-named Bike Components
brand is not well known outside of Europe, but within Germany, they're making some waves. They're an online retailer, but much like CRC and a few other large retailers, they've gone beyond traditional retail or white-labeling products, and have started producing their own designs. We sat down with CEO Philipp Simon and the Head of Product Management Christoph Schmitt to get their take on the future of retail in the mountain bike industry.
First of all, how are you? How are things in this weird time?Philipp:
Yes, it's quite a strange situation for all of us, but I was in a happy situation after my second son was born at the beginning of March. It didn't feel really strange at the beginning but it started to when I came back to work. Here, we have really a lot of rules to keep on running the business. This is what felt completely different between work and home.
What kind of measures have you taken in the office?Philipp:
In the office, everybody used to sit in one room at tables of four people. Now, every table is split into two tables with two people sitting across from each other divided by a wall because then they don't talk at each other. We also have the situation on some tables, where four people are sitting together so we have two walls between people. The hardest regulations are for the logistics department. There's a rule to keep a distance of two meters and it is quite hard at the moment and not really easy for the team and the production rate is 25% lower than in normal because they have to keep a distance from each other.
Since Coronavirus started, we’ve hired more than 60 employees for the logistics, to finish the overload of orders.
The bike industry's in a very strange place where some businesses are really hurting, some are booming, and some just don't have stock. People press the panic button and it's a complicated time. How is Bike Components doing?Philipp:
I don't want to say that there are winners or losers in this situation. It's too early to say this. In my opinion, we are really lucky that we can keep on working, we are expecting 15% growth this year. Normally, we are trying to do it slow and to control every step we do in our business, but when corona started the demand got so high that we weren't able to control this step and we cannot really say how much it is, but it's in between 50 and 100% more compared to this time last year. This is a really unhealthy way to grow in a business because of course, we have some promises for our customers. One of our promises is that we deliver really fast. And we are really struggling to keep that at the moment.
Also, our system wasn't prepared for the situation with sort of a traffic surge. We weren’t prepared to handle this amount of traffic, but I assume nobody was.
Can you tell me a bit about Bike Components’ origin story? How long have you been working with the company and what brought you to it?Philipp:
I have been in the company for 16 years. I started as a student working in customer service. Now, I am the CEO but a lot of things have happened in between. The company was founded in 1997. That was quite early for an online retailer to come to the market. Marcus and Klaus, the owners and founders of Bike Components, started the story of Bike Components in a bar. And every good story begins in a bar, doesn’t it? They both were enthusiastic bicycle riders and they were looking for some solutions on the market that didn't exist. They wanted to invent a seat post, but not a dropper seat post. They wanted a suspension seat post. In 1997...
Ah, the 90s...Philipp:
Yeah, the good old 90s. That was the reason why they went on the next day, after a long night in the bar. They went directly to the local authorities to do all the paperwork for their brand, Bike Components. It just grew. Every year a bit, more and more. Then, the big bike-boom years came and Bike Components exploded. We moved two times and now we are here, with 260 employees. It's a completely different story compared to the first few years. Also, when I came to Bike Components, I remember the time we were just six employees and it was more about having fun and talking about bicycle parts than doing real business. Then, we went through this first boom and it all exploded. We all found our job in the company and we found out what is our real task in the business. This was a great experience because, I think, nobody realized properly what we were doing in the early years.
But despite being very creative in the naming process of their company [laughs], are the original owners still the owners?Philipp:
Yes, they still come to the office nearly every day, looking after their company. Just like in the early days, their interest in the business is quite high and it's also a good thing that we also have all sorts of conversations going on. It's a nice atmosphere. It's like a big family. I sat next to Marcus for more than 10 years. I have seen him more than my wife. That way, you really form a good connection between each other.
How did you rise to the position you're in?Philipp:
At first, I was just a student working in customer service. Over time I got the position as head of the customer service. Then the whole logistics department was added to my responsibilities. It grew more and more. Then, two and a half years ago, I had a really good dinner that Markus and Claus invited me to. And they asked me if I want to join the board as head of distribution, so sales and also for purchasing. Well, that was almost all departments of Bike Components except marketing.
Did you do any schooling for those role changes as you went through or training?Philipp:
No, Marcus, Klaus and me, we all did the same thing. We were studying for engineering degrees, but none of us finished university. For me, this happened during another dinner; another important dinner, when they asked me to skip university and start at Bike Components full time. It seems like every step of my career begins with dinner.
How close do you think Bike Components is now to their original vision? It sounds like it went from originally from a product-focused company to retail, and now maybe back to product a little bit?Philipp:
The most important thing for Marcus and Klaus has always been to be very close to our customers. Customer service has always been the major point of our business. When I joined the board two years ago, my first action was that I wanted to write down the vision, what we stand for and what we are working for. It was important to the company to understand how I am thinking and how I want to lead the employees in the next years.
However, I guess the mentality of Bike Components has never changed: that we see ourselves as customers and as passionate bikers too and that's why we have a true understanding of our customers. That is always central to everything, how we want to work and how we want to create products. We don't do things in a way, where we might say “Let's build a mountain bike frame. We can get rich with this mountain bike frame." No, we are just really looking into the needs we have ourselves as bikers. And I think that our needs are completely similar to the needs of our customers.
We usually do these ‘from the top’ articles with the CEOs of manufacturers, but you have a unique approach, blurring the lines between manufacturing, distribution, and retail. Can you explain what that looks like now?Philipp:
The business model in the early days was just to be a retailer. We bought parts from wholesalers and distributors and then put them on the internet, and in the first days, it was quite easy. You just put on a price and then you've got the orders from all over the world and you could send the bicycle parts wherever you want.
I think it's currently a situation that we are sitting in between the customers and the brands you mentioned. Because, in my opinion, the link between brands and customers is currently missing a bit. That's something we can do. We know the situation to be in between and we can talk to both sides. We have a good relationship with our customers, but we also have a really good relationship with the brands.
One of the first goals of our company was to satisfy our clients with our job, and this was one of the goals Marcus always demands from us. We want to keep the customers satisfied! That is also our mantra when sitting right in between the clients and the industry. And through that approach we started thinking: "Okay, we can do more than we are doing today... Can’t we use them to find products that the market is still missing and how to produce them right?” This way we decided to produce products on our own.
Since the beginning of bike-components, we have been running the brand Vortrieb. We were producing complete bikes under this flag, but it was always a very small brand. Six years ago we decided to re-build this brand completely new. With just one model – an urban bike. We went to Taiwan and tried our best to find a manufacturer for this bike. Then we found out about all the possibilities we have in Taiwan. This was quite interesting for us, and so we went there three years in a row – but didn't place one order. We just learned and simply found out for us how it works in Taiwan.
By the way, I really, really like the Pinkbike article about going to Taiwan
and building a bike
. I know it's completely crazy, you have so many possibilities there. And at the same time you can see so much waste in terms of production, how things are produced – and that's the reason why we are rather creative at finding ways to let our business grow. And not just being dependent on dealing with parts you buy from a wholesaler or distributor. We always strive to find another way to show our clients what our function is in the market.
What are the advantages of going directly to the factories, the assemblers and the manufacturers in Taiwan?Philipp:
When you go to Taichung Bike Week, you see a lot of booths. But from simply walking around, you will never know what these exhibitors are really doing and what is hiding behind such a booth. It actually took us three years to just visit the factories where their production is going on and we took closer looks at what they can do. It's always very important for us to have a look at the production line because then you can see what opportunities and possibilities you have for the production.
Now, this is the main job of Christoph, our Head of Product Management, but in the first years, it was my main job. Yeah, I liked it very much, because there are a lot of things you can still do in Taiwan. And there are a lot of opportunities in the market. That is basically the story of how Levelnine made it to our portfolio. We got our hands on this brand resulting from a good connection to PMG, a very high-level producer of seat posts, bars and stems. They have their own label called Levelnine. So, we get to buy it directly from them and sell it directly in Europe.
So, you cut out a lot of steps in the dealer-wholesale retail model. In some cases the brand, in some cases the distributor, and the retail—you've assumed all three things. But in doing that, you've assumed a lot of risks and you've assumed a lot of the work of manufacturers and distributors: carrying stock, taking photos, writing your own descriptions. Why take on all that risk and work?Philipp:
Again, this goes back to our main goal: the satisfaction of our clients. We are really working hard to achieve that in every single step we make, in every action we take.Christoph [Head of Product Management]:
Maybe I can jump in there. To describe what that means in terms of product management. Basically, we have been doing the product descriptions on our own for years already. We learned over the last years to do it for all the articles from other brands or manufacturers. Thus, it is easy and makes no difference whether it is a brand that we simply sell or if it is a product we produce ourselves.
But what we had to add was to see what is necessary for testing: What does the law say? What's the law behind importing things to Europe? This is something we are doing right now, so we do all the testing ourselves together with certified testing laboratories which test the products on our behalf. Because there is the main risk, in my opinion.
We had to figure out, what are the laws behind testing? This is something that's really important for us, not only for our own brands but also for brands we import from Taiwan or from all over Europe. We are now doing a lot of testing and obtaining a lot of certifications. And basically, every batch we receive gets tested to make sure that we maintain the quality throughout all the products and make the customer happy.
Do you do your own weights as well?Philipp:
With the German law, you cannot point to the column with the weight and say, that’s it. Because then you have to guarantee that every single tire, for example, will have this exact weight. So, it's much easier for us as a dealer to rely on the weight info from the brand. But we are working on something that will show weights better than what we can offer today. At the moment, we are just able to show the origin weights from the manufacturer.
If you call our service hotline in the evening and ask for the lightest tire you can get – let’s say a Maxxis Minion DHR, maybe the person on the phone will have time to go to the warehouse and weigh it for you – until he finds the most lightweight Minion DHR of your choice from our stock.
For us, the problem is with the difference in weights. Normally, you just know the negative side of the weights, because you always get a tire that is heavier than what a brand tells you. But we found out that when you take the average weight, weighing more than three, four, five parts, the weight info from the manufacturers is not that bad. You will always find tires that are higher and lower in weight than what you are told. But the influence of the higher weight is of course much worse than the low weight.
Can Bike Components the retailer become a brand faster than brands can become retailers? Because right now, every brand is trying to become a retailer and you're a retailer trying to become a brand. How's that going to work? What's the future of buying bike parts?Philipp:
It's not necessarily our goal to become a manufacturer that offers every part. In my opinion, a lot of manufacturers should be focusing on their major product categories, to produce really high-quality parts. There are just a few manufacturers that are truly specialized on their parts AND grew big within the market. But there are quite a lot of brands in my opinion, that said, “Okay, clothing is doing quite well. Let's create an apparel offering." Or, another example, there are also manufacturers that said, "Hey, the wheelsets are going well. Okay, everybody can build up a wheelset..."
But this is not our goal. When we talk about Bike Components becoming a brand creating physical products, then we are always trying to offer added value products to the customers. We strongly believe that online retail is way more than simply putting a description on a website, having some good photos, a price tag and fast shipment. We think that Bike Components means more than just retail. It means community. It means high-quality shopping. It means understanding the wishes of riders. And I think this is something different than just a business case. Nowadays, the most important thing is that you know why you are in the business, why that's your profession! And I think a lot of brands just lost this connection with the focus on making money. Of course, we need to make money, too, to pay the salary of all our employees.
True, most people like getting paid. [laughs] Yeah.Philipp:
But there is more because we are selling emotional parts. It's more emotional than buying something you just need. You wish to have a new handlebar and then you put another kind of feeling into the shopping experience.
I'll be honest. I take the same emotional approach with all of my purchases. If it's a car or a tripod or some headphones. There'll be a spreadsheet and a million tabs open. It's terrible.Philipp:
The user experience is quite important in the future. It’s very important and really good to think about that. That's the main reason Bike Components has bike riders working here: to see everything through the eyes of our clients. To put the customer right in the middle of our thought process and ask: "What are their wishes? What is their next step? And how can they find their answer in our webshop?"
We came to the conclusion that it's not the number of brands you have in your webshop. It's more about if you have everything a customer really needs from one brand. In other words: how deep does our range dive into a brand’s portfolio. Do we have all the spare parts that are necessary? And I think this is becoming more and more important than just offering something for a fast and quick shopping experience.
Because you have a huge amount of volume that you sell, but you don't have that many brands.Philipp:
If we are talking about the major retailers in Europe, I think we have the smallest number of brands inside our portfolio. Yesterday we had 336 brands in our portfolio. To give you a comparison, I think Bike24 has more than a thousand brands.
How do you compare to the other online retailers in terms of sales volume? Number of things sold?Philipp:
I think we are the biggest retailer when you just look at bicycle parts without bikes and clothing.Christoph:
I'm not even sure about the number of brands today. Sometimes it varies during a day, but we have around 70,000 different products. This means more products per brand. Usually, we have all the spare parts for all current products and we try to also have the most common spare products plus the ones from older products in stock. If you need something for your bike, because maybe your fork is broken, we try to have all these things in stock so you can get your bike running again quickly.
So let's jump back to the sort of the origin of Bike Components. What did the original founders, what did they do before Bike Components? What did they bring to the table? They were mountain bikers, but what was their background?Philipp:
Just like me they were also studying mechanical engineering and also quit halfway through. This is the history of a lot of employees here. Aachen, where bike-components is based, is very famous for the RWTH University which is specialized in mechanical engineering. A lot of people here have the background that they studied mechanical engineering at some point.
Some longer, some shorter. And some even finished with the degree, like Christoph for example.
And how did they get the funding to get it off the ground? It can't have been cheap?Philipp:
They started very small, sold the first parts out of their apartment. They didn’t need much money for that. It took some time before they moved to a small shop in Aachen. And when I joined Bike Components in 2004, they had just moved to a bigger location with a bigger display window. A place where they could show more bicycles, because, at this time, it was quite important as an online retailer to also have a local shop. Because if not, you couldn't get access to some brands. It was in their contracts, it was always mentioned that you need to have a physical shop.
Interesting. Let's talk about products—in Christoph's world. You have your own line of products as well. Some of them are open molds and white-labelled, but some of them are your own designs, right?Christoph:
For “bc originals” we have our own designs. The idea behind it was really easy because we have all the data from over 20 years of selling bike parts. And as we are also passionate bikers we ask ourselves the question, what is missing in the market? Once we have one of these moments, we take a look at our data and we check if this product is already available or not. And if it's not available, we try to figure out, is there a demand for it? If yes and if this product is not available yet, as it was with the BC Loamer wheelset, we try to do it on our own.
The development process behind the Loamer, for example, started with a closer look onto the situation with affordable 29-inch wheels. Because all of them were really heavy. So we were like “okay, if you get a 29-inch wheelset for around 400 euros, why must this be on the heavy side, around two kilograms or something like this?." In the end, we had a chat with MG Components and Newmen and we were talking with them, just discussing the weights. Finally, we decided to do a wheelset with them. We gained them as a partner for designing a rim for us. Now we have our own rim. We designed it together with Newmen. It's based on the Newmen rim, you can see it, it's close to the mold, but we have our own product. We did that in cooperation and filled the gap in our portfolio.
It's not quite the same wheel, or quite the same rim as what you would get from Newman directly?Christoph:
We have a different rim width. Newmen has a 30 and 25 millimeter rim and we wanted to have an all-round wheelset. That’s why we went to 28 millimeters. We think this is the perfect compromise for such a wheel for a lot of customers that are doing most of their riding in Germany.
You are very savvy about the search terms then, with the name Bike Components, but did you know what a BC Loamer is before you named that one?Christoph:
We've been to British Columbia a couple of times, to Squamish, where your headquarters is based. I heard the term Loamer as an expression for loamy trails, like when they are new and fresh. This is what we are trying to ride as much as possible. And I thought that this would be the wheels that perfectly fit into this.
Do you test all your products or just your originals and how do you test them?Christoph:
We test all these “bc original” products, of course. But also our “bc basic” wheelsets, which are sitting at an even lower price point. And, we do the testing together with a certified testing laboratory. We also do the testing for Levelnine. Since we are the distributor for them, we need to test them by law. So, it’s not only the originals that we test, we basically test all the products which we import.Philipp:
If they have an ISO certification, there is no need for us to test. But to be honest, I want to sleep well and that's why I don't want to sell any kind of crap to our customers. We bought, for example, a huge amount of road racing wheels that were quite cheap in our opinion and as it was such a big amount of wheels we said, "Okay, we need to test it despite the fact that they had an ISO certificate." We sent it to Zedler [bike testing institute-Ed.] just to have them double-checked and sleep well all night long without bad feelings that can make you wake up and say, "Shit, something happened.”
And how did it go? Did they test okay?Philipp:
Yes. The test of the wheelset was successful. This is also something we try to achieve for all products: We don't want to just reach ISO level, we want to be above it. In our mind and in our experience, ISO is usually the basic level you need to have – but you can go way above.
Why do you think so many manufacturers don't have a data-driven approach the way you do? Is it just because you have more consumer data?Philipp:
Yes. We are in between the brands and the customers. I think just a handful of brands and manufacturers have a really good set of information about customers because they do their own retail. But still, you need a lot of traffic and the traffic of only one brand doesn't give you the overview. We have a lot of brands in our shop and you can also see the interaction between different brands. So this is a big advantage for us, of course.
You mentioned earlier that you had to have a physical showroom in order to access some components. There used to be a big split between buying online versus buying from your local bike shop. Were brands wary or resistant to selling to online retailers or selling through online retailers early on? And has that changed over the years?Philipp:
Yes, some brands still have that policy today, it's not possible for us to get every brand in our portfolio. This comes from either bad experiences they’ve had with other online retailers or a general rule that they don't want to work with online retailers. In my opinion, you don't think in the right way; when you think that there is a competition between online and offline. In my opinion, both need to exist. Sometimes it's easier for a client to get parts online, but sometimes it's necessary to go to an offline store. Maybe you want to test a bike. Or you are simply undecided, torn between buying this or that bike. Then sometimes just riding it for a few meters, brings a solution for you and that's not something online retail can change. It wouldn't make sense in my opinion, to try to close this gap.
Right. But now you maybe have less, there's less resistance from manufacturers to sell to you?Philipp:
Yeah. But there are still some on the list. Some I still don't get, but I try every year. And I think it's always important to try it constantly and never give up because I'm missing some brands that I personally want to have in order to complete our offerings.
Can you give away a brand that you're chasing that you really want?Philipp:
I think that would just put the pressure into the discussion. I know that they have good reasons and arguments why they don't want to work with an online retailer for now. But some also said already if they decide to work with an online retailer, they will work with us. And so I'm just trying it every year or every four months, to be precise. Writing an email to them. Again and again.
Over the years, what's the biggest challenge that Bike Components has faced? Was there ever a moment where you went, "Oh shit, we messed up. This whole thing is going to fall apart." A bad review or something?Philipp:
Normally, we don't have anything really bad, we don't get bad feedback. Right now, we have some challenges with the high volume of orders during COVID-19. But our customer service always tries to work on a solution in order to address any problems.
The current situation is definitely one of the biggest challenges we have experienced so far.
I imagine your costs have gone up. Logistics are more complicated, but for us as consumers, we just think you press a button on the internet and then something arrives at our door...Philipp:
Also one of the biggest challenges for us is to get employees. This is really hard. Mechanics and employees who are able to maintain our level of support in the customer service in the last years, it was really hard to get more and more employees there.
Of your 260 employees, what's the split? Is that mostly warehouse employees and call center employees?Philipp:
The call center has 30 employees and the logistics at the moment more than 110. But there are a lot of temp workers because there is no other way you can make it grow as fast as we have had to do recently.
And is that a recent growth? When did Bike Components grow from a six-person core group to 200 plus?Philipp:
Yeah, I think the major years were 2005, 2006, 2007. There we had rates of about 30, 40, 50% growth and we could deal with it. At the moment, in 2020, demand is rising much higher and faster and the growth is not really sustainable. We always try to have a sustainable business and control the growth of Bike Components year by year.
So growing too fast is as big a problem as growing not fast enough?Philipp:
In my opinion, yes. Not growing is also a problem of course. Just because we initially bought a bigger warehouse than we needed, and now we have the capacity to grow inside this warehouse.
But we want to control growth and we want to know what is the next step. What can we handle, where can we grow? It's very funny, but for every part of our portfolio, we are developing new strategies to give a better service to the customers and also try to have different offers than the competitors. For example, right now everybody is asking, “why don't you offer complete mountain bikes?” But there are already really good online retailers and brands using that channel for ecommerce. Like YT, Canyon and also Rose, they are doing a good job. In my opinion, you need a lot of money and you need a lot of power to get inside this business and then we look for the bike components’ way because nobody here rides a Canyon and nearly nobody owns a YT. You look at what we are riding and why we are riding those bikes and then we try to find offers based on our understanding of our customers. We are trying to enter the next level this way.
What's your personal bike? What are you riding?Philipp:
My personal bike at the moment, I'm riding a 2017 Yeti SB5.5.
What about you Christoph?Christoph:
I'm currently switching bikes. My main bike currently, however, is the Transition Smuggler because you don't need so much suspension travel here. But I'm still figuring out what frame I am going to buy for my enduro bike.
It's probably going to be like a RAAW Madonna because I love these bikes and we are working with them, but I'm still waiting for the next batch.
Yeah, me too. I have a Madonna waiting to get built this weekend. I was quick on the draw with that one. [It's built now. -Ed]Christoph:
Yeah, I was too slow. We placed an order and I could have gotten one from the first batch, but I was too slow really.
You mentioned you have a special project with Raaw coming this fall.Christoph:
Yeah, Ruben is going to produce a second batch for this fall. We're going to take a small amount of frames to build up a really special kind of bike. And the interesting thing is: we're going to work with One Up components for example, and a couple of other brands, and we're going to try to get like their idea behind a RAAW Madonna build. It's going to be like kind of a marketing project to get a really unique looking bike. With the input from others in the industry... So it's going to be a really interesting project and it's also going to have new tires that haven’t been released yet. [the Schwalbe tires have since been released
But launches and embargoes are a challenge there. We cannot understand why brands launch their products on different platforms and to the consumer, but the launch for sales is scheduled for another date. It makes no sense because the whole lead generation, all the interest that gets created runs into empty space. We don't understand this because when we have something to offer, we can deal with embargoes and also with embargo dates.
There is no reason to tell people, “Okay, coming up then is this and that.” We always need the parts ready in stock. Or we don’t talk about it. And we also need some time to prepare things. I simply don't get why so many brands don't believe that this is so important and also in their own interest. You can see immediately how many people have received the message about a new product – and how many really want this product. It's a really important thing, in my opinion, to know how many people purchase in the first few days after the launch. And this is the only useful information brands can get from a product launch.
In my opinion, brands often announce things before they’re available because they want consumers to pressure retailers and distributors to increase their bookings. It reduces their risk, but it is also a huge lost opportunity.Philipp:
You always have to produce a minimum batch and if you produce it now or later, in my opinion, makes no difference.
What is your overall perspective on marketing? I don't see you very much in English media, but you're all over the German forums and lots of people talking about, Bike Components. Do you do any sports marketing with athletes? Is there anything else? You have an agency, right?Philipp:
We have three or four agencies working for us, in typical terms of marketing, like SEA [search engine advertising] and SEO. And then we have also one agency who is helping us to create campaigns on our webshop and roll out those campaigns on various channels. Yes, at the moment, we are working hard on the European market and a growth in the European market. And it's not so easy for us to sell to the US or North America in general. There are some embargoes from bigger brands that we are not allowed to sell there. But also the Asian market is quite interesting for us: On one of our trips there, one or two years ago, when we went to Taiwan, we did a lot of riding.Christoph:
We stayed there for ten days and rode for five days, I think. Then worked for five days.
And to answer your question, we are trying to build our community on Facebook or Instagram. Also, we are trying to build up a new YouTube channel, but we haven’t found the right “bc approach” yet.Philipp:
Plus – and this is something a lot of people tend to forget nowadays – it's always important to show your face and show your brand at events. With that in mind we are never looking for the biggest events in Europe, but for the ones where we feel a match. We are working together with Jerome Clementz and his wife. They run events in the Vosges area in France and we like this region very much. I think it's good for us to show exactly that and there are also employees from our company going there, racing, having fun. I think that makes a huge difference. Not only doing SEA marketing and Google advertising. You need to be reachable. Our staff are also racers and they can ride. But they also work really hard to provide the best service possible and while also being a part of the community, too.
Especially for an online retailer to differentiate yourselves from just buying something off Amazon. In terms of online ads, does Google do better than Facebook or YouTube? What generates the best leads for you?Philipp:
Lead generation is quite good from Facebook and also Instagram. But you don't go to Facebook or Instagram to buy or sell stuff, because when you log in to Facebook, you are not like: "Okay, I want to buy a new toaster." Then you don't go to Facebook, you go to Amazon. You can produce leads from Facebook or Instagram but when we talk about shopping and conversion, you need to do Google. It's in my opinion, completely different channels with a completely different functionality for us.
Is there anything product-wise you can tell us about things you have coming down the line, other than this new special edition RAAW Madonna?Christoph:
We have just released our own small collection of bike wear. The interesting thing there is we will take all the feedback we get from our customers, and then work on a new batch, and change smaller things. Improve it, where necessary. And the next thing to come, we are going to release a gravel wheelset really soon.Christoph:
How come? We have a lot of road bike riders and a lot of mountain bike riders, and we meet in the middle and ride gravel together. I had a lot of colleagues, that had never ridden mountain bikes before. And I’d never ridden road bikes – so we started to ride gravel together. It's a cool thing because I was suddenly able to ride with a road rider. That was really interesting. And when we were riding trails, they get like, “Oh shit.”Philipp:
Both of us, we have been working in this company for years. And the view on the market has also changed and sometimes you see products and you think: "Oh, we can do better." This is mainly the reason why we sometimes do things differently, with our own approach. And then I’m talking to a guy like you, you are about my age and I wonder: What are the next parts you’re going to buy? What will you buy for your family? This way, we always identify product groups we need to improve. Or we can do a product in another way, to add more quality or usability to this particular product.
That's how we think. And some of the products that are coming in the next year, because we know a bit more, have to do with this—have to deal with this thing that we are not. Yeah. We are also getting older and thinking differently about some stuff in the last years, yeah. So I just want to give you a hint of what's coming up next.
Is this a fancy way of saying you’ll develop e-bikes?Christoph:
Nah, no. [laughs]Philipp:
I love to ride eMTB. The terrain here is perfect for it. It's quite funny because you just have small ups and small downhills – but you can do a lot more riding with an e-mountain bike. However, we strongly differentiate between riding an e-bike and riding an e-mountain bike. For me, an e-bike is the thing my mother can go along with and ride at 20 kilometers an hour. And e-mountain biking is something, in my opinion, that has just started but will come up more and more in the next few years. Until now, there is no really good interpretation of e-mountain biking in my opinion. But I think that will still come to the market.
And you think it's very challenging to make an e-mountain bike from a manufacturing standpoint?Christoph:
The market is still developing. You see a lot of bikes with a battery on it. Basically, you take a regular bike, put a motor and a battery on it. And most of them are not so fancy or cool bikes, but you also have these ideas like Specialized had and some other brands, too. They are bringing it to another really totally different segment, in a totally different direction. Actually, if we start building e-mountain bikes, we would have to find out first what we actually want.Philipp:
At the Eurobike show last year, there was a discussion going on and everybody was saying the biggest invention of all time in the bike market is the e-bike. And I said, no, no, it's not the e-bike. Christoph:
And it was from a popular brand. Someone there said the biggest invention in MTB is the e-bike.
Yikes. Not suspension or disc brakes or something like that?Philipp:
I cannot understand that, because when I think of the first disc brakes and what brakes we ride now – that is evolution. You couldn't compare them anymore when you think of the first disc brakes. Or just remember the Boxxer World Cup in 2010 –, and now you go ride a modern fork... That’s a different story, and this is development.
Of course, I do understand, I know that the e-bikes, in general, bring a lot of money to the industry.
And new people.Philipp:
Yeah. It saved a lot of stores before the Covid-19 lockdown so they were not forced to close, but it wasn't an invention to put a motor on an existing frame.
That is just my opinion. No big deal and I know it's going to change. Specialized started to change it, trying to get the weight down to 15 kilos. Or maybe they didn't reach 15 kilos, maybe it was 17.Christoph:
It was a Mondraker or like, no, it was Lapierre. 15 kilograms e-bike, which was like, Whoa.
I think we can still take maybe two or three pounds out of some of these motor designs without too much trouble in the next couple of years. But after that, battery technology is going to have to change before and we'll see it in cars first. So, and it won't be any surprises for bikes.Christoph:
Yeah. I saw a lot of interesting designs in the last year. This year there will be a couple of interesting e-bike designs going to be released. And I also think about the trends of geometry: it's going to be really interesting within the next few years because...
People will realize that they're not just regular bikes.Christoph:
Back to you Philipp, tell me about yourself. Like where do you draw inspiration? Are you a book guy? Movies, podcasts? What's your life like outside of your work?Philipp:
When we talk about bikes, it's always a lot of riding with other people and thinking about what can I do differently. It's hard for me to differentiate between hobby and job. In my opinion, there is no off time when I go home. I am always thinking about bicycles and yes, of course, I spend time with my family and do different stuff, but then suddenly you have an idea or think about something and that makes the difference. At least it works for me. Then it's not just about new parts, a new product. It's also about things in the webshop, how we can change it or how we can do it in a better way. At the moment I'm really thinking a lot about the fact that we don't have a nice customer account inside our webshop.
How can you create the best account for our clients? What is necessary for such an account and what do you want to change in your account? How do you want to work with your personal account? And yeah, this is something I'm thinking a lot about at the moment. Do you maybe want to have your bikes inside your account that you can just say, okay, I need new brake pads for my Yeti or something? Then you directly have the brake and it nearly orders itself. I'm not sure about the next steps in online retailing. How I get the inspiration varies completely. Sometimes it's when riding, sometimes it's while watching TV and sometimes it's reading magazines. But I'm reading fewer magazines compared to the last years because yeah, it's always the same story.
I love to read the comments below new products on Pinkbike or MTB-News. There's a lot of crap in these comments, but sometimes you can collect valuable information from it. Unspoken truth or something that makes you think “okay, that's quite funny, but think about it”. Maybe you will find different solutions or at least see it in a different angle. That creates something new. And while everybody's saying that we don't need to come to the office anymore and everybody can work from home – something, that is very important for me is to talk to my colleagues every day, to have an exchange with Christoph and all other employees. Sometimes this is a really big inspiration for me, just to keep listening to them and hear what they are thinking regarding certain issues.
It's really good to have the situation that we can talk to each other here in the office. I think this is the most important thing to get inspiration from. One of the most helpful things in my life has always been the possibility to ask Marcus all the questions I was thinking about.
So these talks are one of the most important things, working from home you can solve it with a quick a call via Zoom or FaceTime or something else. But you won't get the information you could take out of that conversation in the same way. It's something about the reactions, about feelings. Or simply seeing also our employees coming to work with their bikes. And you look at the bikes and you always get some ideas, what they are doing differently. There are so many nice bikes. It's always really nice to see bikes anyway.
Are there other companies that you are looking to model your company after? Inside or outside of the bike industry?Philipp:
No. I don't know any company that is like our company. Absolutely not, not in the business, not in the bike world.
I would love to know a company that is doing online retailing, maybe in a different way and thinking on the same level, but I think it's really, really hard to find. And I also didn't try it to find a company like ours. Personally speaking, I wouldn't want to work for another company. I love to be here.
And where do you go from here? What's the future look like business-wise?Philipp:
I think bike components can become a very important part of the industry because closing the gap between the customers and the manufacturers is a very important step in the coming years. Getting products on the market which do so is our goal! And since there's a need for those products on the market, this will be very important for the manufacturers. I think that we have some programs in our portfolio or are trying to run out some programs to help the manufacturers. But it depends on them, how they want to deal with it. Or not. And I think we can do a lot of things in this field to fill the gap between the manufacturers and the customers.
Thank you very much for your time today. Super interesting, and I'm curious to see where it goes from here.Philipp:
Me too. Thank you very much, Brian.
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