I'm thinking of a bicycle startup?

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I'm thinking of a bicycle startup?

Postby iSamurai » Mon Jun 10, 2013 9:18 pm

Hello! Just want to get your thoughts on this idea.

I'm a mechanical and aerospace engineer and whilst looking at engineering jobs in the bicycle industry, I thought why not start my own company? I absolutely love cycling and I ride everyday (well, weather permitting). It'd be a dream come true if I can combine my two passions together, along with people who share the same idea. I know that there are several well known companies out there that had similar beginnings as well...

One of my goals is to have the R&D here locally and to have "Made in Australia" stamped on the frame, when there aren't many Aussie brands around. The manufacturing industry would tell you otherwise that making anything in this country is unsustainable (in the current economic climate). I know that starting a business is massively challenging and if you've successfully started a company, chapeau to you!

I think the main challenge from an engineering perspective is to come up with a few frame designs that are as competitive as the major bikes out there, have the facility to manufacture them and to keep the cost competitive. The other bits like the gruppo and components would be stock. I know quite a bit about engineering design, CAD, manufacturing, some CFD and have worked extensively on composites, but I would require some help, especially with "Business 101". I also know a few friends from uni who's into sport science and the physio stuff.

For the time being, this is just an idea I tossed up and I'm obviously sticking with my office job. But yeah, what do you think?
Last edited by iSamurai on Mon Jun 10, 2013 9:38 pm, edited 1 time in total.
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by BNA » Mon Jun 10, 2013 9:29 pm

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Re: I'm thinking of a bicycle startup?

Postby thecaptn » Mon Jun 10, 2013 9:29 pm

Yeah don't give up your day job right away.
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Re: I'm thinking of a bicycle startup?

Postby Bob_TAS » Mon Jun 10, 2013 9:40 pm

I think it's a great idea but as thecaptn insinuated, there are a lot of sacrifices along the way and definitely a slow process.

Working with many client businesses of all sizes, I would happily provide provide some input in return for 20% of net :wink:

If you're serious, then the first stage is to get your dream onto paper. This is where a business plan can be drawn from.
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Re: I'm thinking of a bicycle startup?

Postby neoppg » Mon Jun 10, 2013 9:47 pm

Good on you IMO mate. Nothing better than doing something work wise that you enjoy. Yes, won't be easy and let's face it producing locally the odds are probably stacked up against you...... But that would make it all the more sweater if it takes off.

I do a little part time thing with bikes at the moment helping a friend out as my real job is making pizzas. Let me tell you. I can sell 1 bike to 1000 pizzas but the bike is a whole lot more rewarding!

With your skills and qualifications, your already way ahead than many others!

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Re: I'm thinking of a bicycle startup?

Postby iSamurai » Mon Jun 10, 2013 10:29 pm

Thanks guys.

Yep, of course I will still show up at work tomorrow ;) I'm aware that this is a long process and would take years just to get somewhere, but I think if it takes off it'd be the best thing ever. Manufacturing in Australia is never competitive, but I think we've got the brains for the R&D.

@Bob_TAS thanks bud, however I don't even have it on paper yet. I think I'll start by doing some homework first :P
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Re: I'm thinking of a bicycle startup?

Postby MattyK » Mon Jun 10, 2013 10:37 pm

Consider these points.

Cost of developing a new design, prototyping, and bringing to market.
cost of proving that design is "better" than what someone else is already making
Cost of starting up a workplace, insurance, employees, overheads.
Cost of tooling, materials, labour, profit margins necessary to pay off your investments
Cost of convincing someone to pay for a product from an unknown brand with no track record.
Cost of complying it to UCI requirements.

I would take a rough guess that a first-off production ready carbon frame would cost you at least 100-200 thousand, but I'm probably being conservative.

Then consider what you could do to stop someone ripping off your design and making it in China for 1/10th the cost.

If I were mad enough, I would consider starting with creative design products (eg accessories and components) with a USP that hopefully don't already exist on the market.

FWIW I work for an Australian high tech manufacturer and my wife runs her own startup business.
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Re: I'm thinking of a bicycle startup?

Postby iSamurai » Mon Jun 10, 2013 10:58 pm

MattyK wrote:Then consider what you could do to stop someone ripping off your design and making it in China for 1/10th the cost.

If I were mad enough, I would consider starting with creative design products (eg accessories and components) with a USP that hopefully don't already exist on the market.


Thanks bud, that made me LOL hard! I know you can get these el-cheapo frames from China for a few hundred bucks -- and the reviews aren't so bad either. However I thought I'd totally miss the point if I became primarily an import business. As a side note, I want to build one of these frames up just for a side project, and then ride it around like the "Road Bike Party" video on Youtube.

As for the accessories thing, I'm already on it, hoping to have it on Kickstarter later this year. This startup idea originated from that. I think that'll provide me some useful experience :)
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Re: I'm thinking of a bicycle startup?

Postby rjk » Tue Jun 11, 2013 8:18 am

one thing about cycling enthusiasts, is that they love their quality and bling bikes.

Look at BAUM ctcles in vic, they have a waiting list for their bikes.

Cyclists love their bikes and are prepared to pay for QUALITY QUALITY QUALITY, you need to establish great customer service and great quality bikes, once you do that they will come flocking to you, well maybe in dribbles, :)

Reputation is everything, just make sure you do right by your customers and word will spread by mouth, that will get you more customers than advertising
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Re: I'm thinking of a bicycle startup?

Postby Ross » Tue Jun 11, 2013 8:54 am

There was a guy posted on here a while back (last year I think) that was going to something similar but he was going to import frames (made I think to his specs) and build up bikes with custom paint jobs. Not sure if he ended up going through with the project.

As MattyK pointed out there's quite a few things to consider with your business idea.
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Re: I'm thinking of a bicycle startup?

Postby jaffaman » Tue Jun 11, 2013 9:29 am

This post is going to sound negative, but I don't want it to be. I'm not claiming to be a business expert, but I had a little time owning a small retail business and have spent quite a lot of time looking at and thinking about the Australian bike scene recently as I struggled to find someone to sell me a bike I wanted.

Before you started on this adventure, you would need to have your plan well thought through. What will be your unique selling proposition - i.e. why would someone buy from you? The answer to this is the first step. Lots of other questions as well - which may help answer this main one.

Custom or Mass market through dealers?

If mass market, what will make existing dealers with existing relationships with manufacturers stock your product and risk their relationships with their current suppliers? If you are going to do bikes that fit the UCI restrictions like everyone else, then what will make you special? Can you out-engineer, out-test, out-manufacture, out-market and out-price the big boys in the industry?

If you go non-UCI then you could build something more unique, but what would it be that would be successful? We already have world leading manufacturers of recumbents and tricycles, so that space is probably well covered. We have had some other companies doing unique things come and go. It is hard in a market like Australia to find enough folk willing to buy unusual bikes to keep afloat which is why nearly all the "different" bikes come from the US or to a lesser extent Europe. IMHO there are some gaps to be filled in terms of bikes available locally, but the challenge would be finding buyers for what will be niche products - you would probably need to create and fill the market yourself, doing a lot of it on-line and in the face of the market presence of the big manufacturers. But building the volume necessary on an unknown product from an unknown company would be the trick, particularly if it is a bit different. To create and fill your own market you need more skills in marketing and business then in bike design and building.

If you go custom, it generally will mean more expensive - at the higher end why would someone spend big money on a bike from you when they could go to well established existing custom builders with a good reputation. Not saying there isn't a market here, but as was said before, reputation is everything, and with no reputation.....? What will make them come to you and not to an established custom builder like Baum?

Being Australian isn't in itself going to be enough. There are a number of Australian bike companies already, yet they generally hold only a tiny percentage of the market. Avanti (NZ company so sort of local) is an exception, but I believe all the frames are built overseas? There is plenty of evidence in this forum that price is king, or sometimes quality is the driver, and country of origin is in the end of little value. Two products of same quality and same price and one local, the local might just get a win, if the local's reputation was good enough. But more expensive or lesser quality and it won't happen. Think Australian cars - nothing wrong with them, but struggling to compete with overseas manufacturing. No-one buys their cars just because of the made in Australia sticker any more - bikes will be the same.

Not that I want to put you off, but you need to know the answers to all of the above well before you set out on this journey.
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Re: I'm thinking of a bicycle startup?

Postby barefoot » Tue Jun 11, 2013 9:30 am

You'll need to have something unique to bring customers to your bikes ahead of everybody else's. A differentiator.

There are very, very few genuine innovations in cycling. Most differentiators are marketing. The others are mostly heavily marketed incremental changes on an existing product that had a good reputation (mostly through heavy marketing).

So, to succeed in the cycling market, you'll need some very good ideas, and lots of marketing. Especially the marketing.

However... almost all "revolutionary" ideas in cycling are junk. Most are re-heated implementations of ideas that were tried and failed in the 1890s... and often, a few times since then. Don't go there.

There is some mileage to be had in engineering marketing. Find a technical solution to a problem people didn't actually have, give them a solid technical explanation of why they need to solve this problem, and how your solution will make everything better for them.

I've done a bit of this kind of stuff, under duress at the insistence of marketing people. I've been repeatedly dismayed by just how gullible people are, how quasi-technical nonsense and a heavy marketing budget can get customers to believe in "innovations" that make no difference to the product. Yes, I'm a jaded cynical bastard. Working with marketing people will do that to an engineer.

To make money in the cycling world, you're going to have to give customers what they want. And what they really want is smoke blown up their knicks. Marketing. Lots of marketing.

Good luck.

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Re: I'm thinking of a bicycle startup?

Postby thecaptn » Tue Jun 11, 2013 10:03 am

What about custom hand made and fitted carbon road frames? You could design adjustable moulds with interchangeable tube lengths which the Chinese couldn't copy unless they saw it. If you could make a quality product while keeping the price realistic they could be popular. And I should get free frames for life for thinking of it.
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Re: I'm thinking of a bicycle startup?

Postby thecaptn » Tue Jun 11, 2013 10:14 am

Actually it would make more sense to make adjustable frames that individual moulds could be made from. And I get free frames.
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Re: I'm thinking of a bicycle startup?

Postby rkelsen » Tue Jun 11, 2013 10:17 am

If you're new to business, then I'd highly recommend that you read this book: https://en.wikipedia.org/wiki/Iacocca:_An_Autobiography.
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Re: I'm thinking of a bicycle startup?

Postby lock_ » Tue Jun 11, 2013 10:31 am

Probably worth having a look at Argonaut Cycles. They seem to be what you'd like to become; both it terms of frame manufacturing process/technology and local production (albiet US based).
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Re: I'm thinking of a bicycle startup?

Postby thecaptn » Tue Jun 11, 2013 10:54 am

lock_ wrote:Probably worth having a look at Argonaut Cycles. They seem to be what you'd like to become; both it terms of frame manufacturing process/technology and local production (albiet US based).

Someone beat us to it :cry:
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Re: I'm thinking of a bicycle startup?

Postby __PG__ » Tue Jun 11, 2013 11:29 am

I agree with jaffaman - go and make some non-UCI carbon monocoque wonder bikes for guys who like riding Audax rides etc but want a comfortable, aerodynamic bike.

PM me if you want someone to do CFD analysis. I've got over a decades experience in the automotive, aerospace and defence industries.
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Re: I'm thinking of a bicycle startup?

Postby george-bob » Tue Jun 11, 2013 12:42 pm

The issue with any bike start up is what can you possibly offer that major brands can't. You are unlikely to produce bikes that are lighter or more aerodynamic. So performance probably won't be your major selling point.

So, how do you differentiate yourself?

One example is Chappelli Cycles, who differentiate themselves based on design, catering for fashion and design conscious riders.

Other examples include bespoke carbon frame manufacturers catering to those with specific needs and deep pockets.

Alternatively there are the enthusiastic steel builders like English Cycles who produce custom steel frames.

Another interesting brand is Tririg, they produce highly specialised and designed components specifically for triathlon use. So far they have pedals, brakes, stem, bars and extensions.
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Re: I'm thinking of a bicycle startup?

Postby zero » Tue Jun 11, 2013 1:48 pm

iSamurai wrote:
One of my goals is to have the R&D here locally and to have "Made in Australia" stamped on the frame, when there aren't many Aussie brands around. The manufacturing industry would tell you otherwise that making anything in this country is unsustainable (in the current economic climate). I know that starting a business is massively challenging and if you've successfully started a company, chapeau to you!



Teschner and Llewellyn are Australian bike makers, although I rode an australian fabricated Teschner frame to work today, not sure they lay up their CF frames here anymore (they import their custom frames from Italy which I can't imagine they would do if they were building CF frames here). I doubt however that a fresh spend of money could easily replicate Teschners bike design experience or easily convince the bike buying public that you were in fact the real deal. ie to gain sporting traction, you'd have to have a raceable frame, and sponsor teams and riders for some time. In the end people would have to choose your bike over a specialized or a BMC for it to work.

The low end is even harder, as you cannot gain any mystique via R&D or race results that will sell you thousands of units at any price above bottom dollar without building higher end bikes, and the entry level to compete with is quite high - ie an Oppy A5 has a hydroformed frame which is probably not cost effective to replicate here - I'm not convinced there is any volume hydroformed aluminum tubing supplier here. Note my Teschner was built from an American drawn tubeset, an inefficiency that was only ever feasible for high end bikes with their high end margin.
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Re: I'm thinking of a bicycle startup?

Postby ldrcycles » Tue Jun 11, 2013 2:54 pm

I would look at how Ritte bikes in the US came about. IMO when it comes to selling bikes, price is not the big thing (or we'd all be on Reids and Cells) nor is quality to a certain extent, the big reason a lot of people will pick one bike over another is emotion/fashion. Why do you think Pinarello sell so many bikes? They aren't cheap, they don't have a focus on utter perfection like Baum or other custom makers, and to my eyes at least, they are definitely not attractive. But they have a fashionable Italian name and for years Pinarello has been something to aspire to (like BMW for instance).

As for the viability of local manufacture, from the manufacturing companies I have worked for/seen, the issue is not that goods cannot be produced at a competitive price, it's that goods cannot be produced at a competitive price with the appalling inefficiencies and attitudes from both workers and management.
When man invented the bicycle he reached the peak of his attainments- Elizabeth West.
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Re: I'm thinking of a bicycle startup?

Postby iSamurai » Tue Jun 11, 2013 10:56 pm

Thanks for all of the responses! Much appreciated. Originally I tossed up this idea thinking how far it would go... but after reading the feedback I'll definitely put more thought into it, especially with the USP that was much emphasised throughout.

My intention is to develop high quality road racing bicycles with emphasis on cutting edge engineering, and at the same time looking beautiful. I guess as an engineer, it's all about the numbers but I do agree that you gotta market the hell out of it. Afterall, when you buy a car, it's an emotional decision ;)

jaffaman wrote:This post is going to sound negative, but I don't want it to be.
...
Being Australian isn't in itself going to be enough. There are a number of Australian bike companies already, yet they generally hold only a tiny percentage of the market. ... Think Australian cars - nothing wrong with them, but struggling to compete with overseas manufacturing. No-one buys their cars just because of the made in Australia sticker any more - bikes will be the same.


Not at all mate, that's the kind of scrutiny that I was looking for. The thing with Aussie bikes, is that they are virtually non existent. Malvern Star IIRC is now under the same parent company as Avanti. So I see an opportunity here. Just gotta be careful and look at why the car industry is bleak these days though. As for the Made in Australia sticker -- obviously most of us would buy the more value for money option these days, however I was thinking more about international exposure. People overseas (well at least my friends from abroad) apparently love Australian stuff (don't know why, but I'll find out). Kinda ironic that we don't make much stuff (like bikes) to sell them, apart from agriculture, mining resources, cars and tertiary education.

thecaptn wrote:What about custom hand made and fitted carbon road frames? You could design adjustable moulds with interchangeable tube lengths which the Chinese couldn't copy unless they saw it. If you could make a quality product while keeping the price realistic they could be popular. And I should get free frames for life for thinking of it.


Speaking about that, I think that'd be great for low volume production and thinking about how to upscale that to slightly higher unit numbers. One problem would be that pretty bikes these days have different shapes (not just a straight tube) for different sizes as the tubes usually taper and have different bend radii etc. As for the free frames, I can't make promises now but I hope one day I'll be in a better position to answer that question ;)

lock_ wrote:Probably worth having a look at Argonaut Cycles. They seem to be what you'd like to become; both it terms of frame manufacturing process/technology and local production (albiet US based).


Cheers, that's the kind of direction where I'd like to go. Another company I had a look was Devinci, a Canadian company also started out with two engineers and they make their bikes locally. They've expanded considerably though, making MTBs, hybrids etc. whereas I would just like to look at road bikes (at least for now).

__PG__ wrote:PM me if you want someone to do CFD analysis. I've got over a decades experience in the automotive, aerospace and defence industries.

Thanks for offering. I'll keep that in mind, and once I've got some concrete plans and if I proceed with it I'll get back to you.

george-bob wrote:The issue with any bike start up is what can you possibly offer that major brands can't. You are unlikely to produce bikes that are lighter or more aerodynamic. So performance probably won't be your major selling point.


This is the sort of thing that I think it's gonna be difficult to do, but doable. I'm just thinking it's gonna be fun (says no one ever) doing countless iterations of CFD and FEA simulations... but that's okay. In one of Cervelo's white paper on the RCA IIRC they did two dozen iterations on the seat stay. But I'll worry about that later.

ldrcycles wrote:I would look at how Ritte bikes in the US came about.

Thanks for pointing that out.


So all in all I think I have some homework to do and a lot of questions to answer. I'm just wondering why there's not really any Australian bike makers out there on the international stage. Also I'm just a bit uncertain about putting so much time into its conception only to find out some guy is also putting something similar together but has a lot more cash to throw at it haha :P



Edit: So far there's been quite a bit of discussion on the business side of things. What do you want from a design perspective for a road bike? I'm thinking the main boxes to tick are: looks, weight, stiffness/ride quality and aerodynamics...
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Re: I'm thinking of a bicycle startup?

Postby ldrcycles » Tue Jun 11, 2013 11:29 pm

iSamurai wrote:
Edit: So far there's been quite a bit of discussion on the business side of things. What do you want from a design perspective for a road bike? I'm thinking the main boxes to tick are: looks, weight, stiffness/ride quality and aerodynamics...


IMHO, and not wanting to be negative at all, for someone wanting to make big innovations or radical improvements, I think the bicycle is about the worst possible target. It just happens to be something that they got just about perfect first time round (yea yea ok not including the high wheeler/penny farthing etc) and the last century or so has just been a bit of tweaking and refining.

Especially in terms of road racing bikes, there really isn't much difference between them nowadays besides aesthetics from where i'm sitting. Maybe come up with an integrated aero brake that doesn't have the cable sticking out the side like a sore thumb, that looks silly.
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Re: I'm thinking of a bicycle startup?

Postby AUbicycles » Wed Jun 12, 2013 12:41 am

What we can learn about most of the brands mentioned, regardless of size is that they tell a story - and despite technical prowess, a purchase also has a lot to do with the brand (of which the bicycle is a tangible representation) and how a person identifies with the brand and bike.

It is like a bottle of wine (if you are under 18, please look away), ever notice how much better it tastes when you are in good company or when you are at the winery and know the story of the wine as opposed to any old wine off the shelf. It is more than just the technicalities - though these details are still key.
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Re: I'm thinking of a bicycle startup?

Postby winstonw » Wed Jun 12, 2013 1:07 am

samurai, from my 50+ years on planet earth:
- you have a great and rare skill set. why compete with people who don't have your skills (and education), but have 30-40 years of passion driven experience (and hard yards poverty behind them?) my point is, you are trying to enter an industry already oversupplied by people who are passionate. and passion/obsession is a red flag. It means competitors are prepared to work for very little, so someone will always be undercutting you when you think you have something special.
- the industry is already mature = reached commodification stage. i.e. good frames are pumped out of China/Taiwan/Vietnam en masse for beer money. you should be looking at getting into a human need that is not so mature. i.e. for someone of your generation, I'd presume battery technology (nanostructured supercapacitor batteries?) and applications will be a hot area of growth in your life time.
- have a look at how successful Azzuri have been for Cycling Express. AFAIK, they commission frame production in China in a factory with reasonable quality control, stick decals on it, then market it with components that hit sweet spot prices. I'd be more than happy to buy an Azzuri if they didn't have such a gomer name, and they came in less cheap color schemes. I know over 10 guys who have them, and they are all happy with quality after riding them heaps. They were first to market with a reasonable quality generic frame at unbeatable prices.
If I was looking to make a buck out of cycling, I'd adopt the Azzuri business model - commission to be made in China or Vietnam....but add superior color schemes and several cooler brand names.....because most bikes are bought based on price and appearance. It's a marketers playground.
- If you want to get into innovating new designs etc, you'd be up for megadollars in satisfying safety standards and testing. How would you feel if your new design had mass failures and killed a few kids?
- another area I think there will be good growth in, esp if more bike infrastructure is forthcoming, is comfortable commuter and transport bikes - with trailers. I see more and more pressure on baby boomers to make their retirement dollars stretch further into old age. Doing away with a car helps a lot in that. Over the last 10 years, I've seen solid growth in the number of oldies cycling to the shops in some Brisbane suburbs....in fact, a couple of times I've thought about designing a granny trolley that I could tow with my bike but also just as easily walk around Woolies or Farmer's markets with - maybe an improvement on this
http://www.leggero.de/transportanhanger ... ui-89.html
- with your skillset, why not apply it to a more interesting engineering problem less likely to be solved by passion, like designing more durable lightweight hubs, or even a groupset? Read up on how SRAM started......or how about a more efficient on board generator/storage device. as phones and bike computers merge, and more people commute needing bright lights, I foresee large demand for onboard re-charging.
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Re: I'm thinking of a bicycle startup?

Postby cyclotaur » Wed Jun 12, 2013 9:17 am

Being able to combine passion with work is very rare, which is why we idealise it. The cycling business is already overcrowded with big brands and boutique makers. winstonw and others make this and many other good points.

If I were you I would look for some other high-tech line to utilise your skills and when/if you make a success of it you can commission your own bike brand, or line of components, accessories or clothing etc.... or maybe fund your own team.

That is, build a successful brand first and then capitalise on it to support your passion - which, at the moment anyway, happens to be cycling.

Whatever you do, enjoy it and give it a good crack, but don't let it consume you.
Good luck. :wink:
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