John Foley speaks honestly about the Peloton accident and his latest project Ernesta

John Foley bets that his best days are still ahead of him.

The same goes for many of his original investors and employees from Peloton — the fitness company Foley founded in 2012 and left a decade later — who have followed him to his new venture, carpet manufacturing company Ernesta.

While rugs are a surprising next step after starting a fitness giant, Foley said he's been talking about starting the company for more than a decade and even mentioned it to investors in Peloton's early days.

“Ten years ago I sat next to Lee Fixel [CEO of Addition Capital] at a board meeting, and I told him about this carpet startup I wanted to start, and he looked at me like I had three heads,” Foley told The Post.

But he was convincing: Fixel eventually invested in Manhattan-based Ernesta after its founding in 2022.

“I love carpets, I love interior design,” Foley said.

Ernesta – a portmanteau of the first name of his favorite author, Ernest Hemingway, and the middle name (Nesta) of his favorite musician, Bob Marley – is a direct sales company that allows buyers to customize the pattern and dimensions of the rug to fit any room and delivers the finished product within two weeks.

While Foley, 53, is happy to talk about Ernesta and how he believes the company can generate as much as $500 million in free cash flow by 2030, he also speaks candidly about his time at Peloton, the company's high-profile fall from grace and how his life has changed since leaving.

“Oh, I'm an open book,” he said of his brief time as a billionaire. “You know, at one point I had a lot of money on paper. Not really [in the bank]Unfortunately, I lost all my money. I had to sell almost everything in my life.”

At its peak – during the pandemic lockdown – Peloton was valued at $50 billion. But overproduction, recalls, bad press and declining interest in the expensive bikes reduced the company's value to just $1.2 billion earlier this month. (On Thursday, it was reported that a 40% rise in the company's share price had pushed the valuation to nearly $1.7 billion.)

While Foley spends his summer weekends in the Hamptons, he has downsized twice – including selling a $55 million waterfront home in East Hampton on pricey Further Lane. “My family has taken it well. My wife is super supportive. My kids are probably better off if we're being honest.”

During the week, he is at Ernesta's headquarters in Chelsea with 40 employees and is fully focused on success.

“I'm working hard so I can make money again… because I don't have much left,” he joked. “And that's why I'm hungry and humble.”

This sentence – which is also his Instagram bio – has guided his career.

Foley, who grew up in Florida, graduated from the Georgia Institute of Technology and financed his studies at Harvard Business School by working as a night shift supervisor at a Mars Inc. candy factory.

“I always said I was in charge of quality assurance at Mars and that I would separate the Ms from the Ws,” says Foley, who has a self-deprecating sense of humor.

He later founded several consumer technology companies and became a member of the executive team at Barnes & Noble before founding Peloton. The brand's wild ride began months after its IPO in 2019 – when demand for at-home workouts surged in the early days of COVID.

To keep up, the company overhired and overinvested in a new $400 million factory. But when Americans were allowed to venture outside again, Peloton's popularity waned and its stock plummeted.

Then, in December 2021, Mr. Big died of a heart attack in the premiere episode of the “Sex and the City” reboot, “And Just Like That…” – while the character was riding a Peloton. And suddenly the company's stock plummeted 11.5%.

Foley became a public scapegoat.

“We came out of Covid. The stock was crushed. There was a leaker [who told the press of pending layoffs]. We had an activist in the stock,” who wrote to the board demanding Foley's firing, he recalled. “And then this thing happened with Mr. Big … it was brutal.”

“We really thought we were doing something special for the world. We really cared about our members. We cared about our shareholders, we cared about our employees. And suddenly we were just ridiculed… everything fell apart,” he said.

Foley resigned as CEO in February 2022.

But by the end of the year, he had raised $25 million for Ernesta from two major venture capitalists, Fixel and John Callahan of True Ventures, who had previously invested in Peloton—a sign that Foley's success there was no mere fluke.

“I don't think we got lucky at Peloton. I think we were good,” he said of himself and his team. “And if we're good, we can do something similar: build a similarly disruptive consumer brand and deliver above-average shareholder returns in the home goods category.”

Ernesta's COO Jamie Beck, Chief Sales Officer Jennifer Parker, Co-Founder and Chief Legal Officer Hisao Kushi, CMO Alan Smith, CTO Yong Feng and VP of Product Marissa Vivori all came to Peloton from Ernesta.

And Foley believes carpets may be the next big trend. “It's hard to find data on this because the sector is not well covered… it's extremely fragmented,” he said, noting that 70% of carpet searches on Google are unbranded. “It's going to be a high-margin opportunity for us.”

However, he has no interest in bringing a company back to the stock market.

“[Peloton shares] fell from $170 to $2…with this kind of delta, I don't trust the public markets to set prices properly… [Peloton is] a $40 or $50 company, as I see it today,” he said. (The current price is about $4.50.) “The contract that the public markets get a right to value is broken.”

Regardless of the outcome, Foley is convinced that New York is the best place to run a business.

“I think a New York entrepreneur has an advantage because of the flow of information they're exposed to – the dinner parties with diverse, dynamic conversations,” he said. “New York is the best place to live, either when you're walking up the hill or, hopefully, when you get to the top of the hill.”

Foley is ready to attempt the climb again.

“I think John Foley's best days may still be ahead of him,” he said. “I love a good underdog story.”