Thursday
Mar102011

Re-Premium-Branding

The 24 hour news cycle has definitely come to coverage of pro cycling, with I don't even know how many sites all carrying either the same exact story or slight variations thereof.  Which, as I write it, is perfectly in keeping with today's topic: re-branding.  Rebranding news, rebranding parts, rebranding sponsorships. 

One part of cycling coverage that's generally original source is small tech features.  Yesterday or the day before, Velonews.com had a photo essay on Denis Menchov's Fuji Altamira.  Nice bike, a lot gaudy for my taste, but nice.  I'm sure it's vertically compliant and laterally stiffer than get out, but the rear wheel photo instantly got my attention.  Before I even had a chance to see the caption I thought "what the heck is a Reynolds hub doing on those wheels?"

Geox's wheel sponsor is Oval.  This makes perfect sense from a corporate standpoint since Geox's bike sponsor is Fuji, which is owned by Advanced Sports.  Advanced Sports also owns Kestrel, and if I'm not mistaken the Geox TT bikes will be Kestrels.  Advanced recently bought Oval Designs to give them a branded house brand for parts, not at all unlike Trek's positioning with Bontrager.  From a product standpoint, I'm pretty educated on wheels and to my knowledge Oval doesn't have much history in wheels, but then again neither does November.  Not a huge deal.  But it gets sticky from there.

DT Swiss is a sub-sponsor of the wheels.  Their stickers go alongside the Oval stickers on the rims, which you can see on the bike behind Menchov's in this pic.  What does DT provide, exactly?  I don't know.  Their strongest product lines have traditionally been their excellent hubs (which they got into the business of by acquiring Hugi, another swiss company - and phasing out the Hugi name) and spokes.  They have also become known for alloy rims and pre-built wheel systems, and are now making a bigger push into carbon-rimmed pre-built wheels.  DT supplies hubs on an OEM basis to a bunch of different wheel brands, including but not limited to Fast Forward, Enve (nee Edge), and... Reynolds. 

A Reynolds DV-series wheel, to the best of my knowledge, is composed of a Reynolds-produced rim, a DT-produced hub (which I think is identical to a 240 except in branding), and DT spokes.  Reynolds makes their own rims, which are fairly easy to spot with their unidirectional carbon weave and slight green/brown hue.  They're nice rims, I've owned a set of them (although not exactly matched, keep reading).  Lower-tier Reynolds carbon wheels (Assaults, Attacks, etc) use a slightly heavier ("less refined" in catalog-speak) rim layup in the same mold shape, Reynolds-branded KT hubs, and DT spokes.

Reynolds sell their carbon rims to a few other companies.  One of them was Cane Creek, who produced the front wheel that was a very very close cousin to the Assault that I owned.  Cane Creek seems to be either completely out of the wheel business or maybe sort of in the track wheel business, but in either case no more road wheels.  Another company that sources rims from Reynolds is... (wait for it)...  DT Swiss!

A DT Swiss RRC Tubular or RRC Clincher wheel set consists of a Reynolds-produced rim (same mold shape), a DT 240, and DT spokes.  So the only difference between the Reynolds wheels and DT's RRC-T and RRC-C series is...  labeling.   And from sitting in our seat, we've got not an issue with that.  Anyone who wants to forego restful sleep could source, buy, and sell EXACTLY what we sell - with whatever stickers please them.  Unlike most, we don't rebrand our hubs because it seems more of a PITA to do it and it adds zero amount of value (actually we'd argue that it subtracts value), but the rims don't come with any branding so if you want some branding you have to make some branding. 

I need to note that DT also sells a carbon wheel set called the RR1250, which has a notably different rim and which uses DT's 190 hubs instead of 240s.

But back to the picture of Menchov's bike.  Who's on first there?  The only company that seems to have nothing to do with anything there is Oval.  It's a Reynolds-produced rim, and it looks an awful lot like a rebranded 240 hub, and from what I can tell those are DT Revolution spokes.  Unless Oval is buying Reynolds-branded DT hubs from Reynolds, and DT-branded Reynolds rims from DT, and DT spokes from someone else, and that's what an Oval wheel is?  In which case not only can you buy the same exact wheel set from DT and Reynolds, you can also buy it from Oval.

But if that's NOT what an Oval wheel is, then what's the point of this sponsorship?  Mike and I could buy a rack of wheels from someone else, put our stickers on them, and give them to a team and be a sponsor of that team.  But with the massive amount of information that's out there on all the internets, from blogs to news sites to forums, the days of plausibly passing something off for something else, especially in a market that craves information the way cyclists do, is long gone. 

If you're looking for me to make some huge relevant and poignant point here, I apologize but I'll have to disappoint you.  Mostly this falls under the category of idle navel gazing.  I just really can't understand what the point is there?  Of course when I brought this topic up to Mike, he sent back another picture from the same series - can you spot the "WTF?" without looking at the caption?  Is ANYTHING what it's supposed to be?

Tuesday
Mar082011

Wheelie Big News (1.5 of 4): RFSC 58s and 85s here by mid-May

The first of our series of 4 Wheelie Big News was the announcement of our newest deepest carbon clinchers - the RFSC 58s and RFSC 85s. Consider this an amendment to that particularly update.

Part 1 was the announcement of a flash pre-order for only a few days (sorry - we'll give more warning next time around), which closed on a Friday, saw us place the order for the pre-orders along with some extra inventory on Saturday, sell out of that extra inventory by Sunday, and then go grovel to our rim supplier to please please please let us order more rims on Monday. They said yes, so we have some additional stock of both the 58s and the 85s on the way. You can reserve yours whenever you like to make sure you get a set from our incoming stock, or shop around until they arrive to see if you can find a better deal (you can't - but we're not offended if you go look). 

Our rim supplier is highly skilled at managing expectations, and then surprising and delighting. Originally told we'd see up to 90 day lead times, we were informed after placing our order that they'd have our rims out of production in half that time. So we're projecting that we'll be able to deliver our RFSC 58s and RFSC 85s by mid-May.  

Also, we're giving a standing 10% discount on any of our RFSCs to Juniors, Collegiate Racers, Coaches, Officials or anybody on our Sponsored Teams. It's built right into the checkout. Admittedly, 10% off our prices isn't nearly as much as 10% off our competitor's prices, but it's still enough for you to pick up some nice rubber for your new hoops. 

The RFSC 38s are in stock now, by the way. We're building to fulfill existing orders and are projecting about a 2-week lead time to any new orders. Same with the RFSWs and FSWs - you buy 'em, we build 'em, straightaway.

Monday
Mar072011

Garage Dreams

As a startup, we've found that the only asset that rivals cash in critical importance is trust. Trust can be built a number of different ways, but many of them are outside of the scope of our business model. Advertising is the tactic most often used. Throw a sack of cash at your favorite print or online publication and a brand can jump out of a corner and spin up to speed as fast as a pair of 1370g carbon clinchers.

But what a brand is buying through advertising is not actually trust, but recognition. Yeah most of the ads you see have a "click here buy now!" component to them, but the other thing at work is that riders (and their influential friends) start to become familiar with a brand through the ads, and often end up adding a brand to a choice set because "they must be serious because I see them advertising everywhere." In most cases the advertising doesn't compel a purchase. Rather, it removes a reason to write off a lesser known brand. But advertising at a level necessary to engender this kind of trust is expensive. We could do it, but it would mean having to charge at least $100 more per wheelset, and $400 - $500 more per frameset. That would result in us selling less of either, which would compel us to raise our prices further to make up the shortfall. This is how brand new brands end up with premium positioning - it becomes the cost of doing business once you start the slippery slope of heavy ad spending. We decided from the outset not to go that route. (We do advertise on GamJams, but that's because we own it, allowing us to negotiate very hard for unreasonably low rates.)

Another way to achieve trust is through professional sponsorship. Dave and I both have written at length here on the blog about how paying pros to ride your stuff does nothing to make your bikes or wheels any more race worthy, resulting only in unnecessarily high prices for the buyer. But even if Bjarne Riis himself called us and said, "Boys, I like your bikes and really want my team on them next year," we couldn't do it. Our model is to buy bikes in November to deliver them to customers by the end of winter. Even domestic pro squads want their bikes in advance of that, which can only be achieved by already having them in inventory just in case, or by having enough influence on the means of production to accelerate a special order. Neither tactic is within or ken, so we don't play in that pond. (Be glad - if we did it would make our bikes even more expensive than the heavy advertising route - and no faster.)

PR is another way. I like PR because it's less expensive and - they way we intend to do it - more authentic. It encompasses everything from product reviews on racers' blogs, and whatever chatter our products are the subject of on the Facebooks or the Tweetster or the forums. For our part, we want people to experience and talk about our products - real people, who actually race bikes. Now that our products are arriving, we're going to be very aggressive about letting as many people as possible experience them. We already have some Test Ride Testimonials from the fall, but we'll be augmenting those reviews with, well, everything we can. 

Which brings me to the fourth way a brand can engender trust - be un-virtual. In the Mid-Atlantic, where Dave and I live and race, we actually exist as people. But to the rest of the country, we're just another website selling high end cycling products. We know how many other sites are doing the same thing (more than you would imagine). It's easy to discount a new brand's commitment or reliability or trustworthiness when you can't see their skin in the game. Websites are cheap and easy to construct; everybody sees generic carbon frames that go for $325 on eBay so assume they cost brands almost nothing to buy (it doesn't quite work like that, but the perception that it does is something every new brand needs to address); and our pre-order model which allows racers to save even more money ends up undermining our skin-in-game credibility even further. Surely any brand that had confidence would just buy $100K worth of inventory out of their own pocket, knowing they'll be able to sell it at a profit, right?

In any industry where you're selling actual products to real people, a physical location goes a long way towards building trust. It shows there is a commitment at least as long as a 12-month lease (and capital to back it up) and creates the illusion of being able to readily inspect and sample merchandise. I say "illusion" because if we had a store, we'd be no more accessible to our Mid-Atlantic customers than we are without it - perhaps even less. Right now, we'll be taking out show on the road almost every weekend, going to races and other demo functions. Even the most brightly lit downtown corner retail location won't be as close to 400 racers every weekend as our tent. So the irony of physical space for us is that its outcome would largely be to make us more trustworthy to the customers who live in Ohio, Florida, California or Colorado than the ones who live in Maryland, DC or Virginia. 

That's hard for us to stomach - adding the expense of a physical location just for the illusion of trustworthiness. We're happy if a physical space puts us more in the game, but we can't countenance any expense that doesn't translate either into an improved product, or improved service. So whatever physical space we may have one day has to work twice as hard for us, but cost only a fraction of what other "bike shops" cost. Dave and I have started to flesh out what those parameters are. In a conversation on one of the forums last week though, Dave managed expectations by saying "For now and for probably many months to come, we are a garage band."

In truth, we're more of a shed-and-storage-room band right now. A garage would actually be the ultimate upgrade. 20x24 with a roll-top door to make it easy to unload the van after race weekend demos, none of that foo-foo office carpet that gets ruined whenever a wheel tips over cassette-side down, enough space to rack our inventory of wheels and frames but not so big that we feel compelled to fill it with stuff we then have to discount in order to sell, space in the corner for a fit studio, and maybe room against the back wall for a TV by the espresso machine, which we'll park a row of trainers in front of for the 5 months of winter we seem to be having every year now. 

Now if we could just find such a garage - ideally at the intersection of River Road and Esworthy, where the only traffic is the two-wheeled variety - we'll be in business. Until then though, we have to earn your trust the old fashioned way - by telling you the truth about what we're doing and the products you're considering. 

 

Thursday
Mar032011

At A Crossroads

Get it?  I'm going to write about cross bikes.  Excellent, huh? 

In human years, we're less than a year into this thing.  In figuring out the ins and outs of how to get what, and from whom, and how long it's going to take to get, and how many we know we're going to sell, and how much of our blood and treasure we can put at risk terms, we're at least adolescent.  Are you there Sheldon Brown, it's me, Dave?  (Hopefully at least one or two of you actually get that reference).

We've received some excellent business advice that we'd like to share

By the way my mom also has a tattoo on her arm that says "son."  Too bad she got it for my brother.  Try the veal and tip your waitresses, kids, I'll be here all week.  Anyhow, where were we?  Oh, yeah...

So one thing we are not good at is moving immovable objects.  We can sell ketchup popsicles to a woman wearing white gloves in Miami, but we can't make the mechanism that is the Means Of Production move any more quickly than it will.  Which means that in order to get frames here in time for cross season, it would be necessary to make the pre-order deadline (literally) about 20 minutes after we're scheduled to get our demos.  Maybe 20 minutes before we get them.  We'd discussed a bunch of different ways to get that dog to hunt, but in the end we figured it just wouldn't.  The entirety of the Means of Production is right now focused on building and delivering the bikes you'll see in shops when the salmon return to Capistrano in a couple of months, and shop employees go from spending their days doing crossword puzzles to going bats--t crazy trying to keep up with the crowds.

It's not an ideal time of year to be trying to get demo frames here quick fast in a hurry and then turn around a big pre-order.

Our business model doesn't allow us the latitude to just stroke a check for an entire MOQ of cross frames, in sizes that we have no idea whether they'll match demand or not, with a product that we haven't gotten any sort of read on whether people love it or not.  We have to make the small plays, like being prepared for wheel orders that we know (hope?) are coming.  Wheels, you see, are one size fits all.  That's a huge thing, and it's probably a big part of why so many small companies have started off selling frames and wheels and then decided that it's just way better to sell wheels. 

Wheels are much more of impulse thing, where people plan and sweat the details and drive themselves nuts over buying a frame.  We're pretty darn positive that people are going to think great things about the cross frame we've got planned.  But we're also pretty sure that we are stone cold stupid if we think enough people are going to order it sight unseen, or having heard it looked pretty cool from some guy whose cousin's sister's boylfriend saw it parked outside of 31 Flavors (that one's for you, Charlie Sheen). 

So we're going to have a nice long road show and demo season: all stinkin' year.  That's right, we're going to take delivery of our cross demo frames sort of whenever.  Pretty soon, but we've stopped making the daily plaintive whines to the Means Of Production to please hurry up and get them to us faster than fast.  We'll get them built up and ride them like rented mules and invite our ultra secret team of cross lunatics to give them their worst.  And we'll let everyone who's interested give them a good test.  And then this fall, instead of giving people who only have eyes for cross a big fat dose of road bike, we'll give them a big fat dose of cross bike to go along with the big fat dose of road bike.  And we'll make it psychotically reasonable to order a frame from us next winter, to have it delivered in PLENTY of time for even the most rabid of "9 months 'til cross!!!" lunatic to start playing on it before the season.  

We know this is going to bum some people out.  In a perfect world, we'd be delivering cross frames this year.  But it's not a perfect world, and when we don't have a pretty freaking clear road map to exactly how this thing is going to work perfectly, or when we have a pretty strong sniff of the specter of delivery risk, we can't roll like that.  We are about to deliver our first order as promised (in the case of some wheels, even earlier than we thought), and we want to have that all go perfectly.  Maybe we're still walking when we're perfectly capable of running, but we really don't want to fall on our face.  

If anyone is actually capable of parsing out all the ridiculous references I made in there, well, you've spent too much time ingesting pop culture, and for that I apologize.   

 

Wednesday
Mar022011

The Flywheel Effect

I was talking to a couple of our customers yesterday about indoor winter training. Their position was that they're sick of it because they've been doing a lot of it; mine is more of a lamentation that I haven't done enough. Quickly though, the conversation shifted from practice to products, as is often the case when bike guys start talking about anything. One brought up the Lemond Fitness Revolution trainer, and talked about its realistic road feel due to the weighted flywheel. "You can stop pedaling, and the bike keeps on coasting!" he enthused.

Putting aside the fact that coasting isn't the best way to take advantage of your trainer time, his comment on "the flywheel effect" stuck with me throughout the day. Momentum is a powerful force in bike racing, and an elusive one. Many of the features in our own products, in fact, aren't designed to produce or preserve momentum, but to compensate for its loss. We went with an extra-stiff frameset so that when you need to accelerate after scrubbing off speed, the power you push into the pedals goes straight to the road. We source very light rims for all our wheelsets to help you spin up to speed quickly, since you just lost all your momentum by following that guy who took a lousy line through turn 3. And Dave is driving me positively batty with his email per day musing over new rear wheel lacing patterns that might squeeze out a little more rigidity and snappiness.

None of this would be necessary if bike racing was about getting up to speed and staying there - in the way TTs or triathlons are. Instead, bike racing is all about changing speed. The winner is the one who carries momentum the longest - either by getting off the front and staying there, or (much more commonly) finding momentum faster than everyone else at the 200 points in every race where it's lost. 

Business, it turns out, is a lot like bike racing in that regard. Especially ours, which is predisposed towards bike racing metaphors. There were times over this past winter when Dave and I sure wish we were training with a flywheel, so we could coast for a while and still keep our momentum. But starting a new business affords no such luxury. It's more akin to hill repeats on a 18 percent grade. Stop pedaling, or even ratchet back on the power by 50%, and you don't just slow - you topple over. 

But now, what we have going on is starting to feel suspiciously like that elusive momentum. The number of earnest inquiries about our products are up; we're selling through our inventory of frames and wheels; and we just had to go back to our rim supplier to add onto a pre-order for our new RFSC 58s since the extra inventory we took sold out as soon as we closed the order. We're still on a hill, to be sure. But I was expecting it to roll back onto us at the top. Instead it's flattening out a bit. If we punch it hard now and accelerate over the top, we could head into the fastest part of the course with some of that magical momentum we've been chasing since last summer.

And that's exactly what we plan to do. We'll be very visible at races and group rides this season (from the Mid-Atlantic to the Tour of California, but we can't talk about that for another few weeks), making it easy to demo our wheels and throw a leg over our bikes.

You'll see more of us on the Internets too, trying something with online media that other bike brands haven't thought of yet.

And you'll see our stuff on the line at your local races - under racers who bought it with their own money, not pros paid to ride whatever their director is able to secure for them. Go ahead and ask them their opinions, knowing that they're not contractually obligated to say the bike "is one of the best handling bikes I've ridden as it is stiff and has the ideal geometry."

Someone even asked if we're going to open a store soon, the same day I sent Dave an email with a commercial real estate listing alongside a well-traveled group ride route where I remarked, "Plus there's a kitchen, which is mint for serving espressos, brewing our own beer and filling water bottles." (Yeah, we look at brick and mortar retail differently too.)

We're having a blast and are thrilled every time another cyclist finds us and likes what we're doing. And we'll be even happier when we start delivering to our pre-order customers our wheels (being hand-built starting this week and beginning to ship next week) and our frames (sailing for NYC right now aboard this ship).

So while you are waiting for your products to arrive, don't just sit there being patient. Be demanding - tell us what else you want us to start selling, ask us to sponsor something your team is doing, invite us out to drinks. We're listening.