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.

 

Monday
Feb282011

Wheelie Big News (2 of 4): Demos, Demos, Demos

You call 'em demos, but we ride limos, too.  Thanks, Chuck D.  I love that song.   

People want to try our wheels, and we want people to try out our wheels.  We will be at some of the early season crits/circuit races with wheels available for people to demo in those races.  Here are the races we plan to be at:

  • Black Hills Circuit Race, Boyds MD, 3/19
  • Chantilly Criterium, Chantilly VA, 4/16
  • Carl Dolan Memorial Circuit Race, Columbia MD, 4/17
  • Fort Ritchie Classic Criterium, Cascade MD, 5/7

"Gee, Dave," I can hear you thinking right now, "that sounds great and I'd love to try that out.  Where do we go from here?"  Here's where we go...

  • Find our tent about an hour before your race (we may or may not be at all events for any given race, so don't make this your plan A for race wheels, m'kay?).
  • Demos are first come first served (see note above about not making this your plan A for race wheels, m'kay?).
  • Choose between FSWs, RFSWs and RFSC38s, as available.
  • We'll install carbon-compatible brake pads (as necessary) and make sure your limit stops are set correctly for our hubs.
  • Wheels will come equipped with really nice rubber (no better way to have you think the wheels are "meh" than for us to put mediocre rubber on them, right?)
  • You pay us $30 for carbon and $20 for alloy wheel demos, cash on the barrel, 100% of which is applicable as credit against any subsequent wheel or frame purchase.
  • Hand over your driver's license as security. 
  • Return them when your race is over.  Don't forget to grab your license.
  • Go home and hit "Buy Now."

Easy, right?  But what if you want to go with what you know for your race and just take a quick roll around the parking lot?  Well, we can do that too.  Bring your license, keep your cash. 

Send us a note to coordinate. See you at the races. 

Thursday
Feb242011

Wheelie Big News (part 1 of 4): 58mm and 85mm carbon clinchers

We have a number of deep-section announcements to make about our wheelsets. We could cram it all into one post but instead we're going to space them out over the next week or so to give you a chance to consume, chew thoroughly, swallow and digest. (Man I hate the part of the year when I'm focused on reaching race weight - I get a little preoccupied with food.)

The first is about our newest RFSC wheelsets, which will soon be available in 58mm and 85mm depths. The rims are from the same supplier that makes our excellent (and internally beloved) 38mm RFSCs and are nearly identical in construction except of course for the deeper sections. We just received a couple sets of the deeper rims to inspect and demo, and of course these same rims have been in service around the world for over a year so their reliability and performance was well-established before we even selected them. Even if you have not yet raced them yourself, you've probably gone shoulder-to-shoulder with someone who does.

The RFSC 58 Spec:
 - Rim: 58mm carbon clincher
 - Rim weight: 485g
 - Complete wheelset weight: 1550g
 - Spokes: Sapim Laser 20/24 (Sapim CX-Ray upgrade available for +$60)
 - Price: $885   
 - Pre-Order Price: $745 (see below) 

The RFSC 85 Spec:
 - Rim: 85mm carbon clincher
 - Rim weight: 605g
 - Complete wheelset weight: 1790g
 - Spokes: Sapim Laser 20/24 (Sapim CX-Ray upgrade available for +$60)
 - Price: $985   
 - Pre-Order Price: $845 (see below) 

 

Our New Pre-Order Pricing and Policy

We have decided to move away from a strictly pre-order policy for wheels. Part of the reason is based on demand: wheels are more of an impulse need-them-immediately-now purchase than a frameset and we want to have product on hand when racers feel the need for speed. But the other reason is supply. It is less expensive and risky to stock wheel goods than frames since we do not have to forecast different sizes in the same way we would for frames. If we have a set of RFSC 58s in stock, they will appeal equally to a 120-lb woman as they will to a 240-lb man. Having some inventory in wheels does not require us to price them significantly higher - even if they're in stock, they will still be the best deal you'll find.

But the heart of our model is unchanged: don't pay for anything that you don't value. So if you want to pre-order the wheels you can save $140. We have an order window that's closing in just a couple of days that we are taking advantage of (it's Taipei Cycle Show soon and we need to get an order in ahead of that to beat the rush). The rim supplier is forecasting 60-90 days, so it looks like we will be able to deliver wheels around mid-June at the latest (they came in on the early side of the forecast last time). 

We do not intend to stock a 755,000 square foot warehouse with wheels, however. If we could buy a few hundred pairs of each to have on hand, we certainly would. But the only way we could afford to do that is if we charged you twice as much for each wheelset you buy. So we'll have inventory, but it won't be deep inventory yet. Pre-ordering also ensures you will actually have a set of wheels with your name on them.

Inkling for speed? Tell us please.

If you want to pre-order the RFSC 58s or 85s, drop us a note. And "want" here encompasses "definitely want", "might want", "have a mildly discernible interest" and even "I'd consider them when they come in". We're new at this inventory thing so measuring demand - even if it's not immediate demand - helps us a lot.