Former Peloton CEO John Foley on why he launched his rug startup Ernesta

The Modern Retail Podcast

John Foley may be best known as the founder and former CEO of Peloton, but it turns out interior design is his real passion.

"I've been passionate about rugs for decades," he said on the Modern Retail Podcast. "I love design, I love spaces."

This was all said to explain why he launched a rug company. Ernesta is a direct-to-consumer brand selling higher-end rugs. It launched in September of last year and just opened its first showroom in Manhattan last month.

"Now I'm addicted to you know those super high-end custom rugs," he said. "And we're trying to bring them now to both interior designers and to consumers at a price point that most people can't afford."

Ernesta is still in its early days, but Foley said the business is growing and gaining a name for itself. As he described it, the hope is for Ernesta to do for rugs what The Shade Store did for curtains. He even sees Ernesta's business model looking similar to it. "[The Shade store is] right around 50/50, selling to consumers and selling to trade. So we believe we're going to be right in that zone," he said.

Still, the company is very young and still has a lot of learning to do. The biggest lesson thus far is figuring out how best to tap the vast and opaque world of interior design. While customers can buy their rugs directly from its site or store, Foley is also hoping to becoming a trusted partner to designers and firms.

"My team and I come from the consumer world, and so we understand consumers a lot more than we understand interior designers and the trade," he said. "So we're learning our way into it."

Now, with the first store open, Ernesta is hoping to see how well it helps grow sales -- and eventually continue building the business from there. The company is also planning on launching an online platform for customers to share their own designs and interior layouts in the hopes of inspiring others.

"We're building this scaffolding -- this product experience community -- onto Ernesta, he said. "And I think in the next six to 12 months, that's going to come to life and be a really special part of the shopping experience."