While most brands in mountain biking have spent the past few years pivoting towards more online sales, YT has just gone the opposite way. The Germans were trailblazers in the direct sales distribution model but it has now begun to build a number of physical locations including one in Guildford, just south of London in the UK.
The shop won't hold stock of bikes but it will be a servicing and demo location for YT customers. YT described it as like walking into a website and it certainly feels that way. Instead of seeing rows of bikes racked up and ready for sale, each bike gets it's own themed display, including a smoking vent for the Izzo, and plenty of space is given around each one for a customer to get a good look from all angles. Behind the showroom is where all the action happens. YT has now moved its UK customer service team in here and there's also a workshop that will service customers' bikes and a demo fleet.
The main goal here is to make customers feel more secure in buying a YT bike and then give them a better service when they own it. Previously, all YT bike repairs went back to the brand's headquarters in Germany, whereas now it can be done in the same country for the brand's British customers. This will save two weeks in shipping time alone and should get customers back on their bikes quicker.
We were invited down to the showroom to have a look round and, while we were there, caught up with YT's founder and CEO Markus Flossman to discuss the history of the brand and what these shops mean for its future.
Let's go back to the start of YT. What were you doing in your life before YT because you weren't in the mountain bike industry, right?
No, I was working in the fitness industry at the time as Head of Marketing for a big fitness chain group in Germany. And I was doing that for eight years before.
So what was it that made you transition from the fitness industry into YT?
Basically, I already fell in love with mountain biking at the end of the 90s because I injured myself by doing heavy squats. I had a double-disc prolapse and this was the reason my doctor advised me to stop weightlifting and do something else, like mountain biking for example. I fell in love with it and I was still working in the fitness industry but I always thought it would be cool to work in the bicycle industry someday. Then, in 2007, I met two young guys on a dirt jump track and they did so well on their old cheap rubbish bikes and... you probably know the story.
They were the reason for the name Young Talent.
Obviously you've talked all about this steel dirt jump frame you made, how hard was it getting your foot in the door in Taiwan?
You can imagine it was super hard in the beginning as a non-existing company a small startup company. It was just an idea to start with, it was not yet a company. So, I asked for 150 pieces of a frame and most of them didn't really take me seriously. It was a hard fight to get it into the business.
They didn't take you seriously because they didn't know you, or it just wasn't viable for them?
They didn't know me and of course, the quantities were so low that they said that it didn’t make sense for them and that it was not really relevant.
So what changed to be able to get that first order through then? How did you make it happen?
Yeah, there were a few suppliers who thought my idea of direct sales, especially with products for this young target group, made sense and they supported me. We had a lot of discussions with other vendors though where they said no.
Starting out, you need real OE prices to create a product that is competitive on the market. That was the hardest part. But there were still companies like Marzocchi, for example, that got me a real OE deal for only 150 pieces.
They were investing in your idea and saying 150 might not be great now but down the line, they could see the potential.
So you came in with this kind of direct sales approach. Is that something you borrowed from the fitness world?
No, not really. In the beginning, I thought about offering the bikes through shops. As a small bike brand with only one bike model, only a dirt jump bike, it was super hard to get into shops and was too complicated. I knew right from the beginning it was for the younger target group, which was already used to or open to buying stuff online. This was the easiest way for me to go. I had a friend of mine, he was into programming websites and workshops. We did a super basic webshop at the time. And yeah, that is how we sold it.
There was quite a lot of maybe animosity from the more traditional bike sales model towards brands like YT. How did that feel at the time? Was it a worry to you that people saw you as almost like the enemy?
Yes, of course, but it's always like that when you're entering a market where people think they own the market. Somebody new shows up and has a new concept. Everybody has the same chance, you know? It's like back in the day when you had the small grocery stores, now you have supermarkets. People who were complaining about direct sales at the time probably already bought Christmas presents for their wife on Amazon, so I didn't take it too seriously. Everyone is entitled to complain and to have an opinion, but honestly, I just didn't take it too seriously.
Was there a moment that you knew that approach was the way forward?
Absolutely, right at the beginning with those 150 bikes. I was still fully employed at this time and I did it as a side business, a side project. I managed to get 150 bikes to Germany, I assembled all the bikes by myself with a buddy at home in the garage. I drove to Munich to the guys from the German Freeride magazine and asked if they could promote it in the next magazine. They put it in a comparison test and we won the award for the best price/performance ratio. After 10 days, those 150 pieces were sold out, immediately. This proved that this concept could work. So, I quit at my job, put all my eggs in one basket, and founded YT.
And so how big is YT as a company now? So 10-ish years on from that.
We have around, I'd say 130 to 140 employees at the moment.
And how do you think you rank in terms of bike companies as a whole? Still small?
Yeah. Still a small company. Yep.
So how do you set yourself apart from other bike companies?
The brand, the main thing is the brand. The image. I think the top 10 brands in the world are quite close when it comes to products, but it's not only about selling a product. We sell a lifestyle that people want to be part of, we are a community. We focused on this right from the start. Offering bikes for a lower price because of the direct sales model is only one part of our story, the other half is the brand image we have created.
Do you think it's going to be harder to keep that community feel as the brand gets bigger?
I think it's always harder to keep the feeling and the vibe of a smaller company or a cult brand when you grow. But I think it's possible.
How are you going to do that?
By being real, doing things that we want to do, and not trying to be something we are not. Right from the beginning, we always did what we had in our minds. It has happened that we had a beer after lunch and we had a crazy idea for an advertisement campaign. I think many other companies would wake up the next day and say, "Ah, it was a crazy, a nice idea, but we won't do it." And we just thought, who gives a f*ck?
I think I know what advertising campaigns you're talking about there obviously. And why Christopher Walken, where did that come from?
Very much as I just described (laughs). I sat down together with Andy, our Creative Director, and we thought about this ode to real friendship, and who could perform this? Who could perform this? We said, "Okay, the only one is Christopher Walken". Then our media agency said we were crazy and that it would be far too expensive. I requested them to at least ask. In the end, it all went well. It wasn't as expensive as they had expected, and it worked out.
How expensive is it?
How expensive is Vinnie Jones?
Same answer, because it is part of our contractual agreement with the artist.
What was Christopher Walken's reaction? Cause I'm assuming he had never done anything like that.
The thing is, Christopher Walken was already done with doing advertisements. He didn't need the money and said, "I'm too old for this shit".
Still, we sent over the script, he read it and he was so pumped on it he said he would do it if we filmed it in his home area because he didn’t want to fly to Europe anymore. Basically, we convinced him of the story, with the script.
How do you measure the value in doing something like that? It's quite esoteric but how do you know that that was something worth doing?
It's hard to measure the value of a brand campaign. Of course, we can measure sales campaigns, that's quite obvious, you see sales numbers afterward. Doing campaigns like that pay into the image of the brand, which is hard to measure.
We are investing in the brand and I think it turned out quite well. Over the last years, we have been heading in the right direction and when you believe the surveys on different platforms we believe that we are one of the top brands worldwide, I think it worked out.
Do you feel like you have to outdo yourself now with each campaign?
The thing is, people expect that it will get bigger and bigger from campaign to campaign, but we always want to be different. It's not like we had Christopher Walken and are thinking who is next, who is the next Hollywood actor? No, it would be completely wrong to just stick to this approach. So, we did something completely different with the Izzo campaign and anime. Nobody was expecting that.
So talking about new directions, YT now has brick and mortar showrooms. Can you briefly kind of explain what prompted that and how it kind of came to be like this?
I think there are two main points why we did it. First of all, we wanted to bring the YT experience to the customer and make it palpable. We are not planning to have these kinds of YT Mills in every bigger city. Only one Mill in a given country, no more no less.
So, the next thing is improving the after-sales service because this is key and there's a lot of room to improve. Being more approachable, being closer to the customers. Previously, every spare part was stored in Germany so a customer from the UK had to send the bike back to Germany. The bike was on the road for a week before we could start to work on the bike. After closing the case the bike was on the road again for a week. So, we will save the customer a lot of time now.
Can you estimate roughly how much time that will save for a customer?
Shipping wise at least a minimum of two weeks and then it depends on what the case is and if the spare part is available.
Has Brexit played a part in bringing something concrete from YT into the UK?
Of course, this was also a part of the consideration. We don't have the stock here though, they are still shipped from Germany. But let's see how everything turns out post-Brexit.
So looking ahead, what do a successful next five years look like for YT?
First of all, I think our major goal is improving customer service, and working on new products, bringing every bike, every platform we have to the next level. Also increasing the number of touchpoints with the YT Family with YT Mills in key markets.
Which markets would you consider to be the main markets?
Of course, North America. We already have one Mill there but the U.S. is big. Of course, you need a second one on the East coast. Canada, of course, France, Spain, Italy, all those countries could really make sense.
How has YT been affected by COVID?
We have not been affected negatively. I think the whole bicycle industry is one of the winners, but let's see how next year will be.
I think we have seen a big boom. We have seen a lot of new customers joining the mountain bike business. Let's see how it turns out next year.
You're probably one of the big entrepreneurial success stories in mountain biking. What advice would you give to a young entrepreneur who wants to start a business in mountain biking in 2020?
Most importantly you need a USP. And for us, it was the brand and the approach of the brand. This is one piece of advice I would give anybody who wants to start a business. You need a vision of where you want to go and then you need a plan. After that, you need to execute and stick to it. Don’t give a shit about what others say.