made the cut and have been added to the brand’s assortment—are perfectly arranged on Foley’s long rectangular dining room table, where we’re sitting. Some are plush, some are pet-friendly; none that look like they were in your grandmother’s house in the ’80s. “We like to say that our aesthetic is elevated classics with a twist,” DeLuca says. We clock a flax-hued sisal style, which she notes is “more about texture,” and a leather-accented, hand-loomed wool design that’s “more about pattern.” The range includes indoor and outdoor styles, and performance rugs made from synthetic fibers. “It has the look and feel of a viscose or silk,” DeLuca says of the performance offerings, “but it’ll hold up a lot better than that type of product. It’s not going to stain and shed the same way.”
Purchasing an Ernesta rug begins with selecting samples that the company sends to your home for $5 when you register. (Those who need help choosing can share photos of their space through their website and get suggestions from a design specialist.) “We’re trying to build our business so that it’s accommodating and comfortable and easy,” Foley says. Rugs start at $250 and can go up to the low five figures. For an additional charge, there’s an option to purchase a rug pad. As with Peloton, Foley is hoping to make Ernesta personable, despite it being a digital-first company.
“When you think about the hooks between Peloton and Ernesta,” he says, “Pre-Peloton, Ally Love would come to your basement and train you for an hour and a half. Now, Ally Love is on the Peloton screen and streaming to millions of homes around the world. Similarly, an interior designer might [have] come over and shown you some rug samples. In the coming months, we’re going to have the design team on camera explaining why you might love this particular fabric, or why this will be the color of the season.”
On a typical day, Foley wakes up around 6:30 A.M. “I do sometimes get on the Peloton,” he says, “[and] I’ve been running a lot by the river.” He takes a simple commute two stops on the subway. Evenings are reserved for time with his wife, Jill Foley—an attorney with a background in children’s services, who also worked as Peloton’s vice president of apparel—and his two kids, a 15-year-old son and an 11-year-old daughter. Foley serves on the board of his kids’ school in Brooklyn, supports his wife’s advocacy for underserved children, and is currently planning a fundraiser for Manhattan district attorney Alvin Bragg. The career aspirations he had prior to his Peloton exit are on hold.
“I was planning to get into politics coming out of Peloton because I had [the] money and I had a reputation,” he says, adding that he hopes to one day serve the country as his father did. It’s a desire that’s heightened over the years, given his experiences living in Florida, Georgia, Texas, California, and New York—all politically polarizing states. “Quite candidly, I absolutely struggle with the far right, but also in some ways with the far left. I feel like we need a more moderate, unifying voice to help heal some of the situation that’s unfolded, and I feel like I could do that.” For now, though, he’s focused on building his new business.
“I feel a ton of pressure for this to be successful,” Foley says of Ernesta. “I have to reprove myself and, one, show that the Peloton success when it was happening wasn’t luck; and two, prove to, I guess, the world, that I am a businessman worthy of betting on.”